95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB2643

 

Introduced 2/15/2008, by Sen. Don Harmon

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/1501   from Ch. 120, par. 15-1501

    Amends the Illinois Income Tax Act concerning the definition of "captive real estate investment trusts". Provides that, to be a captive real estate investment trust, at least 50% of the voting power must be controlled by a single association that is taxable as a corporation (now, controlled by a single person). Exempts from the definition certain real estate investment trusts that are owned and controlled by certain entities that are organized outside of the laws of the United States. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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 1501 as follows:
 
6     (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)
7     Sec. 1501. Definitions.
8     (a) In general. When used in this Act, where not otherwise
9 distinctly expressed or manifestly incompatible with the
10 intent thereof:
11         (1) Business income. The term "business income" means
12     all income that may be treated as apportionable business
13     income under the Constitution of the United States.
14     Business income is net of the deductions allocable thereto.
15     Such term does not include compensation or the deductions
16     allocable thereto. For each taxable year beginning on or
17     after January 1, 2003, a taxpayer may elect to treat all
18     income other than compensation as business income. This
19     election shall be made in accordance with rules adopted by
20     the Department and, once made, shall be irrevocable.
21         (1.5) Captive real estate investment trust:
22             (A) The term "captive real estate investment
23         trust" means a corporation, trust, or association:

 

 

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1                 (i) that is considered a real estate
2             investment trust for the taxable year under
3             Section 856 of the Internal Revenue Code;
4                 (ii) the certificates of beneficial interest
5             or shares of which are not regularly traded on an
6             established securities market; and
7                 (iii) of which more than 50% of the voting
8             power or value of the beneficial interest or
9             shares, at any time during the last half of the
10             taxable year, is owned or controlled, directly,
11             indirectly, or constructively, by a single entity
12             that is treated as an association that is taxable
13             as a corporation under the Internal Revenue Code
14             person.
15             (B) The term "captive real estate investment
16         trust" does not include:
17                 (i) a real estate investment trust of which
18             more than 50% of the voting power or value of the
19             beneficial interest or shares is owned or
20             controlled, directly, indirectly, or
21             constructively, by:
22                     (a) a real estate investment trust, other
23                 than a captive real estate investment trust;
24                     (b) a person who is exempt from taxation
25                 under Section 501 of the Internal Revenue Code,
26                 and who is not required to treat income

 

 

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1                 received from the real estate investment trust
2                 as unrelated business taxable income under
3                 Section 512 of the Internal Revenue Code;
4                     (c) a listed Australian property trust, if
5                 no more than 50% of the voting power or value
6                 of the beneficial interest or shares of that
7                 trust, at any time during the last half of the
8                 taxable year, is owned or controlled, directly
9                 or indirectly, by a single person; or
10                     (d) an entity organized as a trust,
11                 provided a listed Australian property trust
12                 described in subparagraph (c) owns or
13                 controls, directly or indirectly, or
14                 constructively, 75% or more of the voting power
15                 or value of the beneficial interests or shares
16                 of such entity; or
17                     (e) an entity that is organized outside of
18                 the laws of the United States and that
19                 satisfies all of the following criteria:
20                         (1) at least 75% of the entity's total
21                     asset value at the close of its taxable
22                     year is represented by real estate assets
23                     (as defined in Section 856(c)(5)(B) of the
24                     Internal Revenue Code, thereby including
25                     shares or certificates of beneficial
26                     interest in any real estate investment

 

 

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1                     trust), cash and cash equivalents, and
2                     U.S. Government securities;
3                         (2) the entity is not subject to tax on
4                     amounts that are distributed to its
5                     beneficial owners or that is exempt from
6                     entity-level taxation;
7                         (3) the entity distributes at least
8                     85% of its taxable income (as computed in
9                     the jurisdiction in which it is organized)
10                     to the holders of its shares or
11                     certificates of beneficial interest on an
12                     annual basis;
13                         (4) either (i) the shares or
14                     beneficial interests of the entity are
15                     regularly traded on an established
16                     securities market or (ii) not more than 10%
17                     of the voting power or value in the entity
18                     is held, directly, indirectly, or
19                     constructively, by a single entity or
20                     individual; and
21                         (5) the entity is organized in a
22                     country that has entered into a tax treaty
23                     with the United States; or
24                 (ii) during its first taxable year for which it
25             elects to be treated as a real estate investment
26             trust under Section 856(c)(1) of the Internal

 

 

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1             Revenue Code, a real estate investment trust the
2             certificates of beneficial interest or shares of
3             which are not regularly traded on an established
4             securities market, but only if the certificates of
5             beneficial interest or shares of the real estate
6             investment trust are regularly traded on an
7             established securities market prior to the earlier
8             of the due date (including extensions) for filing
9             its return under this Act for that first taxable
10             year or the date it actually files that return.
11             (C) For the purposes of this subsection (1.5), the
12         constructive ownership rules prescribed under Section
13         318(a) of the Internal Revenue Code, as modified by
14         Section 856(d)(5) of the Internal Revenue Code, apply
15         in determining the ownership of stock, assets, or net
16         profits of any person.
17         (2) Commercial domicile. The term "commercial
18     domicile" means the principal place from which the trade or
19     business of the taxpayer is directed or managed.
20         (3) Compensation. The term "compensation" means wages,
21     salaries, commissions and any other form of remuneration
22     paid to employees for personal services.
23         (4) Corporation. The term "corporation" includes
24     associations, joint-stock companies, insurance companies
25     and cooperatives. Any entity, including a limited
26     liability company formed under the Illinois Limited

 

 

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1     Liability Company Act, shall be treated as a corporation if
2     it is so classified for federal income tax purposes.
3         (5) Department. The term "Department" means the
4     Department of Revenue of this State.
5         (6) Director. The term "Director" means the Director of
6     Revenue of this State.
7         (7) Fiduciary. The term "fiduciary" means a guardian,
8     trustee, executor, administrator, receiver, or any person
9     acting in any fiduciary capacity for any person.
10         (8) Financial organization.
11             (A) The term "financial organization" means any
12         bank, bank holding company, trust company, savings
13         bank, industrial bank, land bank, safe deposit
14         company, private banker, savings and loan association,
15         building and loan association, credit union, currency
16         exchange, cooperative bank, small loan company, sales
17         finance company, investment company, or any person
18         which is owned by a bank or bank holding company. For
19         the purpose of this Section a "person" will include
20         only those persons which a bank holding company may
21         acquire and hold an interest in, directly or
22         indirectly, under the provisions of the Bank Holding
23         Company Act of 1956 (12 U.S.C. 1841, et seq.), except
24         where interests in any person must be disposed of
25         within certain required time limits under the Bank
26         Holding Company Act of 1956.

 

 

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1             (B) For purposes of subparagraph (A) of this
2         paragraph, the term "bank" includes (i) any entity that
3         is regulated by the Comptroller of the Currency under
4         the National Bank Act, or by the Federal Reserve Board,
5         or by the Federal Deposit Insurance Corporation and
6         (ii) any federally or State chartered bank operating as
7         a credit card bank.
8             (C) For purposes of subparagraph (A) of this
9         paragraph, the term "sales finance company" has the
10         meaning provided in the following item (i) or (ii):
11                 (i) A person primarily engaged in one or more
12             of the following businesses: the business of
13             purchasing customer receivables, the business of
14             making loans upon the security of customer
15             receivables, the business of making loans for the
16             express purpose of funding purchases of tangible
17             personal property or services by the borrower, or
18             the business of finance leasing. For purposes of
19             this item (i), "customer receivable" means:
20                     (a) a retail installment contract or
21                 retail charge agreement within the meaning of
22                 the Sales Finance Agency Act, the Retail
23                 Installment Sales Act, or the Motor Vehicle
24                 Retail Installment Sales Act;
25                     (b) an installment, charge, credit, or
26                 similar contract or agreement arising from the

 

 

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1                 sale of tangible personal property or services
2                 in a transaction involving a deferred payment
3                 price payable in one or more installments
4                 subsequent to the sale; or
5                     (c) the outstanding balance of a contract
6                 or agreement described in provisions (a) or (b)
7                 of this item (i).
8                 A customer receivable need not provide for
9             payment of interest on deferred payments. A sales
10             finance company may purchase a customer receivable
11             from, or make a loan secured by a customer
12             receivable to, the seller in the original
13             transaction or to a person who purchased the
14             customer receivable directly or indirectly from
15             that seller.
16                 (ii) A corporation meeting each of the
17             following criteria:
18                     (a) the corporation must be a member of an
19                 "affiliated group" within the meaning of
20                 Section 1504(a) of the Internal Revenue Code,
21                 determined without regard to Section 1504(b)
22                 of the Internal Revenue Code;
23                     (b) more than 50% of the gross income of
24                 the corporation for the taxable year must be
25                 interest income derived from qualifying loans.
26                 A "qualifying loan" is a loan made to a member

 

 

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1                 of the corporation's affiliated group that
2                 originates customer receivables (within the
3                 meaning of item (i)) or to whom customer
4                 receivables originated by a member of the
5                 affiliated group have been transferred, to the
6                 extent the average outstanding balance of
7                 loans from that corporation to members of its
8                 affiliated group during the taxable year do not
9                 exceed the limitation amount for that
10                 corporation. The "limitation amount" for a
11                 corporation is the average outstanding
12                 balances during the taxable year of customer
13                 receivables (within the meaning of item (i))
14                 originated by all members of the affiliated
15                 group. If the average outstanding balances of
16                 the loans made by a corporation to members of
17                 its affiliated group exceed the limitation
18                 amount, the interest income of that
19                 corporation from qualifying loans shall be
20                 equal to its interest income from loans to
21                 members of its affiliated groups times a
22                 fraction equal to the limitation amount
23                 divided by the average outstanding balances of
24                 the loans made by that corporation to members
25                 of its affiliated group;
26                     (c) the total of all shareholder's equity

 

 

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1                 (including, without limitation, paid-in
2                 capital on common and preferred stock and
3                 retained earnings) of the corporation plus the
4                 total of all of its loans, advances, and other
5                 obligations payable or owed to members of its
6                 affiliated group may not exceed 20% of the
7                 total assets of the corporation at any time
8                 during the tax year; and
9                     (d) more than 50% of all interest-bearing
10                 obligations of the affiliated group payable to
11                 persons outside the group determined in
12                 accordance with generally accepted accounting
13                 principles must be obligations of the
14                 corporation.
15             This amendatory Act of the 91st General Assembly is
16         declaratory of existing law.
17             (D) Subparagraphs (B) and (C) of this paragraph are
18         declaratory of existing law and apply retroactively,
19         for all tax years beginning on or before December 31,
20         1996, to all original returns, to all amended returns
21         filed no later than 30 days after the effective date of
22         this amendatory Act of 1996, and to all notices issued
23         on or before the effective date of this amendatory Act
24         of 1996 under subsection (a) of Section 903, subsection
25         (a) of Section 904, subsection (e) of Section 909, or
26         Section 912. A taxpayer that is a "financial

 

 

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1         organization" that engages in any transaction with an
2         affiliate shall be a "financial organization" for all
3         purposes of this Act.
4             (E) For all tax years beginning on or before
5         December 31, 1996, a taxpayer that falls within the
6         definition of a "financial organization" under
7         subparagraphs (B) or (C) of this paragraph, but who
8         does not fall within the definition of a "financial
9         organization" under the Proposed Regulations issued by
10         the Department of Revenue on July 19, 1996, may
11         irrevocably elect to apply the Proposed Regulations
12         for all of those years as though the Proposed
13         Regulations had been lawfully promulgated, adopted,
14         and in effect for all of those years. For purposes of
15         applying subparagraphs (B) or (C) of this paragraph to
16         all of those years, the election allowed by this
17         subparagraph applies only to the taxpayer making the
18         election and to those members of the taxpayer's unitary
19         business group who are ordinarily required to
20         apportion business income under the same subsection of
21         Section 304 of this Act as the taxpayer making the
22         election. No election allowed by this subparagraph
23         shall be made under a claim filed under subsection (d)
24         of Section 909 more than 30 days after the effective
25         date of this amendatory Act of 1996.
26             (F) Finance Leases. For purposes of this

 

 

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1         subsection, a finance lease shall be treated as a loan
2         or other extension of credit, rather than as a lease,
3         regardless of how the transaction is characterized for
4         any other purpose, including the purposes of any
5         regulatory agency to which the lessor is subject. A
6         finance lease is any transaction in the form of a lease
7         in which the lessee is treated as the owner of the
8         leased asset entitled to any deduction for
9         depreciation allowed under Section 167 of the Internal
10         Revenue Code.
11         (9) Fiscal year. The term "fiscal year" means an
12     accounting period of 12 months ending on the last day of
13     any month other than December.
14         (9.5) Fixed place of business. The term "fixed place of
15     business" has the same meaning as that term is given in
16     Section 864 of the Internal Revenue Code and the related
17     Treasury regulations.
18         (10) Includes and including. The terms "includes" and
19     "including" when used in a definition contained in this Act
20     shall not be deemed to exclude other things otherwise
21     within the meaning of the term defined.
22         (11) Internal Revenue Code. The term "Internal Revenue
23     Code" means the United States Internal Revenue Code of 1954
24     or any successor law or laws relating to federal income
25     taxes in effect for the taxable year.
26         (11.5) Investment partnership.

 

 

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1             (A) The term "investment partnership" means any
2         entity that is treated as a partnership for federal
3         income tax purposes that meets the following
4         requirements:
5                 (i) no less than 90% of the partnership's cost
6             of its total assets consists of qualifying
7             investment securities, deposits at banks or other
8             financial institutions, and office space and
9             equipment reasonably necessary to carry on its
10             activities as an investment partnership;
11                 (ii) no less than 90% of its gross income
12             consists of interest, dividends, and gains from
13             the sale or exchange of qualifying investment
14             securities; and
15                 (iii) the partnership is not a dealer in
16             qualifying investment securities.
17             (B) For purposes of this paragraph (11.5), the term
18         "qualifying investment securities" includes all of the
19         following:
20                 (i) common stock, including preferred or debt
21             securities convertible into common stock, and
22             preferred stock;
23                 (ii) bonds, debentures, and other debt
24             securities;
25                 (iii) foreign and domestic currency deposits
26             secured by federal, state, or local governmental

 

 

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1             agencies;
2                 (iv) mortgage or asset-backed securities
3             secured by federal, state, or local governmental
4             agencies;
5                 (v) repurchase agreements and loan
6             participations;
7                 (vi) foreign currency exchange contracts and
8             forward and futures contracts on foreign
9             currencies;
10                 (vii) stock and bond index securities and
11             futures contracts and other similar financial
12             securities and futures contracts on those
13             securities;
14                 (viii) options for the purchase or sale of any
15             of the securities, currencies, contracts, or
16             financial instruments described in items (i) to
17             (vii), inclusive;
18                 (ix) regulated futures contracts;
19                 (x) commodities (not described in Section
20             1221(a)(1) of the Internal Revenue Code) or
21             futures, forwards, and options with respect to
22             such commodities, provided, however, that any item
23             of a physical commodity to which title is actually
24             acquired in the partnership's capacity as a dealer
25             in such commodity shall not be a qualifying
26             investment security;

 

 

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1                 (xi) derivatives; and
2                 (xii) a partnership interest in another
3             partnership that is an investment partnership.
4         (12) Mathematical error. The term "mathematical error"
5     includes the following types of errors, omissions, or
6     defects in a return filed by a taxpayer which prevents
7     acceptance of the return as filed for processing:
8             (A) arithmetic errors or incorrect computations on
9         the return or supporting schedules;
10             (B) entries on the wrong lines;
11             (C) omission of required supporting forms or
12         schedules or the omission of the information in whole
13         or in part called for thereon; and
14             (D) an attempt to claim, exclude, deduct, or
15         improperly report, in a manner directly contrary to the
16         provisions of the Act and regulations thereunder any
17         item of income, exemption, deduction, or credit.
18         (13) Nonbusiness income. The term "nonbusiness income"
19     means all income other than business income or
20     compensation.
21         (14) Nonresident. The term "nonresident" means a
22     person who is not a resident.
23         (15) Paid, incurred and accrued. The terms "paid",
24     "incurred" and "accrued" shall be construed according to
25     the method of accounting upon the basis of which the
26     person's base income is computed under this Act.

 

 

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1         (16) Partnership and partner. The term "partnership"
2     includes a syndicate, group, pool, joint venture or other
3     unincorporated organization, through or by means of which
4     any business, financial operation, or venture is carried
5     on, and which is not, within the meaning of this Act, a
6     trust or estate or a corporation; and the term "partner"
7     includes a member in such syndicate, group, pool, joint
8     venture or organization.
9         The term "partnership" includes any entity, including
10     a limited liability company formed under the Illinois
11     Limited Liability Company Act, classified as a partnership
12     for federal income tax purposes.
13         The term "partnership" does not include a syndicate,
14     group, pool, joint venture, or other unincorporated
15     organization established for the sole purpose of playing
16     the Illinois State Lottery.
17         (17) Part-year resident. The term "part-year resident"
18     means an individual who became a resident during the
19     taxable year or ceased to be a resident during the taxable
20     year. Under Section 1501(a)(20)(A)(i) residence commences
21     with presence in this State for other than a temporary or
22     transitory purpose and ceases with absence from this State
23     for other than a temporary or transitory purpose. Under
24     Section 1501(a)(20)(A)(ii) residence commences with the
25     establishment of domicile in this State and ceases with the
26     establishment of domicile in another State.

 

 

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1         (18) Person. The term "person" shall be construed to
2     mean and include an individual, a trust, estate,
3     partnership, association, firm, company, corporation,
4     limited liability company, or fiduciary. For purposes of
5     Section 1301 and 1302 of this Act, a "person" means (i) an
6     individual, (ii) a corporation, (iii) an officer, agent, or
7     employee of a corporation, (iv) a member, agent or employee
8     of a partnership, or (v) a member, manager, employee,
9     officer, director, or agent of a limited liability company
10     who in such capacity commits an offense specified in
11     Section 1301 and 1302.
12         (18A) Records. The term "records" includes all data
13     maintained by the taxpayer, whether on paper, microfilm,
14     microfiche, or any type of machine-sensible data
15     compilation.
16         (19) Regulations. The term "regulations" includes
17     rules promulgated and forms prescribed by the Department.
18         (20) Resident. The term "resident" means:
19             (A) an individual (i) who is in this State for
20         other than a temporary or transitory purpose during the
21         taxable year; or (ii) who is domiciled in this State
22         but is absent from the State for a temporary or
23         transitory purpose during the taxable year;
24             (B) The estate of a decedent who at his or her
25         death was domiciled in this State;
26             (C) A trust created by a will of a decedent who at

 

 

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1         his death was domiciled in this State; and
2             (D) An irrevocable trust, the grantor of which was
3         domiciled in this State at the time such trust became
4         irrevocable. For purpose of this subparagraph, a trust
5         shall be considered irrevocable to the extent that the
6         grantor is not treated as the owner thereof under
7         Sections 671 through 678 of the Internal Revenue Code.
8         (21) Sales. The term "sales" means all gross receipts
9     of the taxpayer not allocated under Sections 301, 302 and
10     303.
11         (22) State. The term "state" when applied to a
12     jurisdiction other than this State means any state of the
13     United States, the District of Columbia, the Commonwealth
14     of Puerto Rico, any Territory or Possession of the United
15     States, and any foreign country, or any political
16     subdivision of any of the foregoing. For purposes of the
17     foreign tax credit under Section 601, the term "state"
18     means any state of the United States, the District of
19     Columbia, the Commonwealth of Puerto Rico, and any
20     territory or possession of the United States, or any
21     political subdivision of any of the foregoing, effective
22     for tax years ending on or after December 31, 1989.
23         (23) Taxable year. The term "taxable year" means the
24     calendar year, or the fiscal year ending during such
25     calendar year, upon the basis of which the base income is
26     computed under this Act. "Taxable year" means, in the case

 

 

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1     of a return made for a fractional part of a year under the
2     provisions of this Act, the period for which such return is
3     made.
4         (24) Taxpayer. The term "taxpayer" means any person
5     subject to the tax imposed by this Act.
6         (25) International banking facility. The term
7     international banking facility shall have the same meaning
8     as is set forth in the Illinois Banking Act or as is set
9     forth in the laws of the United States or regulations of
10     the Board of Governors of the Federal Reserve System.
11         (26) Income Tax Return Preparer.
12             (A) The term "income tax return preparer" means any
13         person who prepares for compensation, or who employs
14         one or more persons to prepare for compensation, any
15         return of tax imposed by this Act or any claim for
16         refund of tax imposed by this Act. The preparation of a
17         substantial portion of a return or claim for refund
18         shall be treated as the preparation of that return or
19         claim for refund.
20             (B) A person is not an income tax return preparer
21         if all he or she does is
22                 (i) furnish typing, reproducing, or other
23             mechanical assistance;
24                 (ii) prepare returns or claims for refunds for
25             the employer by whom he or she is regularly and
26             continuously employed;

 

 

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1                 (iii) prepare as a fiduciary returns or claims
2             for refunds for any person; or
3                 (iv) prepare claims for refunds for a taxpayer
4             in response to any notice of deficiency issued to
5             that taxpayer or in response to any waiver of
6             restriction after the commencement of an audit of
7             that taxpayer or of another taxpayer if a
8             determination in the audit of the other taxpayer
9             directly or indirectly affects the tax liability
10             of the taxpayer whose claims he or she is
11             preparing.
12         (27) Unitary business group. The term "unitary
13     business group" means a group of persons related through
14     common ownership whose business activities are integrated
15     with, dependent upon and contribute to each other. The
16     group will not include those members whose business
17     activity outside the United States is 80% or more of any
18     such member's total business activity; for purposes of this
19     paragraph and clause (a)(3)(B)(ii) of Section 304,
20     business activity within the United States shall be
21     measured by means of the factors ordinarily applicable
22     under subsections (a), (b), (c), (d), or (h) of Section 304
23     except that, in the case of members ordinarily required to
24     apportion business income by means of the 3 factor formula
25     of property, payroll and sales specified in subsection (a)
26     of Section 304, including the formula as weighted in

 

 

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1     subsection (h) of Section 304, such members shall not use
2     the sales factor in the computation and the results of the
3     property and payroll factor computations of subsection (a)
4     of Section 304 shall be divided by 2 (by one if either the
5     property or payroll factor has a denominator of zero). The
6     computation required by the preceding sentence shall, in
7     each case, involve the division of the member's property,
8     payroll, or revenue miles in the United States, insurance
9     premiums on property or risk in the United States, or
10     financial organization business income from sources within
11     the United States, as the case may be, by the respective
12     worldwide figures for such items. Common ownership in the
13     case of corporations is the direct or indirect control or
14     ownership of more than 50% of the outstanding voting stock
15     of the persons carrying on unitary business activity.
16     Unitary business activity can ordinarily be illustrated
17     where the activities of the members are: (1) in the same
18     general line (such as manufacturing, wholesaling,
19     retailing of tangible personal property, insurance,
20     transportation or finance); or (2) are steps in a
21     vertically structured enterprise or process (such as the
22     steps involved in the production of natural resources,
23     which might include exploration, mining, refining, and
24     marketing); and, in either instance, the members are
25     functionally integrated through the exercise of strong
26     centralized management (where, for example, authority over

 

 

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1     such matters as purchasing, financing, tax compliance,
2     product line, personnel, marketing and capital investment
3     is not left to each member). In no event, however, will any
4     unitary business group include members which are
5     ordinarily required to apportion business income under
6     different subsections of Section 304 except that for tax
7     years ending on or after December 31, 1987 this prohibition
8     shall not apply to a unitary business group composed of one
9     or more taxpayers all of which apportion business income
10     pursuant to subsection (b) of Section 304, or all of which
11     apportion business income pursuant to subsection (d) of
12     Section 304, and a holding company of such single-factor
13     taxpayers (see definition of "financial organization" for
14     rule regarding holding companies of financial
15     organizations). If a unitary business group would, but for
16     the preceding sentence, include members that are
17     ordinarily required to apportion business income under
18     different subsections of Section 304, then for each
19     subsection of Section 304 for which there are two or more
20     members, there shall be a separate unitary business group
21     composed of such members. For purposes of the preceding two
22     sentences, a member is "ordinarily required to apportion
23     business income" under a particular subsection of Section
24     304 if it would be required to use the apportionment method
25     prescribed by such subsection except for the fact that it
26     derives business income solely from Illinois. As used in

 

 

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1     this paragraph, the phrase "United States" means only the
2     50 states and the District of Columbia, but does not
3     include any territory or possession of the United States or
4     any area over which the United States has asserted
5     jurisdiction or claimed exclusive rights with respect to
6     the exploration for or exploitation of natural resources.
7         If the unitary business group members' accounting
8     periods differ, the common parent's accounting period or,
9     if there is no common parent, the accounting period of the
10     member that is expected to have, on a recurring basis, the
11     greatest Illinois income tax liability must be used to
12     determine whether to use the apportionment method provided
13     in subsection (a) or subsection (h) of Section 304. The
14     prohibition against membership in a unitary business group
15     for taxpayers ordinarily required to apportion income
16     under different subsections of Section 304 does not apply
17     to taxpayers required to apportion income under subsection
18     (a) and subsection (h) of Section 304. The provisions of
19     this amendatory Act of 1998 apply to tax years ending on or
20     after December 31, 1998.
21         (28) Subchapter S corporation. The term "Subchapter S
22     corporation" means a corporation for which there is in
23     effect an election under Section 1362 of the Internal
24     Revenue Code, or for which there is a federal election to
25     opt out of the provisions of the Subchapter S Revision Act
26     of 1982 and have applied instead the prior federal

 

 

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1     Subchapter S rules as in effect on July 1, 1982.
2         (30) Foreign person. The term "foreign person" means
3     any person who is a nonresident alien individual and any
4     nonindividual entity, regardless of where created or
5     organized, whose business activity outside the United
6     States is 80% or more of the entity's total business
7     activity.
 
8     (b) Other definitions.
9         (1) Words denoting number, gender, and so forth, when
10     used in this Act, where not otherwise distinctly expressed
11     or manifestly incompatible with the intent thereof:
12             (A) Words importing the singular include and apply
13         to several persons, parties or things;
14             (B) Words importing the plural include the
15         singular; and
16             (C) Words importing the masculine gender include
17         the feminine as well.
18         (2) "Company" or "association" as including successors
19     and assigns. The word "company" or "association", when used
20     in reference to a corporation, shall be deemed to embrace
21     the words "successors and assigns of such company or
22     association", and in like manner as if these last-named
23     words, or words of similar import, were expressed.
24         (3) Other terms. Any term used in any Section of this
25     Act with respect to the application of, or in connection

 

 

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1     with, the provisions of any other Section of this Act shall
2     have the same meaning as in such other Section.
3 (Source: P.A. 95-233, eff. 8-16-07; 95-707, eff. 1-11-08.)
 
4     Section 99. Effective date. This Act takes effect upon
5 becoming law.