Illinois General Assembly - Bill Status for HB0848

Deletes everything after the enacting clause. Creates the Tax Shelter Voluntary Compliance Act. Requires the Department of Revenue to establish a temporary program that applies to tax liabilities attributable to the use of abusive tax avoidance transactions. Sets forth requirements for the program. Amends the Statute on Statutes. Defines "economic substance doctrine". Amends the Illinois Income Tax Act. In the definition of "base income" sets forth modifications that must be made to a taxpayer's adjusted gross income concerning interest and intangible expenses that were paid, accrued, or incurred, directly or indirectly, to a foreign person that would be a member of the same unitary business group but for the fact that the foreign person's business activity outside of the United States is 80% or more of that foreign person's business activity. Provides that a taxpayer's "base income" includes amounts that were excluded from a taxpayer's adjusted gross income under certain Sections of the Internal Revenue Code concerning employer-owned life insurance contracts. Sets forth exceptions if the insurance proceeds are payable to certain beneficiaries. Defines "employer-owned life insurance contract". Recaptures as business income all expenses deducted in prior years related to an asset or business that was classified as business income and is now non-business income. Provides that, with limited exceptions, income received by a nonresident partner of an investment partnership from the investment partnership will be treated as nonbusiness income. Establishes a formula for determining the reduction in the net operating loss and net operating loss carryover for each taxable year ending on or after December 31, 2004. Requires the reduction to be made after the determination of Illinois net income for the taxable year. Sets forth criteria and procedures for determining whether a sale is in this State for purposes of determining the allocation and apportionment of business income for persons other than residents. Sets forth reporting requirements for certain federal and State transactions and sets forth penalties for the failure to make a required report. Requires the registration of certain tax shelters. Requires certain persons to maintain investor lists. Sets forth penalties for the failure to register a tax shelter or maintain an investor list as required. Defines, "business income", "investment partnership", "passive income affiliate", "foreign person", and "small business". Makes other changes. Provides that the provisions of the amendment take effect if and only if House Bill 4266 becomes law in the same form as it passed both houses of the General Assembly on April 29, 2004. Provides that the changes made by the Tax Shelter Voluntary Compliance Act and the amendatory provisions do not apply to small businesses. Effective July 1, 2005.

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