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Rep. Natalie A. Manley
Filed: 4/20/2015
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1 | | AMENDMENT TO HOUSE BILL 675
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2 | | AMENDMENT NO. ______. Amend House Bill 675 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 302 and 701 as follows:
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6 | | (35 ILCS 5/302) (from Ch. 120, par. 3-302)
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7 | | Sec. 302. Compensation paid to nonresidents.
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8 | | (a) In general. For taxable years beginning prior to |
9 | | January 1, 2015, all All items of compensation paid in this |
10 | | State (as
determined under Section 304(a)(2)(B)) to an |
11 | | individual who is a
nonresident at the time of such payment and |
12 | | all items of deduction directly
allocable thereto, shall be |
13 | | allocated to this State.
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14 | | For taxable years beginning on or after January 1, 2015: |
15 | | (1) all items of compensation of a nonresident |
16 | | individual who is a member of a professional athletic team, |
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1 | | and all items of deduction directly allocable thereto, |
2 | | shall be allocated to this State as determined under |
3 | | Section 304(a)(2)(B)(iv); and |
4 | | (2) the amount of all items of compensation of all |
5 | | other nonresident individuals, and of all items of |
6 | | deduction directly allocable thereto, allocated to this |
7 | | State shall be the portion of the individual's total |
8 | | compensation for services performed for his or her employer |
9 | | during the taxable year which the number of working days |
10 | | spent within this State performing services for the |
11 | | employer in any manner during the taxable year bears to the |
12 | | total number of working days spent both within and without |
13 | | this State during the taxable year. For purposes of this |
14 | | paragraph: |
15 | | (A) A "working day" is any day on which the |
16 | | employee performs duties on behalf of the employer. |
17 | | Weekends, vacation days, sick days, and holidays |
18 | | (whether or not paid) are not working days unless the |
19 | | employee is required by the employer to perform some |
20 | | duties on that day. |
21 | | (B) A working day is spent in this State if: |
22 | | (i) a greater amount of time is spent by the |
23 | | employee in this State during that day performing |
24 | | duties on behalf of the employer (other than |
25 | | travelling) than is spent performing duties in any |
26 | | other State; or |
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1 | | (ii) the only work performed by the employee on |
2 | | behalf of the employer on that day is travelling to |
3 | | a destination within this State, and the employee |
4 | | arrives on that day. |
5 | | (C) A working day is not spent in this State if the |
6 | | only activity engaged in by the employee on behalf of |
7 | | the employer in this State on that day is travelling |
8 | | from or through this State to a destination outside |
9 | | this State. |
10 | | (b) Reciprocal exemption. The Director may enter into an |
11 | | agreement with
the taxing authorities of any state which |
12 | | imposes a tax on or measured by
income to provide that |
13 | | compensation paid in such state to residents of this
State |
14 | | shall be exempt from such tax; in such case, any compensation |
15 | | paid in
this State to residents of such state shall not be |
16 | | allocated to this State.
All reciprocal agreements shall be |
17 | | subject to the requirements of Section
2505-575 of the |
18 | | Department of Revenue Law (20 ILCS
2505/2505-575).
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19 | | (c) Cross references.
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20 | | (1) For allocation of amounts received by
nonresidents |
21 | | from certain employee trusts, see Section 301(b)(2).
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22 | | (2) For allocation of compensation by residents, see |
23 | | Section 301(a).
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24 | | (Source: P.A. 90-491, eff. 1-1-98; 91-239, eff. 1-1-00.)
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25 | | (35 ILCS 5/701) (from Ch. 120, par. 7-701) |
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1 | | Sec. 701. Requirement and Amount of Withholding.
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2 | | (a) In General. Every
employer maintaining an office or |
3 | | transacting business within this State
and required under the |
4 | | provisions of the Internal Revenue Code to
withhold a tax on:
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5 | | (1) compensation allocated to this State under |
6 | | subsection (a) of Section 302 paid in this State (as |
7 | | determined under Section
304(a)(2)(B) to an individual ; or
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8 | | (2) payments described in subsection (b) shall deduct |
9 | | and withhold from
such compensation for each payroll period |
10 | | (as defined in Section 3401 of
the Internal Revenue Code) |
11 | | an amount equal to the amount by which such
individual's
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12 | | compensation exceeds the proportionate part of this |
13 | | withholding exemption
(computed as provided in Section |
14 | | 702) attributable to the payroll period
for which such |
15 | | compensation is payable multiplied by a percentage equal
to |
16 | | the percentage tax rate for individuals provided in |
17 | | subsection (b) of
Section 201.
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18 | | (b) Payment to Residents. Any payment (including |
19 | | compensation, but not including a payment from which |
20 | | withholding is required under Section 710 of this Act) to a
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21 | | resident
by a payor maintaining an office or transacting |
22 | | business within this State
(including any agency, officer, or |
23 | | employee of this State or of any political
subdivision of this |
24 | | State) and on which withholding of tax is required under
the |
25 | | provisions of the
Internal Revenue Code shall be deemed to be |
26 | | compensation paid in this State
by an employer to an employee |
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1 | | for the purposes of Article 7 and Section
601(b)(1) to the |
2 | | extent such payment is included in the recipient's base
income |
3 | | and not subjected to withholding by another state.
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4 | | Notwithstanding any other provision to the contrary, no amount |
5 | | shall be
withheld from unemployment insurance benefit payments |
6 | | made to an individual
pursuant to the Unemployment Insurance |
7 | | Act unless the individual has
voluntarily elected the |
8 | | withholding pursuant to rules promulgated by the
Director of |
9 | | Employment Security.
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10 | | (c) Special Definitions. Withholding shall be considered |
11 | | required under
the provisions of the Internal Revenue Code to |
12 | | the extent the Internal Revenue
Code either requires |
13 | | withholding or allows for voluntary withholding the
payor and |
14 | | recipient have entered into such a voluntary withholding |
15 | | agreement.
For the purposes of Article 7 and Section 1002(c) |
16 | | the term "employer" includes
any payor who is required to |
17 | | withhold tax pursuant to this Section.
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18 | | (d) Reciprocal Exemption. The Director may enter into an |
19 | | agreement with
the taxing authorities of any state which |
20 | | imposes a tax on or measured by
income to provide that |
21 | | compensation paid in such state to residents of this
State |
22 | | shall be exempt from withholding of such tax; in such case, any
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23 | | compensation paid in this State to residents of such state |
24 | | shall be exempt
from withholding.
All reciprocal agreements |
25 | | shall be subject to the requirements of Section
2505-575 of the |
26 | | Department of Revenue Law (20 ILCS
2505/2505-575).
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