95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1558

 

Introduced 2/22/2007, by Rep. Mark H. Beaubien, Jr.

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/404   from Ch. 120, par. 4-404

    Amends the Illinois Income Tax Act. In a Section authorizing the Director of Revenue to make certain adjustments to base income if it appears to the Director that any agreement, understanding, or arrangement exists between any persons that causes any person's base income allocable to this State to be improperly or inaccurately reflected, provides that the Director may not make these adjustment before the Department of Revenue adopts rules concerning the adjustments. Provides that, unless the principle purpose of the agreement, understanding, or arrangement is for the avoidance of federal or Illinois income tax, any adjustment made by the Director and the rules required to be adopted must be in accordance with certain provisions of the Internal Revenue Code. Deletes a provision authorizing the Director to adjust factors taken into account in allocating income. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1558 LRB095 09507 BDD 31819 b

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 Section 404 as follows:
 
6     (35 ILCS 5/404)  (from Ch. 120, par. 4-404)
7     Sec. 404. Reallocation of Items.
8     (a) If it appears to the Director that any agreement,
9 understanding or arrangement exists between any persons which
10 causes any person's base income allocable to this State to be
11 improperly or inaccurately reflected, the Director may adjust
12 such items of income and deduction, and any factor taken into
13 account in allocating income to this State, to such extent as
14 may reasonably be required to determine the base income of such
15 person properly allocable to this State.
16     (b) The Director may not make any adjustment under
17 subsection (a) before the Department adopts rules setting forth
18 the methods and standards by which the Director may exercise
19 authority under this Section. The rules must set forth the
20 types of agreements, understandings, and arrangements that the
21 Director will consider to cause a person's base income
22 allocable to this State to be improperly or inaccurately
23 reflected.

 

 

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1     (c) Unless the principle purpose of the agreement,
2 understanding, or arrangement is for the avoidance of federal
3 or Illinois income tax, any adjustment made under this Section
4 and the rules required to be adopted under subsection (b) must
5 be in accordance with Section 482 of the Internal Revenue Code,
6 as amended, and the related Treasury Regulations.
7 (Source: P.A. 76-261.)
 
8     Section 99. Effective date. This Act takes effect upon
9 becoming law.