Illinois General Assembly - Full Text of SB0717
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Full Text of SB0717  99th General Assembly


Sen. Toi W. Hutchinson

Filed: 3/17/2015





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2    AMENDMENT NO. ______. Amend Senate Bill 717 on page 1, line
35, by replacing "Sections 203, 901, and 1501" with "Sections
4203, 804, and 1501"; and
5on page 96, immediately below line 11, by inserting the
7    "(35 ILCS 5/804)  (from Ch. 120, par. 8-804)
8    Sec. 804. Failure to Pay Estimated Tax.
9    (a) In general. In case of any underpayment of estimated
10tax by a taxpayer, except as provided in subsection (d) or (e),
11the taxpayer shall be liable to a penalty in an amount
12determined at the rate prescribed by Section 3-3 of the Uniform
13Penalty and Interest Act upon the amount of the underpayment
14(determined under subsection (b)) for each required
16    (b) Amount of underpayment. For purposes of subsection (a),



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1the amount of the underpayment shall be the excess of:
2        (1) the amount of the installment which would be
3    required to be paid under subsection (c), over
4        (2) the amount, if any, of the installment paid on or
5    before the last date prescribed for payment.
6    (c) Amount of Required Installments.
7        (1) Amount.
8            (A) In General. Except as provided in paragraphs
9        (2) and (3), the amount of any required installment
10        shall be 25% of the required annual payment.
11            (B) Required Annual Payment. For purposes of
12        subparagraph (A), the term "required annual payment"
13        means the lesser of:
14                (i) 90% of the tax shown on the return for the
15            taxable year, or if no return is filed, 90% of the
16            tax for such year;
17                (ii) for installments due prior to February 1,
18            2011, and after January 31, 2012, 100% of the tax
19            shown on the return of the taxpayer for the
20            preceding taxable year if a return showing a
21            liability for tax was filed by the taxpayer for the
22            preceding taxable year and such preceding year was
23            a taxable year of 12 months; or
24                (iii) for installments due after January 31,
25            2011, and prior to February 1, 2012, 150% of the
26            tax shown on the return of the taxpayer for the



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1            preceding taxable year if a return showing a
2            liability for tax was filed by the taxpayer for the
3            preceding taxable year and such preceding year was
4            a taxable year of 12 months.
5        (2) Lower Required Installment where Annualized Income
6    Installment is Less Than Amount Determined Under Paragraph
7    (1).
8            (A) In General. In the case of any required
9        installment if a taxpayer establishes that the
10        annualized income installment is less than the amount
11        determined under paragraph (1),
12                (i) the amount of such required installment
13            shall be the annualized income installment, and
14                (ii) any reduction in a required installment
15            resulting from the application of this
16            subparagraph shall be recaptured by increasing the
17            amount of the next required installment determined
18            under paragraph (1) by the amount of such
19            reduction, and by increasing subsequent required
20            installments to the extent that the reduction has
21            not previously been recaptured under this clause.
22            (B) Determination of Annualized Income
23        Installment. In the case of any required installment,
24        the annualized income installment is the excess, if
25        any, of:
26                (i) an amount equal to the applicable



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1            percentage of the tax for the taxable year computed
2            by placing on an annualized basis the net income
3            for months in the taxable year ending before the
4            due date for the installment, over
5                (ii) the aggregate amount of any prior
6            required installments for the taxable year.
7            (C) Applicable Percentage.
8        In the case of the followingThe applicable
9        required installments:percentage is:
10        1st ...............................22.5%
11        2nd ...............................45%
12        3rd ...............................67.5%
13        4th ...............................90%
14            (D) Annualized Net Income; Individuals. For
15        individuals, net income shall be placed on an
16        annualized basis by:
17                (i) multiplying by 12, or in the case of a
18            taxable year of less than 12 months, by the number
19            of months in the taxable year, the net income
20            computed without regard to the standard exemption
21            for the months in the taxable year ending before
22            the month in which the installment is required to
23            be paid;
24                (ii) dividing the resulting amount by the
25            number of months in the taxable year ending before
26            the month in which such installment date falls; and



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1                (iii) deducting from such amount the standard
2            exemption allowable for the taxable year, such
3            standard exemption being determined as of the last
4            date prescribed for payment of the installment.
5            (E) Annualized Net Income; Corporations. For
6        corporations, net income shall be placed on an
7        annualized basis by multiplying by 12 the taxable
8        income
9                (i) for the first 3 months of the taxable year,
10            in the case of the installment required to be paid
11            in the 4th month,
12                (ii) for the first 3 months or for the first 5
13            months of the taxable year, in the case of the
14            installment required to be paid in the 6th month,
15                (iii) for the first 6 months or for the first 8
16            months of the taxable year, in the case of the
17            installment required to be paid in the 9th month,
18            and
19                (iv) for the first 9 months or for the first 11
20            months of the taxable year, in the case of the
21            installment required to be paid in the 12th month
22            of the taxable year,
23        then dividing the resulting amount by the number of
24        months in the taxable year (3, 5, 6, 8, 9, or 11 as the
25        case may be).
26        (3) Notwithstanding any other provision of this



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1    subsection (c), in the case of a federally regulated
2    exchange that elects to apportion its income under Section
3    304(c-1) of this Act, the amount of each required
4    installment due prior to June 30 of the first taxable year
5    to which the election applies shall be 25% of the tax that
6    would have been shown on the return for that taxable year
7    if the taxpayer had not made such election.
8    (d) Exceptions. Notwithstanding the provisions of the
9preceding subsections, the penalty imposed by subsection (a)
10shall not be imposed if the taxpayer was not required to file
11an Illinois income tax return for the preceding taxable year,
12or, for individuals, if the taxpayer had no tax liability for
13the preceding taxable year and such year was a taxable year of
1412 months. The penalty imposed by subsection (a) shall also not
15be imposed on any underpayments of estimated tax due before the
16effective date of this amendatory Act of 1998 which
17underpayments are solely attributable to the change in
18apportionment from subsection (a) to subsection (h) of Section
19304. The provisions of this amendatory Act of 1998 apply to tax
20years ending on or after December 31, 1998.
21    (e) The penalty imposed for underpayment of estimated tax
22by subsection (a) of this Section shall not be imposed to the
23extent that the Director or his or her designate determines,
24pursuant to Section 3-8 of the Uniform Penalty and Interest Act
25that the penalty should not be imposed.
26    (f) Definition of tax. For purposes of subsections (b) and



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1(c), the term "tax" means the excess of the tax imposed under
2Article 2 of this Act, over the amounts credited against such
3tax under Sections 601(b) (3) and (4).
4    (g) Application of Section in case of tax withheld under
5Article 7. For purposes of applying this Section:
6        (1) tax withheld from compensation for the taxable year
7    shall be deemed a payment of estimated tax, and an equal
8    part of such amount shall be deemed paid on each
9    installment date for such taxable year, unless the taxpayer
10    establishes the dates on which all amounts were actually
11    withheld, in which case the amounts so withheld shall be
12    deemed payments of estimated tax on the dates on which such
13    amounts were actually withheld;
14        (2) amounts timely paid by a partnership, Subchapter S
15    corporation, or trust on behalf of a partner, shareholder,
16    or beneficiary pursuant to subsection (f) of Section 502 or
17    Section 709.5 and claimed as a payment of estimated tax
18    shall be deemed a payment of estimated tax made on the last
19    day of the taxable year of the partnership, Subchapter S
20    corporation, or trust for which the income from the
21    withholding is made was computed; and
22        (3) all other amounts pursuant to Article 7 shall be
23    deemed a payment of estimated tax on the date the payment
24    is made to the taxpayer of the amount from which the tax is
25    withheld.
26    (g-5) Amounts withheld under the State Salary and Annuity



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1Withholding Act. An individual who has amounts withheld under
2paragraph (10) of Section 4 of the State Salary and Annuity
3Withholding Act may elect to have those amounts treated as
4payments of estimated tax made on the dates on which those
5amounts are actually withheld.
6    (g-10) Notwithstanding any other provision of law, no
7penalty shall apply with respect to an underpayment of
8estimated tax for the first, second, or third quarter of any
9taxable year ending on or after December 31, 2015 and ending
10prior to December 31, 2016 if (i) the underpayment was due to
11the changes made by this amendatory Act of the 99th General
12Assembly, (ii) the payment was otherwise timely made, and (iii)
13the balance due is included with the taxpayer's estimated tax
14payment for the fourth quarter.
15    (i) Short taxable year. The application of this Section to
16taxable years of less than 12 months shall be in accordance
17with regulations prescribed by the Department.
18    The changes in this Section made by Public Act 84-127 shall
19apply to taxable years ending on or after January 1, 1986.
20(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11;
2197-636, eff. 6-1-12.)"; and
22by deleting everything from line 12 on page 96 through line 14
23on page 108; and
24by deleting everything from line 18 on page 135 through line 18



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1on page 136.