100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4004

 

Introduced , by Rep. Will Guzzardi

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Income Tax Act. Provides for water's edge combined reporting. Creates an addition modification in an amount equal to the deduction for qualified production activities allowed under Section 199 of the Internal Revenue Code. In the definition of "unitary business group", provides that the term "United States" means the 50 states, the District of Columbia, and any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources, but does not include any territory or possession of the United States (currently, that definition does not include any territory or possession of the United States or any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources). In that definition, further provides that the unitary business group may include members that are ordinarily required to apportion business income under different subsections of the Act. Provides that provisions related to the apportionment of income for federally regulated exchanges expire on December 31, 2017. Amends the Hotel Operators' Occupation Tax Act. Provides that the Act also applies to online travel companies. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Cigarette Tax Act, the Cigarette Use Tax Act, the Hotel Operators' Occupation Tax Act, the Motor Fuel Tax Law, the Telecommunications Excise Tax Act, and the Liquor Control Act of 1934 to provide for reductions in the vendor discount. Effective immediately.


LRB100 11829 HLH 23189 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4004LRB100 11829 HLH 23189 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 Illinois Income Tax Act is amended by
5changing Sections 203, 304, and 1501 and by adding Section 309
6as follows:
 
7    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
8    Sec. 203. Base income defined.
9    (a) Individuals.
10        (1) In general. In the case of an individual, base
11    income means an amount equal to the taxpayer's adjusted
12    gross income for the taxable year as modified by paragraph
13    (2).
14        (2) Modifications. The adjusted gross income referred
15    to in paragraph (1) shall be modified by adding thereto the
16    sum of the following amounts:
17            (A) An amount equal to all amounts paid or accrued
18        to the taxpayer as interest or dividends during the
19        taxable year to the extent excluded from gross income
20        in the computation of adjusted gross income, except
21        stock dividends of qualified public utilities
22        described in Section 305(e) of the Internal Revenue
23        Code;

 

 

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1            (B) An amount equal to the amount of tax imposed by
2        this Act to the extent deducted from gross income in
3        the computation of adjusted gross income for the
4        taxable year;
5            (C) An amount equal to the amount received during
6        the taxable year as a recovery or refund of real
7        property taxes paid with respect to the taxpayer's
8        principal residence under the Revenue Act of 1939 and
9        for which a deduction was previously taken under
10        subparagraph (L) of this paragraph (2) prior to July 1,
11        1991, the retrospective application date of Article 4
12        of Public Act 87-17. In the case of multi-unit or
13        multi-use structures and farm dwellings, the taxes on
14        the taxpayer's principal residence shall be that
15        portion of the total taxes for the entire property
16        which is attributable to such principal residence;
17            (D) An amount equal to the amount of the capital
18        gain deduction allowable under the Internal Revenue
19        Code, to the extent deducted from gross income in the
20        computation of adjusted gross income;
21            (D-5) An amount, to the extent not included in
22        adjusted gross income, equal to the amount of money
23        withdrawn by the taxpayer in the taxable year from a
24        medical care savings account and the interest earned on
25        the account in the taxable year of a withdrawal
26        pursuant to subsection (b) of Section 20 of the Medical

 

 

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1        Care Savings Account Act or subsection (b) of Section
2        20 of the Medical Care Savings Account Act of 2000;
3            (D-10) For taxable years ending after December 31,
4        1997, an amount equal to any eligible remediation costs
5        that the individual deducted in computing adjusted
6        gross income and for which the individual claims a
7        credit under subsection (l) of Section 201;
8            (D-15) For taxable years 2001 and thereafter, an
9        amount equal to the bonus depreciation deduction taken
10        on the taxpayer's federal income tax return for the
11        taxable year under subsection (k) of Section 168 of the
12        Internal Revenue Code;
13            (D-16) If the taxpayer sells, transfers, abandons,
14        or otherwise disposes of property for which the
15        taxpayer was required in any taxable year to make an
16        addition modification under subparagraph (D-15), then
17        an amount equal to the aggregate amount of the
18        deductions taken in all taxable years under
19        subparagraph (Z) with respect to that property.
20            If the taxpayer continues to own property through
21        the last day of the last tax year for which the
22        taxpayer may claim a depreciation deduction for
23        federal income tax purposes and for which the taxpayer
24        was allowed in any taxable year to make a subtraction
25        modification under subparagraph (Z), then an amount
26        equal to that subtraction modification.

 

 

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1            The taxpayer is required to make the addition
2        modification under this subparagraph only once with
3        respect to any one piece of property;
4            (D-17) An amount equal to the amount otherwise
5        allowed as a deduction in computing base income for
6        interest paid, accrued, or incurred, directly or
7        indirectly, (i) for taxable years ending on or after
8        December 31, 2004, to a foreign person who would be a
9        member of the same unitary business group but for the
10        fact that foreign person's business activity outside
11        the United States is 80% or more of the foreign
12        person's total business activity and (ii) for taxable
13        years ending on or after December 31, 2008, to a person
14        who would be a member of the same unitary business
15        group but for the fact that the person is prohibited
16        under Section 1501(a)(27) from being included in the
17        unitary business group because he or she is ordinarily
18        required to apportion business income under different
19        subsections of Section 304. The addition modification
20        required by this subparagraph shall be reduced to the
21        extent that dividends were included in base income of
22        the unitary group for the same taxable year and
23        received by the taxpayer or by a member of the
24        taxpayer's unitary business group (including amounts
25        included in gross income under Sections 951 through 964
26        of the Internal Revenue Code and amounts included in

 

 

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1        gross income under Section 78 of the Internal Revenue
2        Code) with respect to the stock of the same person to
3        whom the interest was paid, accrued, or incurred.
4            This paragraph shall not apply to the following:
5                (i) an item of interest paid, accrued, or
6            incurred, directly or indirectly, to a person who
7            is subject in a foreign country or state, other
8            than a state which requires mandatory unitary
9            reporting, to a tax on or measured by net income
10            with respect to such interest; or
11                (ii) an item of interest paid, accrued, or
12            incurred, directly or indirectly, to a person if
13            the taxpayer can establish, based on a
14            preponderance of the evidence, both of the
15            following:
16                    (a) the person, during the same taxable
17                year, paid, accrued, or incurred, the interest
18                to a person that is not a related member, and
19                    (b) the transaction giving rise to the
20                interest expense between the taxpayer and the
21                person did not have as a principal purpose the
22                avoidance of Illinois income tax, and is paid
23                pursuant to a contract or agreement that
24                reflects an arm's-length interest rate and
25                terms; or
26                (iii) the taxpayer can establish, based on

 

 

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1            clear and convincing evidence, that the interest
2            paid, accrued, or incurred relates to a contract or
3            agreement entered into at arm's-length rates and
4            terms and the principal purpose for the payment is
5            not federal or Illinois tax avoidance; or
6                (iv) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person if
8            the taxpayer establishes by clear and convincing
9            evidence that the adjustments are unreasonable; or
10            if the taxpayer and the Director agree in writing
11            to the application or use of an alternative method
12            of apportionment under Section 304(f).
13                Nothing in this subsection shall preclude the
14            Director from making any other adjustment
15            otherwise allowed under Section 404 of this Act for
16            any tax year beginning after the effective date of
17            this amendment provided such adjustment is made
18            pursuant to regulation adopted by the Department
19            and such regulations provide methods and standards
20            by which the Department will utilize its authority
21            under Section 404 of this Act;
22            (D-18) An amount equal to the amount of intangible
23        expenses and costs otherwise allowed as a deduction in
24        computing base income, and that were paid, accrued, or
25        incurred, directly or indirectly, (i) for taxable
26        years ending on or after December 31, 2004, to a

 

 

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1        foreign person who would be a member of the same
2        unitary business group but for the fact that the
3        foreign person's business activity outside the United
4        States is 80% or more of that person's total business
5        activity and (ii) for taxable years ending on or after
6        December 31, 2008, to a person who would be a member of
7        the same unitary business group but for the fact that
8        the person is prohibited under Section 1501(a)(27)
9        from being included in the unitary business group
10        because he or she is ordinarily required to apportion
11        business income under different subsections of Section
12        304. The addition modification required by this
13        subparagraph shall be reduced to the extent that
14        dividends were included in base income of the unitary
15        group for the same taxable year and received by the
16        taxpayer or by a member of the taxpayer's unitary
17        business group (including amounts included in gross
18        income under Sections 951 through 964 of the Internal
19        Revenue Code and amounts included in gross income under
20        Section 78 of the Internal Revenue Code) with respect
21        to the stock of the same person to whom the intangible
22        expenses and costs were directly or indirectly paid,
23        incurred, or accrued. The preceding sentence does not
24        apply to the extent that the same dividends caused a
25        reduction to the addition modification required under
26        Section 203(a)(2)(D-17) of this Act. As used in this

 

 

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1        subparagraph, the term "intangible expenses and costs"
2        includes (1) expenses, losses, and costs for, or
3        related to, the direct or indirect acquisition, use,
4        maintenance or management, ownership, sale, exchange,
5        or any other disposition of intangible property; (2)
6        losses incurred, directly or indirectly, from
7        factoring transactions or discounting transactions;
8        (3) royalty, patent, technical, and copyright fees;
9        (4) licensing fees; and (5) other similar expenses and
10        costs. For purposes of this subparagraph, "intangible
11        property" includes patents, patent applications, trade
12        names, trademarks, service marks, copyrights, mask
13        works, trade secrets, and similar types of intangible
14        assets.
15            This paragraph shall not apply to the following:
16                (i) any item of intangible expenses or costs
17            paid, accrued, or incurred, directly or
18            indirectly, from a transaction with a person who is
19            subject in a foreign country or state, other than a
20            state which requires mandatory unitary reporting,
21            to a tax on or measured by net income with respect
22            to such item; or
23                (ii) any item of intangible expense or cost
24            paid, accrued, or incurred, directly or
25            indirectly, if the taxpayer can establish, based
26            on a preponderance of the evidence, both of the

 

 

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1            following:
2                    (a) the person during the same taxable
3                year paid, accrued, or incurred, the
4                intangible expense or cost to a person that is
5                not a related member, and
6                    (b) the transaction giving rise to the
7                intangible expense or cost between the
8                taxpayer and the person did not have as a
9                principal purpose the avoidance of Illinois
10                income tax, and is paid pursuant to a contract
11                or agreement that reflects arm's-length terms;
12                or
13                (iii) any item of intangible expense or cost
14            paid, accrued, or incurred, directly or
15            indirectly, from a transaction with a person if the
16            taxpayer establishes by clear and convincing
17            evidence, that the adjustments are unreasonable;
18            or if the taxpayer and the Director agree in
19            writing to the application or use of an alternative
20            method of apportionment under Section 304(f);
21                Nothing in this subsection shall preclude the
22            Director from making any other adjustment
23            otherwise allowed under Section 404 of this Act for
24            any tax year beginning after the effective date of
25            this amendment provided such adjustment is made
26            pursuant to regulation adopted by the Department

 

 

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1            and such regulations provide methods and standards
2            by which the Department will utilize its authority
3            under Section 404 of this Act;
4            (D-19) For taxable years ending on or after
5        December 31, 2008, an amount equal to the amount of
6        insurance premium expenses and costs otherwise allowed
7        as a deduction in computing base income, and that were
8        paid, accrued, or incurred, directly or indirectly, to
9        a person who would be a member of the same unitary
10        business group but for the fact that the person is
11        prohibited under Section 1501(a)(27) from being
12        included in the unitary business group because he or
13        she is ordinarily required to apportion business
14        income under different subsections of Section 304. The
15        addition modification required by this subparagraph
16        shall be reduced to the extent that dividends were
17        included in base income of the unitary group for the
18        same taxable year and received by the taxpayer or by a
19        member of the taxpayer's unitary business group
20        (including amounts included in gross income under
21        Sections 951 through 964 of the Internal Revenue Code
22        and amounts included in gross income under Section 78
23        of the Internal Revenue Code) with respect to the stock
24        of the same person to whom the premiums and costs were
25        directly or indirectly paid, incurred, or accrued. The
26        preceding sentence does not apply to the extent that

 

 

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1        the same dividends caused a reduction to the addition
2        modification required under Section 203(a)(2)(D-17) or
3        Section 203(a)(2)(D-18) of this Act.
4            (D-20) For taxable years beginning on or after
5        January 1, 2002 and ending on or before December 31,
6        2006, in the case of a distribution from a qualified
7        tuition program under Section 529 of the Internal
8        Revenue Code, other than (i) a distribution from a
9        College Savings Pool created under Section 16.5 of the
10        State Treasurer Act or (ii) a distribution from the
11        Illinois Prepaid Tuition Trust Fund, an amount equal to
12        the amount excluded from gross income under Section
13        529(c)(3)(B). For taxable years beginning on or after
14        January 1, 2007, in the case of a distribution from a
15        qualified tuition program under Section 529 of the
16        Internal Revenue Code, other than (i) a distribution
17        from a College Savings Pool created under Section 16.5
18        of the State Treasurer Act, (ii) a distribution from
19        the Illinois Prepaid Tuition Trust Fund, or (iii) a
20        distribution from a qualified tuition program under
21        Section 529 of the Internal Revenue Code that (I)
22        adopts and determines that its offering materials
23        comply with the College Savings Plans Network's
24        disclosure principles and (II) has made reasonable
25        efforts to inform in-state residents of the existence
26        of in-state qualified tuition programs by informing

 

 

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1        Illinois residents directly and, where applicable, to
2        inform financial intermediaries distributing the
3        program to inform in-state residents of the existence
4        of in-state qualified tuition programs at least
5        annually, an amount equal to the amount excluded from
6        gross income under Section 529(c)(3)(B).
7            For the purposes of this subparagraph (D-20), a
8        qualified tuition program has made reasonable efforts
9        if it makes disclosures (which may use the term
10        "in-state program" or "in-state plan" and need not
11        specifically refer to Illinois or its qualified
12        programs by name) (i) directly to prospective
13        participants in its offering materials or makes a
14        public disclosure, such as a website posting; and (ii)
15        where applicable, to intermediaries selling the
16        out-of-state program in the same manner that the
17        out-of-state program distributes its offering
18        materials;
19            (D-21) For taxable years beginning on or after
20        January 1, 2007, in the case of transfer of moneys from
21        a qualified tuition program under Section 529 of the
22        Internal Revenue Code that is administered by the State
23        to an out-of-state program, an amount equal to the
24        amount of moneys previously deducted from base income
25        under subsection (a)(2)(Y) of this Section;
26            (D-22) For taxable years beginning on or after

 

 

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1        January 1, 2009, in the case of a nonqualified
2        withdrawal or refund of moneys from a qualified tuition
3        program under Section 529 of the Internal Revenue Code
4        administered by the State that is not used for
5        qualified expenses at an eligible education
6        institution, an amount equal to the contribution
7        component of the nonqualified withdrawal or refund
8        that was previously deducted from base income under
9        subsection (a)(2)(y) of this Section, provided that
10        the withdrawal or refund did not result from the
11        beneficiary's death or disability;
12            (D-23) An amount equal to the credit allowable to
13        the taxpayer under Section 218(a) of this Act,
14        determined without regard to Section 218(c) of this
15        Act;
16            (D-24) For taxable years ending on or after
17        December 31, 2017, an amount equal to the deduction
18        allowed under Section 199 of the Internal Revenue Code
19        for the taxable year;
20    and by deducting from the total so obtained the sum of the
21    following amounts:
22            (E) For taxable years ending before December 31,
23        2001, any amount included in such total in respect of
24        any compensation (including but not limited to any
25        compensation paid or accrued to a serviceman while a
26        prisoner of war or missing in action) paid to a

 

 

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1        resident by reason of being on active duty in the Armed
2        Forces of the United States and in respect of any
3        compensation paid or accrued to a resident who as a
4        governmental employee was a prisoner of war or missing
5        in action, and in respect of any compensation paid to a
6        resident in 1971 or thereafter for annual training
7        performed pursuant to Sections 502 and 503, Title 32,
8        United States Code as a member of the Illinois National
9        Guard or, beginning with taxable years ending on or
10        after December 31, 2007, the National Guard of any
11        other state. For taxable years ending on or after
12        December 31, 2001, any amount included in such total in
13        respect of any compensation (including but not limited
14        to any compensation paid or accrued to a serviceman
15        while a prisoner of war or missing in action) paid to a
16        resident by reason of being a member of any component
17        of the Armed Forces of the United States and in respect
18        of any compensation paid or accrued to a resident who
19        as a governmental employee was a prisoner of war or
20        missing in action, and in respect of any compensation
21        paid to a resident in 2001 or thereafter by reason of
22        being a member of the Illinois National Guard or,
23        beginning with taxable years ending on or after
24        December 31, 2007, the National Guard of any other
25        state. The provisions of this subparagraph (E) are
26        exempt from the provisions of Section 250;

 

 

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1            (F) An amount equal to all amounts included in such
2        total pursuant to the provisions of Sections 402(a),
3        402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
4        Internal Revenue Code, or included in such total as
5        distributions under the provisions of any retirement
6        or disability plan for employees of any governmental
7        agency or unit, or retirement payments to retired
8        partners, which payments are excluded in computing net
9        earnings from self employment by Section 1402 of the
10        Internal Revenue Code and regulations adopted pursuant
11        thereto;
12            (G) The valuation limitation amount;
13            (H) An amount equal to the amount of any tax
14        imposed by this Act which was refunded to the taxpayer
15        and included in such total for the taxable year;
16            (I) An amount equal to all amounts included in such
17        total pursuant to the provisions of Section 111 of the
18        Internal Revenue Code as a recovery of items previously
19        deducted from adjusted gross income in the computation
20        of taxable income;
21            (J) An amount equal to those dividends included in
22        such total which were paid by a corporation which
23        conducts business operations in a River Edge
24        Redevelopment Zone or zones created under the River
25        Edge Redevelopment Zone Act, and conducts
26        substantially all of its operations in a River Edge

 

 

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1        Redevelopment Zone or zones. This subparagraph (J) is
2        exempt from the provisions of Section 250;
3            (K) An amount equal to those dividends included in
4        such total that were paid by a corporation that
5        conducts business operations in a federally designated
6        Foreign Trade Zone or Sub-Zone and that is designated a
7        High Impact Business located in Illinois; provided
8        that dividends eligible for the deduction provided in
9        subparagraph (J) of paragraph (2) of this subsection
10        shall not be eligible for the deduction provided under
11        this subparagraph (K);
12            (L) For taxable years ending after December 31,
13        1983, an amount equal to all social security benefits
14        and railroad retirement benefits included in such
15        total pursuant to Sections 72(r) and 86 of the Internal
16        Revenue Code;
17            (M) With the exception of any amounts subtracted
18        under subparagraph (N), an amount equal to the sum of
19        all amounts disallowed as deductions by (i) Sections
20        171(a) (2), and 265(2) of the Internal Revenue Code,
21        and all amounts of expenses allocable to interest and
22        disallowed as deductions by Section 265(1) of the
23        Internal Revenue Code; and (ii) for taxable years
24        ending on or after August 13, 1999, Sections 171(a)(2),
25        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
26        Code, plus, for taxable years ending on or after

 

 

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1        December 31, 2011, Section 45G(e)(3) of the Internal
2        Revenue Code and, for taxable years ending on or after
3        December 31, 2008, any amount included in gross income
4        under Section 87 of the Internal Revenue Code; the
5        provisions of this subparagraph are exempt from the
6        provisions of Section 250;
7            (N) An amount equal to all amounts included in such
8        total which are exempt from taxation by this State
9        either by reason of its statutes or Constitution or by
10        reason of the Constitution, treaties or statutes of the
11        United States; provided that, in the case of any
12        statute of this State that exempts income derived from
13        bonds or other obligations from the tax imposed under
14        this Act, the amount exempted shall be the interest net
15        of bond premium amortization;
16            (O) An amount equal to any contribution made to a
17        job training project established pursuant to the Tax
18        Increment Allocation Redevelopment Act;
19            (P) An amount equal to the amount of the deduction
20        used to compute the federal income tax credit for
21        restoration of substantial amounts held under claim of
22        right for the taxable year pursuant to Section 1341 of
23        the Internal Revenue Code or of any itemized deduction
24        taken from adjusted gross income in the computation of
25        taxable income for restoration of substantial amounts
26        held under claim of right for the taxable year;

 

 

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1            (Q) An amount equal to any amounts included in such
2        total, received by the taxpayer as an acceleration in
3        the payment of life, endowment or annuity benefits in
4        advance of the time they would otherwise be payable as
5        an indemnity for a terminal illness;
6            (R) An amount equal to the amount of any federal or
7        State bonus paid to veterans of the Persian Gulf War;
8            (S) An amount, to the extent included in adjusted
9        gross income, equal to the amount of a contribution
10        made in the taxable year on behalf of the taxpayer to a
11        medical care savings account established under the
12        Medical Care Savings Account Act or the Medical Care
13        Savings Account Act of 2000 to the extent the
14        contribution is accepted by the account administrator
15        as provided in that Act;
16            (T) An amount, to the extent included in adjusted
17        gross income, equal to the amount of interest earned in
18        the taxable year on a medical care savings account
19        established under the Medical Care Savings Account Act
20        or the Medical Care Savings Account Act of 2000 on
21        behalf of the taxpayer, other than interest added
22        pursuant to item (D-5) of this paragraph (2);
23            (U) For one taxable year beginning on or after
24        January 1, 1994, an amount equal to the total amount of
25        tax imposed and paid under subsections (a) and (b) of
26        Section 201 of this Act on grant amounts received by

 

 

HB4004- 19 -LRB100 11829 HLH 23189 b

1        the taxpayer under the Nursing Home Grant Assistance
2        Act during the taxpayer's taxable years 1992 and 1993;
3            (V) Beginning with tax years ending on or after
4        December 31, 1995 and ending with tax years ending on
5        or before December 31, 2004, an amount equal to the
6        amount paid by a taxpayer who is a self-employed
7        taxpayer, a partner of a partnership, or a shareholder
8        in a Subchapter S corporation for health insurance or
9        long-term care insurance for that taxpayer or that
10        taxpayer's spouse or dependents, to the extent that the
11        amount paid for that health insurance or long-term care
12        insurance may be deducted under Section 213 of the
13        Internal Revenue Code, has not been deducted on the
14        federal income tax return of the taxpayer, and does not
15        exceed the taxable income attributable to that
16        taxpayer's income, self-employment income, or
17        Subchapter S corporation income; except that no
18        deduction shall be allowed under this item (V) if the
19        taxpayer is eligible to participate in any health
20        insurance or long-term care insurance plan of an
21        employer of the taxpayer or the taxpayer's spouse. The
22        amount of the health insurance and long-term care
23        insurance subtracted under this item (V) shall be
24        determined by multiplying total health insurance and
25        long-term care insurance premiums paid by the taxpayer
26        times a number that represents the fractional

 

 

HB4004- 20 -LRB100 11829 HLH 23189 b

1        percentage of eligible medical expenses under Section
2        213 of the Internal Revenue Code of 1986 not actually
3        deducted on the taxpayer's federal income tax return;
4            (W) For taxable years beginning on or after January
5        1, 1998, all amounts included in the taxpayer's federal
6        gross income in the taxable year from amounts converted
7        from a regular IRA to a Roth IRA. This paragraph is
8        exempt from the provisions of Section 250;
9            (X) For taxable year 1999 and thereafter, an amount
10        equal to the amount of any (i) distributions, to the
11        extent includible in gross income for federal income
12        tax purposes, made to the taxpayer because of his or
13        her status as a victim of persecution for racial or
14        religious reasons by Nazi Germany or any other Axis
15        regime or as an heir of the victim and (ii) items of
16        income, to the extent includible in gross income for
17        federal income tax purposes, attributable to, derived
18        from or in any way related to assets stolen from,
19        hidden from, or otherwise lost to a victim of
20        persecution for racial or religious reasons by Nazi
21        Germany or any other Axis regime immediately prior to,
22        during, and immediately after World War II, including,
23        but not limited to, interest on the proceeds receivable
24        as insurance under policies issued to a victim of
25        persecution for racial or religious reasons by Nazi
26        Germany or any other Axis regime by European insurance

 

 

HB4004- 21 -LRB100 11829 HLH 23189 b

1        companies immediately prior to and during World War II;
2        provided, however, this subtraction from federal
3        adjusted gross income does not apply to assets acquired
4        with such assets or with the proceeds from the sale of
5        such assets; provided, further, this paragraph shall
6        only apply to a taxpayer who was the first recipient of
7        such assets after their recovery and who is a victim of
8        persecution for racial or religious reasons by Nazi
9        Germany or any other Axis regime or as an heir of the
10        victim. The amount of and the eligibility for any
11        public assistance, benefit, or similar entitlement is
12        not affected by the inclusion of items (i) and (ii) of
13        this paragraph in gross income for federal income tax
14        purposes. This paragraph is exempt from the provisions
15        of Section 250;
16            (Y) For taxable years beginning on or after January
17        1, 2002 and ending on or before December 31, 2004,
18        moneys contributed in the taxable year to a College
19        Savings Pool account under Section 16.5 of the State
20        Treasurer Act, except that amounts excluded from gross
21        income under Section 529(c)(3)(C)(i) of the Internal
22        Revenue Code shall not be considered moneys
23        contributed under this subparagraph (Y). For taxable
24        years beginning on or after January 1, 2005, a maximum
25        of $10,000 contributed in the taxable year to (i) a
26        College Savings Pool account under Section 16.5 of the

 

 

HB4004- 22 -LRB100 11829 HLH 23189 b

1        State Treasurer Act or (ii) the Illinois Prepaid
2        Tuition Trust Fund, except that amounts excluded from
3        gross income under Section 529(c)(3)(C)(i) of the
4        Internal Revenue Code shall not be considered moneys
5        contributed under this subparagraph (Y). For purposes
6        of this subparagraph, contributions made by an
7        employer on behalf of an employee, or matching
8        contributions made by an employee, shall be treated as
9        made by the employee. This subparagraph (Y) is exempt
10        from the provisions of Section 250;
11            (Z) For taxable years 2001 and thereafter, for the
12        taxable year in which the bonus depreciation deduction
13        is taken on the taxpayer's federal income tax return
14        under subsection (k) of Section 168 of the Internal
15        Revenue Code and for each applicable taxable year
16        thereafter, an amount equal to "x", where:
17                (1) "y" equals the amount of the depreciation
18            deduction taken for the taxable year on the
19            taxpayer's federal income tax return on property
20            for which the bonus depreciation deduction was
21            taken in any year under subsection (k) of Section
22            168 of the Internal Revenue Code, but not including
23            the bonus depreciation deduction;
24                (2) for taxable years ending on or before
25            December 31, 2005, "x" equals "y" multiplied by 30
26            and then divided by 70 (or "y" multiplied by

 

 

HB4004- 23 -LRB100 11829 HLH 23189 b

1            0.429); and
2                (3) for taxable years ending after December
3            31, 2005:
4                    (i) for property on which a bonus
5                depreciation deduction of 30% of the adjusted
6                basis was taken, "x" equals "y" multiplied by
7                30 and then divided by 70 (or "y" multiplied by
8                0.429); and
9                    (ii) for property on which a bonus
10                depreciation deduction of 50% of the adjusted
11                basis was taken, "x" equals "y" multiplied by
12                1.0.
13            The aggregate amount deducted under this
14        subparagraph in all taxable years for any one piece of
15        property may not exceed the amount of the bonus
16        depreciation deduction taken on that property on the
17        taxpayer's federal income tax return under subsection
18        (k) of Section 168 of the Internal Revenue Code. This
19        subparagraph (Z) is exempt from the provisions of
20        Section 250;
21            (AA) If the taxpayer sells, transfers, abandons,
22        or otherwise disposes of property for which the
23        taxpayer was required in any taxable year to make an
24        addition modification under subparagraph (D-15), then
25        an amount equal to that addition modification.
26            If the taxpayer continues to own property through

 

 

HB4004- 24 -LRB100 11829 HLH 23189 b

1        the last day of the last tax year for which the
2        taxpayer may claim a depreciation deduction for
3        federal income tax purposes and for which the taxpayer
4        was required in any taxable year to make an addition
5        modification under subparagraph (D-15), then an amount
6        equal to that addition modification.
7            The taxpayer is allowed to take the deduction under
8        this subparagraph only once with respect to any one
9        piece of property.
10            This subparagraph (AA) is exempt from the
11        provisions of Section 250;
12            (BB) Any amount included in adjusted gross income,
13        other than salary, received by a driver in a
14        ridesharing arrangement using a motor vehicle;
15            (CC) The amount of (i) any interest income (net of
16        the deductions allocable thereto) taken into account
17        for the taxable year with respect to a transaction with
18        a taxpayer that is required to make an addition
19        modification with respect to such transaction under
20        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
21        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
22        the amount of that addition modification, and (ii) any
23        income from intangible property (net of the deductions
24        allocable thereto) taken into account for the taxable
25        year with respect to a transaction with a taxpayer that
26        is required to make an addition modification with

 

 

HB4004- 25 -LRB100 11829 HLH 23189 b

1        respect to such transaction under Section
2        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
3        203(d)(2)(D-8), but not to exceed the amount of that
4        addition modification. This subparagraph (CC) is
5        exempt from the provisions of Section 250;
6            (DD) An amount equal to the interest income taken
7        into account for the taxable year (net of the
8        deductions allocable thereto) with respect to
9        transactions with (i) a foreign person who would be a
10        member of the taxpayer's unitary business group but for
11        the fact that the foreign person's business activity
12        outside the United States is 80% or more of that
13        person's total business activity and (ii) for taxable
14        years ending on or after December 31, 2008, to a person
15        who would be a member of the same unitary business
16        group but for the fact that the person is prohibited
17        under Section 1501(a)(27) from being included in the
18        unitary business group because he or she is ordinarily
19        required to apportion business income under different
20        subsections of Section 304, but not to exceed the
21        addition modification required to be made for the same
22        taxable year under Section 203(a)(2)(D-17) for
23        interest paid, accrued, or incurred, directly or
24        indirectly, to the same person. This subparagraph (DD)
25        is exempt from the provisions of Section 250;
26            (EE) An amount equal to the income from intangible

 

 

HB4004- 26 -LRB100 11829 HLH 23189 b

1        property taken into account for the taxable year (net
2        of the deductions allocable thereto) with respect to
3        transactions with (i) a foreign person who would be a
4        member of the taxpayer's unitary business group but for
5        the fact that the foreign person's business activity
6        outside the United States is 80% or more of that
7        person's total business activity and (ii) for taxable
8        years ending on or after December 31, 2008, to a person
9        who would be a member of the same unitary business
10        group but for the fact that the person is prohibited
11        under Section 1501(a)(27) from being included in the
12        unitary business group because he or she is ordinarily
13        required to apportion business income under different
14        subsections of Section 304, but not to exceed the
15        addition modification required to be made for the same
16        taxable year under Section 203(a)(2)(D-18) for
17        intangible expenses and costs paid, accrued, or
18        incurred, directly or indirectly, to the same foreign
19        person. This subparagraph (EE) is exempt from the
20        provisions of Section 250;
21            (FF) An amount equal to any amount awarded to the
22        taxpayer during the taxable year by the Court of Claims
23        under subsection (c) of Section 8 of the Court of
24        Claims Act for time unjustly served in a State prison.
25        This subparagraph (FF) is exempt from the provisions of
26        Section 250; and

 

 

HB4004- 27 -LRB100 11829 HLH 23189 b

1            (GG) For taxable years ending on or after December
2        31, 2011, in the case of a taxpayer who was required to
3        add back any insurance premiums under Section
4        203(a)(2)(D-19), such taxpayer may elect to subtract
5        that part of a reimbursement received from the
6        insurance company equal to the amount of the expense or
7        loss (including expenses incurred by the insurance
8        company) that would have been taken into account as a
9        deduction for federal income tax purposes if the
10        expense or loss had been uninsured. If a taxpayer makes
11        the election provided for by this subparagraph (GG),
12        the insurer to which the premiums were paid must add
13        back to income the amount subtracted by the taxpayer
14        pursuant to this subparagraph (GG). This subparagraph
15        (GG) is exempt from the provisions of Section 250.
 
16    (b) Corporations.
17        (1) In general. In the case of a corporation, base
18    income means an amount equal to the taxpayer's taxable
19    income for the taxable year as modified by paragraph (2).
20        (2) Modifications. The taxable income referred to in
21    paragraph (1) shall be modified by adding thereto the sum
22    of the following amounts:
23            (A) An amount equal to all amounts paid or accrued
24        to the taxpayer as interest and all distributions
25        received from regulated investment companies during

 

 

HB4004- 28 -LRB100 11829 HLH 23189 b

1        the taxable year to the extent excluded from gross
2        income in the computation of taxable income;
3            (B) An amount equal to the amount of tax imposed by
4        this Act to the extent deducted from gross income in
5        the computation of taxable income for the taxable year;
6            (C) In the case of a regulated investment company,
7        an amount equal to the excess of (i) the net long-term
8        capital gain for the taxable year, over (ii) the amount
9        of the capital gain dividends designated as such in
10        accordance with Section 852(b)(3)(C) of the Internal
11        Revenue Code and any amount designated under Section
12        852(b)(3)(D) of the Internal Revenue Code,
13        attributable to the taxable year (this amendatory Act
14        of 1995 (Public Act 89-89) is declarative of existing
15        law and is not a new enactment);
16            (D) The amount of any net operating loss deduction
17        taken in arriving at taxable income, other than a net
18        operating loss carried forward from a taxable year
19        ending prior to December 31, 1986;
20            (E) For taxable years in which a net operating loss
21        carryback or carryforward from a taxable year ending
22        prior to December 31, 1986 is an element of taxable
23        income under paragraph (1) of subsection (e) or
24        subparagraph (E) of paragraph (2) of subsection (e),
25        the amount by which addition modifications other than
26        those provided by this subparagraph (E) exceeded

 

 

HB4004- 29 -LRB100 11829 HLH 23189 b

1        subtraction modifications in such earlier taxable
2        year, with the following limitations applied in the
3        order that they are listed:
4                (i) the addition modification relating to the
5            net operating loss carried back or forward to the
6            taxable year from any taxable year ending prior to
7            December 31, 1986 shall be reduced by the amount of
8            addition modification under this subparagraph (E)
9            which related to that net operating loss and which
10            was taken into account in calculating the base
11            income of an earlier taxable year, and
12                (ii) the addition modification relating to the
13            net operating loss carried back or forward to the
14            taxable year from any taxable year ending prior to
15            December 31, 1986 shall not exceed the amount of
16            such carryback or carryforward;
17            For taxable years in which there is a net operating
18        loss carryback or carryforward from more than one other
19        taxable year ending prior to December 31, 1986, the
20        addition modification provided in this subparagraph
21        (E) shall be the sum of the amounts computed
22        independently under the preceding provisions of this
23        subparagraph (E) for each such taxable year;
24            (E-5) For taxable years ending after December 31,
25        1997, an amount equal to any eligible remediation costs
26        that the corporation deducted in computing adjusted

 

 

HB4004- 30 -LRB100 11829 HLH 23189 b

1        gross income and for which the corporation claims a
2        credit under subsection (l) of Section 201;
3            (E-10) For taxable years 2001 and thereafter, an
4        amount equal to the bonus depreciation deduction taken
5        on the taxpayer's federal income tax return for the
6        taxable year under subsection (k) of Section 168 of the
7        Internal Revenue Code;
8            (E-11) If the taxpayer sells, transfers, abandons,
9        or otherwise disposes of property for which the
10        taxpayer was required in any taxable year to make an
11        addition modification under subparagraph (E-10), then
12        an amount equal to the aggregate amount of the
13        deductions taken in all taxable years under
14        subparagraph (T) with respect to that property.
15            If the taxpayer continues to own property through
16        the last day of the last tax year for which the
17        taxpayer may claim a depreciation deduction for
18        federal income tax purposes and for which the taxpayer
19        was allowed in any taxable year to make a subtraction
20        modification under subparagraph (T), then an amount
21        equal to that subtraction modification.
22            The taxpayer is required to make the addition
23        modification under this subparagraph only once with
24        respect to any one piece of property;
25            (E-12) An amount equal to the amount otherwise
26        allowed as a deduction in computing base income for

 

 

HB4004- 31 -LRB100 11829 HLH 23189 b

1        interest paid, accrued, or incurred, directly or
2        indirectly, (i) for taxable years ending on or after
3        December 31, 2004, to a foreign person who would be a
4        member of the same unitary business group but for the
5        fact the foreign person's business activity outside
6        the United States is 80% or more of the foreign
7        person's total business activity and (ii) for taxable
8        years ending on or after December 31, 2008, to a person
9        who would be a member of the same unitary business
10        group but for the fact that the person is prohibited
11        under Section 1501(a)(27) from being included in the
12        unitary business group because he or she is ordinarily
13        required to apportion business income under different
14        subsections of Section 304. The addition modification
15        required by this subparagraph shall be reduced to the
16        extent that dividends were included in base income of
17        the unitary group for the same taxable year and
18        received by the taxpayer or by a member of the
19        taxpayer's unitary business group (including amounts
20        included in gross income pursuant to Sections 951
21        through 964 of the Internal Revenue Code and amounts
22        included in gross income under Section 78 of the
23        Internal Revenue Code) with respect to the stock of the
24        same person to whom the interest was paid, accrued, or
25        incurred.
26            This paragraph shall not apply to the following:

 

 

HB4004- 32 -LRB100 11829 HLH 23189 b

1                (i) an item of interest paid, accrued, or
2            incurred, directly or indirectly, to a person who
3            is subject in a foreign country or state, other
4            than a state which requires mandatory unitary
5            reporting, to a tax on or measured by net income
6            with respect to such interest; or
7                (ii) an item of interest paid, accrued, or
8            incurred, directly or indirectly, to a person if
9            the taxpayer can establish, based on a
10            preponderance of the evidence, both of the
11            following:
12                    (a) the person, during the same taxable
13                year, paid, accrued, or incurred, the interest
14                to a person that is not a related member, and
15                    (b) the transaction giving rise to the
16                interest expense between the taxpayer and the
17                person did not have as a principal purpose the
18                avoidance of Illinois income tax, and is paid
19                pursuant to a contract or agreement that
20                reflects an arm's-length interest rate and
21                terms; or
22                (iii) the taxpayer can establish, based on
23            clear and convincing evidence, that the interest
24            paid, accrued, or incurred relates to a contract or
25            agreement entered into at arm's-length rates and
26            terms and the principal purpose for the payment is

 

 

HB4004- 33 -LRB100 11829 HLH 23189 b

1            not federal or Illinois tax avoidance; or
2                (iv) an item of interest paid, accrued, or
3            incurred, directly or indirectly, to a person if
4            the taxpayer establishes by clear and convincing
5            evidence that the adjustments are unreasonable; or
6            if the taxpayer and the Director agree in writing
7            to the application or use of an alternative method
8            of apportionment under Section 304(f).
9                Nothing in this subsection shall preclude the
10            Director from making any other adjustment
11            otherwise allowed under Section 404 of this Act for
12            any tax year beginning after the effective date of
13            this amendment provided such adjustment is made
14            pursuant to regulation adopted by the Department
15            and such regulations provide methods and standards
16            by which the Department will utilize its authority
17            under Section 404 of this Act;
18            (E-13) An amount equal to the amount of intangible
19        expenses and costs otherwise allowed as a deduction in
20        computing base income, and that were paid, accrued, or
21        incurred, directly or indirectly, (i) for taxable
22        years ending on or after December 31, 2004, to a
23        foreign person who would be a member of the same
24        unitary business group but for the fact that the
25        foreign person's business activity outside the United
26        States is 80% or more of that person's total business

 

 

HB4004- 34 -LRB100 11829 HLH 23189 b

1        activity and (ii) for taxable years ending on or after
2        December 31, 2008, to a person who would be a member of
3        the same unitary business group but for the fact that
4        the person is prohibited under Section 1501(a)(27)
5        from being included in the unitary business group
6        because he or she is ordinarily required to apportion
7        business income under different subsections of Section
8        304. The addition modification required by this
9        subparagraph shall be reduced to the extent that
10        dividends were included in base income of the unitary
11        group for the same taxable year and received by the
12        taxpayer or by a member of the taxpayer's unitary
13        business group (including amounts included in gross
14        income pursuant to Sections 951 through 964 of the
15        Internal Revenue Code and amounts included in gross
16        income under Section 78 of the Internal Revenue Code)
17        with respect to the stock of the same person to whom
18        the intangible expenses and costs were directly or
19        indirectly paid, incurred, or accrued. The preceding
20        sentence shall not apply to the extent that the same
21        dividends caused a reduction to the addition
22        modification required under Section 203(b)(2)(E-12) of
23        this Act. As used in this subparagraph, the term
24        "intangible expenses and costs" includes (1) expenses,
25        losses, and costs for, or related to, the direct or
26        indirect acquisition, use, maintenance or management,

 

 

HB4004- 35 -LRB100 11829 HLH 23189 b

1        ownership, sale, exchange, or any other disposition of
2        intangible property; (2) losses incurred, directly or
3        indirectly, from factoring transactions or discounting
4        transactions; (3) royalty, patent, technical, and
5        copyright fees; (4) licensing fees; and (5) other
6        similar expenses and costs. For purposes of this
7        subparagraph, "intangible property" includes patents,
8        patent applications, trade names, trademarks, service
9        marks, copyrights, mask works, trade secrets, and
10        similar types of intangible assets.
11            This paragraph shall not apply to the following:
12                (i) any item of intangible expenses or costs
13            paid, accrued, or incurred, directly or
14            indirectly, from a transaction with a person who is
15            subject in a foreign country or state, other than a
16            state which requires mandatory unitary reporting,
17            to a tax on or measured by net income with respect
18            to such item; or
19                (ii) any item of intangible expense or cost
20            paid, accrued, or incurred, directly or
21            indirectly, if the taxpayer can establish, based
22            on a preponderance of the evidence, both of the
23            following:
24                    (a) the person during the same taxable
25                year paid, accrued, or incurred, the
26                intangible expense or cost to a person that is

 

 

HB4004- 36 -LRB100 11829 HLH 23189 b

1                not a related member, and
2                    (b) the transaction giving rise to the
3                intangible expense or cost between the
4                taxpayer and the person did not have as a
5                principal purpose the avoidance of Illinois
6                income tax, and is paid pursuant to a contract
7                or agreement that reflects arm's-length terms;
8                or
9                (iii) any item of intangible expense or cost
10            paid, accrued, or incurred, directly or
11            indirectly, from a transaction with a person if the
12            taxpayer establishes by clear and convincing
13            evidence, that the adjustments are unreasonable;
14            or if the taxpayer and the Director agree in
15            writing to the application or use of an alternative
16            method of apportionment under Section 304(f);
17                Nothing in this subsection shall preclude the
18            Director from making any other adjustment
19            otherwise allowed under Section 404 of this Act for
20            any tax year beginning after the effective date of
21            this amendment provided such adjustment is made
22            pursuant to regulation adopted by the Department
23            and such regulations provide methods and standards
24            by which the Department will utilize its authority
25            under Section 404 of this Act;
26            (E-14) For taxable years ending on or after

 

 

HB4004- 37 -LRB100 11829 HLH 23189 b

1        December 31, 2008, an amount equal to the amount of
2        insurance premium expenses and costs otherwise allowed
3        as a deduction in computing base income, and that were
4        paid, accrued, or incurred, directly or indirectly, to
5        a person who would be a member of the same unitary
6        business group but for the fact that the person is
7        prohibited under Section 1501(a)(27) from being
8        included in the unitary business group because he or
9        she is ordinarily required to apportion business
10        income under different subsections of Section 304. The
11        addition modification required by this subparagraph
12        shall be reduced to the extent that dividends were
13        included in base income of the unitary group for the
14        same taxable year and received by the taxpayer or by a
15        member of the taxpayer's unitary business group
16        (including amounts included in gross income under
17        Sections 951 through 964 of the Internal Revenue Code
18        and amounts included in gross income under Section 78
19        of the Internal Revenue Code) with respect to the stock
20        of the same person to whom the premiums and costs were
21        directly or indirectly paid, incurred, or accrued. The
22        preceding sentence does not apply to the extent that
23        the same dividends caused a reduction to the addition
24        modification required under Section 203(b)(2)(E-12) or
25        Section 203(b)(2)(E-13) of this Act;
26            (E-15) For taxable years beginning after December

 

 

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1        31, 2008, any deduction for dividends paid by a captive
2        real estate investment trust that is allowed to a real
3        estate investment trust under Section 857(b)(2)(B) of
4        the Internal Revenue Code for dividends paid;
5            (E-16) An amount equal to the credit allowable to
6        the taxpayer under Section 218(a) of this Act,
7        determined without regard to Section 218(c) of this
8        Act;
9            (E-17) For taxable years ending on or after
10        December 31, 2017, an amount equal to the deduction
11        allowed under Section 199 of the Internal Revenue Code
12        for the taxable year;
13    and by deducting from the total so obtained the sum of the
14    following amounts:
15            (F) An amount equal to the amount of any tax
16        imposed by this Act which was refunded to the taxpayer
17        and included in such total for the taxable year;
18            (G) An amount equal to any amount included in such
19        total under Section 78 of the Internal Revenue Code;
20            (H) In the case of a regulated investment company,
21        an amount equal to the amount of exempt interest
22        dividends as defined in subsection (b) (5) of Section
23        852 of the Internal Revenue Code, paid to shareholders
24        for the taxable year;
25            (I) With the exception of any amounts subtracted
26        under subparagraph (J), an amount equal to the sum of

 

 

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1        all amounts disallowed as deductions by (i) Sections
2        171(a) (2), and 265(a)(2) and amounts disallowed as
3        interest expense by Section 291(a)(3) of the Internal
4        Revenue Code, and all amounts of expenses allocable to
5        interest and disallowed as deductions by Section
6        265(a)(1) of the Internal Revenue Code; and (ii) for
7        taxable years ending on or after August 13, 1999,
8        Sections 171(a)(2), 265, 280C, 291(a)(3), and
9        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
10        for tax years ending on or after December 31, 2011,
11        amounts disallowed as deductions by Section 45G(e)(3)
12        of the Internal Revenue Code and, for taxable years
13        ending on or after December 31, 2008, any amount
14        included in gross income under Section 87 of the
15        Internal Revenue Code and the policyholders' share of
16        tax-exempt interest of a life insurance company under
17        Section 807(a)(2)(B) of the Internal Revenue Code (in
18        the case of a life insurance company with gross income
19        from a decrease in reserves for the tax year) or
20        Section 807(b)(1)(B) of the Internal Revenue Code (in
21        the case of a life insurance company allowed a
22        deduction for an increase in reserves for the tax
23        year); the provisions of this subparagraph are exempt
24        from the provisions of Section 250;
25            (J) An amount equal to all amounts included in such
26        total which are exempt from taxation by this State

 

 

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1        either by reason of its statutes or Constitution or by
2        reason of the Constitution, treaties or statutes of the
3        United States; provided that, in the case of any
4        statute of this State that exempts income derived from
5        bonds or other obligations from the tax imposed under
6        this Act, the amount exempted shall be the interest net
7        of bond premium amortization;
8            (K) An amount equal to those dividends included in
9        such total which were paid by a corporation which
10        conducts business operations in a River Edge
11        Redevelopment Zone or zones created under the River
12        Edge Redevelopment Zone Act and conducts substantially
13        all of its operations in a River Edge Redevelopment
14        Zone or zones. This subparagraph (K) is exempt from the
15        provisions of Section 250;
16            (L) An amount equal to those dividends included in
17        such total that were paid by a corporation that
18        conducts business operations in a federally designated
19        Foreign Trade Zone or Sub-Zone and that is designated a
20        High Impact Business located in Illinois; provided
21        that dividends eligible for the deduction provided in
22        subparagraph (K) of paragraph 2 of this subsection
23        shall not be eligible for the deduction provided under
24        this subparagraph (L);
25            (M) For any taxpayer that is a financial
26        organization within the meaning of Section 304(c) of

 

 

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1        this Act, an amount included in such total as interest
2        income from a loan or loans made by such taxpayer to a
3        borrower, to the extent that such a loan is secured by
4        property which is eligible for the River Edge
5        Redevelopment Zone Investment Credit. To determine the
6        portion of a loan or loans that is secured by property
7        eligible for a Section 201(f) investment credit to the
8        borrower, the entire principal amount of the loan or
9        loans between the taxpayer and the borrower should be
10        divided into the basis of the Section 201(f) investment
11        credit property which secures the loan or loans, using
12        for this purpose the original basis of such property on
13        the date that it was placed in service in the River
14        Edge Redevelopment Zone. The subtraction modification
15        available to taxpayer in any year under this subsection
16        shall be that portion of the total interest paid by the
17        borrower with respect to such loan attributable to the
18        eligible property as calculated under the previous
19        sentence. This subparagraph (M) is exempt from the
20        provisions of Section 250;
21            (M-1) For any taxpayer that is a financial
22        organization within the meaning of Section 304(c) of
23        this Act, an amount included in such total as interest
24        income from a loan or loans made by such taxpayer to a
25        borrower, to the extent that such a loan is secured by
26        property which is eligible for the High Impact Business

 

 

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1        Investment Credit. To determine the portion of a loan
2        or loans that is secured by property eligible for a
3        Section 201(h) investment credit to the borrower, the
4        entire principal amount of the loan or loans between
5        the taxpayer and the borrower should be divided into
6        the basis of the Section 201(h) investment credit
7        property which secures the loan or loans, using for
8        this purpose the original basis of such property on the
9        date that it was placed in service in a federally
10        designated Foreign Trade Zone or Sub-Zone located in
11        Illinois. No taxpayer that is eligible for the
12        deduction provided in subparagraph (M) of paragraph
13        (2) of this subsection shall be eligible for the
14        deduction provided under this subparagraph (M-1). The
15        subtraction modification available to taxpayers in any
16        year under this subsection shall be that portion of the
17        total interest paid by the borrower with respect to
18        such loan attributable to the eligible property as
19        calculated under the previous sentence;
20            (N) Two times any contribution made during the
21        taxable year to a designated zone organization to the
22        extent that the contribution (i) qualifies as a
23        charitable contribution under subsection (c) of
24        Section 170 of the Internal Revenue Code and (ii) must,
25        by its terms, be used for a project approved by the
26        Department of Commerce and Economic Opportunity under

 

 

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1        Section 11 of the Illinois Enterprise Zone Act or under
2        Section 10-10 of the River Edge Redevelopment Zone Act.
3        This subparagraph (N) is exempt from the provisions of
4        Section 250;
5            (O) An amount equal to: (i) 85% for taxable years
6        ending on or before December 31, 1992, or, a percentage
7        equal to the percentage allowable under Section
8        243(a)(1) of the Internal Revenue Code of 1986 for
9        taxable years ending after December 31, 1992, of the
10        amount by which dividends included in taxable income
11        and received from a corporation that is not created or
12        organized under the laws of the United States or any
13        state or political subdivision thereof, including, for
14        taxable years ending on or after December 31, 1988,
15        dividends received or deemed received or paid or deemed
16        paid under Sections 951 through 965 of the Internal
17        Revenue Code, exceed the amount of the modification
18        provided under subparagraph (G) of paragraph (2) of
19        this subsection (b) which is related to such dividends,
20        and including, for taxable years ending on or after
21        December 31, 2008, dividends received from a captive
22        real estate investment trust; plus (ii) 100% of the
23        amount by which dividends, included in taxable income
24        and received, including, for taxable years ending on or
25        after December 31, 1988, dividends received or deemed
26        received or paid or deemed paid under Sections 951

 

 

HB4004- 44 -LRB100 11829 HLH 23189 b

1        through 964 of the Internal Revenue Code and including,
2        for taxable years ending on or after December 31, 2008,
3        dividends received from a captive real estate
4        investment trust, from any such corporation specified
5        in clause (i) that would but for the provisions of
6        Section 1504 (b) (3) of the Internal Revenue Code be
7        treated as a member of the affiliated group which
8        includes the dividend recipient, exceed the amount of
9        the modification provided under subparagraph (G) of
10        paragraph (2) of this subsection (b) which is related
11        to such dividends. This subparagraph (O) is exempt from
12        the provisions of Section 250 of this Act;
13            (P) An amount equal to any contribution made to a
14        job training project established pursuant to the Tax
15        Increment Allocation Redevelopment Act;
16            (Q) An amount equal to the amount of the deduction
17        used to compute the federal income tax credit for
18        restoration of substantial amounts held under claim of
19        right for the taxable year pursuant to Section 1341 of
20        the Internal Revenue Code;
21            (R) On and after July 20, 1999, in the case of an
22        attorney-in-fact with respect to whom an interinsurer
23        or a reciprocal insurer has made the election under
24        Section 835 of the Internal Revenue Code, 26 U.S.C.
25        835, an amount equal to the excess, if any, of the
26        amounts paid or incurred by that interinsurer or

 

 

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1        reciprocal insurer in the taxable year to the
2        attorney-in-fact over the deduction allowed to that
3        interinsurer or reciprocal insurer with respect to the
4        attorney-in-fact under Section 835(b) of the Internal
5        Revenue Code for the taxable year; the provisions of
6        this subparagraph are exempt from the provisions of
7        Section 250;
8            (S) For taxable years ending on or after December
9        31, 1997, in the case of a Subchapter S corporation, an
10        amount equal to all amounts of income allocable to a
11        shareholder subject to the Personal Property Tax
12        Replacement Income Tax imposed by subsections (c) and
13        (d) of Section 201 of this Act, including amounts
14        allocable to organizations exempt from federal income
15        tax by reason of Section 501(a) of the Internal Revenue
16        Code. This subparagraph (S) is exempt from the
17        provisions of Section 250;
18            (T) For taxable years 2001 and thereafter, for the
19        taxable year in which the bonus depreciation deduction
20        is taken on the taxpayer's federal income tax return
21        under subsection (k) of Section 168 of the Internal
22        Revenue Code and for each applicable taxable year
23        thereafter, an amount equal to "x", where:
24                (1) "y" equals the amount of the depreciation
25            deduction taken for the taxable year on the
26            taxpayer's federal income tax return on property

 

 

HB4004- 46 -LRB100 11829 HLH 23189 b

1            for which the bonus depreciation deduction was
2            taken in any year under subsection (k) of Section
3            168 of the Internal Revenue Code, but not including
4            the bonus depreciation deduction;
5                (2) for taxable years ending on or before
6            December 31, 2005, "x" equals "y" multiplied by 30
7            and then divided by 70 (or "y" multiplied by
8            0.429); and
9                (3) for taxable years ending after December
10            31, 2005:
11                    (i) for property on which a bonus
12                depreciation deduction of 30% of the adjusted
13                basis was taken, "x" equals "y" multiplied by
14                30 and then divided by 70 (or "y" multiplied by
15                0.429); and
16                    (ii) for property on which a bonus
17                depreciation deduction of 50% of the adjusted
18                basis was taken, "x" equals "y" multiplied by
19                1.0.
20            The aggregate amount deducted under this
21        subparagraph in all taxable years for any one piece of
22        property may not exceed the amount of the bonus
23        depreciation deduction taken on that property on the
24        taxpayer's federal income tax return under subsection
25        (k) of Section 168 of the Internal Revenue Code. This
26        subparagraph (T) is exempt from the provisions of

 

 

HB4004- 47 -LRB100 11829 HLH 23189 b

1        Section 250;
2            (U) If the taxpayer sells, transfers, abandons, or
3        otherwise disposes of property for which the taxpayer
4        was required in any taxable year to make an addition
5        modification under subparagraph (E-10), then an amount
6        equal to that addition modification.
7            If the taxpayer continues to own property through
8        the last day of the last tax year for which the
9        taxpayer may claim a depreciation deduction for
10        federal income tax purposes and for which the taxpayer
11        was required in any taxable year to make an addition
12        modification under subparagraph (E-10), then an amount
13        equal to that addition modification.
14            The taxpayer is allowed to take the deduction under
15        this subparagraph only once with respect to any one
16        piece of property.
17            This subparagraph (U) is exempt from the
18        provisions of Section 250;
19            (V) The amount of: (i) any interest income (net of
20        the deductions allocable thereto) taken into account
21        for the taxable year with respect to a transaction with
22        a taxpayer that is required to make an addition
23        modification with respect to such transaction under
24        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
25        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
26        the amount of such addition modification, (ii) any

 

 

HB4004- 48 -LRB100 11829 HLH 23189 b

1        income from intangible property (net of the deductions
2        allocable thereto) taken into account for the taxable
3        year with respect to a transaction with a taxpayer that
4        is required to make an addition modification with
5        respect to such transaction under Section
6        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
7        203(d)(2)(D-8), but not to exceed the amount of such
8        addition modification, and (iii) any insurance premium
9        income (net of deductions allocable thereto) taken
10        into account for the taxable year with respect to a
11        transaction with a taxpayer that is required to make an
12        addition modification with respect to such transaction
13        under Section 203(a)(2)(D-19), Section
14        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
15        203(d)(2)(D-9), but not to exceed the amount of that
16        addition modification. This subparagraph (V) is exempt
17        from the provisions of Section 250;
18            (W) An amount equal to the interest income taken
19        into account for the taxable year (net of the
20        deductions allocable thereto) with respect to
21        transactions with (i) a foreign person who would be a
22        member of the taxpayer's unitary business group but for
23        the fact that the foreign person's business activity
24        outside the United States is 80% or more of that
25        person's total business activity and (ii) for taxable
26        years ending on or after December 31, 2008, to a person

 

 

HB4004- 49 -LRB100 11829 HLH 23189 b

1        who would be a member of the same unitary business
2        group but for the fact that the person is prohibited
3        under Section 1501(a)(27) from being included in the
4        unitary business group because he or she is ordinarily
5        required to apportion business income under different
6        subsections of Section 304, but not to exceed the
7        addition modification required to be made for the same
8        taxable year under Section 203(b)(2)(E-12) for
9        interest paid, accrued, or incurred, directly or
10        indirectly, to the same person. This subparagraph (W)
11        is exempt from the provisions of Section 250;
12            (X) An amount equal to the income from intangible
13        property taken into account for the taxable year (net
14        of the deductions allocable thereto) with respect to
15        transactions with (i) a foreign person who would be a
16        member of the taxpayer's unitary business group but for
17        the fact that the foreign person's business activity
18        outside the United States is 80% or more of that
19        person's total business activity and (ii) for taxable
20        years ending on or after December 31, 2008, to a person
21        who would be a member of the same unitary business
22        group but for the fact that the person is prohibited
23        under Section 1501(a)(27) from being included in the
24        unitary business group because he or she is ordinarily
25        required to apportion business income under different
26        subsections of Section 304, but not to exceed the

 

 

HB4004- 50 -LRB100 11829 HLH 23189 b

1        addition modification required to be made for the same
2        taxable year under Section 203(b)(2)(E-13) for
3        intangible expenses and costs paid, accrued, or
4        incurred, directly or indirectly, to the same foreign
5        person. This subparagraph (X) is exempt from the
6        provisions of Section 250;
7            (Y) For taxable years ending on or after December
8        31, 2011, in the case of a taxpayer who was required to
9        add back any insurance premiums under Section
10        203(b)(2)(E-14), such taxpayer may elect to subtract
11        that part of a reimbursement received from the
12        insurance company equal to the amount of the expense or
13        loss (including expenses incurred by the insurance
14        company) that would have been taken into account as a
15        deduction for federal income tax purposes if the
16        expense or loss had been uninsured. If a taxpayer makes
17        the election provided for by this subparagraph (Y), the
18        insurer to which the premiums were paid must add back
19        to income the amount subtracted by the taxpayer
20        pursuant to this subparagraph (Y). This subparagraph
21        (Y) is exempt from the provisions of Section 250; and
22            (Z) The difference between the nondeductible
23        controlled foreign corporation dividends under Section
24        965(e)(3) of the Internal Revenue Code over the taxable
25        income of the taxpayer, computed without regard to
26        Section 965(e)(2)(A) of the Internal Revenue Code, and

 

 

HB4004- 51 -LRB100 11829 HLH 23189 b

1        without regard to any net operating loss deduction.
2        This subparagraph (Z) is exempt from the provisions of
3        Section 250.
4        (3) Special rule. For purposes of paragraph (2) (A),
5    "gross income" in the case of a life insurance company, for
6    tax years ending on and after December 31, 1994, and prior
7    to December 31, 2011, shall mean the gross investment
8    income for the taxable year and, for tax years ending on or
9    after December 31, 2011, shall mean all amounts included in
10    life insurance gross income under Section 803(a)(3) of the
11    Internal Revenue Code.
 
12    (c) Trusts and estates.
13        (1) In general. In the case of a trust or estate, base
14    income means an amount equal to the taxpayer's taxable
15    income for the taxable year as modified by paragraph (2).
16        (2) Modifications. Subject to the provisions of
17    paragraph (3), the taxable income referred to in paragraph
18    (1) shall be modified by adding thereto the sum of the
19    following amounts:
20            (A) An amount equal to all amounts paid or accrued
21        to the taxpayer as interest or dividends during the
22        taxable year to the extent excluded from gross income
23        in the computation of taxable income;
24            (B) In the case of (i) an estate, $600; (ii) a
25        trust which, under its governing instrument, is

 

 

HB4004- 52 -LRB100 11829 HLH 23189 b

1        required to distribute all of its income currently,
2        $300; and (iii) any other trust, $100, but in each such
3        case, only to the extent such amount was deducted in
4        the computation of taxable income;
5            (C) An amount equal to the amount of tax imposed by
6        this Act to the extent deducted from gross income in
7        the computation of taxable income for the taxable year;
8            (D) The amount of any net operating loss deduction
9        taken in arriving at taxable income, other than a net
10        operating loss carried forward from a taxable year
11        ending prior to December 31, 1986;
12            (E) For taxable years in which a net operating loss
13        carryback or carryforward from a taxable year ending
14        prior to December 31, 1986 is an element of taxable
15        income under paragraph (1) of subsection (e) or
16        subparagraph (E) of paragraph (2) of subsection (e),
17        the amount by which addition modifications other than
18        those provided by this subparagraph (E) exceeded
19        subtraction modifications in such taxable year, with
20        the following limitations applied in the order that
21        they are listed:
22                (i) the addition modification relating to the
23            net operating loss carried back or forward to the
24            taxable year from any taxable year ending prior to
25            December 31, 1986 shall be reduced by the amount of
26            addition modification under this subparagraph (E)

 

 

HB4004- 53 -LRB100 11829 HLH 23189 b

1            which related to that net operating loss and which
2            was taken into account in calculating the base
3            income of an earlier taxable year, and
4                (ii) the addition modification relating to the
5            net operating loss carried back or forward to the
6            taxable year from any taxable year ending prior to
7            December 31, 1986 shall not exceed the amount of
8            such carryback or carryforward;
9            For taxable years in which there is a net operating
10        loss carryback or carryforward from more than one other
11        taxable year ending prior to December 31, 1986, the
12        addition modification provided in this subparagraph
13        (E) shall be the sum of the amounts computed
14        independently under the preceding provisions of this
15        subparagraph (E) for each such taxable year;
16            (F) For taxable years ending on or after January 1,
17        1989, an amount equal to the tax deducted pursuant to
18        Section 164 of the Internal Revenue Code if the trust
19        or estate is claiming the same tax for purposes of the
20        Illinois foreign tax credit under Section 601 of this
21        Act;
22            (G) An amount equal to the amount of the capital
23        gain deduction allowable under the Internal Revenue
24        Code, to the extent deducted from gross income in the
25        computation of taxable income;
26            (G-5) For taxable years ending after December 31,

 

 

HB4004- 54 -LRB100 11829 HLH 23189 b

1        1997, an amount equal to any eligible remediation costs
2        that the trust or estate deducted in computing adjusted
3        gross income and for which the trust or estate claims a
4        credit under subsection (l) of Section 201;
5            (G-10) For taxable years 2001 and thereafter, an
6        amount equal to the bonus depreciation deduction taken
7        on the taxpayer's federal income tax return for the
8        taxable year under subsection (k) of Section 168 of the
9        Internal Revenue Code; and
10            (G-11) If the taxpayer sells, transfers, abandons,
11        or otherwise disposes of property for which the
12        taxpayer was required in any taxable year to make an
13        addition modification under subparagraph (G-10), then
14        an amount equal to the aggregate amount of the
15        deductions taken in all taxable years under
16        subparagraph (R) with respect to that property.
17            If the taxpayer continues to own property through
18        the last day of the last tax year for which the
19        taxpayer may claim a depreciation deduction for
20        federal income tax purposes and for which the taxpayer
21        was allowed in any taxable year to make a subtraction
22        modification under subparagraph (R), then an amount
23        equal to that subtraction modification.
24            The taxpayer is required to make the addition
25        modification under this subparagraph only once with
26        respect to any one piece of property;

 

 

HB4004- 55 -LRB100 11829 HLH 23189 b

1            (G-12) An amount equal to the amount otherwise
2        allowed as a deduction in computing base income for
3        interest paid, accrued, or incurred, directly or
4        indirectly, (i) for taxable years ending on or after
5        December 31, 2004, to a foreign person who would be a
6        member of the same unitary business group but for the
7        fact that the foreign person's business activity
8        outside the United States is 80% or more of the foreign
9        person's total business activity and (ii) for taxable
10        years ending on or after December 31, 2008, to a person
11        who would be a member of the same unitary business
12        group but for the fact that the person is prohibited
13        under Section 1501(a)(27) from being included in the
14        unitary business group because he or she is ordinarily
15        required to apportion business income under different
16        subsections of Section 304. The addition modification
17        required by this subparagraph shall be reduced to the
18        extent that dividends were included in base income of
19        the unitary group for the same taxable year and
20        received by the taxpayer or by a member of the
21        taxpayer's unitary business group (including amounts
22        included in gross income pursuant to Sections 951
23        through 964 of the Internal Revenue Code and amounts
24        included in gross income under Section 78 of the
25        Internal Revenue Code) with respect to the stock of the
26        same person to whom the interest was paid, accrued, or

 

 

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1        incurred.
2            This paragraph shall not apply to the following:
3                (i) an item of interest paid, accrued, or
4            incurred, directly or indirectly, to a person who
5            is subject in a foreign country or state, other
6            than a state which requires mandatory unitary
7            reporting, to a tax on or measured by net income
8            with respect to such interest; or
9                (ii) an item of interest paid, accrued, or
10            incurred, directly or indirectly, to a person if
11            the taxpayer can establish, based on a
12            preponderance of the evidence, both of the
13            following:
14                    (a) the person, during the same taxable
15                year, paid, accrued, or incurred, the interest
16                to a person that is not a related member, and
17                    (b) the transaction giving rise to the
18                interest expense between the taxpayer and the
19                person did not have as a principal purpose the
20                avoidance of Illinois income tax, and is paid
21                pursuant to a contract or agreement that
22                reflects an arm's-length interest rate and
23                terms; or
24                (iii) the taxpayer can establish, based on
25            clear and convincing evidence, that the interest
26            paid, accrued, or incurred relates to a contract or

 

 

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1            agreement entered into at arm's-length rates and
2            terms and the principal purpose for the payment is
3            not federal or Illinois tax avoidance; or
4                (iv) an item of interest paid, accrued, or
5            incurred, directly or indirectly, to a person if
6            the taxpayer establishes by clear and convincing
7            evidence that the adjustments are unreasonable; or
8            if the taxpayer and the Director agree in writing
9            to the application or use of an alternative method
10            of apportionment under Section 304(f).
11                Nothing in this subsection shall preclude the
12            Director from making any other adjustment
13            otherwise allowed under Section 404 of this Act for
14            any tax year beginning after the effective date of
15            this amendment provided such adjustment is made
16            pursuant to regulation adopted by the Department
17            and such regulations provide methods and standards
18            by which the Department will utilize its authority
19            under Section 404 of this Act;
20            (G-13) An amount equal to the amount of intangible
21        expenses and costs otherwise allowed as a deduction in
22        computing base income, and that were paid, accrued, or
23        incurred, directly or indirectly, (i) for taxable
24        years ending on or after December 31, 2004, to a
25        foreign person who would be a member of the same
26        unitary business group but for the fact that the

 

 

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1        foreign person's business activity outside the United
2        States is 80% or more of that person's total business
3        activity and (ii) for taxable years ending on or after
4        December 31, 2008, to a person who would be a member of
5        the same unitary business group but for the fact that
6        the person is prohibited under Section 1501(a)(27)
7        from being included in the unitary business group
8        because he or she is ordinarily required to apportion
9        business income under different subsections of Section
10        304. The addition modification required by this
11        subparagraph shall be reduced to the extent that
12        dividends were included in base income of the unitary
13        group for the same taxable year and received by the
14        taxpayer or by a member of the taxpayer's unitary
15        business group (including amounts included in gross
16        income pursuant to Sections 951 through 964 of the
17        Internal Revenue Code and amounts included in gross
18        income under Section 78 of the Internal Revenue Code)
19        with respect to the stock of the same person to whom
20        the intangible expenses and costs were directly or
21        indirectly paid, incurred, or accrued. The preceding
22        sentence shall not apply to the extent that the same
23        dividends caused a reduction to the addition
24        modification required under Section 203(c)(2)(G-12) of
25        this Act. As used in this subparagraph, the term
26        "intangible expenses and costs" includes: (1)

 

 

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1        expenses, losses, and costs for or related to the
2        direct or indirect acquisition, use, maintenance or
3        management, ownership, sale, exchange, or any other
4        disposition of intangible property; (2) losses
5        incurred, directly or indirectly, from factoring
6        transactions or discounting transactions; (3) royalty,
7        patent, technical, and copyright fees; (4) licensing
8        fees; and (5) other similar expenses and costs. For
9        purposes of this subparagraph, "intangible property"
10        includes patents, patent applications, trade names,
11        trademarks, service marks, copyrights, mask works,
12        trade secrets, and similar types of intangible assets.
13            This paragraph shall not apply to the following:
14                (i) any item of intangible expenses or costs
15            paid, accrued, or incurred, directly or
16            indirectly, from a transaction with a person who is
17            subject in a foreign country or state, other than a
18            state which requires mandatory unitary reporting,
19            to a tax on or measured by net income with respect
20            to such item; or
21                (ii) any item of intangible expense or cost
22            paid, accrued, or incurred, directly or
23            indirectly, if the taxpayer can establish, based
24            on a preponderance of the evidence, both of the
25            following:
26                    (a) the person during the same taxable

 

 

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1                year paid, accrued, or incurred, the
2                intangible expense or cost to a person that is
3                not a related member, and
4                    (b) the transaction giving rise to the
5                intangible expense or cost between the
6                taxpayer and the person did not have as a
7                principal purpose the avoidance of Illinois
8                income tax, and is paid pursuant to a contract
9                or agreement that reflects arm's-length terms;
10                or
11                (iii) any item of intangible expense or cost
12            paid, accrued, or incurred, directly or
13            indirectly, from a transaction with a person if the
14            taxpayer establishes by clear and convincing
15            evidence, that the adjustments are unreasonable;
16            or if the taxpayer and the Director agree in
17            writing to the application or use of an alternative
18            method of apportionment under Section 304(f);
19                Nothing in this subsection shall preclude the
20            Director from making any other adjustment
21            otherwise allowed under Section 404 of this Act for
22            any tax year beginning after the effective date of
23            this amendment provided such adjustment is made
24            pursuant to regulation adopted by the Department
25            and such regulations provide methods and standards
26            by which the Department will utilize its authority

 

 

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1            under Section 404 of this Act;
2            (G-14) For taxable years ending on or after
3        December 31, 2008, an amount equal to the amount of
4        insurance premium expenses and costs otherwise allowed
5        as a deduction in computing base income, and that were
6        paid, accrued, or incurred, directly or indirectly, to
7        a person who would be a member of the same unitary
8        business group but for the fact that the person is
9        prohibited under Section 1501(a)(27) from being
10        included in the unitary business group because he or
11        she is ordinarily required to apportion business
12        income under different subsections of Section 304. The
13        addition modification required by this subparagraph
14        shall be reduced to the extent that dividends were
15        included in base income of the unitary group for the
16        same taxable year and received by the taxpayer or by a
17        member of the taxpayer's unitary business group
18        (including amounts included in gross income under
19        Sections 951 through 964 of the Internal Revenue Code
20        and amounts included in gross income under Section 78
21        of the Internal Revenue Code) with respect to the stock
22        of the same person to whom the premiums and costs were
23        directly or indirectly paid, incurred, or accrued. The
24        preceding sentence does not apply to the extent that
25        the same dividends caused a reduction to the addition
26        modification required under Section 203(c)(2)(G-12) or

 

 

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1        Section 203(c)(2)(G-13) of this Act;
2            (G-15) An amount equal to the credit allowable to
3        the taxpayer under Section 218(a) of this Act,
4        determined without regard to Section 218(c) of this
5        Act;
6            (G-16) For taxable years ending on or after
7        December 31, 2017, an amount equal to the deduction
8        allowed under Section 199 of the Internal Revenue Code
9        for the taxable year;
10    and by deducting from the total so obtained the sum of the
11    following amounts:
12            (H) An amount equal to all amounts included in such
13        total pursuant to the provisions of Sections 402(a),
14        402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
15        Internal Revenue Code or included in such total as
16        distributions under the provisions of any retirement
17        or disability plan for employees of any governmental
18        agency or unit, or retirement payments to retired
19        partners, which payments are excluded in computing net
20        earnings from self employment by Section 1402 of the
21        Internal Revenue Code and regulations adopted pursuant
22        thereto;
23            (I) The valuation limitation amount;
24            (J) An amount equal to the amount of any tax
25        imposed by this Act which was refunded to the taxpayer
26        and included in such total for the taxable year;

 

 

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1            (K) An amount equal to all amounts included in
2        taxable income as modified by subparagraphs (A), (B),
3        (C), (D), (E), (F) and (G) which are exempt from
4        taxation by this State either by reason of its statutes
5        or Constitution or by reason of the Constitution,
6        treaties or statutes of the United States; provided
7        that, in the case of any statute of this State that
8        exempts income derived from bonds or other obligations
9        from the tax imposed under this Act, the amount
10        exempted shall be the interest net of bond premium
11        amortization;
12            (L) With the exception of any amounts subtracted
13        under subparagraph (K), an amount equal to the sum of
14        all amounts disallowed as deductions by (i) Sections
15        171(a) (2) and 265(a)(2) of the Internal Revenue Code,
16        and all amounts of expenses allocable to interest and
17        disallowed as deductions by Section 265(1) of the
18        Internal Revenue Code; and (ii) for taxable years
19        ending on or after August 13, 1999, Sections 171(a)(2),
20        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
21        Code, plus, (iii) for taxable years ending on or after
22        December 31, 2011, Section 45G(e)(3) of the Internal
23        Revenue Code and, for taxable years ending on or after
24        December 31, 2008, any amount included in gross income
25        under Section 87 of the Internal Revenue Code; the
26        provisions of this subparagraph are exempt from the

 

 

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1        provisions of Section 250;
2            (M) An amount equal to those dividends included in
3        such total which were paid by a corporation which
4        conducts business operations in a River Edge
5        Redevelopment Zone or zones created under the River
6        Edge Redevelopment Zone Act and conducts substantially
7        all of its operations in a River Edge Redevelopment
8        Zone or zones. This subparagraph (M) is exempt from the
9        provisions of Section 250;
10            (N) An amount equal to any contribution made to a
11        job training project established pursuant to the Tax
12        Increment Allocation Redevelopment Act;
13            (O) An amount equal to those dividends included in
14        such total that were paid by a corporation that
15        conducts business operations in a federally designated
16        Foreign Trade Zone or Sub-Zone and that is designated a
17        High Impact Business located in Illinois; provided
18        that dividends eligible for the deduction provided in
19        subparagraph (M) of paragraph (2) of this subsection
20        shall not be eligible for the deduction provided under
21        this subparagraph (O);
22            (P) An amount equal to the amount of the deduction
23        used to compute the federal income tax credit for
24        restoration of substantial amounts held under claim of
25        right for the taxable year pursuant to Section 1341 of
26        the Internal Revenue Code;

 

 

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1            (Q) For taxable year 1999 and thereafter, an amount
2        equal to the amount of any (i) distributions, to the
3        extent includible in gross income for federal income
4        tax purposes, made to the taxpayer because of his or
5        her status as a victim of persecution for racial or
6        religious reasons by Nazi Germany or any other Axis
7        regime or as an heir of the victim and (ii) items of
8        income, to the extent includible in gross income for
9        federal income tax purposes, attributable to, derived
10        from or in any way related to assets stolen from,
11        hidden from, or otherwise lost to a victim of
12        persecution for racial or religious reasons by Nazi
13        Germany or any other Axis regime immediately prior to,
14        during, and immediately after World War II, including,
15        but not limited to, interest on the proceeds receivable
16        as insurance under policies issued to a victim of
17        persecution for racial or religious reasons by Nazi
18        Germany or any other Axis regime by European insurance
19        companies immediately prior to and during World War II;
20        provided, however, this subtraction from federal
21        adjusted gross income does not apply to assets acquired
22        with such assets or with the proceeds from the sale of
23        such assets; provided, further, this paragraph shall
24        only apply to a taxpayer who was the first recipient of
25        such assets after their recovery and who is a victim of
26        persecution for racial or religious reasons by Nazi

 

 

HB4004- 66 -LRB100 11829 HLH 23189 b

1        Germany or any other Axis regime or as an heir of the
2        victim. The amount of and the eligibility for any
3        public assistance, benefit, or similar entitlement is
4        not affected by the inclusion of items (i) and (ii) of
5        this paragraph in gross income for federal income tax
6        purposes. This paragraph is exempt from the provisions
7        of Section 250;
8            (R) For taxable years 2001 and thereafter, for the
9        taxable year in which the bonus depreciation deduction
10        is taken on the taxpayer's federal income tax return
11        under subsection (k) of Section 168 of the Internal
12        Revenue Code and for each applicable taxable year
13        thereafter, an amount equal to "x", where:
14                (1) "y" equals the amount of the depreciation
15            deduction taken for the taxable year on the
16            taxpayer's federal income tax return on property
17            for which the bonus depreciation deduction was
18            taken in any year under subsection (k) of Section
19            168 of the Internal Revenue Code, but not including
20            the bonus depreciation deduction;
21                (2) for taxable years ending on or before
22            December 31, 2005, "x" equals "y" multiplied by 30
23            and then divided by 70 (or "y" multiplied by
24            0.429); and
25                (3) for taxable years ending after December
26            31, 2005:

 

 

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1                    (i) for property on which a bonus
2                depreciation deduction of 30% of the adjusted
3                basis was taken, "x" equals "y" multiplied by
4                30 and then divided by 70 (or "y" multiplied by
5                0.429); and
6                    (ii) for property on which a bonus
7                depreciation deduction of 50% of the adjusted
8                basis was taken, "x" equals "y" multiplied by
9                1.0.
10            The aggregate amount deducted under this
11        subparagraph in all taxable years for any one piece of
12        property may not exceed the amount of the bonus
13        depreciation deduction taken on that property on the
14        taxpayer's federal income tax return under subsection
15        (k) of Section 168 of the Internal Revenue Code. This
16        subparagraph (R) is exempt from the provisions of
17        Section 250;
18            (S) If the taxpayer sells, transfers, abandons, or
19        otherwise disposes of property for which the taxpayer
20        was required in any taxable year to make an addition
21        modification under subparagraph (G-10), then an amount
22        equal to that addition modification.
23            If the taxpayer continues to own property through
24        the last day of the last tax year for which the
25        taxpayer may claim a depreciation deduction for
26        federal income tax purposes and for which the taxpayer

 

 

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1        was required in any taxable year to make an addition
2        modification under subparagraph (G-10), then an amount
3        equal to that addition modification.
4            The taxpayer is allowed to take the deduction under
5        this subparagraph only once with respect to any one
6        piece of property.
7            This subparagraph (S) is exempt from the
8        provisions of Section 250;
9            (T) The amount of (i) any interest income (net of
10        the deductions allocable thereto) taken into account
11        for the taxable year with respect to a transaction with
12        a taxpayer that is required to make an addition
13        modification with respect to such transaction under
14        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
15        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
16        the amount of such addition modification and (ii) any
17        income from intangible property (net of the deductions
18        allocable thereto) taken into account for the taxable
19        year with respect to a transaction with a taxpayer that
20        is required to make an addition modification with
21        respect to such transaction under Section
22        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
23        203(d)(2)(D-8), but not to exceed the amount of such
24        addition modification. This subparagraph (T) is exempt
25        from the provisions of Section 250;
26            (U) An amount equal to the interest income taken

 

 

HB4004- 69 -LRB100 11829 HLH 23189 b

1        into account for the taxable year (net of the
2        deductions allocable thereto) with respect to
3        transactions with (i) a foreign person who would be a
4        member of the taxpayer's unitary business group but for
5        the fact the foreign person's business activity
6        outside the United States is 80% or more of that
7        person's total business activity and (ii) for taxable
8        years ending on or after December 31, 2008, to a person
9        who would be a member of the same unitary business
10        group but for the fact that the person is prohibited
11        under Section 1501(a)(27) from being included in the
12        unitary business group because he or she is ordinarily
13        required to apportion business income under different
14        subsections of Section 304, but not to exceed the
15        addition modification required to be made for the same
16        taxable year under Section 203(c)(2)(G-12) for
17        interest paid, accrued, or incurred, directly or
18        indirectly, to the same person. This subparagraph (U)
19        is exempt from the provisions of Section 250;
20            (V) An amount equal to the income from intangible
21        property taken into account for the taxable year (net
22        of the deductions allocable thereto) with respect to
23        transactions with (i) a foreign person who would be a
24        member of the taxpayer's unitary business group but for
25        the fact that the foreign person's business activity
26        outside the United States is 80% or more of that

 

 

HB4004- 70 -LRB100 11829 HLH 23189 b

1        person's total business activity and (ii) for taxable
2        years ending on or after December 31, 2008, to a person
3        who would be a member of the same unitary business
4        group but for the fact that the person is prohibited
5        under Section 1501(a)(27) from being included in the
6        unitary business group because he or she is ordinarily
7        required to apportion business income under different
8        subsections of Section 304, but not to exceed the
9        addition modification required to be made for the same
10        taxable year under Section 203(c)(2)(G-13) for
11        intangible expenses and costs paid, accrued, or
12        incurred, directly or indirectly, to the same foreign
13        person. This subparagraph (V) is exempt from the
14        provisions of Section 250;
15            (W) in the case of an estate, an amount equal to
16        all amounts included in such total pursuant to the
17        provisions of Section 111 of the Internal Revenue Code
18        as a recovery of items previously deducted by the
19        decedent from adjusted gross income in the computation
20        of taxable income. This subparagraph (W) is exempt from
21        Section 250;
22            (X) an amount equal to the refund included in such
23        total of any tax deducted for federal income tax
24        purposes, to the extent that deduction was added back
25        under subparagraph (F). This subparagraph (X) is
26        exempt from the provisions of Section 250; and

 

 

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1            (Y) For taxable years ending on or after December
2        31, 2011, in the case of a taxpayer who was required to
3        add back any insurance premiums under Section
4        203(c)(2)(G-14), such taxpayer may elect to subtract
5        that part of a reimbursement received from the
6        insurance company equal to the amount of the expense or
7        loss (including expenses incurred by the insurance
8        company) that would have been taken into account as a
9        deduction for federal income tax purposes if the
10        expense or loss had been uninsured. If a taxpayer makes
11        the election provided for by this subparagraph (Y), the
12        insurer to which the premiums were paid must add back
13        to income the amount subtracted by the taxpayer
14        pursuant to this subparagraph (Y). This subparagraph
15        (Y) is exempt from the provisions of Section 250.
16        (3) Limitation. The amount of any modification
17    otherwise required under this subsection shall, under
18    regulations prescribed by the Department, be adjusted by
19    any amounts included therein which were properly paid,
20    credited, or required to be distributed, or permanently set
21    aside for charitable purposes pursuant to Internal Revenue
22    Code Section 642(c) during the taxable year.
 
23    (d) Partnerships.
24        (1) In general. In the case of a partnership, base
25    income means an amount equal to the taxpayer's taxable

 

 

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1    income for the taxable year as modified by paragraph (2).
2        (2) Modifications. The taxable income referred to in
3    paragraph (1) shall be modified by adding thereto the sum
4    of the following amounts:
5            (A) An amount equal to all amounts paid or accrued
6        to the taxpayer as interest or dividends during the
7        taxable year to the extent excluded from gross income
8        in the computation of taxable income;
9            (B) An amount equal to the amount of tax imposed by
10        this Act to the extent deducted from gross income for
11        the taxable year;
12            (C) The amount of deductions allowed to the
13        partnership pursuant to Section 707 (c) of the Internal
14        Revenue Code in calculating its taxable income;
15            (D) An amount equal to the amount of the capital
16        gain deduction allowable under the Internal Revenue
17        Code, to the extent deducted from gross income in the
18        computation of taxable income;
19            (D-5) For taxable years 2001 and thereafter, an
20        amount equal to the bonus depreciation deduction taken
21        on the taxpayer's federal income tax return for the
22        taxable year under subsection (k) of Section 168 of the
23        Internal Revenue Code;
24            (D-6) If the taxpayer sells, transfers, abandons,
25        or otherwise disposes of property for which the
26        taxpayer was required in any taxable year to make an

 

 

HB4004- 73 -LRB100 11829 HLH 23189 b

1        addition modification under subparagraph (D-5), then
2        an amount equal to the aggregate amount of the
3        deductions taken in all taxable years under
4        subparagraph (O) with respect to that property.
5            If the taxpayer continues to own property through
6        the last day of the last tax year for which the
7        taxpayer may claim a depreciation deduction for
8        federal income tax purposes and for which the taxpayer
9        was allowed in any taxable year to make a subtraction
10        modification under subparagraph (O), then an amount
11        equal to that subtraction modification.
12            The taxpayer is required to make the addition
13        modification under this subparagraph only once with
14        respect to any one piece of property;
15            (D-7) An amount equal to the amount otherwise
16        allowed as a deduction in computing base income for
17        interest paid, accrued, or incurred, directly or
18        indirectly, (i) for taxable years ending on or after
19        December 31, 2004, to a foreign person who would be a
20        member of the same unitary business group but for the
21        fact the foreign person's business activity outside
22        the United States is 80% or more of the foreign
23        person's total business activity and (ii) for taxable
24        years ending on or after December 31, 2008, to a person
25        who would be a member of the same unitary business
26        group but for the fact that the person is prohibited

 

 

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1        under Section 1501(a)(27) from being included in the
2        unitary business group because he or she is ordinarily
3        required to apportion business income under different
4        subsections of Section 304. The addition modification
5        required by this subparagraph shall be reduced to the
6        extent that dividends were included in base income of
7        the unitary group for the same taxable year and
8        received by the taxpayer or by a member of the
9        taxpayer's unitary business group (including amounts
10        included in gross income pursuant to Sections 951
11        through 964 of the Internal Revenue Code and amounts
12        included in gross income under Section 78 of the
13        Internal Revenue Code) with respect to the stock of the
14        same person to whom the interest was paid, accrued, or
15        incurred.
16            This paragraph shall not apply to the following:
17                (i) an item of interest paid, accrued, or
18            incurred, directly or indirectly, to a person who
19            is subject in a foreign country or state, other
20            than a state which requires mandatory unitary
21            reporting, to a tax on or measured by net income
22            with respect to such interest; or
23                (ii) an item of interest paid, accrued, or
24            incurred, directly or indirectly, to a person if
25            the taxpayer can establish, based on a
26            preponderance of the evidence, both of the

 

 

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1            following:
2                    (a) the person, during the same taxable
3                year, paid, accrued, or incurred, the interest
4                to a person that is not a related member, and
5                    (b) the transaction giving rise to the
6                interest expense between the taxpayer and the
7                person did not have as a principal purpose the
8                avoidance of Illinois income tax, and is paid
9                pursuant to a contract or agreement that
10                reflects an arm's-length interest rate and
11                terms; or
12                (iii) the taxpayer can establish, based on
13            clear and convincing evidence, that the interest
14            paid, accrued, or incurred relates to a contract or
15            agreement entered into at arm's-length rates and
16            terms and the principal purpose for the payment is
17            not federal or Illinois tax avoidance; or
18                (iv) an item of interest paid, accrued, or
19            incurred, directly or indirectly, to a person if
20            the taxpayer establishes by clear and convincing
21            evidence that the adjustments are unreasonable; or
22            if the taxpayer and the Director agree in writing
23            to the application or use of an alternative method
24            of apportionment under Section 304(f).
25                Nothing in this subsection shall preclude the
26            Director from making any other adjustment

 

 

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1            otherwise allowed under Section 404 of this Act for
2            any tax year beginning after the effective date of
3            this amendment provided such adjustment is made
4            pursuant to regulation adopted by the Department
5            and such regulations provide methods and standards
6            by which the Department will utilize its authority
7            under Section 404 of this Act; and
8            (D-8) An amount equal to the amount of intangible
9        expenses and costs otherwise allowed as a deduction in
10        computing base income, and that were paid, accrued, or
11        incurred, directly or indirectly, (i) for taxable
12        years ending on or after December 31, 2004, to a
13        foreign person who would be a member of the same
14        unitary business group but for the fact that the
15        foreign person's business activity outside the United
16        States is 80% or more of that person's total business
17        activity and (ii) for taxable years ending on or after
18        December 31, 2008, to a person who would be a member of
19        the same unitary business group but for the fact that
20        the person is prohibited under Section 1501(a)(27)
21        from being included in the unitary business group
22        because he or she is ordinarily required to apportion
23        business income under different subsections of Section
24        304. The addition modification required by this
25        subparagraph shall be reduced to the extent that
26        dividends were included in base income of the unitary

 

 

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1        group for the same taxable year and received by the
2        taxpayer or by a member of the taxpayer's unitary
3        business group (including amounts included in gross
4        income pursuant to Sections 951 through 964 of the
5        Internal Revenue Code and amounts included in gross
6        income under Section 78 of the Internal Revenue Code)
7        with respect to the stock of the same person to whom
8        the intangible expenses and costs were directly or
9        indirectly paid, incurred or accrued. The preceding
10        sentence shall not apply to the extent that the same
11        dividends caused a reduction to the addition
12        modification required under Section 203(d)(2)(D-7) of
13        this Act. As used in this subparagraph, the term
14        "intangible expenses and costs" includes (1) expenses,
15        losses, and costs for, or related to, the direct or
16        indirect acquisition, use, maintenance or management,
17        ownership, sale, exchange, or any other disposition of
18        intangible property; (2) losses incurred, directly or
19        indirectly, from factoring transactions or discounting
20        transactions; (3) royalty, patent, technical, and
21        copyright fees; (4) licensing fees; and (5) other
22        similar expenses and costs. For purposes of this
23        subparagraph, "intangible property" includes patents,
24        patent applications, trade names, trademarks, service
25        marks, copyrights, mask works, trade secrets, and
26        similar types of intangible assets;

 

 

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1            This paragraph shall not apply to the following:
2                (i) any item of intangible expenses or costs
3            paid, accrued, or incurred, directly or
4            indirectly, from a transaction with a person who is
5            subject in a foreign country or state, other than a
6            state which requires mandatory unitary reporting,
7            to a tax on or measured by net income with respect
8            to such item; or
9                (ii) any item of intangible expense or cost
10            paid, accrued, or incurred, directly or
11            indirectly, if the taxpayer can establish, based
12            on a preponderance of the evidence, both of the
13            following:
14                    (a) the person during the same taxable
15                year paid, accrued, or incurred, the
16                intangible expense or cost to a person that is
17                not a related member, and
18                    (b) the transaction giving rise to the
19                intangible expense or cost between the
20                taxpayer and the person did not have as a
21                principal purpose the avoidance of Illinois
22                income tax, and is paid pursuant to a contract
23                or agreement that reflects arm's-length terms;
24                or
25                (iii) any item of intangible expense or cost
26            paid, accrued, or incurred, directly or

 

 

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1            indirectly, from a transaction with a person if the
2            taxpayer establishes by clear and convincing
3            evidence, that the adjustments are unreasonable;
4            or if the taxpayer and the Director agree in
5            writing to the application or use of an alternative
6            method of apportionment under Section 304(f);
7                Nothing in this subsection shall preclude the
8            Director from making any other adjustment
9            otherwise allowed under Section 404 of this Act for
10            any tax year beginning after the effective date of
11            this amendment provided such adjustment is made
12            pursuant to regulation adopted by the Department
13            and such regulations provide methods and standards
14            by which the Department will utilize its authority
15            under Section 404 of this Act;
16            (D-9) For taxable years ending on or after December
17        31, 2008, an amount equal to the amount of insurance
18        premium expenses and costs otherwise allowed as a
19        deduction in computing base income, and that were paid,
20        accrued, or incurred, directly or indirectly, to a
21        person who would be a member of the same unitary
22        business group but for the fact that the person is
23        prohibited under Section 1501(a)(27) from being
24        included in the unitary business group because he or
25        she is ordinarily required to apportion business
26        income under different subsections of Section 304. The

 

 

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1        addition modification required by this subparagraph
2        shall be reduced to the extent that dividends were
3        included in base income of the unitary group for the
4        same taxable year and received by the taxpayer or by a
5        member of the taxpayer's unitary business group
6        (including amounts included in gross income under
7        Sections 951 through 964 of the Internal Revenue Code
8        and amounts included in gross income under Section 78
9        of the Internal Revenue Code) with respect to the stock
10        of the same person to whom the premiums and costs were
11        directly or indirectly paid, incurred, or accrued. The
12        preceding sentence does not apply to the extent that
13        the same dividends caused a reduction to the addition
14        modification required under Section 203(d)(2)(D-7) or
15        Section 203(d)(2)(D-8) of this Act;
16            (D-10) An amount equal to the credit allowable to
17        the taxpayer under Section 218(a) of this Act,
18        determined without regard to Section 218(c) of this
19        Act;
20            (D-11) For taxable years ending on or after
21        December 31, 2017, an amount equal to the deduction
22        allowed under Section 199 of the Internal Revenue Code
23        for the taxable year;
24    and by deducting from the total so obtained the following
25    amounts:
26            (E) The valuation limitation amount;

 

 

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1            (F) An amount equal to the amount of any tax
2        imposed by this Act which was refunded to the taxpayer
3        and included in such total for the taxable year;
4            (G) An amount equal to all amounts included in
5        taxable income as modified by subparagraphs (A), (B),
6        (C) and (D) which are exempt from taxation by this
7        State either by reason of its statutes or Constitution
8        or by reason of the Constitution, treaties or statutes
9        of the United States; provided that, in the case of any
10        statute of this State that exempts income derived from
11        bonds or other obligations from the tax imposed under
12        this Act, the amount exempted shall be the interest net
13        of bond premium amortization;
14            (H) Any income of the partnership which
15        constitutes personal service income as defined in
16        Section 1348 (b) (1) of the Internal Revenue Code (as
17        in effect December 31, 1981) or a reasonable allowance
18        for compensation paid or accrued for services rendered
19        by partners to the partnership, whichever is greater;
20        this subparagraph (H) is exempt from the provisions of
21        Section 250;
22            (I) An amount equal to all amounts of income
23        distributable to an entity subject to the Personal
24        Property Tax Replacement Income Tax imposed by
25        subsections (c) and (d) of Section 201 of this Act
26        including amounts distributable to organizations

 

 

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1        exempt from federal income tax by reason of Section
2        501(a) of the Internal Revenue Code; this subparagraph
3        (I) is exempt from the provisions of Section 250;
4            (J) With the exception of any amounts subtracted
5        under subparagraph (G), an amount equal to the sum of
6        all amounts disallowed as deductions by (i) Sections
7        171(a) (2), and 265(2) of the Internal Revenue Code,
8        and all amounts of expenses allocable to interest and
9        disallowed as deductions by Section 265(1) of the
10        Internal Revenue Code; and (ii) for taxable years
11        ending on or after August 13, 1999, Sections 171(a)(2),
12        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
13        Code, plus, (iii) for taxable years ending on or after
14        December 31, 2011, Section 45G(e)(3) of the Internal
15        Revenue Code and, for taxable years ending on or after
16        December 31, 2008, any amount included in gross income
17        under Section 87 of the Internal Revenue Code; the
18        provisions of this subparagraph are exempt from the
19        provisions of Section 250;
20            (K) An amount equal to those dividends included in
21        such total which were paid by a corporation which
22        conducts business operations in a River Edge
23        Redevelopment Zone or zones created under the River
24        Edge Redevelopment Zone Act and conducts substantially
25        all of its operations from a River Edge Redevelopment
26        Zone or zones. This subparagraph (K) is exempt from the

 

 

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1        provisions of Section 250;
2            (L) An amount equal to any contribution made to a
3        job training project established pursuant to the Real
4        Property Tax Increment Allocation Redevelopment Act;
5            (M) An amount equal to those dividends included in
6        such total that were paid by a corporation that
7        conducts business operations in a federally designated
8        Foreign Trade Zone or Sub-Zone and that is designated a
9        High Impact Business located in Illinois; provided
10        that dividends eligible for the deduction provided in
11        subparagraph (K) of paragraph (2) of this subsection
12        shall not be eligible for the deduction provided under
13        this subparagraph (M);
14            (N) An amount equal to the amount of the deduction
15        used to compute the federal income tax credit for
16        restoration of substantial amounts held under claim of
17        right for the taxable year pursuant to Section 1341 of
18        the Internal Revenue Code;
19            (O) For taxable years 2001 and thereafter, for the
20        taxable year in which the bonus depreciation deduction
21        is taken on the taxpayer's federal income tax return
22        under subsection (k) of Section 168 of the Internal
23        Revenue Code and for each applicable taxable year
24        thereafter, an amount equal to "x", where:
25                (1) "y" equals the amount of the depreciation
26            deduction taken for the taxable year on the

 

 

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1            taxpayer's federal income tax return on property
2            for which the bonus depreciation deduction was
3            taken in any year under subsection (k) of Section
4            168 of the Internal Revenue Code, but not including
5            the bonus depreciation deduction;
6                (2) for taxable years ending on or before
7            December 31, 2005, "x" equals "y" multiplied by 30
8            and then divided by 70 (or "y" multiplied by
9            0.429); and
10                (3) for taxable years ending after December
11            31, 2005:
12                    (i) for property on which a bonus
13                depreciation deduction of 30% of the adjusted
14                basis was taken, "x" equals "y" multiplied by
15                30 and then divided by 70 (or "y" multiplied by
16                0.429); and
17                    (ii) for property on which a bonus
18                depreciation deduction of 50% of the adjusted
19                basis was taken, "x" equals "y" multiplied by
20                1.0.
21            The aggregate amount deducted under this
22        subparagraph in all taxable years for any one piece of
23        property may not exceed the amount of the bonus
24        depreciation deduction taken on that property on the
25        taxpayer's federal income tax return under subsection
26        (k) of Section 168 of the Internal Revenue Code. This

 

 

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1        subparagraph (O) is exempt from the provisions of
2        Section 250;
3            (P) If the taxpayer sells, transfers, abandons, or
4        otherwise disposes of property for which the taxpayer
5        was required in any taxable year to make an addition
6        modification under subparagraph (D-5), then an amount
7        equal to that addition modification.
8            If the taxpayer continues to own property through
9        the last day of the last tax year for which the
10        taxpayer may claim a depreciation deduction for
11        federal income tax purposes and for which the taxpayer
12        was required in any taxable year to make an addition
13        modification under subparagraph (D-5), then an amount
14        equal to that addition modification.
15            The taxpayer is allowed to take the deduction under
16        this subparagraph only once with respect to any one
17        piece of property.
18            This subparagraph (P) is exempt from the
19        provisions of Section 250;
20            (Q) The amount of (i) any interest income (net of
21        the deductions allocable thereto) taken into account
22        for the taxable year with respect to a transaction with
23        a taxpayer that is required to make an addition
24        modification with respect to such transaction under
25        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
26        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

 

 

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1        the amount of such addition modification and (ii) any
2        income from intangible property (net of the deductions
3        allocable thereto) taken into account for the taxable
4        year with respect to a transaction with a taxpayer that
5        is required to make an addition modification with
6        respect to such transaction under Section
7        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
8        203(d)(2)(D-8), but not to exceed the amount of such
9        addition modification. This subparagraph (Q) is exempt
10        from Section 250;
11            (R) An amount equal to the interest income taken
12        into account for the taxable year (net of the
13        deductions allocable thereto) with respect to
14        transactions with (i) a foreign person who would be a
15        member of the taxpayer's unitary business group but for
16        the fact that the foreign person's business activity
17        outside the United States is 80% or more of that
18        person's total business activity and (ii) for taxable
19        years ending on or after December 31, 2008, to a person
20        who would be a member of the same unitary business
21        group but for the fact that the person is prohibited
22        under Section 1501(a)(27) from being included in the
23        unitary business group because he or she is ordinarily
24        required to apportion business income under different
25        subsections of Section 304, but not to exceed the
26        addition modification required to be made for the same

 

 

HB4004- 87 -LRB100 11829 HLH 23189 b

1        taxable year under Section 203(d)(2)(D-7) for interest
2        paid, accrued, or incurred, directly or indirectly, to
3        the same person. This subparagraph (R) is exempt from
4        Section 250;
5            (S) An amount equal to the income from intangible
6        property taken into account for the taxable year (net
7        of the deductions allocable thereto) with respect to
8        transactions with (i) a foreign person who would be a
9        member of the taxpayer's unitary business group but for
10        the fact that the foreign person's business activity
11        outside the United States is 80% or more of that
12        person's total business activity and (ii) for taxable
13        years ending on or after December 31, 2008, to a person
14        who would be a member of the same unitary business
15        group but for the fact that the person is prohibited
16        under Section 1501(a)(27) from being included in the
17        unitary business group because he or she is ordinarily
18        required to apportion business income under different
19        subsections of Section 304, but not to exceed the
20        addition modification required to be made for the same
21        taxable year under Section 203(d)(2)(D-8) for
22        intangible expenses and costs paid, accrued, or
23        incurred, directly or indirectly, to the same person.
24        This subparagraph (S) is exempt from Section 250; and
25            (T) For taxable years ending on or after December
26        31, 2011, in the case of a taxpayer who was required to

 

 

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1        add back any insurance premiums under Section
2        203(d)(2)(D-9), such taxpayer may elect to subtract
3        that part of a reimbursement received from the
4        insurance company equal to the amount of the expense or
5        loss (including expenses incurred by the insurance
6        company) that would have been taken into account as a
7        deduction for federal income tax purposes if the
8        expense or loss had been uninsured. If a taxpayer makes
9        the election provided for by this subparagraph (T), the
10        insurer to which the premiums were paid must add back
11        to income the amount subtracted by the taxpayer
12        pursuant to this subparagraph (T). This subparagraph
13        (T) is exempt from the provisions of Section 250.
 
14    (e) Gross income; adjusted gross income; taxable income.
15        (1) In general. Subject to the provisions of paragraph
16    (2) and subsection (b) (3), for purposes of this Section
17    and Section 803(e), a taxpayer's gross income, adjusted
18    gross income, or taxable income for the taxable year shall
19    mean the amount of gross income, adjusted gross income or
20    taxable income properly reportable for federal income tax
21    purposes for the taxable year under the provisions of the
22    Internal Revenue Code. Taxable income may be less than
23    zero. However, for taxable years ending on or after
24    December 31, 1986, net operating loss carryforwards from
25    taxable years ending prior to December 31, 1986, may not

 

 

HB4004- 89 -LRB100 11829 HLH 23189 b

1    exceed the sum of federal taxable income for the taxable
2    year before net operating loss deduction, plus the excess
3    of addition modifications over subtraction modifications
4    for the taxable year. For taxable years ending prior to
5    December 31, 1986, taxable income may never be an amount in
6    excess of the net operating loss for the taxable year as
7    defined in subsections (c) and (d) of Section 172 of the
8    Internal Revenue Code, provided that when taxable income of
9    a corporation (other than a Subchapter S corporation),
10    trust, or estate is less than zero and addition
11    modifications, other than those provided by subparagraph
12    (E) of paragraph (2) of subsection (b) for corporations or
13    subparagraph (E) of paragraph (2) of subsection (c) for
14    trusts and estates, exceed subtraction modifications, an
15    addition modification must be made under those
16    subparagraphs for any other taxable year to which the
17    taxable income less than zero (net operating loss) is
18    applied under Section 172 of the Internal Revenue Code or
19    under subparagraph (E) of paragraph (2) of this subsection
20    (e) applied in conjunction with Section 172 of the Internal
21    Revenue Code.
22        (2) Special rule. For purposes of paragraph (1) of this
23    subsection, the taxable income properly reportable for
24    federal income tax purposes shall mean:
25            (A) Certain life insurance companies. In the case
26        of a life insurance company subject to the tax imposed

 

 

HB4004- 90 -LRB100 11829 HLH 23189 b

1        by Section 801 of the Internal Revenue Code, life
2        insurance company taxable income, plus the amount of
3        distribution from pre-1984 policyholder surplus
4        accounts as calculated under Section 815a of the
5        Internal Revenue Code;
6            (B) Certain other insurance companies. In the case
7        of mutual insurance companies subject to the tax
8        imposed by Section 831 of the Internal Revenue Code,
9        insurance company taxable income;
10            (C) Regulated investment companies. In the case of
11        a regulated investment company subject to the tax
12        imposed by Section 852 of the Internal Revenue Code,
13        investment company taxable income;
14            (D) Real estate investment trusts. In the case of a
15        real estate investment trust subject to the tax imposed
16        by Section 857 of the Internal Revenue Code, real
17        estate investment trust taxable income;
18            (E) Consolidated corporations. In the case of a
19        corporation which is a member of an affiliated group of
20        corporations filing a consolidated income tax return
21        for the taxable year for federal income tax purposes,
22        taxable income determined as if such corporation had
23        filed a separate return for federal income tax purposes
24        for the taxable year and each preceding taxable year
25        for which it was a member of an affiliated group. For
26        purposes of this subparagraph, the taxpayer's separate

 

 

HB4004- 91 -LRB100 11829 HLH 23189 b

1        taxable income shall be determined as if the election
2        provided by Section 243(b) (2) of the Internal Revenue
3        Code had been in effect for all such years;
4            (F) Cooperatives. In the case of a cooperative
5        corporation or association, the taxable income of such
6        organization determined in accordance with the
7        provisions of Section 1381 through 1388 of the Internal
8        Revenue Code, but without regard to the prohibition
9        against offsetting losses from patronage activities
10        against income from nonpatronage activities; except
11        that a cooperative corporation or association may make
12        an election to follow its federal income tax treatment
13        of patronage losses and nonpatronage losses. In the
14        event such election is made, such losses shall be
15        computed and carried over in a manner consistent with
16        subsection (a) of Section 207 of this Act and
17        apportioned by the apportionment factor reported by
18        the cooperative on its Illinois income tax return filed
19        for the taxable year in which the losses are incurred.
20        The election shall be effective for all taxable years
21        with original returns due on or after the date of the
22        election. In addition, the cooperative may file an
23        amended return or returns, as allowed under this Act,
24        to provide that the election shall be effective for
25        losses incurred or carried forward for taxable years
26        occurring prior to the date of the election. Once made,

 

 

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1        the election may only be revoked upon approval of the
2        Director. The Department shall adopt rules setting
3        forth requirements for documenting the elections and
4        any resulting Illinois net loss and the standards to be
5        used by the Director in evaluating requests to revoke
6        elections. Public Act 96-932 is declaratory of
7        existing law;
8            (G) Subchapter S corporations. In the case of: (i)
9        a Subchapter S corporation for which there is in effect
10        an election for the taxable year under Section 1362 of
11        the Internal Revenue Code, the taxable income of such
12        corporation determined in accordance with Section
13        1363(b) of the Internal Revenue Code, except that
14        taxable income shall take into account those items
15        which are required by Section 1363(b)(1) of the
16        Internal Revenue Code to be separately stated; and (ii)
17        a Subchapter S corporation for which there is in effect
18        a federal election to opt out of the provisions of the
19        Subchapter S Revision Act of 1982 and have applied
20        instead the prior federal Subchapter S rules as in
21        effect on July 1, 1982, the taxable income of such
22        corporation determined in accordance with the federal
23        Subchapter S rules as in effect on July 1, 1982; and
24            (H) Partnerships. In the case of a partnership,
25        taxable income determined in accordance with Section
26        703 of the Internal Revenue Code, except that taxable

 

 

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1        income shall take into account those items which are
2        required by Section 703(a)(1) to be separately stated
3        but which would be taken into account by an individual
4        in calculating his taxable income.
5        (3) Recapture of business expenses on disposition of
6    asset or business. Notwithstanding any other law to the
7    contrary, if in prior years income from an asset or
8    business has been classified as business income and in a
9    later year is demonstrated to be non-business income, then
10    all expenses, without limitation, deducted in such later
11    year and in the 2 immediately preceding taxable years
12    related to that asset or business that generated the
13    non-business income shall be added back and recaptured as
14    business income in the year of the disposition of the asset
15    or business. Such amount shall be apportioned to Illinois
16    using the greater of the apportionment fraction computed
17    for the business under Section 304 of this Act for the
18    taxable year or the average of the apportionment fractions
19    computed for the business under Section 304 of this Act for
20    the taxable year and for the 2 immediately preceding
21    taxable years.
 
22    (f) Valuation limitation amount.
23        (1) In general. The valuation limitation amount
24    referred to in subsections (a) (2) (G), (c) (2) (I) and
25    (d)(2) (E) is an amount equal to:

 

 

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1            (A) The sum of the pre-August 1, 1969 appreciation
2        amounts (to the extent consisting of gain reportable
3        under the provisions of Section 1245 or 1250 of the
4        Internal Revenue Code) for all property in respect of
5        which such gain was reported for the taxable year; plus
6            (B) The lesser of (i) the sum of the pre-August 1,
7        1969 appreciation amounts (to the extent consisting of
8        capital gain) for all property in respect of which such
9        gain was reported for federal income tax purposes for
10        the taxable year, or (ii) the net capital gain for the
11        taxable year, reduced in either case by any amount of
12        such gain included in the amount determined under
13        subsection (a) (2) (F) or (c) (2) (H).
14        (2) Pre-August 1, 1969 appreciation amount.
15            (A) If the fair market value of property referred
16        to in paragraph (1) was readily ascertainable on August
17        1, 1969, the pre-August 1, 1969 appreciation amount for
18        such property is the lesser of (i) the excess of such
19        fair market value over the taxpayer's basis (for
20        determining gain) for such property on that date
21        (determined under the Internal Revenue Code as in
22        effect on that date), or (ii) the total gain realized
23        and reportable for federal income tax purposes in
24        respect of the sale, exchange or other disposition of
25        such property.
26            (B) If the fair market value of property referred

 

 

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1        to in paragraph (1) was not readily ascertainable on
2        August 1, 1969, the pre-August 1, 1969 appreciation
3        amount for such property is that amount which bears the
4        same ratio to the total gain reported in respect of the
5        property for federal income tax purposes for the
6        taxable year, as the number of full calendar months in
7        that part of the taxpayer's holding period for the
8        property ending July 31, 1969 bears to the number of
9        full calendar months in the taxpayer's entire holding
10        period for the property.
11            (C) The Department shall prescribe such
12        regulations as may be necessary to carry out the
13        purposes of this paragraph.
 
14    (g) Double deductions. Unless specifically provided
15otherwise, nothing in this Section shall permit the same item
16to be deducted more than once.
 
17    (h) Legislative intention. Except as expressly provided by
18this Section there shall be no modifications or limitations on
19the amounts of income, gain, loss or deduction taken into
20account in determining gross income, adjusted gross income or
21taxable income for federal income tax purposes for the taxable
22year, or in the amount of such items entering into the
23computation of base income and net income under this Act for
24such taxable year, whether in respect of property values as of

 

 

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1August 1, 1969 or otherwise.
2(Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,
3eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;
496-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.
56-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,
6eff. 8-23-11; 97-905, eff. 8-7-12.)
 
7    (35 ILCS 5/304)  (from Ch. 120, par. 3-304)
8    Sec. 304. Business income of persons other than residents.
9    (a) In general. The business income of a person other than
10a resident shall be allocated to this State if such person's
11business income is derived solely from this State. If a person
12other than a resident derives business income from this State
13and one or more other states, then, for tax years ending on or
14before December 30, 1998, and for tax years ending on or after
15December 31, 2017, and except as otherwise provided by this
16Section, such person's business income shall be apportioned to
17this State by multiplying the income by a fraction, the
18numerator of which is the sum of the property factor (if any),
19the payroll factor (if any) and 200% of the sales factor (if
20any), and the denominator of which is 4 reduced by the number
21of factors other than the sales factor which have a denominator
22of zero and by an additional 2 if the sales factor has a
23denominator of zero. For tax years ending on or after December
2431, 1998, and ending prior to December 31, 2017, and except as
25otherwise provided by this Section, persons other than

 

 

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1residents who derive business income from this State and one or
2more other states shall compute their apportionment factor by
3weighting their property, payroll, and sales factors as
4provided in subsection (h) of this Section.
5    (1) Property factor.
6        (A) The property factor is a fraction, the numerator of
7    which is the average value of the person's real and
8    tangible personal property owned or rented and used in the
9    trade or business in this State during the taxable year and
10    the denominator of which is the average value of all the
11    person's real and tangible personal property owned or
12    rented and used in the trade or business during the taxable
13    year.
14        (B) Property owned by the person is valued at its
15    original cost. Property rented by the person is valued at 8
16    times the net annual rental rate. Net annual rental rate is
17    the annual rental rate paid by the person less any annual
18    rental rate received by the person from sub-rentals.
19        (C) The average value of property shall be determined
20    by averaging the values at the beginning and ending of the
21    taxable year but the Director may require the averaging of
22    monthly values during the taxable year if reasonably
23    required to reflect properly the average value of the
24    person's property.
25    (2) Payroll factor.
26        (A) The payroll factor is a fraction, the numerator of

 

 

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1    which is the total amount paid in this State during the
2    taxable year by the person for compensation, and the
3    denominator of which is the total compensation paid
4    everywhere during the taxable year.
5        (B) Compensation is paid in this State if:
6            (i) The individual's service is performed entirely
7        within this State;
8            (ii) The individual's service is performed both
9        within and without this State, but the service
10        performed without this State is incidental to the
11        individual's service performed within this State; or
12            (iii) Some of the service is performed within this
13        State and either the base of operations, or if there is
14        no base of operations, the place from which the service
15        is directed or controlled is within this State, or the
16        base of operations or the place from which the service
17        is directed or controlled is not in any state in which
18        some part of the service is performed, but the
19        individual's residence is in this State.
20            (iv) Compensation paid to nonresident professional
21        athletes.
22            (a) General. The Illinois source income of a
23        nonresident individual who is a member of a
24        professional athletic team includes the portion of the
25        individual's total compensation for services performed
26        as a member of a professional athletic team during the

 

 

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1        taxable year which the number of duty days spent within
2        this State performing services for the team in any
3        manner during the taxable year bears to the total
4        number of duty days spent both within and without this
5        State during the taxable year.
6            (b) Travel days. Travel days that do not involve
7        either a game, practice, team meeting, or other similar
8        team event are not considered duty days spent in this
9        State. However, such travel days are considered in the
10        total duty days spent both within and without this
11        State.
12            (c) Definitions. For purposes of this subpart
13        (iv):
14                (1) The term "professional athletic team"
15            includes, but is not limited to, any professional
16            baseball, basketball, football, soccer, or hockey
17            team.
18                (2) The term "member of a professional
19            athletic team" includes those employees who are
20            active players, players on the disabled list, and
21            any other persons required to travel and who travel
22            with and perform services on behalf of a
23            professional athletic team on a regular basis.
24            This includes, but is not limited to, coaches,
25            managers, and trainers.
26                (3) Except as provided in items (C) and (D) of

 

 

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1            this subpart (3), the term "duty days" means all
2            days during the taxable year from the beginning of
3            the professional athletic team's official
4            pre-season training period through the last game
5            in which the team competes or is scheduled to
6            compete. Duty days shall be counted for the year in
7            which they occur, including where a team's
8            official pre-season training period through the
9            last game in which the team competes or is
10            scheduled to compete, occurs during more than one
11            tax year.
12                    (A) Duty days shall also include days on
13                which a member of a professional athletic team
14                performs service for a team on a date that does
15                not fall within the foregoing period (e.g.,
16                participation in instructional leagues, the
17                "All Star Game", or promotional "caravans").
18                Performing a service for a professional
19                athletic team includes conducting training and
20                rehabilitation activities, when such
21                activities are conducted at team facilities.
22                    (B) Also included in duty days are game
23                days, practice days, days spent at team
24                meetings, promotional caravans, preseason
25                training camps, and days served with the team
26                through all post-season games in which the team

 

 

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

 

 

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1                not otherwise performing services for the team
2                in Illinois, shall not be considered duty days
3                spent in this State. All days on the disabled
4                list, however, are considered to be included in
5                total duty days spent both within and without
6                this State.
7                (4) The term "total compensation for services
8            performed as a member of a professional athletic
9            team" means the total compensation received during
10            the taxable year for services performed:
11                    (A) from the beginning of the official
12                pre-season training period through the last
13                game in which the team competes or is scheduled
14                to compete during that taxable year; and
15                    (B) during the taxable year on a date which
16                does not fall within the foregoing period
17                (e.g., participation in instructional leagues,
18                the "All Star Game", or promotional caravans).
19                This compensation shall include, but is not
20            limited to, salaries, wages, bonuses as described
21            in this subpart, and any other type of compensation
22            paid during the taxable year to a member of a
23            professional athletic team for services performed
24            in that year. This compensation does not include
25            strike benefits, severance pay, termination pay,
26            contract or option year buy-out payments,

 

 

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1            expansion or relocation payments, or any other
2            payments not related to services performed for the
3            team.
4                For purposes of this subparagraph, "bonuses"
5            included in "total compensation for services
6            performed as a member of a professional athletic
7            team" subject to the allocation described in
8            Section 302(c)(1) are: bonuses earned as a result
9            of play (i.e., performance bonuses) during the
10            season, including bonuses paid for championship,
11            playoff or "bowl" games played by a team, or for
12            selection to all-star league or other honorary
13            positions; and bonuses paid for signing a
14            contract, unless the payment of the signing bonus
15            is not conditional upon the signee playing any
16            games for the team or performing any subsequent
17            services for the team or even making the team, the
18            signing bonus is payable separately from the
19            salary and any other compensation, and the signing
20            bonus is nonrefundable.
21    (3) Sales factor.
22        (A) The sales factor is a fraction, the numerator of
23    which is the total sales of the person in this State during
24    the taxable year, and the denominator of which is the total
25    sales of the person everywhere during the taxable year.
26        (B) Sales of tangible personal property are in this

 

 

HB4004- 104 -LRB100 11829 HLH 23189 b

1    State if:
2            (i) The property is delivered or shipped to a
3        purchaser, other than the United States government,
4        within this State regardless of the f. o. b. point or
5        other conditions of the sale; or
6            (ii) The property is shipped from an office, store,
7        warehouse, factory or other place of storage in this
8        State and either the purchaser is the United States
9        government or the person is not taxable in the state of
10        the purchaser; provided, however, that premises owned
11        or leased by a person who has independently contracted
12        with the seller for the printing of newspapers,
13        periodicals or books shall not be deemed to be an
14        office, store, warehouse, factory or other place of
15        storage for purposes of this Section. Sales of tangible
16        personal property are not in this State if the seller
17        and purchaser would be members of the same unitary
18        business group but for the fact that either the seller
19        or purchaser is a person with 80% or more of total
20        business activity outside of the United States and the
21        property is purchased for resale.
22        (B-1) Patents, copyrights, trademarks, and similar
23    items of intangible personal property.
24            (i) Gross receipts from the licensing, sale, or
25        other disposition of a patent, copyright, trademark,
26        or similar item of intangible personal property, other

 

 

HB4004- 105 -LRB100 11829 HLH 23189 b

1        than gross receipts governed by paragraph (B-7) of this
2        item (3), are in this State to the extent the item is
3        utilized in this State during the year the gross
4        receipts are included in gross income.
5            (ii) Place of utilization.
6                (I) A patent is utilized in a state to the
7            extent that it is employed in production,
8            fabrication, manufacturing, or other processing in
9            the state or to the extent that a patented product
10            is produced in the state. If a patent is utilized
11            in more than one state, the extent to which it is
12            utilized in any one state shall be a fraction equal
13            to the gross receipts of the licensee or purchaser
14            from sales or leases of items produced,
15            fabricated, manufactured, or processed within that
16            state using the patent and of patented items
17            produced within that state, divided by the total of
18            such gross receipts for all states in which the
19            patent is utilized.
20                (II) A copyright is utilized in a state to the
21            extent that printing or other publication
22            originates in the state. If a copyright is utilized
23            in more than one state, the extent to which it is
24            utilized in any one state shall be a fraction equal
25            to the gross receipts from sales or licenses of
26            materials printed or published in that state

 

 

HB4004- 106 -LRB100 11829 HLH 23189 b

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

 

 

HB4004- 107 -LRB100 11829 HLH 23189 b

1    determination shall be made on the basis of the gross
2    receipts of the entire unitary business group.
3        (B-5) For taxable years ending on or after December 31,
4    2008, except as provided in subsections (ii) through (vii),
5    receipts from the sale of telecommunications service or
6    mobile telecommunications service are in this State if the
7    customer's service address is in this State.
8            (i) For purposes of this subparagraph (B-5), the
9        following terms have the following meanings:
10            "Ancillary services" means services that are
11        associated with or incidental to the provision of
12        "telecommunications services", including but not
13        limited to "detailed telecommunications billing",
14        "directory assistance", "vertical service", and "voice
15        mail services".
16            "Air-to-Ground Radiotelephone service" means a
17        radio service, as that term is defined in 47 CFR 22.99,
18        in which common carriers are authorized to offer and
19        provide radio telecommunications service for hire to
20        subscribers in aircraft.
21            "Call-by-call Basis" means any method of charging
22        for telecommunications services where the price is
23        measured by individual calls.
24            "Communications Channel" means a physical or
25        virtual path of communications over which signals are
26        transmitted between or among customer channel

 

 

HB4004- 108 -LRB100 11829 HLH 23189 b

1        termination points.
2            "Conference bridging service" means an "ancillary
3        service" that links two or more participants of an
4        audio or video conference call and may include the
5        provision of a telephone number. "Conference bridging
6        service" does not include the "telecommunications
7        services" used to reach the conference bridge.
8            "Customer Channel Termination Point" means the
9        location where the customer either inputs or receives
10        the communications.
11            "Detailed telecommunications billing service"
12        means an "ancillary service" of separately stating
13        information pertaining to individual calls on a
14        customer's billing statement.
15            "Directory assistance" means an "ancillary
16        service" of providing telephone number information,
17        and/or address information.
18            "Home service provider" means the facilities based
19        carrier or reseller with which the customer contracts
20        for the provision of mobile telecommunications
21        services.
22            "Mobile telecommunications service" means
23        commercial mobile radio service, as defined in Section
24        20.3 of Title 47 of the Code of Federal Regulations as
25        in effect on June 1, 1999.
26            "Place of primary use" means the street address

 

 

HB4004- 109 -LRB100 11829 HLH 23189 b

1        representative of where the customer's use of the
2        telecommunications service primarily occurs, which
3        must be the residential street address or the primary
4        business street address of the customer. In the case of
5        mobile telecommunications services, "place of primary
6        use" must be within the licensed service area of the
7        home service provider.
8            "Post-paid telecommunication service" means the
9        telecommunications service obtained by making a
10        payment on a call-by-call basis either through the use
11        of a credit card or payment mechanism such as a bank
12        card, travel card, credit card, or debit card, or by
13        charge made to a telephone number which is not
14        associated with the origination or termination of the
15        telecommunications service. A post-paid calling
16        service includes telecommunications service, except a
17        prepaid wireless calling service, that would be a
18        prepaid calling service except it is not exclusively a
19        telecommunication service.
20            "Prepaid telecommunication service" means the
21        right to access exclusively telecommunications
22        services, which must be paid for in advance and which
23        enables the origination of calls using an access number
24        or authorization code, whether manually or
25        electronically dialed, and that is sold in
26        predetermined units or dollars of which the number

 

 

HB4004- 110 -LRB100 11829 HLH 23189 b

1        declines with use in a known amount.
2            "Prepaid Mobile telecommunication service" means a
3        telecommunications service that provides the right to
4        utilize mobile wireless service as well as other
5        non-telecommunication services, including but not
6        limited to ancillary services, which must be paid for
7        in advance that is sold in predetermined units or
8        dollars of which the number declines with use in a
9        known amount.
10            "Private communication service" means a
11        telecommunication service that entitles the customer
12        to exclusive or priority use of a communications
13        channel or group of channels between or among
14        termination points, regardless of the manner in which
15        such channel or channels are connected, and includes
16        switching capacity, extension lines, stations, and any
17        other associated services that are provided in
18        connection with the use of such channel or channels.
19            "Service address" means:
20                (a) The location of the telecommunications
21            equipment to which a customer's call is charged and
22            from which the call originates or terminates,
23            regardless of where the call is billed or paid;
24                (b) If the location in line (a) is not known,
25            service address means the origination point of the
26            signal of the telecommunications services first

 

 

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1            identified by either the seller's
2            telecommunications system or in information
3            received by the seller from its service provider
4            where the system used to transport such signals is
5            not that of the seller; and
6                (c) If the locations in line (a) and line (b)
7            are not known, the service address means the
8            location of the customer's place of primary use.
9            "Telecommunications service" means the electronic
10        transmission, conveyance, or routing of voice, data,
11        audio, video, or any other information or signals to a
12        point, or between or among points. The term
13        "telecommunications service" includes such
14        transmission, conveyance, or routing in which computer
15        processing applications are used to act on the form,
16        code or protocol of the content for purposes of
17        transmission, conveyance or routing without regard to
18        whether such service is referred to as voice over
19        Internet protocol services or is classified by the
20        Federal Communications Commission as enhanced or value
21        added. "Telecommunications service" does not include:
22                (a) Data processing and information services
23            that allow data to be generated, acquired, stored,
24            processed, or retrieved and delivered by an
25            electronic transmission to a purchaser when such
26            purchaser's primary purpose for the underlying

 

 

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1            transaction is the processed data or information;
2                (b) Installation or maintenance of wiring or
3            equipment on a customer's premises;
4                (c) Tangible personal property;
5                (d) Advertising, including but not limited to
6            directory advertising; .
7                (e) Billing and collection services provided
8            to third parties;
9                (f) Internet access service;
10                (g) Radio and television audio and video
11            programming services, regardless of the medium,
12            including the furnishing of transmission,
13            conveyance and routing of such services by the
14            programming service provider. Radio and television
15            audio and video programming services shall include
16            but not be limited to cable service as defined in
17            47 USC 522(6) and audio and video programming
18            services delivered by commercial mobile radio
19            service providers, as defined in 47 CFR 20.3;
20                (h) "Ancillary services"; or
21                (i) Digital products "delivered
22            electronically", including but not limited to
23            software, music, video, reading materials or ring
24            tones.
25            "Vertical service" means an "ancillary service"
26        that is offered in connection with one or more

 

 

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1        "telecommunications services", which offers advanced
2        calling features that allow customers to identify
3        callers and to manage multiple calls and call
4        connections, including "conference bridging services".
5            "Voice mail service" means an "ancillary service"
6        that enables the customer to store, send or receive
7        recorded messages. "Voice mail service" does not
8        include any "vertical services" that the customer may
9        be required to have in order to utilize the "voice mail
10        service".
11            (ii) Receipts from the sale of telecommunications
12        service sold on an individual call-by-call basis are in
13        this State if either of the following applies:
14                (a) The call both originates and terminates in
15            this State.
16                (b) The call either originates or terminates
17            in this State and the service address is located in
18            this State.
19            (iii) Receipts from the sale of postpaid
20        telecommunications service at retail are in this State
21        if the origination point of the telecommunication
22        signal, as first identified by the service provider's
23        telecommunication system or as identified by
24        information received by the seller from its service
25        provider if the system used to transport
26        telecommunication signals is not the seller's, is

 

 

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1        located in this State.
2            (iv) Receipts from the sale of prepaid
3        telecommunications service or prepaid mobile
4        telecommunications service at retail are in this State
5        if the purchaser obtains the prepaid card or similar
6        means of conveyance at a location in this State.
7        Receipts from recharging a prepaid telecommunications
8        service or mobile telecommunications service is in
9        this State if the purchaser's billing information
10        indicates a location in this State.
11            (v) Receipts from the sale of private
12        communication services are in this State as follows:
13                (a) 100% of receipts from charges imposed at
14            each channel termination point in this State.
15                (b) 100% of receipts from charges for the total
16            channel mileage between each channel termination
17            point in this State.
18                (c) 50% of the total receipts from charges for
19            service segments when those segments are between 2
20            customer channel termination points, 1 of which is
21            located in this State and the other is located
22            outside of this State, which segments are
23            separately charged.
24                (d) The receipts from charges for service
25            segments with a channel termination point located
26            in this State and in two or more other states, and

 

 

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1            which segments are not separately billed, are in
2            this State based on a percentage determined by
3            dividing the number of customer channel
4            termination points in this State by the total
5            number of customer channel termination points.
6            (vi) Receipts from charges for ancillary services
7        for telecommunications service sold to customers at
8        retail are in this State if the customer's primary
9        place of use of telecommunications services associated
10        with those ancillary services is in this State. If the
11        seller of those ancillary services cannot determine
12        where the associated telecommunications are located,
13        then the ancillary services shall be based on the
14        location of the purchaser.
15            (vii) Receipts to access a carrier's network or
16        from the sale of telecommunication services or
17        ancillary services for resale are in this State as
18        follows:
19                (a) 100% of the receipts from access fees
20            attributable to intrastate telecommunications
21            service that both originates and terminates in
22            this State.
23                (b) 50% of the receipts from access fees
24            attributable to interstate telecommunications
25            service if the interstate call either originates
26            or terminates in this State.

 

 

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1                (c) 100% of the receipts from interstate end
2            user access line charges, if the customer's
3            service address is in this State. As used in this
4            subdivision, "interstate end user access line
5            charges" includes, but is not limited to, the
6            surcharge approved by the federal communications
7            commission and levied pursuant to 47 CFR 69.
8                (d) Gross receipts from sales of
9            telecommunication services or from ancillary
10            services for telecommunications services sold to
11            other telecommunication service providers for
12            resale shall be sourced to this State using the
13            apportionment concepts used for non-resale
14            receipts of telecommunications services if the
15            information is readily available to make that
16            determination. If the information is not readily
17            available, then the taxpayer may use any other
18            reasonable and consistent method.
19        (B-7) For taxable years ending on or after December 31,
20    2008, receipts from the sale of broadcasting services are
21    in this State if the broadcasting services are received in
22    this State. For purposes of this paragraph (B-7), the
23    following terms have the following meanings:
24            "Advertising revenue" means consideration received
25        by the taxpayer in exchange for broadcasting services
26        or allowing the broadcasting of commercials or

 

 

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1        announcements in connection with the broadcasting of
2        film or radio programming, from sponsorships of the
3        programming, or from product placements in the
4        programming.
5            "Audience factor" means the ratio that the
6        audience or subscribers located in this State of a
7        station, a network, or a cable system bears to the
8        total audience or total subscribers for that station,
9        network, or cable system. The audience factor for film
10        or radio programming shall be determined by reference
11        to the books and records of the taxpayer or by
12        reference to published rating statistics provided the
13        method used by the taxpayer is consistently used from
14        year to year for this purpose and fairly represents the
15        taxpayer's activity in this State.
16            "Broadcast" or "broadcasting" or "broadcasting
17        services" means the transmission or provision of film
18        or radio programming, whether through the public
19        airwaves, by cable, by direct or indirect satellite
20        transmission, or by any other means of communication,
21        either through a station, a network, or a cable system.
22            "Film" or "film programming" means the broadcast
23        on television of any and all performances, events, or
24        productions, including but not limited to news,
25        sporting events, plays, stories, or other literary,
26        commercial, educational, or artistic works, either

 

 

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1        live or through the use of video tape, disc, or any
2        other type of format or medium. Each episode of a
3        series of films produced for television shall
4        constitute separate "film" notwithstanding that the
5        series relates to the same principal subject and is
6        produced during one or more tax periods.
7            "Radio" or "radio programming" means the broadcast
8        on radio of any and all performances, events, or
9        productions, including but not limited to news,
10        sporting events, plays, stories, or other literary,
11        commercial, educational, or artistic works, either
12        live or through the use of an audio tape, disc, or any
13        other format or medium. Each episode in a series of
14        radio programming produced for radio broadcast shall
15        constitute a separate "radio programming"
16        notwithstanding that the series relates to the same
17        principal subject and is produced during one or more
18        tax periods.
19                (i) In the case of advertising revenue from
20            broadcasting, the customer is the advertiser and
21            the service is received in this State if the
22            commercial domicile of the advertiser is in this
23            State.
24                (ii) In the case where film or radio
25            programming is broadcast by a station, a network,
26            or a cable system for a fee or other remuneration

 

 

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1            received from the recipient of the broadcast, the
2            portion of the service that is received in this
3            State is measured by the portion of the recipients
4            of the broadcast located in this State.
5            Accordingly, the fee or other remuneration for
6            such service that is included in the Illinois
7            numerator of the sales factor is the total of those
8            fees or other remuneration received from
9            recipients in Illinois. For purposes of this
10            paragraph, a taxpayer may determine the location
11            of the recipients of its broadcast using the
12            address of the recipient shown in its contracts
13            with the recipient or using the billing address of
14            the recipient in the taxpayer's records.
15                (iii) In the case where film or radio
16            programming is broadcast by a station, a network,
17            or a cable system for a fee or other remuneration
18            from the person providing the programming, the
19            portion of the broadcast service that is received
20            by such station, network, or cable system in this
21            State is measured by the portion of recipients of
22            the broadcast located in this State. Accordingly,
23            the amount of revenue related to such an
24            arrangement that is included in the Illinois
25            numerator of the sales factor is the total fee or
26            other total remuneration from the person providing

 

 

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1            the programming related to that broadcast
2            multiplied by the Illinois audience factor for
3            that broadcast.
4                (iv) In the case where film or radio
5            programming is provided by a taxpayer that is a
6            network or station to a customer for broadcast in
7            exchange for a fee or other remuneration from that
8            customer the broadcasting service is received at
9            the location of the office of the customer from
10            which the services were ordered in the regular
11            course of the customer's trade or business.
12            Accordingly, in such a case the revenue derived by
13            the taxpayer that is included in the taxpayer's
14            Illinois numerator of the sales factor is the
15            revenue from such customers who receive the
16            broadcasting service in Illinois.
17                (v) In the case where film or radio programming
18            is provided by a taxpayer that is not a network or
19            station to another person for broadcasting in
20            exchange for a fee or other remuneration from that
21            person, the broadcasting service is received at
22            the location of the office of the customer from
23            which the services were ordered in the regular
24            course of the customer's trade or business.
25            Accordingly, in such a case the revenue derived by
26            the taxpayer that is included in the taxpayer's

 

 

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1            Illinois numerator of the sales factor is the
2            revenue from such customers who receive the
3            broadcasting service in Illinois.
4        (B-8) Gross receipts from winnings under the Illinois
5    Lottery Law from the assignment of a prize under Section
6    13.1 of the Illinois Lottery Law are received in this
7    State. This paragraph (B-8) applies only to taxable years
8    ending on or after December 31, 2013.
9        (C) For taxable years ending before December 31, 2008,
10    sales, other than sales governed by paragraphs (B), (B-1),
11    (B-2), and (B-8) are in this State if:
12            (i) The income-producing activity is performed in
13        this State; or
14            (ii) The income-producing activity is performed
15        both within and without this State and a greater
16        proportion of the income-producing activity is
17        performed within this State than without this State,
18        based on performance costs.
19        (C-5) For taxable years ending on or after December 31,
20    2008, sales, other than sales governed by paragraphs (B),
21    (B-1), (B-2), (B-5), and (B-7), are in this State if any of
22    the following criteria are met:
23            (i) Sales from the sale or lease of real property
24        are in this State if the property is located in this
25        State.
26            (ii) Sales from the lease or rental of tangible

 

 

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1        personal property are in this State if the property is
2        located in this State during the rental period. Sales
3        from the lease or rental of tangible personal property
4        that is characteristically moving property, including,
5        but not limited to, motor vehicles, rolling stock,
6        aircraft, vessels, or mobile equipment are in this
7        State to the extent that the property is used in this
8        State.
9            (iii) In the case of interest, net gains (but not
10        less than zero) and other items of income from
11        intangible personal property, the sale is in this State
12        if:
13                (a) in the case of a taxpayer who is a dealer
14            in the item of intangible personal property within
15            the meaning of Section 475 of the Internal Revenue
16            Code, the income or gain is received from a
17            customer in this State. For purposes of this
18            subparagraph, a customer is in this State if the
19            customer is an individual, trust or estate who is a
20            resident of this State and, for all other
21            customers, if the customer's commercial domicile
22            is in this State. Unless the dealer has actual
23            knowledge of the residence or commercial domicile
24            of a customer during a taxable year, the customer
25            shall be deemed to be a customer in this State if
26            the billing address of the customer, as shown in

 

 

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1            the records of the dealer, is in this State; or
2                (b) in all other cases, if the
3            income-producing activity of the taxpayer is
4            performed in this State or, if the
5            income-producing activity of the taxpayer is
6            performed both within and without this State, if a
7            greater proportion of the income-producing
8            activity of the taxpayer is performed within this
9            State than in any other state, based on performance
10            costs.
11            (iv) Sales of services are in this State if the
12        services are received in this State. For the purposes
13        of this section, gross receipts from the performance of
14        services provided to a corporation, partnership, or
15        trust may only be attributed to a state where that
16        corporation, partnership, or trust has a fixed place of
17        business. If the state where the services are received
18        is not readily determinable or is a state where the
19        corporation, partnership, or trust receiving the
20        service does not have a fixed place of business, the
21        services shall be deemed to be received at the location
22        of the office of the customer from which the services
23        were ordered in the regular course of the customer's
24        trade or business. If the ordering office cannot be
25        determined, the services shall be deemed to be received
26        at the office of the customer to which the services are

 

 

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1        billed. If the taxpayer is not taxable in the state in
2        which the services are received, the sale must be
3        excluded from both the numerator and the denominator of
4        the sales factor. The Department shall adopt rules
5        prescribing where specific types of service are
6        received, including, but not limited to, publishing,
7        and utility service.
8        (D) For taxable years ending on or after December 31,
9    1995, the following items of income shall not be included
10    in the numerator or denominator of the sales factor:
11    dividends; amounts included under Section 78 of the
12    Internal Revenue Code; and Subpart F income as defined in
13    Section 952 of the Internal Revenue Code. No inference
14    shall be drawn from the enactment of this paragraph (D) in
15    construing this Section for taxable years ending before
16    December 31, 1995.
17        (E) Paragraphs (B-1) and (B-2) shall apply to tax years
18    ending on or after December 31, 1999, provided that a
19    taxpayer may elect to apply the provisions of these
20    paragraphs to prior tax years. Such election shall be made
21    in the form and manner prescribed by the Department, shall
22    be irrevocable, and shall apply to all tax years; provided
23    that, if a taxpayer's Illinois income tax liability for any
24    tax year, as assessed under Section 903 prior to January 1,
25    1999, was computed in a manner contrary to the provisions
26    of paragraphs (B-1) or (B-2), no refund shall be payable to

 

 

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1    the taxpayer for that tax year to the extent such refund is
2    the result of applying the provisions of paragraph (B-1) or
3    (B-2) retroactively. In the case of a unitary business
4    group, such election shall apply to all members of such
5    group for every tax year such group is in existence, but
6    shall not apply to any taxpayer for any period during which
7    that taxpayer is not a member of such group.
8    (b) Insurance companies.
9        (1) In general. Except as otherwise provided by
10    paragraph (2), business income of an insurance company for
11    a taxable year shall be apportioned to this State by
12    multiplying such income by a fraction, the numerator of
13    which is the direct premiums written for insurance upon
14    property or risk in this State, and the denominator of
15    which is the direct premiums written for insurance upon
16    property or risk everywhere. For purposes of this
17    subsection, the term "direct premiums written" means the
18    total amount of direct premiums written, assessments and
19    annuity considerations as reported for the taxable year on
20    the annual statement filed by the company with the Illinois
21    Director of Insurance in the form approved by the National
22    Convention of Insurance Commissioners or such other form as
23    may be prescribed in lieu thereof.
24        (2) Reinsurance. If the principal source of premiums
25    written by an insurance company consists of premiums for
26    reinsurance accepted by it, the business income of such

 

 

HB4004- 126 -LRB100 11829 HLH 23189 b

1    company shall be apportioned to this State by multiplying
2    such income by a fraction, the numerator of which is the
3    sum of (i) direct premiums written for insurance upon
4    property or risk in this State, plus (ii) premiums written
5    for reinsurance accepted in respect of property or risk in
6    this State, and the denominator of which is the sum of
7    (iii) direct premiums written for insurance upon property
8    or risk everywhere, plus (iv) premiums written for
9    reinsurance accepted in respect of property or risk
10    everywhere. For purposes of this paragraph, premiums
11    written for reinsurance accepted in respect of property or
12    risk in this State, whether or not otherwise determinable,
13    may, at the election of the company, be determined on the
14    basis of the proportion which premiums written for
15    reinsurance accepted from companies commercially domiciled
16    in Illinois bears to premiums written for reinsurance
17    accepted from all sources, or, alternatively, in the
18    proportion which the sum of the direct premiums written for
19    insurance upon property or risk in this State by each
20    ceding company from which reinsurance is accepted bears to
21    the sum of the total direct premiums written by each such
22    ceding company for the taxable year. The election made by a
23    company under this paragraph for its first taxable year
24    ending on or after December 31, 2011, shall be binding for
25    that company for that taxable year and for all subsequent
26    taxable years, and may be altered only with the written

 

 

HB4004- 127 -LRB100 11829 HLH 23189 b

1    permission of the Department, which shall not be
2    unreasonably withheld.
3    (c) Financial organizations.
4        (1) In general. For taxable years ending before
5    December 31, 2008, business income of a financial
6    organization shall be apportioned to this State by
7    multiplying such income by a fraction, the numerator of
8    which is its business income from sources within this
9    State, and the denominator of which is its business income
10    from all sources. For the purposes of this subsection, the
11    business income of a financial organization from sources
12    within this State is the sum of the amounts referred to in
13    subparagraphs (A) through (E) following, but excluding the
14    adjusted income of an international banking facility as
15    determined in paragraph (2):
16            (A) Fees, commissions or other compensation for
17        financial services rendered within this State;
18            (B) Gross profits from trading in stocks, bonds or
19        other securities managed within this State;
20            (C) Dividends, and interest from Illinois
21        customers, which are received within this State;
22            (D) Interest charged to customers at places of
23        business maintained within this State for carrying
24        debit balances of margin accounts, without deduction
25        of any costs incurred in carrying such accounts; and
26            (E) Any other gross income resulting from the

 

 

HB4004- 128 -LRB100 11829 HLH 23189 b

1        operation as a financial organization within this
2        State. In computing the amounts referred to in
3        paragraphs (A) through (E) of this subsection, any
4        amount received by a member of an affiliated group
5        (determined under Section 1504(a) of the Internal
6        Revenue Code but without reference to whether any such
7        corporation is an "includible corporation" under
8        Section 1504(b) of the Internal Revenue Code) from
9        another member of such group shall be included only to
10        the extent such amount exceeds expenses of the
11        recipient directly related thereto.
12        (2) International Banking Facility. For taxable years
13    ending before December 31, 2008:
14            (A) Adjusted Income. The adjusted income of an
15        international banking facility is its income reduced
16        by the amount of the floor amount.
17            (B) Floor Amount. The floor amount shall be the
18        amount, if any, determined by multiplying the income of
19        the international banking facility by a fraction, not
20        greater than one, which is determined as follows:
21                (i) The numerator shall be:
22                The average aggregate, determined on a
23            quarterly basis, of the financial organization's
24            loans to banks in foreign countries, to foreign
25            domiciled borrowers (except where secured
26            primarily by real estate) and to foreign

 

 

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1            governments and other foreign official
2            institutions, as reported for its branches,
3            agencies and offices within the state on its
4            "Consolidated Report of Condition", Schedule A,
5            Lines 2.c., 5.b., and 7.a., which was filed with
6            the Federal Deposit Insurance Corporation and
7            other regulatory authorities, for the year 1980,
8            minus
9                The average aggregate, determined on a
10            quarterly basis, of such loans (other than loans of
11            an international banking facility), as reported by
12            the financial institution for its branches,
13            agencies and offices within the state, on the
14            corresponding Schedule and lines of the
15            Consolidated Report of Condition for the current
16            taxable year, provided, however, that in no case
17            shall the amount determined in this clause (the
18            subtrahend) exceed the amount determined in the
19            preceding clause (the minuend); and
20                (ii) the denominator shall be the average
21            aggregate, determined on a quarterly basis, of the
22            international banking facility's loans to banks in
23            foreign countries, to foreign domiciled borrowers
24            (except where secured primarily by real estate)
25            and to foreign governments and other foreign
26            official institutions, which were recorded in its

 

 

HB4004- 130 -LRB100 11829 HLH 23189 b

1            financial accounts for the current taxable year.
2            (C) Change to Consolidated Report of Condition and
3        in Qualification. In the event the Consolidated Report
4        of Condition which is filed with the Federal Deposit
5        Insurance Corporation and other regulatory authorities
6        is altered so that the information required for
7        determining the floor amount is not found on Schedule
8        A, lines 2.c., 5.b. and 7.a., the financial institution
9        shall notify the Department and the Department may, by
10        regulations or otherwise, prescribe or authorize the
11        use of an alternative source for such information. The
12        financial institution shall also notify the Department
13        should its international banking facility fail to
14        qualify as such, in whole or in part, or should there
15        be any amendment or change to the Consolidated Report
16        of Condition, as originally filed, to the extent such
17        amendment or change alters the information used in
18        determining the floor amount.
19        (3) For taxable years ending on or after December 31,
20    2008, the business income of a financial organization shall
21    be apportioned to this State by multiplying such income by
22    a fraction, the numerator of which is its gross receipts
23    from sources in this State or otherwise attributable to
24    this State's marketplace and the denominator of which is
25    its gross receipts everywhere during the taxable year.
26    "Gross receipts" for purposes of this subparagraph (3)

 

 

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1    means gross income, including net taxable gain on
2    disposition of assets, including securities and money
3    market instruments, when derived from transactions and
4    activities in the regular course of the financial
5    organization's trade or business. The following examples
6    are illustrative:
7            (i) Receipts from the lease or rental of real or
8        tangible personal property are in this State if the
9        property is located in this State during the rental
10        period. Receipts from the lease or rental of tangible
11        personal property that is characteristically moving
12        property, including, but not limited to, motor
13        vehicles, rolling stock, aircraft, vessels, or mobile
14        equipment are from sources in this State to the extent
15        that the property is used in this State.
16            (ii) Interest income, commissions, fees, gains on
17        disposition, and other receipts from assets in the
18        nature of loans that are secured primarily by real
19        estate or tangible personal property are from sources
20        in this State if the security is located in this State.
21            (iii) Interest income, commissions, fees, gains on
22        disposition, and other receipts from consumer loans
23        that are not secured by real or tangible personal
24        property are from sources in this State if the debtor
25        is a resident of this State.
26            (iv) Interest income, commissions, fees, gains on

 

 

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1        disposition, and other receipts from commercial loans
2        and installment obligations that are not secured by
3        real or tangible personal property are from sources in
4        this State if the proceeds of the loan are to be
5        applied in this State. If it cannot be determined where
6        the funds are to be applied, the income and receipts
7        are from sources in this State if the office of the
8        borrower from which the loan was negotiated in the
9        regular course of business is located in this State. If
10        the location of this office cannot be determined, the
11        income and receipts shall be excluded from the
12        numerator and denominator of the sales factor.
13            (v) Interest income, fees, gains on disposition,
14        service charges, merchant discount income, and other
15        receipts from credit card receivables are from sources
16        in this State if the card charges are regularly billed
17        to a customer in this State.
18            (vi) Receipts from the performance of services,
19        including, but not limited to, fiduciary, advisory,
20        and brokerage services, are in this State if the
21        services are received in this State within the meaning
22        of subparagraph (a)(3)(C-5)(iv) of this Section.
23            (vii) Receipts from the issuance of travelers
24        checks and money orders are from sources in this State
25        if the checks and money orders are issued from a
26        location within this State.

 

 

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1            (viii) Receipts from investment assets and
2        activities and trading assets and activities are
3        included in the receipts factor as follows:
4                (1) Interest, dividends, net gains (but not
5            less than zero) and other income from investment
6            assets and activities from trading assets and
7            activities shall be included in the receipts
8            factor. Investment assets and activities and
9            trading assets and activities include but are not
10            limited to: investment securities; trading account
11            assets; federal funds; securities purchased and
12            sold under agreements to resell or repurchase;
13            options; futures contracts; forward contracts;
14            notional principal contracts such as swaps;
15            equities; and foreign currency transactions. With
16            respect to the investment and trading assets and
17            activities described in subparagraphs (A) and (B)
18            of this paragraph, the receipts factor shall
19            include the amounts described in such
20            subparagraphs.
21                    (A) The receipts factor shall include the
22                amount by which interest from federal funds
23                sold and securities purchased under resale
24                agreements exceeds interest expense on federal
25                funds purchased and securities sold under
26                repurchase agreements.

 

 

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1                    (B) The receipts factor shall include the
2                amount by which interest, dividends, gains and
3                other income from trading assets and
4                activities, including but not limited to
5                assets and activities in the matched book, in
6                the arbitrage book, and foreign currency
7                transactions, exceed amounts paid in lieu of
8                interest, amounts paid in lieu of dividends,
9                and losses from such assets and activities.
10                (2) The numerator of the receipts factor
11            includes interest, dividends, net gains (but not
12            less than zero), and other income from investment
13            assets and activities and from trading assets and
14            activities described in paragraph (1) of this
15            subsection that are attributable to this State.
16                    (A) The amount of interest, dividends, net
17                gains (but not less than zero), and other
18                income from investment assets and activities
19                in the investment account to be attributed to
20                this State and included in the numerator is
21                determined by multiplying all such income from
22                such assets and activities by a fraction, the
23                numerator of which is the gross income from
24                such assets and activities which are properly
25                assigned to a fixed place of business of the
26                taxpayer within this State and the denominator

 

 

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1                of which is the gross income from all such
2                assets and activities.
3                    (B) The amount of interest from federal
4                funds sold and purchased and from securities
5                purchased under resale agreements and
6                securities sold under repurchase agreements
7                attributable to this State and included in the
8                numerator is determined by multiplying the
9                amount described in subparagraph (A) of
10                paragraph (1) of this subsection from such
11                funds and such securities by a fraction, the
12                numerator of which is the gross income from
13                such funds and such securities which are
14                properly assigned to a fixed place of business
15                of the taxpayer within this State and the
16                denominator of which is the gross income from
17                all such funds and such securities.
18                    (C) The amount of interest, dividends,
19                gains, and other income from trading assets and
20                activities, including but not limited to
21                assets and activities in the matched book, in
22                the arbitrage book and foreign currency
23                transactions (but excluding amounts described
24                in subparagraphs (A) or (B) of this paragraph),
25                attributable to this State and included in the
26                numerator is determined by multiplying the

 

 

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1                amount described in subparagraph (B) of
2                paragraph (1) of this subsection by a fraction,
3                the numerator of which is the gross income from
4                such trading assets and activities which are
5                properly assigned to a fixed place of business
6                of the taxpayer within this State and the
7                denominator of which is the gross income from
8                all such assets and activities.
9                    (D) Properly assigned, for purposes of
10                this paragraph (2) of this subsection, means
11                the investment or trading asset or activity is
12                assigned to the fixed place of business with
13                which it has a preponderance of substantive
14                contacts. An investment or trading asset or
15                activity assigned by the taxpayer to a fixed
16                place of business without the State shall be
17                presumed to have been properly assigned if:
18                        (i) the taxpayer has assigned, in the
19                    regular course of its business, such asset
20                    or activity on its records to a fixed place
21                    of business consistent with federal or
22                    state regulatory requirements;
23                        (ii) such assignment on its records is
24                    based upon substantive contacts of the
25                    asset or activity to such fixed place of
26                    business; and

 

 

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1                        (iii) the taxpayer uses such records
2                    reflecting assignment of such assets or
3                    activities for the filing of all state and
4                    local tax returns for which an assignment
5                    of such assets or activities to a fixed
6                    place of business is required.
7                    (E) The presumption of proper assignment
8                of an investment or trading asset or activity
9                provided in subparagraph (D) of paragraph (2)
10                of this subsection may be rebutted upon a
11                showing by the Department, supported by a
12                preponderance of the evidence, that the
13                preponderance of substantive contacts
14                regarding such asset or activity did not occur
15                at the fixed place of business to which it was
16                assigned on the taxpayer's records. If the
17                fixed place of business that has a
18                preponderance of substantive contacts cannot
19                be determined for an investment or trading
20                asset or activity to which the presumption in
21                subparagraph (D) of paragraph (2) of this
22                subsection does not apply or with respect to
23                which that presumption has been rebutted, that
24                asset or activity is properly assigned to the
25                state in which the taxpayer's commercial
26                domicile is located. For purposes of this

 

 

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1                subparagraph (E), it shall be presumed,
2                subject to rebuttal, that taxpayer's
3                commercial domicile is in the state of the
4                United States or the District of Columbia to
5                which the greatest number of employees are
6                regularly connected with the management of the
7                investment or trading income or out of which
8                they are working, irrespective of where the
9                services of such employees are performed, as of
10                the last day of the taxable year.
11        (4) (Blank).
12        (5) (Blank).
13    (c-1) Federally regulated exchanges. For taxable years
14ending on or after December 31, 2012 and ending prior to
15December 31, 2017, business income of a federally regulated
16exchange shall, at the option of the federally regulated
17exchange, be apportioned to this State by multiplying such
18income by a fraction, the numerator of which is its business
19income from sources within this State, and the denominator of
20which is its business income from all sources. For purposes of
21this subsection, the business income within this State of a
22federally regulated exchange is the sum of the following:
23        (1) Receipts attributable to transactions executed on
24    a physical trading floor if that physical trading floor is
25    located in this State.
26        (2) Receipts attributable to all other matching,

 

 

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1    execution, or clearing transactions, including without
2    limitation receipts from the provision of matching,
3    execution, or clearing services to another entity,
4    multiplied by (i) for taxable years ending on or after
5    December 31, 2012 but before December 31, 2013, 63.77%; and
6    (ii) for taxable years ending on or after December 31,
7    2013, 27.54%.
8        (3) All other receipts not governed by subparagraphs
9    (1) or (2) of this subsection (c-1), to the extent the
10    receipts would be characterized as "sales in this State"
11    under item (3) of subsection (a) of this Section.
12    "Federally regulated exchange" means (i) a "registered
13entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B),
14or (C), (ii) an "exchange" or "clearing agency" within the
15meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such
16entities regulated under any successor regulatory structure to
17the foregoing, and (iv) all taxpayers who are members of the
18same unitary business group as a federally regulated exchange,
19determined without regard to the prohibition in Section
201501(a)(27) of this Act against including in a unitary business
21group taxpayers who are ordinarily required to apportion
22business income under different subsections of this Section;
23provided that this subparagraph (iv) shall apply only if 50% or
24more of the business receipts of the unitary business group
25determined by application of this subparagraph (iv) for the
26taxable year are attributable to the matching, execution, or

 

 

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1clearing of transactions conducted by an entity described in
2subparagraph (i), (ii), or (iii) of this paragraph.
3    In no event shall the Illinois apportionment percentage
4computed in accordance with this subsection (c-1) for any
5taxpayer for any tax year be less than the Illinois
6apportionment percentage computed under this subsection (c-1)
7for that taxpayer for the first full tax year ending on or
8after December 31, 2013 for which this subsection (c-1) applied
9to the taxpayer.
10    (d) Transportation services. For taxable years ending
11before December 31, 2008, business income derived from
12furnishing transportation services shall be apportioned to
13this State in accordance with paragraphs (1) and (2):
14        (1) Such business income (other than that derived from
15    transportation by pipeline) shall be apportioned to this
16    State by multiplying such income by a fraction, the
17    numerator of which is the revenue miles of the person in
18    this State, and the denominator of which is the revenue
19    miles of the person everywhere. For purposes of this
20    paragraph, a revenue mile is the transportation of 1
21    passenger or 1 net ton of freight the distance of 1 mile
22    for a consideration. Where a person is engaged in the
23    transportation of both passengers and freight, the
24    fraction above referred to shall be determined by means of
25    an average of the passenger revenue mile fraction and the
26    freight revenue mile fraction, weighted to reflect the

 

 

HB4004- 141 -LRB100 11829 HLH 23189 b

1    person's
2            (A) relative railway operating income from total
3        passenger and total freight service, as reported to the
4        Interstate Commerce Commission, in the case of
5        transportation by railroad, and
6            (B) relative gross receipts from passenger and
7        freight transportation, in case of transportation
8        other than by railroad.
9        (2) Such business income derived from transportation
10    by pipeline shall be apportioned to this State by
11    multiplying such income by a fraction, the numerator of
12    which is the revenue miles of the person in this State, and
13    the denominator of which is the revenue miles of the person
14    everywhere. For the purposes of this paragraph, a revenue
15    mile is the transportation by pipeline of 1 barrel of oil,
16    1,000 cubic feet of gas, or of any specified quantity of
17    any other substance, the distance of 1 mile for a
18    consideration.
19        (3) For taxable years ending on or after December 31,
20    2008, business income derived from providing
21    transportation services other than airline services shall
22    be apportioned to this State by using a fraction, (a) the
23    numerator of which shall be (i) all receipts from any
24    movement or shipment of people, goods, mail, oil, gas, or
25    any other substance (other than by airline) that both
26    originates and terminates in this State, plus (ii) that

 

 

HB4004- 142 -LRB100 11829 HLH 23189 b

1    portion of the person's gross receipts from movements or
2    shipments of people, goods, mail, oil, gas, or any other
3    substance (other than by airline) that originates in one
4    state or jurisdiction and terminates in another state or
5    jurisdiction, that is determined by the ratio that the
6    miles traveled in this State bears to total miles
7    everywhere and (b) the denominator of which shall be all
8    revenue derived from the movement or shipment of people,
9    goods, mail, oil, gas, or any other substance (other than
10    by airline). Where a taxpayer is engaged in the
11    transportation of both passengers and freight, the
12    fraction above referred to shall first be determined
13    separately for passenger miles and freight miles. Then an
14    average of the passenger miles fraction and the freight
15    miles fraction shall be weighted to reflect the taxpayer's:
16            (A) relative railway operating income from total
17        passenger and total freight service, as reported to the
18        Surface Transportation Board, in the case of
19        transportation by railroad; and
20            (B) relative gross receipts from passenger and
21        freight transportation, in case of transportation
22        other than by railroad.
23        (4) For taxable years ending on or after December 31,
24    2008, business income derived from furnishing airline
25    transportation services shall be apportioned to this State
26    by multiplying such income by a fraction, the numerator of

 

 

HB4004- 143 -LRB100 11829 HLH 23189 b

1    which is the revenue miles of the person in this State, and
2    the denominator of which is the revenue miles of the person
3    everywhere. For purposes of this paragraph, a revenue mile
4    is the transportation of one passenger or one net ton of
5    freight the distance of one mile for a consideration. If a
6    person is engaged in the transportation of both passengers
7    and freight, the fraction above referred to shall be
8    determined by means of an average of the passenger revenue
9    mile fraction and the freight revenue mile fraction,
10    weighted to reflect the person's relative gross receipts
11    from passenger and freight airline transportation.
12    (e) Combined apportionment. Where 2 or more persons are
13engaged in a unitary business as described in subsection
14(a)(27) of Section 1501, a part of which is conducted in this
15State by one or more members of the group, the business income
16attributable to this State by any such member or members shall
17be apportioned by means of the combined apportionment method.
18    (f) Alternative allocation. If the allocation and
19apportionment provisions of subsections (a) through (e) and of
20subsection (h) do not, for taxable years ending before December
2131, 2008, fairly represent the extent of a person's business
22activity in this State, or, for taxable years ending on or
23after December 31, 2008, fairly represent the market for the
24person's goods, services, or other sources of business income,
25the person may petition for, or the Director may, without a
26petition, permit or require, in respect of all or any part of

 

 

HB4004- 144 -LRB100 11829 HLH 23189 b

1the person's business activity, if reasonable:
2        (1) Separate accounting;
3        (2) The exclusion of any one or more factors;
4        (3) The inclusion of one or more additional factors
5    which will fairly represent the person's business
6    activities or market in this State; or
7        (4) The employment of any other method to effectuate an
8    equitable allocation and apportionment of the person's
9    business income.
10    (g) Cross reference. For allocation of business income by
11residents, see Section 301(a).
12    (h) For tax years ending on or after December 31, 1998 and
13ending on or before December 31, 2017, the apportionment factor
14of persons who apportion their business income to this State
15under subsection (a) shall be equal to:
16        (1) for tax years ending on or after December 31, 1998
17    and before December 31, 1999, 16 2/3% of the property
18    factor plus 16 2/3% of the payroll factor plus 66 2/3% of
19    the sales factor;
20        (2) for tax years ending on or after December 31, 1999
21    and before December 31, 2000, 8 1/3% of the property factor
22    plus 8 1/3% of the payroll factor plus 83 1/3% of the sales
23    factor;
24        (3) for tax years ending on or after December 31, 2000,
25    the sales factor.
26If, in any tax year ending on or after December 31, 1998 and

 

 

HB4004- 145 -LRB100 11829 HLH 23189 b

1before December 31, 2000, the denominator of the payroll,
2property, or sales factor is zero, the apportionment factor
3computed in paragraph (1) or (2) of this subsection for that
4year shall be divided by an amount equal to 100% minus the
5percentage weight given to each factor whose denominator is
6equal to zero.
7(Source: P.A. 98-478, eff. 1-1-14; 98-496, eff. 1-1-14; 98-756,
8eff. 7-16-14; 99-642, eff. 7-28-16; revised 11-14-16.)
 
9    (35 ILCS 5/309 new)
10    Sec. 309. Water's edge election; inclusion of tax havens.
11    (a) As used in this Section:
12        "Affiliated corporation" means a United States parent
13    corporation and any subsidiary of which more than 50% of
14    the voting stock is owned directly or indirectly by another
15    corporate member of the water's-edge combined group.
16        "United States" means the 50 states of the United
17    States and the District of Columbia.
18        "Water's edge combined group" means all corporations
19    or entities included in the election of a taxpayer under
20    this Section.
21    (b) Notwithstanding any other provisions of law, a taxpayer
22subject to the taxes imposed under subsections (a) and (b) of
23Section 201 of this Act may apportion its income under this
24Section. A return under filed by a taxpayer that elects to
25apportion its income under this Section must include the income

 

 

HB4004- 146 -LRB100 11829 HLH 23189 b

1and apportionment factors of the following affiliated
2corporations only:
3        (1) a corporation incorporated in the United States in
4    a unitary relationship with the taxpayer and eligible to be
5    included in a federal consolidated return as described in
6    26 U.S.C. 1501 through 1505 that has more than 20% of its
7    payroll and property assignable to locations inside the
8    United States; for purposes of determining eligibility for
9    inclusion in a federal consolidated return under this
10    subsection (1)(a), the 80% stock ownership requirements of
11    26 U.S.C. 1504 must be reduced to ownership of over 50% of
12    the voting stock directly or indirectly owned or controlled
13    by an includable corporation;
14        (2) domestic international sales corporations, as
15    described in 26 U.S.C. 991 through 994, and foreign sales
16    corporations, as described in 26 U.S.C. 921 through 927;
17        (3) export trade corporations, as described in 26
18    U.S.C. 970 and 971;
19        (4) foreign corporations deriving gain or loss from
20    disposition of a United States real property interest to
21    the extent recognized under 26 U.S.C. 897;
22        (5) a corporation incorporated outside the United
23    States if over 50% of its voting stock is owned directly or
24    indirectly by the taxpayer and if more than 20% of the
25    average of its payroll and property is assignable to a
26    location inside the United States; or

 

 

HB4004- 147 -LRB100 11829 HLH 23189 b

1        (6) a corporation that is in a unitary relationship
2    with the taxpayer and that is incorporated in a tax haven,
3    including Andorra, Anguilla, Antigua and Barbuda, Aruba,
4    the Bahamas, Bahrain, Barbados, Belize, Bermuda, British
5    Virgin Islands, Cayman Islands, Cook Islands, Cyprus,
6    Dominica, Gibraltar, Grenada, Guernsey-Sark-Alderney, Isle
7    of Man, Jersey, Liberia, Liechtenstein, Luxembourg, Malta,
8    Marshall Islands, Mauritius, Monaco, Montserrat, Nauru,
9    Netherlands Antilles, Niue, Panama, Samoa, San Marino,
10    Seychelles, St. Kitts and Nevis, St. Lucia, St. Vincent and
11    the Grenadines, Turks and Caicos Islands, U.S. Virgin
12    Islands, and Vanuatu.
13    (c) For purposes of paragraphs (1) through (5) of
14subsection (b), the location of payroll and property shall be
15determined under the individual state's laws and regulations
16that set forth the apportionment formulas used to assign net
17income subject to taxes on or measured by net income. If a
18state does not impose a tax on or measured by net income,
19apportionment is determined under this Act. For the purposes of
20paragraph (6) of subsection (b), income shifted to a tax haven,
21to the extent taxable, is considered income subject to
22apportionment.
23    (d) A water's edge election may be made by a taxpayer and
24is effective only if every affiliated corporation subject to
25the taxes imposed under this Act consents to the election.
26Consent by the common parent of an affiliated group constitutes

 

 

HB4004- 148 -LRB100 11829 HLH 23189 b

1consent of all members of the group. An affiliated corporation
2that becomes subject to taxes under this Act after the water's
3edge election is considered to have consented to the election.
4The election must disclose the identity of the taxpayer and the
5identity of any affiliated corporation, including an
6affiliated corporation incorporated in a tax haven set forth in
7paragraph (6) of subsection (b), in which the taxpayer owns
8directly or indirectly more than 50% of the voting stock of the
9affiliated corporation.
10    (e) Each water's edge election must be for a 3-year
11renewable period. A water's edge election may be changed by a
12taxpayer before the end of each 3-year period only with the
13permission of the Department. In granting a change of election,
14the Department shall impose reasonable conditions that are
15necessary to prevent the avoidance of tax or clearly reflect
16income for the election period prior to the change.
17    (f) For the purposes of this Section, dividends received
18from corporations incorporated outside the United States, to
19the extent taxable, are considered income subject to
20apportionment. The after-tax net income of United States
21corporations excluded from eligibility as affiliated
22corporations under this Section and possession corporations
23described in sections 931 through 934 and 936 of the Internal
24Revenue Code are considered dividends received from
25corporations incorporated outside the United States. Eighty
26percent of all dividends apportionable under this Section must

 

 

HB4004- 149 -LRB100 11829 HLH 23189 b

1be excluded from income subject to apportionment. "Deemed"
2distributions, as set forth in section 78 of the Internal
3Revenue Code, and corresponding amounts with respect to
4dividends considered received under this subsection must be
5excluded from the income of the water's-edge combined group.
6The dividends apportionable under this subsection are in lieu
7of any expenses attributable to dividend income. A dividend
8from a corporation required to be combined in the water's edge
9combined group must be eliminated from the calculation of
10apportionable income.
 
11    (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)
12    Sec. 1501. Definitions.
13    (a) In general. When used in this Act, where not otherwise
14distinctly expressed or manifestly incompatible with the
15intent thereof:
16        (1) Business income. The term "business income" means
17    all income that may be treated as apportionable business
18    income under the Constitution of the United States.
19    Business income is net of the deductions allocable thereto.
20    Such term does not include compensation or the deductions
21    allocable thereto. For each taxable year beginning on or
22    after January 1, 2003, a taxpayer may elect to treat all
23    income other than compensation as business income. This
24    election shall be made in accordance with rules adopted by
25    the Department and, once made, shall be irrevocable.

 

 

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1        (1.5) Captive real estate investment trust:
2            (A) The term "captive real estate investment
3        trust" means a corporation, trust, or association:
4                (i) that is considered a real estate
5            investment trust for the taxable year under
6            Section 856 of the Internal Revenue Code;
7                (ii) the certificates of beneficial interest
8            or shares of which are not regularly traded on an
9            established securities market; and
10                (iii) of which more than 50% of the voting
11            power or value of the beneficial interest or
12            shares, at any time during the last half of the
13            taxable year, is owned or controlled, directly,
14            indirectly, or constructively, by a single
15            corporation.
16            (B) The term "captive real estate investment
17        trust" does not include:
18                (i) a real estate investment trust of which
19            more than 50% of the voting power or value of the
20            beneficial interest or shares is owned or
21            controlled, directly, indirectly, or
22            constructively, by:
23                    (a) a real estate investment trust, other
24                than a captive real estate investment trust;
25                    (b) a person who is exempt from taxation
26                under Section 501 of the Internal Revenue Code,

 

 

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1                and who is not required to treat income
2                received from the real estate investment trust
3                as unrelated business taxable income under
4                Section 512 of the Internal Revenue Code;
5                    (c) a listed Australian property trust, if
6                no more than 50% of the voting power or value
7                of the beneficial interest or shares of that
8                trust, at any time during the last half of the
9                taxable year, is owned or controlled, directly
10                or indirectly, by a single person;
11                    (d) an entity organized as a trust,
12                provided a listed Australian property trust
13                described in subparagraph (c) owns or
14                controls, directly or indirectly, or
15                constructively, 75% or more of the voting power
16                or value of the beneficial interests or shares
17                of such entity; or
18                    (e) an entity that is organized outside of
19                the laws of the United States and that
20                satisfies all of the following criteria:
21                        (1) at least 75% of the entity's total
22                    asset value at the close of its taxable
23                    year is represented by real estate assets
24                    (as defined in Section 856(c)(5)(B) of the
25                    Internal Revenue Code, thereby including
26                    shares or certificates of beneficial

 

 

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1                    interest in any real estate investment
2                    trust), cash and cash equivalents, and
3                    U.S. Government securities;
4                        (2) the entity is not subject to tax on
5                    amounts that are distributed to its
6                    beneficial owners or is exempt from
7                    entity-level taxation;
8                        (3) the entity distributes at least
9                    85% of its taxable income (as computed in
10                    the jurisdiction in which it is organized)
11                    to the holders of its shares or
12                    certificates of beneficial interest on an
13                    annual basis;
14                        (4) either (i) the shares or
15                    beneficial interests of the entity are
16                    regularly traded on an established
17                    securities market or (ii) not more than 10%
18                    of the voting power or value in the entity
19                    is held, directly, indirectly, or
20                    constructively, by a single entity or
21                    individual; and
22                        (5) the entity is organized in a
23                    country that has entered into a tax treaty
24                    with the United States; or
25                (ii) during its first taxable year for which it
26            elects to be treated as a real estate investment

 

 

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1            trust under Section 856(c)(1) of the Internal
2            Revenue Code, a real estate investment trust the
3            certificates of beneficial interest or shares of
4            which are not regularly traded on an established
5            securities market, but only if the certificates of
6            beneficial interest or shares of the real estate
7            investment trust are regularly traded on an
8            established securities market prior to the earlier
9            of the due date (including extensions) for filing
10            its return under this Act for that first taxable
11            year or the date it actually files that return.
12            (C) For the purposes of this subsection (1.5), the
13        constructive ownership rules prescribed under Section
14        318(a) of the Internal Revenue Code, as modified by
15        Section 856(d)(5) of the Internal Revenue Code, apply
16        in determining the ownership of stock, assets, or net
17        profits of any person.
18            (D) For the purposes of this item (1.5), for
19        taxable years ending on or after August 16, 2007, the
20        voting power or value of the beneficial interest or
21        shares of a real estate investment trust does not
22        include any voting power or value of beneficial
23        interest or shares in a real estate investment trust
24        held directly or indirectly in a segregated asset
25        account by a life insurance company (as described in
26        Section 817 of the Internal Revenue Code) to the extent

 

 

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1        such voting power or value is for the benefit of
2        entities or persons who are either immune from taxation
3        or exempt from taxation under subtitle A of the
4        Internal Revenue Code.
5        (2) Commercial domicile. The term "commercial
6    domicile" means the principal place from which the trade or
7    business of the taxpayer is directed or managed.
8        (3) Compensation. The term "compensation" means wages,
9    salaries, commissions and any other form of remuneration
10    paid to employees for personal services.
11        (4) Corporation. The term "corporation" includes
12    associations, joint-stock companies, insurance companies
13    and cooperatives. Any entity, including a limited
14    liability company formed under the Illinois Limited
15    Liability Company Act, shall be treated as a corporation if
16    it is so classified for federal income tax purposes.
17        (5) Department. The term "Department" means the
18    Department of Revenue of this State.
19        (6) Director. The term "Director" means the Director of
20    Revenue of this State.
21        (7) Fiduciary. The term "fiduciary" means a guardian,
22    trustee, executor, administrator, receiver, or any person
23    acting in any fiduciary capacity for any person.
24        (8) Financial organization.
25            (A) The term "financial organization" means any
26        bank, bank holding company, trust company, savings

 

 

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1        bank, industrial bank, land bank, safe deposit
2        company, private banker, savings and loan association,
3        building and loan association, credit union, currency
4        exchange, cooperative bank, small loan company, sales
5        finance company, investment company, or any person
6        which is owned by a bank or bank holding company. For
7        the purpose of this Section a "person" will include
8        only those persons which a bank holding company may
9        acquire and hold an interest in, directly or
10        indirectly, under the provisions of the Bank Holding
11        Company Act of 1956 (12 U.S.C. 1841, et seq.), except
12        where interests in any person must be disposed of
13        within certain required time limits under the Bank
14        Holding Company Act of 1956.
15            (B) For purposes of subparagraph (A) of this
16        paragraph, the term "bank" includes (i) any entity that
17        is regulated by the Comptroller of the Currency under
18        the National Bank Act, or by the Federal Reserve Board,
19        or by the Federal Deposit Insurance Corporation and
20        (ii) any federally or State chartered bank operating as
21        a credit card bank.
22            (C) For purposes of subparagraph (A) of this
23        paragraph, the term "sales finance company" has the
24        meaning provided in the following item (i) or (ii):
25                (i) A person primarily engaged in one or more
26            of the following businesses: the business of

 

 

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1            purchasing customer receivables, the business of
2            making loans upon the security of customer
3            receivables, the business of making loans for the
4            express purpose of funding purchases of tangible
5            personal property or services by the borrower, or
6            the business of finance leasing. For purposes of
7            this item (i), "customer receivable" means:
8                    (a) a retail installment contract or
9                retail charge agreement within the meaning of
10                the Sales Finance Agency Act, the Retail
11                Installment Sales Act, or the Motor Vehicle
12                Retail Installment Sales Act;
13                    (b) an installment, charge, credit, or
14                similar contract or agreement arising from the
15                sale of tangible personal property or services
16                in a transaction involving a deferred payment
17                price payable in one or more installments
18                subsequent to the sale; or
19                    (c) the outstanding balance of a contract
20                or agreement described in provisions (a) or (b)
21                of this item (i).
22                A customer receivable need not provide for
23            payment of interest on deferred payments. A sales
24            finance company may purchase a customer receivable
25            from, or make a loan secured by a customer
26            receivable to, the seller in the original

 

 

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1            transaction or to a person who purchased the
2            customer receivable directly or indirectly from
3            that seller.
4                (ii) A corporation meeting each of the
5            following criteria:
6                    (a) the corporation must be a member of an
7                "affiliated group" within the meaning of
8                Section 1504(a) of the Internal Revenue Code,
9                determined without regard to Section 1504(b)
10                of the Internal Revenue Code;
11                    (b) more than 50% of the gross income of
12                the corporation for the taxable year must be
13                interest income derived from qualifying loans.
14                A "qualifying loan" is a loan made to a member
15                of the corporation's affiliated group that
16                originates customer receivables (within the
17                meaning of item (i)) or to whom customer
18                receivables originated by a member of the
19                affiliated group have been transferred, to the
20                extent the average outstanding balance of
21                loans from that corporation to members of its
22                affiliated group during the taxable year do not
23                exceed the limitation amount for that
24                corporation. The "limitation amount" for a
25                corporation is the average outstanding
26                balances during the taxable year of customer

 

 

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1                receivables (within the meaning of item (i))
2                originated by all members of the affiliated
3                group. If the average outstanding balances of
4                the loans made by a corporation to members of
5                its affiliated group exceed the limitation
6                amount, the interest income of that
7                corporation from qualifying loans shall be
8                equal to its interest income from loans to
9                members of its affiliated groups times a
10                fraction equal to the limitation amount
11                divided by the average outstanding balances of
12                the loans made by that corporation to members
13                of its affiliated group;
14                    (c) the total of all shareholder's equity
15                (including, without limitation, paid-in
16                capital on common and preferred stock and
17                retained earnings) of the corporation plus the
18                total of all of its loans, advances, and other
19                obligations payable or owed to members of its
20                affiliated group may not exceed 20% of the
21                total assets of the corporation at any time
22                during the tax year; and
23                    (d) more than 50% of all interest-bearing
24                obligations of the affiliated group payable to
25                persons outside the group determined in
26                accordance with generally accepted accounting

 

 

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1                principles must be obligations of the
2                corporation.
3            This amendatory Act of the 91st General Assembly is
4        declaratory of existing law.
5            (D) Subparagraphs (B) and (C) of this paragraph are
6        declaratory of existing law and apply retroactively,
7        for all tax years beginning on or before December 31,
8        1996, to all original returns, to all amended returns
9        filed no later than 30 days after the effective date of
10        this amendatory Act of 1996, and to all notices issued
11        on or before the effective date of this amendatory Act
12        of 1996 under subsection (a) of Section 903, subsection
13        (a) of Section 904, subsection (e) of Section 909, or
14        Section 912. A taxpayer that is a "financial
15        organization" that engages in any transaction with an
16        affiliate shall be a "financial organization" for all
17        purposes of this Act.
18            (E) For all tax years beginning on or before
19        December 31, 1996, a taxpayer that falls within the
20        definition of a "financial organization" under
21        subparagraphs (B) or (C) of this paragraph, but who
22        does not fall within the definition of a "financial
23        organization" under the Proposed Regulations issued by
24        the Department of Revenue on July 19, 1996, may
25        irrevocably elect to apply the Proposed Regulations
26        for all of those years as though the Proposed

 

 

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1        Regulations had been lawfully promulgated, adopted,
2        and in effect for all of those years. For purposes of
3        applying subparagraphs (B) or (C) of this paragraph to
4        all of those years, the election allowed by this
5        subparagraph applies only to the taxpayer making the
6        election and to those members of the taxpayer's unitary
7        business group who are ordinarily required to
8        apportion business income under the same subsection of
9        Section 304 of this Act as the taxpayer making the
10        election. No election allowed by this subparagraph
11        shall be made under a claim filed under subsection (d)
12        of Section 909 more than 30 days after the effective
13        date of this amendatory Act of 1996.
14            (F) Finance Leases. For purposes of this
15        subsection, a finance lease shall be treated as a loan
16        or other extension of credit, rather than as a lease,
17        regardless of how the transaction is characterized for
18        any other purpose, including the purposes of any
19        regulatory agency to which the lessor is subject. A
20        finance lease is any transaction in the form of a lease
21        in which the lessee is treated as the owner of the
22        leased asset entitled to any deduction for
23        depreciation allowed under Section 167 of the Internal
24        Revenue Code.
25        (9) Fiscal year. The term "fiscal year" means an
26    accounting period of 12 months ending on the last day of

 

 

HB4004- 161 -LRB100 11829 HLH 23189 b

1    any month other than December.
2        (9.5) Fixed place of business. The term "fixed place of
3    business" has the same meaning as that term is given in
4    Section 864 of the Internal Revenue Code and the related
5    Treasury regulations.
6        (10) Includes and including. The terms "includes" and
7    "including" when used in a definition contained in this Act
8    shall not be deemed to exclude other things otherwise
9    within the meaning of the term defined.
10        (11) Internal Revenue Code. The term "Internal Revenue
11    Code" means the United States Internal Revenue Code of 1954
12    or any successor law or laws relating to federal income
13    taxes in effect for the taxable year.
14        (11.5) Investment partnership.
15            (A) The term "investment partnership" means any
16        entity that is treated as a partnership for federal
17        income tax purposes that meets the following
18        requirements:
19                (i) no less than 90% of the partnership's cost
20            of its total assets consists of qualifying
21            investment securities, deposits at banks or other
22            financial institutions, and office space and
23            equipment reasonably necessary to carry on its
24            activities as an investment partnership;
25                (ii) no less than 90% of its gross income
26            consists of interest, dividends, and gains from

 

 

HB4004- 162 -LRB100 11829 HLH 23189 b

1            the sale or exchange of qualifying investment
2            securities; and
3                (iii) the partnership is not a dealer in
4            qualifying investment securities.
5            (B) For purposes of this paragraph (11.5), the term
6        "qualifying investment securities" includes all of the
7        following:
8                (i) common stock, including preferred or debt
9            securities convertible into common stock, and
10            preferred stock;
11                (ii) bonds, debentures, and other debt
12            securities;
13                (iii) foreign and domestic currency deposits
14            secured by federal, state, or local governmental
15            agencies;
16                (iv) mortgage or asset-backed securities
17            secured by federal, state, or local governmental
18            agencies;
19                (v) repurchase agreements and loan
20            participations;
21                (vi) foreign currency exchange contracts and
22            forward and futures contracts on foreign
23            currencies;
24                (vii) stock and bond index securities and
25            futures contracts and other similar financial
26            securities and futures contracts on those

 

 

HB4004- 163 -LRB100 11829 HLH 23189 b

1            securities;
2                (viii) options for the purchase or sale of any
3            of the securities, currencies, contracts, or
4            financial instruments described in items (i) to
5            (vii), inclusive;
6                (ix) regulated futures contracts;
7                (x) commodities (not described in Section
8            1221(a)(1) of the Internal Revenue Code) or
9            futures, forwards, and options with respect to
10            such commodities, provided, however, that any item
11            of a physical commodity to which title is actually
12            acquired in the partnership's capacity as a dealer
13            in such commodity shall not be a qualifying
14            investment security;
15                (xi) derivatives; and
16                (xii) a partnership interest in another
17            partnership that is an investment partnership.
18        (12) Mathematical error. The term "mathematical error"
19    includes the following types of errors, omissions, or
20    defects in a return filed by a taxpayer which prevents
21    acceptance of the return as filed for processing:
22            (A) arithmetic errors or incorrect computations on
23        the return or supporting schedules;
24            (B) entries on the wrong lines;
25            (C) omission of required supporting forms or
26        schedules or the omission of the information in whole

 

 

HB4004- 164 -LRB100 11829 HLH 23189 b

1        or in part called for thereon; and
2            (D) an attempt to claim, exclude, deduct, or
3        improperly report, in a manner directly contrary to the
4        provisions of the Act and regulations thereunder any
5        item of income, exemption, deduction, or credit.
6        (13) Nonbusiness income. The term "nonbusiness income"
7    means all income other than business income or
8    compensation.
9        (14) Nonresident. The term "nonresident" means a
10    person who is not a resident.
11        (15) Paid, incurred and accrued. The terms "paid",
12    "incurred" and "accrued" shall be construed according to
13    the method of accounting upon the basis of which the
14    person's base income is computed under this Act.
15        (16) Partnership and partner. The term "partnership"
16    includes a syndicate, group, pool, joint venture or other
17    unincorporated organization, through or by means of which
18    any business, financial operation, or venture is carried
19    on, and which is not, within the meaning of this Act, a
20    trust or estate or a corporation; and the term "partner"
21    includes a member in such syndicate, group, pool, joint
22    venture or organization.
23        The term "partnership" includes any entity, including
24    a limited liability company formed under the Illinois
25    Limited Liability Company Act, classified as a partnership
26    for federal income tax purposes.

 

 

HB4004- 165 -LRB100 11829 HLH 23189 b

1        The term "partnership" does not include a syndicate,
2    group, pool, joint venture, or other unincorporated
3    organization established for the sole purpose of playing
4    the Illinois State Lottery.
5        (17) Part-year resident. The term "part-year resident"
6    means an individual who became a resident during the
7    taxable year or ceased to be a resident during the taxable
8    year. Under Section 1501(a)(20)(A)(i) residence commences
9    with presence in this State for other than a temporary or
10    transitory purpose and ceases with absence from this State
11    for other than a temporary or transitory purpose. Under
12    Section 1501(a)(20)(A)(ii) residence commences with the
13    establishment of domicile in this State and ceases with the
14    establishment of domicile in another State.
15        (18) Person. The term "person" shall be construed to
16    mean and include an individual, a trust, estate,
17    partnership, association, firm, company, corporation,
18    limited liability company, or fiduciary. For purposes of
19    Section 1301 and 1302 of this Act, a "person" means (i) an
20    individual, (ii) a corporation, (iii) an officer, agent, or
21    employee of a corporation, (iv) a member, agent or employee
22    of a partnership, or (v) a member, manager, employee,
23    officer, director, or agent of a limited liability company
24    who in such capacity commits an offense specified in
25    Section 1301 and 1302.
26        (18A) Records. The term "records" includes all data

 

 

HB4004- 166 -LRB100 11829 HLH 23189 b

1    maintained by the taxpayer, whether on paper, microfilm,
2    microfiche, or any type of machine-sensible data
3    compilation.
4        (19) Regulations. The term "regulations" includes
5    rules promulgated and forms prescribed by the Department.
6        (20) Resident. The term "resident" means:
7            (A) an individual (i) who is in this State for
8        other than a temporary or transitory purpose during the
9        taxable year; or (ii) who is domiciled in this State
10        but is absent from the State for a temporary or
11        transitory purpose during the taxable year;
12            (B) The estate of a decedent who at his or her
13        death was domiciled in this State;
14            (C) A trust created by a will of a decedent who at
15        his death was domiciled in this State; and
16            (D) An irrevocable trust, the grantor of which was
17        domiciled in this State at the time such trust became
18        irrevocable. For purpose of this subparagraph, a trust
19        shall be considered irrevocable to the extent that the
20        grantor is not treated as the owner thereof under
21        Sections 671 through 678 of the Internal Revenue Code.
22        (21) Sales. The term "sales" means all gross receipts
23    of the taxpayer not allocated under Sections 301, 302 and
24    303.
25        (22) State. The term "state" when applied to a
26    jurisdiction other than this State means any state of the

 

 

HB4004- 167 -LRB100 11829 HLH 23189 b

1    United States, the District of Columbia, the Commonwealth
2    of Puerto Rico, any Territory or Possession of the United
3    States, and any foreign country, or any political
4    subdivision of any of the foregoing. For purposes of the
5    foreign tax credit under Section 601, the term "state"
6    means any state of the United States, the District of
7    Columbia, the Commonwealth of Puerto Rico, and any
8    territory or possession of the United States, or any
9    political subdivision of any of the foregoing, effective
10    for tax years ending on or after December 31, 1989.
11        (23) Taxable year. The term "taxable year" means the
12    calendar year, or the fiscal year ending during such
13    calendar year, upon the basis of which the base income is
14    computed under this Act. "Taxable year" means, in the case
15    of a return made for a fractional part of a year under the
16    provisions of this Act, the period for which such return is
17    made.
18        (24) Taxpayer. The term "taxpayer" means any person
19    subject to the tax imposed by this Act.
20        (25) International banking facility. The term
21    international banking facility shall have the same meaning
22    as is set forth in the Illinois Banking Act or as is set
23    forth in the laws of the United States or regulations of
24    the Board of Governors of the Federal Reserve System.
25        (26) Income Tax Return Preparer.
26            (A) The term "income tax return preparer" means any

 

 

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1        person who prepares for compensation, or who employs
2        one or more persons to prepare for compensation, any
3        return of tax imposed by this Act or any claim for
4        refund of tax imposed by this Act. The preparation of a
5        substantial portion of a return or claim for refund
6        shall be treated as the preparation of that return or
7        claim for refund.
8            (B) A person is not an income tax return preparer
9        if all he or she does is
10                (i) furnish typing, reproducing, or other
11            mechanical assistance;
12                (ii) prepare returns or claims for refunds for
13            the employer by whom he or she is regularly and
14            continuously employed;
15                (iii) prepare as a fiduciary returns or claims
16            for refunds for any person; or
17                (iv) prepare claims for refunds for a taxpayer
18            in response to any notice of deficiency issued to
19            that taxpayer or in response to any waiver of
20            restriction after the commencement of an audit of
21            that taxpayer or of another taxpayer if a
22            determination in the audit of the other taxpayer
23            directly or indirectly affects the tax liability
24            of the taxpayer whose claims he or she is
25            preparing.
26        (27) Unitary business group.

 

 

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1            (A) The term "unitary business group" means a group
2        of persons related through common ownership whose
3        business activities are integrated with, dependent
4        upon and contribute to each other. The group will not
5        include those members whose business activity outside
6        the United States is 80% or more of any such member's
7        total business activity; for purposes of this
8        paragraph and clause (a)(3)(B)(ii) of Section 304,
9        business activity within the United States shall be
10        measured by means of the factors ordinarily applicable
11        under subsections (a), (b), (c), (d), or (h) of Section
12        304 except that, in the case of members ordinarily
13        required to apportion business income by means of the 3
14        factor formula of property, payroll and sales
15        specified in subsection (a) of Section 304, including
16        the formula as weighted in subsection (h) of Section
17        304, such members shall not use the sales factor in the
18        computation and the results of the property and payroll
19        factor computations of subsection (a) of Section 304
20        shall be divided by 2 (by one if either the property or
21        payroll factor has a denominator of zero). The
22        computation required by the preceding sentence shall,
23        in each case, involve the division of the member's
24        property, payroll, or revenue miles in the United
25        States, insurance premiums on property or risk in the
26        United States, or financial organization business

 

 

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1        income from sources within the United States, as the
2        case may be, by the respective worldwide figures for
3        such items. Common ownership in the case of
4        corporations is the direct or indirect control or
5        ownership of more than 50% of the outstanding voting
6        stock of the persons carrying on unitary business
7        activity. Unitary business activity can ordinarily be
8        illustrated where the activities of the members are:
9        (1) in the same general line (such as manufacturing,
10        wholesaling, retailing of tangible personal property,
11        insurance, transportation or finance); or (2) are
12        steps in a vertically structured enterprise or process
13        (such as the steps involved in the production of
14        natural resources, which might include exploration,
15        mining, refining, and marketing); and, in either
16        instance, the members are functionally integrated
17        through the exercise of strong centralized management
18        (where, for example, authority over such matters as
19        purchasing, financing, tax compliance, product line,
20        personnel, marketing and capital investment is not
21        left to each member).
22            (B) In no event, for taxable years ending prior to
23        December 31, 2017, shall any unitary business group
24        include members which are ordinarily required to
25        apportion business income under different subsections
26        of Section 304 except that for tax years ending on or

 

 

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1        after December 31, 1987 this prohibition shall not
2        apply to a holding company that would otherwise be a
3        member of a unitary business group with taxpayers that
4        apportion business income under any of subsections
5        (b), (c), (c-1), or (d) of Section 304. If a unitary
6        business group would, but for the preceding sentence,
7        include members that are ordinarily required to
8        apportion business income under different subsections
9        of Section 304, then for each subsection of Section 304
10        for which there are two or more members, there shall be
11        a separate unitary business group composed of such
12        members. For purposes of the preceding two sentences, a
13        member is "ordinarily required to apportion business
14        income" under a particular subsection of Section 304 if
15        it would be required to use the apportionment method
16        prescribed by such subsection except for the fact that
17        it derives business income solely from Illinois. As
18        used in this paragraph, for taxable years ending before
19        December 31, 2017, the phrase "United States" means
20        only the 50 states and the District of Columbia, but
21        does not include any territory or possession of the
22        United States or any area over which the United States
23        has asserted jurisdiction or claimed exclusive rights
24        with respect to the exploration for or exploitation of
25        natural resources. For taxable years ending on or after
26        December 31, 2017, the phrase "United States", as used

 

 

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1        in this paragraph, means only the 50 states, the
2        District of Columbia, and any area over which the
3        United States has asserted jurisdiction or claimed
4        exclusive rights with respect to the exploration for or
5        exploitation of natural resources, but does not
6        include any territory or possession of the United
7        States.
8            (C) Holding companies.
9                (i) For purposes of this subparagraph, a
10            "holding company" is a corporation (other than a
11            corporation that is a financial organization under
12            paragraph (8) of this subsection (a) of Section
13            1501 because it is a bank holding company under the
14            provisions of the Bank Holding Company Act of 1956
15            (12 U.S.C. 1841, et seq.) or because it is owned by
16            a bank or a bank holding company) that owns a
17            controlling interest in one or more other
18            taxpayers ("controlled taxpayers"); that, during
19            the period that includes the taxable year and the 2
20            immediately preceding taxable years or, if the
21            corporation was formed during the current or
22            immediately preceding taxable year, the taxable
23            years in which the corporation has been in
24            existence, derived substantially all its gross
25            income from dividends, interest, rents, royalties,
26            fees or other charges received from controlled

 

 

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1            taxpayers for the provision of services, and gains
2            on the sale or other disposition of interests in
3            controlled taxpayers or in property leased or
4            licensed to controlled taxpayers or used by the
5            taxpayer in providing services to controlled
6            taxpayers; and that incurs no substantial expenses
7            other than expenses (including interest and other
8            costs of borrowing) incurred in connection with
9            the acquisition and holding of interests in
10            controlled taxpayers and in the provision of
11            services to controlled taxpayers or in the leasing
12            or licensing of property to controlled taxpayers.
13                (ii) The income of a holding company which is a
14            member of more than one unitary business group
15            shall be included in each unitary business group of
16            which it is a member on a pro rata basis, by
17            including in each unitary business group that
18            portion of the base income of the holding company
19            that bears the same proportion to the total base
20            income of the holding company as the gross receipts
21            of the unitary business group bears to the combined
22            gross receipts of all unitary business groups (in
23            both cases without regard to the holding company)
24            or on any other reasonable basis, consistently
25            applied.
26                (iii) A holding company shall apportion its

 

 

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1            business income under the subsection of Section
2            304 used by the other members of its unitary
3            business group. The apportionment factors of a
4            holding company which would be a member of more
5            than one unitary business group shall be included
6            with the apportionment factors of each unitary
7            business group of which it is a member on a pro
8            rata basis using the same method used in clause
9            (ii).
10                (iv) The provisions of this subparagraph (C)
11            are intended to clarify existing law.
12            (D) If including the base income and factors of a
13        holding company in more than one unitary business group
14        under subparagraph (C) does not fairly reflect the
15        degree of integration between the holding company and
16        one or more of the unitary business groups, the
17        dependence of the holding company and one or more of
18        the unitary business groups upon each other, or the
19        contributions between the holding company and one or
20        more of the unitary business groups, the holding
21        company may petition the Director, under the
22        procedures provided under Section 304(f), for
23        permission to include all base income and factors of
24        the holding company only with members of a unitary
25        business group apportioning their business income
26        under one subsection of subsections (a), (b), (c), or

 

 

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1        (d) of Section 304. If the petition is granted, the
2        holding company shall be included in a unitary business
3        group only with persons apportioning their business
4        income under the selected subsection of Section 304
5        until the Director grants a petition of the holding
6        company either to be included in more than one unitary
7        business group under subparagraph (C) or to include its
8        base income and factors only with members of a unitary
9        business group apportioning their business income
10        under a different subsection of Section 304.
11            (E) If the unitary business group members'
12        accounting periods differ, the common parent's
13        accounting period or, if there is no common parent, the
14        accounting period of the member that is expected to
15        have, on a recurring basis, the greatest Illinois
16        income tax liability must be used to determine whether
17        to use the apportionment method provided in subsection
18        (a) or subsection (h) of Section 304. The prohibition
19        against membership in a unitary business group for
20        taxpayers ordinarily required to apportion income
21        under different subsections of Section 304 does not
22        apply to taxpayers required to apportion income under
23        subsection (a) and subsection (h) of Section 304. The
24        provisions of this amendatory Act of 1998 apply to tax
25        years ending on or after December 31, 1998.
26        (28) Subchapter S corporation. The term "Subchapter S

 

 

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1    corporation" means a corporation for which there is in
2    effect an election under Section 1362 of the Internal
3    Revenue Code, or for which there is a federal election to
4    opt out of the provisions of the Subchapter S Revision Act
5    of 1982 and have applied instead the prior federal
6    Subchapter S rules as in effect on July 1, 1982.
7        (30) Foreign person. The term "foreign person" means
8    any person who is a nonresident alien individual and any
9    nonindividual entity, regardless of where created or
10    organized, whose business activity outside the United
11    States is 80% or more of the entity's total business
12    activity.
 
13    (b) Other definitions.
14        (1) Words denoting number, gender, and so forth, when
15    used in this Act, where not otherwise distinctly expressed
16    or manifestly incompatible with the intent thereof:
17            (A) Words importing the singular include and apply
18        to several persons, parties or things;
19            (B) Words importing the plural include the
20        singular; and
21            (C) Words importing the masculine gender include
22        the feminine as well.
23        (2) "Company" or "association" as including successors
24    and assigns. The word "company" or "association", when used
25    in reference to a corporation, shall be deemed to embrace

 

 

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1    the words "successors and assigns of such company or
2    association", and in like manner as if these last-named
3    words, or words of similar import, were expressed.
4        (3) Other terms. Any term used in any Section of this
5    Act with respect to the application of, or in connection
6    with, the provisions of any other Section of this Act shall
7    have the same meaning as in such other Section.
8(Source: P.A. 99-213, eff. 7-31-15.)
 
9    Section 10. The Use Tax Act is amended by changing Section
109 as follows:
 
11    (35 ILCS 105/9)  (from Ch. 120, par. 439.9)
12    Sec. 9. Except as to motor vehicles, watercraft, aircraft,
13and trailers that are required to be registered with an agency
14of this State, each retailer required or authorized to collect
15the tax imposed by this Act shall pay to the Department the
16amount of such tax (except as otherwise provided) at the time
17when he is required to file his return for the period during
18which such tax was collected, less the vendor discount amount a
19discount of 2.1% prior to January 1, 1990, and 1.75% on and
20after January 1, 1990, or $5 per calendar year, whichever is
21greater, which is allowed to reimburse the retailer for
22expenses incurred in collecting the tax, keeping records,
23preparing and filing returns, remitting the tax and supplying
24data to the Department on request. On and after January 1, 1990

 

 

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1and prior to January 1, 2018, the vendor discount amount shall
2be 1.75% or $5 per calendar year, whichever is greater. On and
3after January 1, 2018, the vendor discount amount shall be the
4sum of (i) 1.75% of the first $1,000 collected during the
5calendar year and (ii) 1% of the amount of proceeds collected
6during the calendar year that exceeds $1,000; however, on and
7after January 1, 2018, in no event shall the discount allowed
8to any vendor be less than $5 in any calendar year or more than
9$1,500 in any calendar year. In the case of retailers who
10report and pay the tax on a transaction by transaction basis,
11as provided in this Section, such discount shall be taken with
12each such tax remittance instead of when such retailer files
13his periodic return. The Department may disallow the discount
14for retailers whose certificate of registration is revoked at
15the time the return is filed, but only if the Department's
16decision to revoke the certificate of registration has become
17final. A retailer need not remit that part of any tax collected
18by him to the extent that he is required to remit and does
19remit the tax imposed by the Retailers' Occupation Tax Act,
20with respect to the sale of the same property.
21    Where such tangible personal property is sold under a
22conditional sales contract, or under any other form of sale
23wherein the payment of the principal sum, or a part thereof, is
24extended beyond the close of the period for which the return is
25filed, the retailer, in collecting the tax (except as to motor
26vehicles, watercraft, aircraft, and trailers that are required

 

 

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1to be registered with an agency of this State), may collect for
2each tax return period, only the tax applicable to that part of
3the selling price actually received during such tax return
4period.
5    Except as provided in this Section, on or before the
6twentieth day of each calendar month, such retailer shall file
7a return for the preceding calendar month. Such return shall be
8filed on forms prescribed by the Department and shall furnish
9such information as the Department may reasonably require.
10    The Department may require returns to be filed on a
11quarterly basis. If so required, a return for each calendar
12quarter shall be filed on or before the twentieth day of the
13calendar month following the end of such calendar quarter. The
14taxpayer shall also file a return with the Department for each
15of the first two months of each calendar quarter, on or before
16the twentieth day of the following calendar month, stating:
17        1. The name of the seller;
18        2. The address of the principal place of business from
19    which he engages in the business of selling tangible
20    personal property at retail in this State;
21        3. The total amount of taxable receipts received by him
22    during the preceding calendar month from sales of tangible
23    personal property by him during such preceding calendar
24    month, including receipts from charge and time sales, but
25    less all deductions allowed by law;
26        4. The amount of credit provided in Section 2d of this

 

 

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1    Act;
2        5. The amount of tax due;
3        5-5. The signature of the taxpayer; and
4        6. Such other reasonable information as the Department
5    may require.
6    If a taxpayer fails to sign a return within 30 days after
7the proper notice and demand for signature by the Department,
8the return shall be considered valid and any amount shown to be
9due on the return shall be deemed assessed.
10    Beginning October 1, 1993, a taxpayer who has an average
11monthly tax liability of $150,000 or more shall make all
12payments required by rules of the Department by electronic
13funds transfer. Beginning October 1, 1994, a taxpayer who has
14an average monthly tax liability of $100,000 or more shall make
15all payments required by rules of the Department by electronic
16funds transfer. Beginning October 1, 1995, a taxpayer who has
17an average monthly tax liability of $50,000 or more shall make
18all payments required by rules of the Department by electronic
19funds transfer. Beginning October 1, 2000, a taxpayer who has
20an annual tax liability of $200,000 or more shall make all
21payments required by rules of the Department by electronic
22funds transfer. The term "annual tax liability" shall be the
23sum of the taxpayer's liabilities under this Act, and under all
24other State and local occupation and use tax laws administered
25by the Department, for the immediately preceding calendar year.
26The term "average monthly tax liability" means the sum of the

 

 

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1taxpayer's liabilities under this Act, and under all other
2State and local occupation and use tax laws administered by the
3Department, for the immediately preceding calendar year
4divided by 12. Beginning on October 1, 2002, a taxpayer who has
5a tax liability in the amount set forth in subsection (b) of
6Section 2505-210 of the Department of Revenue Law shall make
7all payments required by rules of the Department by electronic
8funds transfer.
9    Before August 1 of each year beginning in 1993, the
10Department shall notify all taxpayers required to make payments
11by electronic funds transfer. All taxpayers required to make
12payments by electronic funds transfer shall make those payments
13for a minimum of one year beginning on October 1.
14    Any taxpayer not required to make payments by electronic
15funds transfer may make payments by electronic funds transfer
16with the permission of the Department.
17    All taxpayers required to make payment by electronic funds
18transfer and any taxpayers authorized to voluntarily make
19payments by electronic funds transfer shall make those payments
20in the manner authorized by the Department.
21    The Department shall adopt such rules as are necessary to
22effectuate a program of electronic funds transfer and the
23requirements of this Section.
24    Before October 1, 2000, if the taxpayer's average monthly
25tax liability to the Department under this Act, the Retailers'
26Occupation Tax Act, the Service Occupation Tax Act, the Service

 

 

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1Use Tax Act was $10,000 or more during the preceding 4 complete
2calendar quarters, he shall file a return with the Department
3each month by the 20th day of the month next following the
4month during which such tax liability is incurred and shall
5make payments to the Department on or before the 7th, 15th,
622nd and last day of the month during which such liability is
7incurred. On and after October 1, 2000, if the taxpayer's
8average monthly tax liability to the Department under this Act,
9the Retailers' Occupation Tax Act, the Service Occupation Tax
10Act, and the Service Use Tax Act was $20,000 or more during the
11preceding 4 complete calendar quarters, he shall file a return
12with the Department each month by the 20th day of the month
13next following the month during which such tax liability is
14incurred and shall make payment to the Department on or before
15the 7th, 15th, 22nd and last day of the month during which such
16liability is incurred. If the month during which such tax
17liability is incurred began prior to January 1, 1985, each
18payment shall be in an amount equal to 1/4 of the taxpayer's
19actual liability for the month or an amount set by the
20Department not to exceed 1/4 of the average monthly liability
21of the taxpayer to the Department for the preceding 4 complete
22calendar quarters (excluding the month of highest liability and
23the month of lowest liability in such 4 quarter period). If the
24month during which such tax liability is incurred begins on or
25after January 1, 1985, and prior to January 1, 1987, each
26payment shall be in an amount equal to 22.5% of the taxpayer's

 

 

HB4004- 183 -LRB100 11829 HLH 23189 b

1actual liability for the month or 27.5% of the taxpayer's
2liability for the same calendar month of the preceding year. If
3the month during which such tax liability is incurred begins on
4or after January 1, 1987, and prior to January 1, 1988, each
5payment shall be in an amount equal to 22.5% of the taxpayer's
6actual liability for the month or 26.25% of the taxpayer's
7liability for the same calendar month of the preceding year. If
8the month during which such tax liability is incurred begins on
9or after January 1, 1988, and prior to January 1, 1989, or
10begins on or after January 1, 1996, each payment shall be in an
11amount equal to 22.5% of the taxpayer's actual liability for
12the month or 25% of the taxpayer's liability for the same
13calendar month of the preceding year. If the month during which
14such tax liability is incurred begins on or after January 1,
151989, and prior to January 1, 1996, each payment shall be in an
16amount equal to 22.5% of the taxpayer's actual liability for
17the month or 25% of the taxpayer's liability for the same
18calendar month of the preceding year or 100% of the taxpayer's
19actual liability for the quarter monthly reporting period. The
20amount of such quarter monthly payments shall be credited
21against the final tax liability of the taxpayer's return for
22that month. Before October 1, 2000, once applicable, the
23requirement of the making of quarter monthly payments to the
24Department shall continue until such taxpayer's average
25monthly liability to the Department during the preceding 4
26complete calendar quarters (excluding the month of highest

 

 

HB4004- 184 -LRB100 11829 HLH 23189 b

1liability and the month of lowest liability) is less than
2$9,000, or until such taxpayer's average monthly liability to
3the Department as computed for each calendar quarter of the 4
4preceding complete calendar quarter period is less than
5$10,000. However, if a taxpayer can show the Department that a
6substantial change in the taxpayer's business has occurred
7which causes the taxpayer to anticipate that his average
8monthly tax liability for the reasonably foreseeable future
9will fall below the $10,000 threshold stated above, then such
10taxpayer may petition the Department for change in such
11taxpayer's reporting status. On and after October 1, 2000, once
12applicable, the requirement of the making of quarter monthly
13payments to the Department shall continue until such taxpayer's
14average monthly liability to the Department during the
15preceding 4 complete calendar quarters (excluding the month of
16highest liability and the month of lowest liability) is less
17than $19,000 or until such taxpayer's average monthly liability
18to the Department as computed for each calendar quarter of the
194 preceding complete calendar quarter period is less than
20$20,000. However, if a taxpayer can show the Department that a
21substantial change in the taxpayer's business has occurred
22which causes the taxpayer to anticipate that his average
23monthly tax liability for the reasonably foreseeable future
24will fall below the $20,000 threshold stated above, then such
25taxpayer may petition the Department for a change in such
26taxpayer's reporting status. The Department shall change such

 

 

HB4004- 185 -LRB100 11829 HLH 23189 b

1taxpayer's reporting status unless it finds that such change is
2seasonal in nature and not likely to be long term. If any such
3quarter monthly payment is not paid at the time or in the
4amount required by this Section, then the taxpayer shall be
5liable for penalties and interest on the difference between the
6minimum amount due and the amount of such quarter monthly
7payment actually and timely paid, except insofar as the
8taxpayer has previously made payments for that month to the
9Department in excess of the minimum payments previously due as
10provided in this Section. The Department shall make reasonable
11rules and regulations to govern the quarter monthly payment
12amount and quarter monthly payment dates for taxpayers who file
13on other than a calendar monthly basis.
14    If any such payment provided for in this Section exceeds
15the taxpayer's liabilities under this Act, the Retailers'
16Occupation Tax Act, the Service Occupation Tax Act and the
17Service Use Tax Act, as shown by an original monthly return,
18the Department shall issue to the taxpayer a credit memorandum
19no later than 30 days after the date of payment, which
20memorandum may be submitted by the taxpayer to the Department
21in payment of tax liability subsequently to be remitted by the
22taxpayer to the Department or be assigned by the taxpayer to a
23similar taxpayer under this Act, the Retailers' Occupation Tax
24Act, the Service Occupation Tax Act or the Service Use Tax Act,
25in accordance with reasonable rules and regulations to be
26prescribed by the Department, except that if such excess

 

 

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1payment is shown on an original monthly return and is made
2after December 31, 1986, no credit memorandum shall be issued,
3unless requested by the taxpayer. If no such request is made,
4the taxpayer may credit such excess payment against tax
5liability subsequently to be remitted by the taxpayer to the
6Department under this Act, the Retailers' Occupation Tax Act,
7the Service Occupation Tax Act or the Service Use Tax Act, in
8accordance with reasonable rules and regulations prescribed by
9the Department. If the Department subsequently determines that
10all or any part of the credit taken was not actually due to the
11taxpayer, the taxpayer's 2.1% or 1.75% vendor's discount shall
12be reduced by 2.1% or 1.75% of the difference between the
13credit taken and that actually due multiplied by the vendor
14discount amount, and the taxpayer shall be liable for penalties
15and interest on such difference.
16    If the retailer is otherwise required to file a monthly
17return and if the retailer's average monthly tax liability to
18the Department does not exceed $200, the Department may
19authorize his returns to be filed on a quarter annual basis,
20with the return for January, February, and March of a given
21year being due by April 20 of such year; with the return for
22April, May and June of a given year being due by July 20 of such
23year; with the return for July, August and September of a given
24year being due by October 20 of such year, and with the return
25for October, November and December of a given year being due by
26January 20 of the following year.

 

 

HB4004- 187 -LRB100 11829 HLH 23189 b

1    If the retailer is otherwise required to file a monthly or
2quarterly return and if the retailer's average monthly tax
3liability to the Department does not exceed $50, the Department
4may authorize his returns to be filed on an annual basis, with
5the return for a given year being due by January 20 of the
6following year.
7    Such quarter annual and annual returns, as to form and
8substance, shall be subject to the same requirements as monthly
9returns.
10    Notwithstanding any other provision in this Act concerning
11the time within which a retailer may file his return, in the
12case of any retailer who ceases to engage in a kind of business
13which makes him responsible for filing returns under this Act,
14such retailer shall file a final return under this Act with the
15Department not more than one month after discontinuing such
16business.
17    In addition, with respect to motor vehicles, watercraft,
18aircraft, and trailers that are required to be registered with
19an agency of this State, every retailer selling this kind of
20tangible personal property shall file, with the Department,
21upon a form to be prescribed and supplied by the Department, a
22separate return for each such item of tangible personal
23property which the retailer sells, except that if, in the same
24transaction, (i) a retailer of aircraft, watercraft, motor
25vehicles or trailers transfers more than one aircraft,
26watercraft, motor vehicle or trailer to another aircraft,

 

 

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1watercraft, motor vehicle or trailer retailer for the purpose
2of resale or (ii) a retailer of aircraft, watercraft, motor
3vehicles, or trailers transfers more than one aircraft,
4watercraft, motor vehicle, or trailer to a purchaser for use as
5a qualifying rolling stock as provided in Section 3-55 of this
6Act, then that seller may report the transfer of all the
7aircraft, watercraft, motor vehicles or trailers involved in
8that transaction to the Department on the same uniform
9invoice-transaction reporting return form. For purposes of
10this Section, "watercraft" means a Class 2, Class 3, or Class 4
11watercraft as defined in Section 3-2 of the Boat Registration
12and Safety Act, a personal watercraft, or any boat equipped
13with an inboard motor.
14    The transaction reporting return in the case of motor
15vehicles or trailers that are required to be registered with an
16agency of this State, shall be the same document as the Uniform
17Invoice referred to in Section 5-402 of the Illinois Vehicle
18Code and must show the name and address of the seller; the name
19and address of the purchaser; the amount of the selling price
20including the amount allowed by the retailer for traded-in
21property, if any; the amount allowed by the retailer for the
22traded-in tangible personal property, if any, to the extent to
23which Section 2 of this Act allows an exemption for the value
24of traded-in property; the balance payable after deducting such
25trade-in allowance from the total selling price; the amount of
26tax due from the retailer with respect to such transaction; the

 

 

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1amount of tax collected from the purchaser by the retailer on
2such transaction (or satisfactory evidence that such tax is not
3due in that particular instance, if that is claimed to be the
4fact); the place and date of the sale; a sufficient
5identification of the property sold; such other information as
6is required in Section 5-402 of the Illinois Vehicle Code, and
7such other information as the Department may reasonably
8require.
9    The transaction reporting return in the case of watercraft
10and aircraft must show the name and address of the seller; the
11name and address of the purchaser; the amount of the selling
12price including the amount allowed by the retailer for
13traded-in property, if any; the amount allowed by the retailer
14for the traded-in tangible personal property, if any, to the
15extent to which Section 2 of this Act allows an exemption for
16the value of traded-in property; the balance payable after
17deducting such trade-in allowance from the total selling price;
18the amount of tax due from the retailer with respect to such
19transaction; the amount of tax collected from the purchaser by
20the retailer on such transaction (or satisfactory evidence that
21such tax is not due in that particular instance, if that is
22claimed to be the fact); the place and date of the sale, a
23sufficient identification of the property sold, and such other
24information as the Department may reasonably require.
25    Such transaction reporting return shall be filed not later
26than 20 days after the date of delivery of the item that is

 

 

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1being sold, but may be filed by the retailer at any time sooner
2than that if he chooses to do so. The transaction reporting
3return and tax remittance or proof of exemption from the tax
4that is imposed by this Act may be transmitted to the
5Department by way of the State agency with which, or State
6officer with whom, the tangible personal property must be
7titled or registered (if titling or registration is required)
8if the Department and such agency or State officer determine
9that this procedure will expedite the processing of
10applications for title or registration.
11    With each such transaction reporting return, the retailer
12shall remit the proper amount of tax due (or shall submit
13satisfactory evidence that the sale is not taxable if that is
14the case), to the Department or its agents, whereupon the
15Department shall issue, in the purchaser's name, a tax receipt
16(or a certificate of exemption if the Department is satisfied
17that the particular sale is tax exempt) which such purchaser
18may submit to the agency with which, or State officer with
19whom, he must title or register the tangible personal property
20that is involved (if titling or registration is required) in
21support of such purchaser's application for an Illinois
22certificate or other evidence of title or registration to such
23tangible personal property.
24    No retailer's failure or refusal to remit tax under this
25Act precludes a user, who has paid the proper tax to the
26retailer, from obtaining his certificate of title or other

 

 

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1evidence of title or registration (if titling or registration
2is required) upon satisfying the Department that such user has
3paid the proper tax (if tax is due) to the retailer. The
4Department shall adopt appropriate rules to carry out the
5mandate of this paragraph.
6    If the user who would otherwise pay tax to the retailer
7wants the transaction reporting return filed and the payment of
8tax or proof of exemption made to the Department before the
9retailer is willing to take these actions and such user has not
10paid the tax to the retailer, such user may certify to the fact
11of such delay by the retailer, and may (upon the Department
12being satisfied of the truth of such certification) transmit
13the information required by the transaction reporting return
14and the remittance for tax or proof of exemption directly to
15the Department and obtain his tax receipt or exemption
16determination, in which event the transaction reporting return
17and tax remittance (if a tax payment was required) shall be
18credited by the Department to the proper retailer's account
19with the Department, but without the 2.1% or 1.75% discount
20provided for in this Section being allowed. When the user pays
21the tax directly to the Department, he shall pay the tax in the
22same amount and in the same form in which it would be remitted
23if the tax had been remitted to the Department by the retailer.
24    Where a retailer collects the tax with respect to the
25selling price of tangible personal property which he sells and
26the purchaser thereafter returns such tangible personal

 

 

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1property and the retailer refunds the selling price thereof to
2the purchaser, such retailer shall also refund, to the
3purchaser, the tax so collected from the purchaser. When filing
4his return for the period in which he refunds such tax to the
5purchaser, the retailer may deduct the amount of the tax so
6refunded by him to the purchaser from any other use tax which
7such retailer may be required to pay or remit to the
8Department, as shown by such return, if the amount of the tax
9to be deducted was previously remitted to the Department by
10such retailer. If the retailer has not previously remitted the
11amount of such tax to the Department, he is entitled to no
12deduction under this Act upon refunding such tax to the
13purchaser.
14    Any retailer filing a return under this Section shall also
15include (for the purpose of paying tax thereon) the total tax
16covered by such return upon the selling price of tangible
17personal property purchased by him at retail from a retailer,
18but as to which the tax imposed by this Act was not collected
19from the retailer filing such return, and such retailer shall
20remit the amount of such tax to the Department when filing such
21return.
22    If experience indicates such action to be practicable, the
23Department may prescribe and furnish a combination or joint
24return which will enable retailers, who are required to file
25returns hereunder and also under the Retailers' Occupation Tax
26Act, to furnish all the return information required by both

 

 

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1Acts on the one form.
2    Where the retailer has more than one business registered
3with the Department under separate registration under this Act,
4such retailer may not file each return that is due as a single
5return covering all such registered businesses, but shall file
6separate returns for each such registered business.
7    Beginning January 1, 1990, each month the Department shall
8pay into the State and Local Sales Tax Reform Fund, a special
9fund in the State Treasury which is hereby created, the net
10revenue realized for the preceding month from the 1% tax on
11sales of food for human consumption which is to be consumed off
12the premises where it is sold (other than alcoholic beverages,
13soft drinks and food which has been prepared for immediate
14consumption) and prescription and nonprescription medicines,
15drugs, medical appliances, products classified as Class III
16medical devices by the United States Food and Drug
17Administration that are used for cancer treatment pursuant to a
18prescription, as well as any accessories and components related
19to those devices, and insulin, urine testing materials,
20syringes and needles used by diabetics.
21    Beginning January 1, 1990, each month the Department shall
22pay into the County and Mass Transit District Fund 4% of the
23net revenue realized for the preceding month from the 6.25%
24general rate on the selling price of tangible personal property
25which is purchased outside Illinois at retail from a retailer
26and which is titled or registered by an agency of this State's

 

 

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1government.
2    Beginning January 1, 1990, each month the Department shall
3pay into the State and Local Sales Tax Reform Fund, a special
4fund in the State Treasury, 20% of the net revenue realized for
5the preceding month from the 6.25% general rate on the selling
6price of tangible personal property, other than tangible
7personal property which is purchased outside Illinois at retail
8from a retailer and which is titled or registered by an agency
9of this State's government.
10    Beginning August 1, 2000, each month the Department shall
11pay into the State and Local Sales Tax Reform Fund 100% of the
12net revenue realized for the preceding month from the 1.25%
13rate on the selling price of motor fuel and gasohol. Beginning
14September 1, 2010, each month the Department shall pay into the
15State and Local Sales Tax Reform Fund 100% of the net revenue
16realized for the preceding month from the 1.25% rate on the
17selling price of sales tax holiday items.
18    Beginning January 1, 1990, each month the Department shall
19pay into the Local Government Tax Fund 16% of the net revenue
20realized for the preceding month from the 6.25% general rate on
21the selling price of tangible personal property which is
22purchased outside Illinois at retail from a retailer and which
23is titled or registered by an agency of this State's
24government.
25    Beginning October 1, 2009, each month the Department shall
26pay into the Capital Projects Fund an amount that is equal to

 

 

HB4004- 195 -LRB100 11829 HLH 23189 b

1an amount estimated by the Department to represent 80% of the
2net revenue realized for the preceding month from the sale of
3candy, grooming and hygiene products, and soft drinks that had
4been taxed at a rate of 1% prior to September 1, 2009 but that
5are now taxed at 6.25%.
6    Beginning July 1, 2011, each month the Department shall pay
7into the Clean Air Act Permit Fund 80% of the net revenue
8realized for the preceding month from the 6.25% general rate on
9the selling price of sorbents used in Illinois in the process
10of sorbent injection as used to comply with the Environmental
11Protection Act or the federal Clean Air Act, but the total
12payment into the Clean Air Act Permit Fund under this Act and
13the Retailers' Occupation Tax Act shall not exceed $2,000,000
14in any fiscal year.
15    Beginning July 1, 2013, each month the Department shall pay
16into the Underground Storage Tank Fund from the proceeds
17collected under this Act, the Service Use Tax Act, the Service
18Occupation Tax Act, and the Retailers' Occupation Tax Act an
19amount equal to the average monthly deficit in the Underground
20Storage Tank Fund during the prior year, as certified annually
21by the Illinois Environmental Protection Agency, but the total
22payment into the Underground Storage Tank Fund under this Act,
23the Service Use Tax Act, the Service Occupation Tax Act, and
24the Retailers' Occupation Tax Act shall not exceed $18,000,000
25in any State fiscal year. As used in this paragraph, the
26"average monthly deficit" shall be equal to the difference

 

 

HB4004- 196 -LRB100 11829 HLH 23189 b

1between the average monthly claims for payment by the fund and
2the average monthly revenues deposited into the fund, excluding
3payments made pursuant to this paragraph.
4    Beginning July 1, 2015, of the remainder of the moneys
5received by the Department under this Act, the Service Use Tax
6Act, the Service Occupation Tax Act, and the Retailers'
7Occupation Tax Act, each month the Department shall deposit
8$500,000 into the State Crime Laboratory Fund.
9    Of the remainder of the moneys received by the Department
10pursuant to this Act, (a) 1.75% thereof shall be paid into the
11Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
12and after July 1, 1989, 3.8% thereof shall be paid into the
13Build Illinois Fund; provided, however, that if in any fiscal
14year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
15may be, of the moneys received by the Department and required
16to be paid into the Build Illinois Fund pursuant to Section 3
17of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
18Act, Section 9 of the Service Use Tax Act, and Section 9 of the
19Service Occupation Tax Act, such Acts being hereinafter called
20the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
21may be, of moneys being hereinafter called the "Tax Act
22Amount", and (2) the amount transferred to the Build Illinois
23Fund from the State and Local Sales Tax Reform Fund shall be
24less than the Annual Specified Amount (as defined in Section 3
25of the Retailers' Occupation Tax Act), an amount equal to the
26difference shall be immediately paid into the Build Illinois

 

 

HB4004- 197 -LRB100 11829 HLH 23189 b

1Fund from other moneys received by the Department pursuant to
2the Tax Acts; and further provided, that if on the last
3business day of any month the sum of (1) the Tax Act Amount
4required to be deposited into the Build Illinois Bond Account
5in the Build Illinois Fund during such month and (2) the amount
6transferred during such month to the Build Illinois Fund from
7the State and Local Sales Tax Reform Fund shall have been less
8than 1/12 of the Annual Specified Amount, an amount equal to
9the difference shall be immediately paid into the Build
10Illinois Fund from other moneys received by the Department
11pursuant to the Tax Acts; and, further provided, that in no
12event shall the payments required under the preceding proviso
13result in aggregate payments into the Build Illinois Fund
14pursuant to this clause (b) for any fiscal year in excess of
15the greater of (i) the Tax Act Amount or (ii) the Annual
16Specified Amount for such fiscal year; and, further provided,
17that the amounts payable into the Build Illinois Fund under
18this clause (b) shall be payable only until such time as the
19aggregate amount on deposit under each trust indenture securing
20Bonds issued and outstanding pursuant to the Build Illinois
21Bond Act is sufficient, taking into account any future
22investment income, to fully provide, in accordance with such
23indenture, for the defeasance of or the payment of the
24principal of, premium, if any, and interest on the Bonds
25secured by such indenture and on any Bonds expected to be
26issued thereafter and all fees and costs payable with respect

 

 

HB4004- 198 -LRB100 11829 HLH 23189 b

1thereto, all as certified by the Director of the Bureau of the
2Budget (now Governor's Office of Management and Budget). If on
3the last business day of any month in which Bonds are
4outstanding pursuant to the Build Illinois Bond Act, the
5aggregate of the moneys deposited in the Build Illinois Bond
6Account in the Build Illinois Fund in such month shall be less
7than the amount required to be transferred in such month from
8the Build Illinois Bond Account to the Build Illinois Bond
9Retirement and Interest Fund pursuant to Section 13 of the
10Build Illinois Bond Act, an amount equal to such deficiency
11shall be immediately paid from other moneys received by the
12Department pursuant to the Tax Acts to the Build Illinois Fund;
13provided, however, that any amounts paid to the Build Illinois
14Fund in any fiscal year pursuant to this sentence shall be
15deemed to constitute payments pursuant to clause (b) of the
16preceding sentence and shall reduce the amount otherwise
17payable for such fiscal year pursuant to clause (b) of the
18preceding sentence. The moneys received by the Department
19pursuant to this Act and required to be deposited into the
20Build Illinois Fund are subject to the pledge, claim and charge
21set forth in Section 12 of the Build Illinois Bond Act.
22    Subject to payment of amounts into the Build Illinois Fund
23as provided in the preceding paragraph or in any amendment
24thereto hereafter enacted, the following specified monthly
25installment of the amount requested in the certificate of the
26Chairman of the Metropolitan Pier and Exposition Authority

 

 

HB4004- 199 -LRB100 11829 HLH 23189 b

1provided under Section 8.25f of the State Finance Act, but not
2in excess of the sums designated as "Total Deposit", shall be
3deposited in the aggregate from collections under Section 9 of
4the Use Tax Act, Section 9 of the Service Use Tax Act, Section
59 of the Service Occupation Tax Act, and Section 3 of the
6Retailers' Occupation Tax Act into the McCormick Place
7Expansion Project Fund in the specified fiscal years.
8Fiscal YearTotal Deposit
91993         $0
101994 53,000,000
111995 58,000,000
121996 61,000,000
131997 64,000,000
141998 68,000,000
151999 71,000,000
162000 75,000,000
172001 80,000,000
182002 93,000,000
192003 99,000,000
202004103,000,000
212005108,000,000
222006113,000,000
232007119,000,000
242008126,000,000
252009132,000,000
262010139,000,000

 

 

HB4004- 200 -LRB100 11829 HLH 23189 b

12011146,000,000
22012153,000,000
32013161,000,000
42014170,000,000
52015179,000,000
62016189,000,000
72017199,000,000
82018210,000,000
92019221,000,000
102020233,000,000
112021246,000,000
122022260,000,000
132023275,000,000
142024 275,000,000
152025 275,000,000
162026 279,000,000
172027 292,000,000
182028 307,000,000
192029 322,000,000
202030 338,000,000
212031 350,000,000
222032 350,000,000
23and
24each fiscal year
25thereafter that bonds
26are outstanding under

 

 

HB4004- 201 -LRB100 11829 HLH 23189 b

1Section 13.2 of the
2Metropolitan Pier and
3Exposition Authority Act,
4but not after fiscal year 2060.
5    Beginning July 20, 1993 and in each month of each fiscal
6year thereafter, one-eighth of the amount requested in the
7certificate of the Chairman of the Metropolitan Pier and
8Exposition Authority for that fiscal year, less the amount
9deposited into the McCormick Place Expansion Project Fund by
10the State Treasurer in the respective month under subsection
11(g) of Section 13 of the Metropolitan Pier and Exposition
12Authority Act, plus cumulative deficiencies in the deposits
13required under this Section for previous months and years,
14shall be deposited into the McCormick Place Expansion Project
15Fund, until the full amount requested for the fiscal year, but
16not in excess of the amount specified above as "Total Deposit",
17has been deposited.
18    Subject to payment of amounts into the Build Illinois Fund
19and the McCormick Place Expansion Project Fund pursuant to the
20preceding paragraphs or in any amendments thereto hereafter
21enacted, beginning July 1, 1993 and ending on September 30,
222013, the Department shall each month pay into the Illinois Tax
23Increment Fund 0.27% of 80% of the net revenue realized for the
24preceding month from the 6.25% general rate on the selling
25price of tangible personal property.
26    Subject to payment of amounts into the Build Illinois Fund

 

 

HB4004- 202 -LRB100 11829 HLH 23189 b

1and the McCormick Place Expansion Project Fund pursuant to the
2preceding paragraphs or in any amendments thereto hereafter
3enacted, beginning with the receipt of the first report of
4taxes paid by an eligible business and continuing for a 25-year
5period, the Department shall each month pay into the Energy
6Infrastructure Fund 80% of the net revenue realized from the
76.25% general rate on the selling price of Illinois-mined coal
8that was sold to an eligible business. For purposes of this
9paragraph, the term "eligible business" means a new electric
10generating facility certified pursuant to Section 605-332 of
11the Department of Commerce and Economic Opportunity Law of the
12Civil Administrative Code of Illinois.
13    Subject to payment of amounts into the Build Illinois Fund,
14the McCormick Place Expansion Project Fund, the Illinois Tax
15Increment Fund, and the Energy Infrastructure Fund pursuant to
16the preceding paragraphs or in any amendments to this Section
17hereafter enacted, beginning on the first day of the first
18calendar month to occur on or after August 26, 2014 (the
19effective date of Public Act 98-1098) this amendatory Act of
20the 98th General Assembly, each month, from the collections
21made under Section 9 of the Use Tax Act, Section 9 of the
22Service Use Tax Act, Section 9 of the Service Occupation Tax
23Act, and Section 3 of the Retailers' Occupation Tax Act, the
24Department shall pay into the Tax Compliance and Administration
25Fund, to be used, subject to appropriation, to fund additional
26auditors and compliance personnel at the Department of Revenue,

 

 

HB4004- 203 -LRB100 11829 HLH 23189 b

1an amount equal to 1/12 of 5% of 80% of the cash receipts
2collected during the preceding fiscal year by the Audit Bureau
3of the Department under the Use Tax Act, the Service Use Tax
4Act, the Service Occupation Tax Act, the Retailers' Occupation
5Tax Act, and associated local occupation and use taxes
6administered by the Department.
7    Of the remainder of the moneys received by the Department
8pursuant to this Act, 75% thereof shall be paid into the State
9Treasury and 25% shall be reserved in a special account and
10used only for the transfer to the Common School Fund as part of
11the monthly transfer from the General Revenue Fund in
12accordance with Section 8a of the State Finance Act.
13    As soon as possible after the first day of each month, upon
14certification of the Department of Revenue, the Comptroller
15shall order transferred and the Treasurer shall transfer from
16the General Revenue Fund to the Motor Fuel Tax Fund an amount
17equal to 1.7% of 80% of the net revenue realized under this Act
18for the second preceding month. Beginning April 1, 2000, this
19transfer is no longer required and shall not be made.
20    Net revenue realized for a month shall be the revenue
21collected by the State pursuant to this Act, less the amount
22paid out during that month as refunds to taxpayers for
23overpayment of liability.
24    For greater simplicity of administration, manufacturers,
25importers and wholesalers whose products are sold at retail in
26Illinois by numerous retailers, and who wish to do so, may

 

 

HB4004- 204 -LRB100 11829 HLH 23189 b

1assume the responsibility for accounting and paying to the
2Department all tax accruing under this Act with respect to such
3sales, if the retailers who are affected do not make written
4objection to the Department to this arrangement.
5(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
698-496, eff. 1-1-14; 98-756, eff. 7-16-14; 98-1098, eff.
78-26-14; 99-352, eff. 8-12-15; 99-858, eff. 8-19-16; 99-933,
8eff. 1-27-17; revised 2-3-17.)
 
9    Section 15. The Service Use Tax Act is amended by changing
10Section 9 as follows:
 
11    (35 ILCS 110/9)  (from Ch. 120, par. 439.39)
12    Sec. 9. Each serviceman required or authorized to collect
13the tax herein imposed shall pay to the Department the amount
14of such tax (except as otherwise provided) at the time when he
15is required to file his return for the period during which such
16tax was collected, less the vendor discount amount a discount
17of 2.1% prior to January 1, 1990 and 1.75% on and after January
181, 1990, or $5 per calendar year, whichever is greater, which
19is allowed to reimburse the serviceman for expenses incurred in
20collecting the tax, keeping records, preparing and filing
21returns, remitting the tax and supplying data to the Department
22on request. On and after January 1, 1990 and prior to January
231, 2018, the vendor discount amount shall be 1.75% or $5 per
24calendar year, whichever is greater. On and after January 1,

 

 

HB4004- 205 -LRB100 11829 HLH 23189 b

12018, the vendor discount amount shall be the sum of (i) 1.75%
2of the first $1,000 collected during the calendar year and (ii)
31% of the amount of proceeds collected during the calendar year
4that exceeds $1,000; however, on and after January 1, 2018, in
5no event shall the discount allowed to any vendor be less than
6$5 in any calendar year or more than $1,500 in any calendar
7year. The Department may disallow the discount for servicemen
8whose certificate of registration is revoked at the time the
9return is filed, but only if the Department's decision to
10revoke the certificate of registration has become final. A
11serviceman need not remit that part of any tax collected by him
12to the extent that he is required to pay and does pay the tax
13imposed by the Service Occupation Tax Act with respect to his
14sale of service involving the incidental transfer by him of the
15same property.
16    Except as provided hereinafter in this Section, on or
17before the twentieth day of each calendar month, such
18serviceman shall file a return for the preceding calendar month
19in accordance with reasonable Rules and Regulations to be
20promulgated by the Department. Such return shall be filed on a
21form prescribed by the Department and shall contain such
22information as the Department may reasonably require.
23    The Department may require returns to be filed on a
24quarterly basis. If so required, a return for each calendar
25quarter shall be filed on or before the twentieth day of the
26calendar month following the end of such calendar quarter. The

 

 

HB4004- 206 -LRB100 11829 HLH 23189 b

1taxpayer shall also file a return with the Department for each
2of the first two months of each calendar quarter, on or before
3the twentieth day of the following calendar month, stating:
4        1. The name of the seller;
5        2. The address of the principal place of business from
6    which he engages in business as a serviceman in this State;
7        3. The total amount of taxable receipts received by him
8    during the preceding calendar month, including receipts
9    from charge and time sales, but less all deductions allowed
10    by law;
11        4. The amount of credit provided in Section 2d of this
12    Act;
13        5. The amount of tax due;
14        5-5. The signature of the taxpayer; and
15        6. Such other reasonable information as the Department
16    may require.
17    If a taxpayer fails to sign a return within 30 days after
18the proper notice and demand for signature by the Department,
19the return shall be considered valid and any amount shown to be
20due on the return shall be deemed assessed.
21    Beginning October 1, 1993, a taxpayer who has an average
22monthly tax liability of $150,000 or more shall make all
23payments required by rules of the Department by electronic
24funds transfer. Beginning October 1, 1994, a taxpayer who has
25an average monthly tax liability of $100,000 or more shall make
26all payments required by rules of the Department by electronic

 

 

HB4004- 207 -LRB100 11829 HLH 23189 b

1funds transfer. Beginning October 1, 1995, a taxpayer who has
2an average monthly tax liability of $50,000 or more shall make
3all payments required by rules of the Department by electronic
4funds transfer. Beginning October 1, 2000, a taxpayer who has
5an annual tax liability of $200,000 or more shall make all
6payments required by rules of the Department by electronic
7funds transfer. The term "annual tax liability" shall be the
8sum of the taxpayer's liabilities under this Act, and under all
9other State and local occupation and use tax laws administered
10by the Department, for the immediately preceding calendar year.
11The term "average monthly tax liability" means the sum of the
12taxpayer's liabilities under this Act, and under all other
13State and local occupation and use tax laws administered by the
14Department, for the immediately preceding calendar year
15divided by 12. Beginning on October 1, 2002, a taxpayer who has
16a tax liability in the amount set forth in subsection (b) of
17Section 2505-210 of the Department of Revenue Law shall make
18all payments required by rules of the Department by electronic
19funds transfer.
20    Before August 1 of each year beginning in 1993, the
21Department shall notify all taxpayers required to make payments
22by electronic funds transfer. All taxpayers required to make
23payments by electronic funds transfer shall make those payments
24for a minimum of one year beginning on October 1.
25    Any taxpayer not required to make payments by electronic
26funds transfer may make payments by electronic funds transfer

 

 

HB4004- 208 -LRB100 11829 HLH 23189 b

1with the permission of the Department.
2    All taxpayers required to make payment by electronic funds
3transfer and any taxpayers authorized to voluntarily make
4payments by electronic funds transfer shall make those payments
5in the manner authorized by the Department.
6    The Department shall adopt such rules as are necessary to
7effectuate a program of electronic funds transfer and the
8requirements of this Section.
9    If the serviceman is otherwise required to file a monthly
10return and if the serviceman's average monthly tax liability to
11the Department does not exceed $200, the Department may
12authorize his returns to be filed on a quarter annual basis,
13with the return for January, February and March of a given year
14being due by April 20 of such year; with the return for April,
15May and June of a given year being due by July 20 of such year;
16with the return for July, August and September of a given year
17being due by October 20 of such year, and with the return for
18October, November and December of a given year being due by
19January 20 of the following year.
20    If the serviceman is otherwise required to file a monthly
21or quarterly return and if the serviceman's average monthly tax
22liability to the Department does not exceed $50, the Department
23may authorize his returns to be filed on an annual basis, with
24the return for a given year being due by January 20 of the
25following year.
26    Such quarter annual and annual returns, as to form and

 

 

HB4004- 209 -LRB100 11829 HLH 23189 b

1substance, shall be subject to the same requirements as monthly
2returns.
3    Notwithstanding any other provision in this Act concerning
4the time within which a serviceman may file his return, in the
5case of any serviceman who ceases to engage in a kind of
6business which makes him responsible for filing returns under
7this Act, such serviceman shall file a final return under this
8Act with the Department not more than 1 month after
9discontinuing such business.
10    Where a serviceman collects the tax with respect to the
11selling price of property which he sells and the purchaser
12thereafter returns such property and the serviceman refunds the
13selling price thereof to the purchaser, such serviceman shall
14also refund, to the purchaser, the tax so collected from the
15purchaser. When filing his return for the period in which he
16refunds such tax to the purchaser, the serviceman may deduct
17the amount of the tax so refunded by him to the purchaser from
18any other Service Use Tax, Service Occupation Tax, retailers'
19occupation tax or use tax which such serviceman may be required
20to pay or remit to the Department, as shown by such return,
21provided that the amount of the tax to be deducted shall
22previously have been remitted to the Department by such
23serviceman. If the serviceman shall not previously have
24remitted the amount of such tax to the Department, he shall be
25entitled to no deduction hereunder upon refunding such tax to
26the purchaser.

 

 

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1    Any serviceman filing a return hereunder shall also include
2the total tax upon the selling price of tangible personal
3property purchased for use by him as an incident to a sale of
4service, and such serviceman shall remit the amount of such tax
5to the Department when filing such return.
6    If experience indicates such action to be practicable, the
7Department may prescribe and furnish a combination or joint
8return which will enable servicemen, who are required to file
9returns hereunder and also under the Service Occupation Tax
10Act, to furnish all the return information required by both
11Acts on the one form.
12    Where the serviceman has more than one business registered
13with the Department under separate registration hereunder,
14such serviceman shall not file each return that is due as a
15single return covering all such registered businesses, but
16shall file separate returns for each such registered business.
17    Beginning January 1, 1990, each month the Department shall
18pay into the State and Local Tax Reform Fund, a special fund in
19the State Treasury, the net revenue realized for the preceding
20month from the 1% tax on sales of food for human consumption
21which is to be consumed off the premises where it is sold
22(other than alcoholic beverages, soft drinks and food which has
23been prepared for immediate consumption) and prescription and
24nonprescription medicines, drugs, medical appliances, products
25classified as Class III medical devices, by the United States
26Food and Drug Administration that are used for cancer treatment

 

 

HB4004- 211 -LRB100 11829 HLH 23189 b

1pursuant to a prescription, as well as any accessories and
2components related to those devices, and insulin, urine testing
3materials, syringes and needles used by diabetics.
4    Beginning January 1, 1990, each month the Department shall
5pay into the State and Local Sales Tax Reform Fund 20% of the
6net revenue realized for the preceding month from the 6.25%
7general rate on transfers of tangible personal property, other
8than tangible personal property which is purchased outside
9Illinois at retail from a retailer and which is titled or
10registered by an agency of this State's government.
11    Beginning August 1, 2000, each month the Department shall
12pay into the State and Local Sales Tax Reform Fund 100% of the
13net revenue realized for the preceding month from the 1.25%
14rate on the selling price of motor fuel and gasohol.
15    Beginning October 1, 2009, each month the Department shall
16pay into the Capital Projects Fund an amount that is equal to
17an amount estimated by the Department to represent 80% of the
18net revenue realized for the preceding month from the sale of
19candy, grooming and hygiene products, and soft drinks that had
20been taxed at a rate of 1% prior to September 1, 2009 but that
21are now taxed at 6.25%.
22    Beginning July 1, 2013, each month the Department shall pay
23into the Underground Storage Tank Fund from the proceeds
24collected under this Act, the Use Tax Act, the Service
25Occupation Tax Act, and the Retailers' Occupation Tax Act an
26amount equal to the average monthly deficit in the Underground

 

 

HB4004- 212 -LRB100 11829 HLH 23189 b

1Storage Tank Fund during the prior year, as certified annually
2by the Illinois Environmental Protection Agency, but the total
3payment into the Underground Storage Tank Fund under this Act,
4the Use Tax Act, the Service Occupation Tax Act, and the
5Retailers' Occupation Tax Act shall not exceed $18,000,000 in
6any State fiscal year. As used in this paragraph, the "average
7monthly deficit" shall be equal to the difference between the
8average monthly claims for payment by the fund and the average
9monthly revenues deposited into the fund, excluding payments
10made pursuant to this paragraph.
11    Beginning July 1, 2015, of the remainder of the moneys
12received by the Department under the Use Tax Act, this Act, the
13Service Occupation Tax Act, and the Retailers' Occupation Tax
14Act, each month the Department shall deposit $500,000 into the
15State Crime Laboratory Fund.
16    Of the remainder of the moneys received by the Department
17pursuant to this Act, (a) 1.75% thereof shall be paid into the
18Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
19and after July 1, 1989, 3.8% thereof shall be paid into the
20Build Illinois Fund; provided, however, that if in any fiscal
21year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
22may be, of the moneys received by the Department and required
23to be paid into the Build Illinois Fund pursuant to Section 3
24of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
25Act, Section 9 of the Service Use Tax Act, and Section 9 of the
26Service Occupation Tax Act, such Acts being hereinafter called

 

 

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1the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
2may be, of moneys being hereinafter called the "Tax Act
3Amount", and (2) the amount transferred to the Build Illinois
4Fund from the State and Local Sales Tax Reform Fund shall be
5less than the Annual Specified Amount (as defined in Section 3
6of the Retailers' Occupation Tax Act), an amount equal to the
7difference shall be immediately paid into the Build Illinois
8Fund from other moneys received by the Department pursuant to
9the Tax Acts; and further provided, that if on the last
10business day of any month the sum of (1) the Tax Act Amount
11required to be deposited into the Build Illinois Bond Account
12in the Build Illinois Fund during such month and (2) the amount
13transferred during such month to the Build Illinois Fund from
14the State and Local Sales Tax Reform Fund shall have been less
15than 1/12 of the Annual Specified Amount, an amount equal to
16the difference shall be immediately paid into the Build
17Illinois Fund from other moneys received by the Department
18pursuant to the Tax Acts; and, further provided, that in no
19event shall the payments required under the preceding proviso
20result in aggregate payments into the Build Illinois Fund
21pursuant to this clause (b) for any fiscal year in excess of
22the greater of (i) the Tax Act Amount or (ii) the Annual
23Specified Amount for such fiscal year; and, further provided,
24that the amounts payable into the Build Illinois Fund under
25this clause (b) shall be payable only until such time as the
26aggregate amount on deposit under each trust indenture securing

 

 

HB4004- 214 -LRB100 11829 HLH 23189 b

1Bonds issued and outstanding pursuant to the Build Illinois
2Bond Act is sufficient, taking into account any future
3investment income, to fully provide, in accordance with such
4indenture, for the defeasance of or the payment of the
5principal of, premium, if any, and interest on the Bonds
6secured by such indenture and on any Bonds expected to be
7issued thereafter and all fees and costs payable with respect
8thereto, all as certified by the Director of the Bureau of the
9Budget (now Governor's Office of Management and Budget). If on
10the last business day of any month in which Bonds are
11outstanding pursuant to the Build Illinois Bond Act, the
12aggregate of the moneys deposited in the Build Illinois Bond
13Account in the Build Illinois Fund in such month shall be less
14than the amount required to be transferred in such month from
15the Build Illinois Bond Account to the Build Illinois Bond
16Retirement and Interest Fund pursuant to Section 13 of the
17Build Illinois Bond Act, an amount equal to such deficiency
18shall be immediately paid from other moneys received by the
19Department pursuant to the Tax Acts to the Build Illinois Fund;
20provided, however, that any amounts paid to the Build Illinois
21Fund in any fiscal year pursuant to this sentence shall be
22deemed to constitute payments pursuant to clause (b) of the
23preceding sentence and shall reduce the amount otherwise
24payable for such fiscal year pursuant to clause (b) of the
25preceding sentence. The moneys received by the Department
26pursuant to this Act and required to be deposited into the

 

 

HB4004- 215 -LRB100 11829 HLH 23189 b

1Build Illinois Fund are subject to the pledge, claim and charge
2set forth in Section 12 of the Build Illinois Bond Act.
3    Subject to payment of amounts into the Build Illinois Fund
4as provided in the preceding paragraph or in any amendment
5thereto hereafter enacted, the following specified monthly
6installment of the amount requested in the certificate of the
7Chairman of the Metropolitan Pier and Exposition Authority
8provided under Section 8.25f of the State Finance Act, but not
9in excess of the sums designated as "Total Deposit", shall be
10deposited in the aggregate from collections under Section 9 of
11the Use Tax Act, Section 9 of the Service Use Tax Act, Section
129 of the Service Occupation Tax Act, and Section 3 of the
13Retailers' Occupation Tax Act into the McCormick Place
14Expansion Project Fund in the specified fiscal years.
15Fiscal YearTotal Deposit
161993         $0
171994 53,000,000
181995 58,000,000
191996 61,000,000
201997 64,000,000
211998 68,000,000
221999 71,000,000
232000 75,000,000
242001 80,000,000
252002 93,000,000

 

 

HB4004- 216 -LRB100 11829 HLH 23189 b

12003 99,000,000
22004103,000,000
32005108,000,000
42006113,000,000
52007119,000,000
62008126,000,000
72009132,000,000
82010139,000,000
92011146,000,000
102012153,000,000
112013161,000,000
122014170,000,000
132015179,000,000
142016189,000,000
152017199,000,000
162018210,000,000
172019221,000,000
182020233,000,000
192021246,000,000
202022260,000,000
212023275,000,000
222024 275,000,000
232025 275,000,000
242026 279,000,000
252027 292,000,000
262028 307,000,000

 

 

HB4004- 217 -LRB100 11829 HLH 23189 b

12029 322,000,000
22030 338,000,000
32031 350,000,000
42032 350,000,000
5and
6each fiscal year
7thereafter that bonds
8are outstanding under
9Section 13.2 of the
10Metropolitan Pier and
11Exposition Authority Act,
12but not after fiscal year 2060.
13    Beginning July 20, 1993 and in each month of each fiscal
14year thereafter, one-eighth of the amount requested in the
15certificate of the Chairman of the Metropolitan Pier and
16Exposition Authority for that fiscal year, less the amount
17deposited into the McCormick Place Expansion Project Fund by
18the State Treasurer in the respective month under subsection
19(g) of Section 13 of the Metropolitan Pier and Exposition
20Authority Act, plus cumulative deficiencies in the deposits
21required under this Section for previous months and years,
22shall be deposited into the McCormick Place Expansion Project
23Fund, until the full amount requested for the fiscal year, but
24not in excess of the amount specified above as "Total Deposit",
25has been deposited.
26    Subject to payment of amounts into the Build Illinois Fund

 

 

HB4004- 218 -LRB100 11829 HLH 23189 b

1and the McCormick Place Expansion Project Fund pursuant to the
2preceding paragraphs or in any amendments thereto hereafter
3enacted, beginning July 1, 1993 and ending on September 30,
42013, the Department shall each month pay into the Illinois Tax
5Increment Fund 0.27% of 80% of the net revenue realized for the
6preceding month from the 6.25% general rate on the selling
7price of tangible personal property.
8    Subject to payment of amounts into the Build Illinois Fund
9and the McCormick Place Expansion Project Fund pursuant to the
10preceding paragraphs or in any amendments thereto hereafter
11enacted, beginning with the receipt of the first report of
12taxes paid by an eligible business and continuing for a 25-year
13period, the Department shall each month pay into the Energy
14Infrastructure Fund 80% of the net revenue realized from the
156.25% general rate on the selling price of Illinois-mined coal
16that was sold to an eligible business. For purposes of this
17paragraph, the term "eligible business" means a new electric
18generating facility certified pursuant to Section 605-332 of
19the Department of Commerce and Economic Opportunity Law of the
20Civil Administrative Code of Illinois.
21    Subject to payment of amounts into the Build Illinois Fund,
22the McCormick Place Expansion Project Fund, the Illinois Tax
23Increment Fund, and the Energy Infrastructure Fund pursuant to
24the preceding paragraphs or in any amendments to this Section
25hereafter enacted, beginning on the first day of the first
26calendar month to occur on or after the effective date of this

 

 

HB4004- 219 -LRB100 11829 HLH 23189 b

1amendatory Act of the 98th General Assembly, each month, from
2the collections made under Section 9 of the Use Tax Act,
3Section 9 of the Service Use Tax Act, Section 9 of the Service
4Occupation Tax Act, and Section 3 of the Retailers' Occupation
5Tax Act, the Department shall pay into the Tax Compliance and
6Administration Fund, to be used, subject to appropriation, to
7fund additional auditors and compliance personnel at the
8Department of Revenue, an amount equal to 1/12 of 5% of 80% of
9the cash receipts collected during the preceding fiscal year by
10the Audit Bureau of the Department under the Use Tax Act, the
11Service Use Tax Act, the Service Occupation Tax Act, the
12Retailers' Occupation Tax Act, and associated local occupation
13and use taxes administered by the Department.
14    Of the remainder of the moneys received by the Department
15pursuant to this Act, 75% thereof shall be paid into the
16General Revenue Fund of the State Treasury and 25% shall be
17reserved in a special account and used only for the transfer to
18the Common School Fund as part of the monthly transfer from the
19General Revenue Fund in accordance with Section 8a of the State
20Finance Act.
21    As soon as possible after the first day of each month, upon
22certification of the Department of Revenue, the Comptroller
23shall order transferred and the Treasurer shall transfer from
24the General Revenue Fund to the Motor Fuel Tax Fund an amount
25equal to 1.7% of 80% of the net revenue realized under this Act
26for the second preceding month. Beginning April 1, 2000, this

 

 

HB4004- 220 -LRB100 11829 HLH 23189 b

1transfer is no longer required and shall not be made.
2    Net revenue realized for a month shall be the revenue
3collected by the State pursuant to this Act, less the amount
4paid out during that month as refunds to taxpayers for
5overpayment of liability.
6(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
798-298, eff. 8-9-13; 98-496, eff. 1-1-14; 98-756, eff. 7-16-14;
898-1098, eff. 8-26-14; 99-352, eff. 8-12-15; 99-858, eff.
98-19-16.)
 
10    Section 20. The Service Occupation Tax Act is amended by
11changing Section 9 as follows:
 
12    (35 ILCS 115/9)  (from Ch. 120, par. 439.109)
13    Sec. 9. Each serviceman required or authorized to collect
14the tax herein imposed shall pay to the Department the amount
15of such tax at the time when he is required to file his return
16for the period during which such tax was collectible, less the
17vendor discount amount a discount of 2.1% prior to January 1,
181990, and 1.75% on and after January 1, 1990, or $5 per
19calendar year, whichever is greater, which is allowed to
20reimburse the serviceman for expenses incurred in collecting
21the tax, keeping records, preparing and filing returns,
22remitting the tax and supplying data to the Department on
23request. On and after January 1, 1990 and prior to January 1,
242018, the vendor discount amount shall be 1.75% or $5 per

 

 

HB4004- 221 -LRB100 11829 HLH 23189 b

1calendar year, whichever is greater. On and after January 1,
22018, the vendor discount amount shall be the sum of (i) 1.75%
3of the first $1,000 collected during the calendar year and (ii)
41% of the amount of proceeds collected during the calendar year
5that exceeds $1,000; however, on and after January 1, 2018, in
6no event shall the discount allowed to any vendor be less than
7$5 in any calendar year or more than $1,500 in any calendar
8year. The Department may disallow the discount for servicemen
9whose certificate of registration is revoked at the time the
10return is filed, but only if the Department's decision to
11revoke the certificate of registration has become final.
12    Where such tangible personal property is sold under a
13conditional sales contract, or under any other form of sale
14wherein the payment of the principal sum, or a part thereof, is
15extended beyond the close of the period for which the return is
16filed, the serviceman, in collecting the tax may collect, for
17each tax return period, only the tax applicable to the part of
18the selling price actually received during such tax return
19period.
20    Except as provided hereinafter in this Section, on or
21before the twentieth day of each calendar month, such
22serviceman shall file a return for the preceding calendar month
23in accordance with reasonable rules and regulations to be
24promulgated by the Department of Revenue. Such return shall be
25filed on a form prescribed by the Department and shall contain
26such information as the Department may reasonably require.

 

 

HB4004- 222 -LRB100 11829 HLH 23189 b

1    The Department may require returns to be filed on a
2quarterly basis. If so required, a return for each calendar
3quarter shall be filed on or before the twentieth day of the
4calendar month following the end of such calendar quarter. The
5taxpayer shall also file a return with the Department for each
6of the first two months of each calendar quarter, on or before
7the twentieth day of the following calendar month, stating:
8        1. The name of the seller;
9        2. The address of the principal place of business from
10    which he engages in business as a serviceman in this State;
11        3. The total amount of taxable receipts received by him
12    during the preceding calendar month, including receipts
13    from charge and time sales, but less all deductions allowed
14    by law;
15        4. The amount of credit provided in Section 2d of this
16    Act;
17        5. The amount of tax due;
18        5-5. The signature of the taxpayer; and
19        6. Such other reasonable information as the Department
20    may require.
21    If a taxpayer fails to sign a return within 30 days after
22the proper notice and demand for signature by the Department,
23the return shall be considered valid and any amount shown to be
24due on the return shall be deemed assessed.
25    Prior to October 1, 2003, and on and after September 1,
262004 a serviceman may accept a Manufacturer's Purchase Credit

 

 

HB4004- 223 -LRB100 11829 HLH 23189 b

1certification from a purchaser in satisfaction of Service Use
2Tax as provided in Section 3-70 of the Service Use Tax Act if
3the purchaser provides the appropriate documentation as
4required by Section 3-70 of the Service Use Tax Act. A
5Manufacturer's Purchase Credit certification, accepted prior
6to October 1, 2003 or on or after September 1, 2004 by a
7serviceman as provided in Section 3-70 of the Service Use Tax
8Act, may be used by that serviceman to satisfy Service
9Occupation Tax liability in the amount claimed in the
10certification, not to exceed 6.25% of the receipts subject to
11tax from a qualifying purchase. A Manufacturer's Purchase
12Credit reported on any original or amended return filed under
13this Act after October 20, 2003 for reporting periods prior to
14September 1, 2004 shall be disallowed. Manufacturer's Purchase
15Credit reported on annual returns due on or after January 1,
162005 will be disallowed for periods prior to September 1, 2004.
17No Manufacturer's Purchase Credit may be used after September
1830, 2003 through August 31, 2004 to satisfy any tax liability
19imposed under this Act, including any audit liability.
20    If the serviceman's average monthly tax liability to the
21Department does not exceed $200, the Department may authorize
22his returns to be filed on a quarter annual basis, with the
23return for January, February and March of a given year being
24due by April 20 of such year; with the return for April, May
25and June of a given year being due by July 20 of such year; with
26the return for July, August and September of a given year being

 

 

HB4004- 224 -LRB100 11829 HLH 23189 b

1due by October 20 of such year, and with the return for
2October, November and December of a given year being due by
3January 20 of the following year.
4    If the serviceman's average monthly tax liability to the
5Department does not exceed $50, the Department may authorize
6his returns to be filed on an annual basis, with the return for
7a given year being due by January 20 of the following year.
8    Such quarter annual and annual returns, as to form and
9substance, shall be subject to the same requirements as monthly
10returns.
11    Notwithstanding any other provision in this Act concerning
12the time within which a serviceman may file his return, in the
13case of any serviceman who ceases to engage in a kind of
14business which makes him responsible for filing returns under
15this Act, such serviceman shall file a final return under this
16Act with the Department not more than 1 month after
17discontinuing such business.
18    Beginning October 1, 1993, a taxpayer who has an average
19monthly tax liability of $150,000 or more shall make all
20payments required by rules of the Department by electronic
21funds transfer. Beginning October 1, 1994, a taxpayer who has
22an average monthly tax liability of $100,000 or more shall make
23all payments required by rules of the Department by electronic
24funds transfer. Beginning October 1, 1995, a taxpayer who has
25an average monthly tax liability of $50,000 or more shall make
26all payments required by rules of the Department by electronic

 

 

HB4004- 225 -LRB100 11829 HLH 23189 b

1funds transfer. Beginning October 1, 2000, a taxpayer who has
2an annual tax liability of $200,000 or more shall make all
3payments required by rules of the Department by electronic
4funds transfer. The term "annual tax liability" shall be the
5sum of the taxpayer's liabilities under this Act, and under all
6other State and local occupation and use tax laws administered
7by the Department, for the immediately preceding calendar year.
8The term "average monthly tax liability" means the sum of the
9taxpayer's liabilities under this Act, and under all other
10State and local occupation and use tax laws administered by the
11Department, for the immediately preceding calendar year
12divided by 12. Beginning on October 1, 2002, a taxpayer who has
13a tax liability in the amount set forth in subsection (b) of
14Section 2505-210 of the Department of Revenue Law shall make
15all payments required by rules of the Department by electronic
16funds transfer.
17    Before August 1 of each year beginning in 1993, the
18Department shall notify all taxpayers required to make payments
19by electronic funds transfer. All taxpayers required to make
20payments by electronic funds transfer shall make those payments
21for a minimum of one year beginning on October 1.
22    Any taxpayer not required to make payments by electronic
23funds transfer may make payments by electronic funds transfer
24with the permission of the Department.
25    All taxpayers required to make payment by electronic funds
26transfer and any taxpayers authorized to voluntarily make

 

 

HB4004- 226 -LRB100 11829 HLH 23189 b

1payments by electronic funds transfer shall make those payments
2in the manner authorized by the Department.
3    The Department shall adopt such rules as are necessary to
4effectuate a program of electronic funds transfer and the
5requirements of this Section.
6    Where a serviceman collects the tax with respect to the
7selling price of tangible personal property which he sells and
8the purchaser thereafter returns such tangible personal
9property and the serviceman refunds the selling price thereof
10to the purchaser, such serviceman shall also refund, to the
11purchaser, the tax so collected from the purchaser. When filing
12his return for the period in which he refunds such tax to the
13purchaser, the serviceman may deduct the amount of the tax so
14refunded by him to the purchaser from any other Service
15Occupation Tax, Service Use Tax, Retailers' Occupation Tax or
16Use Tax which such serviceman may be required to pay or remit
17to the Department, as shown by such return, provided that the
18amount of the tax to be deducted shall previously have been
19remitted to the Department by such serviceman. If the
20serviceman shall not previously have remitted the amount of
21such tax to the Department, he shall be entitled to no
22deduction hereunder upon refunding such tax to the purchaser.
23    If experience indicates such action to be practicable, the
24Department may prescribe and furnish a combination or joint
25return which will enable servicemen, who are required to file
26returns hereunder and also under the Retailers' Occupation Tax

 

 

HB4004- 227 -LRB100 11829 HLH 23189 b

1Act, the Use Tax Act or the Service Use Tax Act, to furnish all
2the return information required by all said Acts on the one
3form.
4    Where the serviceman has more than one business registered
5with the Department under separate registrations hereunder,
6such serviceman shall file separate returns for each registered
7business.
8    Beginning January 1, 1990, each month the Department shall
9pay into the Local Government Tax Fund the revenue realized for
10the preceding month from the 1% tax on sales of food for human
11consumption which is to be consumed off the premises where it
12is sold (other than alcoholic beverages, soft drinks and food
13which has been prepared for immediate consumption) and
14prescription and nonprescription medicines, drugs, medical
15appliances, products classified as Class III medical devices by
16the United States Food and Drug Administration that are used
17for cancer treatment pursuant to a prescription, as well as any
18accessories and components related to those devices, and
19insulin, urine testing materials, syringes and needles used by
20diabetics.
21    Beginning January 1, 1990, each month the Department shall
22pay into the County and Mass Transit District Fund 4% of the
23revenue realized for the preceding month from the 6.25% general
24rate.
25    Beginning August 1, 2000, each month the Department shall
26pay into the County and Mass Transit District Fund 20% of the

 

 

HB4004- 228 -LRB100 11829 HLH 23189 b

1net revenue realized for the preceding month from the 1.25%
2rate on the selling price of motor fuel and gasohol.
3    Beginning January 1, 1990, each month the Department shall
4pay into the Local Government Tax Fund 16% of the revenue
5realized for the preceding month from the 6.25% general rate on
6transfers of tangible personal property.
7    Beginning August 1, 2000, each month the Department shall
8pay into the Local Government Tax Fund 80% of the net revenue
9realized for the preceding month from the 1.25% rate on the
10selling price of motor fuel and gasohol.
11    Beginning October 1, 2009, each month the Department shall
12pay into the Capital Projects Fund an amount that is equal to
13an amount estimated by the Department to represent 80% of the
14net revenue realized for the preceding month from the sale of
15candy, grooming and hygiene products, and soft drinks that had
16been taxed at a rate of 1% prior to September 1, 2009 but that
17are now taxed at 6.25%.
18    Beginning July 1, 2013, each month the Department shall pay
19into the Underground Storage Tank Fund from the proceeds
20collected under this Act, the Use Tax Act, the Service Use Tax
21Act, and the Retailers' Occupation Tax Act an amount equal to
22the average monthly deficit in the Underground Storage Tank
23Fund during the prior year, as certified annually by the
24Illinois Environmental Protection Agency, but the total
25payment into the Underground Storage Tank Fund under this Act,
26the Use Tax Act, the Service Use Tax Act, and the Retailers'

 

 

HB4004- 229 -LRB100 11829 HLH 23189 b

1Occupation Tax Act shall not exceed $18,000,000 in any State
2fiscal year. As used in this paragraph, the "average monthly
3deficit" shall be equal to the difference between the average
4monthly claims for payment by the fund and the average monthly
5revenues deposited into the fund, excluding payments made
6pursuant to this paragraph.
7    Beginning July 1, 2015, of the remainder of the moneys
8received by the Department under the Use Tax Act, the Service
9Use Tax Act, this Act, and the Retailers' Occupation Tax Act,
10each month the Department shall deposit $500,000 into the State
11Crime Laboratory Fund.
12    Of the remainder of the moneys received by the Department
13pursuant to this Act, (a) 1.75% thereof shall be paid into the
14Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
15and after July 1, 1989, 3.8% thereof shall be paid into the
16Build Illinois Fund; provided, however, that if in any fiscal
17year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
18may be, of the moneys received by the Department and required
19to be paid into the Build Illinois Fund pursuant to Section 3
20of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
21Act, Section 9 of the Service Use Tax Act, and Section 9 of the
22Service Occupation Tax Act, such Acts being hereinafter called
23the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
24may be, of moneys being hereinafter called the "Tax Act
25Amount", and (2) the amount transferred to the Build Illinois
26Fund from the State and Local Sales Tax Reform Fund shall be

 

 

HB4004- 230 -LRB100 11829 HLH 23189 b

1less than the Annual Specified Amount (as defined in Section 3
2of the Retailers' Occupation Tax Act), an amount equal to the
3difference shall be immediately paid into the Build Illinois
4Fund from other moneys received by the Department pursuant to
5the Tax Acts; and further provided, that if on the last
6business day of any month the sum of (1) the Tax Act Amount
7required to be deposited into the Build Illinois Account in the
8Build Illinois Fund during such month and (2) the amount
9transferred during such month to the Build Illinois Fund from
10the State and Local Sales Tax Reform Fund shall have been less
11than 1/12 of the Annual Specified Amount, an amount equal to
12the difference shall be immediately paid into the Build
13Illinois Fund from other moneys received by the Department
14pursuant to the Tax Acts; and, further provided, that in no
15event shall the payments required under the preceding proviso
16result in aggregate payments into the Build Illinois Fund
17pursuant to this clause (b) for any fiscal year in excess of
18the greater of (i) the Tax Act Amount or (ii) the Annual
19Specified Amount for such fiscal year; and, further provided,
20that the amounts payable into the Build Illinois Fund under
21this clause (b) shall be payable only until such time as the
22aggregate amount on deposit under each trust indenture securing
23Bonds issued and outstanding pursuant to the Build Illinois
24Bond Act is sufficient, taking into account any future
25investment income, to fully provide, in accordance with such
26indenture, for the defeasance of or the payment of the

 

 

HB4004- 231 -LRB100 11829 HLH 23189 b

1principal of, premium, if any, and interest on the Bonds
2secured by such indenture and on any Bonds expected to be
3issued thereafter and all fees and costs payable with respect
4thereto, all as certified by the Director of the Bureau of the
5Budget (now Governor's Office of Management and Budget). If on
6the last business day of any month in which Bonds are
7outstanding pursuant to the Build Illinois Bond Act, the
8aggregate of the moneys deposited in the Build Illinois Bond
9Account in the Build Illinois Fund in such month shall be less
10than the amount required to be transferred in such month from
11the Build Illinois Bond Account to the Build Illinois Bond
12Retirement and Interest Fund pursuant to Section 13 of the
13Build Illinois Bond Act, an amount equal to such deficiency
14shall be immediately paid from other moneys received by the
15Department pursuant to the Tax Acts to the Build Illinois Fund;
16provided, however, that any amounts paid to the Build Illinois
17Fund in any fiscal year pursuant to this sentence shall be
18deemed to constitute payments pursuant to clause (b) of the
19preceding sentence and shall reduce the amount otherwise
20payable for such fiscal year pursuant to clause (b) of the
21preceding sentence. The moneys received by the Department
22pursuant to this Act and required to be deposited into the
23Build Illinois Fund are subject to the pledge, claim and charge
24set forth in Section 12 of the Build Illinois Bond Act.
25    Subject to payment of amounts into the Build Illinois Fund
26as provided in the preceding paragraph or in any amendment

 

 

HB4004- 232 -LRB100 11829 HLH 23189 b

1thereto hereafter enacted, the following specified monthly
2installment of the amount requested in the certificate of the
3Chairman of the Metropolitan Pier and Exposition Authority
4provided under Section 8.25f of the State Finance Act, but not
5in excess of the sums designated as "Total Deposit", shall be
6deposited in the aggregate from collections under Section 9 of
7the Use Tax Act, Section 9 of the Service Use Tax Act, Section
89 of the Service Occupation Tax Act, and Section 3 of the
9Retailers' Occupation Tax Act into the McCormick Place
10Expansion Project Fund in the specified fiscal years.
11Fiscal YearTotal Deposit
121993         $0
131994 53,000,000
141995 58,000,000
151996 61,000,000
161997 64,000,000
171998 68,000,000
181999 71,000,000
192000 75,000,000
202001 80,000,000
212002 93,000,000
222003 99,000,000
232004103,000,000
242005108,000,000
252006113,000,000

 

 

HB4004- 233 -LRB100 11829 HLH 23189 b

12007119,000,000
22008126,000,000
32009132,000,000
42010139,000,000
52011146,000,000
62012153,000,000
72013161,000,000
82014170,000,000
92015179,000,000
102016189,000,000
112017199,000,000
122018210,000,000
132019221,000,000
142020233,000,000
152021246,000,000
162022260,000,000
172023275,000,000
182024 275,000,000
192025 275,000,000
202026 279,000,000
212027 292,000,000
222028 307,000,000
232029 322,000,000
242030 338,000,000
252031 350,000,000
262032 350,000,000

 

 

HB4004- 234 -LRB100 11829 HLH 23189 b

1and
2each fiscal year
3thereafter that bonds
4are outstanding under
5Section 13.2 of the
6Metropolitan Pier and
7Exposition Authority Act,
8but not after fiscal year 2060.
9    Beginning July 20, 1993 and in each month of each fiscal
10year thereafter, one-eighth of the amount requested in the
11certificate of the Chairman of the Metropolitan Pier and
12Exposition Authority for that fiscal year, less the amount
13deposited into the McCormick Place Expansion Project Fund by
14the State Treasurer in the respective month under subsection
15(g) of Section 13 of the Metropolitan Pier and Exposition
16Authority Act, plus cumulative deficiencies in the deposits
17required under this Section for previous months and years,
18shall be deposited into the McCormick Place Expansion Project
19Fund, until the full amount requested for the fiscal year, but
20not in excess of the amount specified above as "Total Deposit",
21has been deposited.
22    Subject to payment of amounts into the Build Illinois Fund
23and the McCormick Place Expansion Project Fund pursuant to the
24preceding paragraphs or in any amendments thereto hereafter
25enacted, beginning July 1, 1993 and ending on September 30,
262013, the Department shall each month pay into the Illinois Tax

 

 

HB4004- 235 -LRB100 11829 HLH 23189 b

1Increment Fund 0.27% of 80% of the net revenue realized for the
2preceding month from the 6.25% general rate on the selling
3price of tangible personal property.
4    Subject to payment of amounts into the Build Illinois Fund
5and the McCormick Place Expansion Project Fund pursuant to the
6preceding paragraphs or in any amendments thereto hereafter
7enacted, beginning with the receipt of the first report of
8taxes paid by an eligible business and continuing for a 25-year
9period, the Department shall each month pay into the Energy
10Infrastructure Fund 80% of the net revenue realized from the
116.25% general rate on the selling price of Illinois-mined coal
12that was sold to an eligible business. For purposes of this
13paragraph, the term "eligible business" means a new electric
14generating facility certified pursuant to Section 605-332 of
15the Department of Commerce and Economic Opportunity Law of the
16Civil Administrative Code of Illinois.
17    Subject to payment of amounts into the Build Illinois Fund,
18the McCormick Place Expansion Project Fund, the Illinois Tax
19Increment Fund, and the Energy Infrastructure Fund pursuant to
20the preceding paragraphs or in any amendments to this Section
21hereafter enacted, beginning on the first day of the first
22calendar month to occur on or after the effective date of this
23amendatory Act of the 98th General Assembly, each month, from
24the collections made under Section 9 of the Use Tax Act,
25Section 9 of the Service Use Tax Act, Section 9 of the Service
26Occupation Tax Act, and Section 3 of the Retailers' Occupation

 

 

HB4004- 236 -LRB100 11829 HLH 23189 b

1Tax Act, the Department shall pay into the Tax Compliance and
2Administration Fund, to be used, subject to appropriation, to
3fund additional auditors and compliance personnel at the
4Department of Revenue, an amount equal to 1/12 of 5% of 80% of
5the cash receipts collected during the preceding fiscal year by
6the Audit Bureau of the Department under the Use Tax Act, the
7Service Use Tax Act, the Service Occupation Tax Act, the
8Retailers' Occupation Tax Act, and associated local occupation
9and use taxes administered by the Department.
10    Of the remainder of the moneys received by the Department
11pursuant to this Act, 75% shall be paid into the General
12Revenue Fund of the State Treasury and 25% shall be reserved in
13a special account and used only for the transfer to the Common
14School Fund as part of the monthly transfer from the General
15Revenue Fund in accordance with Section 8a of the State Finance
16Act.
17    The Department may, upon separate written notice to a
18taxpayer, require the taxpayer to prepare and file with the
19Department on a form prescribed by the Department within not
20less than 60 days after receipt of the notice an annual
21information return for the tax year specified in the notice.
22Such annual return to the Department shall include a statement
23of gross receipts as shown by the taxpayer's last Federal
24income tax return. If the total receipts of the business as
25reported in the Federal income tax return do not agree with the
26gross receipts reported to the Department of Revenue for the

 

 

HB4004- 237 -LRB100 11829 HLH 23189 b

1same period, the taxpayer shall attach to his annual return a
2schedule showing a reconciliation of the 2 amounts and the
3reasons for the difference. The taxpayer's annual return to the
4Department shall also disclose the cost of goods sold by the
5taxpayer during the year covered by such return, opening and
6closing inventories of such goods for such year, cost of goods
7used from stock or taken from stock and given away by the
8taxpayer during such year, pay roll information of the
9taxpayer's business during such year and any additional
10reasonable information which the Department deems would be
11helpful in determining the accuracy of the monthly, quarterly
12or annual returns filed by such taxpayer as hereinbefore
13provided for in this Section.
14    If the annual information return required by this Section
15is not filed when and as required, the taxpayer shall be liable
16as follows:
17        (i) Until January 1, 1994, the taxpayer shall be liable
18    for a penalty equal to 1/6 of 1% of the tax due from such
19    taxpayer under this Act during the period to be covered by
20    the annual return for each month or fraction of a month
21    until such return is filed as required, the penalty to be
22    assessed and collected in the same manner as any other
23    penalty provided for in this Act.
24        (ii) On and after January 1, 1994, the taxpayer shall
25    be liable for a penalty as described in Section 3-4 of the
26    Uniform Penalty and Interest Act.

 

 

HB4004- 238 -LRB100 11829 HLH 23189 b

1    The chief executive officer, proprietor, owner or highest
2ranking manager shall sign the annual return to certify the
3accuracy of the information contained therein. Any person who
4willfully signs the annual return containing false or
5inaccurate information shall be guilty of perjury and punished
6accordingly. The annual return form prescribed by the
7Department shall include a warning that the person signing the
8return may be liable for perjury.
9    The foregoing portion of this Section concerning the filing
10of an annual information return shall not apply to a serviceman
11who is not required to file an income tax return with the
12United States Government.
13    As soon as possible after the first day of each month, upon
14certification of the Department of Revenue, the Comptroller
15shall order transferred and the Treasurer shall transfer from
16the General Revenue Fund to the Motor Fuel Tax Fund an amount
17equal to 1.7% of 80% of the net revenue realized under this Act
18for the second preceding month. Beginning April 1, 2000, this
19transfer is no longer required and shall not be made.
20    Net revenue realized for a month shall be the revenue
21collected by the State pursuant to this Act, less the amount
22paid out during that month as refunds to taxpayers for
23overpayment of liability.
24    For greater simplicity of administration, it shall be
25permissible for manufacturers, importers and wholesalers whose
26products are sold by numerous servicemen in Illinois, and who

 

 

HB4004- 239 -LRB100 11829 HLH 23189 b

1wish to do so, to assume the responsibility for accounting and
2paying to the Department all tax accruing under this Act with
3respect to such sales, if the servicemen who are affected do
4not make written objection to the Department to this
5arrangement.
6(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
798-298, eff. 8-9-13; 98-496, eff. 1-1-14; 98-756, eff. 7-16-14;
898-1098, eff. 8-26-14; 99-352, eff. 8-12-15; 99-858, eff.
98-19-16.)
 
10    Section 25. The Retailers' Occupation Tax Act is amended by
11changing Section 3 as follows:
 
12    (35 ILCS 120/3)  (from Ch. 120, par. 442)
13    Sec. 3. Except as provided in this Section, on or before
14the twentieth day of each calendar month, every person engaged
15in the business of selling tangible personal property at retail
16in this State during the preceding calendar month shall file a
17return with the Department, stating:
18        1. The name of the seller;
19        2. His residence address and the address of his
20    principal place of business and the address of the
21    principal place of business (if that is a different
22    address) from which he engages in the business of selling
23    tangible personal property at retail in this State;
24        3. Total amount of receipts received by him during the

 

 

HB4004- 240 -LRB100 11829 HLH 23189 b

1    preceding calendar month or quarter, as the case may be,
2    from sales of tangible personal property, and from services
3    furnished, by him during such preceding calendar month or
4    quarter;
5        4. Total amount received by him during the preceding
6    calendar month or quarter on charge and time sales of
7    tangible personal property, and from services furnished,
8    by him prior to the month or quarter for which the return
9    is filed;
10        5. Deductions allowed by law;
11        6. Gross receipts which were received by him during the
12    preceding calendar month or quarter and upon the basis of
13    which the tax is imposed;
14        7. The amount of credit provided in Section 2d of this
15    Act;
16        8. The amount of tax due;
17        9. The signature of the taxpayer; and
18        10. Such other reasonable information as the
19    Department may require.
20    If a taxpayer fails to sign a return within 30 days after
21the proper notice and demand for signature by the Department,
22the return shall be considered valid and any amount shown to be
23due on the return shall be deemed assessed.
24    Each return shall be accompanied by the statement of
25prepaid tax issued pursuant to Section 2e for which credit is
26claimed.

 

 

HB4004- 241 -LRB100 11829 HLH 23189 b

1    Prior to October 1, 2003, and on and after September 1,
22004 a retailer may accept a Manufacturer's Purchase Credit
3certification from a purchaser in satisfaction of Use Tax as
4provided in Section 3-85 of the Use Tax Act if the purchaser
5provides the appropriate documentation as required by Section
63-85 of the Use Tax Act. A Manufacturer's Purchase Credit
7certification, accepted by a retailer prior to October 1, 2003
8and on and after September 1, 2004 as provided in Section 3-85
9of the Use Tax Act, may be used by that retailer to satisfy
10Retailers' Occupation Tax liability in the amount claimed in
11the certification, not to exceed 6.25% of the receipts subject
12to tax from a qualifying purchase. A Manufacturer's Purchase
13Credit reported on any original or amended return filed under
14this Act after October 20, 2003 for reporting periods prior to
15September 1, 2004 shall be disallowed. Manufacturer's
16Purchaser Credit reported on annual returns due on or after
17January 1, 2005 will be disallowed for periods prior to
18September 1, 2004. No Manufacturer's Purchase Credit may be
19used after September 30, 2003 through August 31, 2004 to
20satisfy any tax liability imposed under this Act, including any
21audit liability.
22    The Department may require returns to be filed on a
23quarterly basis. If so required, a return for each calendar
24quarter shall be filed on or before the twentieth day of the
25calendar month following the end of such calendar quarter. The
26taxpayer shall also file a return with the Department for each

 

 

HB4004- 242 -LRB100 11829 HLH 23189 b

1of the first two months of each calendar quarter, on or before
2the twentieth day of the following calendar month, stating:
3        1. The name of the seller;
4        2. The address of the principal place of business from
5    which he engages in the business of selling tangible
6    personal property at retail in this State;
7        3. The total amount of taxable receipts received by him
8    during the preceding calendar month from sales of tangible
9    personal property by him during such preceding calendar
10    month, including receipts from charge and time sales, but
11    less all deductions allowed by law;
12        4. The amount of credit provided in Section 2d of this
13    Act;
14        5. The amount of tax due; and
15        6. Such other reasonable information as the Department
16    may require.
17    Beginning on October 1, 2003, any person who is not a
18licensed distributor, importing distributor, or manufacturer,
19as defined in the Liquor Control Act of 1934, but is engaged in
20the business of selling, at retail, alcoholic liquor shall file
21a statement with the Department of Revenue, in a format and at
22a time prescribed by the Department, showing the total amount
23paid for alcoholic liquor purchased during the preceding month
24and such other information as is reasonably required by the
25Department. The Department may adopt rules to require that this
26statement be filed in an electronic or telephonic format. Such

 

 

HB4004- 243 -LRB100 11829 HLH 23189 b

1rules may provide for exceptions from the filing requirements
2of this paragraph. For the purposes of this paragraph, the term
3"alcoholic liquor" shall have the meaning prescribed in the
4Liquor Control Act of 1934.
5    Beginning on October 1, 2003, every distributor, importing
6distributor, and manufacturer of alcoholic liquor as defined in
7the Liquor Control Act of 1934, shall file a statement with the
8Department of Revenue, no later than the 10th day of the month
9for the preceding month during which transactions occurred, by
10electronic means, showing the total amount of gross receipts
11from the sale of alcoholic liquor sold or distributed during
12the preceding month to purchasers; identifying the purchaser to
13whom it was sold or distributed; the purchaser's tax
14registration number; and such other information reasonably
15required by the Department. A distributor, importing
16distributor, or manufacturer of alcoholic liquor must
17personally deliver, mail, or provide by electronic means to
18each retailer listed on the monthly statement a report
19containing a cumulative total of that distributor's, importing
20distributor's, or manufacturer's total sales of alcoholic
21liquor to that retailer no later than the 10th day of the month
22for the preceding month during which the transaction occurred.
23The distributor, importing distributor, or manufacturer shall
24notify the retailer as to the method by which the distributor,
25importing distributor, or manufacturer will provide the sales
26information. If the retailer is unable to receive the sales

 

 

HB4004- 244 -LRB100 11829 HLH 23189 b

1information by electronic means, the distributor, importing
2distributor, or manufacturer shall furnish the sales
3information by personal delivery or by mail. For purposes of
4this paragraph, the term "electronic means" includes, but is
5not limited to, the use of a secure Internet website, e-mail,
6or facsimile.
7    If a total amount of less than $1 is payable, refundable or
8creditable, such amount shall be disregarded if it is less than
950 cents and shall be increased to $1 if it is 50 cents or more.
10    Beginning October 1, 1993, a taxpayer who has an average
11monthly tax liability of $150,000 or more shall make all
12payments required by rules of the Department by electronic
13funds transfer. Beginning October 1, 1994, a taxpayer who has
14an average monthly tax liability of $100,000 or more shall make
15all payments required by rules of the Department by electronic
16funds transfer. Beginning October 1, 1995, a taxpayer who has
17an average monthly tax liability of $50,000 or more shall make
18all payments required by rules of the Department by electronic
19funds transfer. Beginning October 1, 2000, a taxpayer who has
20an annual tax liability of $200,000 or more shall make all
21payments required by rules of the Department by electronic
22funds transfer. The term "annual tax liability" shall be the
23sum of the taxpayer's liabilities under this Act, and under all
24other State and local occupation and use tax laws administered
25by the Department, for the immediately preceding calendar year.
26The term "average monthly tax liability" shall be the sum of

 

 

HB4004- 245 -LRB100 11829 HLH 23189 b

1the taxpayer's liabilities under this Act, and under all other
2State and local occupation and use tax laws administered by the
3Department, for the immediately preceding calendar year
4divided by 12. Beginning on October 1, 2002, a taxpayer who has
5a tax liability in the amount set forth in subsection (b) of
6Section 2505-210 of the Department of Revenue Law shall make
7all payments required by rules of the Department by electronic
8funds transfer.
9    Before August 1 of each year beginning in 1993, the
10Department shall notify all taxpayers required to make payments
11by electronic funds transfer. All taxpayers required to make
12payments by electronic funds transfer shall make those payments
13for a minimum of one year beginning on October 1.
14    Any taxpayer not required to make payments by electronic
15funds transfer may make payments by electronic funds transfer
16with the permission of the Department.
17    All taxpayers required to make payment by electronic funds
18transfer and any taxpayers authorized to voluntarily make
19payments by electronic funds transfer shall make those payments
20in the manner authorized by the Department.
21    The Department shall adopt such rules as are necessary to
22effectuate a program of electronic funds transfer and the
23requirements of this Section.
24    Any amount which is required to be shown or reported on any
25return or other document under this Act shall, if such amount
26is not a whole-dollar amount, be increased to the nearest

 

 

HB4004- 246 -LRB100 11829 HLH 23189 b

1whole-dollar amount in any case where the fractional part of a
2dollar is 50 cents or more, and decreased to the nearest
3whole-dollar amount where the fractional part of a dollar is
4less than 50 cents.
5    If the retailer is otherwise required to file a monthly
6return and if the retailer's average monthly tax liability to
7the Department does not exceed $200, the Department may
8authorize his returns to be filed on a quarter annual basis,
9with the return for January, February and March of a given year
10being due by April 20 of such year; with the return for April,
11May and June of a given year being due by July 20 of such year;
12with the return for July, August and September of a given year
13being due by October 20 of such year, and with the return for
14October, November and December of a given year being due by
15January 20 of the following year.
16    If the retailer is otherwise required to file a monthly or
17quarterly return and if the retailer's average monthly tax
18liability with the Department does not exceed $50, the
19Department may authorize his returns to be filed on an annual
20basis, with the return for a given year being due by January 20
21of the following year.
22    Such quarter annual and annual returns, as to form and
23substance, shall be subject to the same requirements as monthly
24returns.
25    Notwithstanding any other provision in this Act concerning
26the time within which a retailer may file his return, in the

 

 

HB4004- 247 -LRB100 11829 HLH 23189 b

1case of any retailer who ceases to engage in a kind of business
2which makes him responsible for filing returns under this Act,
3such retailer shall file a final return under this Act with the
4Department not more than one month after discontinuing such
5business.
6    Where the same person has more than one business registered
7with the Department under separate registrations under this
8Act, such person may not file each return that is due as a
9single return covering all such registered businesses, but
10shall file separate returns for each such registered business.
11    In addition, with respect to motor vehicles, watercraft,
12aircraft, and trailers that are required to be registered with
13an agency of this State, every retailer selling this kind of
14tangible personal property shall file, with the Department,
15upon a form to be prescribed and supplied by the Department, a
16separate return for each such item of tangible personal
17property which the retailer sells, except that if, in the same
18transaction, (i) a retailer of aircraft, watercraft, motor
19vehicles or trailers transfers more than one aircraft,
20watercraft, motor vehicle or trailer to another aircraft,
21watercraft, motor vehicle retailer or trailer retailer for the
22purpose of resale or (ii) a retailer of aircraft, watercraft,
23motor vehicles, or trailers transfers more than one aircraft,
24watercraft, motor vehicle, or trailer to a purchaser for use as
25a qualifying rolling stock as provided in Section 2-5 of this
26Act, then that seller may report the transfer of all aircraft,

 

 

HB4004- 248 -LRB100 11829 HLH 23189 b

1watercraft, motor vehicles or trailers involved in that
2transaction to the Department on the same uniform
3invoice-transaction reporting return form. For purposes of
4this Section, "watercraft" means a Class 2, Class 3, or Class 4
5watercraft as defined in Section 3-2 of the Boat Registration
6and Safety Act, a personal watercraft, or any boat equipped
7with an inboard motor.
8    Any retailer who sells only motor vehicles, watercraft,
9aircraft, or trailers that are required to be registered with
10an agency of this State, so that all retailers' occupation tax
11liability is required to be reported, and is reported, on such
12transaction reporting returns and who is not otherwise required
13to file monthly or quarterly returns, need not file monthly or
14quarterly returns. However, those retailers shall be required
15to file returns on an annual basis.
16    The transaction reporting return, in the case of motor
17vehicles or trailers that are required to be registered with an
18agency of this State, shall be the same document as the Uniform
19Invoice referred to in Section 5-402 of The Illinois Vehicle
20Code and must show the name and address of the seller; the name
21and address of the purchaser; the amount of the selling price
22including the amount allowed by the retailer for traded-in
23property, if any; the amount allowed by the retailer for the
24traded-in tangible personal property, if any, to the extent to
25which Section 1 of this Act allows an exemption for the value
26of traded-in property; the balance payable after deducting such

 

 

HB4004- 249 -LRB100 11829 HLH 23189 b

1trade-in allowance from the total selling price; the amount of
2tax due from the retailer with respect to such transaction; the
3amount of tax collected from the purchaser by the retailer on
4such transaction (or satisfactory evidence that such tax is not
5due in that particular instance, if that is claimed to be the
6fact); the place and date of the sale; a sufficient
7identification of the property sold; such other information as
8is required in Section 5-402 of The Illinois Vehicle Code, and
9such other information as the Department may reasonably
10require.
11    The transaction reporting return in the case of watercraft
12or aircraft must show the name and address of the seller; the
13name and address of the purchaser; the amount of the selling
14price including the amount allowed by the retailer for
15traded-in property, if any; the amount allowed by the retailer
16for the traded-in tangible personal property, if any, to the
17extent to which Section 1 of this Act allows an exemption for
18the value of traded-in property; the balance payable after
19deducting such trade-in allowance from the total selling price;
20the amount of tax due from the retailer with respect to such
21transaction; the amount of tax collected from the purchaser by
22the retailer on such transaction (or satisfactory evidence that
23such tax is not due in that particular instance, if that is
24claimed to be the fact); the place and date of the sale, a
25sufficient identification of the property sold, and such other
26information as the Department may reasonably require.

 

 

HB4004- 250 -LRB100 11829 HLH 23189 b

1    Such transaction reporting return shall be filed not later
2than 20 days after the day of delivery of the item that is
3being sold, but may be filed by the retailer at any time sooner
4than that if he chooses to do so. The transaction reporting
5return and tax remittance or proof of exemption from the
6Illinois use tax may be transmitted to the Department by way of
7the State agency with which, or State officer with whom the
8tangible personal property must be titled or registered (if
9titling or registration is required) if the Department and such
10agency or State officer determine that this procedure will
11expedite the processing of applications for title or
12registration.
13    With each such transaction reporting return, the retailer
14shall remit the proper amount of tax due (or shall submit
15satisfactory evidence that the sale is not taxable if that is
16the case), to the Department or its agents, whereupon the
17Department shall issue, in the purchaser's name, a use tax
18receipt (or a certificate of exemption if the Department is
19satisfied that the particular sale is tax exempt) which such
20purchaser may submit to the agency with which, or State officer
21with whom, he must title or register the tangible personal
22property that is involved (if titling or registration is
23required) in support of such purchaser's application for an
24Illinois certificate or other evidence of title or registration
25to such tangible personal property.
26    No retailer's failure or refusal to remit tax under this

 

 

HB4004- 251 -LRB100 11829 HLH 23189 b

1Act precludes a user, who has paid the proper tax to the
2retailer, from obtaining his certificate of title or other
3evidence of title or registration (if titling or registration
4is required) upon satisfying the Department that such user has
5paid the proper tax (if tax is due) to the retailer. The
6Department shall adopt appropriate rules to carry out the
7mandate of this paragraph.
8    If the user who would otherwise pay tax to the retailer
9wants the transaction reporting return filed and the payment of
10the tax or proof of exemption made to the Department before the
11retailer is willing to take these actions and such user has not
12paid the tax to the retailer, such user may certify to the fact
13of such delay by the retailer and may (upon the Department
14being satisfied of the truth of such certification) transmit
15the information required by the transaction reporting return
16and the remittance for tax or proof of exemption directly to
17the Department and obtain his tax receipt or exemption
18determination, in which event the transaction reporting return
19and tax remittance (if a tax payment was required) shall be
20credited by the Department to the proper retailer's account
21with the Department, but without the vendor's 2.1% or 1.75%
22discount provided for in this Section being allowed. When the
23user pays the tax directly to the Department, he shall pay the
24tax in the same amount and in the same form in which it would be
25remitted if the tax had been remitted to the Department by the
26retailer.

 

 

HB4004- 252 -LRB100 11829 HLH 23189 b

1    Refunds made by the seller during the preceding return
2period to purchasers, on account of tangible personal property
3returned to the seller, shall be allowed as a deduction under
4subdivision 5 of his monthly or quarterly return, as the case
5may be, in case the seller had theretofore included the
6receipts from the sale of such tangible personal property in a
7return filed by him and had paid the tax imposed by this Act
8with respect to such receipts.
9    Where the seller is a corporation, the return filed on
10behalf of such corporation shall be signed by the president,
11vice-president, secretary or treasurer or by the properly
12accredited agent of such corporation.
13    Where the seller is a limited liability company, the return
14filed on behalf of the limited liability company shall be
15signed by a manager, member, or properly accredited agent of
16the limited liability company.
17    Except as provided in this Section, the retailer filing the
18return under this Section shall, at the time of filing such
19return, pay to the Department the amount of tax imposed by this
20Act less the vendor discount amount a discount of 2.1% prior to
21January 1, 1990 and 1.75% on and after January 1, 1990, or $5
22per calendar year, whichever is greater, which is allowed to
23reimburse the retailer for the expenses incurred in keeping
24records, preparing and filing returns, remitting the tax and
25supplying data to the Department on request. On and after
26January 1, 1990 and prior to January 1, 2018, the vendor

 

 

HB4004- 253 -LRB100 11829 HLH 23189 b

1discount amount shall be 1.75% or $5 per calendar year,
2whichever is greater. On and after January 1, 2018, the vendor
3discount amount shall be the sum of (i) 1.75% of the first
4$1,000 collected during the calendar year and (ii) 1% of the
5amount of proceeds collected during the calendar year that
6exceeds $1,000; however, on and after January 1, 2018, in no
7event shall the discount allowed to any vendor be less than $5
8in any calendar year or more than $1,500 in any calendar year.
9Any prepayment made pursuant to Section 2d of this Act shall be
10included in the amount on which such 2.1% or 1.75% discount is
11computed. In the case of retailers who report and pay the tax
12on a transaction by transaction basis, as provided in this
13Section, such discount shall be taken with each such tax
14remittance instead of when such retailer files his periodic
15return. The Department may disallow the discount for retailers
16whose certificate of registration is revoked at the time the
17return is filed, but only if the Department's decision to
18revoke the certificate of registration has become final.
19    Before October 1, 2000, if the taxpayer's average monthly
20tax liability to the Department under this Act, the Use Tax
21Act, the Service Occupation Tax Act, and the Service Use Tax
22Act, excluding any liability for prepaid sales tax to be
23remitted in accordance with Section 2d of this Act, was $10,000
24or more during the preceding 4 complete calendar quarters, he
25shall file a return with the Department each month by the 20th
26day of the month next following the month during which such tax

 

 

HB4004- 254 -LRB100 11829 HLH 23189 b

1liability is incurred and shall make payments to the Department
2on or before the 7th, 15th, 22nd and last day of the month
3during which such liability is incurred. On and after October
41, 2000, if the taxpayer's average monthly tax liability to the
5Department under this Act, the Use Tax Act, the Service
6Occupation Tax Act, and the Service Use Tax Act, excluding any
7liability for prepaid sales tax to be remitted in accordance
8with Section 2d of this Act, was $20,000 or more during the
9preceding 4 complete calendar quarters, he shall file a return
10with the Department each month by the 20th day of the month
11next following the month during which such tax liability is
12incurred and shall make payment to the Department on or before
13the 7th, 15th, 22nd and last day of the month during which such
14liability is incurred. If the month during which such tax
15liability is incurred began prior to January 1, 1985, each
16payment shall be in an amount equal to 1/4 of the taxpayer's
17actual liability for the month or an amount set by the
18Department not to exceed 1/4 of the average monthly liability
19of the taxpayer to the Department for the preceding 4 complete
20calendar quarters (excluding the month of highest liability and
21the month of lowest liability in such 4 quarter period). If the
22month during which such tax liability is incurred begins on or
23after January 1, 1985 and prior to January 1, 1987, each
24payment shall be in an amount equal to 22.5% of the taxpayer's
25actual liability for the month or 27.5% of the taxpayer's
26liability for the same calendar month of the preceding year. If

 

 

HB4004- 255 -LRB100 11829 HLH 23189 b

1the month during which such tax liability is incurred begins on
2or after January 1, 1987 and prior to January 1, 1988, each
3payment shall be in an amount equal to 22.5% of the taxpayer's
4actual liability for the month or 26.25% of the taxpayer's
5liability for the same calendar month of the preceding year. If
6the month during which such tax liability is incurred begins on
7or after January 1, 1988, and prior to January 1, 1989, or
8begins on or after January 1, 1996, each payment shall be in an
9amount equal to 22.5% of the taxpayer's actual liability for
10the month or 25% of the taxpayer's liability for the same
11calendar month of the preceding year. If the month during which
12such tax liability is incurred begins on or after January 1,
131989, and prior to January 1, 1996, each payment shall be in an
14amount equal to 22.5% of the taxpayer's actual liability for
15the month or 25% of the taxpayer's liability for the same
16calendar month of the preceding year or 100% of the taxpayer's
17actual liability for the quarter monthly reporting period. The
18amount of such quarter monthly payments shall be credited
19against the final tax liability of the taxpayer's return for
20that month. Before October 1, 2000, once applicable, the
21requirement of the making of quarter monthly payments to the
22Department by taxpayers having an average monthly tax liability
23of $10,000 or more as determined in the manner provided above
24shall continue until such taxpayer's average monthly liability
25to the Department during the preceding 4 complete calendar
26quarters (excluding the month of highest liability and the

 

 

HB4004- 256 -LRB100 11829 HLH 23189 b

1month of lowest liability) is less than $9,000, or until such
2taxpayer's average monthly liability to the Department as
3computed for each calendar quarter of the 4 preceding complete
4calendar quarter period is less than $10,000. However, if a
5taxpayer can show the Department that a substantial change in
6the taxpayer's business has occurred which causes the taxpayer
7to anticipate that his average monthly tax liability for the
8reasonably foreseeable future will fall below the $10,000
9threshold stated above, then such taxpayer may petition the
10Department for a change in such taxpayer's reporting status. On
11and after October 1, 2000, once applicable, the requirement of
12the making of quarter monthly payments to the Department by
13taxpayers having an average monthly tax liability of $20,000 or
14more as determined in the manner provided above shall continue
15until such taxpayer's average monthly liability to the
16Department during the preceding 4 complete calendar quarters
17(excluding the month of highest liability and the month of
18lowest liability) is less than $19,000 or until such taxpayer's
19average monthly liability to the Department as computed for
20each calendar quarter of the 4 preceding complete calendar
21quarter period is less than $20,000. However, if a taxpayer can
22show the Department that a substantial change in the taxpayer's
23business has occurred which causes the taxpayer to anticipate
24that his average monthly tax liability for the reasonably
25foreseeable future will fall below the $20,000 threshold stated
26above, then such taxpayer may petition the Department for a

 

 

HB4004- 257 -LRB100 11829 HLH 23189 b

1change in such taxpayer's reporting status. The Department
2shall change such taxpayer's reporting status unless it finds
3that such change is seasonal in nature and not likely to be
4long term. If any such quarter monthly payment is not paid at
5the time or in the amount required by this Section, then the
6taxpayer shall be liable for penalties and interest on the
7difference between the minimum amount due as a payment and the
8amount of such quarter monthly payment actually and timely
9paid, except insofar as the taxpayer has previously made
10payments for that month to the Department in excess of the
11minimum payments previously due as provided in this Section.
12The Department shall make reasonable rules and regulations to
13govern the quarter monthly payment amount and quarter monthly
14payment dates for taxpayers who file on other than a calendar
15monthly basis.
16    The provisions of this paragraph apply before October 1,
172001. Without regard to whether a taxpayer is required to make
18quarter monthly payments as specified above, any taxpayer who
19is required by Section 2d of this Act to collect and remit
20prepaid taxes and has collected prepaid taxes which average in
21excess of $25,000 per month during the preceding 2 complete
22calendar quarters, shall file a return with the Department as
23required by Section 2f and shall make payments to the
24Department on or before the 7th, 15th, 22nd and last day of the
25month during which such liability is incurred. If the month
26during which such tax liability is incurred began prior to

 

 

HB4004- 258 -LRB100 11829 HLH 23189 b

1September 1, 1985 (the effective date of Public Act 84-221)
2this amendatory Act of 1985, each payment shall be in an amount
3not less than 22.5% of the taxpayer's actual liability under
4Section 2d. If the month during which such tax liability is
5incurred begins on or after January 1, 1986, each payment shall
6be in an amount equal to 22.5% of the taxpayer's actual
7liability for the month or 27.5% of the taxpayer's liability
8for the same calendar month of the preceding calendar year. If
9the month during which such tax liability is incurred begins on
10or after January 1, 1987, each payment shall be in an amount
11equal to 22.5% of the taxpayer's actual liability for the month
12or 26.25% of the taxpayer's liability for the same calendar
13month of the preceding year. The amount of such quarter monthly
14payments shall be credited against the final tax liability of
15the taxpayer's return for that month filed under this Section
16or Section 2f, as the case may be. Once applicable, the
17requirement of the making of quarter monthly payments to the
18Department pursuant to this paragraph shall continue until such
19taxpayer's average monthly prepaid tax collections during the
20preceding 2 complete calendar quarters is $25,000 or less. If
21any such quarter monthly payment is not paid at the time or in
22the amount required, the taxpayer shall be liable for penalties
23and interest on such difference, except insofar as the taxpayer
24has previously made payments for that month in excess of the
25minimum payments previously due.
26    The provisions of this paragraph apply on and after October

 

 

HB4004- 259 -LRB100 11829 HLH 23189 b

11, 2001. Without regard to whether a taxpayer is required to
2make quarter monthly payments as specified above, any taxpayer
3who is required by Section 2d of this Act to collect and remit
4prepaid taxes and has collected prepaid taxes that average in
5excess of $20,000 per month during the preceding 4 complete
6calendar quarters shall file a return with the Department as
7required by Section 2f and shall make payments to the
8Department on or before the 7th, 15th, 22nd and last day of the
9month during which the liability is incurred. Each payment
10shall be in an amount equal to 22.5% of the taxpayer's actual
11liability for the month or 25% of the taxpayer's liability for
12the same calendar month of the preceding year. The amount of
13the quarter monthly payments shall be credited against the
14final tax liability of the taxpayer's return for that month
15filed under this Section or Section 2f, as the case may be.
16Once applicable, the requirement of the making of quarter
17monthly payments to the Department pursuant to this paragraph
18shall continue until the taxpayer's average monthly prepaid tax
19collections during the preceding 4 complete calendar quarters
20(excluding the month of highest liability and the month of
21lowest liability) is less than $19,000 or until such taxpayer's
22average monthly liability to the Department as computed for
23each calendar quarter of the 4 preceding complete calendar
24quarters is less than $20,000. If any such quarter monthly
25payment is not paid at the time or in the amount required, the
26taxpayer shall be liable for penalties and interest on such

 

 

HB4004- 260 -LRB100 11829 HLH 23189 b

1difference, except insofar as the taxpayer has previously made
2payments for that month in excess of the minimum payments
3previously due.
4    If any payment provided for in this Section exceeds the
5taxpayer's liabilities under this Act, the Use Tax Act, the
6Service Occupation Tax Act and the Service Use Tax Act, as
7shown on an original monthly return, the Department shall, if
8requested by the taxpayer, issue to the taxpayer a credit
9memorandum no later than 30 days after the date of payment. The
10credit evidenced by such credit memorandum may be assigned by
11the taxpayer to a similar taxpayer under this Act, the Use Tax
12Act, the Service Occupation Tax Act or the Service Use Tax Act,
13in accordance with reasonable rules and regulations to be
14prescribed by the Department. If no such request is made, the
15taxpayer may credit such excess payment against tax liability
16subsequently to be remitted to the Department under this Act,
17the Use Tax Act, the Service Occupation Tax Act or the Service
18Use Tax Act, in accordance with reasonable rules and
19regulations prescribed by the Department. If the Department
20subsequently determined that all or any part of the credit
21taken was not actually due to the taxpayer, the taxpayer's 2.1%
22and 1.75% vendor's discount shall be reduced by 2.1% or 1.75%
23of the difference between the credit taken and that actually
24due multiplied by the vendor discount amount, and that taxpayer
25shall be liable for penalties and interest on such difference.
26    If a retailer of motor fuel is entitled to a credit under

 

 

HB4004- 261 -LRB100 11829 HLH 23189 b

1Section 2d of this Act which exceeds the taxpayer's liability
2to the Department under this Act for the month which the
3taxpayer is filing a return, the Department shall issue the
4taxpayer a credit memorandum for the excess.
5    Beginning January 1, 1990, each month the Department shall
6pay into the Local Government Tax Fund, a special fund in the
7State treasury which is hereby created, the net revenue
8realized for the preceding month from the 1% tax on sales of
9food for human consumption which is to be consumed off the
10premises where it is sold (other than alcoholic beverages, soft
11drinks and food which has been prepared for immediate
12consumption) and prescription and nonprescription medicines,
13drugs, medical appliances, products classified as Class III
14medical devices by the United States Food and Drug
15Administration that are used for cancer treatment pursuant to a
16prescription, as well as any accessories and components related
17to those devices, and insulin, urine testing materials,
18syringes and needles used by diabetics.
19    Beginning January 1, 1990, each month the Department shall
20pay into the County and Mass Transit District Fund, a special
21fund in the State treasury which is hereby created, 4% of the
22net revenue realized for the preceding month from the 6.25%
23general rate.
24    Beginning August 1, 2000, each month the Department shall
25pay into the County and Mass Transit District Fund 20% of the
26net revenue realized for the preceding month from the 1.25%

 

 

HB4004- 262 -LRB100 11829 HLH 23189 b

1rate on the selling price of motor fuel and gasohol. Beginning
2September 1, 2010, each month the Department shall pay into the
3County and Mass Transit District Fund 20% of the net revenue
4realized for the preceding month from the 1.25% rate on the
5selling price of sales tax holiday items.
6    Beginning January 1, 1990, each month the Department shall
7pay into the Local Government Tax Fund 16% of the net revenue
8realized for the preceding month from the 6.25% general rate on
9the selling price of tangible personal property.
10    Beginning August 1, 2000, each month the Department shall
11pay into the Local Government Tax Fund 80% of the net revenue
12realized for the preceding month from the 1.25% rate on the
13selling price of motor fuel and gasohol. Beginning September 1,
142010, each month the Department shall pay into the Local
15Government Tax Fund 80% of the net revenue realized for the
16preceding month from the 1.25% rate on the selling price of
17sales tax holiday items.
18    Beginning October 1, 2009, each month the Department shall
19pay into the Capital Projects Fund an amount that is equal to
20an amount estimated by the Department to represent 80% of the
21net revenue realized for the preceding month from the sale of
22candy, grooming and hygiene products, and soft drinks that had
23been taxed at a rate of 1% prior to September 1, 2009 but that
24are now taxed at 6.25%.
25    Beginning July 1, 2011, each month the Department shall pay
26into the Clean Air Act Permit Fund 80% of the net revenue

 

 

HB4004- 263 -LRB100 11829 HLH 23189 b

1realized for the preceding month from the 6.25% general rate on
2the selling price of sorbents used in Illinois in the process
3of sorbent injection as used to comply with the Environmental
4Protection Act or the federal Clean Air Act, but the total
5payment into the Clean Air Act Permit Fund under this Act and
6the Use Tax Act shall not exceed $2,000,000 in any fiscal year.
7    Beginning July 1, 2013, each month the Department shall pay
8into the Underground Storage Tank Fund from the proceeds
9collected under this Act, the Use Tax Act, the Service Use Tax
10Act, and the Service Occupation Tax Act an amount equal to the
11average monthly deficit in the Underground Storage Tank Fund
12during the prior year, as certified annually by the Illinois
13Environmental Protection Agency, but the total payment into the
14Underground Storage Tank Fund under this Act, the Use Tax Act,
15the Service Use Tax Act, and the Service Occupation Tax Act
16shall not exceed $18,000,000 in any State fiscal year. As used
17in this paragraph, the "average monthly deficit" shall be equal
18to the difference between the average monthly claims for
19payment by the fund and the average monthly revenues deposited
20into the fund, excluding payments made pursuant to this
21paragraph.
22    Beginning July 1, 2015, of the remainder of the moneys
23received by the Department under the Use Tax Act, the Service
24Use Tax Act, the Service Occupation Tax Act, and this Act, each
25month the Department shall deposit $500,000 into the State
26Crime Laboratory Fund.

 

 

HB4004- 264 -LRB100 11829 HLH 23189 b

1    Of the remainder of the moneys received by the Department
2pursuant to this Act, (a) 1.75% thereof shall be paid into the
3Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
4and after July 1, 1989, 3.8% thereof shall be paid into the
5Build Illinois Fund; provided, however, that if in any fiscal
6year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
7may be, of the moneys received by the Department and required
8to be paid into the Build Illinois Fund pursuant to this Act,
9Section 9 of the Use Tax Act, Section 9 of the Service Use Tax
10Act, and Section 9 of the Service Occupation Tax Act, such Acts
11being hereinafter called the "Tax Acts" and such aggregate of
122.2% or 3.8%, as the case may be, of moneys being hereinafter
13called the "Tax Act Amount", and (2) the amount transferred to
14the Build Illinois Fund from the State and Local Sales Tax
15Reform Fund shall be less than the Annual Specified Amount (as
16hereinafter defined), an amount equal to the difference shall
17be immediately paid into the Build Illinois Fund from other
18moneys received by the Department pursuant to the Tax Acts; the
19"Annual Specified Amount" means the amounts specified below for
20fiscal years 1986 through 1993:
21Fiscal YearAnnual Specified Amount
221986$54,800,000
231987$76,650,000
241988$80,480,000
251989$88,510,000
261990$115,330,000

 

 

HB4004- 265 -LRB100 11829 HLH 23189 b

11991$145,470,000
21992$182,730,000
31993$206,520,000;
4and means the Certified Annual Debt Service Requirement (as
5defined in Section 13 of the Build Illinois Bond Act) or the
6Tax Act Amount, whichever is greater, for fiscal year 1994 and
7each fiscal year thereafter; and further provided, that if on
8the last business day of any month the sum of (1) the Tax Act
9Amount required to be deposited into the Build Illinois Bond
10Account in the Build Illinois Fund during such month and (2)
11the amount transferred to the Build Illinois Fund from the
12State and Local Sales Tax Reform Fund shall have been less than
131/12 of the Annual Specified Amount, an amount equal to the
14difference shall be immediately paid into the Build Illinois
15Fund from other moneys received by the Department pursuant to
16the Tax Acts; and, further provided, that in no event shall the
17payments required under the preceding proviso result in
18aggregate payments into the Build Illinois Fund pursuant to
19this clause (b) for any fiscal year in excess of the greater of
20(i) the Tax Act Amount or (ii) the Annual Specified Amount for
21such fiscal year. The amounts payable into the Build Illinois
22Fund under clause (b) of the first sentence in this paragraph
23shall be payable only until such time as the aggregate amount
24on deposit under each trust indenture securing Bonds issued and
25outstanding pursuant to the Build Illinois Bond Act is
26sufficient, taking into account any future investment income,

 

 

HB4004- 266 -LRB100 11829 HLH 23189 b

1to fully provide, in accordance with such indenture, for the
2defeasance of or the payment of the principal of, premium, if
3any, and interest on the Bonds secured by such indenture and on
4any Bonds expected to be issued thereafter and all fees and
5costs payable with respect thereto, all as certified by the
6Director of the Bureau of the Budget (now Governor's Office of
7Management and Budget). If on the last business day of any
8month in which Bonds are outstanding pursuant to the Build
9Illinois Bond Act, the aggregate of moneys deposited in the
10Build Illinois Bond Account in the Build Illinois Fund in such
11month shall be less than the amount required to be transferred
12in such month from the Build Illinois Bond Account to the Build
13Illinois Bond Retirement and Interest Fund pursuant to Section
1413 of the Build Illinois Bond Act, an amount equal to such
15deficiency shall be immediately paid from other moneys received
16by the Department pursuant to the Tax Acts to the Build
17Illinois Fund; provided, however, that any amounts paid to the
18Build Illinois Fund in any fiscal year pursuant to this
19sentence shall be deemed to constitute payments pursuant to
20clause (b) of the first sentence of this paragraph and shall
21reduce the amount otherwise payable for such fiscal year
22pursuant to that clause (b). The moneys received by the
23Department pursuant to this Act and required to be deposited
24into the Build Illinois Fund are subject to the pledge, claim
25and charge set forth in Section 12 of the Build Illinois Bond
26Act.

 

 

HB4004- 267 -LRB100 11829 HLH 23189 b

1    Subject to payment of amounts into the Build Illinois Fund
2as provided in the preceding paragraph or in any amendment
3thereto hereafter enacted, the following specified monthly
4installment of the amount requested in the certificate of the
5Chairman of the Metropolitan Pier and Exposition Authority
6provided under Section 8.25f of the State Finance Act, but not
7in excess of sums designated as "Total Deposit", shall be
8deposited in the aggregate from collections under Section 9 of
9the Use Tax Act, Section 9 of the Service Use Tax Act, Section
109 of the Service Occupation Tax Act, and Section 3 of the
11Retailers' Occupation Tax Act into the McCormick Place
12Expansion Project Fund in the specified fiscal years.
13Fiscal YearTotal Deposit
141993         $0
151994 53,000,000
161995 58,000,000
171996 61,000,000
181997 64,000,000
191998 68,000,000
201999 71,000,000
212000 75,000,000
222001 80,000,000
232002 93,000,000
242003 99,000,000
252004103,000,000

 

 

HB4004- 268 -LRB100 11829 HLH 23189 b

12005108,000,000
22006113,000,000
32007119,000,000
42008126,000,000
52009132,000,000
62010139,000,000
72011146,000,000
82012153,000,000
92013161,000,000
102014170,000,000
112015179,000,000
122016189,000,000
132017199,000,000
142018210,000,000
152019221,000,000
162020233,000,000
172021246,000,000
182022260,000,000
192023275,000,000
202024 275,000,000
212025 275,000,000
222026 279,000,000
232027 292,000,000
242028 307,000,000
252029 322,000,000
262030 338,000,000

 

 

HB4004- 269 -LRB100 11829 HLH 23189 b

12031 350,000,000
22032 350,000,000
3and
4each fiscal year
5thereafter that bonds
6are outstanding under
7Section 13.2 of the
8Metropolitan Pier and
9Exposition Authority Act,
10but not after fiscal year 2060.
11    Beginning July 20, 1993 and in each month of each fiscal
12year thereafter, one-eighth of the amount requested in the
13certificate of the Chairman of the Metropolitan Pier and
14Exposition Authority for that fiscal year, less the amount
15deposited into the McCormick Place Expansion Project Fund by
16the State Treasurer in the respective month under subsection
17(g) of Section 13 of the Metropolitan Pier and Exposition
18Authority Act, plus cumulative deficiencies in the deposits
19required under this Section for previous months and years,
20shall be deposited into the McCormick Place Expansion Project
21Fund, until the full amount requested for the fiscal year, but
22not in excess of the amount specified above as "Total Deposit",
23has been deposited.
24    Subject to payment of amounts into the Build Illinois Fund
25and the McCormick Place Expansion Project Fund pursuant to the
26preceding paragraphs or in any amendments thereto hereafter

 

 

HB4004- 270 -LRB100 11829 HLH 23189 b

1enacted, beginning July 1, 1993 and ending on September 30,
22013, the Department shall each month pay into the Illinois Tax
3Increment Fund 0.27% of 80% of the net revenue realized for the
4preceding month from the 6.25% general rate on the selling
5price of tangible personal property.
6    Subject to payment of amounts into the Build Illinois Fund
7and the McCormick Place Expansion Project Fund pursuant to the
8preceding paragraphs or in any amendments thereto hereafter
9enacted, beginning with the receipt of the first report of
10taxes paid by an eligible business and continuing for a 25-year
11period, the Department shall each month pay into the Energy
12Infrastructure Fund 80% of the net revenue realized from the
136.25% general rate on the selling price of Illinois-mined coal
14that was sold to an eligible business. For purposes of this
15paragraph, the term "eligible business" means a new electric
16generating facility certified pursuant to Section 605-332 of
17the Department of Commerce and Economic Opportunity Law of the
18Civil Administrative Code of Illinois.
19    Subject to payment of amounts into the Build Illinois Fund,
20the McCormick Place Expansion Project Fund, the Illinois Tax
21Increment Fund, and the Energy Infrastructure Fund pursuant to
22the preceding paragraphs or in any amendments to this Section
23hereafter enacted, beginning on the first day of the first
24calendar month to occur on or after August 26, 2014 (the
25effective date of Public Act 98-1098) this amendatory Act of
26the 98th General Assembly, each month, from the collections

 

 

HB4004- 271 -LRB100 11829 HLH 23189 b

1made under Section 9 of the Use Tax Act, Section 9 of the
2Service Use Tax Act, Section 9 of the Service Occupation Tax
3Act, and Section 3 of the Retailers' Occupation Tax Act, the
4Department shall pay into the Tax Compliance and Administration
5Fund, to be used, subject to appropriation, to fund additional
6auditors and compliance personnel at the Department of Revenue,
7an amount equal to 1/12 of 5% of 80% of the cash receipts
8collected during the preceding fiscal year by the Audit Bureau
9of the Department under the Use Tax Act, the Service Use Tax
10Act, the Service Occupation Tax Act, the Retailers' Occupation
11Tax Act, and associated local occupation and use taxes
12administered by the Department.
13    Of the remainder of the moneys received by the Department
14pursuant to this Act, 75% thereof shall be paid into the State
15Treasury and 25% shall be reserved in a special account and
16used only for the transfer to the Common School Fund as part of
17the monthly transfer from the General Revenue Fund in
18accordance with Section 8a of the State Finance Act.
19    The Department may, upon separate written notice to a
20taxpayer, require the taxpayer to prepare and file with the
21Department on a form prescribed by the Department within not
22less than 60 days after receipt of the notice an annual
23information return for the tax year specified in the notice.
24Such annual return to the Department shall include a statement
25of gross receipts as shown by the retailer's last Federal
26income tax return. If the total receipts of the business as

 

 

HB4004- 272 -LRB100 11829 HLH 23189 b

1reported in the Federal income tax return do not agree with the
2gross receipts reported to the Department of Revenue for the
3same period, the retailer shall attach to his annual return a
4schedule showing a reconciliation of the 2 amounts and the
5reasons for the difference. The retailer's annual return to the
6Department shall also disclose the cost of goods sold by the
7retailer during the year covered by such return, opening and
8closing inventories of such goods for such year, costs of goods
9used from stock or taken from stock and given away by the
10retailer during such year, payroll information of the
11retailer's business during such year and any additional
12reasonable information which the Department deems would be
13helpful in determining the accuracy of the monthly, quarterly
14or annual returns filed by such retailer as provided for in
15this Section.
16    If the annual information return required by this Section
17is not filed when and as required, the taxpayer shall be liable
18as follows:
19        (i) Until January 1, 1994, the taxpayer shall be liable
20    for a penalty equal to 1/6 of 1% of the tax due from such
21    taxpayer under this Act during the period to be covered by
22    the annual return for each month or fraction of a month
23    until such return is filed as required, the penalty to be
24    assessed and collected in the same manner as any other
25    penalty provided for in this Act.
26        (ii) On and after January 1, 1994, the taxpayer shall

 

 

HB4004- 273 -LRB100 11829 HLH 23189 b

1    be liable for a penalty as described in Section 3-4 of the
2    Uniform Penalty and Interest Act.
3    The chief executive officer, proprietor, owner or highest
4ranking manager shall sign the annual return to certify the
5accuracy of the information contained therein. Any person who
6willfully signs the annual return containing false or
7inaccurate information shall be guilty of perjury and punished
8accordingly. The annual return form prescribed by the
9Department shall include a warning that the person signing the
10return may be liable for perjury.
11    The provisions of this Section concerning the filing of an
12annual information return do not apply to a retailer who is not
13required to file an income tax return with the United States
14Government.
15    As soon as possible after the first day of each month, upon
16certification of the Department of Revenue, the Comptroller
17shall order transferred and the Treasurer shall transfer from
18the General Revenue Fund to the Motor Fuel Tax Fund an amount
19equal to 1.7% of 80% of the net revenue realized under this Act
20for the second preceding month. Beginning April 1, 2000, this
21transfer is no longer required and shall not be made.
22    Net revenue realized for a month shall be the revenue
23collected by the State pursuant to this Act, less the amount
24paid out during that month as refunds to taxpayers for
25overpayment of liability.
26    For greater simplicity of administration, manufacturers,

 

 

HB4004- 274 -LRB100 11829 HLH 23189 b

1importers and wholesalers whose products are sold at retail in
2Illinois by numerous retailers, and who wish to do so, may
3assume the responsibility for accounting and paying to the
4Department all tax accruing under this Act with respect to such
5sales, if the retailers who are affected do not make written
6objection to the Department to this arrangement.
7    Any person who promotes, organizes, provides retail
8selling space for concessionaires or other types of sellers at
9the Illinois State Fair, DuQuoin State Fair, county fairs,
10local fairs, art shows, flea markets and similar exhibitions or
11events, including any transient merchant as defined by Section
122 of the Transient Merchant Act of 1987, is required to file a
13report with the Department providing the name of the merchant's
14business, the name of the person or persons engaged in
15merchant's business, the permanent address and Illinois
16Retailers Occupation Tax Registration Number of the merchant,
17the dates and location of the event and other reasonable
18information that the Department may require. The report must be
19filed not later than the 20th day of the month next following
20the month during which the event with retail sales was held.
21Any person who fails to file a report required by this Section
22commits a business offense and is subject to a fine not to
23exceed $250.
24    Any person engaged in the business of selling tangible
25personal property at retail as a concessionaire or other type
26of seller at the Illinois State Fair, county fairs, art shows,

 

 

HB4004- 275 -LRB100 11829 HLH 23189 b

1flea markets and similar exhibitions or events, or any
2transient merchants, as defined by Section 2 of the Transient
3Merchant Act of 1987, may be required to make a daily report of
4the amount of such sales to the Department and to make a daily
5payment of the full amount of tax due. The Department shall
6impose this requirement when it finds that there is a
7significant risk of loss of revenue to the State at such an
8exhibition or event. Such a finding shall be based on evidence
9that a substantial number of concessionaires or other sellers
10who are not residents of Illinois will be engaging in the
11business of selling tangible personal property at retail at the
12exhibition or event, or other evidence of a significant risk of
13loss of revenue to the State. The Department shall notify
14concessionaires and other sellers affected by the imposition of
15this requirement. In the absence of notification by the
16Department, the concessionaires and other sellers shall file
17their returns as otherwise required in this Section.
18(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
1998-496, eff. 1-1-14; 98-756, eff. 7-16-14; 98-1098, eff.
208-26-14; 99-352, eff. 8-12-15; 99-858, eff. 8-19-16; 99-933,
21eff. 1-27-17; revised 2-3-17.)
 
22    Section 30. The Cigarette Tax Act is amended by changing
23Section 2 as follows:
 
24    (35 ILCS 130/2)  (from Ch. 120, par. 453.2)

 

 

HB4004- 276 -LRB100 11829 HLH 23189 b

1    Sec. 2. Tax imposed; rate; collection, payment, and
2distribution; discount.
3    (a) A tax is imposed upon any person engaged in business as
4a retailer of cigarettes in this State at the rate of 5 1/2
5mills per cigarette sold, or otherwise disposed of in the
6course of such business in this State. In addition to any other
7tax imposed by this Act, a tax is imposed upon any person
8engaged in business as a retailer of cigarettes in this State
9at a rate of 1/2 mill per cigarette sold or otherwise disposed
10of in the course of such business in this State on and after
11January 1, 1947, and shall be paid into the Metropolitan Fair
12and Exposition Authority Reconstruction Fund or as otherwise
13provided in Section 29. On and after December 1, 1985, in
14addition to any other tax imposed by this Act, a tax is imposed
15upon any person engaged in business as a retailer of cigarettes
16in this State at a rate of 4 mills per cigarette sold or
17otherwise disposed of in the course of such business in this
18State. Of the additional tax imposed by this amendatory Act of
191985, $9,000,000 of the moneys received by the Department of
20Revenue pursuant to this Act shall be paid each month into the
21Common School Fund. On and after the effective date of this
22amendatory Act of 1989, in addition to any other tax imposed by
23this Act, a tax is imposed upon any person engaged in business
24as a retailer of cigarettes at the rate of 5 mills per
25cigarette sold or otherwise disposed of in the course of such
26business in this State. On and after the effective date of this

 

 

HB4004- 277 -LRB100 11829 HLH 23189 b

1amendatory Act of 1993, in addition to any other tax imposed by
2this Act, a tax is imposed upon any person engaged in business
3as a retailer of cigarettes at the rate of 7 mills per
4cigarette sold or otherwise disposed of in the course of such
5business in this State. On and after December 15, 1997, in
6addition to any other tax imposed by this Act, a tax is imposed
7upon any person engaged in business as a retailer of cigarettes
8at the rate of 7 mills per cigarette sold or otherwise disposed
9of in the course of such business of this State. All of the
10moneys received by the Department of Revenue pursuant to this
11Act and the Cigarette Use Tax Act from the additional taxes
12imposed by this amendatory Act of 1997, shall be paid each
13month into the Common School Fund. On and after July 1, 2002,
14in addition to any other tax imposed by this Act, a tax is
15imposed upon any person engaged in business as a retailer of
16cigarettes at the rate of 20.0 mills per cigarette sold or
17otherwise disposed of in the course of such business in this
18State. Beginning on June 24, 2012, in addition to any other tax
19imposed by this Act, a tax is imposed upon any person engaged
20in business as a retailer of cigarettes at the rate of 50 mills
21per cigarette sold or otherwise disposed of in the course of
22such business in this State. All moneys received by the
23Department of Revenue under this Act and the Cigarette Use Tax
24Act from the additional taxes imposed by this amendatory Act of
25the 97th General Assembly shall be paid each month into the
26Healthcare Provider Relief Fund. The payment of such taxes

 

 

HB4004- 278 -LRB100 11829 HLH 23189 b

1shall be evidenced by a stamp affixed to each original package
2of cigarettes, or an authorized substitute for such stamp
3imprinted on each original package of such cigarettes
4underneath the sealed transparent outside wrapper of such
5original package, as hereinafter provided. However, such taxes
6are not imposed upon any activity in such business in
7interstate commerce or otherwise, which activity may not under
8the Constitution and statutes of the United States be made the
9subject of taxation by this State.
10    Beginning on the effective date of this amendatory Act of
11the 92nd General Assembly and through June 30, 2006, all of the
12moneys received by the Department of Revenue pursuant to this
13Act and the Cigarette Use Tax Act, other than the moneys that
14are dedicated to the Common School Fund, shall be distributed
15each month as follows: first, there shall be paid into the
16General Revenue Fund an amount which, when added to the amount
17paid into the Common School Fund for that month, equals
18$33,300,000, except that in the month of August of 2004, this
19amount shall equal $83,300,000; then, from the moneys
20remaining, if any amounts required to be paid into the General
21Revenue Fund in previous months remain unpaid, those amounts
22shall be paid into the General Revenue Fund; then, beginning on
23April 1, 2003, from the moneys remaining, $5,000,000 per month
24shall be paid into the School Infrastructure Fund; then, if any
25amounts required to be paid into the School Infrastructure Fund
26in previous months remain unpaid, those amounts shall be paid

 

 

HB4004- 279 -LRB100 11829 HLH 23189 b

1into the School Infrastructure Fund; then the moneys remaining,
2if any, shall be paid into the Long-Term Care Provider Fund. To
3the extent that more than $25,000,000 has been paid into the
4General Revenue Fund and Common School Fund per month for the
5period of July 1, 1993 through the effective date of this
6amendatory Act of 1994 from combined receipts of the Cigarette
7Tax Act and the Cigarette Use Tax Act, notwithstanding the
8distribution provided in this Section, the Department of
9Revenue is hereby directed to adjust the distribution provided
10in this Section to increase the next monthly payments to the
11Long Term Care Provider Fund by the amount paid to the General
12Revenue Fund and Common School Fund in excess of $25,000,000
13per month and to decrease the next monthly payments to the
14General Revenue Fund and Common School Fund by that same excess
15amount.
16    Beginning on July 1, 2006, all of the moneys received by
17the Department of Revenue pursuant to this Act and the
18Cigarette Use Tax Act, other than the moneys that are dedicated
19to the Common School Fund and, beginning on the effective date
20of this amendatory Act of the 97th General Assembly, other than
21the moneys from the additional taxes imposed by this amendatory
22Act of the 97th General Assembly that must be paid each month
23into the Healthcare Provider Relief Fund, shall be distributed
24each month as follows: first, there shall be paid into the
25General Revenue Fund an amount that, when added to the amount
26paid into the Common School Fund for that month, equals

 

 

HB4004- 280 -LRB100 11829 HLH 23189 b

1$29,200,000; then, from the moneys remaining, if any amounts
2required to be paid into the General Revenue Fund in previous
3months remain unpaid, those amounts shall be paid into the
4General Revenue Fund; then from the moneys remaining,
5$5,000,000 per month shall be paid into the School
6Infrastructure Fund; then, if any amounts required to be paid
7into the School Infrastructure Fund in previous months remain
8unpaid, those amounts shall be paid into the School
9Infrastructure Fund; then the moneys remaining, if any, shall
10be paid into the Long-Term Care Provider Fund.
11    Moneys collected from the tax imposed on little cigars
12under Section 10-10 of the Tobacco Products Tax Act of 1995
13shall be included with the moneys collected under the Cigarette
14Tax Act and the Cigarette Use Tax Act when making distributions
15to the Common School Fund, the Healthcare Provider Relief Fund,
16the General Revenue Fund, the School Infrastructure Fund, and
17the Long-Term Care Provider Fund under this Section.
18    When any tax imposed herein terminates or has terminated,
19distributors who have bought stamps while such tax was in
20effect and who therefore paid such tax, but who can show, to
21the Department's satisfaction, that they sold the cigarettes to
22which they affixed such stamps after such tax had terminated
23and did not recover the tax or its equivalent from purchasers,
24shall be allowed by the Department to take credit for such
25absorbed tax against subsequent tax stamp purchases from the
26Department by such distributor.

 

 

HB4004- 281 -LRB100 11829 HLH 23189 b

1    The impact of the tax levied by this Act is imposed upon
2the retailer and shall be prepaid or pre-collected by the
3distributor for the purpose of convenience and facility only,
4and the amount of the tax shall be added to the price of the
5cigarettes sold by such distributor. Collection of the tax
6shall be evidenced by a stamp or stamps affixed to each
7original package of cigarettes, as hereinafter provided.
8    Each distributor shall collect the tax from the retailer at
9or before the time of the sale, shall affix the stamps as
10hereinafter required, and shall remit the tax collected from
11retailers to the Department, as hereinafter provided. Any
12distributor who fails to properly collect and pay the tax
13imposed by this Act shall be liable for the tax. Any
14distributor having cigarettes to which stamps have been affixed
15in his possession for sale on the effective date of this
16amendatory Act of 1989 shall not be required to pay the
17additional tax imposed by this amendatory Act of 1989 on such
18stamped cigarettes. Any distributor having cigarettes to which
19stamps have been affixed in his or her possession for sale at
2012:01 a.m. on the effective date of this amendatory Act of
211993, is required to pay the additional tax imposed by this
22amendatory Act of 1993 on such stamped cigarettes. This
23payment, less the discount provided in subsection (b), shall be
24due when the distributor first makes a purchase of cigarette
25tax stamps after the effective date of this amendatory Act of
261993, or on the first due date of a return under this Act after

 

 

HB4004- 282 -LRB100 11829 HLH 23189 b

1the effective date of this amendatory Act of 1993, whichever
2occurs first. Any distributor having cigarettes to which stamps
3have been affixed in his possession for sale on December 15,
41997 shall not be required to pay the additional tax imposed by
5this amendatory Act of 1997 on such stamped cigarettes.
6    Any distributor having cigarettes to which stamps have been
7affixed in his or her possession for sale on July 1, 2002 shall
8not be required to pay the additional tax imposed by this
9amendatory Act of the 92nd General Assembly on those stamped
10cigarettes.
11    Any retailer having cigarettes in his or her possession on
12June 24, 2012 to which tax stamps have been affixed is not
13required to pay the additional tax that begins on June 24, 2012
14imposed by this amendatory Act of the 97th General Assembly on
15those stamped cigarettes. Any distributor having cigarettes in
16his or her possession on June 24, 2012 to which tax stamps have
17been affixed, and any distributor having stamps in his or her
18possession on June 24, 2012 that have not been affixed to
19packages of cigarettes before June 24, 2012, is required to pay
20the additional tax that begins on June 24, 2012 imposed by this
21amendatory Act of the 97th General Assembly to the extent the
22calendar year 2012 average monthly volume of cigarette stamps
23in the distributor's possession exceeds the average monthly
24volume of cigarette stamps purchased by the distributor in
25calendar year 2011. This payment, less the discount provided in
26subsection (b), is due when the distributor first makes a

 

 

HB4004- 283 -LRB100 11829 HLH 23189 b

1purchase of cigarette stamps on or after June 24, 2012 or on
2the first due date of a return under this Act occurring on or
3after June 24, 2012, whichever occurs first. Those distributors
4may elect to pay the additional tax on packages of cigarettes
5to which stamps have been affixed and on any stamps in the
6distributor's possession that have not been affixed to packages
7of cigarettes over a period not to exceed 12 months from the
8due date of the additional tax by notifying the Department in
9writing. The first payment for distributors making such
10election is due when the distributor first makes a purchase of
11cigarette tax stamps on or after June 24, 2012 or on the first
12due date of a return under this Act occurring on or after June
1324, 2012, whichever occurs first. Distributors making such an
14election are not entitled to take the discount provided in
15subsection (b) on such payments.
16    Distributors making sales of cigarettes to secondary
17distributors shall add the amount of the tax to the price of
18the cigarettes sold by the distributors. Secondary
19distributors making sales of cigarettes to retailers shall
20include the amount of the tax in the price of the cigarettes
21sold to retailers. The amount of tax shall not be less than the
22amount of taxes imposed by the State and all local
23jurisdictions. The amount of local taxes shall be calculated
24based on the location of the retailer's place of business shown
25on the retailer's certificate of registration or
26sub-registration issued to the retailer pursuant to Section 2a

 

 

HB4004- 284 -LRB100 11829 HLH 23189 b

1of the Retailers' Occupation Tax Act. The original packages of
2cigarettes sold to the retailer shall bear all the required
3stamps, or other indicia, for the taxes included in the price
4of cigarettes.
5    The amount of the Cigarette Tax imposed by this Act shall
6be separately stated, apart from the price of the goods, by
7distributors, manufacturer representatives, secondary
8distributors, and retailers, in all bills and sales invoices.
9    (b) The distributor shall be required to collect the taxes
10provided under paragraph (a) hereof, and, to cover the costs of
11such collection, shall be allowed a discount during any year
12commencing July 1st and ending the following June 30th in
13accordance with the schedule set out hereinbelow, which
14discount shall be allowed at the time of purchase of the stamps
15when purchase is required by this Act, or at the time when the
16tax is remitted to the Department without the purchase of
17stamps from the Department when that method of paying the tax
18is required or authorized by this Act. Prior to December 1,
191985, a discount equal to 1 2/3% of the amount of the tax up to
20and including the first $700,000 paid hereunder by such
21distributor to the Department during any such year; 1 1/3% of
22the next $700,000 of tax or any part thereof, paid hereunder by
23such distributor to the Department during any such year; 1% of
24the next $700,000 of tax, or any part thereof, paid hereunder
25by such distributor to the Department during any such year, and
262/3 of 1% of the amount of any additional tax paid hereunder by

 

 

HB4004- 285 -LRB100 11829 HLH 23189 b

1such distributor to the Department during any such year shall
2apply. On and after December 1, 1985, a discount equal to 1.75%
3of the amount of the tax payable under this Act up to and
4including the first $3,000,000 paid hereunder by such
5distributor to the Department during any such year and 1.5% of
6the amount of any additional tax paid hereunder by such
7distributor to the Department during any such year shall apply.
8On and after December 1, 1985 and until January 1, 2018, the
9discount amount shall be 1.75% of the amount of the tax payable
10under this Act up to and including the first $3,000,000 paid
11hereunder by such distributor to the Department during any such
12year and 1.5% of the amount of any additional tax paid
13hereunder by such distributor to the Department during any the
14year. On and after January 1, 2018, the discount amount shall
15be the sum of (i) 1.75% of the first $1,000 of the tax payable
16under this Act during the calendar year and (ii) 1% of the
17amount of the tax payable under this Act during the calendar
18year that exceeds $1,000; however, on and after January 1,
192018, in no event shall the discount allowed to any distributor
20be less than $5 in any calendar year or more than $1,500 in any
21calendar year.
22    Two or more distributors that use a common means of
23affixing revenue tax stamps or that are owned or controlled by
24the same interests shall be treated as a single distributor for
25the purpose of computing the discount.
26    (c) The taxes herein imposed are in addition to all other

 

 

HB4004- 286 -LRB100 11829 HLH 23189 b

1occupation or privilege taxes imposed by the State of Illinois,
2or by any political subdivision thereof, or by any municipal
3corporation.
4(Source: P.A. 97-587, eff. 8-26-11; 97-688, eff. 6-14-12;
598-273, eff. 8-9-13.)
 
6    Section 35. The Cigarette Use Tax Act is amended by
7changing Section 3 as follows:
 
8    (35 ILCS 135/3)  (from Ch. 120, par. 453.33)
9    Sec. 3. Stamp payment. The tax hereby imposed shall be
10collected by a distributor maintaining a place of business in
11this State or a distributor authorized by the Department
12pursuant to Section 7 hereof to collect the tax, and the amount
13of the tax shall be added to the price of the cigarettes sold
14by such distributor. Collection of the tax shall be evidenced
15by a stamp or stamps affixed to each original package of
16cigarettes or by an authorized substitute for such stamp
17imprinted on each original package of such cigarettes
18underneath the sealed transparent outside wrapper of such
19original package, except as hereinafter provided. Each
20distributor who is required or authorized to collect the tax
21herein imposed, before delivering or causing to be delivered
22any original packages of cigarettes in this State to any
23purchaser, shall firmly affix a proper stamp or stamps to each
24such package, or (in the case of manufacturers of cigarettes in

 

 

HB4004- 287 -LRB100 11829 HLH 23189 b

1original packages which are contained inside a sealed
2transparent wrapper) shall imprint the required language on the
3original package of cigarettes beneath such outside wrapper as
4hereinafter provided. Such stamp or stamps need not be affixed
5to the original package of any cigarettes with respect to which
6the distributor is required to affix a like stamp or stamps by
7virtue of the Cigarette Tax Act, however, and no tax imprint
8need be placed underneath the sealed transparent wrapper of an
9original package of cigarettes with respect to which the
10distributor is required or authorized to employ a like tax
11imprint by virtue of the Cigarette Tax Act.
12    No stamp or imprint may be affixed to, or made upon, any
13package of cigarettes unless that package complies with all
14requirements of the federal Cigarette Labeling and Advertising
15Act, 15 U.S.C. 1331 and following, for the placement of labels,
16warnings, or any other information upon a package of cigarettes
17that is sold within the United States. Under the authority of
18Section 6, the Department shall revoke the license of any
19distributor that is determined to have violated this paragraph.
20A person may not affix a stamp on a package of cigarettes,
21cigarette papers, wrappers, or tubes if that individual package
22has been marked for export outside the United States with a
23label or notice in compliance with Section 290.185 of Title 27
24of the Code of Federal Regulations. It is not a defense to a
25proceeding for violation of this paragraph that the label or
26notice has been removed, mutilated, obliterated, or altered in

 

 

HB4004- 288 -LRB100 11829 HLH 23189 b

1any manner.
2    Only distributors licensed under this Act and
3transporters, as defined in Section 9c of the Cigarette Tax
4Act, may possess unstamped original packages of cigarettes.
5Prior to shipment to an Illinois retailer or secondary
6distributor, a stamp shall be applied to each original package
7of cigarettes sold to the retailer or secondary distributor. A
8distributor may apply a tax stamp only to an original package
9of cigarettes purchased or obtained directly from an in-state
10maker, manufacturer, or fabricator licensed as a distributor
11under Section 4 of this Act or an out-of-state maker,
12manufacturer, or fabricator holding a permit under Section 7 of
13this Act. A licensed distributor may ship or otherwise cause to
14be delivered unstamped original packages of cigarettes in,
15into, or from this State. A licensed distributor may transport
16unstamped original packages of cigarettes to a facility,
17wherever located, owned or controlled by such distributor;
18however, a distributor may not transport unstamped original
19packages of cigarettes to a facility where retail sales of
20cigarettes take place or to a facility where a secondary
21distributor makes sales for resale. Any licensed distributor
22that ships or otherwise causes to be delivered unstamped
23original packages of cigarettes into, within, or from this
24State shall ensure that the invoice or equivalent documentation
25and the bill of lading or freight bill for the shipment
26identifies the true name and address of the consignor or

 

 

HB4004- 289 -LRB100 11829 HLH 23189 b

1seller, the true name and address of the consignee or
2purchaser, and the quantity by brand style of the cigarettes so
3transported, provided that this Section shall not be construed
4as to impose any requirement or liability upon any common or
5contract carrier.
6    Distributors making sales of cigarettes to secondary
7distributors shall add the amount of the tax to the price of
8the cigarettes sold by the distributors. Secondary
9distributors making sales of cigarettes to retailers shall
10include the amount of the tax in the price of the cigarettes
11sold to retailers. The amount of tax shall not be less than the
12amount of taxes imposed by the State and all local
13jurisdictions. The amount of local taxes shall be calculated
14based on the location of the retailer's place of business shown
15on the retailer's certificate of registration or
16sub-registration issued to the retailer pursuant to Section 2a
17of the Retailers' Occupation Tax Act. The original packages of
18cigarettes sold by the retailer shall bear all the required
19stamps, or other indicia, for the taxes included in the price
20of cigarettes.
21    Stamps, when required hereunder, shall be purchased from
22the Department, or any person authorized by the Department, by
23distributors. On and after July 1, 2003, payment for such
24stamps must be made by means of electronic funds transfer. The
25Department may refuse to sell stamps to any person who does not
26comply with the provisions of this Act. Beginning on June 6,

 

 

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12002 and through June 30, 2002, persons holding valid licenses
2as distributors may purchase cigarette tax stamps up to an
3amount equal to 115% of the distributor's average monthly
4cigarette tax stamp purchases over the 12 calendar months prior
5to June 6, 2002.
6    Prior to December 1, 1985, the Department shall allow a
7distributor 21 days in which to make final payment of the
8amount to be paid for such stamps, by allowing the distributor
9to make payment for the stamps at the time of purchasing them
10with a draft which shall be in such form as the Department
11prescribes, and which shall be payable within 21 days
12thereafter: Provided that such distributor has filed with the
13Department, and has received the Department's approval of, a
14bond, which is in addition to the bond required under Section 4
15of this Act, payable to the Department in an amount equal to
1680% of such distributor's average monthly tax liability to the
17Department under this Act during the preceding calendar year or
18$500,000, whichever is less. The bond shall be joint and
19several and shall be in the form of a surety company bond in
20such form as the Department prescribes, or it may be in the
21form of a bank certificate of deposit or bank letter of credit.
22The bond shall be conditioned upon the distributor's payment of
23the amount of any 21-day draft which the Department accepts
24from that distributor for the delivery of stamps to that
25distributor under this Act. The distributor's failure to pay
26any such draft, when due, shall also make such distributor

 

 

HB4004- 291 -LRB100 11829 HLH 23189 b

1automatically liable to the Department for a penalty equal to
225% of the amount of such draft.
3    On and after December 1, 1985 and until July 1, 2003, the
4Department shall allow a distributor 30 days in which to make
5final payment of the amount to be paid for such stamps, by
6allowing the distributor to make payment for the stamps at the
7time of purchasing them with a draft which shall be in such
8form as the Department prescribes, and which shall be payable
9within 30 days thereafter, and beginning on January 1, 2003 and
10thereafter, the draft shall be payable by means of electronic
11funds transfer: Provided that such distributor has filed with
12the Department, and has received the Department's approval of,
13a bond, which is in addition to the bond required under Section
144 of this Act, payable to the Department in an amount equal to
15150% of such distributor's average monthly tax liability to the
16Department under this Act during the preceding calendar year or
17$750,000, whichever is less, except that as to bonds filed on
18or after January 1, 1987, such additional bond shall be in an
19amount equal to 100% of such distributor's average monthly tax
20liability under this Act during the preceding calendar year or
21$750,000, whichever is less. The bond shall be joint and
22several and shall be in the form of a surety company bond in
23such form as the Department prescribes, or it may be in the
24form of a bank certificate of deposit or bank letter of credit.
25The bond shall be conditioned upon the distributor's payment of
26the amount of any 30-day draft which the Department accepts

 

 

HB4004- 292 -LRB100 11829 HLH 23189 b

1from that distributor for the delivery of stamps to that
2distributor under this Act. The distributor's failure to pay
3any such draft, when due, shall also make such distributor
4automatically liable to the Department for a penalty equal to
525% of the amount of such draft.
6    Every prior continuous compliance taxpayer shall be exempt
7from all requirements under this Section concerning the
8furnishing of such bond, as defined in this Section, as a
9condition precedent to his being authorized to engage in the
10business licensed under this Act. This exemption shall continue
11for each such taxpayer until such time as he may be determined
12by the Department to be delinquent in the filing of any
13returns, or is determined by the Department (either through the
14Department's issuance of a final assessment which has become
15final under the Act, or by the taxpayer's filing of a return
16which admits tax to be due that is not paid) to be delinquent
17or deficient in the paying of any tax under this Act, at which
18time that taxpayer shall become subject to the bond
19requirements of this Section and, as a condition of being
20allowed to continue to engage in the business licensed under
21this Act, shall be required to furnish bond to the Department
22in such form as provided in this Section. Such taxpayer shall
23furnish such bond for a period of 2 years, after which, if the
24taxpayer has not been delinquent in the filing of any returns,
25or delinquent or deficient in the paying of any tax under this
26Act, the Department may reinstate such person as a prior

 

 

HB4004- 293 -LRB100 11829 HLH 23189 b

1continuance compliance taxpayer. Any taxpayer who fails to pay
2an admitted or established liability under this Act may also be
3required to post bond or other acceptable security with the
4Department guaranteeing the payment of such admitted or
5established liability.
6    Except as otherwise provided in this Section, any person
7aggrieved by any decision of the Department under this Section
8may, within the time allowed by law, protest and request a
9hearing before the Department, whereupon the Department shall
10give notice and shall hold a hearing in conformity with the
11provisions of this Act and then issue its final administrative
12decision in the matter to such person. Effective July 1, 2013,
13protests concerning matters that are subject to the
14jurisdiction of the Illinois Independent Tax Tribunal shall be
15filed in accordance with the Illinois Independent Tax Tribunal
16Act of 2012, and hearings concerning those matters shall be
17held before the Tribunal in accordance with that Act. With
18respect to protests filed with the Department prior to July 1,
192013 that would otherwise be subject to the jurisdiction of the
20Illinois Independent Tax Tribunal, the person filing the
21protest may elect to be subject to the provisions of the
22Illinois Independent Tax Tribunal Act of 2012 at any time on or
23after July 1, 2013, but not later than 30 days after the date
24on which the protest was filed. If made, the election shall be
25irrevocable. In the absence of such a protest filed within the
26time allowed by law, the Department's decision shall become

 

 

HB4004- 294 -LRB100 11829 HLH 23189 b

1final without any further determination being made or notice
2given.
3    The Department shall discharge any surety and shall release
4and return any bond or security deposited, assigned, pledged,
5or otherwise provided to it by a taxpayer under this Section
6within 30 days after:
7        (1) such Taxpayer becomes a prior continuous
8    compliance taxpayer; or
9        (2) such taxpayer has ceased to collect receipts on
10    which he is required to remit tax to the Department, has
11    filed a final tax return, and has paid to the Department an
12    amount sufficient to discharge his remaining tax liability
13    as determined by the Department under this Act. The
14    Department shall make a final determination of the
15    taxpayer's outstanding tax liability as expeditiously as
16    possible after his final tax return has been filed. If the
17    Department cannot make such final determination within 45
18    days after receiving the final tax return, within such
19    period it shall so notify the taxpayer, stating its reasons
20    therefor.
21    At the time of purchasing such stamps from the Department
22when purchase is required by this Act, or at the time when the
23tax which he has collected is remitted by a distributor to the
24Department without the purchase of stamps from the Department
25when that method of remitting the tax that has been collected
26is required or authorized by this Act, the distributor shall be

 

 

HB4004- 295 -LRB100 11829 HLH 23189 b

1allowed a discount during any year commencing July 1 and ending
2the following June 30 in accordance with the schedule set out
3hereinbelow, from the amount to be paid by him to the
4Department for such stamps, or to be paid by him to the
5Department on the basis of monthly remittances (as the case may
6be), to cover the cost, to such distributor, of collecting the
7tax herein imposed by affixing such stamps to the original
8packages of cigarettes sold by such distributor or by placing
9tax imprints underneath the sealed transparent wrapper of
10original packages of cigarettes sold by such distributor (as
11the case may be). : (1) Prior to December 1, 1985, a discount
12equal to 1-2/3% of the amount of the tax up to and including
13the first $700,000 paid hereunder by such distributor to the
14Department during any such year; 1-1/3% of the next $700,000 of
15tax or any part thereof, paid hereunder by such distributor to
16the Department during any such year; 1% of the next $700,000 of
17tax, or any part thereof, paid hereunder by such distributor to
18the Department during any such year; and 2/3 of 1% of the
19amount of any additional tax paid hereunder by such distributor
20to the Department during any such year or (2) On and after
21December 1, 1985 and until January 1, 2018, the a discount
22shall be equal to 1.75% of the amount of the tax payable under
23this Act up to and including the first $3,000,000 paid
24hereunder by such distributor to the Department during any such
25year and 1.5% of the amount of any additional tax paid
26hereunder by such distributor to the Department during any such

 

 

HB4004- 296 -LRB100 11829 HLH 23189 b

1year. On and after January 1, 2018, the discount shall be equal
2to the sum of (i) 1.75% of the first $1,000 of the tax payable
3under this Act during the calendar year and (ii) 1% of the
4amount of the tax payable under this Act during the calendar
5year that exceeds $1,000; however, on and after January 1,
62018, in no event shall the discount allowed to any distributor
7be less than $5 in any calendar year or more than $1,500 in any
8calendar year.
9    Two or more distributors that use a common means of
10affixing revenue tax stamps or that are owned or controlled by
11the same interests shall be treated as a single distributor for
12the purpose of computing the discount.
13    Cigarette manufacturers who are distributors under Section
147(a) of this Act, and who place their cigarettes in original
15packages which are contained inside a sealed transparent
16wrapper, shall be required to remit the tax which they are
17required to collect under this Act to the Department by
18remitting the amount thereof to the Department by the 5th day
19of each month, covering cigarettes shipped or otherwise
20delivered to points in Illinois to purchasers during the
21preceding calendar month, but a distributor need not remit to
22the Department the tax so collected by him from purchasers
23under this Act to the extent to which such distributor is
24required to remit the tax imposed by the Cigarette Tax Act to
25the Department with respect to the same cigarettes. All taxes
26upon cigarettes under this Act are a direct tax upon the retail

 

 

HB4004- 297 -LRB100 11829 HLH 23189 b

1consumer and shall conclusively be presumed to be precollected
2for the purpose of convenience and facility only. Cigarette
3manufacturers that are distributors licensed under Section
47(a) of this Act and who place their cigarettes in original
5packages which are contained inside a sealed transparent
6wrapper, before delivering such cigarettes or causing such
7cigarettes to be delivered in this State to purchasers, shall
8evidence their obligation to collect and remit the tax due with
9respect to such cigarettes by imprinting language to be
10prescribed by the Department on each original package of such
11cigarettes underneath the sealed transparent outside wrapper
12of such original package, in such place thereon and in such
13manner as the Department may prescribe; provided (as stated
14hereinbefore) that this requirement does not apply when such
15distributor is required or authorized by the Cigarette Tax Act
16to place the tax imprint provided for in the last paragraph of
17Section 3 of that Act underneath the sealed transparent wrapper
18of such original package of cigarettes. Such imprinted language
19shall acknowledge the manufacturer's collection and payment of
20or liability for the tax imposed by this Act with respect to
21such cigarettes.
22    The Department shall adopt the design or designs of the tax
23stamps and shall procure the printing of such stamps in such
24amounts and denominations as it deems necessary to provide for
25the affixation of the proper amount of tax stamps to each
26original package of cigarettes.

 

 

HB4004- 298 -LRB100 11829 HLH 23189 b

1    Where tax stamps are required, the Department may authorize
2distributors to affix revenue tax stamps by imprinting tax
3meter stamps upon original packages of cigarettes. The
4Department shall adopt rules and regulations relating to the
5imprinting of such tax meter stamps as will result in payment
6of the proper taxes as herein imposed. No distributor may affix
7revenue tax stamps to original packages of cigarettes by
8imprinting meter stamps thereon unless such distributor has
9first obtained permission from the Department to employ this
10method of affixation. The Department shall regulate the use of
11tax meters and may, to assure the proper collection of the
12taxes imposed by this Act, revoke or suspend the privilege,
13theretofore granted by the Department to any distributor, to
14imprint tax meter stamps upon original packages of cigarettes.
15    The tax hereby imposed and not paid pursuant to this
16Section shall be paid to the Department directly by any person
17using such cigarettes within this State, pursuant to Section 12
18hereof.
19    A distributor shall not affix, or cause to be affixed, any
20stamp or imprint to a package of cigarettes, as provided for in
21this Section, if the tobacco product manufacturer, as defined
22in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
23that made or sold the cigarettes has failed to become a
24participating manufacturer, as defined in subdivision (a)(1)
25of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
26or has failed to create a qualified escrow fund for any

 

 

HB4004- 299 -LRB100 11829 HLH 23189 b

1cigarettes manufactured by the tobacco product manufacturer
2and sold in this State or otherwise failed to bring itself into
3compliance with subdivision (a)(2) of Section 15 of the Tobacco
4Product Manufacturers' Escrow Act.
5(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10;
697-1129, eff. 8-28-12.)
 
7    Section 40. The Hotel Operators' Occupation Tax Act is
8amended by changing Sections 2 and 6 as follows:
 
9    (35 ILCS 145/2)  (from Ch. 120, par. 481b.32)
10    Sec. 2. As used in this Act, unless the context otherwise
11requires:
12        (1) "Hotel" means any building or buildings in which
13    the public may, for a consideration, obtain living
14    quarters, sleeping or housekeeping accommodations. The
15    term includes inns, motels, tourist homes or courts,
16    lodging houses, rooming houses and apartment houses.
17        (2) "Operator" means any person operating a hotel,
18    including, but not limited to, an online travel company
19    that sells hotel rooms to the general public.
20        (3) "Occupancy" means the use or possession, or the
21    right to the use or possession, of any room or rooms in a
22    hotel for any purpose, or the right to the use or
23    possession of the furnishings or to the services and
24    accommodations accompanying the use and possession of the

 

 

HB4004- 300 -LRB100 11829 HLH 23189 b

1    room or rooms.
2        "Online travel company" means a retailer that
3    purchases hotel rooms in the State at a wholesale price and
4    resells those rooms to the general public via an Internet
5    website.
6        (4) "Room" or "rooms" means any living quarters,
7    sleeping or housekeeping accommodations.
8        (5) "Permanent resident" means any person who occupied
9    or has the right to occupy any room or rooms, regardless of
10    whether or not it is the same room or rooms, in a hotel for
11    at least 30 consecutive days.
12        (6) "Rent" or "rental" means the consideration
13    received for occupancy, valued in money, whether received
14    in money or otherwise, including all receipts, cash,
15    credits and property or services of any kind or nature.
16        (7) "Department" means the Department of Revenue.
17        (8) "Person" means any natural individual, firm,
18    partnership, association, joint stock company, joint
19    adventure, public or private corporation, limited
20    liability company, or a receiver, executor, trustee,
21    guardian or other representative appointed by order of any
22    court.
23(Source: P.A. 87-951; 88-480.)
 
24    (35 ILCS 145/6)  (from Ch. 120, par. 481b.36)
25    Sec. 6. Except as provided hereinafter in this Section, on

 

 

HB4004- 301 -LRB100 11829 HLH 23189 b

1or before the last day of each calendar month, every person
2engaged in the business of renting, leasing or letting rooms in
3a hotel in this State during the preceding calendar month shall
4file a return with the Department, stating:
5        1. The name of the operator;
6        2. His residence address and the address of his
7    principal place of business and the address of the
8    principal place of business (if that is a different
9    address) from which he engages in the business of renting,
10    leasing or letting rooms in a hotel in this State;
11        3. Total amount of rental receipts received by him
12    during the preceding calendar month from renting, leasing
13    or letting rooms during such preceding calendar month;
14        4. Total amount of rental receipts received by him
15    during the preceding calendar month from renting, leasing
16    or letting rooms to permanent residents during such
17    preceding calendar month;
18        5. Total amount of other exclusions from gross rental
19    receipts allowed by this Act;
20        6. Gross rental receipts which were received by him
21    during the preceding calendar month and upon the basis of
22    which the tax is imposed;
23        7. The amount of tax due;
24        8. Such other reasonable information as the Department
25    may require.
26    If the operator's average monthly tax liability to the

 

 

HB4004- 302 -LRB100 11829 HLH 23189 b

1Department does not exceed $200, the Department may authorize
2his returns to be filed on a quarter annual basis, with the
3return for January, February and March of a given year being
4due by April 30 of such year; with the return for April, May
5and June of a given year being due by July 31 of such year; with
6the return for July, August and September of a given year being
7due by October 31 of such year, and with the return for
8October, November and December of a given year being due by
9January 31 of the following year.
10    If the operator's average monthly tax liability to the
11Department does not exceed $50, the Department may authorize
12his returns to be filed on an annual basis, with the return for
13a given year being due by January 31 of the following year.
14    Such quarter annual and annual returns, as to form and
15substance, shall be subject to the same requirements as monthly
16returns.
17    Notwithstanding any other provision in this Act concerning
18the time within which an operator may file his return, in the
19case of any operator who ceases to engage in a kind of business
20which makes him responsible for filing returns under this Act,
21such operator shall file a final return under this Act with the
22Department not more than 1 month after discontinuing such
23business.
24    Where the same person has more than 1 business registered
25with the Department under separate registrations under this
26Act, such person shall not file each return that is due as a

 

 

HB4004- 303 -LRB100 11829 HLH 23189 b

1single return covering all such registered businesses, but
2shall file separate returns for each such registered business.
3    In his return, the operator shall determine the value of
4any consideration other than money received by him in
5connection with the renting, leasing or letting of rooms in the
6course of his business and he shall include such value in his
7return. Such determination shall be subject to review and
8revision by the Department in the manner hereinafter provided
9for the correction of returns.
10    Where the operator is a corporation, the return filed on
11behalf of such corporation shall be signed by the president,
12vice-president, secretary or treasurer or by the properly
13accredited agent of such corporation.
14    The person filing the return herein provided for shall, at
15the time of filing such return, pay to the Department the
16amount of tax herein imposed. The operator filing the return
17under this Section shall, at the time of filing such return,
18pay to the Department the amount of tax imposed by this Act
19less the vendor discount amount a discount of 2.1% or $25 per
20calendar year, whichever is greater, which is allowed to
21reimburse the operator for the expenses incurred in keeping
22records, preparing and filing returns, remitting the tax and
23supplying data to the Department on request. Prior to January
241, 2018, the vendor discount amount shall be 2.1% or $25 per
25calendar year, whichever is greater. On and after January 1,
262018, the vendor discount amount shall be the sum of (i) 1.75%

 

 

HB4004- 304 -LRB100 11829 HLH 23189 b

1of the first $1,000 collected during the calendar year and (ii)
21% of the amount of proceeds collected during the calendar year
3that exceeds $1,000; however, on and after January 1, 2018, in
4no event shall the discount allowed to any person be less than
5$25 in any calendar year or more than $1,500 in any calendar
6year.
7    There shall be deposited in the Build Illinois Fund in the
8State Treasury for each State fiscal year 40% of the amount of
9total net proceeds from the tax imposed by subsection (a) of
10Section 3. Of the remaining 60%, $5,000,000 shall be deposited
11in the Illinois Sports Facilities Fund and credited to the
12Subsidy Account each fiscal year by making monthly deposits in
13the amount of 1/8 of $5,000,000 plus cumulative deficiencies in
14such deposits for prior months, and an additional $8,000,000
15shall be deposited in the Illinois Sports Facilities Fund and
16credited to the Advance Account each fiscal year by making
17monthly deposits in the amount of 1/8 of $8,000,000 plus any
18cumulative deficiencies in such deposits for prior months;
19provided, that for fiscal years ending after June 30, 2001, the
20amount to be so deposited into the Illinois Sports Facilities
21Fund and credited to the Advance Account each fiscal year shall
22be increased from $8,000,000 to the then applicable Advance
23Amount and the required monthly deposits beginning with July
242001 shall be in the amount of 1/8 of the then applicable
25Advance Amount plus any cumulative deficiencies in those
26deposits for prior months. (The deposits of the additional

 

 

HB4004- 305 -LRB100 11829 HLH 23189 b

1$8,000,000 or the then applicable Advance Amount, as
2applicable, during each fiscal year shall be treated as
3advances of funds to the Illinois Sports Facilities Authority
4for its corporate purposes to the extent paid to the Authority
5or its trustee and shall be repaid into the General Revenue
6Fund in the State Treasury by the State Treasurer on behalf of
7the Authority pursuant to Section 19 of the Illinois Sports
8Facilities Authority Act, as amended. If in any fiscal year the
9full amount of the then applicable Advance Amount is not repaid
10into the General Revenue Fund, then the deficiency shall be
11paid from the amount in the Local Government Distributive Fund
12that would otherwise be allocated to the City of Chicago under
13the State Revenue Sharing Act.)
14    For purposes of the foregoing paragraph, the term "Advance
15Amount" means, for fiscal year 2002, $22,179,000, and for
16subsequent fiscal years through fiscal year 2032, 105.615% of
17the Advance Amount for the immediately preceding fiscal year,
18rounded up to the nearest $1,000.
19    Of the remaining 60% of the amount of total net proceeds
20prior to August 1, 2011 from the tax imposed by subsection (a)
21of Section 3 after all required deposits in the Illinois Sports
22Facilities Fund, the amount equal to 8% of the net revenue
23realized from this Act plus an amount equal to 8% of the net
24revenue realized from any tax imposed under Section 4.05 of the
25Chicago World's Fair-1992 Authority Act during the preceding
26month shall be deposited in the Local Tourism Fund each month

 

 

HB4004- 306 -LRB100 11829 HLH 23189 b

1for purposes authorized by Section 605-705 of the Department of
2Commerce and Economic Opportunity Law (20 ILCS 605/605-705). Of
3the remaining 60% of the amount of total net proceeds beginning
4on August 1, 2011 from the tax imposed by subsection (a) of
5Section 3 after all required deposits in the Illinois Sports
6Facilities Fund, an amount equal to 8% of the net revenue
7realized from this Act plus an amount equal to 8% of the net
8revenue realized from any tax imposed under Section 4.05 of the
9Chicago World's Fair-1992 Authority Act during the preceding
10month shall be deposited as follows: 18% of such amount shall
11be deposited into the Chicago Travel Industry Promotion Fund
12for the purposes described in subsection (n) of Section 5 of
13the Metropolitan Pier and Exposition Authority Act and the
14remaining 82% of such amount shall be deposited into the Local
15Tourism Fund each month for purposes authorized by Section
16605-705 of the Department of Commerce and Economic Opportunity
17Law. Beginning on August 1, 1999 and ending on July 31, 2011,
18an amount equal to 4.5% of the net revenue realized from the
19Hotel Operators' Occupation Tax Act during the preceding month
20shall be deposited into the International Tourism Fund for the
21purposes authorized in Section 605-707 of the Department of
22Commerce and Economic Opportunity Law. Beginning on August 1,
232011, an amount equal to 4.5% of the net revenue realized from
24this Act during the preceding month shall be deposited as
25follows: 55% of such amount shall be deposited into the Chicago
26Travel Industry Promotion Fund for the purposes described in

 

 

HB4004- 307 -LRB100 11829 HLH 23189 b

1subsection (n) of Section 5 of the Metropolitan Pier and
2Exposition Authority Act and the remaining 45% of such amount
3deposited into the International Tourism Fund for the purposes
4authorized in Section 605-707 of the Department of Commerce and
5Economic Opportunity Law. "Net revenue realized for a month"
6means the revenue collected by the State under that Act during
7the previous month less the amount paid out during that same
8month as refunds to taxpayers for overpayment of liability
9under that Act.
10    After making all these deposits, all other proceeds of the
11tax imposed under subsection (a) of Section 3 shall be
12deposited in the General Revenue Fund in the State Treasury.
13All moneys received by the Department from the additional tax
14imposed under subsection (b) of Section 3 shall be deposited
15into the Build Illinois Fund in the State Treasury.
16    The Department may, upon separate written notice to a
17taxpayer, require the taxpayer to prepare and file with the
18Department on a form prescribed by the Department within not
19less than 60 days after receipt of the notice an annual
20information return for the tax year specified in the notice.
21Such annual return to the Department shall include a statement
22of gross receipts as shown by the operator's last State income
23tax return. If the total receipts of the business as reported
24in the State income tax return do not agree with the gross
25receipts reported to the Department for the same period, the
26operator shall attach to his annual information return a

 

 

HB4004- 308 -LRB100 11829 HLH 23189 b

1schedule showing a reconciliation of the 2 amounts and the
2reasons for the difference. The operator's annual information
3return to the Department shall also disclose pay roll
4information of the operator's business during the year covered
5by such return and any additional reasonable information which
6the Department deems would be helpful in determining the
7accuracy of the monthly, quarterly or annual tax returns by
8such operator as hereinbefore provided for in this Section.
9    If the annual information return required by this Section
10is not filed when and as required the taxpayer shall be liable
11for a penalty in an amount determined in accordance with
12Section 3-4 of the Uniform Penalty and Interest Act until such
13return is filed as required, the penalty to be assessed and
14collected in the same manner as any other penalty provided for
15in this Act.
16    The chief executive officer, proprietor, owner or highest
17ranking manager shall sign the annual return to certify the
18accuracy of the information contained therein. Any person who
19willfully signs the annual return containing false or
20inaccurate information shall be guilty of perjury and punished
21accordingly. The annual return form prescribed by the
22Department shall include a warning that the person signing the
23return may be liable for perjury.
24    The foregoing portion of this Section concerning the filing
25of an annual information return shall not apply to an operator
26who is not required to file an income tax return with the

 

 

HB4004- 309 -LRB100 11829 HLH 23189 b

1United States Government.
2(Source: P.A. 97-617, eff. 10-26-11.)
 
3    Section 45. The Motor Fuel Tax Law is amended by changing
4Sections 2b, 6, and 6a as follows:
 
5    (35 ILCS 505/2b)  (from Ch. 120, par. 418b)
6    Sec. 2b. In addition to the tax collection and reporting
7responsibilities imposed elsewhere in this Act, a person who is
8required to pay the tax imposed by Section 2a of this Act shall
9pay the tax to the Department by return showing all fuel
10purchased, acquired or received and sold, distributed or used
11during the preceding calendar month including losses of fuel as
12the result of evaporation or shrinkage due to temperature
13variations, and such other reasonable information as the
14Department may require. Losses of fuel as the result of
15evaporation or shrinkage due to temperature variations may not
16exceed 1% of the total gallons in storage at the beginning of
17the month, plus the receipts of gallonage during the month,
18minus the gallonage remaining in storage at the end of the
19month. Any loss reported that is in excess of this amount shall
20be subject to the tax imposed by Section 2a of this Law. On and
21after July 1, 2001, for each 6-month period January through
22June, net losses of fuel (for each category of fuel that is
23required to be reported on a return) as the result of
24evaporation or shrinkage due to temperature variations may not

 

 

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1exceed 1% of the total gallons in storage at the beginning of
2each January, plus the receipts of gallonage each January
3through June, minus the gallonage remaining in storage at the
4end of each June. On and after July 1, 2001, for each 6-month
5period July through December, net losses of fuel (for each
6category of fuel that is required to be reported on a return)
7as the result of evaporation or shrinkage due to temperature
8variations may not exceed 1% of the total gallons in storage at
9the beginning of each July, plus the receipts of gallonage each
10July through December, minus the gallonage remaining in storage
11at the end of each December. Any net loss reported that is in
12excess of this amount shall be subject to the tax imposed by
13Section 2a of this Law. For purposes of this Section, "net
14loss" means the number of gallons gained through temperature
15variations minus the number of gallons lost through temperature
16variations or evaporation for each of the respective 6-month
17periods.
18    The return shall be prescribed by the Department and shall
19be filed between the 1st and 20th days of each calendar month.
20The Department may, in its discretion, combine the returns
21filed under this Section, Section 5, and Section 5a of this
22Act. The return must be accompanied by appropriate
23computer-generated magnetic media supporting schedule data in
24the format required by the Department, unless, as provided by
25rule, the Department grants an exception upon petition of a
26taxpayer. If the return is filed timely, the seller shall take

 

 

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1a discount of 2% through June 30, 2003 and 1.75% thereafter
2which is allowed to reimburse the seller for the expenses
3incurred in keeping records, preparing and filing returns,
4collecting and remitting the tax and supplying data to the
5Department on request. The discount, however, shall be
6applicable only to the amount of payment which accompanies a
7return that is filed timely in accordance with this Section.
8Prior to January 1, 2018, the vendor discount amount shall be
91.75%. On and after January 1, 2018, the vendor discount amount
10shall be the sum of (i) 1.75% of the first $1,000 collected
11during the calendar year and (ii) 1% of the amount of proceeds
12collected during the calendar year that exceeds $1,000;
13however, on and after January 1, 2018, in no event shall the
14discount allowed to any person be more than $1,500 in any
15calendar year.
16(Source: P.A. 92-30, eff. 7-1-01; 93-32, eff. 6-20-03.)
 
17    (35 ILCS 505/6)  (from Ch. 120, par. 422)
18    Sec. 6. Collection of tax; distributors. A distributor who
19sells or distributes any motor fuel, which he is required by
20Section 5 to report to the Department when filing a return,
21shall (except as hereinafter provided) collect at the time of
22such sale and distribution, the amount of tax imposed under
23this Act on all such motor fuel sold and distributed, and at
24the time of making a return, the distributor shall pay to the
25Department the amount so collected less a discount of 2%

 

 

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1through June 30, 2003 and 1.75% thereafter which is allowed to
2reimburse the distributor for the expenses incurred in keeping
3records, preparing and filing returns, collecting and
4remitting the tax and supplying data to the Department on
5request, and shall also pay to the Department an amount equal
6to the amount that would be collectible as a tax in the event
7of a sale thereof on all such motor fuel used by said
8distributor during the period covered by the return. Prior to
9July 1, 2003, the discount amount shall be 2%. From July 1,
102003 through December 31, 2017, the discount amount shall be
111.75%. On and after January 1, 2018, the discount amount shall
12be the sum of (i) 1.75% of the first $1,000 collected during
13the calendar year and (ii) 1% of the amount of proceeds
14collected during the calendar year that exceeds $1,000;
15however, on and after January 1, 2018, in no event shall the
16discount allowed to any distributor be more than $1,500 in any
17calendar year. However, no payment shall be made based upon
18dyed diesel fuel used by the distributor for non-highway
19purposes. The discount shall only be applicable to the amount
20of tax payment which accompanies a return which is filed timely
21in accordance with Section 5 of this Act. In each subsequent
22sale of motor fuel on which the amount of tax imposed under
23this Act has been collected as provided in this Section, the
24amount so collected shall be added to the selling price, so
25that the amount of tax is paid ultimately by the user of the
26motor fuel. However, no collection or payment shall be made in

 

 

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1the case of the sale or use of any motor fuel to the extent to
2which such sale or use of motor fuel may not, under the
3constitution and statutes of the United States, be made the
4subject of taxation by this State. A person whose license to
5act as a distributor of fuel has been revoked shall, at the
6time of making a return, also pay to the Department an amount
7equal to the amount that would be collectible as a tax in the
8event of a sale thereof on all motor fuel, which he is required
9by the second paragraph of Section 5 to report to the
10Department in making a return, and which he had on hand on the
11date on which the license was revoked, and with respect to
12which no tax had been previously paid under this Act.
13    A distributor may make tax free sales of motor fuel, with
14respect to which he is otherwise required to collect the tax,
15only as specified in the following items 1 through 7.
16        1. When the sale is made to a person holding a valid
17    unrevoked license as a distributor, by making a specific
18    notation thereof on invoices or sales slip covering each
19    sale.
20        2. When the sale is made with delivery to a purchaser
21    outside of this State.
22        3. When the sale is made to the Federal Government or
23    its instrumentalities.
24        4. When the sale is made to a municipal corporation
25    owning and operating a local transportation system for
26    public service in this State when an official certificate

 

 

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1    of exemption is obtained in lieu of the tax.
2        5. When the sale is made to a privately owned public
3    utility owning and operating 2 axle vehicles designed and
4    used for transporting more than 7 passengers, which
5    vehicles are used as common carriers in general
6    transportation of passengers, are not devoted to any
7    specialized purpose and are operated entirely within the
8    territorial limits of a single municipality or of any group
9    of contiguous municipalities, or in a close radius thereof,
10    and the operations of which are subject to the regulations
11    of the Illinois Commerce Commission, when an official
12    certificate of exemption is obtained in lieu of the tax.
13        6. When a sale of special fuel is made to a person
14    holding a valid, unrevoked license as a supplier, by making
15    a specific notation thereof on the invoice or sales slip
16    covering each such sale.
17        7. When a sale of dyed diesel fuel is made to someone
18    other than a licensed distributor or a licensed supplier
19    for non-highway purposes and the fuel is (i) delivered from
20    a vehicle designed for the specific purpose of such sales
21    and delivered directly into a stationary bulk storage tank
22    that displays the notice required by Section 4f of this
23    Act, (ii) delivered from a vehicle designed for the
24    specific purpose of such sales and delivered directly into
25    the fuel supply tanks of non-highway vehicles that are not
26    required to be registered for highway use, or (iii)

 

 

HB4004- 315 -LRB100 11829 HLH 23189 b

1    dispensed from a dyed diesel fuel dispensing facility that
2    has withdrawal facilities that are not readily accessible
3    to and are not capable of dispensing dyed diesel fuel into
4    the fuel supply tank of a motor vehicle.
5        A specific notation is required on the invoice or sales
6    slip covering such sales, and any supporting documentation
7    that may be required by the Department must be obtained by
8    the distributor. The distributor shall obtain and keep the
9    supporting documentation in such form as the Department may
10    require by rule.
11        For purposes of this item 7, a dyed diesel fuel
12    dispensing facility is considered to have withdrawal
13    facilities that are "not readily accessible to and not
14    capable of dispensing dyed diesel fuel into the fuel supply
15    tank of a motor vehicle" only if the dyed diesel fuel is
16    delivered from: (i) a dispenser hose that is short enough
17    so that it will not reach the fuel supply tank of a motor
18    vehicle or (ii) a dispenser that is enclosed by a fence or
19    other physical barrier so that a vehicle cannot pull
20    alongside the dispenser to permit fueling.
21        8. (Blank).
22    All special fuel sold or used for non-highway purposes must
23have a dye added in accordance with Section 4d of this Law.
24    All suits or other proceedings brought for the purpose of
25recovering any taxes, interest or penalties due the State of
26Illinois under this Act may be maintained in the name of the

 

 

HB4004- 316 -LRB100 11829 HLH 23189 b

1Department.
2(Source: P.A. 96-1384, eff. 7-29-10.)
 
3    (35 ILCS 505/6a)  (from Ch. 120, par. 422a)
4    Sec. 6a. Collection of tax; suppliers. A supplier, other
5than a licensed distributor, who sells or distributes any
6special fuel, which he is required by Section 5a to report to
7the Department when filing a return, shall (except as
8hereinafter provided) collect at the time of such sale and
9distribution, the amount of tax imposed under this Act on all
10such special fuel sold and distributed, and at the time of
11making a return, the supplier shall pay to the Department the
12amount so collected less a discount of 2% through June 30, 2003
13and 1.75% thereafter which is allowed to reimburse the supplier
14for the expenses incurred in keeping records, preparing and
15filing returns, collecting and remitting the tax and supplying
16data to the Department on request, and shall also pay to the
17Department an amount equal to the amount that would be
18collectible as a tax in the event of a sale thereof on all such
19special fuel used by said supplier during the period covered by
20the return. Prior to July 1, 2003, the discount amount shall be
212%. From July 1, 2003 through December 31, 2017, the discount
22amount shall be 1.75%. On and after January 1, 2018, the
23discount amount shall be the sum of (i) 1.75% of the first
24$1,000 collected during the calendar year and (ii) 1% of the
25amount of proceeds collected during the calendar year that

 

 

HB4004- 317 -LRB100 11829 HLH 23189 b

1exceeds $1,000; however, on and after January 1, 2018, in no
2event shall the discount allowed to any distributor be more
3than $1,500 in any calendar year. However, no payment shall be
4made based upon dyed diesel fuel used by said supplier for
5non-highway purposes. The discount shall only be applicable to
6the amount of tax payment which accompanies a return which is
7filed timely in accordance with Section 5(a) of this Act. In
8each subsequent sale of special fuel on which the amount of tax
9imposed under this Act has been collected as provided in this
10Section, the amount so collected shall be added to the selling
11price, so that the amount of tax is paid ultimately by the user
12of the special fuel. However, no collection or payment shall be
13made in the case of the sale or use of any special fuel to the
14extent to which such sale or use of motor fuel may not, under
15the Constitution and statutes of the United States, be made the
16subject of taxation by this State.
17    A person whose license to act as supplier of special fuel
18has been revoked shall, at the time of making a return, also
19pay to the Department an amount equal to the amount that would
20be collectible as a tax in the event of a sale thereof on all
21special fuel, which he is required by the 1st paragraph of
22Section 5a to report to the Department in making a return.
23    A supplier may make tax-free sales of special fuel, with
24respect to which he is otherwise required to collect the tax,
25only as specified in the following items 1 through 7.
26        1. When the sale is made to the federal government or

 

 

HB4004- 318 -LRB100 11829 HLH 23189 b

1    its instrumentalities.
2        2. When the sale is made to a municipal corporation
3    owning and operating a local transportation system for
4    public service in this State when an official certificate
5    of exemption is obtained in lieu of the tax.
6        3. When the sale is made to a privately owned public
7    utility owning and operating 2 axle vehicles designed and
8    used for transporting more than 7 passengers, which
9    vehicles are used as common carriers in general
10    transportation of passengers, are not devoted to any
11    specialized purpose and are operated entirely within the
12    territorial limits of a single municipality or of any group
13    of contiguous municipalities, or in a close radius thereof,
14    and the operations of which are subject to the regulations
15    of the Illinois Commerce Commission, when an official
16    certificate of exemption is obtained in lieu of the tax.
17        4. When a sale is made to a person holding a valid
18    unrevoked license as a supplier or a distributor by making
19    a specific notation thereof on invoice or sales slip
20    covering each such sale.
21        5. When a sale of dyed diesel fuel is made to someone
22    other than a licensed distributor or licensed supplier for
23    non-highway purposes and the fuel is (i) delivered from a
24    vehicle designed for the specific purpose of such sales and
25    delivered directly into a stationary bulk storage tank that
26    displays the notice required by Section 4f of this Act,

 

 

HB4004- 319 -LRB100 11829 HLH 23189 b

1    (ii) delivered from a vehicle designed for the specific
2    purpose of such sales and delivered directly into the fuel
3    supply tanks of non-highway vehicles that are not required
4    to be registered for highway use, or (iii) dispensed from a
5    dyed diesel fuel dispensing facility that has withdrawal
6    facilities that are not readily accessible to and are not
7    capable of dispensing dyed diesel fuel into the fuel supply
8    tank of a motor vehicle.
9        A specific notation is required on the invoice or sales
10    slip covering such sales, and any supporting documentation
11    that may be required by the Department must be obtained by
12    the supplier. The supplier shall obtain and keep the
13    supporting documentation in such form as the Department may
14    require by rule.
15        For purposes of this item 5, a dyed diesel fuel
16    dispensing facility is considered to have withdrawal
17    facilities that are "not readily accessible to and not
18    capable of dispensing dyed diesel fuel into the fuel supply
19    tank of a motor vehicle" only if the dyed diesel fuel is
20    delivered from: (i) a dispenser hose that is short enough
21    so that it will not reach the fuel supply tank of a motor
22    vehicle or (ii) a dispenser that is enclosed by a fence or
23    other physical barrier so that a vehicle cannot pull
24    alongside the dispenser to permit fueling.
25        6. (Blank).
26        7. When a sale of special fuel is made to a person

 

 

HB4004- 320 -LRB100 11829 HLH 23189 b

1    where delivery is made outside of this State.
2    All special fuel sold or used for non-highway purposes must
3have a dye added in accordance with Section 4d of this Law.
4    All suits or other proceedings brought for the purpose of
5recovering any taxes, interest or penalties due the State of
6Illinois under this Act may be maintained in the name of the
7Department.
8(Source: P.A. 96-1384, eff. 7-29-10.)
 
9    Section 50. The Telecommunications Excise Tax Act is
10amended by changing Section 6 as follows:
 
11    (35 ILCS 630/6)  (from Ch. 120, par. 2006)
12    Sec. 6. Except as provided hereinafter in this Section, on
13or before the last day of each month, each retailer maintaining
14a place of business in this State shall make a return to the
15Department for the preceding calendar month, stating:
16        1. His name;
17        2. The address of his principal place of business, or
18    the address of the principal place of business (if that is
19    a different address) from which he engages in the business
20    of transmitting telecommunications;
21        3. Total amount of gross charges billed by him during
22    the preceding calendar month for providing
23    telecommunications during such calendar month;
24        4. Total amount received by him during the preceding

 

 

HB4004- 321 -LRB100 11829 HLH 23189 b

1    calendar month on credit extended;
2        5. Deductions allowed by law;
3        6. Gross charges which were billed by him during the
4    preceding calendar month and upon the basis of which the
5    tax is imposed;
6        7. Amount of tax (computed upon Item 6);
7        8. Such other reasonable information as the Department
8    may require.
9    Any taxpayer required to make payments under this Section
10may make the payments by electronic funds transfer. The
11Department shall adopt rules necessary to effectuate a program
12of electronic funds transfer. Any taxpayer who has average
13monthly tax billings due to the Department under this Act and
14the Simplified Municipal Telecommunications Tax Act that
15exceed $1,000 shall make all payments by electronic funds
16transfer as required by rules of the Department and shall file
17the return required by this Section by electronic means as
18required by rules of the Department.
19    If the retailer's average monthly tax billings due to the
20Department under this Act and the Simplified Municipal
21Telecommunications Tax Act do not exceed $1,000, the Department
22may authorize his returns to be filed on a quarter annual
23basis, with the return for January, February and March of a
24given year being due by April 30 of such year; with the return
25for April, May and June of a given year being due by July 31st
26of such year; with the return for July, August and September of

 

 

HB4004- 322 -LRB100 11829 HLH 23189 b

1a given year being due by October 31st of such year; and with
2the return of October, November and December of a given year
3being due by January 31st of the following year.
4    If the retailer is otherwise required to file a monthly or
5quarterly return and if the retailer's average monthly tax
6billings due to the Department under this Act and the
7Simplified Municipal Telecommunications Tax Act do not exceed
8$400, the Department may authorize his or her return to be
9filed on an annual basis, with the return for a given year
10being due by January 31st of the following year.
11    Notwithstanding any other provision of this Article
12containing the time within which a retailer may file his
13return, in the case of any retailer who ceases to engage in a
14kind of business which makes him responsible for filing returns
15under this Article, such retailer shall file a final return
16under this Article with the Department not more than one month
17after discontinuing such business.
18    In making such return, the retailer shall determine the
19value of any consideration other than money received by him and
20he shall include such value in his return. Such determination
21shall be subject to review and revision by the Department in
22the manner hereinafter provided for the correction of returns.
23    Each retailer whose average monthly liability to the
24Department under this Article and the Simplified Municipal
25Telecommunications Tax Act was $25,000 or more during the
26preceding calendar year, excluding the month of highest

 

 

HB4004- 323 -LRB100 11829 HLH 23189 b

1liability and the month of lowest liability in such calendar
2year, and who is not operated by a unit of local government,
3shall make estimated payments to the Department on or before
4the 7th, 15th, 22nd and last day of the month during which tax
5collection liability to the Department is incurred in an amount
6not less than the lower of either 22.5% of the retailer's
7actual tax collections for the month or 25% of the retailer's
8actual tax collections for the same calendar month of the
9preceding year. The amount of such quarter monthly payments
10shall be credited against the final liability of the retailer's
11return for that month. Any outstanding credit, approved by the
12Department, arising from the retailer's overpayment of its
13final liability for any month may be applied to reduce the
14amount of any subsequent quarter monthly payment or credited
15against the final liability of the retailer's return for any
16subsequent month. If any quarter monthly payment is not paid at
17the time or in the amount required by this Section, the
18retailer shall be liable for penalty and interest on the
19difference between the minimum amount due as a payment and the
20amount of such payment actually and timely paid, except insofar
21as the retailer has previously made payments for that month to
22the Department in excess of the minimum payments previously
23due.
24    The retailer making the return herein provided for shall,
25at the time of making such return, pay to the Department the
26amount of tax herein imposed, less a discount of 1% which is

 

 

HB4004- 324 -LRB100 11829 HLH 23189 b

1allowed to reimburse the retailer for the expenses incurred in
2keeping records, billing the customer, preparing and filing
3returns, remitting the tax, and supplying data to the
4Department upon request. No discount may be claimed by a
5retailer on returns not timely filed and for taxes not timely
6remitted. On and after January 1, 2018, in no event shall the
7discount allowed to any retailer be more than $1,500 in any
8calendar year.
9    On and after the effective date of this Article of 1985, of
10the moneys received by the Department of Revenue pursuant to
11this Article, other than moneys received pursuant to the
12additional taxes imposed by Public Act 90-548:
13        (1) $1,000,000 shall be paid each month into the Common
14    School Fund;
15        (2) beginning on the first day of the first calendar
16    month to occur on or after the effective date of this
17    amendatory Act of the 98th General Assembly, an amount
18    equal to 1/12 of 5% of the cash receipts collected during
19    the preceding fiscal year by the Audit Bureau of the
20    Department from the tax under this Act and the Simplified
21    Municipal Telecommunications Tax Act shall be paid each
22    month into the Tax Compliance and Administration Fund;
23    those moneys shall be used, subject to appropriation, to
24    fund additional auditors and compliance personnel at the
25    Department of Revenue; and
26        (3) the remainder shall be deposited into the General

 

 

HB4004- 325 -LRB100 11829 HLH 23189 b

1    Revenue Fund.
2    On and after February 1, 1998, however, of the moneys
3received by the Department of Revenue pursuant to the
4additional taxes imposed by Public Act 90-548, one-half shall
5be deposited into the School Infrastructure Fund and one-half
6shall be deposited into the Common School Fund. On and after
7the effective date of this amendatory Act of the 91st General
8Assembly, if in any fiscal year the total of the moneys
9deposited into the School Infrastructure Fund under this Act is
10less than the total of the moneys deposited into that Fund from
11the additional taxes imposed by Public Act 90-548 during fiscal
12year 1999, then, as soon as possible after the close of the
13fiscal year, the Comptroller shall order transferred and the
14Treasurer shall transfer from the General Revenue Fund to the
15School Infrastructure Fund an amount equal to the difference
16between the fiscal year total deposits and the total amount
17deposited into the Fund in fiscal year 1999.
18(Source: P.A. 98-1098, eff. 8-26-14.)
 
19    Section 55. The Liquor Control Act of 1934 is amended by
20changing Section 8-2 as follows:
 
21    (235 ILCS 5/8-2)  (from Ch. 43, par. 159)
22    Sec. 8-2. It is the duty of each manufacturer with respect
23to alcoholic liquor produced or imported by such manufacturer,
24or purchased tax-free by such manufacturer from another

 

 

HB4004- 326 -LRB100 11829 HLH 23189 b

1manufacturer or importing distributor, and of each importing
2distributor as to alcoholic liquor purchased by such importing
3distributor from foreign importers or from anyone from any
4point in the United States outside of this State or purchased
5tax-free from another manufacturer or importing distributor,
6to pay the tax imposed by Section 8-1 to the Department of
7Revenue on or before the 15th day of the calendar month
8following the calendar month in which such alcoholic liquor is
9sold or used by such manufacturer or by such importing
10distributor other than in an authorized tax-free manner or to
11pay that tax electronically as provided in this Section.
12    Each manufacturer and each importing distributor shall
13make payment under one of the following methods: (1) on or
14before the 15th day of each calendar month, file in person or
15by United States first-class mail, postage pre-paid, with the
16Department of Revenue, on forms prescribed and furnished by the
17Department, a report in writing in such form as may be required
18by the Department in order to compute, and assure the accuracy
19of, the tax due on all taxable sales and uses of alcoholic
20liquor occurring during the preceding month. Payment of the tax
21in the amount disclosed by the report shall accompany the
22report or, (2) on or before the 15th day of each calendar
23month, electronically file with the Department of Revenue, on
24forms prescribed and furnished by the Department, an electronic
25report in such form as may be required by the Department in
26order to compute, and assure the accuracy of, the tax due on

 

 

HB4004- 327 -LRB100 11829 HLH 23189 b

1all taxable sales and uses of alcoholic liquor occurring during
2the preceding month. An electronic payment of the tax in the
3amount disclosed by the report shall accompany the report. A
4manufacturer or distributor who files an electronic report and
5electronically pays the tax imposed pursuant to Section 8-1 to
6the Department of Revenue on or before the 15th day of the
7calendar month following the calendar month in which such
8alcoholic liquor is sold or used by that manufacturer or
9importing distributor other than in an authorized tax-free
10manner shall pay to the Department the amount of the tax
11imposed pursuant to Section 8-1, less a discount which is
12allowed to reimburse the manufacturer or importing distributor
13for the expenses incurred in keeping and maintaining records,
14preparing and filing the electronic returns, remitting the tax,
15and supplying data to the Department upon request.
16    The discount shall be in an amount as follows:
17        (1) For original returns due on or after January 1,
18    2003 through September 30, 2003, the discount shall be
19    1.75% or $1,250 per return, whichever is less;
20        (2) For original returns due on or after October 1,
21    2003 through September 30, 2004, the discount shall be 2%
22    or $3,000 per return, whichever is less; and
23        (3) For original returns due on or after October 1,
24    2004 through December 31, 2017, the discount shall be 2% or
25    $2,000 per return, whichever is less; and .
26        (4) For original returns due on and after January 1,

 

 

HB4004- 328 -LRB100 11829 HLH 23189 b

1    2018, the sum of (i) 1.75% of the first $1,000 collected
2    during the calendar year and (ii) 1% of the amount of
3    proceeds collected during the calendar year that exceeds
4    $1,000; however, on and after January 1, 2018, in no event
5    shall the discount allowed to any manufacturer or
6    distributor be more than $1,500 in any calendar year.
7    The Department may, if it deems it necessary in order to
8insure the payment of the tax imposed by this Article, require
9returns to be made more frequently than and covering periods of
10less than a month. Such return shall contain such further
11information as the Department may reasonably require.
12    It shall be presumed that all alcoholic liquors acquired or
13made by any importing distributor or manufacturer have been
14sold or used by him in this State and are the basis for the tax
15imposed by this Article unless proven, to the satisfaction of
16the Department, that such alcoholic liquors are (1) still in
17the possession of such importing distributor or manufacturer,
18or (2) prior to the termination of possession have been lost by
19theft or through unintentional destruction, or (3) that such
20alcoholic liquors are otherwise exempt from taxation under this
21Act.
22    The Department may require any foreign importer to file
23monthly information returns, by the 15th day of the month
24following the month which any such return covers, if the
25Department determines this to be necessary to the proper
26performance of the Department's functions and duties under this

 

 

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1Act. Such return shall contain such information as the
2Department may reasonably require.
3    Every manufacturer and importing distributor shall also
4file, with the Department, a bond in an amount not less than
5$1,000 and not to exceed $100,000 on a form to be approved by,
6and with a surety or sureties satisfactory to, the Department.
7Such bond shall be conditioned upon the manufacturer or
8importing distributor paying to the Department all monies
9becoming due from such manufacturer or importing distributor
10under this Article. The Department shall fix the penalty of
11such bond in each case, taking into consideration the amount of
12alcoholic liquor expected to be sold and used by such
13manufacturer or importing distributor, and the penalty fixed by
14the Department shall be sufficient, in the Department's
15opinion, to protect the State of Illinois against failure to
16pay any amount due under this Article, but the amount of the
17penalty fixed by the Department shall not exceed twice the
18amount of tax liability of a monthly return, nor shall the
19amount of such penalty be less than $1,000. The Department
20shall notify the Commission of the Department's approval or
21disapproval of any such manufacturer's or importing
22distributor's bond, or of the termination or cancellation of
23any such bond, or of the Department's direction to a
24manufacturer or importing distributor that he must file
25additional bond in order to comply with this Section. The
26Commission shall not issue a license to any applicant for a

 

 

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1manufacturer's or importing distributor's license unless the
2Commission has received a notification from the Department
3showing that such applicant has filed a satisfactory bond with
4the Department hereunder and that such bond has been approved
5by the Department. Failure by any licensed manufacturer or
6importing distributor to keep a satisfactory bond in effect
7with the Department or to furnish additional bond to the
8Department, when required hereunder by the Department to do so,
9shall be grounds for the revocation or suspension of such
10manufacturer's or importing distributor's license by the
11Commission. If a manufacturer or importing distributor fails to
12pay any amount due under this Article, his bond with the
13Department shall be deemed forfeited, and the Department may
14institute a suit in its own name on such bond.
15    After notice and opportunity for a hearing the State
16Commission may revoke or suspend the license of any
17manufacturer or importing distributor who fails to comply with
18the provisions of this Section. Notice of such hearing and the
19time and place thereof shall be in writing and shall contain a
20statement of the charges against the licensee. Such notice may
21be given by United States registered or certified mail with
22return receipt requested, addressed to the person concerned at
23his last known address and shall be given not less than 7 days
24prior to the date fixed for the hearing. An order revoking or
25suspending a license under the provisions of this Section may
26be reviewed in the manner provided in Section 7-10 of this Act.

 

 

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1No new license shall be granted to a person whose license has
2been revoked for a violation of this Section or, in case of
3suspension, shall such suspension be terminated until he has
4paid to the Department all taxes and penalties which he owes
5the State under the provisions of this Act.
6    Every manufacturer or importing distributor who has, as
7verified by the Department, continuously complied with the
8conditions of the bond under this Act for a period of 2 years
9shall be considered to be a prior continuous compliance
10taxpayer. In determining the consecutive period of time for
11qualification as a prior continuous compliance taxpayer, any
12consecutive period of time of qualifying compliance
13immediately prior to the effective date of this amendatory Act
14of 1987 shall be credited to any manufacturer or importing
15distributor.
16    A manufacturer or importing distributor that is a prior
17continuous compliance taxpayer under this Section and becomes a
18successor as the result of an acquisition, merger, or
19consolidation of a manufacturer or importing distributor shall
20be deemed to be a prior continuous compliance taxpayer with
21respect to the acquired, merged, or consolidated entity.
22    Every prior continuous compliance taxpayer shall be exempt
23from the bond requirements of this Act until the Department has
24determined the taxpayer to be delinquent in the filing of any
25return or deficient in the payment of any tax under this Act.
26Any taxpayer who fails to pay an admitted or established

 

 

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1liability under this Act may also be required to post bond or
2other acceptable security with the Department guaranteeing the
3payment of such admitted or established liability.
4    The Department shall discharge any surety and shall release
5and return any bond or security deposit assigned, pledged or
6otherwise provided to it by a taxpayer under this Section
7within 30 days after: (1) such taxpayer becomes a prior
8continuous compliance taxpayer; or (2) such taxpayer has ceased
9to collect receipts on which he is required to remit tax to the
10Department, has filed a final tax return, and has paid to the
11Department an amount sufficient to discharge his remaining tax
12liability as determined by the Department under this Act.
13(Source: P.A. 95-769, eff. 7-29-08.)
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    35 ILCS 5/203from Ch. 120, par. 2-203
4    35 ILCS 5/304from Ch. 120, par. 3-304
5    35 ILCS 5/309 new
6    35 ILCS 5/1501from Ch. 120, par. 15-1501
7    35 ILCS 105/9from Ch. 120, par. 439.9
8    35 ILCS 110/9from Ch. 120, par. 439.39
9    35 ILCS 115/9from Ch. 120, par. 439.109
10    35 ILCS 120/3from Ch. 120, par. 442
11    35 ILCS 130/2from Ch. 120, par. 453.2
12    35 ILCS 135/3from Ch. 120, par. 453.33
13    35 ILCS 145/2from Ch. 120, par. 481b.32
14    35 ILCS 145/6from Ch. 120, par. 481b.36
15    35 ILCS 505/2bfrom Ch. 120, par. 418b
16    35 ILCS 505/6from Ch. 120, par. 422
17    35 ILCS 505/6afrom Ch. 120, par. 422a
18    35 ILCS 630/6from Ch. 120, par. 2006
19    235 ILCS 5/8-2from Ch. 43, par. 159