Full Text of HB3659 96th General Assembly
HB3659sam002 96TH GENERAL ASSEMBLY
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Sen. Dan Kotowski
Filed: 5/5/2010
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| AMENDMENT TO HOUSE BILL 3659
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| AMENDMENT NO. ______. Amend House Bill 3659, AS AMENDED, by | 3 |
| replacing everything after the enacting clause with the | 4 |
| following:
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| "Section 1. Short title. This Act may be cited as the Oil | 6 |
| Company Gross Income Tax Act. | 7 |
| Section 5. Definitions. Except as otherwise expressly | 8 |
| provided or clearly appearing from the context, any term used | 9 |
| in this Act shall have the same meaning as when used in a | 10 |
| comparable context in the Illinois Income Tax Act, as in effect | 11 |
| for the taxable year. As used in this Act: | 12 |
| "Department" means the Department of Revenue. | 13 |
| "Gross income" of a taxpayer means the amount of gross | 14 |
| income properly reportable for federal income tax purposes for | 15 |
| the taxable year under the provisions of the Internal Revenue | 16 |
| Code, minus any amounts that are exempt from taxation by this |
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| State either by reason of its statutes or Constitution or by | 2 |
| reason of the Constitution, treaties or statutes of the United | 3 |
| States. | 4 |
| "Illinois gross income" of a taxpayer means the amount of | 5 |
| gross income of the taxpayer, multiplied by the apportionment | 6 |
| fraction of the taxpayer determined under Section 304 of the | 7 |
| Illinois Income Tax Act for the taxable year. | 8 |
| "Oil company" means any taxpayer primarily engaged in the | 9 |
| business (other than as an employee) of exploration, drilling, | 10 |
| importation, refining or wholesale distribution of petroleum | 11 |
| products, excluding retail sales of tangible personal property | 12 |
| for use or consumption, and not for resale. | 13 |
| "Petroleum products" means any products that contain or are | 14 |
| made from petroleum or a petroleum derivative. | 15 |
| "Taxpayer" means any person subject to tax under the | 16 |
| Illinois Income Tax Act. In the case of a unitary business | 17 |
| group as defined in Section 1501(a)(27) of the Illinois Income | 18 |
| Tax Act, "taxpayer" means the unitary business group, all | 19 |
| returns on behalf of the taxpayer shall be made by the | 20 |
| designated agent of the unitary business group and each member | 21 |
| of the unitary business group doing business in this State | 22 |
| shall be jointly and severally liable for the tax imposed under | 23 |
| this Act. | 24 |
| Section 10. Tax imposed. For taxable years ending on or | 25 |
| after December 31, 2011, a tax is hereby imposed on each oil |
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| company doing business in this State at the rate of 12% of the | 2 |
| Illinois gross income of the oil company. | 3 |
| Section 15. Returns and payments. | 4 |
| (a) In General. Except as provided by the Department by | 5 |
| rule, every taxpayer qualified to do business in this State at | 6 |
| any time during a taxable year shall make a return under this | 7 |
| Act for that taxable year. Returns required by this Act shall | 8 |
| be made in the form and manner prescribed by the Department, | 9 |
| and shall be filed on or before the due date (including | 10 |
| extensions) for filing of the taxpayer's Illinois income tax | 11 |
| return for the same taxable year under the Illinois Income Tax | 12 |
| Act. The Department may by rule require any return required | 13 |
| under this Act to be filed electronically. | 14 |
| (b) A taxpayer shall notify the Department if the federal | 15 |
| income tax liability of that taxpayer for any year is altered | 16 |
| by amendment of that taxpayer's federal income tax return or as | 17 |
| a result of any other recomputation or redetermination of | 18 |
| federal income tax liability, and such alteration reflects a | 19 |
| change or settlement with respect to any item or items | 20 |
| affecting the computation of such taxpayer's Illinois gross | 21 |
| income for any year under this Act. Such notification shall be | 22 |
| in the form of an amended return or such other form as the | 23 |
| Department may by rule prescribe, and shall be filed not later | 24 |
| than 120 days after such alteration has been agreed to or | 25 |
| finally determined for federal income tax purposes or any |
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| federal income tax deficiency or refund, abatement or credit | 2 |
| resulting therefrom has been assessed or paid, whichever shall | 3 |
| first occur. | 4 |
| (c) Every taxpayer required to file a return under this Act | 5 |
| shall, without assessment, notice or demand, pay any tax due | 6 |
| thereon to the Department, at the place fixed for filing, on or | 7 |
| before the date fixed for filing such return (including any | 8 |
| extension of time for filing the return) pursuant to rules | 9 |
| prescribed by the Department. | 10 |
| (d) Every taxpayer shall keep such records, render such | 11 |
| statements, make such returns and notices, and comply with such | 12 |
| rules and regulations as the Department may from time to time | 13 |
| prescribe. Whenever in the judgment of the Director it is | 14 |
| necessary, he may require any taxpayer, by notice served upon | 15 |
| such taxpayer or by regulations, to make such returns and | 16 |
| notices, render such statements, or keep such records, as the | 17 |
| Director deems sufficient to show whether or not such taxpayer | 18 |
| is liable for tax under this Act. | 19 |
| Section 20. Payment of Estimated Tax. | 20 |
| (a) For taxable years ending on or after December 31, 2011, | 21 |
| each taxpayer is required to pay estimated tax for the taxable | 22 |
| year, in such amount and with such forms as the Department | 23 |
| shall prescribe. | 24 |
| (b) There shall be paid 4 equal installments of estimated | 25 |
| tax for each taxable year, payable as follows: | |
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| 1 | | Required Installment: | Due Date: |
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2 | | 1st | April 15 |
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3 | | 2nd | June 15 |
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4 | | 3rd | September 15 |
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5 | | 4th | December 15 |
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| (c) Application to short taxable years. The application of | 7 |
| this Section to taxable years of less than 12 months shall be | 8 |
| in accordance with regulations prescribed by the Department. | 9 |
| (d) Fiscal years. In the application of this Section to the | 10 |
| case of a taxable year ending on any date other than December | 11 |
| 31, there shall be substituted, for the months specified in | 12 |
| subsection (b), the months which correspond thereto. | 13 |
| (e) In case of any underpayment of estimated tax by a | 14 |
| taxpayer, the taxpayer shall be liable to a penalty in an | 15 |
| amount determined at the rate prescribed by Section 3-3 of the | 16 |
| Uniform Penalty and Interest Act upon the amount of the | 17 |
| underpayment for each required installment. | 18 |
| (1) Amount of underpayment. For purposes of subsection | 19 |
| (a), the amount of the underpayment shall be the excess of: | 20 |
| (A) the amount of the installment which would be | 21 |
| required to be paid under paragraph (2) of this | 22 |
| subsection, over
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| (B) the amount, if any, of the installment paid on | 24 |
| or before the last date prescribed for payment.
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| (2) Amount of Required Installments. The amount of any | 26 |
| required installment shall be 25% of the required annual |
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| payment. The "required annual payment" means the lesser of | 2 |
| 90% of the tax shown on the return for the taxable year, or | 3 |
| if no return is filed, 90% of the tax for such year. | 4 |
| Section 25. Collection authority. The Department shall | 5 |
| collect the taxes imposed by this Act and shall deposit the | 6 |
| amounts collected into the General Revenue Fund in the State | 7 |
| treasury. | 8 |
| Section 30. Notice and Demand. | 9 |
| (a) In general. Except as provided in subsection (b) the | 10 |
| Director shall, as soon as practicable after an amount payable | 11 |
| under this Act is deemed assessed (as provided in Section 35 of | 12 |
| this Act), give notice to each taxpayer liable for any unpaid | 13 |
| portion of such assessment, stating the amount unpaid and | 14 |
| demanding payment thereof. In the case of tax deemed assessed | 15 |
| with the filing of a return, the Director shall give notice no | 16 |
| later than 3 years after the date the return was filed. Upon | 17 |
| receipt of any notice and demand there shall be paid at the | 18 |
| place and time stated in such notice the amount stated in such | 19 |
| notice. Such notice shall be left at the dwelling or usual | 20 |
| place of business of such taxpayer or shall be sent by mail to | 21 |
| the taxpayer's last known address. | 22 |
| (b) Judicial review. In the case of a deficiency deemed | 23 |
| assessed under Section 35(b) of this Act after the filing of a | 24 |
| protest, notice and demand shall not be made with respect to |
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| such assessment until all proceedings in court for the review | 2 |
| of such assessment have terminated or the time for the taking | 3 |
| thereof has expired without such proceedings being instituted. | 4 |
| Section 35. Assessment. | 5 |
| (a) Returns. The amount of tax which is shown to be due on | 6 |
| the return shall be deemed assessed on the date of filing of | 7 |
| the return (including any amended returns showing an increase | 8 |
| of tax). In the event that the amount of tax is understated on | 9 |
| the taxpayer's return due to a mathematical error, the | 10 |
| Department shall notify the taxpayer that the amount of tax in | 11 |
| excess of that shown on the return is due and has been | 12 |
| assessed. Such notice of additional tax due shall be issued no | 13 |
| later than 3 years after the date the return was filed. Such | 14 |
| notice of additional tax due shall not be considered a notice | 15 |
| of deficiency nor shall the taxpayer have any right of protest. | 16 |
| In the case of a return properly filed without the computation | 17 |
| of the tax, the tax computed by the Department shall be deemed | 18 |
| to be assessed on the date when payment is due. | 19 |
| (b) Notice of deficiency. If a notice of deficiency has | 20 |
| been issued, the amount of the deficiency shall be deemed | 21 |
| assessed on the date provided in Section 40(d) of this Act if | 22 |
| no protest is filed; or, if a protest is filed, then upon the | 23 |
| date when the decision of the Department becomes final. | 24 |
| (c) Payments. Any amount paid as tax or in respect of tax | 25 |
| paid under this Act, other than amounts paid as estimated tax |
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| under Section 20 of this Act, shall be deemed assessed upon the | 2 |
| date of receipt of payment, notwithstanding any other | 3 |
| provisions of this Act. | 4 |
| (d) Limitations on assessment. No deficiency shall be | 5 |
| assessed with respect to a taxable year for which a return was | 6 |
| filed unless a notice of deficiency for such year was issued | 7 |
| not later than the date prescribed in Section 45 of this Act. | 8 |
| Section 40. Deficiencies and overpayments. | 9 |
| (a) Examination of return. As soon as practicable after a | 10 |
| return is filed, the Department shall examine it to determine | 11 |
| the correct amount of tax. If the Department finds that the | 12 |
| amount of tax shown on the return is less than the correct | 13 |
| amount, it shall issue a notice of deficiency to the taxpayer | 14 |
| which shall set forth the amount of tax and penalties proposed | 15 |
| to be assessed. If the Department finds that the tax paid is | 16 |
| more than the correct amount, it shall credit or refund the | 17 |
| overpayment as provided by Section 55. The findings of the | 18 |
| Department under this subsection shall be prima facie correct | 19 |
| and shall be prima facie evidence of the correctness of the | 20 |
| amount of tax and penalties due. | 21 |
| (b) No return filed. If the taxpayer fails to file a tax | 22 |
| return, the Department shall determine the amount of tax due | 23 |
| according to its best judgment and information, which amount so | 24 |
| fixed by the Department shall be prima facie correct and shall | 25 |
| be prima facie evidence of the correctness of the amount of tax |
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| due. The Department shall issue a notice of deficiency to the | 2 |
| taxpayer which shall set forth the amount of tax and penalties | 3 |
| proposed to be assessed. | 4 |
| (c) Notice of deficiency. A notice of deficiency issued | 5 |
| under this Act shall set forth the adjustments giving rise to | 6 |
| the proposed assessment and the reasons therefor. | 7 |
| (d) Assessment when no protest. Upon the expiration of 60 | 8 |
| days (150 days if the taxpayer is outside the United States) | 9 |
| after the date on which it was issued, a notice of deficiency | 10 |
| shall constitute an assessment of the amount of tax and | 11 |
| penalties specified therein, except only for such amounts as to | 12 |
| which the taxpayer shall have filed a protest with the | 13 |
| Department, as provided in Section 50 of this Act. | 14 |
| Section 45. Limitations on notices of deficiency. | 15 |
| (a) In general. Except as otherwise provided in this Act: | 16 |
| (1) A notice of deficiency shall be issued not later | 17 |
| than 3 years after the date the return was filed, and
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| (2) No deficiency shall be assessed or collected with | 19 |
| respect to the year for which the return was filed unless | 20 |
| such notice is issued within such period.
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| (b) No return or fraudulent return. If no return is filed | 22 |
| or a false and fraudulent return is filed with intent to evade | 23 |
| the tax imposed by this Act, a notice of deficiency may be | 24 |
| issued at any time. | 25 |
| (c) Failure to report federal change. If a taxpayer fails |
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| to notify the Department in any case where notification is | 2 |
| required by Section 15 of this Act, a notice of deficiency may | 3 |
| be issued at any time for the taxable year for which the | 4 |
| notification is required; provided, however, that the amount of | 5 |
| any proposed assessment set forth in the notice shall be | 6 |
| limited to the amount of any deficiency resulting under this | 7 |
| Act from giving effect to the item or items required to be | 8 |
| reported. | 9 |
| (d) Report of federal change. In any case where | 10 |
| notification of an alteration is given as required by Section | 11 |
| 15 of this Act, a notice of deficiency may be issued at any | 12 |
| time within 2 years after the date such notification is given, | 13 |
| provided, however, that the amount of any proposed assessment | 14 |
| set forth in such notice shall be limited to the amount of any | 15 |
| deficiency resulting under this Act from giving effect to the | 16 |
| item or items reflected in the reported alteration. | 17 |
| (e) Change in Illinois income tax liability. In any case | 18 |
| where the taxpayer's Illinois income tax liability for a | 19 |
| taxable year is increased as the result of a change in the | 20 |
| taxpayer's apportionment fraction, a notice of deficiency for | 21 |
| any additional tax due under this Act as the result of the | 22 |
| change in the taxpayer's apportionment fraction may be issued | 23 |
| at any time within 2 years after the increased Illinois income | 24 |
| tax overpayment is assessed. | 25 |
| (f) Extension by agreement. Where, before the expiration of | 26 |
| the time prescribed in this section for the issuance of a |
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| notice of deficiency, both the Department and the taxpayer | 2 |
| shall have consented in writing to its issuance after such | 3 |
| time, such notice may be issued at any time prior to the | 4 |
| expiration of the period agreed upon. The period so agreed upon | 5 |
| may be extended by subsequent agreements in writing made before | 6 |
| the expiration of the period previously agreed upon. | 7 |
| (g) Erroneous refunds. In any case in which there has been | 8 |
| an erroneous refund of tax payable under this Act, a notice of | 9 |
| deficiency may be issued at any time within 2 years from the | 10 |
| making of such refund, or within 5 years from the making of | 11 |
| such refund if it appears that any part of the refund was | 12 |
| induced by fraud or the misrepresentation of a material fact, | 13 |
| provided, however, that the amount of any proposed assessment | 14 |
| set forth in such notice shall be limited to the amount of such | 15 |
| erroneous refund. | 16 |
| (h) Time return deemed filed. For purposes of this Section | 17 |
| a tax return filed before the last day prescribed by law | 18 |
| (including any extension thereof) shall be deemed to have been | 19 |
| filed on such last day. | 20 |
| Section 50. Procedure on protest. | 21 |
| (a) Time for protest. Within 60 days (150 days if the | 22 |
| taxpayer is outside the United States) after the issuance of a | 23 |
| notice of deficiency, the taxpayer may file with the Department | 24 |
| a written protest against the proposed assessment in such form | 25 |
| as the Department may by regulations prescribe, setting forth |
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| the grounds on which such protest is based. If a protest is | 2 |
| filed, the Department shall reconsider the proposed assessment | 3 |
| and, if the taxpayer has so requested, shall grant the taxpayer | 4 |
| or the taxpayer's authorized representative a hearing. | 5 |
| (b) Notice of decision. As soon as practicable after such | 6 |
| reconsideration and hearing, if any, the Department shall issue | 7 |
| a notice of decision by mailing such notice by certified or | 8 |
| registered mail. Such notice shall set forth briefly the | 9 |
| Department's findings of fact and the basis of decision in each | 10 |
| case decided in whole or in part adversely to the taxpayer. | 11 |
| (c) Request for rehearing. Within 30 days after the mailing | 12 |
| of a notice of decision, the taxpayer may file with a | 13 |
| Department a written request for rehearing in such form as the | 14 |
| Department may by regulations prescribe, setting forth the | 15 |
| grounds on which rehearing is requested. In any such case, the | 16 |
| Department shall, in its discretion, grant either a rehearing | 17 |
| or Departmental review unless, within 10 days of receipt of | 18 |
| such request, it shall issue a denial of such request by | 19 |
| mailing such denial to the taxpayer by certified or registered | 20 |
| mail. If rehearing or Departmental review is granted, as soon | 21 |
| as practicable after such rehearing or Departmental review, the | 22 |
| Department shall issue a notice of final decision as provided | 23 |
| in subsection (b). | 24 |
| (d) Finality of decision. The action of the Department on | 25 |
| the taxpayer's protest shall become final: | 26 |
| (1) 30 Days after issuance of a notice of decision as |
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| provided in subsection (b); or
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| (2) if a timely request for rehearing was made, upon | 3 |
| the issuance of a denial of such request or the issuance of | 4 |
| a notice of final decision as provided in subsection (c).
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| Section 55. Credits and refunds. | 6 |
| (a) In general. In the case of any overpayment, the | 7 |
| Department may credit the amount of such overpayment, including | 8 |
| any interest allowed thereon, against any liability in respect | 9 |
| of the tax imposed by this Act or any other act administered by | 10 |
| the Department or against any liability of the taxpayer | 11 |
| collectible by the Department, regardless of whether other | 12 |
| collection remedies are closed to the Department on the part of | 13 |
| the person who made the overpayment and shall refund any | 14 |
| balance to such person. The Department shall apply overpayments | 15 |
| to liabilities in the order provided in Section 911.3 of the | 16 |
| Illinois Income Tax Act. | 17 |
| (b) Credits against estimated tax. The Department may | 18 |
| prescribe regulations providing for the crediting against the | 19 |
| estimated tax for any taxable year of the amount determined by | 20 |
| the taxpayer or the Department to be an overpayment of the tax | 21 |
| imposed by this Act for a preceding taxable year. | 22 |
| (c) Interest on overpayment. Interest shall be allowed and | 23 |
| paid at the rate and in the manner prescribed in Section 3-2 of | 24 |
| the Uniform Penalty and Interest Act upon any overpayment in | 25 |
| respect of the tax imposed by this Act. For purposes of this |
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| subsection, no amount of tax, for any taxable year, shall be | 2 |
| treated as having been paid before the date on which the | 3 |
| payment of tax for such year was due under Section 15(c) of | 4 |
| this Act. | 5 |
| (d) Refund claim. Every claim for refund shall be filed | 6 |
| with the Department in writing in such form as the Department | 7 |
| may by regulations prescribe, and shall state the specific | 8 |
| grounds upon which it is founded. | 9 |
| (e) Notice of denial. As soon as practicable after a claim | 10 |
| for refund is filed, the Department shall examine it and either | 11 |
| issue a notice of refund, abatement or credit to the claimant | 12 |
| or issue a notice of denial. If the Department has failed to | 13 |
| approve or deny the claim before the expiration of 6 months | 14 |
| from the date the claim was filed, the claimant may | 15 |
| nevertheless thereafter file with the Department a written | 16 |
| protest in such form as the Department may by regulation | 17 |
| prescribe. If a protest is filed, the Department shall consider | 18 |
| the claim and, if the taxpayer has so requested, shall grant | 19 |
| the taxpayer or the taxpayer's authorized representative a | 20 |
| hearing within 6 months after the date such request is filed. | 21 |
| (f) Effect of denial. A denial of a claim for refund | 22 |
| becomes final 60 days after the date of issuance of the notice | 23 |
| of such denial except for such amounts denied as to which the | 24 |
| claimant has filed a protest with the Department, as provided | 25 |
| by Section 60 of this Act. |
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| Section 60. Procedure on denial of claim for refund. | 2 |
| (a) Time for protest. Within 60 days after the denial of | 3 |
| the claim, the claimant may file with the Department a written | 4 |
| protest against such denial in such form as the Department may | 5 |
| by regulations prescribe, setting forth the grounds on which | 6 |
| such protest is based. If a protest is filed, the Department | 7 |
| shall reconsider the denial and, if the taxpayer has so | 8 |
| requested, shall grant the taxpayer or his authorized | 9 |
| representative a hearing. | 10 |
| (b) Notice of decision. As soon as practicable after such | 11 |
| reconsideration and hearing, if any, the Department shall issue | 12 |
| a notice of decision by mailing such notice by certified or | 13 |
| registered mail. Such notice shall set forth briefly the | 14 |
| Department's findings of fact and the basis of decision in each | 15 |
| case decided in whole or in part adversely to the claimant. | 16 |
| (c) Request for rehearing. Within 30 days after the mailing | 17 |
| of a notice of decision, the claimant may file with the | 18 |
| Department a written request for rehearing in such form as the | 19 |
| Department may by regulations prescribe, setting forth the | 20 |
| grounds on which rehearing is requested. In any such case, the | 21 |
| Department shall, in its discretion, grant either a rehearing | 22 |
| or Departmental review unless, within 10 days of receipt of | 23 |
| such request, it shall issue a denial of such request by | 24 |
| mailing such denial to the claimant by certified or registered | 25 |
| mail. If rehearing or Departmental review is granted, as soon | 26 |
| as practicable after such rehearing or Departmental review, the |
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| Department shall issue a notice of final decision as provided | 2 |
| in subsection (b). | 3 |
| (d) Finality of decision. The action of the Department on | 4 |
| the claimant's protest shall become final: | 5 |
| (1) 30 days after issuance of a notice of decision as | 6 |
| provided in subsection (b); or
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| (2) If a timely request for rehearing was made, upon | 8 |
| the issuance of a denial of such request or the issuance of | 9 |
| a notice of final decision as provided in subsection (c).
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| Section 65. Limitations on claims for refund. | 11 |
| (a) In general. Except as otherwise provided in this Act: | 12 |
| (1) A claim for refund shall be filed not later than 3 | 13 |
| years after the date the return was filed, or one year | 14 |
| after the date the tax was paid, whichever is the later; | 15 |
| and
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| (2) No credit or refund shall be allowed or made with | 17 |
| respect to the year for which the claim was filed unless | 18 |
| such claim is filed within such period.
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| (b) Federal changes. In any case where notification of an | 20 |
| alteration is required by Section 15(b) of this Act, a claim | 21 |
| for refund may be filed within 2 years after the date on which | 22 |
| such notification was due (regardless of whether such notice | 23 |
| was given), but the amount recoverable pursuant to a claim | 24 |
| filed under this Section shall be limited to the amount of any | 25 |
| overpayment resulting under this Act from giving effect to the |
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| item or items reflected in the alteration required to be | 2 |
| reported. | 3 |
| (c) Change in Illinois income tax liability. In any case | 4 |
| where the taxpayer's Illinois income tax liability for a | 5 |
| taxable year is decreased as the result of a change in the | 6 |
| taxpayer's apportionment fraction, a claim refund of an | 7 |
| overpayment resulting from the change in the taxpayer's | 8 |
| apportionment fraction may be issued at any time within 2 years | 9 |
| after the decreased Illinois income tax overpayment is refunded | 10 |
| or credited. | 11 |
| (d) Extension by agreement. Where, before the expiration of | 12 |
| the time prescribed in this Section for the filing of a claim | 13 |
| for refund, both the Department and the claimant shall have | 14 |
| consented in writing to its filing after such time, such claim | 15 |
| may be filed at any time prior to the expiration of the period | 16 |
| agreed upon. The period so agreed upon may be extended by | 17 |
| subsequent agreements in writing made before the expiration of | 18 |
| the period previously agreed upon. | 19 |
| (e) Limit on amount of credit or refund. | 20 |
| (1) Limit where claim filed within 3-year period. If | 21 |
| the claim was filed by the claimant during the 3-year | 22 |
| period prescribed in subsection (a), the amount of the | 23 |
| credit or refund shall not exceed the portion of the tax | 24 |
| paid within the period, immediately preceding the filing of | 25 |
| the claim, equal to 3 years plus the period of any | 26 |
| extension of time for filing the return. |
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| (2) Limit where claim not filed within 3-year period. | 2 |
| If the claim was not filed within such 3-year period, the | 3 |
| amount of the credit or refund shall not exceed the portion | 4 |
| of the tax paid during the one year immediately preceding | 5 |
| the filing of the claim. | 6 |
| (f) Time return deemed filed. For purposes of this Section | 7 |
| a tax return filed before the last day prescribed by law for | 8 |
| the filing of such return (including any extensions thereof) | 9 |
| shall be deemed to have been filed on such last day. | 10 |
| Section 70. Procedure and administration. The provisions | 11 |
| of Section 913, 914, 915, 916, 917 and 918 and Articles 10, 11, | 12 |
| 12, 13 and 14 of the Illinois Income Tax Act which are not | 13 |
| inconsistent with this Act shall apply, as far as practicable, | 14 |
| to the subject matter of this Act to the same extent as if such | 15 |
| provisions were included herein. | 16 |
| Section 75. The Illinois Income Tax Act is amended by | 17 |
| changing Sections 205, 901, and 1501 as follows: | 18 |
| (35 ILCS 5/205) (from Ch. 120, par. 2-205) | 19 |
| Sec. 205. Exempt organizations. | 20 |
| (a) Charitable, etc. organizations. The base income of an
| 21 |
| organization which is exempt from the federal income tax by | 22 |
| reason of
Section 501(a) of the Internal Revenue Code shall not | 23 |
| be determined
under section 203 of this Act, but shall be its |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| unrelated business
taxable income as determined under section | 2 |
| 512 of the Internal Revenue
Code, without any deduction for the | 3 |
| tax imposed by this Act. The
standard exemption provided by | 4 |
| section 204 of this Act shall not be
allowed in determining the | 5 |
| net income of an organization to which this
subsection applies. | 6 |
| (b) Partnerships. A partnership as such shall not be | 7 |
| subject to
the tax imposed by subsection 201 (a) and (b) of | 8 |
| this Act, but shall be
subject to the replacement tax imposed | 9 |
| by subsection 201 (c) and (d) of
this Act and shall compute its | 10 |
| base income as described in subsection (d)
of Section 203 of | 11 |
| this Act. For taxable years ending on or after December 31, | 12 |
| 2004, an investment partnership, as defined in Section | 13 |
| 1501(a)(11.5) of this Act, shall not be subject to the tax | 14 |
| imposed by subsections (c) and (d) of Section 201 of this Act.
| 15 |
| A partnership shall file such returns and other
information at | 16 |
| such
time and in such manner as may be required under Article 5 | 17 |
| of this Act.
The partners in a partnership shall be liable for | 18 |
| the replacement tax imposed
by subsection 201 (c) and (d) of | 19 |
| this Act on such partnership, to the extent
such tax is not | 20 |
| paid by the partnership, as provided under the laws of Illinois
| 21 |
| governing the liability of partners for the obligations of a | 22 |
| partnership.
Persons carrying on business as partners shall be | 23 |
| liable for the tax
imposed by subsection 201 (a) and (b) of | 24 |
| this Act only in their separate
or individual capacities. | 25 |
| (c) Subchapter S corporations. A Subchapter S corporation | 26 |
| shall not
be subject to the tax imposed by subsection 201 (a) |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| and
(b) of this Act but shall be subject to the replacement tax | 2 |
| imposed by subsection
201 (c) and (d) of this Act and shall | 3 |
| file such returns
and other information
at such time and in | 4 |
| such manner as may be required under Article 5 of this Act. | 5 |
| (d) Combat zone death. An individual relieved from the | 6 |
| federal
income tax for any taxable year by reason of section | 7 |
| 692 of the Internal
Revenue Code shall not be subject to the | 8 |
| tax imposed by this Act for
such taxable year. | 9 |
| (e) Certain trusts. A common trust fund described in | 10 |
| Section 584
of the Internal Revenue Code, and any other trust | 11 |
| to the extent that the
grantor is treated as the owner thereof | 12 |
| under sections 671 through 678
of the Internal Revenue Code | 13 |
| shall not be subject to the tax imposed by
this Act. | 14 |
| (f) Certain business activities. A person not otherwise | 15 |
| subject to the tax
imposed by this Act shall not become subject | 16 |
| to the tax imposed by this Act by
reason of: | 17 |
| (1) that person's ownership of tangible personal | 18 |
| property located at the
premises of
a printer in this State | 19 |
| with which the person has contracted for printing, or | 20 |
| (2) activities of the person's employees or agents | 21 |
| located solely at the
premises of a printer and related to | 22 |
| quality control, distribution, or printing
services | 23 |
| performed by a printer in the State with which the person | 24 |
| has
contracted for printing. | 25 |
| (g) A nonprofit risk organization that holds a certificate | 26 |
| of authority under Article VIID of the Illinois Insurance Code |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| is exempt from the tax imposed under this Act with respect to | 2 |
| its activities or operations in furtherance of the powers | 3 |
| conferred upon it under that Article VIID of the Illinois | 4 |
| Insurance Code.
| 5 |
| (h) For taxable years ending on or after December 31, 2011, | 6 |
| any oil company liable for tax under the Oil Company Gross | 7 |
| Income Tax Act shall not be subject to the tax imposed by | 8 |
| subsections 201 (a) and (b) of this Act, but shall be subject | 9 |
| to the replacement tax imposed by subsection 201 (c) and (d) of | 10 |
| this Act. For purposes of computing the tax imposed on any | 11 |
| person by subsections 201 (a) and (b) of this Act, but not the | 12 |
| replacement tax imposed by subsections 201 (c) and (d) of this | 13 |
| Act, the base income of a partnership, trust or Subchapter S | 14 |
| corporation that is liable for tax under the Oil Company Gross | 15 |
| Income Tax Act shall be deemed to be an amount exempt from | 16 |
| taxation by this State under subparagraphs (a)(2)(N), | 17 |
| (b)(2)(J), (c)(2)(K) and (d)(2)(G) of Section 203 of this Act. | 18 |
| This subsection (h) is exempt from the provisions of Section | 19 |
| 250 of this Act. | 20 |
| (Source: P.A. 95-233, eff. 8-16-07; 95-331, eff. 8-21-07.) | 21 |
| (35 ILCS 5/901) (from Ch. 120, par. 9-901) | 22 |
| Sec. 901. Collection Authority. | 23 |
| (a) In general. | 24 |
| The Department shall collect the taxes imposed by this Act. | 25 |
| The Department
shall collect certified past due child support |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| amounts under Section 2505-650
of the Department of Revenue Law | 2 |
| (20 ILCS 2505/2505-650). Except as
provided in subsections (c) | 3 |
| and (e) of this Section, money collected
pursuant to | 4 |
| subsections (a) and (b) of Section 201 of this Act shall be
| 5 |
| paid into the General Revenue Fund in the State treasury; money
| 6 |
| collected pursuant to subsections (c) and (d) of Section 201 of | 7 |
| this Act
shall be paid into the Personal Property Tax | 8 |
| Replacement Fund, a special
fund in the State Treasury; and | 9 |
| money collected under Section 2505-650 of the
Department of | 10 |
| Revenue Law (20 ILCS 2505/2505-650) shall be paid
into the
| 11 |
| Child Support Enforcement Trust Fund, a special fund outside | 12 |
| the State
Treasury, or
to the State
Disbursement Unit | 13 |
| established under Section 10-26 of the Illinois Public Aid
| 14 |
| Code, as directed by the Department of Healthcare and Family | 15 |
| Services. | 16 |
| (b) Local Government Distributive Fund. | 17 |
| Beginning August 1, 1969, and continuing through June 30, | 18 |
| 1994, the Treasurer
shall transfer each month from the General | 19 |
| Revenue Fund to a special fund in
the State treasury, to be | 20 |
| known as the "Local Government Distributive Fund", an
amount | 21 |
| equal to 1/12 of the net revenue realized from the tax imposed | 22 |
| by
subsections (a) and (b) of Section 201 of this Act during | 23 |
| the preceding month.
Beginning July 1, 1994, and continuing | 24 |
| through June 30, 1995, the Treasurer
shall transfer each month | 25 |
| from the General Revenue Fund to the Local Government
| 26 |
| Distributive Fund an amount equal to 1/11 of the net revenue |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| realized from the
tax imposed by subsections (a) and (b) of | 2 |
| Section 201 of this Act during the
preceding month. Beginning | 3 |
| July 1, 1995, the Treasurer shall transfer each
month from the | 4 |
| General Revenue Fund to the Local Government Distributive Fund
| 5 |
| an amount equal to the net of (i) 1/10 of the net revenue | 6 |
| realized from the
tax imposed by
subsections (a) and (b) of | 7 |
| Section 201 of the Illinois Income Tax Act during
the preceding | 8 |
| month
(ii) minus, beginning July 1, 2003 and ending June 30, | 9 |
| 2004, $6,666,666, and
beginning July 1,
2004,
zero. Net revenue | 10 |
| realized for a month shall be defined as the
revenue from the | 11 |
| tax imposed by subsections (a) and (b) of Section 201 of this
| 12 |
| Act which is deposited in the General Revenue Fund, the | 13 |
| Educational Assistance
Fund and the Income Tax Surcharge Local | 14 |
| Government Distributive Fund during the
month minus the amount | 15 |
| paid out of the General Revenue Fund in State warrants
during | 16 |
| that same month as refunds to taxpayers for overpayment of | 17 |
| liability
under the tax imposed by subsections (a) and (b) of | 18 |
| Section 201 of this Act. | 19 |
| (c) Deposits Into Income Tax Refund Fund. | 20 |
| (1) Beginning on January 1, 1989 and thereafter, the | 21 |
| Department shall
deposit a percentage of the amounts | 22 |
| collected pursuant to subsections (a)
and (b)(1), (2), and | 23 |
| (3), of Section 201 of this Act into a fund in the State
| 24 |
| treasury known as the Income Tax Refund Fund. The | 25 |
| Department shall deposit 6%
of such amounts during the | 26 |
| period beginning January 1, 1989 and ending on June
30, |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| 1989. Beginning with State fiscal year 1990 and for each | 2 |
| fiscal year
thereafter, the percentage deposited into the | 3 |
| Income Tax Refund Fund during a
fiscal year shall be the | 4 |
| Annual Percentage. For fiscal years 1999 through
2001, the | 5 |
| Annual Percentage shall be 7.1%.
For fiscal year 2003, the | 6 |
| Annual Percentage shall be 8%.
For fiscal year 2004, the | 7 |
| Annual Percentage shall be 11.7%. Upon the effective date | 8 |
| of this amendatory Act of the 93rd General Assembly, the | 9 |
| Annual Percentage shall be 10% for fiscal year 2005. For | 10 |
| fiscal year 2006, the Annual Percentage shall be 9.75%. For | 11 |
| fiscal
year 2007, the Annual Percentage shall be 9.75%. For | 12 |
| fiscal year 2008, the Annual Percentage shall be 7.75%. For | 13 |
| fiscal year 2009, the Annual Percentage shall be 9.75%. For | 14 |
| fiscal year 2010, the Annual Percentage shall be 9.75%. For | 15 |
| all other
fiscal years, the
Annual Percentage shall be | 16 |
| calculated as a fraction, the numerator of which
shall be | 17 |
| the amount of refunds approved for payment by the | 18 |
| Department during
the preceding fiscal year as a result of | 19 |
| overpayment of tax liability under
subsections (a) and | 20 |
| (b)(1), (2), and (3) of Section 201 of this Act plus the
| 21 |
| amount of such refunds remaining approved but unpaid at the | 22 |
| end of the
preceding fiscal year, minus the amounts | 23 |
| transferred into the Income Tax
Refund Fund from the | 24 |
| Tobacco Settlement Recovery Fund, and
the denominator of | 25 |
| which shall be the amounts which will be collected pursuant
| 26 |
| to subsections (a) and (b)(1), (2), and (3) of Section 201 |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| of this Act during
the preceding fiscal year; except that | 2 |
| in State fiscal year 2002, the Annual
Percentage shall in | 3 |
| no event exceed 7.6%. The Director of Revenue shall
certify | 4 |
| the Annual Percentage to the Comptroller on the last | 5 |
| business day of
the fiscal year immediately preceding the | 6 |
| fiscal year for which it is to be
effective. | 7 |
| (2) Beginning on January 1, 1989 and thereafter, the | 8 |
| Department shall
deposit a percentage of the amounts | 9 |
| collected pursuant to subsections (a)
and (b)(6), (7), and | 10 |
| (8), (c) and (d) of Section 201
of this Act into a fund in | 11 |
| the State treasury known as the Income Tax
Refund Fund. The | 12 |
| Department shall deposit 18% of such amounts during the
| 13 |
| period beginning January 1, 1989 and ending on June 30, | 14 |
| 1989. Beginning
with State fiscal year 1990 and for each | 15 |
| fiscal year thereafter, the
percentage deposited into the | 16 |
| Income Tax Refund Fund during a fiscal year
shall be the | 17 |
| Annual Percentage. For fiscal years 1999, 2000, and 2001, | 18 |
| the
Annual Percentage shall be 19%.
For fiscal year 2003, | 19 |
| the Annual Percentage shall be 27%. For fiscal year
2004, | 20 |
| the Annual Percentage shall be 32%.
Upon the effective date | 21 |
| of this amendatory Act of the 93rd General Assembly, the | 22 |
| Annual Percentage shall be 24% for fiscal year 2005.
For | 23 |
| fiscal year 2006, the Annual Percentage shall be 20%. For | 24 |
| fiscal
year 2007, the Annual Percentage shall be 17.5%. For | 25 |
| fiscal year 2008, the Annual Percentage shall be 15.5%. For | 26 |
| fiscal year 2009, the Annual Percentage shall be 17.5%. For |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| fiscal year 2010, the Annual Percentage shall be 17.5%. For | 2 |
| all other fiscal years, the Annual
Percentage shall be | 3 |
| calculated
as a fraction, the numerator of which shall be | 4 |
| the amount of refunds
approved for payment by the | 5 |
| Department during the preceding fiscal year as
a result of | 6 |
| overpayment of tax liability under subsections (a) and | 7 |
| (b)(6),
(7), and (8), (c) and (d) of Section 201 of this | 8 |
| Act plus the
amount of such refunds remaining approved but | 9 |
| unpaid at the end of the
preceding fiscal year, and the | 10 |
| denominator of
which shall be the amounts which will be | 11 |
| collected pursuant to subsections (a)
and (b)(6), (7), and | 12 |
| (8), (c) and (d) of Section 201 of this Act during the
| 13 |
| preceding fiscal year; except that in State fiscal year | 14 |
| 2002, the Annual
Percentage shall in no event exceed 23%. | 15 |
| The Director of Revenue shall
certify the Annual Percentage | 16 |
| to the Comptroller on the last business day of
the fiscal | 17 |
| year immediately preceding the fiscal year for which it is | 18 |
| to be
effective. | 19 |
| (3) The Comptroller shall order transferred and the | 20 |
| Treasurer shall
transfer from the Tobacco Settlement | 21 |
| Recovery Fund to the Income Tax Refund
Fund (i) $35,000,000 | 22 |
| in January, 2001, (ii) $35,000,000 in January, 2002, and
| 23 |
| (iii) $35,000,000 in January, 2003. | 24 |
| (4) As soon as possible after the end of each fiscal | 25 |
| year, the Director shall order transferred and the State | 26 |
| Treasurer and State Comptroller shall transfer from the |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| General Revenue Fund to the Income Tax Refund Fund an | 2 |
| amount, certified by the Director to the Comptroller, equal | 3 |
| to refunds paid during the fiscal year under the Oil | 4 |
| Company Gross Income Tax Act. | 5 |
| (d) Expenditures from Income Tax Refund Fund. | 6 |
| (1) Beginning January 1, 1989, money in the Income Tax | 7 |
| Refund Fund
shall be expended exclusively for the purpose | 8 |
| of paying refunds resulting
from overpayment of tax | 9 |
| liability under Section 201 of this Act or under the Oil | 10 |
| Company Gross Income Tax Act , for paying
rebates under | 11 |
| Section 208.1 in the event that the amounts in the | 12 |
| Homeowners'
Tax Relief Fund are insufficient for that | 13 |
| purpose,
and for
making transfers pursuant to this | 14 |
| subsection (d). | 15 |
| (2) The Director shall order payment of refunds | 16 |
| resulting from
overpayment of tax liability under Section | 17 |
| 201 of this Act or under the Oil Company Gross Income Tax | 18 |
| Act from the
Income Tax Refund Fund only to the extent that | 19 |
| amounts collected pursuant
to Section 201 of this Act and | 20 |
| transfers pursuant to this subsection (d)
and item (3) of | 21 |
| subsection (c) have been deposited and retained in the
| 22 |
| Fund. | 23 |
| (3) As soon as possible after the end of each fiscal | 24 |
| year, the Director
shall
order transferred and the State | 25 |
| Treasurer and State Comptroller shall
transfer from the | 26 |
| Income Tax Refund Fund to the Personal Property Tax
|
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| Replacement Fund an amount, certified by the Director to | 2 |
| the Comptroller,
equal to the excess of the amount | 3 |
| collected pursuant to subsections (c) and
(d) of Section | 4 |
| 201 of this Act deposited into the Income Tax Refund Fund
| 5 |
| during the fiscal year over the amount of refunds resulting | 6 |
| from
overpayment of tax liability under subsections (c) and | 7 |
| (d) of Section 201
of this Act paid from the Income Tax | 8 |
| Refund Fund during the fiscal year. | 9 |
| (4) As soon as possible after the end of each fiscal | 10 |
| year, the Director shall
order transferred and the State | 11 |
| Treasurer and State Comptroller shall
transfer from the | 12 |
| Personal Property Tax Replacement Fund to the Income Tax
| 13 |
| Refund Fund an amount, certified by the Director to the | 14 |
| Comptroller, equal
to the excess of the amount of refunds | 15 |
| resulting from overpayment of tax
liability under | 16 |
| subsections (c) and (d) of Section 201 of this Act paid
| 17 |
| from the Income Tax Refund Fund during the fiscal year over | 18 |
| the amount
collected pursuant to subsections (c) and (d) of | 19 |
| Section 201 of this Act
deposited into the Income Tax | 20 |
| Refund Fund during the fiscal year. | 21 |
| (4.5) As soon as possible after the end of fiscal year | 22 |
| 1999 and of each
fiscal year
thereafter, the Director shall | 23 |
| order transferred and the State Treasurer and
State | 24 |
| Comptroller shall transfer from the Income Tax Refund Fund | 25 |
| to the General
Revenue Fund any surplus remaining in the | 26 |
| Income Tax Refund Fund as of the end
of such fiscal year; |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| excluding for fiscal years 2000, 2001, and 2002
amounts | 2 |
| attributable to transfers under item (3) of subsection (c) | 3 |
| less refunds
resulting from the earned income tax credit. | 4 |
| (5) This Act shall constitute an irrevocable and | 5 |
| continuing
appropriation from the Income Tax Refund Fund | 6 |
| for the purpose of paying
refunds upon the order of the | 7 |
| Director in accordance with the provisions of
this Section. | 8 |
| (e) Deposits into the Education Assistance Fund and the | 9 |
| Income Tax
Surcharge Local Government Distributive Fund. | 10 |
| On July 1, 1991, and thereafter, of the amounts collected | 11 |
| pursuant to
subsections (a) and (b) of Section 201 of this Act, | 12 |
| minus deposits into the
Income Tax Refund Fund, the Department | 13 |
| shall deposit 7.3% into the
Education Assistance Fund in the | 14 |
| State Treasury. Beginning July 1, 1991,
and continuing through | 15 |
| January 31, 1993, of the amounts collected pursuant to
| 16 |
| subsections (a) and (b) of Section 201 of the Illinois Income | 17 |
| Tax Act, minus
deposits into the Income Tax Refund Fund, the | 18 |
| Department shall deposit 3.0%
into the Income Tax Surcharge | 19 |
| Local Government Distributive Fund in the State
Treasury. | 20 |
| Beginning February 1, 1993 and continuing through June 30, | 21 |
| 1993, of
the amounts collected pursuant to subsections (a) and | 22 |
| (b) of Section 201 of the
Illinois Income Tax Act, minus | 23 |
| deposits into the Income Tax Refund Fund, the
Department shall | 24 |
| deposit 4.4% into the Income Tax Surcharge Local Government
| 25 |
| Distributive Fund in the State Treasury. Beginning July 1, | 26 |
| 1993, and
continuing through June 30, 1994, of the amounts |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| collected under subsections
(a) and (b) of Section 201 of this | 2 |
| Act, minus deposits into the Income Tax
Refund Fund, the | 3 |
| Department shall deposit 1.475% into the Income Tax Surcharge
| 4 |
| Local Government Distributive Fund in the State Treasury. | 5 |
| (Source: P.A. 95-707, eff. 1-11-08; 95-744, eff. 7-18-08; | 6 |
| 96-45, eff. 7-15-09; 96-328, eff. 8-11-09.) | 7 |
| (35 ILCS 5/1501) (from Ch. 120, par. 15-1501) | 8 |
| Sec. 1501. Definitions. | 9 |
| (a) In general. When used in this Act, where not
otherwise | 10 |
| distinctly expressed or manifestly incompatible with the | 11 |
| intent
thereof: | 12 |
| (1) Business income. The term "business income" means | 13 |
| all income that may be treated as apportionable business | 14 |
| income under the Constitution of the United States. | 15 |
| Business income is net of the deductions allocable thereto. | 16 |
| Such term does not include compensation
or the deductions | 17 |
| allocable thereto.
For each taxable year beginning on or | 18 |
| after January 1, 2003, a taxpayer may
elect to treat all | 19 |
| income other than compensation as business income. This
| 20 |
| election shall be made in accordance with rules adopted by | 21 |
| the Department and,
once made, shall be irrevocable. | 22 |
| (1.5) Captive real estate investment trust:
| 23 |
| (A) The term "captive real estate investment | 24 |
| trust" means a corporation, trust, or association:
| 25 |
| (i) that is considered a real estate |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| investment trust for the taxable year under | 2 |
| Section 856 of the Internal Revenue Code;
| 3 |
| (ii) the certificates of beneficial interest | 4 |
| or shares of which are not regularly traded on an | 5 |
| established securities market; and | 6 |
| (iii) of which more than 50% of the voting | 7 |
| power or value of the beneficial interest or | 8 |
| shares, at any time during the last half of the | 9 |
| taxable year, is owned or controlled, directly, | 10 |
| indirectly, or constructively, by a single | 11 |
| corporation. | 12 |
| (B) The term "captive real estate investment | 13 |
| trust" does not include: | 14 |
| (i) a real estate investment trust of which | 15 |
| more than 50% of the voting power or value of the | 16 |
| beneficial interest or shares is owned or | 17 |
| controlled, directly, indirectly, or | 18 |
| constructively, by: | 19 |
| (a) a real estate investment trust, other | 20 |
| than a captive real estate investment trust; | 21 |
| (b) a person who is exempt from taxation | 22 |
| under Section 501 of the Internal Revenue Code, | 23 |
| and who is not required to treat income | 24 |
| received from the real estate investment trust | 25 |
| as unrelated business taxable income under | 26 |
| Section 512 of the Internal Revenue Code; |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| (c) a listed Australian property trust, if | 2 |
| no more than 50% of the voting power or value | 3 |
| of the beneficial interest or shares of that | 4 |
| trust, at any time during the last half of the | 5 |
| taxable year, is owned or controlled, directly | 6 |
| or indirectly, by a single person; | 7 |
| (d) an entity organized as a trust, | 8 |
| provided a listed Australian property trust | 9 |
| described in subparagraph (c) owns or | 10 |
| controls, directly or indirectly, or | 11 |
| constructively, 75% or more of the voting power | 12 |
| or value of the beneficial interests or shares | 13 |
| of such entity; or | 14 |
| (e) an entity that is organized outside of | 15 |
| the laws of the United States and that | 16 |
| satisfies all of the following criteria: | 17 |
| (1) at least 75% of the entity's total | 18 |
| asset value at the close of its taxable | 19 |
| year is represented by real estate assets | 20 |
| (as defined in Section 856(c)(5)(B) of the | 21 |
| Internal Revenue Code, thereby including | 22 |
| shares or certificates of beneficial | 23 |
| interest in any real estate investment | 24 |
| trust), cash and cash equivalents, and | 25 |
| U.S. Government securities; | 26 |
| (2) the entity is not subject to tax on |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| amounts that are distributed to its | 2 |
| beneficial owners or is exempt from | 3 |
| entity-level taxation; | 4 |
| (3) the entity distributes at least | 5 |
| 85% of its taxable income (as computed in | 6 |
| the jurisdiction in which it is organized) | 7 |
| to the holders of its shares or | 8 |
| certificates of beneficial interest on an | 9 |
| annual basis; | 10 |
| (4) either (i) the shares or | 11 |
| beneficial interests of the entity are | 12 |
| regularly traded on an established | 13 |
| securities market or (ii) not more than 10% | 14 |
| of the voting power or value in the entity | 15 |
| is held, directly, indirectly, or | 16 |
| constructively, by a single entity or | 17 |
| individual; and | 18 |
| (5) the entity is organized in a | 19 |
| country that has entered into a tax treaty | 20 |
| with the United States; or | 21 |
| (ii) during its first taxable year for which it | 22 |
| elects to be treated as a real estate investment | 23 |
| trust under Section 856(c)(1) of the Internal | 24 |
| Revenue Code, a real estate investment trust the | 25 |
| certificates of beneficial interest or shares of | 26 |
| which are not regularly traded on an established |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| securities market, but only if the certificates of | 2 |
| beneficial interest or shares of the real estate | 3 |
| investment trust are regularly traded on an | 4 |
| established securities market prior to the earlier | 5 |
| of the due date (including extensions) for filing | 6 |
| its return under this Act for that first taxable | 7 |
| year or the date it actually files that return. | 8 |
| (C) For the purposes of this subsection (1.5), the | 9 |
| constructive ownership rules prescribed under Section | 10 |
| 318(a) of the Internal Revenue Code, as modified by | 11 |
| Section 856(d)(5) of the Internal Revenue Code, apply | 12 |
| in determining the ownership of stock, assets, or net | 13 |
| profits of any person.
| 14 |
| (2) Commercial domicile. The term "commercial | 15 |
| domicile" means the
principal
place from which the trade or | 16 |
| business of the taxpayer is directed or managed. | 17 |
| (3) Compensation. The term "compensation" means wages, | 18 |
| salaries,
commissions
and any other form of remuneration | 19 |
| paid to employees for personal services. | 20 |
| (4) Corporation. The term "corporation" includes | 21 |
| associations, joint-stock
companies, insurance companies | 22 |
| and cooperatives. Any entity, including a
limited | 23 |
| liability company formed under the Illinois Limited | 24 |
| Liability Company
Act, shall be treated as a corporation if | 25 |
| it is so classified for federal
income tax purposes.
| 26 |
| (5) Department. The term "Department" means the |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| Department of Revenue of
this State. | 2 |
| (6) Director. The term "Director" means the Director of | 3 |
| Revenue of this
State. | 4 |
| (7) Fiduciary. The term "fiduciary" means a guardian, | 5 |
| trustee, executor,
administrator, receiver, or any person | 6 |
| acting in any fiduciary capacity for any
person. | 7 |
| (8) Financial organization. | 8 |
| (A) The term "financial organization" means
any
| 9 |
| bank, bank holding company, trust company, savings | 10 |
| bank, industrial bank,
land bank, safe deposit | 11 |
| company, private banker, savings and loan association,
| 12 |
| building and loan association, credit union, currency | 13 |
| exchange, cooperative
bank, small loan company, sales | 14 |
| finance company, investment company, or any
person | 15 |
| which is owned by a bank or bank holding company. For | 16 |
| the purpose of
this Section a "person" will include | 17 |
| only those persons which a bank holding
company may | 18 |
| acquire and hold an interest in, directly or | 19 |
| indirectly, under the
provisions of the Bank Holding | 20 |
| Company Act of 1956 (12 U.S.C. 1841, et seq.),
except | 21 |
| where interests in any person must be disposed of | 22 |
| within certain
required time limits under the Bank | 23 |
| Holding Company Act of 1956. | 24 |
| (B) For purposes of subparagraph (A) of this | 25 |
| paragraph, the term
"bank" includes (i) any entity that | 26 |
| is regulated by the Comptroller of the
Currency under |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| the National Bank Act, or by the Federal Reserve Board, | 2 |
| or by
the
Federal Deposit Insurance Corporation and | 3 |
| (ii) any federally or State chartered
bank
operating as | 4 |
| a credit card bank. | 5 |
| (C) For purposes of subparagraph (A) of this | 6 |
| paragraph, the term
"sales finance company" has the | 7 |
| meaning provided in the following item (i) or
(ii): | 8 |
| (i) A person primarily engaged in one or more | 9 |
| of the following
businesses: the business of | 10 |
| purchasing customer receivables, the business
of | 11 |
| making loans upon the security of customer | 12 |
| receivables, the
business of making loans for the | 13 |
| express purpose of funding purchases of
tangible | 14 |
| personal property or services by the borrower, or | 15 |
| the business of
finance leasing. For purposes of | 16 |
| this item (i), "customer receivable"
means: | 17 |
| (a) a retail installment contract or | 18 |
| retail charge agreement within
the
meaning
of | 19 |
| the Sales Finance Agency Act, the Retail | 20 |
| Installment Sales Act, or the
Motor Vehicle | 21 |
| Retail Installment Sales Act; | 22 |
| (b) an installment, charge, credit, or | 23 |
| similar contract or agreement
arising from
the | 24 |
| sale of tangible personal property or services | 25 |
| in a transaction involving
a deferred payment | 26 |
| price payable in one or more installments |
|
|
|
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| 1 |
| subsequent
to the sale; or | 2 |
| (c) the outstanding balance of a contract | 3 |
| or agreement described in
provisions
(a) or (b) | 4 |
| of this item (i). | 5 |
| A customer receivable need not provide for | 6 |
| payment of interest on
deferred
payments. A sales | 7 |
| finance company may purchase a customer receivable | 8 |
| from, or
make a loan secured by a customer | 9 |
| receivable to, the seller in the original
| 10 |
| transaction or to a person who purchased the | 11 |
| customer receivable directly or
indirectly from | 12 |
| that seller. | 13 |
| (ii) A corporation meeting each of the | 14 |
| following criteria: | 15 |
| (a) the corporation must be a member of an | 16 |
| "affiliated group" within
the
meaning of | 17 |
| Section 1504(a) of the Internal Revenue Code, | 18 |
| determined
without regard to Section 1504(b) | 19 |
| of the Internal Revenue Code; | 20 |
| (b) more than 50% of the gross income of | 21 |
| the corporation for the
taxable
year
must be | 22 |
| interest income derived from qualifying loans. | 23 |
| A "qualifying
loan" is a loan made to a member | 24 |
| of the corporation's affiliated group that
| 25 |
| originates customer receivables (within the | 26 |
| meaning of item (i)) or to whom
customer |
|
|
|
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|
| 1 |
| receivables originated by a member of the | 2 |
| affiliated group have been
transferred, to
the | 3 |
| extent the average outstanding balance of | 4 |
| loans from that corporation
to members of its | 5 |
| affiliated group during the taxable year do not | 6 |
| exceed
the limitation amount for that | 7 |
| corporation. The "limitation amount" for a
| 8 |
| corporation is the average outstanding | 9 |
| balances during the taxable year of
customer | 10 |
| receivables (within the meaning of item (i)) | 11 |
| originated by
all members of the affiliated | 12 |
| group.
If the average outstanding balances of | 13 |
| the
loans made by a corporation to members of | 14 |
| its affiliated group exceed the
limitation | 15 |
| amount, the interest income of that | 16 |
| corporation from qualifying
loans shall be | 17 |
| equal to its interest income from loans to | 18 |
| members of its
affiliated groups times a | 19 |
| fraction equal to the limitation amount | 20 |
| divided by
the average outstanding balances of | 21 |
| the loans made by that corporation to
members | 22 |
| of its affiliated group; | 23 |
| (c) the total of all shareholder's equity | 24 |
| (including, without
limitation,
paid-in
| 25 |
| capital on common and preferred stock and | 26 |
| retained earnings) of the
corporation plus the |
|
|
|
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|
| 1 |
| total of all of its loans, advances, and other
| 2 |
| obligations payable or owed to members of its | 3 |
| affiliated group may not
exceed 20% of the | 4 |
| total assets of the corporation at any time | 5 |
| during the tax
year; and | 6 |
| (d) more than 50% of all interest-bearing | 7 |
| obligations of the
affiliated group payable to | 8 |
| persons outside the group determined in | 9 |
| accordance
with generally accepted accounting | 10 |
| principles must be obligations of the
| 11 |
| corporation. | 12 |
| This amendatory Act of the 91st General Assembly is | 13 |
| declaratory of
existing
law. | 14 |
| (D) Subparagraphs
(B) and (C) of this paragraph are | 15 |
| declaratory of
existing law and apply retroactively, | 16 |
| for all tax years beginning on or before
December 31, | 17 |
| 1996,
to all original returns, to all amended returns | 18 |
| filed no later than 30
days after the effective date of | 19 |
| this amendatory Act of 1996, and to all
notices issued | 20 |
| on or before the effective date of this amendatory Act | 21 |
| of 1996
under subsection (a) of Section 903, subsection | 22 |
| (a) of Section 904,
subsection (e) of Section 909, or | 23 |
| Section 912.
A taxpayer that is a "financial | 24 |
| organization" that engages in any transaction
with an | 25 |
| affiliate shall be a "financial organization" for all | 26 |
| purposes of this
Act. |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| (E) For all tax years beginning on or
before | 2 |
| December 31, 1996, a taxpayer that falls within the | 3 |
| definition
of a
"financial organization" under | 4 |
| subparagraphs (B) or (C) of this paragraph, but
who | 5 |
| does
not fall within the definition of a "financial | 6 |
| organization" under the Proposed
Regulations issued by | 7 |
| the Department of Revenue on July 19, 1996, may
| 8 |
| irrevocably elect to apply the Proposed Regulations | 9 |
| for all of those years as
though the Proposed | 10 |
| Regulations had been lawfully promulgated, adopted, | 11 |
| and in
effect for all of those years. For purposes of | 12 |
| applying subparagraphs (B) or
(C) of
this
paragraph to | 13 |
| all of those years, the election allowed by this | 14 |
| subparagraph
applies only to the taxpayer making the | 15 |
| election and to those members of the
taxpayer's unitary | 16 |
| business group who are ordinarily required to | 17 |
| apportion
business income under the same subsection of | 18 |
| Section 304 of this Act as the
taxpayer making the | 19 |
| election. No election allowed by this subparagraph | 20 |
| shall
be made under a claim
filed under subsection (d) | 21 |
| of Section 909 more than 30 days after the
effective | 22 |
| date of this amendatory Act of 1996. | 23 |
| (F) Finance Leases. For purposes of this | 24 |
| subsection, a finance lease
shall be treated as a loan | 25 |
| or other extension of credit, rather than as a
lease,
| 26 |
| regardless of how the transaction is characterized for |
|
|
|
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|
| 1 |
| any other purpose,
including the purposes of any | 2 |
| regulatory agency to which the lessor is subject.
A | 3 |
| finance lease is any transaction in the form of a lease | 4 |
| in which the lessee
is treated as the owner of the | 5 |
| leased asset entitled to any deduction for
| 6 |
| depreciation allowed under Section 167 of the Internal | 7 |
| Revenue Code. | 8 |
| (9) Fiscal year. The term "fiscal year" means an | 9 |
| accounting period of
12 months ending on the last day of | 10 |
| any month other than December. | 11 |
| (9.5) Fixed place of business. The term "fixed place of | 12 |
| business" has the same meaning as that term is given in | 13 |
| Section 864 of the Internal Revenue Code and the related | 14 |
| Treasury regulations. | 15 |
| (10) Includes and including. The terms "includes" and | 16 |
| "including" when
used in a definition contained in this Act | 17 |
| shall not be deemed to exclude
other things otherwise | 18 |
| within the meaning of the term defined. | 19 |
| (11) Internal Revenue Code. The term "Internal Revenue | 20 |
| Code" means the
United States Internal Revenue Code of 1954 | 21 |
| or any successor law or laws
relating to federal income | 22 |
| taxes in effect for the taxable year. | 23 |
| (11.5) Investment partnership. | 24 |
| (A) The term "investment partnership" means any | 25 |
| entity that is treated as a partnership for federal | 26 |
| income tax purposes that meets the following |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| requirements: | 2 |
| (i) no less than 90% of the partnership's cost | 3 |
| of its total assets consists of qualifying | 4 |
| investment securities, deposits at banks or other | 5 |
| financial institutions, and office space and | 6 |
| equipment reasonably necessary to carry on its | 7 |
| activities as an investment partnership; | 8 |
| (ii) no less than 90% of its gross income | 9 |
| consists of interest, dividends, and gains from | 10 |
| the sale or exchange of qualifying investment | 11 |
| securities; and
| 12 |
| (iii) the partnership is not a dealer in | 13 |
| qualifying investment securities. | 14 |
| (B) For purposes of this paragraph (11.5), the term | 15 |
| "qualifying investment securities" includes all of the | 16 |
| following:
| 17 |
| (i) common stock, including preferred or debt | 18 |
| securities convertible into common stock, and | 19 |
| preferred stock; | 20 |
| (ii) bonds, debentures, and other debt | 21 |
| securities; | 22 |
| (iii) foreign and domestic currency deposits | 23 |
| secured by federal, state, or local governmental | 24 |
| agencies; | 25 |
| (iv) mortgage or asset-backed securities | 26 |
| secured by federal, state, or local governmental |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| agencies; | 2 |
| (v) repurchase agreements and loan | 3 |
| participations; | 4 |
| (vi) foreign currency exchange contracts and | 5 |
| forward and futures contracts on foreign | 6 |
| currencies; | 7 |
| (vii) stock and bond index securities and | 8 |
| futures contracts and other similar financial | 9 |
| securities and futures contracts on those | 10 |
| securities;
| 11 |
| (viii) options for the purchase or sale of any | 12 |
| of the securities, currencies, contracts, or | 13 |
| financial instruments described in items (i) to | 14 |
| (vii), inclusive;
| 15 |
| (ix) regulated futures contracts;
| 16 |
| (x) commodities (not described in Section | 17 |
| 1221(a)(1) of the Internal Revenue Code) or | 18 |
| futures, forwards, and options with respect to | 19 |
| such commodities, provided, however, that any item | 20 |
| of a physical commodity to which title is actually | 21 |
| acquired in the partnership's capacity as a dealer | 22 |
| in such commodity shall not be a qualifying | 23 |
| investment security;
| 24 |
| (xi) derivatives; and
| 25 |
| (xii) a partnership interest in another | 26 |
| partnership that is an investment partnership.
|
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| (12) Mathematical error. The term "mathematical error" | 2 |
| includes the
following types of errors, omissions, or | 3 |
| defects in a return filed by a
taxpayer which prevents | 4 |
| acceptance of the return as filed for processing: | 5 |
| (A) arithmetic errors or incorrect computations on | 6 |
| the return or
supporting schedules; | 7 |
| (B) entries on the wrong lines; | 8 |
| (C) omission of required supporting forms or | 9 |
| schedules or the omission
of the information in whole | 10 |
| or in part called for thereon; and | 11 |
| (D) an attempt to claim, exclude, deduct, or | 12 |
| improperly report, in a
manner
directly contrary to the | 13 |
| provisions of the Act and regulations thereunder
any | 14 |
| item of income, exemption, deduction, or credit. | 15 |
| (13) Nonbusiness income. The term "nonbusiness income" | 16 |
| means all income
other than business income or | 17 |
| compensation. | 18 |
| (14) Nonresident. The term "nonresident" means a | 19 |
| person who is not a
resident. | 20 |
| (15) Paid, incurred and accrued. The terms "paid", | 21 |
| "incurred" and
"accrued"
shall be construed according to | 22 |
| the method of accounting upon the basis
of which the | 23 |
| person's base income is computed under this Act. | 24 |
| (16) Partnership and partner. The term "partnership" | 25 |
| includes a syndicate,
group, pool, joint venture or other | 26 |
| unincorporated organization, through
or by means of which |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| any business, financial operation, or venture is carried
| 2 |
| on, and which is not, within the meaning of this Act, a | 3 |
| trust or estate
or a corporation; and the term "partner" | 4 |
| includes a member in such syndicate,
group, pool, joint | 5 |
| venture or organization. | 6 |
| The term "partnership" includes any entity, including | 7 |
| a limited
liability company formed under the Illinois
| 8 |
| Limited Liability Company Act, classified as a partnership | 9 |
| for federal income tax purposes. | 10 |
| The term "partnership" does not include a syndicate, | 11 |
| group, pool,
joint venture, or other unincorporated | 12 |
| organization established for the
sole purpose of playing | 13 |
| the Illinois State Lottery. | 14 |
| (17) Part-year resident. The term "part-year resident" | 15 |
| means an individual
who became a resident during the | 16 |
| taxable year or ceased to be a resident
during the taxable | 17 |
| year. Under Section 1501(a)(20)(A)(i) residence
commences | 18 |
| with presence in this State for other than a temporary or | 19 |
| transitory
purpose and ceases with absence from this State | 20 |
| for other than a temporary or
transitory purpose. Under | 21 |
| Section 1501(a)(20)(A)(ii) residence commences
with the | 22 |
| establishment of domicile in this State and ceases with the
| 23 |
| establishment of domicile in another State. | 24 |
| (18) Person. The term "person" shall be construed to | 25 |
| mean and include
an individual, a trust, estate, | 26 |
| partnership, association, firm, company,
corporation, |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| limited liability company, or fiduciary. For purposes of | 2 |
| Section
1301 and 1302 of this Act, a "person" means (i) an | 3 |
| individual, (ii) a
corporation, (iii) an officer, agent, or | 4 |
| employee of a
corporation, (iv) a member, agent or employee | 5 |
| of a partnership, or (v)
a member,
manager, employee, | 6 |
| officer, director, or agent of a limited liability company
| 7 |
| who in such capacity commits an offense specified in | 8 |
| Section 1301 and 1302. | 9 |
| (18A) Records. The term "records" includes all data | 10 |
| maintained by the
taxpayer, whether on paper, microfilm, | 11 |
| microfiche, or any type of
machine-sensible data | 12 |
| compilation. | 13 |
| (19) Regulations. The term "regulations" includes | 14 |
| rules promulgated and
forms prescribed by the Department. | 15 |
| (20) Resident. The term "resident" means: | 16 |
| (A) an individual (i) who is
in this State for | 17 |
| other than a temporary or transitory purpose during the
| 18 |
| taxable year; or (ii) who is domiciled in this State | 19 |
| but is absent from
the State for a temporary or | 20 |
| transitory purpose during the taxable year; | 21 |
| (B) The estate of a decedent who at his or her | 22 |
| death was domiciled in
this
State; | 23 |
| (C) A trust created by a will of a decedent who at | 24 |
| his death was
domiciled
in this State; and | 25 |
| (D) An irrevocable trust, the grantor of which was | 26 |
| domiciled in this
State
at the time such trust became |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| irrevocable. For purpose of this subparagraph,
a trust | 2 |
| shall be considered irrevocable to the extent that the | 3 |
| grantor is
not treated as the owner thereof under | 4 |
| Sections 671 through 678 of the Internal
Revenue Code. | 5 |
| (21) Sales. The term "sales" means all gross receipts | 6 |
| of the taxpayer
not allocated under Sections 301, 302 and | 7 |
| 303. | 8 |
| (22) State. The term "state" when applied to a | 9 |
| jurisdiction other than
this State means any state of the | 10 |
| United States, the District of Columbia,
the Commonwealth | 11 |
| of Puerto Rico, any Territory or Possession of the United
| 12 |
| States, and any foreign country, or any political | 13 |
| subdivision of any of the
foregoing. For purposes of the | 14 |
| foreign tax credit under Section 601, the
term "state" | 15 |
| means any state of the United States, the District of | 16 |
| Columbia,
the Commonwealth of Puerto Rico, and any | 17 |
| territory or possession of the
United States, or any | 18 |
| political subdivision of any of the foregoing,
effective | 19 |
| for tax years ending on or after December 31, 1989. | 20 |
| (23) Taxable year. The term "taxable year" means the | 21 |
| calendar year, or
the fiscal year ending during such | 22 |
| calendar year, upon the basis of which
the base income is | 23 |
| computed under this Act. "Taxable year" means, in the
case | 24 |
| of a return made for a fractional part of a year under the | 25 |
| provisions
of this Act, the period for which such return is | 26 |
| made. |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| (24) Taxpayer. The term "taxpayer" means any person | 2 |
| subject to the tax
imposed by this Act. | 3 |
| (25) International banking facility. The term | 4 |
| international banking
facility shall have the same meaning | 5 |
| as is set forth in the Illinois Banking
Act or as is set | 6 |
| forth in the laws of the United States or regulations of
| 7 |
| the Board of Governors of the Federal Reserve System. | 8 |
| (26) Income Tax Return Preparer. | 9 |
| (A) The term "income tax return preparer"
means any | 10 |
| person who prepares for compensation, or who employs | 11 |
| one or more
persons to prepare for compensation, any | 12 |
| return of tax imposed by this Act
or any claim for | 13 |
| refund of tax imposed by this Act. The preparation of a
| 14 |
| substantial portion of a return or claim for refund | 15 |
| shall be treated as
the preparation of that return or | 16 |
| claim for refund. | 17 |
| (B) A person is not an income tax return preparer | 18 |
| if all he or she does
is | 19 |
| (i) furnish typing, reproducing, or other | 20 |
| mechanical assistance; | 21 |
| (ii) prepare returns or claims for refunds for | 22 |
| the employer by whom he
or she is regularly and | 23 |
| continuously employed; | 24 |
| (iii) prepare as a fiduciary returns or claims | 25 |
| for refunds for any
person; or | 26 |
| (iv) prepare claims for refunds for a taxpayer |
|
|
|
09600HB3659sam002 |
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|
| 1 |
| in response to any
notice
of deficiency issued to | 2 |
| that taxpayer or in response to any waiver of
| 3 |
| restriction after the commencement of an audit of | 4 |
| that taxpayer or of another
taxpayer if a | 5 |
| determination in the audit of the other taxpayer | 6 |
| directly or
indirectly affects the tax liability | 7 |
| of the taxpayer whose claims he or she is
| 8 |
| preparing. | 9 |
| (27) Unitary business group. The term "unitary | 10 |
| business group" means
a group of persons related through | 11 |
| common ownership whose business activities
are integrated | 12 |
| with, dependent upon and contribute to each other. The | 13 |
| group
will not include those members whose business | 14 |
| activity outside the United
States is 80% or more of any | 15 |
| such member's total business activity; for
purposes of this | 16 |
| paragraph and clause (a)(3)(B)(ii) of Section 304,
| 17 |
| business
activity within the United States shall be | 18 |
| measured by means of the factors
ordinarily applicable | 19 |
| under subsections (a), (b), (c), (d), or (h)
of Section
304 | 20 |
| except that, in the case of members ordinarily required to | 21 |
| apportion
business income by means of the 3 factor formula | 22 |
| of property, payroll and sales
specified in subsection (a) | 23 |
| of Section 304, including the
formula as weighted in | 24 |
| subsection (h) of Section 304, such members shall
not use | 25 |
| the sales factor in the computation and the results of the | 26 |
| property
and payroll factor computations of subsection (a) |
|
|
|
09600HB3659sam002 |
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LRB096 09388 HLH 41193 a |
|
| 1 |
| of Section 304 shall be
divided by 2 (by one if either
the | 2 |
| property or payroll factor has a denominator of zero). The | 3 |
| computation
required by the preceding sentence shall, in | 4 |
| each case, involve the division of
the member's property, | 5 |
| payroll, or revenue miles in the United States,
insurance | 6 |
| premiums on property or risk in the United States, or | 7 |
| financial
organization business income from sources within | 8 |
| the United States, as the
case may be, by the respective | 9 |
| worldwide figures for such items. Common
ownership in the | 10 |
| case of corporations is the direct or indirect control or
| 11 |
| ownership of more than 50% of the outstanding voting stock | 12 |
| of the persons
carrying on unitary business activity. | 13 |
| Unitary business activity can
ordinarily be illustrated | 14 |
| where the activities of the members are: (1) in the
same | 15 |
| general line (such as manufacturing, wholesaling, | 16 |
| retailing of tangible
personal property, insurance, | 17 |
| transportation or finance); or (2) are steps in a
| 18 |
| vertically structured enterprise or process (such as the | 19 |
| steps involved in the
production of natural resources, | 20 |
| which might include exploration, mining,
refining, and | 21 |
| marketing); and, in either instance, the members are | 22 |
| functionally
integrated through the exercise of strong | 23 |
| centralized management (where, for
example, authority over | 24 |
| such matters as purchasing, financing, tax compliance,
| 25 |
| product line, personnel, marketing and capital investment | 26 |
| is not left to each
member).
In no event, however, will any
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| unitary business group include members
which are | 2 |
| ordinarily required to apportion business income under | 3 |
| different
subsections of Section 304 except that for tax | 4 |
| years ending on or after
December 31, 1987 this prohibition | 5 |
| shall not apply to a unitary business group
composed of one | 6 |
| or more taxpayers all of which apportion business income
| 7 |
| pursuant to subsection (b) of Section 304, or all of which | 8 |
| apportion business
income pursuant to subsection (d) of | 9 |
| Section 304, and a holding company of such
single-factor | 10 |
| taxpayers (see definition of "financial organization" for | 11 |
| rule
regarding holding companies of financial | 12 |
| organizations). If a unitary business
group would, but for | 13 |
| the preceding sentence, include members that are
| 14 |
| ordinarily required to apportion business income under | 15 |
| different subsections of
Section 304, then for each | 16 |
| subsection of Section 304 for which there are two or
more | 17 |
| members, there shall be a separate unitary business group | 18 |
| composed of such
members. For purposes of the preceding two | 19 |
| sentences, a member is "ordinarily
required to apportion | 20 |
| business income" under a particular subsection of Section
| 21 |
| 304 if it would be required to use the apportionment method | 22 |
| prescribed by such
subsection except for the fact that it | 23 |
| derives business income solely from
Illinois. As used in | 24 |
| this paragraph, the phrase "United States" means only the | 25 |
| 50 states and the District of Columbia, and for taxable | 26 |
| years ending on or after December 31, 2011, but does not |
|
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| include any territory or possession of the United States | 2 |
| and or any area over which the United States has asserted | 3 |
| jurisdiction or claimed exclusive rights with respect to | 4 |
| the exploration for or exploitation of natural resources.
| 5 |
| If the unitary business group members' accounting | 6 |
| periods differ,
the common parent's accounting period or, | 7 |
| if there is no common parent, the
accounting period of the | 8 |
| member that is expected to have, on a recurring basis,
the | 9 |
| greatest Illinois income tax liability must be used to | 10 |
| determine whether to
use the apportionment method provided | 11 |
| in subsection (a) or subsection (h) of
Section 304. The
| 12 |
| prohibition against membership in a unitary business group | 13 |
| for taxpayers
ordinarily required to apportion income | 14 |
| under different subsections of Section
304 does not apply | 15 |
| to taxpayers required to apportion income under subsection
| 16 |
| (a) and subsection (h) of Section
304. The provisions of | 17 |
| this amendatory Act of 1998 apply to tax
years ending on or | 18 |
| after December 31, 1998. | 19 |
| (28) Subchapter S corporation. The term "Subchapter S | 20 |
| corporation"
means a corporation for which there is in | 21 |
| effect an election under Section
1362 of the Internal | 22 |
| Revenue Code, or for which there is a federal election
to | 23 |
| opt out of the provisions of the Subchapter S Revision Act | 24 |
| of 1982 and
have applied instead the prior federal | 25 |
| Subchapter S rules as in effect on July
1, 1982. | 26 |
| (30) Foreign person. The term "foreign person" means |
|
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| any person who is a nonresident alien individual and any | 2 |
| nonindividual entity, regardless of where created or | 3 |
| organized, whose business activity outside the United | 4 |
| States is 80% or more of the entity's total business | 5 |
| activity.
| 6 |
| (b) Other definitions. | 7 |
| (1) Words denoting number, gender, and so forth,
when | 8 |
| used in this Act, where not otherwise distinctly expressed | 9 |
| or manifestly
incompatible with the intent thereof: | 10 |
| (A) Words importing the singular include and apply | 11 |
| to several persons,
parties or things; | 12 |
| (B) Words importing the plural include the | 13 |
| singular; and | 14 |
| (C) Words importing the masculine gender include | 15 |
| the feminine as well. | 16 |
| (2) "Company" or "association" as including successors | 17 |
| and assigns. The
word "company" or "association", when used | 18 |
| in reference to a corporation,
shall be deemed to embrace | 19 |
| the words "successors and assigns of such company
or | 20 |
| association", and in like manner as if these last-named | 21 |
| words, or words
of similar import, were expressed. | 22 |
| (3) Other terms. Any term used in any Section of this | 23 |
| Act with respect
to the application of, or in connection | 24 |
| with, the provisions of any other
Section of this Act shall | 25 |
| have the same meaning as in such other Section. |
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| (Source: P.A. 95-233, eff. 8-16-07; 95-707, eff. 1-11-08; | 2 |
| 96-641, eff. 8-24-09.)
| 3 |
| Section 99. Effective date. This Act takes effect upon | 4 |
| becoming law.".
|
|