HB1558 Engrossed

LRB095 09507 BDD 31819 b






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    AN ACT concerning revenue.

 
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    Be it enacted by the People of the State of Illinois,
 
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represented in the General Assembly:


 
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    Section 5. The Illinois Income Tax Act is amended  by 
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changing Section 404 as follows:
 



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    (35 ILCS 5/404)  (from Ch. 120, par. 4-404)



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    Sec. 404. Reallocation of Items. 

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    (a) If it appears to the Director that any agreement, 
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understanding or
arrangement exists between any persons which 
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causes any person's base
income allocable to this State to be 
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improperly or inaccurately reflected,
the Director may adjust 
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such items of income and deduction, and any factor
taken into 
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account in allocating non-business income to this State, to 
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such extent as
may reasonably be required to determine the base 
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income of such person
properly allocable to this State.

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    (b) The Director may not make any adjustment under 
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subsection (a) before the Department adopts rules setting forth 
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the methods and standards by which the Director may exercise 
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authority under this Section. The rules must set forth the 
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types of agreements, understandings, and arrangements that the 
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Director will consider to cause a person's base income 
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allocable to this State to be improperly or inaccurately 
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reflected.
 


 






HB1558 Engrossed
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LRB095 09507 BDD 31819 b




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    (c) Unless the principal purpose of the agreement, 
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understanding, or
arrangement is for the avoidance of federal 
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or state income tax, any adjustment made under this Section and 
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the rules required to be adopted under subsection (b) must be 
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in accordance with Section 482 of the Internal Revenue Code, as 
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amended, and the related Treasury Regulations.

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(Source: P.A. 76-261.)

 

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    Section 99. Effective date. This Act takes effect upon 
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becoming law.