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Rep. David McSweeney
Filed: 3/23/2016
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1 | | AMENDMENT TO HOUSE BILL 4381
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2 | | AMENDMENT NO. ______. Amend House Bill 4381 by replacing |
3 | | everything after the enacting clause with the following:
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4 | | "Section 5. The Illinois Income Tax Act is amended by |
5 | | changing Sections 202, 304, and 1501 and by adding Section |
6 | | 204.5 as follows:
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7 | | (35 ILCS 5/202) (from Ch. 120, par. 2-202)
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8 | | Sec. 202. Net Income Defined. In general. For purposes of |
9 | | this Act,
a taxpayer's net income for
a taxable year shall be |
10 | | that portion of his base income for such year which
is |
11 | | allocable to this State under the provisions of Article 3, less |
12 | | the
standard exemption allowed by Section 204 , the Illinois |
13 | | manufacturing deduction allowed by Section 204.5, and the |
14 | | deduction allowed by Section
207.
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15 | | (Source: P.A. 92-846, eff. 8-23-02.)
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1 | | (35 ILCS 5/204.5 new) |
2 | | Sec. 204.5. Illinois manufacturing deduction. |
3 | | (a) Allowance of deduction. For taxable years ending on and |
4 | | after December 31, 2016, in computing net income under this |
5 | | Act, there shall be allowed the Illinois manufacturing |
6 | | deduction in an amount equal to the taxpayer's net income from |
7 | | manufacturing multiplied by a fraction, the numerator of which |
8 | | is the sum of the manufacturing property factor (if any) and |
9 | | the manufacturing payroll factor (if any), and the denominator |
10 | | of which is 2 reduced by the number of factors which have a |
11 | | denominator of zero. For taxable years ending on or after |
12 | | December 31, 2016 and ending prior to December 31, 2018, the |
13 | | amount of the Illinois manufacturing deduction shall be |
14 | | modified as provided in subsection (b). |
15 | | (b) Notwithstanding any other provision of law: (i) for |
16 | | taxable years ending on or after December 31, 2016 and ending |
17 | | prior to December 31, 2017, the amount of the Illinois |
18 | | manufacturing deduction shall be one-third of the amount |
19 | | calculated under subsection (a); (ii) for taxable years ending |
20 | | on or after December 31, 2017 and ending prior to December 31, |
21 | | 2018, the amount of the Illinois manufacturing deduction shall |
22 | | be two-thirds of the amount calculated under subsection (a); |
23 | | and (iii) for taxable years ending on or after December 31, |
24 | | 2018, the Illinois manufacturing deduction shall be the amount |
25 | | calculated under subsection (a). |
26 | | (c) As used in this Section: |
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1 | | "Manufacturing" and "tangible personal property" have the |
2 | | same meanings as provided in paragraph (3) of subsection (e) of |
3 | | Section 201. |
4 | | "Manufacturing property factor" means a fraction, the |
5 | | numerator of which is the average value of the taxpayer's real |
6 | | and tangible personal property owned or rented and used by the |
7 | | taxpayer in manufacturing in this State, and the denominator of |
8 | | which is the average value of all of the taxpayer's real and |
9 | | tangible personal property owned or rented and used by the |
10 | | taxpayer in manufacturing. For purposes of this paragraph, the |
11 | | average value of the taxpayer's property shall be determined by |
12 | | applying the provisions of subparagraphs (B) and (C) of |
13 | | paragraph (1) of subsection (a) of Section 304 of this Act. |
14 | | "Manufacturing payroll factor" means a fraction, the |
15 | | numerator of which is the total amount paid by the taxpayer in |
16 | | this State as compensation that is a direct cost of |
17 | | manufacturing, and the denominator of which is the total |
18 | | compensation paid by the taxpayer everywhere that is a direct |
19 | | cost of manufacturing. |
20 | | "Net income from manufacturing" means the taxpayer's net |
21 | | income for the taxable year (computed without regard to the |
22 | | exemption under Section 204 or the deduction under Section |
23 | | 207), multiplied by a fraction, the numerator of which is the |
24 | | total sales of tangible personal property manufactured by the |
25 | | taxpayer, and the denominator of which is the total sales of |
26 | | the taxpayer for the taxable year. |
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1 | | (d) Unitary business groups. In the case of a taxpayer that |
2 | | is a member of a unitary business group (as defined in |
3 | | paragraph (27) of subsection (a) of Section 1501), consistent |
4 | | with rules adopted by the Department, the deduction under this |
5 | | Section shall be computed in a manner consistent with the |
6 | | combined apportionment method required under subsection (e) of |
7 | | Section 304. |
8 | | (e) Multiple trades or businesses. The Department shall |
9 | | adopt rules consistent with the provisions of this Section to |
10 | | determine the deduction in the case of a taxpayer that operates |
11 | | more than one separate and distinct trade or business. |
12 | | (f) Sunset exemption. This Section is exempt from the |
13 | | provisions of Section 250.
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14 | | (35 ILCS 5/304) (from Ch. 120, par. 3-304)
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15 | | Sec. 304. Business income of persons other than residents.
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16 | | (a) In general. The business income of a person other than |
17 | | a
resident shall be allocated to this State if such person's |
18 | | business
income is derived solely from this State. If a person |
19 | | other than a
resident derives business income from this State |
20 | | and one or more other
states, then, for tax years ending on or |
21 | | before December 30, 1998, and
except as otherwise provided by |
22 | | this Section, such
person's business income shall be |
23 | | apportioned to this State by
multiplying the income by a |
24 | | fraction, the numerator of which is the sum
of the property |
25 | | factor (if any), the payroll factor (if any) and 200% of the
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1 | | sales factor (if any), and the denominator of which is 4 |
2 | | reduced by the
number of factors other than the sales factor |
3 | | which have a denominator
of zero and by an additional 2 if the |
4 | | sales factor has a denominator of zero.
For tax years ending on |
5 | | or after December 31, 1998, and except as otherwise
provided by |
6 | | this Section, persons other than
residents who derive business |
7 | | income from this State and one or more other
states shall |
8 | | compute their apportionment factor by weighting their |
9 | | property,
payroll, and sales factors as provided in
subsection |
10 | | (h) of this Section.
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11 | | (1) Property factor.
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12 | | (A) The property factor is a fraction, the numerator of |
13 | | which is the
average value of the person's real and |
14 | | tangible personal property owned
or rented and used in the |
15 | | trade or business in this State during the
taxable year and |
16 | | the denominator of which is the average value of all
the |
17 | | person's real and tangible personal property owned or |
18 | | rented and
used in the trade or business during the taxable |
19 | | year.
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20 | | (B) Property owned by the person is valued at its |
21 | | original cost.
Property rented by the person is valued at 8 |
22 | | times the net annual rental
rate. Net annual rental rate is |
23 | | the annual rental rate paid by the
person less any annual |
24 | | rental rate received by the person from
sub-rentals.
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25 | | (C) The average value of property shall be determined |
26 | | by averaging
the values at the beginning and ending of the |
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1 | | taxable year but the
Director may require the averaging of |
2 | | monthly values during the taxable
year if reasonably |
3 | | required to reflect properly the average value of the
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4 | | person's property.
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5 | | (2) Payroll factor.
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6 | | (A) The payroll factor is a fraction, the numerator of |
7 | | which is the
total amount paid in this State during the |
8 | | taxable year by the person
for compensation, and the |
9 | | denominator of which is the total compensation
paid |
10 | | everywhere during the taxable year.
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11 | | (B) Compensation is paid in this State if:
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12 | | (i) The individual's service is performed entirely |
13 | | within this
State;
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14 | | (ii) The individual's service is performed both |
15 | | within and without
this State, but the service |
16 | | performed without this State is incidental
to the |
17 | | individual's service performed within this State; or
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18 | | (iii) Some of the service is performed within this |
19 | | State and either
the base of operations, or if there is |
20 | | no base of operations, the place
from which the service |
21 | | is directed or controlled is within this State,
or the |
22 | | base of operations or the place from which the service |
23 | | is
directed or controlled is not in any state in which |
24 | | some part of the
service is performed, but the |
25 | | individual's residence is in this State.
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26 | | (iv) Compensation paid to nonresident professional |
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1 | | athletes. |
2 | | (a) General. The Illinois source income of a |
3 | | nonresident individual who is a member of a |
4 | | professional athletic team includes the portion of the |
5 | | individual's total compensation for services performed |
6 | | as a member of a professional athletic team during the |
7 | | taxable year which the number of duty days spent within |
8 | | this State performing services for the team in any |
9 | | manner during the taxable year bears to the total |
10 | | number of duty days spent both within and without this |
11 | | State during the taxable year. |
12 | | (b) Travel days. Travel days that do not involve |
13 | | either a game, practice, team meeting, or other similar |
14 | | team event are not considered duty days spent in this |
15 | | State. However, such travel days are considered in the |
16 | | total duty days spent both within and without this |
17 | | State. |
18 | | (c) Definitions. For purposes of this subpart |
19 | | (iv): |
20 | | (1) The term "professional athletic team" |
21 | | includes, but is not limited to, any professional |
22 | | baseball, basketball, football, soccer, or hockey |
23 | | team. |
24 | | (2) The term "member of a professional |
25 | | athletic team" includes those employees who are |
26 | | active players, players on the disabled list, and |
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1 | | any other persons required to travel and who travel |
2 | | with and perform services on behalf of a |
3 | | professional athletic team on a regular basis. |
4 | | This includes, but is not limited to, coaches, |
5 | | managers, and trainers. |
6 | | (3) Except as provided in items (C) and (D) of |
7 | | this subpart (3), the term "duty days" means all |
8 | | days during the taxable year from the beginning of |
9 | | the professional athletic team's official |
10 | | pre-season training period through the last game |
11 | | in which the team competes or is scheduled to |
12 | | compete. Duty days shall be counted for the year in |
13 | | which they occur, including where a team's |
14 | | official pre-season training period through the |
15 | | last game in which the team competes or is |
16 | | scheduled to compete, occurs during more than one |
17 | | tax year. |
18 | | (A) Duty days shall also include days on |
19 | | which a member of a professional athletic team |
20 | | performs service for a team on a date that does |
21 | | not fall within the foregoing period (e.g., |
22 | | participation in instructional leagues, the |
23 | | "All Star Game", or promotional "caravans"). |
24 | | Performing a service for a professional |
25 | | athletic team includes conducting training and |
26 | | rehabilitation activities, when such |
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1 | | activities are conducted at team facilities. |
2 | | (B) Also included in duty days are game |
3 | | days, practice days, days spent at team |
4 | | meetings, promotional caravans, preseason |
5 | | training camps, and days served with the team |
6 | | through all post-season games in which the team |
7 | | competes or is scheduled to compete. |
8 | | (C) Duty days for any person who joins a |
9 | | team during the period from the beginning of |
10 | | the professional athletic team's official |
11 | | pre-season training period through the last |
12 | | game in which the team competes, or is |
13 | | scheduled to compete, shall begin on the day |
14 | | that person joins the team. Conversely, duty |
15 | | days for any person who leaves a team during |
16 | | this period shall end on the day that person |
17 | | leaves the team. Where a person switches teams |
18 | | during a taxable year, a separate duty-day |
19 | | calculation shall be made for the period the |
20 | | person was with each team. |
21 | | (D) Days for which a member of a |
22 | | professional athletic team is not compensated |
23 | | and is not performing services for the team in |
24 | | any manner, including days when such member of |
25 | | a professional athletic team has been |
26 | | suspended without pay and prohibited from |
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1 | | performing any services for the team, shall not |
2 | | be treated as duty days. |
3 | | (E) Days for which a member of a |
4 | | professional athletic team is on the disabled |
5 | | list and does not conduct rehabilitation |
6 | | activities at facilities of the team, and is |
7 | | not otherwise performing services for the team |
8 | | in Illinois, shall not be considered duty days |
9 | | spent in this State. All days on the disabled |
10 | | list, however, are considered to be included in |
11 | | total duty days spent both within and without |
12 | | this State. |
13 | | (4) The term "total compensation for services |
14 | | performed as a member of a professional athletic |
15 | | team" means the total compensation received during |
16 | | the taxable year for services performed: |
17 | | (A) from the beginning of the official |
18 | | pre-season training period through the last |
19 | | game in which the team competes or is scheduled |
20 | | to compete during that taxable year; and |
21 | | (B) during the taxable year on a date which |
22 | | does not fall within the foregoing period |
23 | | (e.g., participation in instructional leagues, |
24 | | the "All Star Game", or promotional caravans). |
25 | | This compensation shall include, but is not |
26 | | limited to, salaries, wages, bonuses as described |
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1 | | in this subpart, and any other type of compensation |
2 | | paid during the taxable year to a member of a |
3 | | professional athletic team for services performed |
4 | | in that year. This compensation does not include |
5 | | strike benefits, severance pay, termination pay, |
6 | | contract or option year buy-out payments, |
7 | | expansion or relocation payments, or any other |
8 | | payments not related to services performed for the |
9 | | team. |
10 | | For purposes of this subparagraph, "bonuses" |
11 | | included in "total compensation for services |
12 | | performed as a member of a professional athletic |
13 | | team" subject to the allocation described in |
14 | | Section 302(c)(1) are: bonuses earned as a result |
15 | | of play (i.e., performance bonuses) during the |
16 | | season, including bonuses paid for championship, |
17 | | playoff or "bowl" games played by a team, or for |
18 | | selection to all-star league or other honorary |
19 | | positions; and bonuses paid for signing a |
20 | | contract, unless the payment of the signing bonus |
21 | | is not conditional upon the signee playing any |
22 | | games for the team or performing any subsequent |
23 | | services for the team or even making the team, the |
24 | | signing bonus is payable separately from the |
25 | | salary and any other compensation, and the signing |
26 | | bonus is nonrefundable.
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1 | | (3) Sales factor.
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2 | | (A) The sales factor is a fraction, the numerator of |
3 | | which is the
total sales of the person in this State during |
4 | | the taxable year, and the
denominator of which is the total |
5 | | sales of the person everywhere during
the taxable year.
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6 | | (B) Sales of tangible personal property are in this |
7 | | State if:
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8 | | (i) The property is delivered or shipped to a |
9 | | purchaser, other than
the United States government, |
10 | | within this State regardless of the f. o.
b. point or |
11 | | other conditions of the sale; or
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12 | | (ii) The property is shipped from an office, store, |
13 | | warehouse,
factory or other place of storage in this |
14 | | State and either the purchaser
is the United States |
15 | | government or the person is not taxable in the
state of |
16 | | the purchaser; provided, however, that premises owned |
17 | | or leased
by a person who has independently contracted |
18 | | with the seller for the printing
of newspapers, |
19 | | periodicals or books shall not be deemed to be an |
20 | | office,
store, warehouse, factory or other place of |
21 | | storage for purposes of this
Section.
Sales of tangible |
22 | | personal property are not in this State if the
seller |
23 | | and purchaser would be members of the same unitary |
24 | | business group
but for the fact that either the seller |
25 | | or purchaser is a person with 80%
or more of total |
26 | | business activity outside of the United States and the
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1 | | property is purchased for resale.
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2 | | (B-1) Patents, copyrights, trademarks, and similar |
3 | | items of intangible
personal property.
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4 | | (i) Gross receipts from the licensing, sale, or |
5 | | other disposition of a
patent, copyright, trademark, |
6 | | or similar item of intangible personal property, other |
7 | | than gross receipts governed by paragraph (B-7) of this |
8 | | item (3),
are in this State to the extent the item is |
9 | | utilized in this State during the
year the gross |
10 | | receipts are included in gross income.
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11 | | (ii) Place of utilization.
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12 | | (I) A patent is utilized in a state to the |
13 | | extent that it is employed
in production, |
14 | | fabrication, manufacturing, or other processing in |
15 | | the state or
to the extent that a patented product |
16 | | is produced in the state. If a patent is
utilized |
17 | | in
more than one state, the extent to which it is |
18 | | utilized in any one state shall
be a fraction equal |
19 | | to the gross receipts of the licensee or purchaser |
20 | | from
sales or leases of items produced, |
21 | | fabricated, manufactured, or processed
within that |
22 | | state using the patent and of patented items |
23 | | produced within that
state, divided by the total of |
24 | | such gross receipts for all states in which the
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25 | | patent is utilized.
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26 | | (II) A copyright is utilized in a state to the |
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1 | | extent that printing or
other publication |
2 | | originates in the state. If a copyright is utilized |
3 | | in more
than one state, the extent to which it is |
4 | | utilized in any one state shall be a
fraction equal |
5 | | to the gross receipts from sales or licenses of |
6 | | materials
printed or published in that state |
7 | | divided by the total of such gross receipts
for all |
8 | | states in which the copyright is utilized.
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9 | | (III) Trademarks and other items of intangible |
10 | | personal property
governed by this paragraph (B-1) |
11 | | are utilized in the state in which the
commercial |
12 | | domicile of the licensee or purchaser is located.
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13 | | (iii) If the state of utilization of an item of |
14 | | property governed by
this paragraph (B-1) cannot be |
15 | | determined from the taxpayer's books and
records or |
16 | | from the books and records of any person related to the |
17 | | taxpayer
within the meaning of Section 267(b) of the |
18 | | Internal Revenue Code, 26 U.S.C.
267, the gross
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19 | | receipts attributable to that item shall be excluded |
20 | | from both the numerator
and the denominator of the |
21 | | sales factor.
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22 | | (B-2) Gross receipts from the license, sale, or other |
23 | | disposition of
patents, copyrights, trademarks, and |
24 | | similar items of intangible personal
property, other than |
25 | | gross receipts governed by paragraph (B-7) of this item |
26 | | (3), may be included in the numerator or denominator of the |
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1 | | sales factor
only if gross receipts from licenses, sales, |
2 | | or other disposition of such items
comprise more than 50% |
3 | | of the taxpayer's total gross receipts included in gross
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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.
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9 | | (B-5) For taxable years ending on or after December 31, |
10 | | 2008, except as provided in subsections (ii) through (vii), |
11 | | receipts from the sale of telecommunications service or |
12 | | mobile telecommunications service are in this State if the |
13 | | customer's service address is in this State. |
14 | | (i) For purposes of this subparagraph (B-5), the |
15 | | following terms have the following meanings: |
16 | | "Ancillary services" means services that are |
17 | | associated with or incidental to the provision of |
18 | | "telecommunications services", including but not |
19 | | limited to "detailed telecommunications billing", |
20 | | "directory assistance", "vertical service", and "voice |
21 | | mail services". |
22 | | "Air-to-Ground Radiotelephone service" means a |
23 | | radio service, as that term is defined in 47 CFR 22.99, |
24 | | in which common carriers are authorized to offer and |
25 | | provide radio telecommunications service for hire to |
26 | | subscribers in aircraft. |
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1 | | "Call-by-call Basis" means any method of charging |
2 | | for telecommunications services where the price is |
3 | | measured by individual calls. |
4 | | "Communications Channel" means a physical or |
5 | | virtual path of communications over which signals are |
6 | | transmitted between or among customer channel |
7 | | termination points. |
8 | | "Conference bridging service" means an "ancillary |
9 | | service" that links two or more participants of an |
10 | | audio or video conference call and may include the |
11 | | provision of a telephone number. "Conference bridging |
12 | | service" does not include the "telecommunications |
13 | | services" used to reach the conference bridge. |
14 | | "Customer Channel Termination Point" means the |
15 | | location where the customer either inputs or receives |
16 | | the communications. |
17 | | "Detailed telecommunications billing service" |
18 | | means an "ancillary service" of separately stating |
19 | | information pertaining to individual calls on a |
20 | | customer's billing statement. |
21 | | "Directory assistance" means an "ancillary |
22 | | service" of providing telephone number information, |
23 | | and/or address information. |
24 | | "Home service provider" means the facilities based |
25 | | carrier or reseller with which the customer contracts |
26 | | for the provision of mobile telecommunications |
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1 | | services. |
2 | | "Mobile telecommunications service" means |
3 | | commercial mobile radio service, as defined in Section |
4 | | 20.3 of Title 47 of the Code of Federal Regulations as |
5 | | in effect on June 1, 1999. |
6 | | "Place of primary use" means the street address |
7 | | representative of where the customer's use of the |
8 | | telecommunications service primarily occurs, which |
9 | | must be the residential street address or the primary |
10 | | business street address of the customer. In the case of |
11 | | mobile telecommunications services, "place of primary |
12 | | use" must be within the licensed service area of the |
13 | | home service provider. |
14 | | "Post-paid telecommunication service" means the |
15 | | telecommunications service obtained by making a |
16 | | payment on a call-by-call basis either through the use |
17 | | of a credit card or payment mechanism such as a bank |
18 | | card, travel card, credit card, or debit card, or by |
19 | | charge made to a telephone number which is not |
20 | | associated with the origination or termination of the |
21 | | telecommunications service. A post-paid calling |
22 | | service includes telecommunications service, except a |
23 | | prepaid wireless calling service, that would be a |
24 | | prepaid calling service except it is not exclusively a |
25 | | telecommunication service. |
26 | | "Prepaid telecommunication service" means the |
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1 | | right to access exclusively telecommunications |
2 | | services, which must be paid for in advance and which |
3 | | enables the origination of calls using an access number |
4 | | or authorization code, whether manually or |
5 | | electronically dialed, and that is sold in |
6 | | predetermined units or dollars of which the number |
7 | | declines with use in a known amount. |
8 | | "Prepaid Mobile telecommunication service" means a |
9 | | telecommunications service that provides the right to |
10 | | utilize mobile wireless service as well as other |
11 | | non-telecommunication services, including but not |
12 | | limited to ancillary services, which must be paid for |
13 | | in advance that is sold in predetermined units or |
14 | | dollars of which the number declines with use in a |
15 | | known amount. |
16 | | "Private communication service" means a |
17 | | telecommunication service that entitles the customer |
18 | | to exclusive or priority use of a communications |
19 | | channel or group of channels between or among |
20 | | termination points, regardless of the manner in which |
21 | | such channel or channels are connected, and includes |
22 | | switching capacity, extension lines, stations, and any |
23 | | other associated services that are provided in |
24 | | connection with the use of such channel or channels. |
25 | | "Service address" means: |
26 | | (a) The location of the telecommunications |
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1 | | equipment to which a customer's call is charged and |
2 | | from which the call originates or terminates, |
3 | | regardless of where the call is billed or paid; |
4 | | (b) If the location in line (a) is not known, |
5 | | service address means the origination point of the |
6 | | signal of the telecommunications services first |
7 | | identified by either the seller's |
8 | | telecommunications system or in information |
9 | | received by the seller from its service provider |
10 | | where the system used to transport such signals is |
11 | | not that of the seller; and |
12 | | (c) If the locations in line (a) and line (b) |
13 | | are not known, the service address means the |
14 | | location of the customer's place of primary use. |
15 | | "Telecommunications service" means the electronic |
16 | | transmission, conveyance, or routing of voice, data, |
17 | | audio, video, or any other information or signals to a |
18 | | point, or between or among points. The term |
19 | | "telecommunications service" includes such |
20 | | transmission, conveyance, or routing in which computer |
21 | | processing applications are used to act on the form, |
22 | | code or protocol of the content for purposes of |
23 | | transmission, conveyance or routing without regard to |
24 | | whether such service is referred to as voice over |
25 | | Internet protocol services or is classified by the |
26 | | Federal Communications Commission as enhanced or value |
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1 | | added. "Telecommunications service" does not include: |
2 | | (a) Data processing and information services |
3 | | that allow data to be generated, acquired, stored, |
4 | | processed, or retrieved and delivered by an |
5 | | electronic transmission to a purchaser when such |
6 | | purchaser's primary purpose for the underlying |
7 | | transaction is the processed data or information; |
8 | | (b) Installation or maintenance of wiring or |
9 | | equipment on a customer's premises; |
10 | | (c) Tangible personal property; |
11 | | (d) Advertising, including but not limited to |
12 | | directory advertising. |
13 | | (e) Billing and collection services provided |
14 | | to third parties; |
15 | | (f) Internet access service; |
16 | | (g) Radio and television audio and video |
17 | | programming services, regardless of the medium, |
18 | | including the furnishing of transmission, |
19 | | conveyance and routing of such services by the |
20 | | programming service provider. Radio and television |
21 | | audio and video programming services shall include |
22 | | but not be limited to cable service as defined in |
23 | | 47 USC 522(6) and audio and video programming |
24 | | services delivered by commercial mobile radio |
25 | | service providers, as defined in 47 CFR 20.3; |
26 | | (h) "Ancillary services"; or |
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1 | | (i) Digital products "delivered |
2 | | electronically", including but not limited to |
3 | | software, music, video, reading materials or ring |
4 | | tones. |
5 | | "Vertical service" means an "ancillary service" |
6 | | that is offered in connection with one or more |
7 | | "telecommunications services", which offers advanced |
8 | | calling features that allow customers to identify |
9 | | callers and to manage multiple calls and call |
10 | | connections, including "conference bridging services". |
11 | | "Voice mail service" means an "ancillary service" |
12 | | that enables the customer to store, send or receive |
13 | | recorded messages. "Voice mail service" does not |
14 | | include any "vertical services" that the customer may |
15 | | be required to have in order to utilize the "voice mail |
16 | | service". |
17 | | (ii) Receipts from the sale of telecommunications |
18 | | service sold on an individual call-by-call basis are in |
19 | | this State if either of the following applies: |
20 | | (a) The call both originates and terminates in |
21 | | this State. |
22 | | (b) The call either originates or terminates |
23 | | in this State and the service address is located in |
24 | | this State. |
25 | | (iii) Receipts from the sale of postpaid |
26 | | telecommunications service at retail are in this State |
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1 | | if the origination point of the telecommunication |
2 | | signal, as first identified by the service provider's |
3 | | telecommunication system or as identified by |
4 | | information received by the seller from its service |
5 | | provider if the system used to transport |
6 | | telecommunication signals is not the seller's, is |
7 | | located in this State. |
8 | | (iv) Receipts from the sale of prepaid |
9 | | telecommunications service or prepaid mobile |
10 | | telecommunications service at retail are in this State |
11 | | if the purchaser obtains the prepaid card or similar |
12 | | means of conveyance at a location in this State. |
13 | | Receipts from recharging a prepaid telecommunications |
14 | | service or mobile telecommunications service is in |
15 | | this State if the purchaser's billing information |
16 | | indicates a location in this State. |
17 | | (v) Receipts from the sale of private |
18 | | communication services are in this State as follows: |
19 | | (a) 100% of receipts from charges imposed at |
20 | | each channel termination point in this State. |
21 | | (b) 100% of receipts from charges for the total |
22 | | channel mileage between each channel termination |
23 | | point in this State. |
24 | | (c) 50% of the total receipts from charges for |
25 | | service segments when those segments are between 2 |
26 | | customer channel termination points, 1 of which is |
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1 | | located in this State and the other is located |
2 | | outside of this State, which segments are |
3 | | separately charged. |
4 | | (d) The receipts from charges for service |
5 | | segments with a channel termination point located |
6 | | in this State and in two or more other states, and |
7 | | which segments are not separately billed, are in |
8 | | this State based on a percentage determined by |
9 | | dividing the number of customer channel |
10 | | termination points in this State by the total |
11 | | number of customer channel termination points. |
12 | | (vi) Receipts from charges for ancillary services |
13 | | for telecommunications service sold to customers at |
14 | | retail are in this State if the customer's primary |
15 | | place of use of telecommunications services associated |
16 | | with those ancillary services is in this State. If the |
17 | | seller of those ancillary services cannot determine |
18 | | where the associated telecommunications are located, |
19 | | then the ancillary services shall be based on the |
20 | | location of the purchaser. |
21 | | (vii) Receipts to access a carrier's network or |
22 | | from the sale of telecommunication services or |
23 | | ancillary services for resale are in this State as |
24 | | follows: |
25 | | (a) 100% of the receipts from access fees |
26 | | attributable to intrastate telecommunications |
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1 | | service that both originates and terminates in |
2 | | this State. |
3 | | (b) 50% of the receipts from access fees |
4 | | attributable to interstate telecommunications |
5 | | service if the interstate call either originates |
6 | | or terminates in this State. |
7 | | (c) 100% of the receipts from interstate end |
8 | | user access line charges, if the customer's |
9 | | service address is in this State. As used in this |
10 | | subdivision, "interstate end user access line |
11 | | charges" includes, but is not limited to, the |
12 | | surcharge approved by the federal communications |
13 | | commission and levied pursuant to 47 CFR 69. |
14 | | (d) Gross receipts from sales of |
15 | | telecommunication services or from ancillary |
16 | | services for telecommunications services sold to |
17 | | other telecommunication service providers for |
18 | | resale shall be sourced to this State using the |
19 | | apportionment concepts used for non-resale |
20 | | receipts of telecommunications services if the |
21 | | information is readily available to make that |
22 | | determination. If the information is not readily |
23 | | available, then the taxpayer may use any other |
24 | | reasonable and consistent method. |
25 | | (B-7) For taxable years ending on or after December 31, |
26 | | 2008, receipts from the sale of broadcasting services are |
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1 | | in this State if the broadcasting services are received in |
2 | | this State. For purposes of this paragraph (B-7), the |
3 | | following terms have the following meanings: |
4 | | "Advertising revenue" means consideration received |
5 | | by the taxpayer in exchange for broadcasting services |
6 | | or allowing the broadcasting of commercials or |
7 | | announcements in connection with the broadcasting of |
8 | | film or radio programming, from sponsorships of the |
9 | | programming, or from product placements in the |
10 | | programming. |
11 | | "Audience factor" means the ratio that the |
12 | | audience or subscribers located in this State of a |
13 | | station, a network, or a cable system bears to the |
14 | | total audience or total subscribers for that station, |
15 | | network, or cable system. The audience factor for film |
16 | | or radio programming shall be determined by reference |
17 | | to the books and records of the taxpayer or by |
18 | | reference to published rating statistics provided the |
19 | | method used by the taxpayer is consistently used from |
20 | | year to year for this purpose and fairly represents the |
21 | | taxpayer's activity in this State. |
22 | | "Broadcast" or "broadcasting" or "broadcasting |
23 | | services" means the transmission or provision of film |
24 | | or radio programming, whether through the public |
25 | | airwaves, by cable, by direct or indirect satellite |
26 | | transmission, or by any other means of communication, |
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1 | | either through a station, a network, or a cable system. |
2 | | "Film" or "film programming" means the broadcast |
3 | | on television of any and all performances, events, or |
4 | | productions, including but not limited to news, |
5 | | sporting events, plays, stories, or other literary, |
6 | | commercial, educational, or artistic works, either |
7 | | live or through the use of video tape, disc, or any |
8 | | other type of format or medium. Each episode of a |
9 | | series of films produced for television shall |
10 | | constitute separate "film" notwithstanding that the |
11 | | series relates to the same principal subject and is |
12 | | produced during one or more tax periods. |
13 | | "Radio" or "radio programming" means the broadcast |
14 | | on radio of any and all performances, events, or |
15 | | productions, including but not limited to news, |
16 | | sporting events, plays, stories, or other literary, |
17 | | commercial, educational, or artistic works, either |
18 | | live or through the use of an audio tape, disc, or any |
19 | | other format or medium. Each episode in a series of |
20 | | radio programming produced for radio broadcast shall |
21 | | constitute a separate "radio programming" |
22 | | notwithstanding that the series relates to the same |
23 | | principal subject and is produced during one or more |
24 | | tax periods. |
25 | | (i) In the case of advertising revenue from |
26 | | broadcasting, the customer is the advertiser and |
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1 | | the service is received in this State if the |
2 | | commercial domicile of the advertiser is in this |
3 | | State. |
4 | | (ii) In the case where film or radio |
5 | | programming is broadcast by a station, a network, |
6 | | or a cable system for a fee or other remuneration |
7 | | received from the recipient of the broadcast, the |
8 | | portion of the service that is received in this |
9 | | State is measured by the portion of the recipients |
10 | | of the broadcast located in this State. |
11 | | Accordingly, the fee or other remuneration for |
12 | | such service that is included in the Illinois |
13 | | numerator of the sales factor is the total of those |
14 | | fees or other remuneration received from |
15 | | recipients in Illinois. For purposes of this |
16 | | paragraph, a taxpayer may determine the location |
17 | | of the recipients of its broadcast using the |
18 | | address of the recipient shown in its contracts |
19 | | with the recipient or using the billing address of |
20 | | the recipient in the taxpayer's records. |
21 | | (iii) In the case where film or radio |
22 | | programming is broadcast by a station, a network, |
23 | | or a cable system for a fee or other remuneration |
24 | | from the person providing the programming, the |
25 | | portion of the broadcast service that is received |
26 | | by such station, network, or cable system in this |
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1 | | State is measured by the portion of recipients of |
2 | | the broadcast located in this State. Accordingly, |
3 | | the amount of revenue related to such an |
4 | | arrangement that is included in the Illinois |
5 | | numerator of the sales factor is the total fee or |
6 | | other total remuneration from the person providing |
7 | | the programming related to that broadcast |
8 | | multiplied by the Illinois audience factor for |
9 | | that broadcast. |
10 | | (iv) In the case where film or radio |
11 | | programming is provided by a taxpayer that is a |
12 | | network or station to a customer for broadcast in |
13 | | exchange for a fee or other remuneration from that |
14 | | customer the broadcasting service is received at |
15 | | the location of the office of the customer from |
16 | | which the services were ordered in the regular |
17 | | course of the customer's trade or business. |
18 | | Accordingly, in such a case the revenue derived by |
19 | | the taxpayer that is included in the taxpayer's |
20 | | Illinois numerator of the sales factor is the |
21 | | revenue from such customers who receive the |
22 | | broadcasting service in Illinois. |
23 | | (v) In the case where film or radio programming |
24 | | is provided by a taxpayer that is not a network or |
25 | | station to another person for broadcasting in |
26 | | exchange for a fee or other remuneration from that |
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1 | | person, the broadcasting service is received at |
2 | | the location of the office of the customer from |
3 | | which the services were ordered in the regular |
4 | | course of the customer's trade or business. |
5 | | Accordingly, in such a case the revenue derived by |
6 | | the taxpayer that is included in the taxpayer's |
7 | | Illinois numerator of the sales factor is the |
8 | | revenue from such customers who receive the |
9 | | broadcasting service in Illinois. |
10 | | (B-8) Gross receipts from winnings under the Illinois |
11 | | Lottery Law from the assignment of a prize under Section |
12 | | 13.1 13-1 of the Illinois Lottery Law are received in this |
13 | | State. This paragraph (B-8) applies only to taxable years |
14 | | ending on or after December 31, 2013.
|
15 | | (C) For taxable years ending before December 31, 2008, |
16 | | sales, other than sales governed by paragraphs (B), (B-1), |
17 | | (B-2), and (B-8) are in
this State if:
|
18 | | (i) The income-producing activity is performed in |
19 | | this State; or
|
20 | | (ii) The income-producing activity is performed |
21 | | both within and
without this State and a greater |
22 | | proportion of the income-producing
activity is |
23 | | performed within this State than without this State, |
24 | | based
on performance costs.
|
25 | | (C-5) For taxable years ending on or after December 31, |
26 | | 2008, sales, other than sales governed by paragraphs (B), |
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1 | | (B-1), (B-2), (B-5), and (B-7), are in this State if any of |
2 | | the following criteria are met: |
3 | | (i) Sales from the sale or lease of real property |
4 | | are in this State if the property is located in this |
5 | | State. |
6 | | (ii) Sales from the lease or rental of tangible |
7 | | personal property are in this State if the property is |
8 | | located in this State during the rental period. Sales |
9 | | from the lease or rental of tangible personal property |
10 | | that is characteristically moving property, including, |
11 | | but not limited to, motor vehicles, rolling stock, |
12 | | aircraft, vessels, or mobile equipment are in this |
13 | | State to the extent that the property is used in this |
14 | | State. |
15 | | (iii) In the case of interest, net gains (but not |
16 | | less than zero) and other items of income from |
17 | | intangible personal property, the sale is in this State |
18 | | if: |
19 | | (a) in the case of a taxpayer who is a dealer |
20 | | in the item of intangible personal property within |
21 | | the meaning of Section 475 of the Internal Revenue |
22 | | Code, the income or gain is received from a |
23 | | customer in this State. For purposes of this |
24 | | subparagraph, a customer is in this State if the |
25 | | customer is an individual, trust or estate who is a |
26 | | resident of this State and, for all other |
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1 | | customers, if the customer's commercial domicile |
2 | | is in this State. Unless the dealer has actual |
3 | | knowledge of the residence or commercial domicile |
4 | | of a customer during a taxable year, the customer |
5 | | shall be deemed to be a customer in this State if |
6 | | the billing address of the customer, as shown in |
7 | | the records of the dealer, is in this State; or |
8 | | (b) in all other cases, if the |
9 | | income-producing activity of the taxpayer is |
10 | | performed in this State or, if the |
11 | | income-producing activity of the taxpayer is |
12 | | performed both within and without this State, if a |
13 | | greater proportion of the income-producing |
14 | | activity of the taxpayer is performed within this |
15 | | State than in any other state, based on performance |
16 | | costs. |
17 | | (iv) Sales of services are in this State if the |
18 | | services are received in this State. For the purposes |
19 | | of this section, gross receipts from the performance of |
20 | | services provided to a corporation, partnership, or |
21 | | trust may only be attributed to a state where that |
22 | | corporation, partnership, or trust has a fixed place of |
23 | | business. If the state where the services are received |
24 | | is not readily determinable or is a state where the |
25 | | corporation, partnership, or trust receiving the |
26 | | service does not have a fixed place of business, the |
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1 | | services shall be deemed to be received at the location |
2 | | of the office of the customer from which the services |
3 | | were ordered in the regular course of the customer's |
4 | | trade or business. If the ordering office cannot be |
5 | | determined, the services shall be deemed to be received |
6 | | at the office of the customer to which the services are |
7 | | billed. If the taxpayer is not taxable in the state in |
8 | | which the services are received, the sale must be |
9 | | excluded from both the numerator and the denominator of |
10 | | the sales factor. The Department shall adopt rules |
11 | | prescribing where specific types of service are |
12 | | received, including, but not limited to, publishing, |
13 | | and utility service.
|
14 | | (D) For taxable years ending on or after December 31, |
15 | | 1995, the following
items of income shall not be included |
16 | | in the numerator or denominator of the
sales factor: |
17 | | dividends; amounts included under Section 78 of the |
18 | | Internal
Revenue Code; and Subpart F income as defined in |
19 | | Section 952 of the Internal
Revenue Code.
No inference |
20 | | shall be drawn from the enactment of this paragraph (D) in
|
21 | | construing this Section for taxable years ending before |
22 | | December 31, 1995.
|
23 | | (E) Paragraphs (B-1) and (B-2) shall apply to tax years |
24 | | ending on or
after December 31, 1999, provided that a |
25 | | taxpayer may elect to apply the
provisions of these |
26 | | paragraphs to prior tax years. Such election shall be made
|
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1 | | in the form and manner prescribed by the Department, shall |
2 | | be irrevocable, and
shall apply to all tax years; provided |
3 | | that, if a taxpayer's Illinois income
tax liability for any |
4 | | tax year, as assessed under Section 903 prior to January
1, |
5 | | 1999, was computed in a manner contrary to the provisions |
6 | | of paragraphs
(B-1) or (B-2), no refund shall be payable to |
7 | | the taxpayer for that tax year to
the extent such refund is |
8 | | the result of applying the provisions of paragraph
(B-1) or |
9 | | (B-2) retroactively. In the case of a unitary business |
10 | | group, such
election shall apply to all members of such |
11 | | group for every tax year such group
is in existence, but |
12 | | shall not apply to any taxpayer for any period during
which |
13 | | that taxpayer is not a member of such group.
|
14 | | (b) Insurance companies.
|
15 | | (1) In general. Except as otherwise
provided by |
16 | | paragraph (2), business income of an insurance company for |
17 | | a
taxable year shall be apportioned to this State by |
18 | | multiplying such
income by a fraction, the numerator of |
19 | | which is the direct premiums
written for insurance upon |
20 | | property or risk in this State, and the
denominator of |
21 | | which is the direct premiums written for insurance upon
|
22 | | property or risk everywhere. For purposes of this |
23 | | subsection, the term
"direct premiums written" means the |
24 | | total amount of direct premiums
written, assessments and |
25 | | annuity considerations as reported for the
taxable year on |
26 | | the annual statement filed by the company with the
Illinois |
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1 | | Director of Insurance in the form approved by the National
|
2 | | Convention of Insurance Commissioners
or such other form as |
3 | | may be
prescribed in lieu thereof.
|
4 | | (2) Reinsurance. If the principal source of premiums |
5 | | written by an
insurance company consists of premiums for |
6 | | reinsurance accepted by it,
the business income of such |
7 | | company shall be apportioned to this State
by multiplying |
8 | | such income by a fraction, the numerator of which is the
|
9 | | sum of (i) direct premiums written for insurance upon |
10 | | property or risk
in this State, plus (ii) premiums written |
11 | | for reinsurance accepted in
respect of property or risk in |
12 | | this State, and the denominator of which
is the sum of |
13 | | (iii) direct premiums written for insurance upon property
|
14 | | or risk everywhere, plus (iv) premiums written for |
15 | | reinsurance accepted
in respect of property or risk |
16 | | everywhere. For purposes of this
paragraph, premiums |
17 | | written for reinsurance accepted in respect of
property or |
18 | | risk in this State, whether or not otherwise determinable,
|
19 | | may, at the election of the company, be determined on the |
20 | | basis of the
proportion which premiums written for |
21 | | reinsurance accepted from
companies commercially domiciled |
22 | | in Illinois bears to premiums written
for reinsurance |
23 | | accepted from all sources, or, alternatively, in the
|
24 | | proportion which the sum of the direct premiums written for |
25 | | insurance
upon property or risk in this State by each |
26 | | ceding company from which
reinsurance is accepted bears to |
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1 | | the sum of the total direct premiums
written by each such |
2 | | ceding company for the taxable year. The election made by a |
3 | | company under this paragraph for its first taxable year |
4 | | ending on or after December 31, 2011, shall be binding for |
5 | | that company for that taxable year and for all subsequent |
6 | | taxable years, and may be altered only with the written |
7 | | permission of the Department, which shall not be |
8 | | unreasonably withheld.
|
9 | | (c) Financial organizations.
|
10 | | (1) In general. For taxable years ending before |
11 | | December 31, 2008, business income of a financial
|
12 | | organization shall be apportioned to this State by |
13 | | multiplying such
income by a fraction, the numerator of |
14 | | which is its business income from
sources within this |
15 | | State, and the denominator of which is its business
income |
16 | | from all sources. For the purposes of this subsection, the
|
17 | | business income of a financial organization from sources |
18 | | within this
State is the sum of the amounts referred to in |
19 | | subparagraphs (A) through
(E) following, but excluding the |
20 | | adjusted income of an international banking
facility as |
21 | | determined in paragraph (2):
|
22 | | (A) Fees, commissions or other compensation for |
23 | | financial services
rendered within this State;
|
24 | | (B) Gross profits from trading in stocks, bonds or |
25 | | other securities
managed within this State;
|
26 | | (C) Dividends, and interest from Illinois |
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1 | | customers, which are received
within this State;
|
2 | | (D) Interest charged to customers at places of |
3 | | business maintained
within this State for carrying |
4 | | debit balances of margin accounts,
without deduction |
5 | | of any costs incurred in carrying such accounts; and
|
6 | | (E) Any other gross income resulting from the |
7 | | operation as a
financial organization within this |
8 | | State. In computing the amounts
referred to in |
9 | | paragraphs (A) through (E) of this subsection, any |
10 | | amount
received by a member of an affiliated group |
11 | | (determined under Section
1504(a) of the Internal |
12 | | Revenue Code but without reference to whether
any such |
13 | | corporation is an "includible corporation" under |
14 | | Section
1504(b) of the Internal Revenue Code) from |
15 | | another member of such group
shall be included only to |
16 | | the extent such amount exceeds expenses of the
|
17 | | recipient directly related thereto.
|
18 | | (2) International Banking Facility. For taxable years |
19 | | ending before December 31, 2008:
|
20 | | (A) Adjusted Income. The adjusted income of an |
21 | | international banking
facility is its income reduced |
22 | | by the amount of the floor amount.
|
23 | | (B) Floor Amount. The floor amount shall be the |
24 | | amount, if any,
determined
by multiplying the income of |
25 | | the international banking facility by a fraction,
not |
26 | | greater than one, which is determined as follows:
|
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1 | | (i) The numerator shall be:
|
2 | | The average aggregate, determined on a |
3 | | quarterly basis, of the
financial
organization's |
4 | | loans to banks in foreign countries, to foreign |
5 | | domiciled
borrowers (except where secured |
6 | | primarily by real estate) and to foreign
|
7 | | governments and other foreign official |
8 | | institutions, as reported for its
branches, |
9 | | agencies and offices within the state on its |
10 | | "Consolidated Report
of Condition", Schedule A, |
11 | | Lines 2.c., 5.b., and 7.a., which was filed with
|
12 | | the Federal Deposit Insurance Corporation and |
13 | | other regulatory authorities,
for the year 1980, |
14 | | minus
|
15 | | The average aggregate, determined on a |
16 | | quarterly basis, of such loans
(other
than loans of |
17 | | an international banking facility), as reported by |
18 | | the financial
institution for its branches, |
19 | | agencies and offices within the state, on
the |
20 | | corresponding Schedule and lines of the |
21 | | Consolidated Report of Condition
for the current |
22 | | taxable year, provided, however, that in no case |
23 | | shall the
amount determined in this clause (the |
24 | | subtrahend) exceed the amount determined
in the |
25 | | preceding clause (the minuend); and
|
26 | | (ii) the denominator shall be the average |
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1 | | aggregate, determined on a
quarterly basis, of the |
2 | | international banking facility's loans to banks in
|
3 | | foreign countries, to foreign domiciled borrowers |
4 | | (except where secured
primarily by real estate) |
5 | | and to foreign governments and other foreign
|
6 | | official institutions, which were recorded in its |
7 | | financial accounts for
the current taxable year.
|
8 | | (C) Change to Consolidated Report of Condition and |
9 | | in Qualification.
In the event the Consolidated Report |
10 | | of Condition which is filed with the
Federal Deposit |
11 | | Insurance Corporation and other regulatory authorities |
12 | | is
altered so that the information required for |
13 | | determining the floor amount
is not found on Schedule |
14 | | A, lines 2.c., 5.b. and 7.a., the financial
institution |
15 | | shall notify the Department and the Department may, by
|
16 | | regulations or otherwise, prescribe or authorize the |
17 | | use of an alternative
source for such information. The |
18 | | financial institution shall also notify
the Department |
19 | | should its international banking facility fail to |
20 | | qualify as
such, in whole or in part, or should there |
21 | | be any amendment or change to
the Consolidated Report |
22 | | of Condition, as originally filed, to the extent
such |
23 | | amendment or change alters the information used in |
24 | | determining the floor
amount.
|
25 | | (3) For taxable years ending on or after December 31, |
26 | | 2008, the business income of a financial organization shall |
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1 | | be apportioned to this State by multiplying such income by |
2 | | a fraction, the numerator of which is its gross receipts |
3 | | from sources in this State or otherwise attributable to |
4 | | this State's marketplace and the denominator of which is |
5 | | its gross receipts everywhere during the taxable year. |
6 | | "Gross receipts" for purposes of this subparagraph (3) |
7 | | means gross income, including net taxable gain on |
8 | | disposition of assets, including securities and money |
9 | | market instruments, when derived from transactions and |
10 | | activities in the regular course of the financial |
11 | | organization's trade or business. The following examples |
12 | | are illustrative:
|
13 | | (i) Receipts from the lease or rental of real or |
14 | | tangible personal property are in this State if the |
15 | | property is located in this State during the rental |
16 | | period. Receipts from the lease or rental of tangible |
17 | | personal property that is characteristically moving |
18 | | property, including, but not limited to, motor |
19 | | vehicles, rolling stock, aircraft, vessels, or mobile |
20 | | equipment are from sources in this State to the extent |
21 | | that the property is used in this State. |
22 | | (ii) Interest income, commissions, fees, gains on |
23 | | disposition, and other receipts from assets in the |
24 | | nature of loans that are secured primarily by real |
25 | | estate or tangible personal property are from sources |
26 | | in this State if the security is located in this State. |
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1 | | (iii) Interest income, commissions, fees, gains on |
2 | | disposition, and other receipts from consumer loans |
3 | | that are not secured by real or tangible personal |
4 | | property are from sources in this State if the debtor |
5 | | is a resident of this State. |
6 | | (iv) Interest income, commissions, fees, gains on |
7 | | disposition, and other receipts from commercial loans |
8 | | and installment obligations that are not secured by |
9 | | real or tangible personal property are from sources in |
10 | | this State if the proceeds of the loan are to be |
11 | | applied in this State. If it cannot be determined where |
12 | | the funds are to be applied, the income and receipts |
13 | | are from sources in this State if the office of the |
14 | | borrower from which the loan was negotiated in the |
15 | | regular course of business is located in this State. If |
16 | | the location of this office cannot be determined, the |
17 | | income and receipts shall be excluded from the |
18 | | numerator and denominator of the sales factor.
|
19 | | (v) Interest income, fees, gains on disposition, |
20 | | service charges, merchant discount income, and other |
21 | | receipts from credit card receivables are from sources |
22 | | in this State if the card charges are regularly billed |
23 | | to a customer in this State. |
24 | | (vi) Receipts from the performance of services, |
25 | | including, but not limited to, fiduciary, advisory, |
26 | | and brokerage services, are in this State if the |
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1 | | services are received in this State within the meaning |
2 | | of subparagraph (a)(3)(C-5)(iv) of this Section. |
3 | | (vii) Receipts from the issuance of travelers |
4 | | checks and money orders are from sources in this State |
5 | | if the checks and money orders are issued from a |
6 | | location within this State. |
7 | | (viii) Receipts from investment assets and |
8 | | activities and trading assets and activities are |
9 | | included in the receipts factor as follows: |
10 | | (1) Interest, dividends, net gains (but not |
11 | | less than zero) and other income from investment |
12 | | assets and activities from trading assets and |
13 | | activities shall be included in the receipts |
14 | | factor. Investment assets and activities and |
15 | | trading assets and activities include but are not |
16 | | limited to: investment securities; trading account |
17 | | assets; federal funds; securities purchased and |
18 | | sold under agreements to resell or repurchase; |
19 | | options; futures contracts; forward contracts; |
20 | | notional principal contracts such as swaps; |
21 | | equities; and foreign currency transactions. With |
22 | | respect to the investment and trading assets and |
23 | | activities described in subparagraphs (A) and (B) |
24 | | of this paragraph, the receipts factor shall |
25 | | include the amounts described in such |
26 | | subparagraphs. |
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1 | | (A) The receipts factor shall include the |
2 | | amount by which interest from federal funds |
3 | | sold and securities purchased under resale |
4 | | agreements exceeds interest expense on federal |
5 | | funds purchased and securities sold under |
6 | | repurchase agreements. |
7 | | (B) The receipts factor shall include the |
8 | | amount by which interest, dividends, gains and |
9 | | other income from trading assets and |
10 | | activities, including but not limited to |
11 | | assets and activities in the matched book, in |
12 | | the arbitrage book, and foreign currency |
13 | | transactions, exceed amounts paid in lieu of |
14 | | interest, amounts paid in lieu of dividends, |
15 | | and losses from such assets and activities. |
16 | | (2) The numerator of the receipts factor |
17 | | includes interest, dividends, net gains (but not |
18 | | less than zero), and other income from investment |
19 | | assets and activities and from trading assets and |
20 | | activities described in paragraph (1) of this |
21 | | subsection that are attributable to this State. |
22 | | (A) The amount of interest, dividends, net |
23 | | gains (but not less than zero), and other |
24 | | income from investment assets and activities |
25 | | in the investment account to be attributed to |
26 | | this State and included in the numerator is |
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1 | | determined by multiplying all such income from |
2 | | such assets and activities by a fraction, the |
3 | | numerator of which is the gross income from |
4 | | such assets and activities which are properly |
5 | | assigned to a fixed place of business of the |
6 | | taxpayer within this State and the denominator |
7 | | of which is the gross income from all such |
8 | | assets and activities. |
9 | | (B) The amount of interest from federal |
10 | | funds sold and purchased and from securities |
11 | | purchased under resale agreements and |
12 | | securities sold under repurchase agreements |
13 | | attributable to this State and included in the |
14 | | numerator is determined by multiplying the |
15 | | amount described in subparagraph (A) of |
16 | | paragraph (1) of this subsection from such |
17 | | funds and such securities by a fraction, the |
18 | | numerator of which is the gross income from |
19 | | such funds and such securities which are |
20 | | properly assigned to a fixed place of business |
21 | | of the taxpayer within this State and the |
22 | | denominator of which is the gross income from |
23 | | all such funds and such securities. |
24 | | (C) The amount of interest, dividends, |
25 | | gains, and other income from trading assets and |
26 | | activities, including but not limited to |
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1 | | assets and activities in the matched book, in |
2 | | the arbitrage book and foreign currency |
3 | | transactions (but excluding amounts described |
4 | | in subparagraphs (A) or (B) of this paragraph), |
5 | | attributable to this State and included in the |
6 | | numerator is determined by multiplying the |
7 | | amount described in subparagraph (B) of |
8 | | paragraph (1) of this subsection by a fraction, |
9 | | the numerator of which is the gross income from |
10 | | such trading assets and activities which are |
11 | | properly assigned to a fixed place of business |
12 | | of the taxpayer within this State and the |
13 | | denominator of which is the gross income from |
14 | | all such assets and activities. |
15 | | (D) Properly assigned, for purposes of |
16 | | this paragraph (2) of this subsection, means |
17 | | the investment or trading asset or activity is |
18 | | assigned to the fixed place of business with |
19 | | which it has a preponderance of substantive |
20 | | contacts. An investment or trading asset or |
21 | | activity assigned by the taxpayer to a fixed |
22 | | place of business without the State shall be |
23 | | presumed to have been properly assigned if: |
24 | | (i) the taxpayer has assigned, in the |
25 | | regular course of its business, such asset |
26 | | or activity on its records to a fixed place |
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1 | | of business consistent with federal or |
2 | | state regulatory requirements; |
3 | | (ii) such assignment on its records is |
4 | | based upon substantive contacts of the |
5 | | asset or activity to such fixed place of |
6 | | business; and |
7 | | (iii) the taxpayer uses such records |
8 | | reflecting assignment of such assets or |
9 | | activities for the filing of all state and |
10 | | local tax returns for which an assignment |
11 | | of such assets or activities to a fixed |
12 | | place of business is required. |
13 | | (E) The presumption of proper assignment |
14 | | of an investment or trading asset or activity |
15 | | provided in subparagraph (D) of paragraph (2) |
16 | | of this subsection may be rebutted upon a |
17 | | showing by the Department, supported by a |
18 | | preponderance of the evidence, that the |
19 | | preponderance of substantive contacts |
20 | | regarding such asset or activity did not occur |
21 | | at the fixed place of business to which it was |
22 | | assigned on the taxpayer's records. If the |
23 | | fixed place of business that has a |
24 | | preponderance of substantive contacts cannot |
25 | | be determined for an investment or trading |
26 | | asset or activity to which the presumption in |
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1 | | subparagraph (D) of paragraph (2) of this |
2 | | subsection does not apply or with respect to |
3 | | which that presumption has been rebutted, that |
4 | | asset or activity is properly assigned to the |
5 | | state in which the taxpayer's commercial |
6 | | domicile is located. For purposes of this |
7 | | subparagraph (E), it shall be presumed, |
8 | | subject to rebuttal, that taxpayer's |
9 | | commercial domicile is in the state of the |
10 | | United States or the District of Columbia to |
11 | | which the greatest number of employees are |
12 | | regularly connected with the management of the |
13 | | investment or trading income or out of which |
14 | | they are working, irrespective of where the |
15 | | services of such employees are performed, as of |
16 | | the last day of the taxable year.
|
17 | | (4) (Blank). |
18 | | (5) (Blank). |
19 | | (c-1) Federally regulated exchanges. For taxable years |
20 | | ending on or after December 31, 2012, business income of a |
21 | | federally regulated exchange shall, at the option of the |
22 | | federally regulated exchange, be apportioned to this State by |
23 | | multiplying such income by a fraction, the numerator of which |
24 | | is its business income from sources within this State, and the |
25 | | denominator of which is its business income from all sources. |
26 | | For purposes of this subsection, the business income within |
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1 | | this State of a federally regulated exchange is the sum of the |
2 | | following: |
3 | | (1) Receipts attributable to transactions executed on |
4 | | a physical trading floor if that physical trading floor is |
5 | | located in this State. |
6 | | (2) Receipts attributable to all other matching, |
7 | | execution, or clearing transactions, including without |
8 | | limitation receipts from the provision of matching, |
9 | | execution, or clearing services to another entity, |
10 | | multiplied by (i) for taxable years ending on or after |
11 | | December 31, 2012 but before December 31, 2013, 63.77%; and |
12 | | (ii) for taxable years ending on or after December 31, |
13 | | 2013, 27.54%. |
14 | | (3) All other receipts not governed by subparagraphs |
15 | | (1) or (2) of this subsection (c-1), to the extent the |
16 | | receipts would be characterized as "sales in this State" |
17 | | under item (3) of subsection (a) of this Section. |
18 | | "Federally regulated exchange" means (i) a "registered |
19 | | entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B), |
20 | | or (C), (ii) an "exchange" or "clearing agency" within the |
21 | | meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such |
22 | | entities regulated under any successor regulatory structure to |
23 | | the foregoing, and (iv) all taxpayers who are members of the |
24 | | same unitary business group as a federally regulated exchange, |
25 | | determined without regard to the prohibition in Section |
26 | | 1501(a)(27) of this Act against including in a unitary business |
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1 | | group taxpayers who are ordinarily required to apportion |
2 | | business income under different subsections of this Section; |
3 | | provided that this subparagraph (iv) shall apply only if 50% or |
4 | | more of the business receipts of the unitary business group |
5 | | determined by application of this subparagraph (iv) for the |
6 | | taxable year are attributable to the matching, execution, or |
7 | | clearing of transactions conducted by an entity described in |
8 | | subparagraph (i), (ii), or (iii) of this paragraph. |
9 | | In no event shall the Illinois apportionment percentage |
10 | | computed in accordance with this subsection (c-1) for any |
11 | | taxpayer for any tax year be less than the Illinois |
12 | | apportionment percentage computed under this subsection (c-1) |
13 | | for that taxpayer for the first full tax year ending on or |
14 | | after December 31, 2013 for which this subsection (c-1) applied |
15 | | to the taxpayer. |
16 | | (d) Transportation services. For taxable years ending |
17 | | before December 31, 2008, business income derived from |
18 | | furnishing
transportation services shall be apportioned to |
19 | | this State in accordance
with paragraphs (1) and (2):
|
20 | | (1) Such business income (other than that derived from
|
21 | | transportation by pipeline) shall be apportioned to this |
22 | | State by
multiplying such income by a fraction, the |
23 | | numerator of which is the
revenue miles of the person in |
24 | | this State, and the denominator of which
is the revenue |
25 | | miles of the person everywhere. For purposes of this
|
26 | | paragraph, a revenue mile is the transportation of 1 |
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1 | | passenger or 1 net
ton of freight the distance of 1 mile |
2 | | for a consideration. Where a
person is engaged in the |
3 | | transportation of both passengers and freight,
the |
4 | | fraction above referred to shall be determined by means of |
5 | | an
average of the passenger revenue mile fraction and the |
6 | | freight revenue
mile fraction, weighted to reflect the |
7 | | person's
|
8 | | (A) relative railway operating income from total |
9 | | passenger and total
freight service, as reported to the |
10 | | Interstate Commerce Commission, in
the case of |
11 | | transportation by railroad, and
|
12 | | (B) relative gross receipts from passenger and |
13 | | freight
transportation, in case of transportation |
14 | | other than by railroad.
|
15 | | (2) Such business income derived from transportation |
16 | | by pipeline
shall be apportioned to this State by |
17 | | multiplying such income by a
fraction, the numerator of |
18 | | which is the revenue miles of the person in
this State, and |
19 | | the denominator of which is the revenue miles of the
person |
20 | | everywhere. For the purposes of this paragraph, a revenue |
21 | | mile is
the transportation by pipeline of 1 barrel of oil, |
22 | | 1,000 cubic feet of
gas, or of any specified quantity of |
23 | | any other substance, the distance
of 1 mile for a |
24 | | consideration.
|
25 | | (3) For taxable years ending on or after December 31, |
26 | | 2008, business income derived from providing |
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1 | | transportation services other than airline services shall |
2 | | be apportioned to this State by using a fraction, (a) the |
3 | | numerator of which shall be (i) all receipts from any |
4 | | movement or shipment of people, goods, mail, oil, gas, or |
5 | | any other substance (other than by airline) that both |
6 | | originates and terminates in this State, plus (ii) that |
7 | | portion of the person's gross receipts from movements or |
8 | | shipments of people, goods, mail, oil, gas, or any other |
9 | | substance (other than by airline) that originates in one |
10 | | state or jurisdiction and terminates in another state or |
11 | | jurisdiction, that is determined by the ratio that the |
12 | | miles traveled in this State bears to total miles |
13 | | everywhere and (b) the denominator of which shall be all |
14 | | revenue derived from the movement or shipment of people, |
15 | | goods, mail, oil, gas, or any other substance (other than |
16 | | by airline). Where a taxpayer is engaged in the |
17 | | transportation of both passengers and freight, the |
18 | | fraction above referred to shall first be determined |
19 | | separately for passenger miles and freight miles. Then an |
20 | | average of the passenger miles fraction and the freight |
21 | | miles fraction shall be weighted to reflect the taxpayer's: |
22 | | (A) relative railway operating income from total |
23 | | passenger and total freight service, as reported to the |
24 | | Surface Transportation Board, in the case of |
25 | | transportation by railroad; and
|
26 | | (B) relative gross receipts from passenger and |
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1 | | freight transportation, in case of transportation |
2 | | other than by railroad.
|
3 | | (4) For taxable years ending on or after December 31, |
4 | | 2008, business income derived from furnishing airline
|
5 | | transportation services shall be apportioned to this State |
6 | | by
multiplying such income by a fraction, the numerator of |
7 | | which is the
revenue miles of the person in this State, and |
8 | | the denominator of which
is the revenue miles of the person |
9 | | everywhere. For purposes of this
paragraph, a revenue mile |
10 | | is the transportation of one passenger or one net
ton of |
11 | | freight the distance of one mile for a consideration. If a
|
12 | | person is engaged in the transportation of both passengers |
13 | | and freight,
the fraction above referred to shall be |
14 | | determined by means of an
average of the passenger revenue |
15 | | mile fraction and the freight revenue
mile fraction, |
16 | | weighted to reflect the person's relative gross receipts |
17 | | from passenger and freight
airline transportation.
|
18 | | (e) Combined apportionment. Where 2 or more persons are |
19 | | engaged in
a unitary business as described in subsection |
20 | | (a)(27) of
Section 1501,
a part of which is conducted in this |
21 | | State by one or more members of the
group, the business income |
22 | | attributable to this State by any such member
or members shall |
23 | | be apportioned by means of the combined apportionment method. |
24 | | Notwithstanding any other provision of law, for taxable years |
25 | | ending on or after December 31, 2016 and ending prior to |
26 | | December 31, 2017, for the purposes of determining the business |
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1 | | income attributable to this State by a member of a unitary |
2 | | business group, the business income of any member of the |
3 | | unitary business group that is derived from an area over which |
4 | | the United States has asserted jurisdiction or claimed |
5 | | exclusive rights with respect to the exploration for or |
6 | | exploitation of natural resources, other than the 50 states and |
7 | | the District of Columbia, shall be reduced by two-thirds. |
8 | | Notwithstanding any other provision of law, for taxable years |
9 | | ending on or after December 31, 2017 and ending prior to |
10 | | December 31, 2018, for the purposes of determining the business |
11 | | income attributable to this State by a member of a unitary |
12 | | business group, the total business income of any member of the |
13 | | unitary business group that is derived from an area over which |
14 | | the United States has asserted jurisdiction or claimed |
15 | | exclusive rights with respect to the exploration for or |
16 | | exploitation of natural resources, other than the 50 states and |
17 | | the District of Columbia, shall be reduced by one-third.
|
18 | | (f) Alternative allocation. If the allocation and |
19 | | apportionment
provisions of subsections (a) through (e) and of |
20 | | subsection (h) do not, for taxable years ending before December |
21 | | 31, 2008, fairly represent the
extent of a person's business |
22 | | activity in this State, or, for taxable years ending on or |
23 | | after December 31, 2008, fairly represent the market for the |
24 | | person's goods, services, or other sources of business income, |
25 | | the person may
petition for, or the Director may, without a |
26 | | petition, permit or require, in respect of all or any part
of |
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1 | | the 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 |
11 | | residents,
see Section 301(a).
|
12 | | (h) For tax years ending on or after December 31, 1998, the |
13 | | apportionment
factor of persons who apportion their business |
14 | | income to this State under
subsection (a) shall be equal to:
|
15 | | (1) for tax years ending on or after December 31, 1998 |
16 | | and before December
31, 1999, 16 2/3% of the property |
17 | | factor plus 16 2/3% of the payroll factor
plus
66 2/3% of |
18 | | the sales factor;
|
19 | | (2) for tax years ending on or after December 31, 1999 |
20 | | and before December
31,
2000, 8 1/3% of the property factor |
21 | | plus 8 1/3% of the payroll factor plus 83
1/3%
of the sales |
22 | | factor;
|
23 | | (3) for tax years ending on or after December 31, 2000, |
24 | | the sales factor.
|
25 | | If, in any tax year ending on or after December 31, 1998 and |
26 | | before December
31, 2000, the denominator of the payroll, |
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1 | | property, or sales factor is zero,
the apportionment
factor |
2 | | computed in paragraph (1) or (2) of this subsection for that |
3 | | year shall
be divided by an amount equal to 100% minus the |
4 | | percentage weight given to each
factor whose denominator is |
5 | | equal to zero.
|
6 | | (Source: P.A. 97-507, eff. 8-23-11; 97-636, eff. 6-1-12; |
7 | | 98-478, eff. 1-1-14; 98-496, eff. 1-1-14; 98-756, eff. 7-16-14; |
8 | | revised 10-19-15.)
|
9 | | (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
|
10 | | Sec. 1501. Definitions.
|
11 | | (a) In general. When used in this Act, where not
otherwise |
12 | | distinctly expressed or manifestly incompatible with the |
13 | | intent
thereof:
|
14 | | (1) Business income. The term "business income" means |
15 | | all income that may be treated as apportionable business |
16 | | income under the Constitution of the United States. |
17 | | Business income is net of the deductions allocable thereto. |
18 | | Such term does not include compensation
or the deductions |
19 | | allocable thereto.
For each taxable year beginning on or |
20 | | after January 1, 2003, a taxpayer may
elect to treat all |
21 | | income other than compensation as business income. This
|
22 | | election shall be made in accordance with rules adopted by |
23 | | the Department and,
once made, shall be irrevocable.
|
24 | | (1.5) Captive real estate investment trust:
|
25 | | (A) The term "captive real estate investment |
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1 | | trust" means a corporation, trust, or association:
|
2 | | (i) that is considered a real estate |
3 | | investment trust for the taxable year under |
4 | | Section 856 of the Internal Revenue Code;
|
5 | | (ii) the certificates of beneficial interest |
6 | | or shares of which are not regularly traded on an |
7 | | established securities market; and |
8 | | (iii) of which more than 50% of the voting |
9 | | power or value of the beneficial interest or |
10 | | shares, at any time during the last half of the |
11 | | taxable year, is owned or controlled, directly, |
12 | | indirectly, or constructively, by a single |
13 | | corporation. |
14 | | (B) The term "captive real estate investment |
15 | | trust" does not include: |
16 | | (i) a real estate investment trust of which |
17 | | more than 50% of the voting power or value of the |
18 | | beneficial interest or shares is owned or |
19 | | controlled, directly, indirectly, or |
20 | | constructively, by: |
21 | | (a) a real estate investment trust, other |
22 | | than a captive real estate investment trust; |
23 | | (b) a person who is exempt from taxation |
24 | | under Section 501 of the Internal Revenue Code, |
25 | | and who is not required to treat income |
26 | | received from the real estate investment trust |
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1 | | as unrelated business taxable income under |
2 | | Section 512 of the Internal Revenue Code; |
3 | | (c) a listed Australian property trust, if |
4 | | no more than 50% of the voting power or value |
5 | | of the beneficial interest or shares of that |
6 | | trust, at any time during the last half of the |
7 | | taxable year, is owned or controlled, directly |
8 | | or indirectly, by a single person; |
9 | | (d) an entity organized as a trust, |
10 | | provided a listed Australian property trust |
11 | | described in subparagraph (c) owns or |
12 | | controls, directly or indirectly, or |
13 | | constructively, 75% or more of the voting power |
14 | | or value of the beneficial interests or shares |
15 | | of such entity; or |
16 | | (e) an entity that is organized outside of |
17 | | the laws of the United States and that |
18 | | satisfies all of the following criteria: |
19 | | (1) at least 75% of the entity's total |
20 | | asset value at the close of its taxable |
21 | | year is represented by real estate assets |
22 | | (as defined in Section 856(c)(5)(B) of the |
23 | | Internal Revenue Code, thereby including |
24 | | shares or certificates of beneficial |
25 | | interest in any real estate investment |
26 | | trust), cash and cash equivalents, and |
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1 | | U.S. Government securities; |
2 | | (2) the entity is not subject to tax on |
3 | | amounts that are distributed to its |
4 | | beneficial owners or is exempt from |
5 | | entity-level taxation; |
6 | | (3) the entity distributes at least |
7 | | 85% of its taxable income (as computed in |
8 | | the jurisdiction in which it is organized) |
9 | | to the holders of its shares or |
10 | | certificates of beneficial interest on an |
11 | | annual basis; |
12 | | (4) either (i) the shares or |
13 | | beneficial interests of the entity are |
14 | | regularly traded on an established |
15 | | securities market or (ii) not more than 10% |
16 | | of the voting power or value in the entity |
17 | | is held, directly, indirectly, or |
18 | | constructively, by a single entity or |
19 | | individual; and |
20 | | (5) the entity is organized in a |
21 | | country that has entered into a tax treaty |
22 | | with the United States; or |
23 | | (ii) during its first taxable year for which it |
24 | | elects to be treated as a real estate investment |
25 | | trust under Section 856(c)(1) of the Internal |
26 | | Revenue Code, a real estate investment trust the |
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1 | | certificates of beneficial interest or shares of |
2 | | which are not regularly traded on an established |
3 | | securities market, but only if the certificates of |
4 | | beneficial interest or shares of the real estate |
5 | | investment trust are regularly traded on an |
6 | | established securities market prior to the earlier |
7 | | of the due date (including extensions) for filing |
8 | | its return under this Act for that first taxable |
9 | | year or the date it actually files that return. |
10 | | (C) For the purposes of this subsection (1.5), the |
11 | | constructive ownership rules prescribed under Section |
12 | | 318(a) of the Internal Revenue Code, as modified by |
13 | | Section 856(d)(5) of the Internal Revenue Code, apply |
14 | | in determining the ownership of stock, assets, or net |
15 | | profits of any person.
|
16 | | (D) For the purposes of this item (1.5), for |
17 | | taxable years ending on or after August 16, 2007, the |
18 | | voting power or value of the beneficial interest or |
19 | | shares of a real estate investment trust does not |
20 | | include any voting power or value of beneficial |
21 | | interest or shares in a real estate investment trust |
22 | | held directly or indirectly in a segregated asset |
23 | | account by a life insurance company (as described in |
24 | | Section 817 of the Internal Revenue Code) to the extent |
25 | | such voting power or value is for the benefit of |
26 | | entities or persons who are either immune from taxation |
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1 | | or exempt from taxation under subtitle A of the |
2 | | Internal Revenue Code.
|
3 | | (2) Commercial domicile. The term "commercial |
4 | | domicile" means the
principal
place from which the trade or |
5 | | business of the taxpayer is directed or managed.
|
6 | | (3) Compensation. The term "compensation" means wages, |
7 | | salaries,
commissions
and any other form of remuneration |
8 | | paid to employees for personal services.
|
9 | | (4) Corporation. The term "corporation" includes |
10 | | associations, joint-stock
companies, insurance companies |
11 | | and cooperatives. Any entity, including a
limited |
12 | | liability company formed under the Illinois Limited |
13 | | Liability Company
Act, shall be treated as a corporation if |
14 | | it is so classified for federal
income tax purposes.
|
15 | | (5) Department. The term "Department" means the |
16 | | Department of Revenue of
this State.
|
17 | | (6) Director. The term "Director" means the Director of |
18 | | Revenue of this
State.
|
19 | | (7) Fiduciary. The term "fiduciary" means a guardian, |
20 | | trustee, executor,
administrator, receiver, or any person |
21 | | acting in any fiduciary capacity for any
person.
|
22 | | (8) Financial organization.
|
23 | | (A) The term "financial organization" means
any
|
24 | | bank, bank holding company, trust company, savings |
25 | | bank, industrial bank,
land bank, safe deposit |
26 | | company, private banker, savings and loan association,
|
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1 | | building and loan association, credit union, currency |
2 | | exchange, cooperative
bank, small loan company, sales |
3 | | finance company, investment company, or any
person |
4 | | which is owned by a bank or bank holding company. For |
5 | | the purpose of
this Section a "person" will include |
6 | | only those persons which a bank holding
company may |
7 | | acquire and hold an interest in, directly or |
8 | | indirectly, under the
provisions of the Bank Holding |
9 | | Company Act of 1956 (12 U.S.C. 1841, et seq.),
except |
10 | | where interests in any person must be disposed of |
11 | | within certain
required time limits under the Bank |
12 | | Holding Company Act of 1956.
|
13 | | (B) For purposes of subparagraph (A) of this |
14 | | paragraph, the term
"bank" includes (i) any entity that |
15 | | is regulated by the Comptroller of the
Currency under |
16 | | the National Bank Act, or by the Federal Reserve Board, |
17 | | or by
the
Federal Deposit Insurance Corporation and |
18 | | (ii) any federally or State chartered
bank
operating as |
19 | | a credit card bank.
|
20 | | (C) For purposes of subparagraph (A) of this |
21 | | paragraph, the term
"sales finance company" has the |
22 | | meaning provided in the following item (i) or
(ii):
|
23 | | (i) A person primarily engaged in one or more |
24 | | of the following
businesses: the business of |
25 | | purchasing customer receivables, the business
of |
26 | | making loans upon the security of customer |
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1 | | receivables, the
business of making loans for the |
2 | | express purpose of funding purchases of
tangible |
3 | | personal property or services by the borrower, or |
4 | | the business of
finance leasing. For purposes of |
5 | | this item (i), "customer receivable"
means:
|
6 | | (a) a retail installment contract or |
7 | | retail charge agreement within
the
meaning
of |
8 | | the Sales Finance Agency Act, the Retail |
9 | | Installment Sales Act, or the
Motor Vehicle |
10 | | Retail Installment Sales Act;
|
11 | | (b) an installment, charge, credit, or |
12 | | similar contract or agreement
arising from
the |
13 | | sale of tangible personal property or services |
14 | | in a transaction involving
a deferred payment |
15 | | price payable in one or more installments |
16 | | subsequent
to the sale; or
|
17 | | (c) the outstanding balance of a contract |
18 | | or agreement described in
provisions
(a) or (b) |
19 | | of this item (i).
|
20 | | A customer receivable need not provide for |
21 | | payment of interest on
deferred
payments. A sales |
22 | | finance company may purchase a customer receivable |
23 | | from, or
make a loan secured by a customer |
24 | | receivable to, the seller in the original
|
25 | | transaction or to a person who purchased the |
26 | | customer receivable directly or
indirectly from |
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1 | | that seller.
|
2 | | (ii) A corporation meeting each of the |
3 | | following criteria:
|
4 | | (a) the corporation must be a member of an |
5 | | "affiliated group" within
the
meaning of |
6 | | Section 1504(a) of the Internal Revenue Code, |
7 | | determined
without regard to Section 1504(b) |
8 | | of the Internal Revenue Code;
|
9 | | (b) more than 50% of the gross income of |
10 | | the corporation for the
taxable
year
must be |
11 | | interest income derived from qualifying loans. |
12 | | A "qualifying
loan" is a loan made to a member |
13 | | of the corporation's affiliated group that
|
14 | | originates customer receivables (within the |
15 | | meaning of item (i)) or to whom
customer |
16 | | receivables originated by a member of the |
17 | | affiliated group have been
transferred, to
the |
18 | | extent the average outstanding balance of |
19 | | loans from that corporation
to members of its |
20 | | affiliated group during the taxable year do not |
21 | | exceed
the limitation amount for that |
22 | | corporation. The "limitation amount" for a
|
23 | | corporation is the average outstanding |
24 | | balances during the taxable year of
customer |
25 | | receivables (within the meaning of item (i)) |
26 | | originated by
all members of the affiliated |
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1 | | group.
If the average outstanding balances of |
2 | | the
loans made by a corporation to members of |
3 | | its affiliated group exceed the
limitation |
4 | | amount, the interest income of that |
5 | | corporation from qualifying
loans shall be |
6 | | equal to its interest income from loans to |
7 | | members of its
affiliated groups times a |
8 | | fraction equal to the limitation amount |
9 | | divided by
the average outstanding balances of |
10 | | the loans made by that corporation to
members |
11 | | of its affiliated group;
|
12 | | (c) the total of all shareholder's equity |
13 | | (including, without
limitation,
paid-in
|
14 | | capital on common and preferred stock and |
15 | | retained earnings) of the
corporation plus the |
16 | | total of all of its loans, advances, and other
|
17 | | obligations payable or owed to members of its |
18 | | affiliated group may not
exceed 20% of the |
19 | | total assets of the corporation at any time |
20 | | during the tax
year; and
|
21 | | (d) more than 50% of all interest-bearing |
22 | | obligations of the
affiliated group payable to |
23 | | persons outside the group determined in |
24 | | accordance
with generally accepted accounting |
25 | | principles must be obligations of the
|
26 | | corporation.
|
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1 | | This amendatory Act of the 91st General Assembly is |
2 | | declaratory of
existing
law.
|
3 | | (D) Subparagraphs
(B) and (C) of this paragraph are |
4 | | declaratory of
existing law and apply retroactively, |
5 | | for all tax years beginning on or before
December 31, |
6 | | 1996,
to all original returns, to all amended returns |
7 | | filed no later than 30
days after the effective date of |
8 | | this amendatory Act of 1996, and to all
notices issued |
9 | | on or before the effective date of this amendatory Act |
10 | | of 1996
under subsection (a) of Section 903, subsection |
11 | | (a) of Section 904,
subsection (e) of Section 909, or |
12 | | Section 912.
A taxpayer that is a "financial |
13 | | organization" that engages in any transaction
with an |
14 | | affiliate shall be a "financial organization" for all |
15 | | purposes of this
Act.
|
16 | | (E) For all tax years beginning on or
before |
17 | | December 31, 1996, a taxpayer that falls within the |
18 | | definition
of a
"financial organization" under |
19 | | subparagraphs (B) or (C) of this paragraph, but
who |
20 | | does
not fall within the definition of a "financial |
21 | | organization" under the Proposed
Regulations issued by |
22 | | the Department of Revenue on July 19, 1996, may
|
23 | | irrevocably elect to apply the Proposed Regulations |
24 | | for all of those years as
though the Proposed |
25 | | Regulations had been lawfully promulgated, adopted, |
26 | | and in
effect for all of those years. For purposes of |
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1 | | applying subparagraphs (B) or
(C) of
this
paragraph to |
2 | | all of those years, the election allowed by this |
3 | | subparagraph
applies only to the taxpayer making the |
4 | | election and to those members of the
taxpayer's unitary |
5 | | business group who are ordinarily required to |
6 | | apportion
business income under the same subsection of |
7 | | Section 304 of this Act as the
taxpayer making the |
8 | | election. No election allowed by this subparagraph |
9 | | shall
be made under a claim
filed under subsection (d) |
10 | | of Section 909 more than 30 days after the
effective |
11 | | date of this amendatory Act of 1996.
|
12 | | (F) Finance Leases. For purposes of this |
13 | | subsection, a finance lease
shall be treated as a loan |
14 | | or other extension of credit, rather than as a
lease,
|
15 | | regardless of how the transaction is characterized for |
16 | | any other purpose,
including the purposes of any |
17 | | regulatory agency to which the lessor is subject.
A |
18 | | finance lease is any transaction in the form of a lease |
19 | | in which the lessee
is treated as the owner of the |
20 | | leased asset entitled to any deduction for
|
21 | | depreciation allowed under Section 167 of the Internal |
22 | | Revenue Code.
|
23 | | (9) Fiscal year. The term "fiscal year" means an |
24 | | accounting period of
12 months ending on the last day of |
25 | | any month other than December.
|
26 | | (9.5) Fixed place of business. The term "fixed place of |
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1 | | business" has the same meaning as that term is given in |
2 | | Section 864 of the Internal Revenue Code and the related |
3 | | Treasury regulations.
|
4 | | (10) Includes and including. The terms "includes" and |
5 | | "including" when
used in a definition contained in this Act |
6 | | shall not be deemed to exclude
other things otherwise |
7 | | within the meaning of the term defined.
|
8 | | (11) Internal Revenue Code. The term "Internal Revenue |
9 | | Code" means the
United States Internal Revenue Code of 1954 |
10 | | or any successor law or laws
relating to federal income |
11 | | taxes in effect for the taxable year.
|
12 | | (11.5) Investment partnership. |
13 | | (A) The term "investment partnership" means any |
14 | | entity that is treated as a partnership for federal |
15 | | income tax purposes that meets the following |
16 | | requirements: |
17 | | (i) no less than 90% of the partnership's cost |
18 | | of its total assets consists of qualifying |
19 | | investment securities, deposits at banks or other |
20 | | financial institutions, and office space and |
21 | | equipment reasonably necessary to carry on its |
22 | | activities as an investment partnership; |
23 | | (ii) no less than 90% of its gross income |
24 | | consists of interest, dividends, and gains from |
25 | | the sale or exchange of qualifying investment |
26 | | securities; and
|
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1 | | (iii) the partnership is not a dealer in |
2 | | qualifying investment securities. |
3 | | (B) For purposes of this paragraph (11.5), the term |
4 | | "qualifying investment securities" includes all of the |
5 | | following:
|
6 | | (i) common stock, including preferred or debt |
7 | | securities convertible into common stock, and |
8 | | preferred stock; |
9 | | (ii) bonds, debentures, and other debt |
10 | | securities; |
11 | | (iii) foreign and domestic currency deposits |
12 | | secured by federal, state, or local governmental |
13 | | agencies; |
14 | | (iv) mortgage or asset-backed securities |
15 | | secured by federal, state, or local governmental |
16 | | agencies; |
17 | | (v) repurchase agreements and loan |
18 | | participations; |
19 | | (vi) foreign currency exchange contracts and |
20 | | forward and futures contracts on foreign |
21 | | currencies; |
22 | | (vii) stock and bond index securities and |
23 | | futures contracts and other similar financial |
24 | | securities and futures contracts on those |
25 | | securities;
|
26 | | (viii) options for the purchase or sale of any |
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1 | | of the securities, currencies, contracts, or |
2 | | financial instruments described in items (i) to |
3 | | (vii), inclusive;
|
4 | | (ix) regulated futures contracts;
|
5 | | (x) commodities (not described in Section |
6 | | 1221(a)(1) of the Internal Revenue Code) or |
7 | | futures, forwards, and options with respect to |
8 | | such commodities, provided, however, that any item |
9 | | of a physical commodity to which title is actually |
10 | | acquired in the partnership's capacity as a dealer |
11 | | in such commodity shall not be a qualifying |
12 | | investment security;
|
13 | | (xi) derivatives; and
|
14 | | (xii) a partnership interest in another |
15 | | partnership that is an investment partnership.
|
16 | | (12) Mathematical error. The term "mathematical error" |
17 | | includes the
following types of errors, omissions, or |
18 | | defects in a return filed by a
taxpayer which prevents |
19 | | acceptance of the return as filed for processing:
|
20 | | (A) arithmetic errors or incorrect computations on |
21 | | the return or
supporting schedules;
|
22 | | (B) entries on the wrong lines;
|
23 | | (C) omission of required supporting forms or |
24 | | schedules or the omission
of the information in whole |
25 | | or in part called for thereon; and
|
26 | | (D) an attempt to claim, exclude, deduct, or |
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1 | | improperly report, in a
manner
directly contrary to the |
2 | | provisions of the Act and regulations thereunder
any |
3 | | item of income, exemption, deduction, or credit.
|
4 | | (13) Nonbusiness income. The term "nonbusiness income" |
5 | | means all income
other than business income or |
6 | | compensation.
|
7 | | (14) Nonresident. The term "nonresident" means a |
8 | | person who is not a
resident.
|
9 | | (15) Paid, incurred and accrued. The terms "paid", |
10 | | "incurred" and
"accrued"
shall be construed according to |
11 | | the method of accounting upon the basis
of which the |
12 | | person's base income is computed under this Act.
|
13 | | (16) Partnership and partner. The term "partnership" |
14 | | includes a syndicate,
group, pool, joint venture or other |
15 | | unincorporated organization, through
or by means of which |
16 | | any business, financial operation, or venture is carried
|
17 | | on, and which is not, within the meaning of this Act, a |
18 | | trust or estate
or a corporation; and the term "partner" |
19 | | includes a member in such syndicate,
group, pool, joint |
20 | | venture or organization.
|
21 | | The term "partnership" includes any entity, including |
22 | | a limited
liability company formed under the Illinois
|
23 | | Limited Liability Company Act, classified as a partnership |
24 | | for federal income tax purposes.
|
25 | | The term "partnership" does not include a syndicate, |
26 | | group, pool,
joint venture, or other unincorporated |
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1 | | organization established for the
sole purpose of playing |
2 | | the Illinois State Lottery.
|
3 | | (17) Part-year resident. The term "part-year resident" |
4 | | means an individual
who became a resident during the |
5 | | taxable year or ceased to be a resident
during the taxable |
6 | | year. Under Section 1501(a)(20)(A)(i) residence
commences |
7 | | with presence in this State for other than a temporary or |
8 | | transitory
purpose and ceases with absence from this State |
9 | | for other than a temporary or
transitory purpose. Under |
10 | | Section 1501(a)(20)(A)(ii) residence commences
with the |
11 | | establishment of domicile in this State and ceases with the
|
12 | | establishment of domicile in another State.
|
13 | | (18) Person. The term "person" shall be construed to |
14 | | mean and include
an individual, a trust, estate, |
15 | | partnership, association, firm, company,
corporation, |
16 | | limited liability company, or fiduciary. For purposes of |
17 | | Section
1301 and 1302 of this Act, a "person" means (i) an |
18 | | individual, (ii) a
corporation, (iii) an officer, agent, or |
19 | | employee of a
corporation, (iv) a member, agent or employee |
20 | | of a partnership, or (v)
a member,
manager, employee, |
21 | | officer, director, or agent of a limited liability company
|
22 | | who in such capacity commits an offense specified in |
23 | | Section 1301 and 1302.
|
24 | | (18A) Records. The term "records" includes all data |
25 | | maintained by the
taxpayer, whether on paper, microfilm, |
26 | | microfiche, or any type of
machine-sensible data |
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1 | | compilation.
|
2 | | (19) Regulations. The term "regulations" includes |
3 | | rules promulgated and
forms prescribed by the Department.
|
4 | | (20) Resident. The term "resident" means:
|
5 | | (A) an individual (i) who is
in this State for |
6 | | other than a temporary or transitory purpose during the
|
7 | | taxable year; or (ii) who is domiciled in this State |
8 | | but is absent from
the State for a temporary or |
9 | | transitory purpose during the taxable year;
|
10 | | (B) The estate of a decedent who at his or her |
11 | | death was domiciled in
this
State;
|
12 | | (C) A trust created by a will of a decedent who at |
13 | | his death was
domiciled
in this State; and
|
14 | | (D) An irrevocable trust, the grantor of which was |
15 | | domiciled in this
State
at the time such trust became |
16 | | irrevocable. For purpose of this subparagraph,
a trust |
17 | | shall be considered irrevocable to the extent that the |
18 | | grantor is
not treated as the owner thereof under |
19 | | Sections 671 through 678 of the Internal
Revenue Code.
|
20 | | (21) Sales. The term "sales" means all gross receipts |
21 | | of the taxpayer
not allocated under Sections 301, 302 and |
22 | | 303.
|
23 | | (22) State. The term "state" when applied to a |
24 | | jurisdiction other than
this State means any state of the |
25 | | United States, the District of Columbia,
the Commonwealth |
26 | | of Puerto Rico, any Territory or Possession of the United
|
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1 | | States, and any foreign country, or any political |
2 | | subdivision of any of the
foregoing. For purposes of the |
3 | | foreign tax credit under Section 601, the
term "state" |
4 | | means any state of the United States, the District of |
5 | | Columbia,
the Commonwealth of Puerto Rico, and any |
6 | | territory or possession of the
United States, or any |
7 | | political subdivision of any of the foregoing,
effective |
8 | | for tax years ending on or after December 31, 1989.
|
9 | | (23) Taxable year. The term "taxable year" means the |
10 | | calendar year, or
the fiscal year ending during such |
11 | | calendar year, upon the basis of which
the base income is |
12 | | computed under this Act. "Taxable year" means, in the
case |
13 | | of a return made for a fractional part of a year under the |
14 | | provisions
of this Act, the period for which such return is |
15 | | made.
|
16 | | (24) Taxpayer. The term "taxpayer" means any person |
17 | | subject to the tax
imposed by this Act.
|
18 | | (25) International banking facility. The term |
19 | | international banking
facility shall have the same meaning |
20 | | as is set forth in the Illinois Banking
Act or as is set |
21 | | forth in the laws of the United States or regulations of
|
22 | | the Board of Governors of the Federal Reserve System.
|
23 | | (26) Income Tax Return Preparer.
|
24 | | (A) The term "income tax return preparer"
means any |
25 | | person who prepares for compensation, or who employs |
26 | | one or more
persons to prepare for compensation, any |
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1 | | return of tax imposed by this Act
or any claim for |
2 | | refund of tax imposed by this Act. The preparation of a
|
3 | | substantial portion of a return or claim for refund |
4 | | shall be treated as
the preparation of that return or |
5 | | claim for refund.
|
6 | | (B) A person is not an income tax return preparer |
7 | | if all he or she does
is
|
8 | | (i) furnish typing, reproducing, or other |
9 | | mechanical assistance;
|
10 | | (ii) prepare returns or claims for refunds for |
11 | | the employer by whom he
or she is regularly and |
12 | | continuously employed;
|
13 | | (iii) prepare as a fiduciary returns or claims |
14 | | for refunds for any
person; or
|
15 | | (iv) prepare claims for refunds for a taxpayer |
16 | | in response to any
notice
of deficiency issued to |
17 | | that taxpayer or in response to any waiver of
|
18 | | restriction after the commencement of an audit of |
19 | | that taxpayer or of another
taxpayer if a |
20 | | determination in the audit of the other taxpayer |
21 | | directly or
indirectly affects the tax liability |
22 | | of the taxpayer whose claims he or she is
|
23 | | preparing.
|
24 | | (27) Unitary business group. |
25 | | (A) The term "unitary business group" means
a group |
26 | | of persons related through common ownership whose |
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1 | | business activities
are integrated with, dependent |
2 | | upon and contribute to each other. The group
will not |
3 | | include those members whose business activity outside |
4 | | the United
States is 80% or more of any such member's |
5 | | total business activity; for
purposes of this |
6 | | paragraph and clause (a)(3)(B)(ii) of Section 304,
|
7 | | business
activity within the United States shall be |
8 | | measured by means of the factors
ordinarily applicable |
9 | | under subsections (a), (b), (c), (d), or (h)
of Section
|
10 | | 304 except that, in the case of members ordinarily |
11 | | required to apportion
business income by means of the 3 |
12 | | factor formula of property, payroll and sales
|
13 | | specified in subsection (a) of Section 304, including |
14 | | the
formula as weighted in subsection (h) of Section |
15 | | 304, such members shall
not use the sales factor in the |
16 | | computation and the results of the property
and payroll |
17 | | factor computations of subsection (a) of Section 304 |
18 | | shall be
divided by 2 (by one if either
the property or |
19 | | payroll factor has a denominator of zero). The |
20 | | computation
required by the preceding sentence shall, |
21 | | in each case, involve the division of
the member's |
22 | | property, payroll, or revenue miles in the United |
23 | | States,
insurance premiums on property or risk in the |
24 | | United States, or financial
organization business |
25 | | income from sources within the United States, as the
|
26 | | case may be, by the respective worldwide figures for |
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1 | | such items. Common
ownership in the case of |
2 | | corporations is the direct or indirect control or
|
3 | | ownership of more than 50% of the outstanding voting |
4 | | stock of the persons
carrying on unitary business |
5 | | activity. Unitary business activity can
ordinarily be |
6 | | illustrated where the activities of the members are: |
7 | | (1) in the
same general line (such as manufacturing, |
8 | | wholesaling, retailing of tangible
personal property, |
9 | | insurance, transportation or finance); or (2) are |
10 | | steps in a
vertically structured enterprise or process |
11 | | (such as the steps involved in the
production of |
12 | | natural resources, which might include exploration, |
13 | | mining,
refining, and marketing); and, in either |
14 | | instance, the members are functionally
integrated |
15 | | through the exercise of strong centralized management |
16 | | (where, for
example, authority over such matters as |
17 | | purchasing, financing, tax compliance,
product line, |
18 | | personnel, marketing and capital investment is not |
19 | | left to each
member).
|
20 | | (B) In no event, shall any
unitary business group |
21 | | include members
which are ordinarily required to |
22 | | apportion business income under different
subsections |
23 | | of Section 304 except that for tax years ending on or |
24 | | after
December 31, 1987 this prohibition shall not |
25 | | apply to a holding company that would otherwise be a |
26 | | member of a unitary business group with taxpayers that |
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1 | | apportion business income under any of subsections |
2 | | (b), (c), (c-1), or (d) of Section 304. If a unitary |
3 | | business
group would, but for the preceding sentence, |
4 | | include members that are
ordinarily required to |
5 | | apportion business income under different subsections |
6 | | of
Section 304, then for each subsection of Section 304 |
7 | | for which there are two or
more members, there shall be |
8 | | a separate unitary business group composed of such
|
9 | | members. For purposes of the preceding two sentences, a |
10 | | member is "ordinarily
required to apportion business |
11 | | income" under a particular subsection of Section
304 if |
12 | | it would be required to use the apportionment method |
13 | | prescribed by such
subsection except for the fact that |
14 | | it derives business income solely from
Illinois. As |
15 | | used in this paragraph, for taxable years ending before |
16 | | December 31, 2016, the phrase "United States" means |
17 | | only the 50 states and the District of Columbia, but |
18 | | does not include any territory or possession of the |
19 | | United States or any area over which the United States |
20 | | has asserted jurisdiction or claimed exclusive rights |
21 | | with respect to the exploration for or exploitation of |
22 | | natural resources.
For taxable years ending on or after |
23 | | December 31, 2016, the phrase "United States", as used |
24 | | in this paragraph, means only the 50 states, the |
25 | | District of Columbia, and any area over which the |
26 | | United States has asserted jurisdiction or claimed |
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1 | | exclusive rights with respect to the exploration for or |
2 | | exploitation of natural resources, but does not |
3 | | include any territory or possession of the United |
4 | | States. |
5 | | (C) Holding companies. |
6 | | (i) For purposes of this subparagraph, a |
7 | | "holding company" is a corporation (other than a |
8 | | corporation that is a financial organization under |
9 | | paragraph (8) of this subsection (a) of Section |
10 | | 1501 because it is a bank holding company under the |
11 | | provisions of the Bank Holding Company Act of 1956 |
12 | | (12 U.S.C. 1841, et seq.) or because it is owned by |
13 | | a bank or a bank holding company) that owns a |
14 | | controlling interest in one or more other |
15 | | taxpayers ("controlled taxpayers"); that, during |
16 | | the period that includes the taxable year and the 2 |
17 | | immediately preceding taxable years or, if the |
18 | | corporation was formed during the current or |
19 | | immediately preceding taxable year, the taxable |
20 | | years in which the corporation has been in |
21 | | existence, derived substantially all its gross |
22 | | income from dividends, interest, rents, royalties, |
23 | | fees or other charges received from controlled |
24 | | taxpayers for the provision of services, and gains |
25 | | on the sale or other disposition of interests in |
26 | | controlled taxpayers or in property leased or |
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1 | | licensed to controlled taxpayers or used by the |
2 | | taxpayer in providing services to controlled |
3 | | taxpayers; and that incurs no substantial expenses |
4 | | other than expenses (including interest and other |
5 | | costs of borrowing) incurred in connection with |
6 | | the acquisition and holding of interests in |
7 | | controlled taxpayers and in the provision of |
8 | | services to controlled taxpayers or in the leasing |
9 | | or licensing of property to controlled taxpayers. |
10 | | (ii) The income of a holding company which is a |
11 | | member of more than one unitary business group |
12 | | shall be included in each unitary business group of |
13 | | which it is a member on a pro rata basis, by |
14 | | including in each unitary business group that |
15 | | portion of the base income of the holding company |
16 | | that bears the same proportion to the total base |
17 | | income of the holding company as the gross receipts |
18 | | of the unitary business group bears to the combined |
19 | | gross receipts of all unitary business groups (in |
20 | | both cases without regard to the holding company) |
21 | | or on any other reasonable basis, consistently |
22 | | applied. |
23 | | (iii) A holding company shall apportion its |
24 | | business income under the subsection of Section |
25 | | 304 used by the other members of its unitary |
26 | | business group. The apportionment factors of a |
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1 | | holding company which would be a member of more |
2 | | than one unitary business group shall be included |
3 | | with the apportionment factors of each unitary |
4 | | business group of which it is a member on a pro |
5 | | rata basis using the same method used in clause |
6 | | (ii). |
7 | | (iv) The provisions of this subparagraph (C) |
8 | | are intended to clarify existing law. |
9 | | (D) If including the base income and factors of a |
10 | | holding company in more than one unitary business group |
11 | | under subparagraph (C) does not fairly reflect the |
12 | | degree of integration between the holding company and |
13 | | one or more of the unitary business groups, the |
14 | | dependence of the holding company and one or more of |
15 | | the unitary business groups upon each other, or the |
16 | | contributions between the holding company and one or |
17 | | more of the unitary business groups, the holding |
18 | | company may petition the Director, under the |
19 | | procedures provided under Section 304(f), for |
20 | | permission to include all base income and factors of |
21 | | the holding company only with members of a unitary |
22 | | business group apportioning their business income |
23 | | under one subsection of subsections (a), (b), (c), or |
24 | | (d) of Section 304. If the petition is granted, the |
25 | | holding company shall be included in a unitary business |
26 | | group only with persons apportioning their business |
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1 | | income under the selected subsection of Section 304 |
2 | | until the Director grants a petition of the holding |
3 | | company either to be included in more than one unitary |
4 | | business group under subparagraph (C) or to include its |
5 | | base income and factors only with members of a unitary |
6 | | business group apportioning their business income |
7 | | under a different subsection of Section 304. |
8 | | (E) If the unitary business group members' |
9 | | accounting periods differ,
the common parent's |
10 | | accounting period or, if there is no common parent, the
|
11 | | accounting period of the member that is expected to |
12 | | have, on a recurring basis,
the greatest Illinois |
13 | | income tax liability must be used to determine whether |
14 | | to
use the apportionment method provided in subsection |
15 | | (a) or subsection (h) of
Section 304. The
prohibition |
16 | | against membership in a unitary business group for |
17 | | taxpayers
ordinarily required to apportion income |
18 | | under different subsections of Section
304 does not |
19 | | apply to taxpayers required to apportion income under |
20 | | subsection
(a) and subsection (h) of Section
304. The |
21 | | provisions of this amendatory Act of 1998 apply to tax
|
22 | | years ending on or after December 31, 1998.
|
23 | | (28) Subchapter S corporation. The term "Subchapter S |
24 | | corporation"
means a corporation for which there is in |
25 | | effect an election under Section
1362 of the Internal |
26 | | Revenue Code, or for which there is a federal election
to |
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1 | | opt out of the provisions of the Subchapter S Revision Act |
2 | | of 1982 and
have applied instead the prior federal |
3 | | Subchapter S rules as in effect on July
1, 1982.
|
4 | | (30) Foreign person. The term "foreign person" means |
5 | | any person who is a nonresident alien individual and any |
6 | | nonindividual entity, regardless of where created or |
7 | | organized, whose business activity outside the United |
8 | | States is 80% or more of the entity's total business |
9 | | activity.
|
10 | | (b) Other definitions.
|
11 | | (1) Words denoting number, gender, and so forth,
when |
12 | | used in this Act, where not otherwise distinctly expressed |
13 | | or manifestly
incompatible with the intent thereof:
|
14 | | (A) Words importing the singular include and apply |
15 | | to several persons,
parties or things;
|
16 | | (B) Words importing the plural include the |
17 | | singular; and
|
18 | | (C) Words importing the masculine gender include |
19 | | the feminine as well.
|
20 | | (2) "Company" or "association" as including successors |
21 | | and assigns. The
word "company" or "association", when used |
22 | | in reference to a corporation,
shall be deemed to embrace |
23 | | the words "successors and assigns of such company
or |
24 | | association", and in like manner as if these last-named |
25 | | words, or words
of similar import, were expressed.
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1 | | (3) Other terms. Any term used in any Section of this |
2 | | Act with respect
to the application of, or in connection |
3 | | with, the provisions of any other
Section of this Act shall |
4 | | have the same meaning as in such other Section.
|
5 | | (Source: P.A. 99-213, eff. 7-31-15.)
|
6 | | Section 99. Effective date. This Act takes effect upon |
7 | | becoming law.".
|