Full Text of SB3507 97th General Assembly
SB3507enr 97TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Section 303 as follows:
| 6 | | (35 ILCS 5/303) (from Ch. 120, par. 3-303)
| 7 | | Sec. 303. (a) In general. Any item of capital gain or loss, | 8 | | and any
item of income from rents or royalties from real or | 9 | | tangible personal
property, interest, dividends, and patent or | 10 | | copyright royalties, and prizes
awarded under the Illinois | 11 | | Lottery Law, to the extent such item constitutes
nonbusiness | 12 | | income, together with any item of deduction directly allocable
| 13 | | thereto, shall be allocated by any person other than a resident | 14 | | as provided
in this Section.
| 15 | | (b) Capital gains and losses. (1) Real property. Capital | 16 | | gains and
losses from sales or exchanges of real property are | 17 | | allocable to this State
if the property is located in this | 18 | | State.
| 19 | | (2) Tangible personal property. Capital gains and losses | 20 | | from sales
or exchanges of tangible personal property are | 21 | | allocable to this State if,
at the time of such sale or | 22 | | exchange:
| 23 | | (A) The property had its situs in this State; or
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| 1 | | (B) The taxpayer had its commercial domicile in this State | 2 | | and was not
taxable in the state in which the property had its | 3 | | situs.
| 4 | | (3) Intangibles. Capital gains and losses from sales or | 5 | | exchanges of
intangible personal property are allocable to this | 6 | | State if the taxpayer
had its commercial domicile in this State | 7 | | at the time of such sale or
exchange.
| 8 | | (c) Rents and royalties. (1) Real property. Rents and | 9 | | royalties
from real property are allocable to this State if the | 10 | | property is located
in this State.
| 11 | | (2) Tangible personal property. Rents and royalties from | 12 | | tangible
personal property are allocable to this State:
| 13 | | (A) If and to the extent that the property is utilized in | 14 | | this State; or
| 15 | | (B) In their entirety if, at the time such rents or | 16 | | royalties were paid
or accrued, the taxpayer had its commercial | 17 | | domicile in this State and was
not organized under the laws of | 18 | | or taxable with respect to such rents or
royalties in the state | 19 | | in which the property was utilized.
The extent of utilization | 20 | | of tangible personal property in a state is
determined by | 21 | | multiplying the rents or royalties derived from such property
| 22 | | by a fraction, the numerator of which is the number of days of | 23 | | physical
location of the property in the state during the | 24 | | rental or royalty period
in the taxable year and the | 25 | | denominator of which is the number of days of
physical location | 26 | | of the property everywhere during all rental or royalty
periods |
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| 1 | | in the taxable year. If the physical location of the property
| 2 | | during the rental or royalty period is unknown or | 3 | | unascertainable by the
taxpayer, tangible personal property is | 4 | | utilized in the state in which the
property was located at the | 5 | | time the rental or royalty payer obtained
possession.
| 6 | | (d) Patent and copyright royalties.
| 7 | | (1) Allocation. Patent and copyright royalties are | 8 | | allocable to this
State:
| 9 | | (A) If and to the extent that the patent or copyright is | 10 | | utilized by the
payer in this State; or
| 11 | | (B) If and to the extent that the patent or copyright is | 12 | | utilized by the
payer in a state in which the taxpayer is not | 13 | | taxable with respect to such
royalties and, at the time such | 14 | | royalties were paid or accrued, the
taxpayer had its commercial | 15 | | domicile in this State.
| 16 | | (2) Utilization.
| 17 | | (A) A patent is utilized in a state to the extent that it | 18 | | is employed in
production, fabrication, manufacturing or other | 19 | | processing in the state or
to the extent that a patented | 20 | | product is produced in the state. If the
basis of receipts from | 21 | | patent royalties does not permit allocation to
states or if the | 22 | | accounting procedures do not reflect states of
utilization, the | 23 | | patent is utilized in this State if the taxpayer has its
| 24 | | commercial domicile in this State.
| 25 | | (B) A copyright is utilized in a state to the extent that | 26 | | printing or
other publication originates in the state. If the |
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| 1 | | basis of receipts from
copyright royalties does not permit | 2 | | allocation to states or if the
accounting procedures do not | 3 | | reflect states of utilization, the copyright
is utilized in | 4 | | this State if the taxpayer has its commercial domicile in
this | 5 | | State.
| 6 | | (e) Illinois lottery prizes. Prizes awarded under the | 7 | | "Illinois Lottery
Law", approved December 14, 1973, are | 8 | | allocable to this State.
| 9 | | (e-5) Unemployment benefits. Unemployment benefits paid by | 10 | | the Illinois Department of Employment Security are allocable to | 11 | | this State. | 12 | | (f) Taxability in other state. For purposes of allocation | 13 | | of income
pursuant to this Section, a taxpayer is taxable in | 14 | | another state if:
| 15 | | (1) In that state he is subject to a net income tax, a | 16 | | franchise tax
measured by net income, a franchise tax for the | 17 | | privilege of doing
business, or a corporate stock tax; or
| 18 | | (2) That state has jurisdiction to subject the taxpayer to | 19 | | a net income
tax regardless of whether, in fact, the state does | 20 | | or does not.
| 21 | | (g) Cross references. (1) For allocation of interest and | 22 | | dividends by
persons other than residents, see Section | 23 | | 301(c)(2).
| 24 | | (2) For allocation of nonbusiness income by residents, see | 25 | | Section
301(a).
| 26 | | (Source: P.A. 79-743.)
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| 1 | | Section 99. Effective date. This Act takes effect July 1, | 2 | | 2012.
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