LRB093 05712 SJM 05805 b

 1        AN ACT in relation to taxes.

 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 302 as follows:

 6        (35 ILCS 5/302) (from Ch. 120, par. 3-302)
 7        Sec. 302. Compensation paid to nonresidents.
 8        (a)  In  general.  All items of compensation paid in this
 9    State  (as  determined  under  Section  304(a)(2)(B))  to  an
10    individual who is a nonresident at the time of  such  payment
11    and  all items of deduction directly allocable thereto, shall
12    be allocated to this State.
13        (b)  Reciprocal exemption. The Director may enter into an
14    agreement with the taxing authorities of any state that which
15    imposes a tax on  or  measured  by  income  to  provide  that
16    compensation  paid  in  such state to residents of this State
17    shall be exempt from such tax; in such case, any compensation
18    paid in this State to residents of such state  shall  not  be
19    allocated  to  this State. All reciprocal agreements shall be
20    subject to  the  requirements  of  Section  2505-575  of  the
21    Department of Revenue Law (20 ILCS 2505/2505-575).
22        (c)  Cross references.
23             (1)  For   allocation   of   amounts   received   by
24        nonresidents  from  certain  employee trusts, see Section
25        301(b)(2).
26             (2)  For allocation of  compensation  by  residents,
27        see Section 301(a).
28    (Source: P.A. 90-491, eff. 1-1-98; 91-239, eff. 1-1-00.)