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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Income Tax Act is amended by | |||||||||||||||||||
5 | changing Section 205 as follows:
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6 | (35 ILCS 5/205) (from Ch. 120, par. 2-205)
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7 | Sec. 205. Exempt organizations.
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8 | (a) Charitable, etc. organizations. The base income of an
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9 | organization which is exempt from the federal income tax by | |||||||||||||||||||
10 | reason of the Internal Revenue Code shall not be determined
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11 | under section 203 of this Act, but shall be its unrelated | |||||||||||||||||||
12 | business
taxable income as determined under section 512 of the | |||||||||||||||||||
13 | Internal Revenue
Code, without any deduction for the tax | |||||||||||||||||||
14 | imposed by this Act. The
standard exemption provided by section | |||||||||||||||||||
15 | 204 of this Act shall not be
allowed in determining the net | |||||||||||||||||||
16 | income of an organization to which this
subsection applies.
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17 | (b) Partnerships. A partnership as such shall not be | |||||||||||||||||||
18 | subject to
the tax imposed by subsection 201 (a) and (b) of | |||||||||||||||||||
19 | this Act, but shall be
subject to the replacement tax imposed | |||||||||||||||||||
20 | by subsection 201 (c) and (d) of
this Act and shall compute its | |||||||||||||||||||
21 | base income as described in subsection (d)
of Section 203 of | |||||||||||||||||||
22 | this Act. For taxable years ending on or after December 31, | |||||||||||||||||||
23 | 2004, an investment partnership, as defined in Section |
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1 | 1501(a)(11.5) of this Act, shall not be subject to the tax | ||||||
2 | imposed by subsections (c) and (d) of Section 201 of this Act.
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3 | A partnership shall file such returns and other
information at | ||||||
4 | such
time and in such manner as may be required under Article 5 | ||||||
5 | of this Act.
The partners in a partnership shall be liable for | ||||||
6 | the replacement tax imposed
by subsection 201 (c) and (d) of | ||||||
7 | this Act on such partnership, to the extent
such tax is not | ||||||
8 | paid by the partnership, as provided under the laws of Illinois
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9 | governing the liability of partners for the obligations of a | ||||||
10 | partnership.
Persons carrying on business as partners shall be | ||||||
11 | liable for the tax
imposed by subsection 201 (a) and (b) of | ||||||
12 | this Act only in their separate
or individual capacities.
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13 | (c) Subchapter S corporations. A Subchapter S corporation | ||||||
14 | shall not
be subject to the tax imposed by subsection 201 (a) | ||||||
15 | and
(b) of this Act but shall be subject to the replacement tax | ||||||
16 | imposed by subsection
201 (c) and (d) of this Act and shall | ||||||
17 | file such returns
and other information
at such time and in | ||||||
18 | such manner as may be required under Article 5 of this Act.
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19 | (c-5) Surcharge. Notwithstanding any provision of law to | ||||||
20 | the contrary and in addition to any other tax imposed under | ||||||
21 | this Act, a privilege tax is imposed on partnerships, including | ||||||
22 | investment partnerships, and S corporations engaged in the | ||||||
23 | business of conducting investment management services of 20% | ||||||
24 | until such time as the United States Congress has passed and | ||||||
25 | the President of the United States has signed legislation | ||||||
26 | having an identical effect with this act applicable to such |
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1 | income earned in all of the states and territories. Persons | ||||||
2 | carrying on business as partners conducing investment | ||||||
3 | management services shall be liable for the tax imposed by | ||||||
4 | subsections 201 (a) and (b) of this Act in their separate or | ||||||
5 | individual capacities in accordance with subsection 205 (b) of | ||||||
6 | this Act. | ||||||
7 | For the purposes of this subsection (c-5), "Investment | ||||||
8 | Management Services" means a business which is held by any | ||||||
9 | person if such person provides, directly or indirectly, in the | ||||||
10 | active conduct of a trade or business, a substantial quantity | ||||||
11 | of any of the following services to the business: | ||||||
12 | (1) advising the business (partnership, S corporation | ||||||
13 | or any business entity) as to the advisability of investing | ||||||
14 | in, purchasing, or selling any specified asset; | ||||||
15 | (2) managing, acquiring, or disposing of any specified | ||||||
16 | asset; | ||||||
17 | (3) arranging financing with respect to acquiring | ||||||
18 | specified assets; or | ||||||
19 | (4) any activity in support of any service described in | ||||||
20 | items (1) through (3) of this paragraph. | ||||||
21 | For the purposes of this definition, the term specified | ||||||
22 | asset means securities (as defined in section 475(c)(2) of the | ||||||
23 | Internal Revenue Code) real estate held for rental or | ||||||
24 | investment, interest in partnerships, commodities (as defined | ||||||
25 | in section 475(E)(2) of the Internal Revenue Code) or options | ||||||
26 | or derivative contracts to any of these. |
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1 | A partner or shareholder will not be deemed to hold an | ||||||
2 | investment management services interest if at least 80% of the | ||||||
3 | average fair market value of the specified assets of business | ||||||
4 | during the taxable year consists of real estate. | ||||||
5 | (d) Combat zone, terrorist attack, and certain other | ||||||
6 | deaths. An individual relieved from the federal
income tax for | ||||||
7 | any taxable year by reason of section 692 of the Internal
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8 | Revenue Code shall not be subject to the tax imposed by this | ||||||
9 | Act for
such taxable year.
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10 | (e) Certain trusts. A common trust fund described in | ||||||
11 | Section 584
of the Internal Revenue Code, and any other trust | ||||||
12 | to the extent that the
grantor is treated as the owner thereof | ||||||
13 | under sections 671 through 678
of the Internal Revenue Code | ||||||
14 | shall not be subject to the tax imposed by
this Act.
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15 | (f) Certain business activities. A person not otherwise | ||||||
16 | subject to the tax
imposed by this Act shall not become subject | ||||||
17 | to the tax imposed by this Act by
reason of:
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18 | (1) that person's ownership of tangible personal | ||||||
19 | property located at the
premises of
a printer in this State | ||||||
20 | with which the person has contracted for printing, or
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21 | (2) activities of the person's employees or agents | ||||||
22 | located solely at the
premises of a printer and related to | ||||||
23 | quality control, distribution, or printing
services | ||||||
24 | performed by a printer in the State with which the person | ||||||
25 | has
contracted for printing.
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26 | (g) A nonprofit risk organization that holds a certificate |
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1 | of authority under Article VIID of the Illinois Insurance Code | ||||||
2 | is exempt from the tax imposed under this Act with respect to | ||||||
3 | its activities or operations in furtherance of the powers | ||||||
4 | conferred upon it under that Article VIID of the Illinois | ||||||
5 | Insurance Code.
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6 | (Source: P.A. 97-507, eff. 8-23-11.)
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7 | Section 99. Effective date. This Act takes effect upon | ||||||
8 | becoming law.
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