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Rep. Natalie A. Manley
Filed: 3/9/2017
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1 | | AMENDMENT TO HOUSE BILL 3812
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2 | | AMENDMENT NO. ______. Amend House Bill 3812 by replacing |
3 | | everything after the enacting clause with the following:
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4 | | "Section 5. The Illinois Income Tax Act is amended by |
5 | | changing Sections 224, 302, 601, and 701 as follows: |
6 | | (35 ILCS 5/224 new) |
7 | | Sec. 224. Credit for tracking and reporting expenses. |
8 | | (a) For taxable years ending on and after December 31, 2017 |
9 | | and prior to January 1, 2021, a taxpayer shall be allowed a |
10 | | credit against the tax imposed by subsections (a) and (b) of |
11 | | Section 201 equal to the amount of the investment made by the |
12 | | taxpayer during the taxable year in qualified property and |
13 | | qualified expenses that are used for tracking and reporting the |
14 | | location of resident and nonresident employees for purposes of |
15 | | compliance with the tracking, reporting, and income tax |
16 | | withholding requirements of this amendatory Act of the 100th |
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1 | | General Assembly. |
2 | | (b) In no event shall a credit under this Section reduce a |
3 | | taxpayer's liability to less than zero. The credit shall be |
4 | | allowed for the taxable year in which the qualified property is |
5 | | placed in service or qualified expenses are incurred, or, if |
6 | | the amount of the credit exceeds the tax liability for that |
7 | | year, whether it exceeds the original liability or the |
8 | | liability as later amended, the excess may be carried forward |
9 | | and applied to the tax liability of the 5 taxable years |
10 | | following the excess credit years. The credit shall be applied |
11 | | to the earliest year for which there is a liability. If there |
12 | | is credit from more than one taxable year that is available to |
13 | | offset a liability, the earlier credit shall be applied first. |
14 | | (c) As used in this Section: |
15 | | "Qualified property" means tangible and intangible |
16 | | personal property, including custom or canned computer |
17 | | software that is licensed, acquired by purchase, or |
18 | | developed internally by a taxpayer. |
19 | | "Qualified expenses" includes, but is not limited to, |
20 | | salary expenses and expenses of non-employee contractors.
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21 | | (35 ILCS 5/302) (from Ch. 120, par. 3-302)
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22 | | Sec. 302. Compensation paid to nonresidents.
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23 | | (a) In general. For taxable years beginning prior to |
24 | | January 1, 2018, all All items of compensation paid in this |
25 | | State (as
determined under Section 304(a)(2)(B)) to an |
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1 | | individual who is a
nonresident at the time of such payment and |
2 | | all items of deduction directly
allocable thereto, shall be |
3 | | allocated to this State.
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4 | | For taxable years beginning on or after January 1, 2018, |
5 | | the amount of all items of compensation of nonresident |
6 | | individual employees, and all items of deduction directly |
7 | | allocable thereto, allocated to this State shall be the portion |
8 | | of the individual's total compensation for services performed |
9 | | for his or her employer during the taxable year which the |
10 | | number of working days spent in this State during the taxable |
11 | | year in excess of 30 working days bears to the total number of |
12 | | working days in the taxable year regardless of location. For |
13 | | purposes of this subsection: |
14 | | (1) A "working day" is any day during which the |
15 | | employee performs duties on behalf of the employer. |
16 | | Weekends, vacation days, sick days, and holidays (whether |
17 | | or not paid) are not working days unless the employee is |
18 | | required by the employer to perform some duties on that |
19 | | day. |
20 | | (2) A working day is spent in this State if: |
21 | | (A) a greater amount of time is spent by the |
22 | | employee in this State during that day performing |
23 | | duties on behalf of the employer (other than traveling) |
24 | | than is spent performing duties in any other State; or |
25 | | (B) the only work performed by the employee on |
26 | | behalf of the employer on that day is traveling to a |
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1 | | destination within this State, and the employee |
2 | | arrives in this State on that day. |
3 | | (3) A working day is not spent in this State if the |
4 | | only activity engaged in by the employee on behalf of the |
5 | | employer in this State on that day is traveling from or |
6 | | through this State to a destination outside of this State. |
7 | | (4) Working days spent in this State do not include any |
8 | | day in which the employee is performing services in this |
9 | | State during a disaster period solely in response to a |
10 | | request made to his or her employer by the government of |
11 | | this State or of any political subdivision of this State, |
12 | | or by a person conducting business in this State, to |
13 | | perform disaster or emergency-related services in this |
14 | | State. For purposes of this paragraph (4): |
15 | | (A) "Declared State disaster or emergency" means a |
16 | | disaster or emergency event (i) for which a Governor's |
17 | | proclamation of a state of emergency has been issued or |
18 | | (ii) for which a Presidential declaration of a federal |
19 | | major disaster or emergency has been issued. |
20 | | (B) "Disaster period" means a period that begins 10 |
21 | | days prior to the date of the Governor's proclamation |
22 | | or the President's declaration (whichever is earlier) |
23 | | and extends for a period of 60 calendar days after the |
24 | | end of the declared disaster or emergency period. |
25 | | "Disaster or emergency-related services" means |
26 | | repairing, renovating, installing, building, or |
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1 | | rendering services or conducting other business |
2 | | activities that relate to infrastructure that has been |
3 | | damaged, impaired, or destroyed by the declared State |
4 | | disaster or emergency. |
5 | | "Infrastructure" means property and equipment |
6 | | owned or used by a public utility, communications |
7 | | network, broadband and internet service provider, |
8 | | cable and video service provider, electric or gas |
9 | | distribution system, or water pipeline that provides |
10 | | service to more than one customer or person, including |
11 | | related support facilities. Infrastructure includes |
12 | | real and personal property such as buildings, offices, |
13 | | power lines, cable lines, poles, communications lines, |
14 | | pipes, structures, and equipment. |
15 | | Notwithstanding the provisions of this subsection, |
16 | | compensation of a nonresident individual who is a member of a |
17 | | professional athletic team, and all items of deduction directly |
18 | | allocable thereto, shall be allocated to this State as |
19 | | determined under item (iv) of subparagraph (B) of paragraph (2) |
20 | | of subsection (a) of Section 304. |
21 | | (b) Reciprocal exemption. The Director may enter into an |
22 | | agreement with
the taxing authorities of any state which |
23 | | imposes a tax on or measured by
income to provide that |
24 | | compensation paid in such state to residents of this
State |
25 | | shall be exempt from such tax; in such case, any compensation |
26 | | paid in
this State to residents of such state shall not be |
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1 | | allocated to this State.
All reciprocal agreements shall be |
2 | | subject to the requirements of Section
2505-575 of the |
3 | | Department of Revenue Law (20 ILCS
2505/2505-575).
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4 | | (c) Cross references.
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5 | | (1) For allocation of amounts received by
nonresidents |
6 | | from certain employee trusts, see Section 301(b)(2).
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7 | | (2) For allocation of compensation by residents, see |
8 | | Section 301(a).
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9 | | (Source: P.A. 90-491, eff. 1-1-98; 91-239, eff. 1-1-00.)
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10 | | (35 ILCS 5/601) (from Ch. 120, par. 6-601)
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11 | | Sec. 601. Payment on Due Date of Return.
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12 | | (a) In general. Every taxpayer required to file a return |
13 | | under
this Act shall, without assessment, notice or demand, pay |
14 | | any tax due
thereon to the Department, at the place fixed for |
15 | | filing, on or before
the date fixed for filing such return |
16 | | (determined without regard to any
extension of time for filing |
17 | | the return) pursuant to regulations
prescribed by the |
18 | | Department.
If, however, the due date for payment of a |
19 | | taxpayer's federal income tax
liability for a tax year (as |
20 | | provided in the Internal Revenue Code or by
Treasury |
21 | | regulation, or as extended by the Internal Revenue Service) is |
22 | | later
than the date fixed for filing the taxpayer's Illinois |
23 | | income tax return for
that tax year, the Department may, by |
24 | | rule, prescribe a due date for payment
that is not later than |
25 | | the due date for payment of the taxpayer's federal
income tax |
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1 | | liability. For purposes of the Illinois Administrative |
2 | | Procedure
Act, the adoption of rules to prescribe a later due |
3 | | date for payment shall be
deemed an emergency and necessary for |
4 | | the public interest, safety, and
welfare.
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5 | | (b) Amount payable. In making payment as provided in this
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6 | | section there shall remain payable only the balance of such tax
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7 | | remaining due after giving effect to the following:
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8 | | (1) Withheld tax. Any amount withheld during any |
9 | | calendar year
pursuant to Article 7 from compensation paid |
10 | | to a taxpayer shall be
deemed to have been paid on account |
11 | | of any tax imposed by subsections 201(a)
and (b) of this |
12 | | Act on
such taxpayer for his taxable year beginning in such |
13 | | calendar year. If
more than one taxable year begins in a |
14 | | calendar year, such amount shall
be deemed to have been |
15 | | paid on account of such tax for the last taxable
year so |
16 | | beginning.
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17 | | (2) Estimated and tentative tax payments. Any amount of |
18 | | estimated tax
paid by a taxpayer pursuant to Article 8 for |
19 | | a taxable year shall be deemed to
have been paid on account |
20 | | of the tax imposed by this Act for such
taxable year.
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21 | | (3) Foreign tax. The aggregate amount of tax which is |
22 | | imposed
upon or measured by income and which is paid by a |
23 | | resident for a taxable
year to another state or states on |
24 | | income which is also subject to the tax
imposed by |
25 | | subsections 201(a) and (b) of this Act shall be credited |
26 | | against
the tax imposed by subsections 201(a) and (b) |
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1 | | otherwise due under
this Act for such taxable year. For |
2 | | taxable years ending prior to December 31, 2009, the |
3 | | aggregate credit provided under this
paragraph shall not |
4 | | exceed that amount which bears the same ratio to the tax
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5 | | imposed by subsections 201(a) and (b) otherwise due under |
6 | | this Act as the
amount of the taxpayer's base income |
7 | | subject to tax both by such other state or
states and by |
8 | | this State bears to his total base income subject to tax by |
9 | | this
State for the taxable year. For taxable years ending |
10 | | on or after December 31, 2009, the credit provided under |
11 | | this paragraph for tax paid to other states shall not |
12 | | exceed that amount which bears the same ratio to the tax |
13 | | imposed by subsections 201(a) and (b) otherwise due under |
14 | | this Act as the amount of the taxpayer's base income that |
15 | | would be allocated or apportioned to other states if all |
16 | | other states had adopted the provisions in Article 3 of |
17 | | this Act (other than the provisions of paragraph (4) of |
18 | | subsection (a) of Section 302 and the 30-day threshold set |
19 | | forth in subsection (a) of Section 302) bears to the |
20 | | taxpayer's total base income subject to tax by this State |
21 | | for the taxable year. The credit provided by this paragraph |
22 | | shall
not be allowed if any creditable tax was deducted in |
23 | | determining base income
for the taxable year. Any person |
24 | | claiming such credit shall attach a
statement in support |
25 | | thereof and shall notify the Director of any refund
or |
26 | | reductions in the amount of tax claimed as a credit |
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1 | | hereunder all in
such manner and at such time as the |
2 | | Department shall by regulations prescribe.
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3 | | (4) Accumulation and capital gain distributions. If |
4 | | the net
income of a taxpayer includes amounts included in |
5 | | his base income by
reason of Section 667 of the Internal |
6 | | Revenue Code (relating to
accumulation and capital gain |
7 | | distributions by a trust, respectively),
the tax imposed on |
8 | | such taxpayer by this Act shall be credited with his
pro |
9 | | rata portion of the taxes imposed by this Act on such trust |
10 | | for
preceding taxable years which would not have been |
11 | | payable for such
preceding years if the trust had in fact |
12 | | made distributions to its
beneficiaries at the times and in |
13 | | the amounts specified in Sections 666
and 669 of the |
14 | | Internal Revenue Code. The credit provided by this
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15 | | paragraph shall not reduce the tax otherwise due from the |
16 | | taxpayer to an
amount less than that which would be due if |
17 | | the amounts included by
reason of Section 667 of the |
18 | | Internal Revenue Code were
excluded from his or her base |
19 | | income.
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20 | | (c) Cross reference. For application against tax due of
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21 | | overpayments of tax for a prior year, see Section 909.
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22 | | (Source: P.A. 96-468, eff. 8-14-09; 97-507, eff. 8-23-11.)
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23 | | (35 ILCS 5/701) (from Ch. 120, par. 7-701) |
24 | | Sec. 701. Requirement and Amount of Withholding.
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25 | | (a) In General. Every
employer maintaining an office or |
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1 | | transacting business within this State
and required under the |
2 | | provisions of the Internal Revenue Code to
withhold a tax on:
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3 | | (1) for taxable years beginning prior to January 1, |
4 | | 2018, compensation paid in this State (as determined under |
5 | | Section
304(a)(2)(B) to an individual; or
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6 | | (1.1) for taxable years beginning on or after January |
7 | | 1, 2018, compensation allocated to this State under Section |
8 | | 302 of this Code; or |
9 | | (2) for all taxable years, payments described in |
10 | | subsection (b) shall deduct and withhold from
such |
11 | | compensation for each payroll period (as defined in Section |
12 | | 3401 of
the Internal Revenue Code) an amount equal to the |
13 | | amount by which such
individual's
compensation exceeds the |
14 | | proportionate part of this withholding exemption
(computed |
15 | | as provided in Section 702) attributable to the payroll |
16 | | period
for which such compensation is payable multiplied by |
17 | | a percentage equal
to the percentage tax rate for |
18 | | individuals provided in subsection (b) of
Section 201.
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19 | | (a-5) Withholding for nonresident employees. For taxable |
20 | | years beginning on or after January 1, 2018, for the purposes |
21 | | of determining compensation allocated to this State under |
22 | | subsection (a) of Section 302 of this Code: |
23 | | (1) an employer may rely on an employee's annual |
24 | | determination of the time expected to be spent by such |
25 | | employee in the states in which the employee will perform |
26 | | duties absent: |
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1 | | (A) the employer's actual knowledge of fraud by the |
2 | | employee in making the determination; or |
3 | | (B) collusion between the employer and the |
4 | | employee to evade tax; |
5 | | (2) except as provided in paragraph (3), if records are |
6 | | maintained by an employer in the regular course of business |
7 | | that record the location of an employee, those records |
8 | | shall not preclude an employer's ability to rely on an |
9 | | employee's determination under paragraph (1); and |
10 | | (3) notwithstanding paragraph (2), if an employer, in |
11 | | its sole discretion, maintains a time and attendance system |
12 | | that tracks where the employee performs duties on a daily |
13 | | basis, data from the time and attendance system shall be |
14 | | used instead of the employee's determination under |
15 | | paragraph (1). For purposes of this paragraph, the term |
16 | | "time and attendance system" means a system in which: |
17 | | (A) the employee is required on a contemporaneous |
18 | | basis to record his or her work location for every day |
19 | | worked outside of the State in which the employee's |
20 | | employment duties are primarily performed; and |
21 | | (B) the system is designed to allow the employer to |
22 | | allocate the employee's wages for income tax purposes |
23 | | among all states in which the employee performs |
24 | | employment duties for such employer. |
25 | | (b) Payment to Residents. Any payment (including |
26 | | compensation, but not including a payment from which |
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1 | | withholding is required under Section 710 of this Act) to a
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2 | | resident
by a payor maintaining an office or transacting |
3 | | business within this State
(including any agency, officer, or |
4 | | employee of this State or of any political
subdivision of this |
5 | | State) and on which withholding of tax is required under
the |
6 | | provisions of the
Internal Revenue Code shall be deemed to be |
7 | | compensation paid in this State
by an employer to an employee |
8 | | for the purposes of Article 7 and Section
601(b)(1) to the |
9 | | extent such payment is included in the recipient's base
income |
10 | | and not subjected to withholding by another state.
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11 | | Notwithstanding any other provision to the contrary, no amount |
12 | | shall be
withheld from unemployment insurance benefit payments |
13 | | made to an individual
pursuant to the Unemployment Insurance |
14 | | Act unless the individual has
voluntarily elected the |
15 | | withholding pursuant to rules promulgated by the
Director of |
16 | | Employment Security.
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17 | | (c) Special Definitions. Withholding shall be considered |
18 | | required under
the provisions of the Internal Revenue Code to |
19 | | the extent the Internal Revenue
Code either requires |
20 | | withholding or allows for voluntary withholding the
payor and |
21 | | recipient have entered into such a voluntary withholding |
22 | | agreement.
For the purposes of Article 7 and Section 1002(c) |
23 | | the term "employer" includes
any payor who is required to |
24 | | withhold tax pursuant to this Section.
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25 | | (d) Reciprocal Exemption. The Director may enter into an |
26 | | agreement with
the taxing authorities of any state which |
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1 | | imposes a tax on or measured by
income to provide that |
2 | | compensation paid in such state to residents of this
State |
3 | | shall be exempt from withholding of such tax; in such case, any
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4 | | compensation paid in this State to residents of such state |
5 | | shall be exempt
from withholding.
All reciprocal agreements |
6 | | shall be subject to the requirements of Section
2505-575 of the |
7 | | Department of Revenue Law (20 ILCS
2505/2505-575).
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8 | | (e) Notwithstanding subsection (a)(2) of this Section, no |
9 | | withholding
is required on payments for which withholding is |
10 | | required under Section
3405 or 3406 of the Internal Revenue |
11 | | Code.
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12 | | (Source: P.A. 97-507, eff. 8-23-11; 98-496, eff. 1-1-14.)".
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