Illinois General Assembly - Full Text of SB2102
Illinois General Assembly

  Bills & Resolutions  
  Compiled Statutes  
  Public Acts  
  Legislative Reports  
  IL Constitution  
  Legislative Guide  
  Legislative Glossary  

 Search By Number
 (example: HB0001)
Search Tips

Search By Keyword

Full Text of SB2102  102nd General Assembly

SB2102 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2102

 

Introduced 2/26/2021, by Sen. Robert F. Martwick

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/205  from Ch. 120, par. 2-205
35 ILCS 5/303  from Ch. 120, par. 3-303
35 ILCS 5/304  from Ch. 120, par. 3-304
35 ILCS 5/710  from Ch. 120, par. 7-710

    Amends the Illinois Income Tax Act. Restores certain provisions concerning the calculation of base income for an exempt organization under the Internal Revenue Code. Provides that certain sports wagering winnings are allocable to this State. Effective immediately.


LRB102 17277 HLH 22749 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2102LRB102 17277 HLH 22749 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing Sections 205, 303, 304 and 710 as follows:
 
6    (35 ILCS 5/205)  (from Ch. 120, par. 2-205)
7    Sec. 205. Exempt organizations.
8    (a) Charitable, etc. organizations. The For tax years
9beginning before January 1, 2019, the base income of an
10organization which is exempt from the federal income tax by
11reason of the Internal Revenue Code shall not be determined
12under section 203 of this Act, but shall be its unrelated
13business taxable income as determined under section 512 of the
14Internal Revenue Code, without any deduction for the tax
15imposed by this Act. The standard exemption provided by
16section 204 of this Act shall not be allowed in determining the
17net income of an organization to which this subsection
18applies.
19    For tax years beginning on or after January 1, 2019, the
20base income of an organization which is exempt from the
21federal income tax by reason of the Internal Revenue Code
22shall not be determined under Section 203 of this Act, but
23shall be its unrelated business taxable income as determined

 

 

SB2102- 2 -LRB102 17277 HLH 22749 b

1under Section 512 of the Internal Revenue Code, without regard
2to Section 512(a)(7) of the Internal Revenue Code and without
3any deduction for the tax imposed by this Act. The standard
4exemption provided by Section 204 of this Act shall not be
5allowed in determining the net income of an organization to
6which this subsection applies. This exclusion is exempt from
7the provisions of Section 250.
8    (b) Partnerships. A partnership as such shall not be
9subject to the tax imposed by subsection 201 (a) and (b) of
10this Act, but shall be subject to the replacement tax imposed
11by subsection 201 (c) and (d) of this Act and shall compute its
12base income as described in subsection (d) of Section 203 of
13this Act. For taxable years ending on or after December 31,
142004, an investment partnership, as defined in Section
151501(a)(11.5) of this Act, shall not be subject to the tax
16imposed by subsections (c) and (d) of Section 201 of this Act.
17A partnership shall file such returns and other information at
18such time and in such manner as may be required under Article 5
19of this Act. The partners in a partnership shall be liable for
20the replacement tax imposed by subsection 201 (c) and (d) of
21this Act on such partnership, to the extent such tax is not
22paid by the partnership, as provided under the laws of
23Illinois governing the liability of partners for the
24obligations of a partnership. Persons carrying on business as
25partners shall be liable for the tax imposed by subsection 201
26(a) and (b) of this Act only in their separate or individual

 

 

SB2102- 3 -LRB102 17277 HLH 22749 b

1capacities.
2    (c) Subchapter S corporations. A Subchapter S corporation
3shall not be subject to the tax imposed by subsection 201 (a)
4and (b) of this Act but shall be subject to the replacement tax
5imposed by subsection 201 (c) and (d) of this Act and shall
6file such returns and other information at such time and in
7such manner as may be required under Article 5 of this Act.
8    (d) Combat zone, terrorist attack, and certain other
9deaths. An individual relieved from the federal income tax for
10any taxable year by reason of section 692 of the Internal
11Revenue Code shall not be subject to the tax imposed by this
12Act for such taxable year.
13    (e) Certain trusts. A common trust fund described in
14Section 584 of the Internal Revenue Code, and any other trust
15to the extent that the grantor is treated as the owner thereof
16under sections 671 through 678 of the Internal Revenue Code
17shall not be subject to the tax imposed by this Act.
18    (f) Certain business activities. A person not otherwise
19subject to the tax imposed by this Act shall not become subject
20to the tax imposed by this Act by reason of:
21        (1) that person's ownership of tangible personal
22    property located at the premises of a printer in this
23    State with which the person has contracted for printing,
24    or
25        (2) activities of the person's employees or agents
26    located solely at the premises of a printer and related to

 

 

SB2102- 4 -LRB102 17277 HLH 22749 b

1    quality control, distribution, or printing services
2    performed by a printer in the State with which the person
3    has contracted for printing.
4    (g) A nonprofit risk organization that holds a certificate
5of authority under Article VIID of the Illinois Insurance Code
6is exempt from the tax imposed under this Act with respect to
7its activities or operations in furtherance of the powers
8conferred upon it under that Article VIID of the Illinois
9Insurance Code.
10(Source: P.A. 101-545, eff. 8-23-19.)
 
11    (35 ILCS 5/303)  (from Ch. 120, par. 3-303)
12    Sec. 303. (a) In general. Any item of capital gain or loss,
13and any item of income from rents or royalties from real or
14tangible personal property, interest, dividends, and patent or
15copyright royalties, and prizes awarded under the Illinois
16Lottery Law, and, for taxable years ending on or after
17December 31, 2019, wagering and gambling winnings from
18Illinois sources as set forth in subsection (e-1) of this
19Section, and, for taxable years ending on or after December
2031, 2021, sports wagering and winnings from Illinois sources
21as set forth in subsection (e-2) of this Section, to the extent
22such item constitutes nonbusiness income, together with any
23item of deduction directly allocable thereto, shall be
24allocated by any person other than a resident as provided in
25this Section.

 

 

SB2102- 5 -LRB102 17277 HLH 22749 b

1    (b) Capital gains and losses.
2        (1) Real property. Capital gains and losses from sales
3    or exchanges of real property are allocable to this State
4    if the property is located in this State.
5        (2) Tangible personal property. Capital gains and
6    losses from sales or exchanges of tangible personal
7    property are allocable to this State if, at the time of
8    such sale or exchange:
9            (A) The property had its situs in this State; or
10            (B) The taxpayer had its commercial domicile in
11        this State and was not taxable in the state in which
12        the property had its situs.
13        (3) Intangibles. Capital gains and losses from sales
14    or exchanges of intangible personal property are allocable
15    to this State if the taxpayer had its commercial domicile
16    in this State at the time of such sale or exchange.
17    (c) Rents and royalties.
18        (1) Real property. Rents and royalties from real
19    property are allocable to this State if the property is
20    located in this State.
21        (2) Tangible personal property. Rents and royalties
22    from tangible personal property are allocable to this
23    State:
24            (A) If and to the extent that the property is
25        utilized in this State; or
26            (B) In their entirety if, at the time such rents or

 

 

SB2102- 6 -LRB102 17277 HLH 22749 b

1        royalties were paid or accrued, the taxpayer had its
2        commercial domicile in this State and was not
3        organized under the laws of or taxable with respect to
4        such rents or royalties in the state in which the
5        property was utilized. The extent of utilization of
6        tangible personal property in a state is determined by
7        multiplying the rents or royalties derived from such
8        property by a fraction, the numerator of which is the
9        number of days of physical location of the property in
10        the state during the rental or royalty period in the
11        taxable year and the denominator of which is the
12        number of days of physical location of the property
13        everywhere during all rental or royalty periods in the
14        taxable year. If the physical location of the property
15        during the rental or royalty period is unknown or
16        unascertainable by the taxpayer, tangible personal
17        property is utilized in the state in which the
18        property was located at the time the rental or royalty
19        payer obtained possession.
20    (d) Patent and copyright royalties.
21        (1) Allocation. Patent and copyright royalties are
22    allocable to this State:
23            (A) If and to the extent that the patent or
24        copyright is utilized by the payer in this State; or
25            (B) If and to the extent that the patent or
26        copyright is utilized by the payer in a state in which

 

 

SB2102- 7 -LRB102 17277 HLH 22749 b

1        the taxpayer is not taxable with respect to such
2        royalties and, at the time such royalties were paid or
3        accrued, the taxpayer had its commercial domicile in
4        this State.
5        (2) Utilization.
6            (A) A patent is utilized in a state to the extent
7        that it is employed in production, fabrication,
8        manufacturing or other processing in the state or to
9        the extent that a patented product is produced in the
10        state. If the basis of receipts from patent royalties
11        does not permit allocation to states or if the
12        accounting procedures do not reflect states of
13        utilization, the patent is utilized in this State if
14        the taxpayer has its commercial domicile in this
15        State.
16            (B) A copyright is utilized in a state to the
17        extent that printing or other publication originates
18        in the state. If the basis of receipts from copyright
19        royalties does not permit allocation to states or if
20        the accounting procedures do not reflect states of
21        utilization, the copyright is utilized in this State
22        if the taxpayer has its commercial domicile in this
23        State.
24    (e) Illinois lottery prizes. Prizes awarded under the
25Illinois Lottery Law are allocable to this State. Payments
26received in taxable years ending on or after December 31,

 

 

SB2102- 8 -LRB102 17277 HLH 22749 b

12013, from the assignment of a prize under Section 13.1 of the
2Illinois Lottery Law are allocable to this State.
3    (e-1) Wagering and gambling winnings. Payments received in
4taxable years ending on or after December 31, 2019 of winnings
5from pari-mutuel wagering conducted at a wagering facility
6licensed under the Illinois Horse Racing Act of 1975 and from
7gambling games conducted on a riverboat or in a casino or
8organization gaming facility licensed under the Illinois
9Gambling Act are allocable to this State.
10    (e-2) Sports wagering and winnings. Payments received in
11taxable years ending on or after December 31, 2021 of winnings
12from sports wagering conducted in accordance with the Sports
13Wagering Act are allocable to this State.
14    (e-5) Unemployment benefits. Unemployment benefits paid by
15the Illinois Department of Employment Security are allocable
16to this State.
17    (f) Taxability in other state. For purposes of allocation
18of income pursuant to this Section, a taxpayer is taxable in
19another state if:
20        (1) In that state he is subject to a net income tax, a
21    franchise tax measured by net income, a franchise tax for
22    the privilege of doing business, or a corporate stock tax;
23    or
24        (2) That state has jurisdiction to subject the
25    taxpayer to a net income tax regardless of whether, in
26    fact, the state does or does not.

 

 

SB2102- 9 -LRB102 17277 HLH 22749 b

1    (g) Cross references.
2        (1) For allocation of interest and dividends by
3    persons other than residents, see Section 301(c)(2).
4        (2) For allocation of nonbusiness income by residents,
5    see Section 301(a).
6(Source: P.A. 101-31, eff. 6-28-19.)
 
7    (35 ILCS 5/304)  (from Ch. 120, par. 3-304)
8    Sec. 304. Business income of persons other than residents.
9    (a) In general. The business income of a person other than
10a resident shall be allocated to this State if such person's
11business income is derived solely from this State. If a person
12other than a resident derives business income from this State
13and one or more other states, then, for tax years ending on or
14before December 30, 1998, and except as otherwise provided by
15this Section, such person's business income shall be
16apportioned to this State by multiplying the income by a
17fraction, the numerator of which is the sum of the property
18factor (if any), the payroll factor (if any) and 200% of the
19sales factor (if any), and the denominator of which is 4
20reduced by the number of factors other than the sales factor
21which have a denominator of zero and by an additional 2 if the
22sales factor has a denominator of zero. For tax years ending on
23or after December 31, 1998, and except as otherwise provided
24by this Section, persons other than residents who derive
25business income from this State and one or more other states

 

 

SB2102- 10 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 11 -LRB102 17277 HLH 22749 b

1    which is the total amount paid in this State during the
2    taxable year by the person for compensation, and the
3    denominator of which is the total compensation paid
4    everywhere during the taxable year.
5        (B) Compensation is paid in this State if:
6            (i) The individual's service is performed entirely
7        within this State;
8            (ii) The individual's service is performed both
9        within and without this State, but the service
10        performed without this State is incidental to the
11        individual's service performed within this State; or
12            (iii) For tax years ending prior to December 31,
13        2020, some of the service is performed within this
14        State and either the base of operations, or if there is
15        no base of operations, the place from which the
16        service is directed or controlled is within this
17        State, or the base of operations or the place from
18        which the service is directed or controlled is not in
19        any state in which some part of the service is
20        performed, but the individual's residence is in this
21        State. For tax years ending on or after December 31,
22        2020, compensation is paid in this State if some of the
23        individual's service is performed within this State,
24        the individual's service performed within this State
25        is nonincidental to the individual's service performed
26        without this State, and the individual's service is

 

 

SB2102- 12 -LRB102 17277 HLH 22749 b

1        performed within this State for more than 30 working
2        days during the tax year. The amount of compensation
3        paid in this State shall include the portion of the
4        individual's total compensation for services performed
5        on behalf of his or her employer during the tax year
6        which the number of working days spent within this
7        State during the tax year bears to the total number of
8        working days spent both within and without this State
9        during the tax year. For purposes of this paragraph:
10                (a) The term "working day" means all days
11            during the tax year in which the individual
12            performs duties on behalf of his or her employer.
13            All days in which the individual performs no
14            duties on behalf of his or her employer (e.g.,
15            weekends, vacation days, sick days, and holidays)
16            are not working days.
17                (b) A working day is spent within this State
18            if:
19                    (1) the individual performs service on
20                behalf of the employer and a greater amount of
21                time on that day is spent by the individual
22                performing duties on behalf of the employer
23                within this State, without regard to time
24                spent traveling, than is spent performing
25                duties on behalf of the employer without this
26                State; or

 

 

SB2102- 13 -LRB102 17277 HLH 22749 b

1                    (2) the only service the individual
2                performs on behalf of the employer on that day
3                is traveling to a destination within this
4                State, and the individual arrives on that day.
5                (c) Working days spent within this State do
6            not include any day in which the employee is
7            performing services in this State during a
8            disaster period solely in response to a request
9            made to his or her employer by the government of
10            this State, by any political subdivision of this
11            State, or by a person conducting business in this
12            State to perform disaster or emergency-related
13            services in this State. For purposes of this item
14            (c):
15                    "Declared State disaster or emergency"
16                means a disaster or emergency event (i) for
17                which a Governor's proclamation of a state of
18                emergency has been issued or (ii) for which a
19                Presidential declaration of a federal major
20                disaster or emergency has been issued.
21                    "Disaster period" means a period that
22                begins 10 days prior to the date of the
23                Governor's proclamation or the President's
24                declaration (whichever is earlier) and extends
25                for a period of 60 calendar days after the end
26                of the declared disaster or emergency period.

 

 

SB2102- 14 -LRB102 17277 HLH 22749 b

1                    "Disaster or emergency-related services"
2                means repairing, renovating, installing,
3                building, or rendering services or conducting
4                other business activities that relate to
5                infrastructure that has been damaged,
6                impaired, or destroyed by the declared State
7                disaster or emergency.
8                    "Infrastructure" means property and
9                equipment owned or used by a public utility,
10                communications network, broadband and internet
11                service provider, cable and video service
12                provider, electric or gas distribution system,
13                or water pipeline that provides service to
14                more than one customer or person, including
15                related support facilities. "Infrastructure"
16                includes, but is not limited to, real and
17                personal property such as buildings, offices,
18                power lines, cable lines, poles,
19                communications lines, pipes, structures, and
20                equipment.
21            (iv) Compensation paid to nonresident professional
22        athletes.
23            (a) General. The Illinois source income of a
24        nonresident individual who is a member of a
25        professional athletic team includes the portion of the
26        individual's total compensation for services performed

 

 

SB2102- 15 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 16 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 17 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 18 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 19 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 20 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 21 -LRB102 17277 HLH 22749 b

1        resale.
2        (B-1) Patents, copyrights, trademarks, and similar
3    items of intangible personal property.
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
8        this item (3), are in this State to the extent the item
9        is utilized in this State during the year the gross
10        receipts are included in gross income.
11            (ii) Place of utilization.
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
19            equal to the gross receipts of the licensee or
20            purchaser 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
24            of such gross receipts for all states in which the
25            patent is utilized.
26                (II) A copyright is utilized in a state to the

 

 

SB2102- 22 -LRB102 17277 HLH 22749 b

1            extent that printing or other publication
2            originates in the state. If a copyright is
3            utilized in more than one state, the extent to
4            which it is utilized in any one state shall be a
5            fraction equal to the gross receipts from sales or
6            licenses of materials printed or published in that
7            state divided by the total of such gross receipts
8            for all states in which the copyright is utilized.
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.
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
19        receipts attributable to that item shall be excluded
20        from both the numerator and the denominator of the
21        sales factor.
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

 

 

SB2102- 23 -LRB102 17277 HLH 22749 b

1    the sales factor only if gross receipts from licenses,
2    sales, or other disposition of such items comprise more
3    than 50% of the taxpayer's total gross receipts included
4    in gross income during the tax year and during each of the
5    2 immediately preceding tax years; provided that, when a
6    taxpayer is a member of a unitary business group, such
7    determination shall be made on the basis of the gross
8    receipts of the entire unitary business group.
9        (B-5) For taxable years ending on or after December
10    31, 2008, except as provided in subsections (ii) through
11    (vii), receipts from the sale of telecommunications
12    service or mobile telecommunications service are in this
13    State if the 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.

 

 

SB2102- 24 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 25 -LRB102 17277 HLH 22749 b

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
11        of mobile telecommunications services, "place of
12        primary use" must be within the licensed service area
13        of the 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

 

 

SB2102- 26 -LRB102 17277 HLH 22749 b

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
4        number 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

 

 

SB2102- 27 -LRB102 17277 HLH 22749 b

1            equipment to which a customer's call is charged
2            and 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

 

 

SB2102- 28 -LRB102 17277 HLH 22749 b

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
12            to, 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
22            include, but not be limited to, cable service as
23            defined in 47 USC 522(6) and audio and video
24            programming services delivered by commercial
25            mobile radio service providers, as defined in 47
26            CFR 20.3;

 

 

SB2102- 29 -LRB102 17277 HLH 22749 b

1                (h) "Ancillary services"; or
2                (i) Digital products "delivered
3            electronically", including, but not limited to,
4            software, music, video, reading materials or ring
5            tones.
6            "Vertical service" means an "ancillary service"
7        that is offered in connection with one or more
8        "telecommunications services", which offers advanced
9        calling features that allow customers to identify
10        callers and to manage multiple calls and call
11        connections, including "conference bridging services".
12            "Voice mail service" means an "ancillary service"
13        that enables the customer to store, send or receive
14        recorded messages. "Voice mail service" does not
15        include any "vertical services" that the customer may
16        be required to have in order to utilize the "voice mail
17        service".
18            (ii) Receipts from the sale of telecommunications
19        service sold on an individual call-by-call basis are
20        in this State if either of the following applies:
21                (a) The call both originates and terminates in
22            this State.
23                (b) The call either originates or terminates
24            in this State and the service address is located
25            in this State.
26            (iii) Receipts from the sale of postpaid

 

 

SB2102- 30 -LRB102 17277 HLH 22749 b

1        telecommunications service at retail are in this State
2        if the origination point of the telecommunication
3        signal, as first identified by the service provider's
4        telecommunication system or as identified by
5        information received by the seller from its service
6        provider if the system used to transport
7        telecommunication signals is not the seller's, is
8        located in this State.
9            (iv) Receipts from the sale of prepaid
10        telecommunications service or prepaid mobile
11        telecommunications service at retail are in this State
12        if the purchaser obtains the prepaid card or similar
13        means of conveyance at a location in this State.
14        Receipts from recharging a prepaid telecommunications
15        service or mobile telecommunications service is in
16        this State if the purchaser's billing information
17        indicates a location in this State.
18            (v) Receipts from the sale of private
19        communication services are in this State as follows:
20                (a) 100% of receipts from charges imposed at
21            each channel termination point in this State.
22                (b) 100% of receipts from charges for the
23            total channel mileage between each channel
24            termination point in this State.
25                (c) 50% of the total receipts from charges for
26            service segments when those segments are between 2

 

 

SB2102- 31 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 32 -LRB102 17277 HLH 22749 b

1            attributable to intrastate telecommunications
2            service that both originates and terminates in
3            this State.
4                (b) 50% of the receipts from access fees
5            attributable to interstate telecommunications
6            service if the interstate call either originates
7            or terminates in this State.
8                (c) 100% of the receipts from interstate end
9            user access line charges, if the customer's
10            service address is in this State. As used in this
11            subdivision, "interstate end user access line
12            charges" includes, but is not limited to, the
13            surcharge approved by the federal communications
14            commission and levied pursuant to 47 CFR 69.
15                (d) Gross receipts from sales of
16            telecommunication services or from ancillary
17            services for telecommunications services sold to
18            other telecommunication service providers for
19            resale shall be sourced to this State using the
20            apportionment concepts used for non-resale
21            receipts of telecommunications services if the
22            information is readily available to make that
23            determination. If the information is not readily
24            available, then the taxpayer may use any other
25            reasonable and consistent method.
26        (B-7) For taxable years ending on or after December

 

 

SB2102- 33 -LRB102 17277 HLH 22749 b

1    31, 2008, receipts from the sale of broadcasting services
2    are in this State if the broadcasting services are
3    received in this State. For purposes of this paragraph
4    (B-7), the following terms have the following meanings:
5            "Advertising revenue" means consideration received
6        by the taxpayer in exchange for broadcasting services
7        or allowing the broadcasting of commercials or
8        announcements in connection with the broadcasting of
9        film or radio programming, from sponsorships of the
10        programming, or from product placements in the
11        programming.
12            "Audience factor" means the ratio that the
13        audience or subscribers located in this State of a
14        station, a network, or a cable system bears to the
15        total audience or total subscribers for that station,
16        network, or cable system. The audience factor for film
17        or radio programming shall be determined by reference
18        to the books and records of the taxpayer or by
19        reference to published rating statistics provided the
20        method used by the taxpayer is consistently used from
21        year to year for this purpose and fairly represents
22        the taxpayer's activity in this State.
23            "Broadcast" or "broadcasting" or "broadcasting
24        services" means the transmission or provision of film
25        or radio programming, whether through the public
26        airwaves, by cable, by direct or indirect satellite

 

 

SB2102- 34 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 35 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 36 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 37 -LRB102 17277 HLH 22749 b

1            a network or station to another person for
2            broadcasting in exchange for a fee or other
3            remuneration from that person, the broadcasting
4            service is received at the location of the office
5            of the customer from which the services were
6            ordered in the regular course of the customer's
7            trade or business. Accordingly, in such a case the
8            revenue derived by the taxpayer that is included
9            in the taxpayer's Illinois numerator of the sales
10            factor is the revenue from such customers who
11            receive the broadcasting service in Illinois.
12        (B-8) Gross receipts from winnings under the Illinois
13    Lottery Law from the assignment of a prize under Section
14    13.1 of the Illinois Lottery Law are received in this
15    State. This paragraph (B-8) applies only to taxable years
16    ending on or after December 31, 2013.
17        (B-9) For taxable years ending on or after December
18    31, 2019, gross receipts from winnings from pari-mutuel
19    wagering conducted at a wagering facility licensed under
20    the Illinois Horse Racing Act of 1975 or from winnings
21    from gambling games conducted on a riverboat or in a
22    casino or organization gaming facility licensed under the
23    Illinois Gambling Act are in this State.
24        (B-10) For taxable years ending on or after December
25    31, 2021, gross receipts from winnings from sports
26    wagering conducted in accordance with the Sports Wagering

 

 

SB2102- 38 -LRB102 17277 HLH 22749 b

1    Act are in this State.
2        (C) For taxable years ending before December 31, 2008,
3    sales, other than sales governed by paragraphs (B), (B-1),
4    (B-2), and (B-8) are in this State if:
5            (i) The income-producing activity is performed in
6        this State; or
7            (ii) The income-producing activity is performed
8        both within and without this State and a greater
9        proportion of the income-producing activity is
10        performed within this State than without this State,
11        based on performance costs.
12        (C-5) For taxable years ending on or after December
13    31, 2008, sales, other than sales governed by paragraphs
14    (B), (B-1), (B-2), (B-5), and (B-7), are in this State if
15    any of the following criteria are met:
16            (i) Sales from the sale or lease of real property
17        are in this State if the property is located in this
18        State.
19            (ii) Sales from the lease or rental of tangible
20        personal property are in this State if the property is
21        located in this State during the rental period. Sales
22        from the lease or rental of tangible personal property
23        that is characteristically moving property, including,
24        but not limited to, motor vehicles, rolling stock,
25        aircraft, vessels, or mobile equipment are in this
26        State to the extent that the property is used in this

 

 

SB2102- 39 -LRB102 17277 HLH 22749 b

1        State.
2            (iii) In the case of interest, net gains (but not
3        less than zero) and other items of income from
4        intangible personal property, the sale is in this
5        State if:
6                (a) in the case of a taxpayer who is a dealer
7            in the item of intangible personal property within
8            the meaning of Section 475 of the Internal Revenue
9            Code, the income or gain is received from a
10            customer in this State. For purposes of this
11            subparagraph, a customer is in this State if the
12            customer is an individual, trust or estate who is
13            a resident of this State and, for all other
14            customers, if the customer's commercial domicile
15            is in this State. Unless the dealer has actual
16            knowledge of the residence or commercial domicile
17            of a customer during a taxable year, the customer
18            shall be deemed to be a customer in this State if
19            the billing address of the customer, as shown in
20            the records of the dealer, is in this State; or
21                (b) in all other cases, if the
22            income-producing activity of the taxpayer is
23            performed in this State or, if the
24            income-producing activity of the taxpayer is
25            performed both within and without this State, if a
26            greater proportion of the income-producing

 

 

SB2102- 40 -LRB102 17277 HLH 22749 b

1            activity of the taxpayer is performed within this
2            State than in any other state, based on
3            performance costs.
4            (iv) Sales of services are in this State if the
5        services are received in this State. For the purposes
6        of this section, gross receipts from the performance
7        of services provided to a corporation, partnership, or
8        trust may only be attributed to a state where that
9        corporation, partnership, or trust has a fixed place
10        of business. If the state where the services are
11        received is not readily determinable or is a state
12        where the corporation, partnership, or trust receiving
13        the service does not have a fixed place of business,
14        the services shall be deemed to be received at the
15        location of the office of the customer from which the
16        services were ordered in the regular course of the
17        customer's trade or business. If the ordering office
18        cannot be determined, the services shall be deemed to
19        be received at the office of the customer to which the
20        services are billed. If the taxpayer is not taxable in
21        the state in which the services are received, the sale
22        must be excluded from both the numerator and the
23        denominator of the sales factor. The Department shall
24        adopt rules prescribing where specific types of
25        service are received, including, but not limited to,
26        publishing, and utility service.

 

 

SB2102- 41 -LRB102 17277 HLH 22749 b

1        (D) For taxable years ending on or after December 31,
2    1995, the following items of income shall not be included
3    in the numerator or denominator of the sales factor:
4    dividends; amounts included under Section 78 of the
5    Internal Revenue Code; and Subpart F income as defined in
6    Section 952 of the Internal Revenue Code. No inference
7    shall be drawn from the enactment of this paragraph (D) in
8    construing this Section for taxable years ending before
9    December 31, 1995.
10        (E) Paragraphs (B-1) and (B-2) shall apply to tax
11    years ending on or after December 31, 1999, provided that
12    a taxpayer may elect to apply the provisions of these
13    paragraphs to prior tax years. Such election shall be made
14    in the form and manner prescribed by the Department, shall
15    be irrevocable, and shall apply to all tax years; provided
16    that, if a taxpayer's Illinois income tax liability for
17    any tax year, as assessed under Section 903 prior to
18    January 1, 1999, was computed in a manner contrary to the
19    provisions of paragraphs (B-1) or (B-2), no refund shall
20    be payable to the taxpayer for that tax year to the extent
21    such refund is the result of applying the provisions of
22    paragraph (B-1) or (B-2) retroactively. In the case of a
23    unitary business group, such election shall apply to all
24    members of such group for every tax year such group is in
25    existence, but shall not apply to any taxpayer for any
26    period during which that taxpayer is not a member of such

 

 

SB2102- 42 -LRB102 17277 HLH 22749 b

1    group.
2    (b) Insurance companies.
3        (1) In general. Except as otherwise provided by
4    paragraph (2), business income of an insurance company for
5    a taxable year shall be apportioned to this State by
6    multiplying such income by a fraction, the numerator of
7    which is the direct premiums written for insurance upon
8    property or risk in this State, and the denominator of
9    which is the direct premiums written for insurance upon
10    property or risk everywhere. For purposes of this
11    subsection, the term "direct premiums written" means the
12    total amount of direct premiums written, assessments and
13    annuity considerations as reported for the taxable year on
14    the annual statement filed by the company with the
15    Illinois Director of Insurance in the form approved by the
16    National Convention of Insurance Commissioners or such
17    other form as may be prescribed in lieu thereof.
18        (2) Reinsurance. If the principal source of premiums
19    written by an insurance company consists of premiums for
20    reinsurance accepted by it, the business income of such
21    company shall be apportioned to this State by multiplying
22    such income by a fraction, the numerator of which is the
23    sum of (i) direct premiums written for insurance upon
24    property or risk in this State, plus (ii) premiums written
25    for reinsurance accepted in respect of property or risk in
26    this State, and the denominator of which is the sum of

 

 

SB2102- 43 -LRB102 17277 HLH 22749 b

1    (iii) direct premiums written for insurance upon property
2    or risk everywhere, plus (iv) premiums written for
3    reinsurance accepted in respect of property or risk
4    everywhere. For purposes of this paragraph, premiums
5    written for reinsurance accepted in respect of property or
6    risk in this State, whether or not otherwise determinable,
7    may, at the election of the company, be determined on the
8    basis of the proportion which premiums written for
9    reinsurance accepted from companies commercially domiciled
10    in Illinois bears to premiums written for reinsurance
11    accepted from all sources, or, alternatively, in the
12    proportion which the sum of the direct premiums written
13    for insurance upon property or risk in this State by each
14    ceding company from which reinsurance is accepted bears to
15    the sum of the total direct premiums written by each such
16    ceding company for the taxable year. The election made by
17    a company under this paragraph for its first taxable year
18    ending on or after December 31, 2011, shall be binding for
19    that company for that taxable year and for all subsequent
20    taxable years, and may be altered only with the written
21    permission of the Department, which shall not be
22    unreasonably withheld.
23    (c) Financial organizations.
24        (1) In general. For taxable years ending before
25    December 31, 2008, business income of a financial
26    organization shall be apportioned to this State by

 

 

SB2102- 44 -LRB102 17277 HLH 22749 b

1    multiplying such income by a fraction, the numerator of
2    which is its business income from sources within this
3    State, and the denominator of which is its business income
4    from all sources. For the purposes of this subsection, the
5    business income of a financial organization from sources
6    within this State is the sum of the amounts referred to in
7    subparagraphs (A) through (E) following, but excluding the
8    adjusted income of an international banking facility as
9    determined in paragraph (2):
10            (A) Fees, commissions or other compensation for
11        financial services rendered within this State;
12            (B) Gross profits from trading in stocks, bonds or
13        other securities managed within this State;
14            (C) Dividends, and interest from Illinois
15        customers, which are received within this State;
16            (D) Interest charged to customers at places of
17        business maintained within this State for carrying
18        debit balances of margin accounts, without deduction
19        of any costs incurred in carrying such accounts; and
20            (E) Any other gross income resulting from the
21        operation as a financial organization within this
22        State.
23        In computing the amounts referred to in paragraphs (A)
24    through (E) of this subsection, any amount received by a
25    member of an affiliated group (determined under Section
26    1504(a) of the Internal Revenue Code but without reference

 

 

SB2102- 45 -LRB102 17277 HLH 22749 b

1    to whether any such corporation is an "includible
2    corporation" under Section 1504(b) of the Internal Revenue
3    Code) from another member of such group shall be included
4    only to the extent such amount exceeds expenses of the
5    recipient directly related thereto.
6        (2) International Banking Facility. For taxable years
7    ending before December 31, 2008:
8            (A) Adjusted Income. The adjusted income of an
9        international banking facility is its income reduced
10        by the amount of the floor amount.
11            (B) Floor Amount. The floor amount shall be the
12        amount, if any, determined by multiplying the income
13        of the international banking facility by a fraction,
14        not greater than one, which is determined as follows:
15                (i) The numerator shall be:
16                The average aggregate, determined on a
17            quarterly basis, of the financial organization's
18            loans to banks in foreign countries, to foreign
19            domiciled borrowers (except where secured
20            primarily by real estate) and to foreign
21            governments and other foreign official
22            institutions, as reported for its branches,
23            agencies and offices within the state on its
24            "Consolidated Report of Condition", Schedule A,
25            Lines 2.c., 5.b., and 7.a., which was filed with
26            the Federal Deposit Insurance Corporation and

 

 

SB2102- 46 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 47 -LRB102 17277 HLH 22749 b

1        determining the floor amount is not found on Schedule
2        A, lines 2.c., 5.b. and 7.a., the financial
3        institution shall notify the Department and the
4        Department may, by regulations or otherwise, prescribe
5        or authorize the use of an alternative source for such
6        information. The financial institution shall also
7        notify the Department should its international banking
8        facility fail to qualify as such, in whole or in part,
9        or should there be any amendment or change to the
10        Consolidated Report of Condition, as originally filed,
11        to the extent such amendment or change alters the
12        information used in determining the floor amount.
13        (3) For taxable years ending on or after December 31,
14    2008, the business income of a financial organization
15    shall be apportioned to this State by multiplying such
16    income by a fraction, the numerator of which is its gross
17    receipts from sources in this State or otherwise
18    attributable to this State's marketplace and the
19    denominator of which is its gross receipts everywhere
20    during the taxable year. "Gross receipts" for purposes of
21    this subparagraph (3) means gross income, including net
22    taxable gain on disposition of assets, including
23    securities and money market instruments, when derived from
24    transactions and activities in the regular course of the
25    financial organization's trade or business. The following
26    examples are illustrative:

 

 

SB2102- 48 -LRB102 17277 HLH 22749 b

1            (i) Receipts from the lease or rental of real or
2        tangible personal property are in this State if the
3        property is located in this State during the rental
4        period. Receipts from the lease or rental of tangible
5        personal property that is characteristically moving
6        property, including, but not limited to, motor
7        vehicles, rolling stock, aircraft, vessels, or mobile
8        equipment are from sources in this State to the extent
9        that the property is used in this State.
10            (ii) Interest income, commissions, fees, gains on
11        disposition, and other receipts from assets in the
12        nature of loans that are secured primarily by real
13        estate or tangible personal property are from sources
14        in this State if the security is located in this State.
15            (iii) Interest income, commissions, fees, gains on
16        disposition, and other receipts from consumer loans
17        that are not secured by real or tangible personal
18        property are from sources in this State if the debtor
19        is a resident of this State.
20            (iv) Interest income, commissions, fees, gains on
21        disposition, and other receipts from commercial loans
22        and installment obligations that are not secured by
23        real or tangible personal property are from sources in
24        this State if the proceeds of the loan are to be
25        applied in this State. If it cannot be determined
26        where the funds are to be applied, the income and

 

 

SB2102- 49 -LRB102 17277 HLH 22749 b

1        receipts are from sources in this State if the office
2        of the borrower from which the loan was negotiated in
3        the regular course of business is located in this
4        State. If the location of this office cannot be
5        determined, the income and receipts shall be excluded
6        from the numerator and denominator of the sales
7        factor.
8            (v) Interest income, fees, gains on disposition,
9        service charges, merchant discount income, and other
10        receipts from credit card receivables are from sources
11        in this State if the card charges are regularly billed
12        to a customer in this State.
13            (vi) Receipts from the performance of services,
14        including, but not limited to, fiduciary, advisory,
15        and brokerage services, are in this State if the
16        services are received in this State within the meaning
17        of subparagraph (a)(3)(C-5)(iv) of this Section.
18            (vii) Receipts from the issuance of travelers
19        checks and money orders are from sources in this State
20        if the checks and money orders are issued from a
21        location within this State.
22            (viii) Receipts from investment assets and
23        activities and trading assets and activities are
24        included in the receipts factor as follows:
25                (1) Interest, dividends, net gains (but not
26            less than zero) and other income from investment

 

 

SB2102- 50 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 51 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 52 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 53 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 54 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 55 -LRB102 17277 HLH 22749 b

1                which the greatest number of employees are
2                regularly connected with the management of the
3                investment or trading income or out of which
4                they are working, irrespective of where the
5                services of such employees are performed, as
6                of the last day of the taxable year.
7        (4) (Blank).
8        (5) (Blank).
9    (c-1) Federally regulated exchanges. For taxable years
10ending on or after December 31, 2012, business income of a
11federally regulated exchange shall, at the option of the
12federally regulated exchange, be apportioned to this State by
13multiplying such income by a fraction, the numerator of which
14is its business income from sources within this State, and the
15denominator of which is its business income from all sources.
16For purposes of this subsection, the business income within
17this State of a federally regulated exchange is the sum of the
18following:
19        (1) Receipts attributable to transactions executed on
20    a physical trading floor if that physical trading floor is
21    located in this State.
22        (2) Receipts attributable to all other matching,
23    execution, or clearing transactions, including without
24    limitation receipts from the provision of matching,
25    execution, or clearing services to another entity,
26    multiplied by (i) for taxable years ending on or after

 

 

SB2102- 56 -LRB102 17277 HLH 22749 b

1    December 31, 2012 but before December 31, 2013, 63.77%;
2    and (ii) for taxable years ending on or after December 31,
3    2013, 27.54%.
4        (3) All other receipts not governed by subparagraphs
5    (1) or (2) of this subsection (c-1), to the extent the
6    receipts would be characterized as "sales in this State"
7    under item (3) of subsection (a) of this Section.
8    "Federally regulated exchange" means (i) a "registered
9entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B),
10or (C), (ii) an "exchange" or "clearing agency" within the
11meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such
12entities regulated under any successor regulatory structure to
13the foregoing, and (iv) all taxpayers who are members of the
14same unitary business group as a federally regulated exchange,
15determined without regard to the prohibition in Section
161501(a)(27) of this Act against including in a unitary
17business group taxpayers who are ordinarily required to
18apportion business income under different subsections of this
19Section; provided that this subparagraph (iv) shall apply only
20if 50% or more of the business receipts of the unitary business
21group determined by application of this subparagraph (iv) for
22the taxable year are attributable to the matching, execution,
23or clearing of transactions conducted by an entity described
24in subparagraph (i), (ii), or (iii) of this paragraph.
25    In no event shall the Illinois apportionment percentage
26computed in accordance with this subsection (c-1) for any

 

 

SB2102- 57 -LRB102 17277 HLH 22749 b

1taxpayer for any tax year be less than the Illinois
2apportionment percentage computed under this subsection (c-1)
3for that taxpayer for the first full tax year ending on or
4after December 31, 2013 for which this subsection (c-1)
5applied to the taxpayer.
6    (d) Transportation services. For taxable years ending
7before December 31, 2008, business income derived from
8furnishing transportation services shall be apportioned to
9this State in accordance with paragraphs (1) and (2):
10        (1) Such business income (other than that derived from
11    transportation by pipeline) shall be apportioned to this
12    State by multiplying such income by a fraction, the
13    numerator of which is the revenue miles of the person in
14    this State, and the denominator of which is the revenue
15    miles of the person everywhere. For purposes of this
16    paragraph, a revenue mile is the transportation of 1
17    passenger or 1 net ton of freight the distance of 1 mile
18    for a consideration. Where a person is engaged in the
19    transportation of both passengers and freight, the
20    fraction above referred to shall be determined by means of
21    an average of the passenger revenue mile fraction and the
22    freight revenue mile fraction, weighted to reflect the
23    person's
24            (A) relative railway operating income from total
25        passenger and total freight service, as reported to
26        the Interstate Commerce Commission, in the case of

 

 

SB2102- 58 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 59 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 60 -LRB102 17277 HLH 22749 b

1    revenue mile is the transportation of one passenger or one
2    net ton of freight the distance of one mile for a
3    consideration. If a person is engaged in the
4    transportation of both passengers and freight, the
5    fraction above referred to shall be determined by means of
6    an average of the passenger revenue mile fraction and the
7    freight revenue mile fraction, weighted to reflect the
8    person's relative gross receipts from passenger and
9    freight airline transportation.
10    (e) Combined apportionment. Where 2 or more persons are
11engaged in a unitary business as described in subsection
12(a)(27) of Section 1501, a part of which is conducted in this
13State by one or more members of the group, the business income
14attributable to this State by any such member or members shall
15be apportioned by means of the combined apportionment method.
16    (f) Alternative allocation. If the allocation and
17apportionment provisions of subsections (a) through (e) and of
18subsection (h) do not, for taxable years ending before
19December 31, 2008, fairly represent the extent of a person's
20business activity in this State, or, for taxable years ending
21on or after December 31, 2008, fairly represent the market for
22the person's goods, services, or other sources of business
23income, the person may petition for, or the Director may,
24without a petition, permit or require, in respect of all or any
25part of the person's business activity, if reasonable:
26        (1) Separate accounting;

 

 

SB2102- 61 -LRB102 17277 HLH 22749 b

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

 

 

SB2102- 62 -LRB102 17277 HLH 22749 b

1year shall be divided by an amount equal to 100% minus the
2percentage weight given to each factor whose denominator is
3equal to zero.
4(Source: P.A. 100-201, eff. 8-18-17; 101-31, eff. 6-28-19;
5101-585, eff. 8-26-19; revised 9-12-19.)
 
6    (35 ILCS 5/710)  (from Ch. 120, par. 7-710)
7    Sec. 710. Withholding from lottery winnings.
8    (a) In general.
9        (1) Any person making a payment to a resident or
10    nonresident of winnings under the Illinois Lottery Law and
11    not required to withhold Illinois income tax from such
12    payment under Subsection (b) of Section 701 of this Act
13    because those winnings are not subject to Federal income
14    tax withholding, must withhold Illinois income tax from
15    such payment at a rate equal to the percentage tax rate for
16    individuals provided in subsection (b) of Section 201,
17    provided that withholding is not required if such payment
18    of winnings is less than $1,000.
19        (2) In the case of an assignment of a lottery prize
20    under Section 13.1 of the Illinois Lottery Law, any person
21    making a payment of the purchase price after December 31,
22    2013, shall withhold from the amount of each payment at a
23    rate equal to the percentage tax rate for individuals
24    provided in subsection (b) of Section 201.
25        (3) Any person making a payment after December 31,

 

 

SB2102- 63 -LRB102 17277 HLH 22749 b

1    2019 to a resident or nonresident of winnings from
2    pari-mutuel wagering conducted at a wagering facility
3    licensed under the Illinois Horse Racing Act of 1975 or
4    from gambling games conducted on a riverboat or in a
5    casino or organization gaming facility licensed under the
6    Illinois Gambling Act must withhold Illinois income tax
7    from such payment at a rate equal to the percentage tax
8    rate for individuals provided in subsection (b) of Section
9    201, provided that the person making the payment is
10    required to withhold under Section 3402(q) of the Internal
11    Revenue Code.
12        (4) Any person making a payment after December 31,
13    2021 to a resident or nonresident of winnings from sports
14    wagering conducted in accordance with the Sports Wagering
15    Act must withhold Illinois income tax from such payment at
16    a rate equal to the percentage tax rate for individuals
17    provided in subsection (b) of Section 201, provided that
18    the person making the payment is required to withhold
19    under Section 3402(q) of the Internal Revenue Code.
20    (b) Credit for taxes withheld. Any amount withheld under
21Subsection (a) shall be a credit against the Illinois income
22tax liability of the person to whom the payment of winnings was
23made for the taxable year in which that person incurred an
24Illinois income tax liability with respect to those winnings.
25(Source: P.A. 101-31, eff. 6-28-19.)
 
26    Section 99. Effective date. This Act takes effect upon

 

 

SB2102- 64 -LRB102 17277 HLH 22749 b

1becoming law.