Full Text of HB0855 93rd General Assembly
HB0855sam001 93RD GENERAL ASSEMBLY
|
Sen. Terry Link
Filed: 5/18/2004
|
|
09300HB0855sam001 |
|
LRB093 05723 MKM 51135 a |
|
| 1 |
| AMENDMENT TO HOUSE BILL 855
| 2 |
| AMENDMENT NO. ______. Amend House Bill 855 by replacing | 3 |
| everything after the enacting clause with the following:
| 4 |
| "Section 5. The Illinois Income Tax Act is amended by | 5 |
| changing Sections 303, 701, and 710 as follows:
| 6 |
| (35 ILCS 5/303) (from Ch. 120, par. 3-303)
| 7 |
| Sec. 303. (a) In general. Any item of capital gain or loss | 8 |
| ; , and any
item of income from rents or royalties from real or | 9 |
| tangible personal
property, interest, dividends, and patent or | 10 |
| copyright royalties ;
, and prizes
awarded under the Illinois | 11 |
| Lottery Law ; and, for taxable years ending on or after December | 12 |
| 31, 2004, any item of income from wagering and gambling | 13 |
| winnings from Illinois sources , to the extent such item | 14 |
| constitutes
nonbusiness income, together with any item of | 15 |
| deduction directly allocable
thereto, shall be allocated by any | 16 |
| person other than a resident as provided
in this Section.
| 17 |
| (b) Capital gains and losses. (1) Real property. Capital | 18 |
| gains and
losses from sales or exchanges of real property are | 19 |
| allocable to this State
if the property is located in this | 20 |
| State.
| 21 |
| (2) Tangible personal property. Capital gains and losses | 22 |
| from sales
or exchanges of tangible personal property are | 23 |
| allocable to this State if,
at the time of such sale or | 24 |
| exchange:
|
|
|
|
09300HB0855sam001 |
- 2 - |
LRB093 05723 MKM 51135 a |
|
| 1 |
| (A) The property had its situs in this State; or
| 2 |
| (B) The taxpayer had its commercial domicile in this State | 3 |
| and was not
taxable in the state in which the property had its | 4 |
| situs.
| 5 |
| (3) Intangibles. Capital gains and losses from sales or | 6 |
| exchanges of
intangible personal property are allocable to this | 7 |
| State if the taxpayer
had its commercial domicile in this State | 8 |
| at the time of such sale or
exchange.
| 9 |
| (c) Rents and royalties. (1) Real property. Rents and | 10 |
| royalties
from real property are allocable to this State if the | 11 |
| property is located
in this State.
| 12 |
| (2) Tangible personal property. Rents and royalties from | 13 |
| tangible
personal property are allocable to this State:
| 14 |
| (A) If and to the extent that the property is utilized in | 15 |
| this State; or
| 16 |
| (B) In their entirety if, at the time such rents or | 17 |
| royalties were paid
or accrued, the taxpayer had its commercial | 18 |
| domicile in this State and was
not organized under the laws of | 19 |
| or taxable with respect to such rents or
royalties in the state | 20 |
| in which the property was utilized.
The extent of utilization | 21 |
| of tangible personal property in a state is
determined by | 22 |
| multiplying the rents or royalties derived from such property
| 23 |
| by a fraction, the numerator of which is the number of days of | 24 |
| physical
location of the property in the state during the | 25 |
| rental or royalty period
in the taxable year and the | 26 |
| denominator of which is the number of days of
physical location | 27 |
| of the property everywhere during all rental or royalty
periods | 28 |
| in the taxable year. If the physical location of the property
| 29 |
| during the rental or royalty period is unknown or | 30 |
| unascertainable by the
taxpayer, tangible personal property is | 31 |
| utilized in the state in which the
property was located at the | 32 |
| time the rental or royalty payer obtained
possession.
| 33 |
| (d) Patent and copyright royalties.
| 34 |
| (1) Allocation. Patent and copyright royalties are |
|
|
|
09300HB0855sam001 |
- 3 - |
LRB093 05723 MKM 51135 a |
|
| 1 |
| allocable to this
State:
| 2 |
| (A) If and to the extent that the patent or copyright is | 3 |
| utilized by the
payer in this State; or
| 4 |
| (B) If and to the extent that the patent or copyright is | 5 |
| utilized by the
payer in a state in which the taxpayer is not | 6 |
| taxable with respect to such
royalties and, at the time such | 7 |
| royalties were paid or accrued, the
taxpayer had its commercial | 8 |
| domicile in this State.
| 9 |
| (2) Utilization.
| 10 |
| (A) A patent is utilized in a state to the extent that it | 11 |
| is employed in
production, fabrication, manufacturing or other | 12 |
| processing in the state or
to the extent that a patented | 13 |
| product is produced in the state. If the
basis of receipts from | 14 |
| patent royalties does not permit allocation to
states or if the | 15 |
| accounting procedures do not reflect states of
utilization, the | 16 |
| patent is utilized in this State if the taxpayer has its
| 17 |
| commercial domicile in this State.
| 18 |
| (B) A copyright is utilized in a state to the extent that | 19 |
| printing or
other publication originates in the state. If the | 20 |
| basis of receipts from
copyright royalties does not permit | 21 |
| allocation to states or if the
accounting procedures do not | 22 |
| reflect states of utilization, the copyright
is utilized in | 23 |
| this State if the taxpayer has its commercial domicile in
this | 24 |
| State.
| 25 |
| (e) Illinois lottery prizes. Prizes awarded under the | 26 |
| "Illinois Lottery
Law", approved December 14, 1973, are | 27 |
| allocable to this State.
| 28 |
| (e-5) Wagering and gambling winnings. Payments made after | 29 |
| December 31, 2004 of winnings from pari-mutuel wagering | 30 |
| conducted at a wagering facility licensed under the Illinois | 31 |
| Horse Racing Act of 1975 or from gambling games conducted on a | 32 |
| riverboat licensed under the Riverboat Gambling Act are | 33 |
| allocable to this State.
| 34 |
| (f) Taxability in other state. For purposes of allocation |
|
|
|
09300HB0855sam001 |
- 4 - |
LRB093 05723 MKM 51135 a |
|
| 1 |
| of income
pursuant to this Section, a taxpayer is taxable in | 2 |
| another state if:
| 3 |
| (1) In that state he is subject to a net income tax, a | 4 |
| franchise tax
measured by net income, a franchise tax for the | 5 |
| privilege of doing
business, or a corporate stock tax; or
| 6 |
| (2) That state has jurisdiction to subject the taxpayer to | 7 |
| a net income
tax regardless of whether, in fact, the state does | 8 |
| or does not.
| 9 |
| (g) Cross references. (1) For allocation of interest and | 10 |
| dividends by
persons other than residents, see Section | 11 |
| 301(c)(2).
| 12 |
| (2) For allocation of nonbusiness income by residents, see | 13 |
| Section
301(a).
| 14 |
| (Source: P.A. 79-743.)
| 15 |
| (35 ILCS 5/701) (from Ch. 120, par. 7-701)
| 16 |
| Sec. 701. Requirement and Amount of Withholding.
| 17 |
| (a) In General. Every
employer maintaining an office or | 18 |
| transacting business within this State
and required under the | 19 |
| provisions of the Internal Revenue Code to
withhold a tax on:
| 20 |
| (1) compensation paid in this State (as determined | 21 |
| under Section
304(a)(2)(B) to an individual; or
| 22 |
| (2) payments described in subsection (b) shall deduct | 23 |
| and withhold from
such compensation for each payroll period | 24 |
| (as defined in Section 3401 of
the Internal Revenue Code) | 25 |
| an amount equal to the amount by which such
individual's
| 26 |
| compensation exceeds the proportionate part of this | 27 |
| withholding exemption
(computed as provided in Section | 28 |
| 702) attributable to the payroll period
for which such | 29 |
| compensation is payable multiplied by a percentage equal
to | 30 |
| the percentage tax rate for individuals provided in | 31 |
| subsection (b) of
Section 201.
| 32 |
| (b) Payment to Residents. Any payment (including | 33 |
| compensation , but not including a payment from which |
|
|
|
09300HB0855sam001 |
- 5 - |
LRB093 05723 MKM 51135 a |
|
| 1 |
| withholding is required under Section 710 of this Act ) to a
| 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.
| 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.
| 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.
| 25 |
| (d) Reciprocal Exemption. The Director may enter into an | 26 |
| agreement with
the taxing authorities of any state which | 27 |
| imposes a tax on or measured by
income to provide that | 28 |
| compensation paid in such state to residents of this
State | 29 |
| shall be exempt from withholding of such tax; in such case, any
| 30 |
| compensation paid in this State to residents of such state | 31 |
| shall be exempt
from withholding.
All reciprocal agreements | 32 |
| shall be subject to the requirements of Section
2505-575 of the | 33 |
| Department of Revenue Law (20 ILCS
2505/2505-575).
| 34 |
| (e) Notwithstanding subsection (a)(2) of this Section, no |
|
|
|
09300HB0855sam001 |
- 6 - |
LRB093 05723 MKM 51135 a |
|
| 1 |
| withholding
is required on payments for which withholding is | 2 |
| required under Section
3405 or 3406 of the Internal Revenue | 3 |
| Code of 1954.
| 4 |
| (Source: P.A. 92-846, eff. 8-23-02; 93-634, eff. 1-1-04.)
| 5 |
| (35 ILCS 5/710) (from Ch. 120, par. 7-710)
| 6 |
| Sec. 710. Withholding from lottery , wagering, and gambling | 7 |
| winnings. (a) In General. Any person
making a payment to a | 8 |
| resident or nonresident of winnings under the Illinois
Lottery | 9 |
| Law and not required to withhold Illinois income tax from such | 10 |
| payment
under Subsection (b) of Section 701 of this Act because | 11 |
| those winnings are
not subject to Federal income tax | 12 |
| withholding, must withhold Illinois income
tax from such | 13 |
| payment at a rate equal to the percentage tax rate for | 14 |
| individuals
provided in subsection (b) of Section 201, provided | 15 |
| that withholding is
not required if such payment of winnings is | 16 |
| less than $1,000. Any person making a payment after December | 17 |
| 31, 2004 to a resident or nonresident of winnings from | 18 |
| pari-mutuel wagering conducted at a wagering facility licensed | 19 |
| under the Illinois Horse Racing Act of 1975 or from gambling | 20 |
| games conducted on a riverboat licensed under the Riverboat | 21 |
| Gambling Act must withhold Illinois income tax from that | 22 |
| payment at a rate equal to the percentage tax rate for | 23 |
| individuals provided in subsection (b) of Section 201, provided | 24 |
| that the withholding is not required if the payment of winnings | 25 |
| is less than $1,000.
| 26 |
| (b) Credit for taxes withheld. Any amount withheld under | 27 |
| Subsection (a)
shall be a credit against the Illinois income | 28 |
| tax liability of the person
to whom the payment of winnings was | 29 |
| made for the taxable year in which that
person incurred an | 30 |
| Illinois income tax liability with respect to those winnings.
| 31 |
| (Source: P.A. 85-731.)
| 32 |
| Section 99. Effective date. This Act takes effect upon |
|
|
|
09300HB0855sam001 |
- 7 - |
LRB093 05723 MKM 51135 a |
|
| 1 |
| becoming law.".
|
|