97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB3507

 

Introduced 2/8/2012, by Sen. Mike Jacobs

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 5/303  from Ch. 120, par. 3-303

    Amends the Illinois Income Tax Act. Provides that unemployment benefits paid by the Illinois Department of Employment Security are allocable to this State. Effective July 1, 2012.


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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,
3represented in the General Assembly:
 
4    Section 5. The Illinois Income Tax Act is amended by
5changing 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,
8and any item of income from rents or royalties from real or
9tangible personal property, interest, dividends, and patent or
10copyright royalties, and prizes awarded under the Illinois
11Lottery Law, to the extent such item constitutes nonbusiness
12income, together with any item of deduction directly allocable
13thereto, shall be allocated by any person other than a resident
14as provided in this Section.
15    (b) Capital gains and losses. (1) Real property. Capital
16gains and losses from sales or exchanges of real property are
17allocable to this State if the property is located in this
18State.
19    (2) Tangible personal property. Capital gains and losses
20from sales or exchanges of tangible personal property are
21allocable to this State if, at the time of such sale or
22exchange:
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
2and was not taxable in the state in which the property had its
3situs.
4    (3) Intangibles. Capital gains and losses from sales or
5exchanges of intangible personal property are allocable to this
6State if the taxpayer had its commercial domicile in this State
7at the time of such sale or exchange.
8    (c) Rents and royalties. (1) Real property. Rents and
9royalties from real property are allocable to this State if the
10property is located in this State.
11    (2) Tangible personal property. Rents and royalties from
12tangible personal property are allocable to this State:
13    (A) If and to the extent that the property is utilized in
14this State; or
15    (B) In their entirety if, at the time such rents or
16royalties were paid or accrued, the taxpayer had its commercial
17domicile in this State and was not organized under the laws of
18or taxable with respect to such rents or royalties in the state
19in which the property was utilized. The extent of utilization
20of tangible personal property in a state is determined by
21multiplying the rents or royalties derived from such property
22by a fraction, the numerator of which is the number of days of
23physical location of the property in the state during the
24rental or royalty period in the taxable year and the
25denominator of which is the number of days of physical location
26of the property everywhere during all rental or royalty periods

 

 

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1in the taxable year. If the physical location of the property
2during the rental or royalty period is unknown or
3unascertainable by the taxpayer, tangible personal property is
4utilized in the state in which the property was located at the
5time the rental or royalty payer obtained possession.
6    (d) Patent and copyright royalties.
7    (1) Allocation. Patent and copyright royalties are
8allocable to this State:
9    (A) If and to the extent that the patent or copyright is
10utilized by the payer in this State; or
11    (B) If and to the extent that the patent or copyright is
12utilized by the payer in a state in which the taxpayer is not
13taxable with respect to such royalties and, at the time such
14royalties were paid or accrued, the taxpayer had its commercial
15domicile in this State.
16    (2) Utilization.
17    (A) A patent is utilized in a state to the extent that it
18is employed in production, fabrication, manufacturing or other
19processing in the state or to the extent that a patented
20product is produced in the state. If the basis of receipts from
21patent royalties does not permit allocation to states or if the
22accounting procedures do not reflect states of utilization, the
23patent is utilized in this State if the taxpayer has its
24commercial domicile in this State.
25    (B) A copyright is utilized in a state to the extent that
26printing or other publication originates in the state. If the

 

 

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1basis of receipts from copyright royalties does not permit
2allocation to states or if the accounting procedures do not
3reflect states of utilization, the copyright is utilized in
4this State if the taxpayer has its commercial domicile in this
5State.
6    (e) Illinois lottery prizes. Prizes awarded under the
7"Illinois Lottery Law", approved December 14, 1973, are
8allocable to this State.
9    (e-5) Unemployment benefits. Unemployment benefits paid by
10the Illinois Department of Employment Security are allocable to
11this State.
12    (f) Taxability in other state. For purposes of allocation
13of income pursuant to this Section, a taxpayer is taxable in
14another state if:
15    (1) In that state he is subject to a net income tax, a
16franchise tax measured by net income, a franchise tax for the
17privilege of doing business, or a corporate stock tax; or
18    (2) That state has jurisdiction to subject the taxpayer to
19a net income tax regardless of whether, in fact, the state does
20or does not.
21    (g) Cross references. (1) For allocation of interest and
22dividends by persons other than residents, see Section
23301(c)(2).
24    (2) For allocation of nonbusiness income by residents, see
25Section 301(a).
26(Source: P.A. 79-743.)
 

 

 

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1    Section 99. Effective date. This Act takes effect July 1,
22012.