HB0675ham001 99TH GENERAL ASSEMBLY

Rep. Natalie A. Manley

Filed: 4/16/2015

09900HB0675ham001 LRB099 04484 HLH 33937 a

AMENDMENT TO HOUSE BILL 675

AMENDMENT NO. ______. Amend House Bill 675 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Income Tax Act is amended by changing Section 302 as follows:

(35 ILCS 5/302) (from Ch. 120, par. 3-302)

Sec. 302. Compensation paid to nonresidents.

(a) In general. For taxable years beginning prior to January 1, 2015, and for all taxable years for members of professional athletic teams, all All items of compensation paid in this State (as determined under Section 304(a)(2)(B)) to an individual who is a nonresident at the time of such payment and all items of deduction directly allocable thereto, shall be allocated to this State.

For taxable years beginning on or after January 1, 2015:

(1) all items of compensation of a nonresident individual who is a member of a professional athletic team, and all items of deduction directly allocable thereto, shall be allocated to this State as determined under Section 304(a)(2)(B)(iv); and

(2) the amount of all items of compensation of all other nonresident individuals, and of all items of deduction directly allocable thereto, allocated to this State shall be the portion of the individual's total compensation for services performed for his or her employer during the taxable year which the number of working days spent within this State performing services for the employer in any manner during the taxable year bears to the total number of working days spent both within and without this State during the taxable year. For purposes of this paragraph:

(A) A "working day" is any day on which the employee performs duties on behalf of the employer. Weekends, vacation days, sick days, and holidays (whether or not paid) are not working days unless the employee is required by the employer to perform some duties on that day.

(B) A working day is spent in this State if:

(i) a greater amount of time is spent by the employee in this State during that day performing duties on behalf of the employer (other than travelling) than is spent performing duties in any other State; or

(ii) the only work performed by the employee on behalf of the employer on that day is travelling to a destination within this State, and the employee arrives on that day.

(C) A working day is not spent in this State if the only activity engaged in by the employee on behalf of the employer in this State on that day is travelling from or through this State to a destination outside this State.

(b) Reciprocal exemption. The Director may enter into an agreement with the taxing authorities of any state which imposes a tax on or measured by income to provide that compensation paid in such state to residents of this State shall be exempt from such tax; in such case, any compensation paid in this State to residents of such state shall not be allocated to this State. All reciprocal agreements shall be subject to the requirements of Section 2505-575 of the Department of Revenue Law (20 ILCS 2505/2505-575).

(c) Cross references.

(1) For allocation of amounts received by nonresidents from certain employee trusts, see Section 301(b)(2).

(2) For allocation of compensation by residents, see Section 301(a).

(Source: P.A. 90-491, eff. 1-1-98; 91-239, eff. 1-1-00.)

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