Full Text of HB0675 99th General Assembly
HB0675ham002 99TH GENERAL ASSEMBLY | Rep. Natalie A. Manley Filed: 4/20/2015
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| 1 | | AMENDMENT TO HOUSE BILL 675
| 2 | | AMENDMENT NO. ______. Amend House Bill 675 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 302 and 701 as follows:
| 6 | | (35 ILCS 5/302) (from Ch. 120, par. 3-302)
| 7 | | Sec. 302. Compensation paid to nonresidents.
| 8 | | (a) In general. For taxable years beginning prior to | 9 | | January 1, 2015, all All items of compensation paid in this | 10 | | State (as
determined under Section 304(a)(2)(B)) to an | 11 | | individual who is a
nonresident at the time of such payment and | 12 | | all items of deduction directly
allocable thereto, shall be | 13 | | allocated to this State.
| 14 | | For taxable years beginning on or after January 1, 2015: | 15 | | (1) all items of compensation of a nonresident | 16 | | individual who is a member of a professional athletic team, |
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| 1 | | and all items of deduction directly allocable thereto, | 2 | | shall be allocated to this State as determined under | 3 | | Section 304(a)(2)(B)(iv); and | 4 | | (2) the amount of all items of compensation of all | 5 | | other nonresident individuals, and of all items of | 6 | | deduction directly allocable thereto, allocated to this | 7 | | State shall be the portion of the individual's total | 8 | | compensation for services performed for his or her employer | 9 | | during the taxable year which the number of working days | 10 | | spent within this State performing services for the | 11 | | employer in any manner during the taxable year bears to the | 12 | | total number of working days spent both within and without | 13 | | this State during the taxable year. For purposes of this | 14 | | paragraph: | 15 | | (A) A "working day" is any day on which the | 16 | | employee performs duties on behalf of the employer. | 17 | | Weekends, vacation days, sick days, and holidays | 18 | | (whether or not paid) are not working days unless the | 19 | | employee is required by the employer to perform some | 20 | | duties on that day. | 21 | | (B) A working day is spent in this State if: | 22 | | (i) a greater amount of time is spent by the | 23 | | employee in this State during that day performing | 24 | | duties on behalf of the employer (other than | 25 | | travelling) than is spent performing duties in any | 26 | | other State; or |
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| 1 | | (ii) the only work performed by the employee on | 2 | | behalf of the employer on that day is travelling to | 3 | | a destination within this State, and the employee | 4 | | arrives on that day. | 5 | | (C) A working day is not spent in this State if the | 6 | | only activity engaged in by the employee on behalf of | 7 | | the employer in this State on that day is travelling | 8 | | from or through this State to a destination outside | 9 | | this State. | 10 | | (b) Reciprocal exemption. The Director may enter into an | 11 | | agreement with
the taxing authorities of any state which | 12 | | imposes a tax on or measured by
income to provide that | 13 | | compensation paid in such state to residents of this
State | 14 | | shall be exempt from such tax; in such case, any compensation | 15 | | paid in
this State to residents of such state shall not be | 16 | | allocated to this State.
All reciprocal agreements shall be | 17 | | subject to the requirements of Section
2505-575 of the | 18 | | Department of Revenue Law (20 ILCS
2505/2505-575).
| 19 | | (c) Cross references.
| 20 | | (1) For allocation of amounts received by
nonresidents | 21 | | from certain employee trusts, see Section 301(b)(2).
| 22 | | (2) For allocation of compensation by residents, see | 23 | | Section 301(a).
| 24 | | (Source: P.A. 90-491, eff. 1-1-98; 91-239, eff. 1-1-00.)
| 25 | | (35 ILCS 5/701) (from Ch. 120, par. 7-701) |
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| 1 | | Sec. 701. Requirement and Amount of Withholding.
| 2 | | (a) In General. Every
employer maintaining an office or | 3 | | transacting business within this State
and required under the | 4 | | provisions of the Internal Revenue Code to
withhold a tax on:
| 5 | | (1) compensation allocated to this State under | 6 | | subsection (a) of Section 302 paid in this State (as | 7 | | determined under Section
304(a)(2)(B) to an individual ; or
| 8 | | (2) payments described in subsection (b) shall deduct | 9 | | and withhold from
such compensation for each payroll period | 10 | | (as defined in Section 3401 of
the Internal Revenue Code) | 11 | | an amount equal to the amount by which such
individual's
| 12 | | compensation exceeds the proportionate part of this | 13 | | withholding exemption
(computed as provided in Section | 14 | | 702) attributable to the payroll period
for which such | 15 | | compensation is payable multiplied by a percentage equal
to | 16 | | the percentage tax rate for individuals provided in | 17 | | subsection (b) of
Section 201.
| 18 | | (b) Payment to Residents. Any payment (including | 19 | | compensation, but not including a payment from which | 20 | | withholding is required under Section 710 of this Act) to a
| 21 | | resident
by a payor maintaining an office or transacting | 22 | | business within this State
(including any agency, officer, or | 23 | | employee of this State or of any political
subdivision of this | 24 | | State) and on which withholding of tax is required under
the | 25 | | provisions of the
Internal Revenue Code shall be deemed to be | 26 | | compensation paid in this State
by an employer to an employee |
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| 1 | | for the purposes of Article 7 and Section
601(b)(1) to the | 2 | | extent such payment is included in the recipient's base
income | 3 | | and not subjected to withholding by another state.
| 4 | | Notwithstanding any other provision to the contrary, no amount | 5 | | shall be
withheld from unemployment insurance benefit payments | 6 | | made to an individual
pursuant to the Unemployment Insurance | 7 | | Act unless the individual has
voluntarily elected the | 8 | | withholding pursuant to rules promulgated by the
Director of | 9 | | Employment Security.
| 10 | | (c) Special Definitions. Withholding shall be considered | 11 | | required under
the provisions of the Internal Revenue Code to | 12 | | the extent the Internal Revenue
Code either requires | 13 | | withholding or allows for voluntary withholding the
payor and | 14 | | recipient have entered into such a voluntary withholding | 15 | | agreement.
For the purposes of Article 7 and Section 1002(c) | 16 | | the term "employer" includes
any payor who is required to | 17 | | withhold tax pursuant to this Section.
| 18 | | (d) Reciprocal Exemption. The Director may enter into an | 19 | | agreement with
the taxing authorities of any state which | 20 | | imposes a tax on or measured by
income to provide that | 21 | | compensation paid in such state to residents of this
State | 22 | | shall be exempt from withholding of such tax; in such case, any
| 23 | | compensation paid in this State to residents of such state | 24 | | shall be exempt
from withholding.
All reciprocal agreements | 25 | | shall be subject to the requirements of Section
2505-575 of the | 26 | | Department of Revenue Law (20 ILCS
2505/2505-575).
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| 1 | | (e) Notwithstanding subsection (a)(2) of this Section, no | 2 | | withholding
is required on payments for which withholding is | 3 | | required under Section
3405 or 3406 of the Internal Revenue | 4 | | Code.
| 5 | | (Source: P.A. 97-507, eff. 8-23-11; 98-496, eff. 1-1-14.)
| 6 | | Section 99. Effective date. This Act takes effect upon | 7 | | becoming law.".
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