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1     AN ACT concerning revenue.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Income Tax Act is amended by
5 changing Sections 304 and 601 as follows:
 
6     (35 ILCS 5/304)  (from Ch. 120, par. 3-304)
7     Sec. 304. Business income of persons other than residents.
8     (a) In general. The business income of a person other than
9 a resident shall be allocated to this State if such person's
10 business income is derived solely from this State. If a person
11 other than a resident derives business income from this State
12 and one or more other states, then, for tax years ending on or
13 before December 30, 1998, and except as otherwise provided by
14 this Section, such person's business income shall be
15 apportioned to this State by multiplying the income by a
16 fraction, the numerator of which is the sum of the property
17 factor (if any), the payroll factor (if any) and 200% of the
18 sales factor (if any), and the denominator of which is 4
19 reduced by the number of factors other than the sales factor
20 which have a denominator of zero and by an additional 2 if the
21 sales factor has a denominator of zero. For tax years ending on
22 or after December 31, 1998, and except as otherwise provided by
23 this Section, persons other than residents who derive business
24 income from this State and one or more other states shall
25 compute their apportionment factor by weighting their
26 property, payroll, and sales factors as provided in subsection
27 (h) of this Section.
28     (1) Property factor.
29         (A) The property factor is a fraction, the numerator of
30     which is the average value of the person's real and
31     tangible personal property owned or rented and used in the
32     trade or business in this State during the taxable year and

 

 

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1     the denominator of which is the average value of all the
2     person's real and tangible personal property owned or
3     rented and used in the trade or business during the taxable
4     year.
5         (B) Property owned by the person is valued at its
6     original cost. Property rented by the person is valued at 8
7     times the net annual rental rate. Net annual rental rate is
8     the annual rental rate paid by the person less any annual
9     rental rate received by the person from sub-rentals.
10         (C) The average value of property shall be determined
11     by averaging the values at the beginning and ending of the
12     taxable year but the Director may require the averaging of
13     monthly values during the taxable year if reasonably
14     required to reflect properly the average value of the
15     person's property.
16     (2) Payroll factor.
17         (A) The payroll factor is a fraction, the numerator of
18     which is the total amount paid in this State during the
19     taxable year by the person for compensation, and the
20     denominator of which is the total compensation paid
21     everywhere during the taxable year.
22         (B) Compensation is paid in this State if:
23             (i) The individual's service is performed entirely
24         within this State;
25             (ii) The individual's service is performed both
26         within and without this State, but the service
27         performed without this State is incidental to the
28         individual's service performed within this State; or
29             (iii) Some of the service is performed within this
30         State and either the base of operations, or if there is
31         no base of operations, the place from which the service
32         is directed or controlled is within this State, or the
33         base of operations or the place from which the service
34         is directed or controlled is not in any state in which
35         some part of the service is performed, but the
36         individual's residence is in this State.

 

 

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

 

 

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

 

 

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1                 person was with each team.
2                     (D) Days for which a member of a
3                 professional athletic team is not compensated
4                 and is not performing services for the team in
5                 any manner, including days when such member of
6                 a professional athletic team has been
7                 suspended without pay and prohibited from
8                 performing any services for the team, shall not
9                 be treated as duty days.
10                     (E) Days for which a member of a
11                 professional athletic team is on the disabled
12                 list and does not conduct rehabilitation
13                 activities at facilities of the team, and is
14                 not otherwise performing services for the team
15                 in Illinois, shall not be considered duty days
16                 spent in this State. All days on the disabled
17                 list, however, are considered to be included in
18                 total duty days spent both within and without
19                 this State.
20                 (4) The term "total compensation for services
21             performed as a member of a professional athletic
22             team" means the total compensation received during
23             the taxable year for services performed:
24                     (A) from the beginning of the official
25                 pre-season training period through the last
26                 game in which the team competes or is scheduled
27                 to compete during that taxable year; and
28                     (B) during the taxable year on a date which
29                 does not fall within the foregoing period
30                 (e.g., participation in instructional leagues,
31                 the "All Star Game", or promotional caravans).
32                 This compensation shall include, but is not
33             limited to, salaries, wages, bonuses as described
34             in this subpart, and any other type of compensation
35             paid during the taxable year to a member of a
36             professional athletic team for services performed

 

 

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1             in that year. This compensation does not include
2             strike benefits, severance pay, termination pay,
3             contract or option year buy-out payments,
4             expansion or relocation payments, or any other
5             payments not related to services performed for the
6             team.
7                 For purposes of this subparagraph, "bonuses"
8             included in "total compensation for services
9             performed as a member of a professional athletic
10             team" subject to the allocation described in
11             Section 302(c)(1) are: bonuses earned as a result
12             of play (i.e., performance bonuses) during the
13             season, including bonuses paid for championship,
14             playoff or "bowl" games played by a team, or for
15             selection to all-star league or other honorary
16             positions; and bonuses paid for signing a
17             contract, unless the payment of the signing bonus
18             is not conditional upon the signee playing any
19             games for the team or performing any subsequent
20             services for the team or even making the team, the
21             signing bonus is payable separately from the
22             salary and any other compensation, and the signing
23             bonus is nonrefundable.
24         Beginning with taxable years ending on or after
25     December 31, 1992, for residents of states that impose a
26     comparable tax liability on residents of this State, for
27     purposes of item (i) of this paragraph (B), in the case of
28     persons who perform personal services under personal
29     service contracts for sports performances, services by
30     that person at a sporting event taking place in Illinois
31     shall be deemed to be a performance entirely within this
32     State.
33     (3) Sales factor.
34         (A) The sales factor is a fraction, the numerator of
35     which is the total sales of the person in this State during
36     the taxable year, and the denominator of which is the total

 

 

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

 

 

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1             is produced in the state. If a patent is utilized
2             in more than one state, the extent to which it is
3             utilized in any one state shall be a fraction equal
4             to the gross receipts of the licensee or purchaser
5             from sales or leases of items produced,
6             fabricated, manufactured, or processed within that
7             state using the patent and of patented items
8             produced within that state, divided by the total of
9             such gross receipts for all states in which the
10             patent is utilized.
11                 (II) A copyright is utilized in a state to the
12             extent that printing or other publication
13             originates in the state. If a copyright is utilized
14             in more than one state, the extent to which it is
15             utilized in any one state shall be a fraction equal
16             to the gross receipts from sales or licenses of
17             materials printed or published in that state
18             divided by the total of such gross receipts for all
19             states in which the copyright is utilized.
20                 (III) Trademarks and other items of intangible
21             personal property governed by this paragraph (B-1)
22             are utilized in the state in which the commercial
23             domicile of the licensee or purchaser is located.
24             (iii) If the state of utilization of an item of
25         property governed by this paragraph (B-1) cannot be
26         determined from the taxpayer's books and records or
27         from the books and records of any person related to the
28         taxpayer within the meaning of Section 267(b) of the
29         Internal Revenue Code, 26 U.S.C. 267, the gross
30         receipts attributable to that item shall be excluded
31         from both the numerator and the denominator of the
32         sales factor.
33         (B-2) Gross receipts from the license, sale, or other
34     disposition of patents, copyrights, trademarks, and
35     similar items of intangible personal property may be
36     included in the numerator or denominator of the sales

 

 

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1     factor only if gross receipts from licenses, sales, or
2     other disposition of such items comprise more than 50% of
3     the taxpayer's total gross receipts included in gross
4     income during the tax year and during each of the 2
5     immediately preceding tax years; provided that, when a
6     taxpayer is a member of a unitary business group, such
7     determination shall be made on the basis of the gross
8     receipts of the entire unitary business group.
9         (C) Sales, other than sales governed by paragraphs (B)
10     and (B-1), are in this State if:
11             (i) The income-producing activity is performed in
12         this State; or
13             (ii) The income-producing activity is performed
14         both within and without this State and a greater
15         proportion of the income-producing activity is
16         performed within this State than without this State,
17         based on performance costs.
18         (D) For taxable years ending on or after December 31,
19     1995, the following items of income shall not be included
20     in the numerator or denominator of the sales factor:
21     dividends; amounts included under Section 78 of the
22     Internal Revenue Code; and Subpart F income as defined in
23     Section 952 of the Internal Revenue Code. No inference
24     shall be drawn from the enactment of this paragraph (D) in
25     construing this Section for taxable years ending before
26     December 31, 1995.
27         (E) Paragraphs (B-1) and (B-2) shall apply to tax years
28     ending on or after December 31, 1999, provided that a
29     taxpayer may elect to apply the provisions of these
30     paragraphs to prior tax years. Such election shall be made
31     in the form and manner prescribed by the Department, shall
32     be irrevocable, and shall apply to all tax years; provided
33     that, if a taxpayer's Illinois income tax liability for any
34     tax year, as assessed under Section 903 prior to January 1,
35     1999, was computed in a manner contrary to the provisions
36     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
27     company shall be apportioned to this State by multiplying
28     such income by a fraction, the numerator of which is the
29     sum of (i) direct premiums written for insurance upon
30     property or risk in this State, plus (ii) premiums written
31     for reinsurance accepted in respect of property or risk in
32     this State, and the denominator of which is the sum of
33     (iii) direct premiums written for insurance upon property
34     or risk everywhere, plus (iv) premiums written for
35     reinsurance accepted in respect of property or risk
36     everywhere. For purposes of this paragraph, premiums

 

 

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1     written for reinsurance accepted in respect of property or
2     risk in this State, whether or not otherwise determinable,
3     may, at the election of the company, be determined on the
4     basis of the proportion which premiums written for
5     reinsurance accepted from companies commercially domiciled
6     in Illinois bears to premiums written for reinsurance
7     accepted from all sources, or, alternatively, in the
8     proportion which the sum of the direct premiums written for
9     insurance upon property or risk in this State by each
10     ceding company from which reinsurance is accepted bears to
11     the sum of the total direct premiums written by each such
12     ceding company for the taxable year.
13     (c) Financial organizations.
14         (1) In general. Business income of a financial
15     organization shall be apportioned to this State by
16     multiplying such income by a fraction, the numerator of
17     which is its business income from sources within this
18     State, and the denominator of which is its business income
19     from all sources. For the purposes of this subsection, the
20     business income of a financial organization from sources
21     within this State is the sum of the amounts referred to in
22     subparagraphs (A) through (E) following, but excluding the
23     adjusted income of an international banking facility as
24     determined in paragraph (2):
25             (A) Fees, commissions or other compensation for
26         financial services rendered within this State;
27             (B) Gross profits from trading in stocks, bonds or
28         other securities managed within this State;
29             (C) Dividends, and interest from Illinois
30         customers, which are received within this State;
31             (D) Interest charged to customers at places of
32         business maintained within this State for carrying
33         debit balances of margin accounts, without deduction
34         of any costs incurred in carrying such accounts; and
35             (E) Any other gross income resulting from the
36         operation as a financial organization within this

 

 

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1         State. In computing the amounts referred to in
2         paragraphs (A) through (E) of this subsection, any
3         amount received by a member of an affiliated group
4         (determined under Section 1504(a) of the Internal
5         Revenue Code but without reference to whether any such
6         corporation is an "includible corporation" under
7         Section 1504(b) of the Internal Revenue Code) from
8         another member of such group shall be included only to
9         the extent such amount exceeds expenses of the
10         recipient directly related thereto.
11         (2) International Banking Facility.
12             (A) Adjusted Income. The adjusted income of an
13         international banking facility is its income reduced
14         by the amount of the floor amount.
15             (B) Floor Amount. The floor amount shall be the
16         amount, if any, determined by multiplying the income of
17         the international banking facility by a fraction, not
18         greater than one, which is determined as follows:
19                 (i) The numerator shall be:
20                 The average aggregate, determined on a
21             quarterly basis, of the financial organization's
22             loans to banks in foreign countries, to foreign
23             domiciled borrowers (except where secured
24             primarily by real estate) and to foreign
25             governments and other foreign official
26             institutions, as reported for its branches,
27             agencies and offices within the state on its
28             "Consolidated Report of Condition", Schedule A,
29             Lines 2.c., 5.b., and 7.a., which was filed with
30             the Federal Deposit Insurance Corporation and
31             other regulatory authorities, for the year 1980,
32             minus
33                 The average aggregate, determined on a
34             quarterly basis, of such loans (other than loans of
35             an international banking facility), as reported by
36             the financial institution for its branches,

 

 

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1             agencies and offices within the state, on the
2             corresponding Schedule and lines of the
3             Consolidated Report of Condition for the current
4             taxable year, provided, however, that in no case
5             shall the amount determined in this clause (the
6             subtrahend) exceed the amount determined in the
7             preceding clause (the minuend); and
8                 (ii) the denominator shall be the average
9             aggregate, determined on a quarterly basis, of the
10             international banking facility's loans to banks in
11             foreign countries, to foreign domiciled borrowers
12             (except where secured primarily by real estate)
13             and to foreign governments and other foreign
14             official institutions, which were recorded in its
15             financial accounts for the current taxable year.
16             (C) Change to Consolidated Report of Condition and
17         in Qualification. In the event the Consolidated Report
18         of Condition which is filed with the Federal Deposit
19         Insurance Corporation and other regulatory authorities
20         is altered so that the information required for
21         determining the floor amount is not found on Schedule
22         A, lines 2.c., 5.b. and 7.a., the financial institution
23         shall notify the Department and the Department may, by
24         regulations or otherwise, prescribe or authorize the
25         use of an alternative source for such information. The
26         financial institution shall also notify the Department
27         should its international banking facility fail to
28         qualify as such, in whole or in part, or should there
29         be any amendment or change to the Consolidated Report
30         of Condition, as originally filed, to the extent such
31         amendment or change alters the information used in
32         determining the floor amount.
33     (d) Transportation services. Business income derived from
34 furnishing transportation services shall be apportioned to
35 this State in accordance with paragraphs (1) and (2):
36         (1) Such business income (other than that derived from

 

 

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

 

 

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

 

 

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

 

 

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1     estimated tax paid by a taxpayer pursuant to Article 8 for
2     a taxable year shall be deemed to have been paid on account
3     of the tax imposed by this Act for such taxable year.
4         (3) Foreign tax. The aggregate amount of tax which is
5     imposed upon or measured by income and which is paid by a
6     resident for a taxable year to another state or states on
7     income which is also subject to the tax imposed by
8     subsections 201(a) and (b) of this Act shall be credited
9     against the tax imposed by subsections 201(a) and (b)
10     otherwise due under this Act for such taxable year. The
11     aggregate credit provided under this paragraph shall not
12     exceed that amount which bears the same ratio to the tax
13     imposed by subsections 201(a) and (b) otherwise due under
14     this Act as the amount of the taxpayer's base income
15     subject to tax both by such other state or states and by
16     this State bears to his total base income subject to tax by
17     this State for the taxable year. For purposes of this
18     subsection, no compensation received by a resident which
19     qualifies as compensation paid in this State as determined
20     under Section 304(a)(2)(B) shall be considered income
21     subject to tax by another state or states. The credit
22     provided by this paragraph shall not be allowed if any
23     creditable tax was deducted in determining base income for
24     the taxable year. Any person claiming such credit shall
25     attach a statement in support thereof and shall notify the
26     Director of any refund or reductions in the amount of tax
27     claimed as a credit hereunder all in such manner and at
28     such time as the Department shall by regulations prescribe.
29         (4) Accumulation and capital gain distributions. If
30     the net income of a taxpayer includes amounts included in
31     his base income by reason of Section 668 or 669 of the
32     Internal Revenue Code (relating to accumulation and
33     capital gain distributions by a trust, respectively), the
34     tax imposed on such taxpayer by this Act shall be credited
35     with his pro rata portion of the taxes imposed by this Act
36     on such trust for preceding taxable years which would not

 

 

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