Full Text of SB1582 102nd General Assembly
SB1582eng 102ND GENERAL ASSEMBLY |
| | SB1582 Engrossed | | LRB102 16047 HLH 21419 b |
|
| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Sections 211, 303, 304, 710, and 902 as follows:
| 6 | | (35 ILCS 5/211)
| 7 | | Sec. 211. Economic Development for a Growing Economy Tax | 8 | | Credit. For tax years beginning on or after January 1, 1999, a | 9 | | Taxpayer
who has entered into an Agreement (including a New | 10 | | Construction EDGE Agreement) under the Economic Development | 11 | | for a Growing
Economy Tax Credit Act is entitled to a credit | 12 | | against the taxes imposed
under subsections (a) and (b) of | 13 | | Section 201 of this Act in an amount to be
determined in the | 14 | | Agreement. If the Taxpayer is a partnership or Subchapter
S | 15 | | corporation, the credit shall be allowed to the partners or | 16 | | shareholders in
accordance with the determination of income | 17 | | and distributive share of income
under Sections 702 and 704 | 18 | | and subchapter S of the Internal Revenue Code.
The Department, | 19 | | in cooperation with the Department
of Commerce and Economic | 20 | | Opportunity, shall prescribe rules to enforce and
administer | 21 | | the provisions of this Section. This Section is
exempt from | 22 | | the provisions of Section 250 of this Act.
| 23 | | The credit shall be subject to the conditions set forth in
|
| | | SB1582 Engrossed | - 2 - | LRB102 16047 HLH 21419 b |
|
| 1 | | the Agreement and the following limitations:
| 2 | | (1) The tax credit shall not exceed the Incremental | 3 | | Income Tax
(as defined in Section 5-5 of the Economic | 4 | | Development for a Growing Economy
Tax Credit Act) with | 5 | | respect to the project; additionally, the New Construction | 6 | | EDGE Credit shall not exceed the New Construction EDGE | 7 | | Incremental Income Tax (as defined in Section 5-5 of the | 8 | | Economic Development for a Growing Economy Tax Credit | 9 | | Act).
| 10 | | (2) The amount of the credit allowed during the tax | 11 | | year plus the sum of
all amounts allowed in prior years | 12 | | shall not exceed 100% of the aggregate
amount expended by | 13 | | the Taxpayer during all prior tax years on approved costs
| 14 | | defined by Agreement.
| 15 | | (3) The amount of the credit shall be determined on an | 16 | | annual
basis. Except as applied in a carryover year | 17 | | pursuant to Section 211(4) of
this Act, the credit may not | 18 | | be applied against any State
income tax liability in more | 19 | | than 10 taxable
years; provided, however, that (i) an | 20 | | eligible business certified by the
Department of Commerce | 21 | | and Economic Opportunity under the Corporate Headquarters
| 22 | | Relocation Act may not
apply the credit against any of its | 23 | | State income tax liability in more than 15
taxable years
| 24 | | and (ii) credits allowed to that eligible business are | 25 | | subject to the
conditions
and requirements set forth in | 26 | | Sections 5-35 and 5-45 of the Economic
Development for a |
| | | SB1582 Engrossed | - 3 - | LRB102 16047 HLH 21419 b |
|
| 1 | | Growing Economy Tax Credit Act and Section 5-51 as | 2 | | applicable to New Construction EDGE Credits.
| 3 | | (4) The credit may not exceed the amount of taxes | 4 | | imposed pursuant to
subsections (a) and (b) of Section 201 | 5 | | of this Act. Any credit
that is unused in the year the | 6 | | credit is computed may be carried forward and
applied to | 7 | | the tax liability of the 5 taxable years following the | 8 | | excess credit
year. The credit shall be applied to the | 9 | | earliest year for which there is a
tax liability. If there | 10 | | are credits from more than one tax year that are
available | 11 | | to offset a liability, the earlier credit shall be applied | 12 | | first.
| 13 | | (5) No credit shall be allowed with respect to any | 14 | | Agreement for any
taxable year ending after the | 15 | | Noncompliance Date. Upon receiving notification
by the | 16 | | Department of Commerce and Economic Opportunity of the | 17 | | noncompliance of a
Taxpayer with an Agreement, the | 18 | | Department shall notify the Taxpayer that no
credit is | 19 | | allowed with respect to that Agreement for any taxable | 20 | | year ending
after the Noncompliance Date, as stated in | 21 | | such notification. If any credit
has been allowed with | 22 | | respect to an Agreement for a taxable year ending after
| 23 | | the Noncompliance Date for that Agreement, any refund paid | 24 | | to the
Taxpayer for that taxable year shall, to the extent | 25 | | of that credit allowed, be
an erroneous refund within the | 26 | | meaning of Section 912 of this Act.
|
| | | SB1582 Engrossed | - 4 - | LRB102 16047 HLH 21419 b |
|
| 1 | | If, during any taxable year, a taxpayer ceases | 2 | | operations at a project location that is the subject of | 3 | | that Agreement with the intent to terminate operations in | 4 | | the State, the tax imposed under subsections (a) and (b) | 5 | | of Section 201 of this Act for such taxable year shall be | 6 | | increased by the amount of any credit allowed under the | 7 | | Agreement for that project location prior to the date the | 8 | | taxpayer ceases operations. | 9 | | (6) For purposes of this Section, the terms | 10 | | "Agreement", "Incremental
Income Tax", "New Construction | 11 | | EDGE Agreement", "New Construction EDGE Credit", "New | 12 | | Construction EDGE Incremental Income Tax", and | 13 | | "Noncompliance Date" have the same meaning as when used
in | 14 | | the Economic Development for a Growing Economy Tax Credit | 15 | | Act.
| 16 | | (Source: P.A. 101-9, eff. 6-5-19.)
| 17 | | (35 ILCS 5/303) (from Ch. 120, par. 3-303)
| 18 | | Sec. 303. (a) In general. Any item of capital gain or loss, | 19 | | and any
item of income from rents or royalties from real or | 20 | | tangible personal
property, interest, dividends, and patent or | 21 | | copyright royalties, and prizes
awarded under the Illinois | 22 | | Lottery Law, and, for taxable years ending on or after | 23 | | December 31, 2019, wagering and gambling winnings from | 24 | | Illinois sources as set forth in subsection (e-1) of this | 25 | | Section, and, for taxable years ending on or after December |
| | | SB1582 Engrossed | - 5 - | LRB102 16047 HLH 21419 b |
|
| 1 | | 31, 2021, sports wagering and winnings from Illinois sources | 2 | | as set forth in subsection (e-2) of this Section, to the extent | 3 | | such item constitutes
nonbusiness income, together with any | 4 | | item of deduction directly allocable
thereto, shall be | 5 | | allocated by any person other than a resident as provided
in | 6 | | this Section.
| 7 | | (b) Capital gains and losses. | 8 | | (1) Real property. Capital gains and
losses from sales | 9 | | or exchanges of real property are allocable to this State
| 10 | | if the property is located in this State.
| 11 | | (2) Tangible personal property. Capital gains and | 12 | | losses from sales
or exchanges of tangible personal | 13 | | property are allocable to this State if,
at the time of | 14 | | such sale or exchange:
| 15 | | (A) The property had its situs in this State; or
| 16 | | (B) The taxpayer had its commercial domicile in | 17 | | this State and was not
taxable in the state in which | 18 | | the property had its situs.
| 19 | | (3) Intangibles. Capital gains and losses from sales | 20 | | or exchanges of
intangible personal property are allocable | 21 | | to this State if the taxpayer
had its commercial domicile | 22 | | in this State at the time of such sale or
exchange.
| 23 | | (c) Rents and royalties. | 24 | | (1) Real property. Rents and royalties
from real | 25 | | property are allocable to this State if the property is | 26 | | located
in this State.
|
| | | SB1582 Engrossed | - 6 - | LRB102 16047 HLH 21419 b |
|
| 1 | | (2) Tangible personal property. Rents and royalties | 2 | | from tangible
personal property are allocable to this | 3 | | State:
| 4 | | (A) If and to the extent that the property is | 5 | | utilized in this State; or
| 6 | | (B) In their entirety if, at the time such rents or | 7 | | royalties were paid
or accrued, the taxpayer had its | 8 | | commercial domicile in this State and was
not | 9 | | organized under the laws of or taxable with respect to | 10 | | such rents or
royalties in the state in which the | 11 | | property was utilized.
The extent of utilization of | 12 | | tangible personal property in a state is
determined by | 13 | | multiplying the rents or royalties derived from such | 14 | | property
by a fraction, the numerator of which is the | 15 | | number of days of physical
location of the property in | 16 | | the state during the rental or royalty period
in the | 17 | | taxable year and the denominator of which is the | 18 | | number of days of
physical location of the property | 19 | | everywhere during all rental or royalty
periods in the | 20 | | taxable year. If the physical location of the property
| 21 | | during the rental or royalty period is unknown or | 22 | | unascertainable by the
taxpayer, tangible personal | 23 | | property is utilized in the state in which the
| 24 | | property was located at the time the rental or royalty | 25 | | payer obtained
possession.
| 26 | | (d) Patent and copyright royalties.
|
| | | SB1582 Engrossed | - 7 - | LRB102 16047 HLH 21419 b |
|
| 1 | | (1) Allocation. Patent and copyright royalties are | 2 | | allocable to this
State:
| 3 | | (A) If and to the extent that the patent or | 4 | | copyright is utilized by the
payer in this State; or
| 5 | | (B) If and to the extent that the patent or | 6 | | copyright is utilized by the
payer in a state in which | 7 | | the taxpayer is not taxable with respect to such
| 8 | | royalties and, at the time such royalties were paid or | 9 | | accrued, the
taxpayer had its commercial domicile in | 10 | | this State.
| 11 | | (2) Utilization.
| 12 | | (A) A patent is utilized in a state to the extent | 13 | | that it is employed in
production, fabrication, | 14 | | manufacturing or other processing in the state or
to | 15 | | the extent that a patented product is produced in the | 16 | | state. If the
basis of receipts from patent royalties | 17 | | does not permit allocation to
states or if the | 18 | | accounting procedures do not reflect states of
| 19 | | utilization, the patent is utilized in this State if | 20 | | the taxpayer has its
commercial domicile in this | 21 | | State.
| 22 | | (B) A copyright is utilized in a state to the | 23 | | extent that printing or
other publication originates | 24 | | in the state. If the basis of receipts from
copyright | 25 | | royalties does not permit allocation to states or if | 26 | | the
accounting procedures do not reflect states of |
| | | SB1582 Engrossed | - 8 - | LRB102 16047 HLH 21419 b |
|
| 1 | | utilization, the copyright
is utilized in this State | 2 | | if the taxpayer has its commercial domicile in
this | 3 | | State.
| 4 | | (e) Illinois lottery prizes. Prizes awarded under the | 5 | | Illinois Lottery Law are allocable to this State. Payments | 6 | | received in taxable years ending on or after December 31, | 7 | | 2013, from the assignment of a prize under Section 13.1 of the | 8 | | Illinois Lottery Law are allocable to this State.
| 9 | | (e-1) Wagering and gambling winnings. Payments received in | 10 | | taxable years ending on or after December 31, 2019 of winnings | 11 | | from pari-mutuel wagering conducted at a wagering facility | 12 | | licensed under the Illinois Horse Racing Act of 1975 and from | 13 | | gambling games conducted on a riverboat or in a casino or | 14 | | organization gaming facility licensed under the Illinois | 15 | | Gambling Act are allocable to this State. | 16 | | (e-2) Sports wagering and winnings. Payments received in | 17 | | taxable years ending on or after December 31, 2021 of winnings | 18 | | from sports wagering conducted in accordance with the Sports | 19 | | Wagering Act are allocable to this State. | 20 | | (e-5) Unemployment benefits. Unemployment benefits paid by | 21 | | the Illinois Department of Employment Security are allocable | 22 | | to this State. | 23 | | (f) Taxability in other state. For purposes of allocation | 24 | | of income
pursuant to this Section, a taxpayer is taxable in | 25 | | another state if:
| 26 | | (1) In that state he is subject to a net income tax, a |
| | | SB1582 Engrossed | - 9 - | LRB102 16047 HLH 21419 b |
|
| 1 | | franchise tax
measured by net income, a franchise tax for | 2 | | the privilege of doing
business, or a corporate stock tax; | 3 | | or
| 4 | | (2) That state has jurisdiction to subject the | 5 | | taxpayer to a net income
tax regardless of whether, in | 6 | | fact, the state does or does not.
| 7 | | (g) Cross references. | 8 | | (1) For allocation of interest and dividends by
| 9 | | persons other than residents, see Section 301(c)(2).
| 10 | | (2) For allocation of nonbusiness income by residents, | 11 | | see Section
301(a).
| 12 | | (Source: P.A. 101-31, eff. 6-28-19.)
| 13 | | (35 ILCS 5/304) (from Ch. 120, par. 3-304)
| 14 | | Sec. 304. Business income of persons other than residents.
| 15 | | (a) In general. The business income of a person other than | 16 | | a
resident shall be allocated to this State if such person's | 17 | | business
income is derived solely from this State. If a person | 18 | | other than a
resident derives business income from this State | 19 | | and one or more other
states, then, for tax years ending on or | 20 | | before December 30, 1998, and
except as otherwise provided by | 21 | | this Section, such
person's business income shall be | 22 | | apportioned to this State by
multiplying the income by a | 23 | | fraction, the numerator of which is the sum
of the property | 24 | | factor (if any), the payroll factor (if any) and 200% of the
| 25 | | sales factor (if any), and the denominator of which is 4 |
| | | SB1582 Engrossed | - 10 - | LRB102 16047 HLH 21419 b |
|
| 1 | | reduced by the
number of factors other than the sales factor | 2 | | which have a denominator
of zero and by an additional 2 if the | 3 | | sales factor has a denominator of zero.
For tax years ending on | 4 | | or after December 31, 1998, and except as otherwise
provided | 5 | | by this Section, persons other than
residents who derive | 6 | | business income from this State and one or more other
states | 7 | | shall compute their apportionment factor by weighting their | 8 | | property,
payroll, and sales factors as provided in
subsection | 9 | | (h) of this Section.
| 10 | | (1) Property factor.
| 11 | | (A) The property factor is a fraction, the numerator | 12 | | of which is the
average value of the person's real and | 13 | | tangible personal property owned
or rented and used in the | 14 | | trade or business in this State during the
taxable year | 15 | | and the denominator of which is the average value of all
| 16 | | the person's real and tangible personal property owned or | 17 | | rented and
used in the trade or business during the | 18 | | taxable year.
| 19 | | (B) Property owned by the person is valued at its | 20 | | original cost.
Property rented by the person is valued at | 21 | | 8 times the net annual rental
rate. Net annual rental rate | 22 | | is the annual rental rate paid by the
person less any | 23 | | annual rental rate received by the person from
| 24 | | sub-rentals.
| 25 | | (C) The average value of property shall be determined | 26 | | by averaging
the values at the beginning and ending of the |
| | | SB1582 Engrossed | - 11 - | LRB102 16047 HLH 21419 b |
|
| 1 | | taxable year but the
Director may require the averaging of | 2 | | monthly values during the taxable
year if reasonably | 3 | | required to reflect properly the average value of the
| 4 | | person's property.
| 5 | | (2) Payroll factor.
| 6 | | (A) The payroll factor is a fraction, the numerator of | 7 | | which is the
total amount paid in this State during the | 8 | | taxable year by the person
for compensation, and the | 9 | | denominator of which is the total compensation
paid | 10 | | everywhere during the taxable year.
| 11 | | (B) Compensation is paid in this State if:
| 12 | | (i) The individual's service is performed entirely | 13 | | within this
State;
| 14 | | (ii) The individual's service is performed both | 15 | | within and without
this State, but the service | 16 | | performed without this State is incidental
to the | 17 | | individual's service performed within this State; or
| 18 | | (iii) For tax years ending prior to December 31, | 19 | | 2020, some of the service is performed within this | 20 | | State and either
the base of operations, or if there is | 21 | | no base of operations, the place
from which the | 22 | | service is directed or controlled is within this | 23 | | State,
or the base of operations or the place from | 24 | | which the service is
directed or controlled is not in | 25 | | any state in which some part of the
service is | 26 | | performed, but the individual's residence is in this |
| | | SB1582 Engrossed | - 12 - | LRB102 16047 HLH 21419 b |
|
| 1 | | State. For tax years ending on or after December 31, | 2 | | 2020, compensation is paid in this State if some of the | 3 | | individual's service is performed within this State, | 4 | | the individual's service performed within this State | 5 | | is nonincidental to the individual's service performed | 6 | | without this State, and the individual's service is | 7 | | performed within this State for more than 30 working | 8 | | days during the tax year. The amount of compensation | 9 | | paid in this State shall include the portion of the | 10 | | individual's total compensation for services performed | 11 | | on behalf of his or her employer during the tax year | 12 | | which the number of working days spent within this | 13 | | State during the tax year bears to the total number of | 14 | | working days spent both within and without this State | 15 | | during the tax year. For purposes of this paragraph:
| 16 | | (a) The term "working day" means all days | 17 | | during the tax year in which the individual | 18 | | performs duties on behalf of his or her employer. | 19 | | All days in which the individual performs no | 20 | | duties on behalf of his or her employer (e.g., | 21 | | weekends, vacation days, sick days, and holidays) | 22 | | are not working days. | 23 | | (b) A working day is spent within this State | 24 | | if: | 25 | | (1) the individual performs service on | 26 | | behalf of the employer and a greater amount of |
| | | SB1582 Engrossed | - 13 - | LRB102 16047 HLH 21419 b |
|
| 1 | | time on that day is spent by the individual | 2 | | performing duties on behalf of the employer | 3 | | within this State, without regard to time | 4 | | spent traveling, than is spent performing | 5 | | duties on behalf of the employer without this | 6 | | State; or | 7 | | (2) the only service the individual | 8 | | performs on behalf of the employer on that day | 9 | | is traveling to a destination within this | 10 | | State, and the individual arrives on that day. | 11 | | (c) Working days spent within this State do | 12 | | not include any day in which the employee is | 13 | | performing services in this State during a | 14 | | disaster period solely in response to a request | 15 | | made to his or her employer by the government of | 16 | | this State, by any political subdivision of this | 17 | | State, or by a person conducting business in this | 18 | | State to perform disaster or emergency-related | 19 | | services in this State. For purposes of this item | 20 | | (c): | 21 | | "Declared State disaster or emergency" | 22 | | means a disaster or emergency event (i) for | 23 | | which a Governor's proclamation of a state of | 24 | | emergency has been issued or (ii) for which a | 25 | | Presidential declaration of a federal major | 26 | | disaster or emergency has been issued. |
| | | SB1582 Engrossed | - 14 - | LRB102 16047 HLH 21419 b |
|
| 1 | | "Disaster period" means a period that | 2 | | begins 10 days prior to the date of the | 3 | | Governor's proclamation or the President's | 4 | | declaration (whichever is earlier) and extends | 5 | | for a period of 60 calendar days after the end | 6 | | of the declared disaster or emergency period. | 7 | | "Disaster or emergency-related services" | 8 | | means repairing, renovating, installing, | 9 | | building, or rendering services or conducting | 10 | | other business activities that relate to | 11 | | infrastructure that has been damaged, | 12 | | impaired, or destroyed by the declared State | 13 | | disaster or emergency. | 14 | | "Infrastructure" means property and | 15 | | equipment owned or used by a public utility, | 16 | | communications network, broadband and internet | 17 | | service provider, cable and video service | 18 | | provider, electric or gas distribution system, | 19 | | or water pipeline that provides service to | 20 | | more than one customer or person, including | 21 | | related support facilities. "Infrastructure" | 22 | | includes, but is not limited to, real and | 23 | | personal property such as buildings, offices, | 24 | | power lines, cable lines, poles, | 25 | | communications lines, pipes, structures, and | 26 | | equipment. |
| | | SB1582 Engrossed | - 15 - | LRB102 16047 HLH 21419 b |
|
| 1 | | (iv) Compensation paid to nonresident professional | 2 | | athletes. | 3 | | (a) General. The Illinois source income of a | 4 | | nonresident individual who is a member of a | 5 | | professional athletic team includes the portion of the | 6 | | individual's total compensation for services performed | 7 | | as a member of a professional athletic team during the | 8 | | taxable year which the number of duty days spent | 9 | | within this State performing services for the team in | 10 | | any manner during the taxable year bears to the total | 11 | | number of duty days spent both within and without this | 12 | | State during the taxable year. | 13 | | (b) Travel days. Travel days that do not involve | 14 | | either a game, practice, team meeting, or other | 15 | | similar team event are not considered duty days spent | 16 | | in this State. However, such travel days are | 17 | | considered in the total duty days spent both within | 18 | | and without this State. | 19 | | (c) Definitions. For purposes of this subpart | 20 | | (iv): | 21 | | (1) The term "professional athletic team" | 22 | | includes, but is not limited to, any professional | 23 | | baseball, basketball, football, soccer, or hockey | 24 | | team. | 25 | | (2) The term "member of a professional | 26 | | athletic team" includes those employees who are |
| | | SB1582 Engrossed | - 16 - | LRB102 16047 HLH 21419 b |
|
| 1 | | active players, players on the disabled list, and | 2 | | any other persons required to travel and who | 3 | | travel with and perform services on behalf of a | 4 | | professional athletic team on a regular basis. | 5 | | This includes, but is not limited to, coaches, | 6 | | managers, and trainers. | 7 | | (3) Except as provided in items (C) and (D) of | 8 | | this subpart (3), the term "duty days" means all | 9 | | days during the taxable year from the beginning of | 10 | | the professional athletic team's official | 11 | | pre-season training period through the last game | 12 | | in which the team competes or is scheduled to | 13 | | compete. Duty days shall be counted for the year | 14 | | in which they occur, including where a team's | 15 | | official pre-season training period through the | 16 | | last game in which the team competes or is | 17 | | scheduled to compete, occurs during more than one | 18 | | tax year. | 19 | | (A) Duty days shall also include days on | 20 | | which a member of a professional athletic team | 21 | | performs service for a team on a date that | 22 | | does not fall within the foregoing period | 23 | | (e.g., participation in instructional leagues, | 24 | | the "All Star Game", or promotional | 25 | | "caravans"). Performing a service for a | 26 | | professional athletic team includes conducting |
| | | SB1582 Engrossed | - 17 - | LRB102 16047 HLH 21419 b |
|
| 1 | | training and rehabilitation activities, when | 2 | | such activities are conducted at team | 3 | | facilities. | 4 | | (B) Also included in duty days are game | 5 | | days, practice days, days spent at team | 6 | | meetings, promotional caravans, preseason | 7 | | training camps, and days served with the team | 8 | | through all post-season games in which the | 9 | | team competes or is scheduled to compete. | 10 | | (C) Duty days for any person who joins a | 11 | | team during the period from the beginning of | 12 | | the professional athletic team's official | 13 | | pre-season training period through the last | 14 | | game in which the team competes, or is | 15 | | scheduled to compete, shall begin on the day | 16 | | that person joins the team. Conversely, duty | 17 | | days for any person who leaves a team during | 18 | | this period shall end on the day that person | 19 | | leaves the team. Where a person switches teams | 20 | | during a taxable year, a separate duty-day | 21 | | calculation shall be made for the period the | 22 | | person was with each team. | 23 | | (D) Days for which a member of a | 24 | | professional athletic team is not compensated | 25 | | and is not performing services for the team in | 26 | | any manner, including days when such member of |
| | | SB1582 Engrossed | - 18 - | LRB102 16047 HLH 21419 b |
|
| 1 | | a professional athletic team has been | 2 | | suspended without pay and prohibited from | 3 | | performing any services for the team, shall | 4 | | not be treated as duty days. | 5 | | (E) Days for which a member of a | 6 | | professional athletic team is on the disabled | 7 | | list and does not conduct rehabilitation | 8 | | activities at facilities of the team, and is | 9 | | not otherwise performing services for the team | 10 | | in Illinois, shall not be considered duty days | 11 | | spent in this State. All days on the disabled | 12 | | list, however, are considered to be included | 13 | | in total duty days spent both within and | 14 | | without this State. | 15 | | (4) The term "total compensation for services | 16 | | performed as a member of a professional athletic | 17 | | team" means the total compensation received during | 18 | | the taxable year for services performed: | 19 | | (A) from the beginning of the official | 20 | | pre-season training period through the last | 21 | | game in which the team competes or is | 22 | | scheduled to compete during that taxable year; | 23 | | and | 24 | | (B) during the taxable year on a date | 25 | | which does not fall within the foregoing | 26 | | period (e.g., participation in instructional |
| | | SB1582 Engrossed | - 19 - | LRB102 16047 HLH 21419 b |
|
| 1 | | leagues, the "All Star Game", or promotional | 2 | | caravans). | 3 | | This compensation shall include, but is not | 4 | | limited to, salaries, wages, bonuses as described | 5 | | in this subpart, and any other type of | 6 | | compensation paid during the taxable year to a | 7 | | member of a professional athletic team for | 8 | | services performed in that year. This compensation | 9 | | does not include strike benefits, severance pay, | 10 | | termination pay, contract or option year buy-out | 11 | | payments, expansion or relocation payments, or any | 12 | | other payments not related to services performed | 13 | | for the team. | 14 | | For purposes of this subparagraph, "bonuses" | 15 | | included in "total compensation for services | 16 | | performed as a member of a professional athletic | 17 | | team" subject to the allocation described in | 18 | | Section 302(c)(1) are: bonuses earned as a result | 19 | | of play (i.e., performance bonuses) during the | 20 | | season, including bonuses paid for championship, | 21 | | playoff or "bowl" games played by a team, or for | 22 | | selection to all-star league or other honorary | 23 | | positions; and bonuses paid for signing a | 24 | | contract, unless the payment of the signing bonus | 25 | | is not conditional upon the signee playing any | 26 | | games for the team or performing any subsequent |
| | | SB1582 Engrossed | - 20 - | LRB102 16047 HLH 21419 b |
|
| 1 | | services for the team or even making the team, the | 2 | | signing bonus is payable separately from the | 3 | | salary and any other compensation, and the signing | 4 | | bonus is nonrefundable.
| 5 | | (3) Sales factor.
| 6 | | (A) The sales factor is a fraction, the numerator of | 7 | | which is the
total sales of the person in this State during | 8 | | the taxable year, and the
denominator of which is the | 9 | | total sales of the person everywhere during
the taxable | 10 | | year.
| 11 | | (B) Sales of tangible personal property are in this | 12 | | State if:
| 13 | | (i) The property is delivered or shipped to a | 14 | | purchaser, other than
the United States government, | 15 | | within this State regardless of the f. o.
b. point or | 16 | | other conditions of the sale; or
| 17 | | (ii) The property is shipped from an office, | 18 | | store, warehouse,
factory or other place of storage in | 19 | | this State and either the purchaser
is the United | 20 | | States government or the person is not taxable in the
| 21 | | state of the purchaser; provided, however, that | 22 | | premises owned or leased
by a person who has | 23 | | independently contracted with the seller for the | 24 | | printing
of newspapers, periodicals or books shall not | 25 | | be deemed to be an office,
store, warehouse, factory | 26 | | or other place of storage for purposes of this
|
| | | SB1582 Engrossed | - 21 - | LRB102 16047 HLH 21419 b |
|
| 1 | | Section.
Sales of tangible personal property are not | 2 | | in this State if the
seller and purchaser would be | 3 | | members of the same unitary business group
but for the | 4 | | fact that either the seller or purchaser is a person | 5 | | with 80%
or more of total business activity outside of | 6 | | the United States and the
property is purchased for | 7 | | resale.
| 8 | | (B-1) Patents, copyrights, trademarks, and similar | 9 | | items of intangible
personal property.
| 10 | | (i) Gross receipts from the licensing, sale, or | 11 | | other disposition of a
patent, copyright, trademark, | 12 | | or similar item of intangible personal property, other | 13 | | than gross receipts governed by paragraph (B-7) of | 14 | | this item (3),
are in this State to the extent the item | 15 | | is utilized in this State during the
year the gross | 16 | | receipts are included in gross income.
| 17 | | (ii) Place of utilization.
| 18 | | (I) A patent is utilized in a state to the | 19 | | extent that it is employed
in production, | 20 | | fabrication, manufacturing, or other processing in | 21 | | the state or
to the extent that a patented product | 22 | | is produced in the state. If a patent is
utilized | 23 | | in
more than one state, the extent to which it is | 24 | | utilized in any one state shall
be a fraction | 25 | | equal to the gross receipts of the licensee or | 26 | | purchaser from
sales or leases of items produced, |
| | | SB1582 Engrossed | - 22 - | LRB102 16047 HLH 21419 b |
|
| 1 | | fabricated, manufactured, or processed
within that | 2 | | state using the patent and of patented items | 3 | | produced within that
state, divided by the total | 4 | | of such gross receipts for all states in which the
| 5 | | patent is utilized.
| 6 | | (II) A copyright is utilized in a state to the | 7 | | extent that printing or
other publication | 8 | | originates in the state. If a copyright is | 9 | | utilized in more
than one state, the extent to | 10 | | which it is utilized in any one state shall be a
| 11 | | fraction equal to the gross receipts from sales or | 12 | | licenses of materials
printed or published in that | 13 | | state divided by the total of such gross receipts
| 14 | | for all states in which the copyright is utilized.
| 15 | | (III) Trademarks and other items of intangible | 16 | | personal property
governed by this paragraph (B-1) | 17 | | are utilized in the state in which the
commercial | 18 | | domicile of the licensee or purchaser is located.
| 19 | | (iii) If the state of utilization of an item of | 20 | | property governed by
this paragraph (B-1) cannot be | 21 | | determined from the taxpayer's books and
records or | 22 | | from the books and records of any person related to the | 23 | | taxpayer
within the meaning of Section 267(b) of the | 24 | | Internal Revenue Code, 26 U.S.C.
267, the gross
| 25 | | receipts attributable to that item shall be excluded | 26 | | from both the numerator
and the denominator of the |
| | | SB1582 Engrossed | - 23 - | LRB102 16047 HLH 21419 b |
|
| 1 | | sales factor.
| 2 | | (B-2) Gross receipts from the license, sale, or other | 3 | | disposition of
patents, copyrights, trademarks, and | 4 | | similar items of intangible personal
property, other than | 5 | | gross receipts governed by paragraph (B-7) of this item | 6 | | (3), may be included in the numerator or denominator of | 7 | | the sales factor
only if gross receipts from licenses, | 8 | | sales, or other disposition of such items
comprise more | 9 | | than 50% of the taxpayer's total gross receipts included | 10 | | in gross
income during the tax year and during each of the | 11 | | 2 immediately preceding tax
years; provided that, when a | 12 | | taxpayer is a member of a unitary business group,
such | 13 | | determination shall be made on the basis of the gross | 14 | | receipts of the
entire unitary business group.
| 15 | | (B-5) For taxable years ending on or after December | 16 | | 31, 2008, except as provided in subsections (ii) through | 17 | | (vii), receipts from the sale of telecommunications | 18 | | service or mobile telecommunications service are in this | 19 | | State if the customer's service address is in this State. | 20 | | (i) For purposes of this subparagraph (B-5), the | 21 | | following terms have the following meanings: | 22 | | "Ancillary services" means services that are | 23 | | associated with or incidental to the provision of | 24 | | "telecommunications services", including , but not | 25 | | limited to , "detailed telecommunications billing", | 26 | | "directory assistance", "vertical service", and "voice |
| | | SB1582 Engrossed | - 24 - | LRB102 16047 HLH 21419 b |
|
| 1 | | mail services". | 2 | | "Air-to-Ground Radiotelephone service" means a | 3 | | radio service, as that term is defined in 47 CFR 22.99, | 4 | | in which common carriers are authorized to offer and | 5 | | provide radio telecommunications service for hire to | 6 | | subscribers in aircraft. | 7 | | "Call-by-call Basis" means any method of charging | 8 | | for telecommunications services where the price is | 9 | | measured by individual calls. | 10 | | "Communications Channel" means a physical or | 11 | | virtual path of communications over which signals are | 12 | | transmitted between or among customer channel | 13 | | termination points. | 14 | | "Conference bridging service" means an "ancillary | 15 | | service" that links two or more participants of an | 16 | | audio or video conference call and may include the | 17 | | provision of a telephone number. "Conference bridging | 18 | | service" does not include the "telecommunications | 19 | | services" used to reach the conference bridge. | 20 | | "Customer Channel Termination Point" means the | 21 | | location where the customer either inputs or receives | 22 | | the communications. | 23 | | "Detailed telecommunications billing service" | 24 | | means an "ancillary service" of separately stating | 25 | | information pertaining to individual calls on a | 26 | | customer's billing statement. |
| | | SB1582 Engrossed | - 25 - | LRB102 16047 HLH 21419 b |
|
| 1 | | "Directory assistance" means an "ancillary | 2 | | service" of providing telephone number information, | 3 | | and/or address information. | 4 | | "Home service provider" means the facilities based | 5 | | carrier or reseller with which the customer contracts | 6 | | for the provision of mobile telecommunications | 7 | | services. | 8 | | "Mobile telecommunications service" means | 9 | | commercial mobile radio service, as defined in Section | 10 | | 20.3 of Title 47 of the Code of Federal Regulations as | 11 | | in effect on June 1, 1999. | 12 | | "Place of primary use" means the street address | 13 | | representative of where the customer's use of the | 14 | | telecommunications service primarily occurs, which | 15 | | must be the residential street address or the primary | 16 | | business street address of the customer. In the case | 17 | | of mobile telecommunications services, "place of | 18 | | primary use" must be within the licensed service area | 19 | | of the home service provider. | 20 | | "Post-paid telecommunication service" means the | 21 | | telecommunications service obtained by making a | 22 | | payment on a call-by-call basis either through the use | 23 | | of a credit card or payment mechanism such as a bank | 24 | | card, travel card, credit card, or debit card, or by | 25 | | charge made to a telephone number which is not | 26 | | associated with the origination or termination of the |
| | | SB1582 Engrossed | - 26 - | LRB102 16047 HLH 21419 b |
|
| 1 | | telecommunications service. A post-paid calling | 2 | | service includes telecommunications service, except a | 3 | | prepaid wireless calling service, that would be a | 4 | | prepaid calling service except it is not exclusively a | 5 | | telecommunication service. | 6 | | "Prepaid telecommunication service" means the | 7 | | right to access exclusively telecommunications | 8 | | services, which must be paid for in advance and which | 9 | | enables the origination of calls using an access | 10 | | number or authorization code, whether manually or | 11 | | electronically dialed, and that is sold in | 12 | | predetermined units or dollars of which the number | 13 | | declines with use in a known amount. | 14 | | "Prepaid Mobile telecommunication service" means a | 15 | | telecommunications service that provides the right to | 16 | | utilize mobile wireless service as well as other | 17 | | non-telecommunication services, including , but not | 18 | | limited to , ancillary services, which must be paid for | 19 | | in advance that is sold in predetermined units or | 20 | | dollars of which the number declines with use in a | 21 | | known amount. | 22 | | "Private communication service" means a | 23 | | telecommunication service that entitles the customer | 24 | | to exclusive or priority use of a communications | 25 | | channel or group of channels between or among | 26 | | termination points, regardless of the manner in which |
| | | SB1582 Engrossed | - 27 - | LRB102 16047 HLH 21419 b |
|
| 1 | | such channel or channels are connected, and includes | 2 | | switching capacity, extension lines, stations, and any | 3 | | other associated services that are provided in | 4 | | connection with the use of such channel or channels. | 5 | | "Service address" means: | 6 | | (a) The location of the telecommunications | 7 | | equipment to which a customer's call is charged | 8 | | and from which the call originates or terminates, | 9 | | regardless of where the call is billed or paid; | 10 | | (b) If the location in line (a) is not known, | 11 | | service address means the origination point of the | 12 | | signal of the telecommunications services first | 13 | | identified by either the seller's | 14 | | telecommunications system or in information | 15 | | received by the seller from its service provider | 16 | | where the system used to transport such signals is | 17 | | not that of the seller; and | 18 | | (c) If the locations in line (a) and line (b) | 19 | | are not known, the service address means the | 20 | | location of the customer's place of primary use. | 21 | | "Telecommunications service" means the electronic | 22 | | transmission, conveyance, or routing of voice, data, | 23 | | audio, video, or any other information or signals to a | 24 | | point, or between or among points. The term | 25 | | "telecommunications service" includes such | 26 | | transmission, conveyance, or routing in which computer |
| | | SB1582 Engrossed | - 28 - | LRB102 16047 HLH 21419 b |
|
| 1 | | processing applications are used to act on the form, | 2 | | code or protocol of the content for purposes of | 3 | | transmission, conveyance or routing without regard to | 4 | | whether such service is referred to as voice over | 5 | | Internet protocol services or is classified by the | 6 | | Federal Communications Commission as enhanced or value | 7 | | added. "Telecommunications service" does not include: | 8 | | (a) Data processing and information services | 9 | | that allow data to be generated, acquired, stored, | 10 | | processed, or retrieved and delivered by an | 11 | | electronic transmission to a purchaser when such | 12 | | purchaser's primary purpose for the underlying | 13 | | transaction is the processed data or information; | 14 | | (b) Installation or maintenance of wiring or | 15 | | equipment on a customer's premises; | 16 | | (c) Tangible personal property; | 17 | | (d) Advertising, including , but not limited | 18 | | to , directory advertising; | 19 | | (e) Billing and collection services provided | 20 | | to third parties; | 21 | | (f) Internet access service; | 22 | | (g) Radio and television audio and video | 23 | | programming services, regardless of the medium, | 24 | | including the furnishing of transmission, | 25 | | conveyance and routing of such services by the | 26 | | programming service provider. Radio and television |
| | | SB1582 Engrossed | - 29 - | LRB102 16047 HLH 21419 b |
|
| 1 | | audio and video programming services shall | 2 | | include , but not be limited to , cable service as | 3 | | defined in 47 USC 522(6) and audio and video | 4 | | programming services delivered by commercial | 5 | | mobile radio service providers, as defined in 47 | 6 | | CFR 20.3; | 7 | | (h) "Ancillary services"; or | 8 | | (i) Digital products "delivered | 9 | | electronically", including , but not limited to , | 10 | | software, music, video, reading materials or ring | 11 | | tones. | 12 | | "Vertical service" means an "ancillary service" | 13 | | that is offered in connection with one or more | 14 | | "telecommunications services", which offers advanced | 15 | | calling features that allow customers to identify | 16 | | callers and to manage multiple calls and call | 17 | | connections, including "conference bridging services". | 18 | | "Voice mail service" means an "ancillary service" | 19 | | that enables the customer to store, send or receive | 20 | | recorded messages. "Voice mail service" does not | 21 | | include any "vertical services" that the customer may | 22 | | be required to have in order to utilize the "voice mail | 23 | | service". | 24 | | (ii) Receipts from the sale of telecommunications | 25 | | service sold on an individual call-by-call basis are | 26 | | in this State if either of the following applies: |
| | | SB1582 Engrossed | - 30 - | LRB102 16047 HLH 21419 b |
|
| 1 | | (a) The call both originates and terminates in | 2 | | this State. | 3 | | (b) The call either originates or terminates | 4 | | in this State and the service address is located | 5 | | in this State. | 6 | | (iii) Receipts from the sale of postpaid | 7 | | telecommunications service at retail are in this State | 8 | | if the origination point of the telecommunication | 9 | | signal, as first identified by the service provider's | 10 | | telecommunication system or as identified by | 11 | | information received by the seller from its service | 12 | | provider if the system used to transport | 13 | | telecommunication signals is not the seller's, is | 14 | | located in this State. | 15 | | (iv) Receipts from the sale of prepaid | 16 | | telecommunications service or prepaid mobile | 17 | | telecommunications service at retail are in this State | 18 | | if the purchaser obtains the prepaid card or similar | 19 | | means of conveyance at a location in this State. | 20 | | Receipts from recharging a prepaid telecommunications | 21 | | service or mobile telecommunications service is in | 22 | | this State if the purchaser's billing information | 23 | | indicates a location in this State. | 24 | | (v) Receipts from the sale of private | 25 | | communication services are in this State as follows: | 26 | | (a) 100% of receipts from charges imposed at |
| | | SB1582 Engrossed | - 31 - | LRB102 16047 HLH 21419 b |
|
| 1 | | each channel termination point in this State. | 2 | | (b) 100% of receipts from charges for the | 3 | | total channel mileage between each channel | 4 | | termination point in this State. | 5 | | (c) 50% of the total receipts from charges for | 6 | | service segments when those segments are between 2 | 7 | | customer channel termination points, 1 of which is | 8 | | located in this State and the other is located | 9 | | outside of this State, which segments are | 10 | | separately charged. | 11 | | (d) The receipts from charges for service | 12 | | segments with a channel termination point located | 13 | | in this State and in two or more other states, and | 14 | | which segments are not separately billed, are in | 15 | | this State based on a percentage determined by | 16 | | dividing the number of customer channel | 17 | | termination points in this State by the total | 18 | | number of customer channel termination points. | 19 | | (vi) Receipts from charges for ancillary services | 20 | | for telecommunications service sold to customers at | 21 | | retail are in this State if the customer's primary | 22 | | place of use of telecommunications services associated | 23 | | with those ancillary services is in this State. If the | 24 | | seller of those ancillary services cannot determine | 25 | | where the associated telecommunications are located, | 26 | | then the ancillary services shall be based on the |
| | | SB1582 Engrossed | - 32 - | LRB102 16047 HLH 21419 b |
|
| 1 | | location of the purchaser. | 2 | | (vii) Receipts to access a carrier's network or | 3 | | from the sale of telecommunication services or | 4 | | ancillary services for resale are in this State as | 5 | | follows: | 6 | | (a) 100% of the receipts from access fees | 7 | | attributable to intrastate telecommunications | 8 | | service that both originates and terminates in | 9 | | this State. | 10 | | (b) 50% of the receipts from access fees | 11 | | attributable to interstate telecommunications | 12 | | service if the interstate call either originates | 13 | | or terminates in this State. | 14 | | (c) 100% of the receipts from interstate end | 15 | | user access line charges, if the customer's | 16 | | service address is in this State. As used in this | 17 | | subdivision, "interstate end user access line | 18 | | charges" includes, but is not limited to, the | 19 | | surcharge approved by the federal communications | 20 | | commission and levied pursuant to 47 CFR 69. | 21 | | (d) Gross receipts from sales of | 22 | | telecommunication services or from ancillary | 23 | | services for telecommunications services sold to | 24 | | other telecommunication service providers for | 25 | | resale shall be sourced to this State using the | 26 | | apportionment concepts used for non-resale |
| | | SB1582 Engrossed | - 33 - | LRB102 16047 HLH 21419 b |
|
| 1 | | receipts of telecommunications services if the | 2 | | information is readily available to make that | 3 | | determination. If the information is not readily | 4 | | available, then the taxpayer may use any other | 5 | | reasonable and consistent method. | 6 | | (B-7) For taxable years ending on or after December | 7 | | 31, 2008, receipts from the sale of broadcasting services | 8 | | are in this State if the broadcasting services are | 9 | | received in this State. For purposes of this paragraph | 10 | | (B-7), the following terms have the following meanings: | 11 | | "Advertising revenue" means consideration received | 12 | | by the taxpayer in exchange for broadcasting services | 13 | | or allowing the broadcasting of commercials or | 14 | | announcements in connection with the broadcasting of | 15 | | film or radio programming, from sponsorships of the | 16 | | programming, or from product placements in the | 17 | | programming. | 18 | | "Audience factor" means the ratio that the | 19 | | audience or subscribers located in this State of a | 20 | | station, a network, or a cable system bears to the | 21 | | total audience or total subscribers for that station, | 22 | | network, or cable system. The audience factor for film | 23 | | or radio programming shall be determined by reference | 24 | | to the books and records of the taxpayer or by | 25 | | reference to published rating statistics provided the | 26 | | method used by the taxpayer is consistently used from |
| | | SB1582 Engrossed | - 34 - | LRB102 16047 HLH 21419 b |
|
| 1 | | year to year for this purpose and fairly represents | 2 | | the taxpayer's activity in this State. | 3 | | "Broadcast" or "broadcasting" or "broadcasting | 4 | | services" means the transmission or provision of film | 5 | | or radio programming, whether through the public | 6 | | airwaves, by cable, by direct or indirect satellite | 7 | | transmission, or by any other means of communication, | 8 | | either through a station, a network, or a cable | 9 | | system. | 10 | | "Film" or "film programming" means the broadcast | 11 | | on television of any and all performances, events, or | 12 | | productions, including , but not limited to , news, | 13 | | sporting events, plays, stories, or other literary, | 14 | | commercial, educational, or artistic works, either | 15 | | live or through the use of video tape, disc, or any | 16 | | other type of format or medium. Each episode of a | 17 | | series of films produced for television shall | 18 | | constitute separate "film" notwithstanding that the | 19 | | series relates to the same principal subject and is | 20 | | produced during one or more tax periods. | 21 | | "Radio" or "radio programming" means the broadcast | 22 | | on radio of any and all performances, events, or | 23 | | productions, including , but not limited to , news, | 24 | | sporting events, plays, stories, or other literary, | 25 | | commercial, educational, or artistic works, either | 26 | | live or through the use of an audio tape, disc, or any |
| | | SB1582 Engrossed | - 35 - | LRB102 16047 HLH 21419 b |
|
| 1 | | other format or medium. Each episode in a series of | 2 | | radio programming produced for radio broadcast shall | 3 | | constitute a separate "radio programming" | 4 | | notwithstanding that the series relates to the same | 5 | | principal subject and is produced during one or more | 6 | | tax periods. | 7 | | (i) In the case of advertising revenue from | 8 | | broadcasting, the customer is the advertiser and | 9 | | the service is received in this State if the | 10 | | commercial domicile of the advertiser is in this | 11 | | State. | 12 | | (ii) In the case where film or radio | 13 | | programming is broadcast by a station, a network, | 14 | | or a cable system for a fee or other remuneration | 15 | | received from the recipient of the broadcast, the | 16 | | portion of the service that is received in this | 17 | | State is measured by the portion of the recipients | 18 | | of the broadcast located in this State. | 19 | | Accordingly, the fee or other remuneration for | 20 | | such service that is included in the Illinois | 21 | | numerator of the sales factor is the total of | 22 | | those fees or other remuneration received from | 23 | | recipients in Illinois. For purposes of this | 24 | | paragraph, a taxpayer may determine the location | 25 | | of the recipients of its broadcast using the | 26 | | address of the recipient shown in its contracts |
| | | SB1582 Engrossed | - 36 - | LRB102 16047 HLH 21419 b |
|
| 1 | | with the recipient or using the billing address of | 2 | | the recipient in the taxpayer's records. | 3 | | (iii) In the case where film or radio | 4 | | programming is broadcast by a station, a network, | 5 | | or a cable system for a fee or other remuneration | 6 | | from the person providing the programming, the | 7 | | portion of the broadcast service that is received | 8 | | by such station, network, or cable system in this | 9 | | State is measured by the portion of recipients of | 10 | | the broadcast located in this State. Accordingly, | 11 | | the amount of revenue related to such an | 12 | | arrangement that is included in the Illinois | 13 | | numerator of the sales factor is the total fee or | 14 | | other total remuneration from the person providing | 15 | | the programming related to that broadcast | 16 | | multiplied by the Illinois audience factor for | 17 | | that broadcast. | 18 | | (iv) In the case where film or radio | 19 | | programming is provided by a taxpayer that is a | 20 | | network or station to a customer for broadcast in | 21 | | exchange for a fee or other remuneration from that | 22 | | customer the broadcasting service is received at | 23 | | the location of the office of the customer from | 24 | | which the services were ordered in the regular | 25 | | course of the customer's trade or business. | 26 | | Accordingly, in such a case the revenue derived by |
| | | SB1582 Engrossed | - 37 - | LRB102 16047 HLH 21419 b |
|
| 1 | | the taxpayer that is included in the taxpayer's | 2 | | Illinois numerator of the sales factor is the | 3 | | revenue from such customers who receive the | 4 | | broadcasting service in Illinois. | 5 | | (v) In the case where film or radio | 6 | | programming is provided by a taxpayer that is not | 7 | | a network or station to another person for | 8 | | broadcasting in exchange for a fee or other | 9 | | remuneration from that person, the broadcasting | 10 | | service is received at the location of the office | 11 | | of the customer from which the services were | 12 | | ordered in the regular course of the customer's | 13 | | trade or business. Accordingly, in such a case the | 14 | | revenue derived by the taxpayer that is included | 15 | | in the taxpayer's Illinois numerator of the sales | 16 | | factor is the revenue from such customers who | 17 | | receive the broadcasting service in Illinois. | 18 | | (B-8) Gross receipts from winnings under the Illinois | 19 | | Lottery Law from the assignment of a prize under Section | 20 | | 13.1 of the Illinois Lottery Law are received in this | 21 | | State. This paragraph (B-8) applies only to taxable years | 22 | | ending on or after December 31, 2013. | 23 | | (B-9) For taxable years ending on or after December | 24 | | 31, 2019, gross receipts from winnings from pari-mutuel | 25 | | wagering conducted at a wagering facility licensed under | 26 | | the Illinois Horse Racing Act of 1975 or from winnings |
| | | SB1582 Engrossed | - 38 - | LRB102 16047 HLH 21419 b |
|
| 1 | | from gambling games conducted on a riverboat or in a | 2 | | casino or organization gaming facility licensed under the | 3 | | Illinois Gambling Act are in this State. | 4 | | (B-10) For taxable years ending on or after December | 5 | | 31, 2021, gross receipts from winnings from sports | 6 | | wagering conducted in accordance with the Sports Wagering | 7 | | Act are in this State. | 8 | | (C) For taxable years ending before December 31, 2008, | 9 | | sales, other than sales governed by paragraphs (B), (B-1), | 10 | | (B-2), and (B-8) are in
this State if:
| 11 | | (i) The income-producing activity is performed in | 12 | | this State; or
| 13 | | (ii) The income-producing activity is performed | 14 | | both within and
without this State and a greater | 15 | | proportion of the income-producing
activity is | 16 | | performed within this State than without this State, | 17 | | based
on performance costs.
| 18 | | (C-5) For taxable years ending on or after December | 19 | | 31, 2008, sales, other than sales governed by paragraphs | 20 | | (B), (B-1), (B-2), (B-5), and (B-7), are in this State if | 21 | | any of the following criteria are met: | 22 | | (i) Sales from the sale or lease of real property | 23 | | are in this State if the property is located in this | 24 | | State. | 25 | | (ii) Sales from the lease or rental of tangible | 26 | | personal property are in this State if the property is |
| | | SB1582 Engrossed | - 39 - | LRB102 16047 HLH 21419 b |
|
| 1 | | located in this State during the rental period. Sales | 2 | | from the lease or rental of tangible personal property | 3 | | that is characteristically moving property, including, | 4 | | but not limited to, motor vehicles, rolling stock, | 5 | | aircraft, vessels, or mobile equipment are in this | 6 | | State to the extent that the property is used in this | 7 | | State. | 8 | | (iii) In the case of interest, net gains (but not | 9 | | less than zero) and other items of income from | 10 | | intangible personal property, the sale is in this | 11 | | State if: | 12 | | (a) in the case of a taxpayer who is a dealer | 13 | | in the item of intangible personal property within | 14 | | the meaning of Section 475 of the Internal Revenue | 15 | | Code, the income or gain is received from a | 16 | | customer in this State. For purposes of this | 17 | | subparagraph, a customer is in this State if the | 18 | | customer is an individual, trust or estate who is | 19 | | a resident of this State and, for all other | 20 | | customers, if the customer's commercial domicile | 21 | | is in this State. Unless the dealer has actual | 22 | | knowledge of the residence or commercial domicile | 23 | | of a customer during a taxable year, the customer | 24 | | shall be deemed to be a customer in this State if | 25 | | the billing address of the customer, as shown in | 26 | | the records of the dealer, is in this State; or |
| | | SB1582 Engrossed | - 40 - | LRB102 16047 HLH 21419 b |
|
| 1 | | (b) in all other cases, if the | 2 | | income-producing activity of the taxpayer is | 3 | | performed in this State or, if the | 4 | | income-producing activity of the taxpayer is | 5 | | performed both within and without this State, if a | 6 | | greater proportion of the income-producing | 7 | | activity of the taxpayer is performed within this | 8 | | State than in any other state, based on | 9 | | performance costs. | 10 | | (iv) Sales of services are in this State if the | 11 | | services are received in this State. For the purposes | 12 | | of this section, gross receipts from the performance | 13 | | of services provided to a corporation, partnership, or | 14 | | trust may only be attributed to a state where that | 15 | | corporation, partnership, or trust has a fixed place | 16 | | of business. If the state where the services are | 17 | | received is not readily determinable or is a state | 18 | | where the corporation, partnership, or trust receiving | 19 | | the service does not have a fixed place of business, | 20 | | the services shall be deemed to be received at the | 21 | | location of the office of the customer from which the | 22 | | services were ordered in the regular course of the | 23 | | customer's trade or business. If the ordering office | 24 | | cannot be determined, the services shall be deemed to | 25 | | be received at the office of the customer to which the | 26 | | services are billed. If the taxpayer is not taxable in |
| | | SB1582 Engrossed | - 41 - | LRB102 16047 HLH 21419 b |
|
| 1 | | the state in which the services are received, the sale | 2 | | must be excluded from both the numerator and the | 3 | | denominator of the sales factor. The Department shall | 4 | | adopt rules prescribing where specific types of | 5 | | service are received, including, but not limited to, | 6 | | publishing, and utility service.
| 7 | | (D) For taxable years ending on or after December 31, | 8 | | 1995, the following
items of income shall not be included | 9 | | in the numerator or denominator of the
sales factor: | 10 | | dividends; amounts included under Section 78 of the | 11 | | Internal
Revenue Code; and Subpart F income as defined in | 12 | | Section 952 of the Internal
Revenue Code.
No inference | 13 | | shall be drawn from the enactment of this paragraph (D) in
| 14 | | construing this Section for taxable years ending before | 15 | | December 31, 1995.
| 16 | | (E) Paragraphs (B-1) and (B-2) shall apply to tax | 17 | | years ending on or
after December 31, 1999, provided that | 18 | | a taxpayer may elect to apply the
provisions of these | 19 | | paragraphs to prior tax years. Such election shall be made
| 20 | | in the form and manner prescribed by the Department, shall | 21 | | be irrevocable, and
shall apply to all tax years; provided | 22 | | that, if a taxpayer's Illinois income
tax liability for | 23 | | any tax year, as assessed under Section 903 prior to | 24 | | January
1, 1999, was computed in a manner contrary to the | 25 | | provisions of paragraphs
(B-1) or (B-2), no refund shall | 26 | | be payable to the taxpayer for that tax year to
the extent |
| | | SB1582 Engrossed | - 42 - | LRB102 16047 HLH 21419 b |
|
| 1 | | such refund is the result of applying the provisions of | 2 | | paragraph
(B-1) or (B-2) retroactively. In the case of a | 3 | | unitary business group, such
election shall apply to all | 4 | | members of such group for every tax year such group
is in | 5 | | existence, but shall not apply to any taxpayer for any | 6 | | period during
which that taxpayer is not a member of such | 7 | | group.
| 8 | | (b) Insurance companies.
| 9 | | (1) In general. Except as otherwise
provided by | 10 | | paragraph (2), business income of an insurance company for | 11 | | a
taxable year shall be apportioned to this State by | 12 | | multiplying such
income by a fraction, the numerator of | 13 | | which is the direct premiums
written for insurance upon | 14 | | property or risk in this State, and the
denominator of | 15 | | which is the direct premiums written for insurance upon
| 16 | | property or risk everywhere. For purposes of this | 17 | | subsection, the term
"direct premiums written" means the | 18 | | total amount of direct premiums
written, assessments and | 19 | | annuity considerations as reported for the
taxable year on | 20 | | the annual statement filed by the company with the
| 21 | | Illinois Director of Insurance in the form approved by the | 22 | | National
Convention of Insurance Commissioners
or such | 23 | | other form as may be
prescribed in lieu thereof.
| 24 | | (2) Reinsurance. If the principal source of premiums | 25 | | written by an
insurance company consists of premiums for | 26 | | reinsurance accepted by it,
the business income of such |
| | | SB1582 Engrossed | - 43 - | LRB102 16047 HLH 21419 b |
|
| 1 | | company shall be apportioned to this State
by multiplying | 2 | | such income by a fraction, the numerator of which is the
| 3 | | sum of (i) direct premiums written for insurance upon | 4 | | property or risk
in this State, plus (ii) premiums written | 5 | | for reinsurance accepted in
respect of property or risk in | 6 | | this State, and the denominator of which
is the sum of | 7 | | (iii) direct premiums written for insurance upon property
| 8 | | or risk everywhere, plus (iv) premiums written for | 9 | | reinsurance accepted
in respect of property or risk | 10 | | everywhere. For purposes of this
paragraph, premiums | 11 | | written for reinsurance accepted in respect of
property or | 12 | | risk in this State, whether or not otherwise determinable,
| 13 | | may, at the election of the company, be determined on the | 14 | | basis of the
proportion which premiums written for | 15 | | reinsurance accepted from
companies commercially domiciled | 16 | | in Illinois bears to premiums written
for reinsurance | 17 | | accepted from all sources, or, alternatively, in the
| 18 | | proportion which the sum of the direct premiums written | 19 | | for insurance
upon property or risk in this State by each | 20 | | ceding company from which
reinsurance is accepted bears to | 21 | | the sum of the total direct premiums
written by each such | 22 | | ceding company for the taxable year. The election made by | 23 | | a company under this paragraph for its first taxable year | 24 | | ending on or after December 31, 2011, shall be binding for | 25 | | that company for that taxable year and for all subsequent | 26 | | taxable years, and may be altered only with the written |
| | | SB1582 Engrossed | - 44 - | LRB102 16047 HLH 21419 b |
|
| 1 | | permission of the Department, which shall not be | 2 | | unreasonably withheld.
| 3 | | (c) Financial organizations.
| 4 | | (1) In general. For taxable years ending before | 5 | | December 31, 2008, business income of a financial
| 6 | | organization shall be apportioned to this State by | 7 | | multiplying such
income by a fraction, the numerator of | 8 | | which is its business income from
sources within this | 9 | | State, and the denominator of which is its business
income | 10 | | from all sources. For the purposes of this subsection, the
| 11 | | business income of a financial organization from sources | 12 | | within this
State is the sum of the amounts referred to in | 13 | | subparagraphs (A) through
(E) following, but excluding the | 14 | | adjusted income of an international banking
facility as | 15 | | determined in paragraph (2):
| 16 | | (A) Fees, commissions or other compensation for | 17 | | financial services
rendered within this State;
| 18 | | (B) Gross profits from trading in stocks, bonds or | 19 | | other securities
managed within this State;
| 20 | | (C) Dividends, and interest from Illinois | 21 | | customers, which are received
within this State;
| 22 | | (D) Interest charged to customers at places of | 23 | | business maintained
within this State for carrying | 24 | | debit balances of margin accounts,
without deduction | 25 | | of any costs incurred in carrying such accounts; and
| 26 | | (E) Any other gross income resulting from the |
| | | SB1582 Engrossed | - 45 - | LRB102 16047 HLH 21419 b |
|
| 1 | | operation as a
financial organization within this | 2 | | State. | 3 | | In computing the amounts
referred to in paragraphs (A) | 4 | | through (E) of this subsection, any amount
received by a | 5 | | member of an affiliated group (determined under Section
| 6 | | 1504(a) of the Internal Revenue Code but without reference | 7 | | to whether
any such corporation is an "includible | 8 | | corporation" under Section
1504(b) of the Internal Revenue | 9 | | Code) from another member of such group
shall be included | 10 | | only to the extent such amount exceeds expenses of the
| 11 | | recipient directly related thereto.
| 12 | | (2) International Banking Facility. For taxable years | 13 | | ending before December 31, 2008:
| 14 | | (A) Adjusted Income. The adjusted income of an | 15 | | international banking
facility is its income reduced | 16 | | by the amount of the floor amount.
| 17 | | (B) Floor Amount. The floor amount shall be the | 18 | | amount, if any,
determined
by multiplying the income | 19 | | of the international banking facility by a fraction,
| 20 | | not greater than one, which is determined as follows:
| 21 | | (i) The numerator shall be:
| 22 | | The average aggregate, determined on a | 23 | | quarterly basis, of the
financial
organization's | 24 | | loans to banks in foreign countries, to foreign | 25 | | domiciled
borrowers (except where secured | 26 | | primarily by real estate) and to foreign
|
| | | SB1582 Engrossed | - 46 - | LRB102 16047 HLH 21419 b |
|
| 1 | | governments and other foreign official | 2 | | institutions, as reported for its
branches, | 3 | | agencies and offices within the state on its | 4 | | "Consolidated Report
of Condition", Schedule A, | 5 | | Lines 2.c., 5.b., and 7.a., which was filed with
| 6 | | the Federal Deposit Insurance Corporation and | 7 | | other regulatory authorities,
for the year 1980, | 8 | | minus
| 9 | | The average aggregate, determined on a | 10 | | quarterly basis, of such loans
(other
than loans | 11 | | of an international banking facility), as reported | 12 | | by the financial
institution for its branches, | 13 | | agencies and offices within the state, on
the | 14 | | corresponding Schedule and lines of the | 15 | | Consolidated Report of Condition
for the current | 16 | | taxable year, provided, however, that in no case | 17 | | shall the
amount determined in this clause (the | 18 | | subtrahend) exceed the amount determined
in the | 19 | | preceding clause (the minuend); and
| 20 | | (ii) the denominator shall be the average | 21 | | aggregate, determined on a
quarterly basis, of the | 22 | | international banking facility's loans to banks in
| 23 | | foreign countries, to foreign domiciled borrowers | 24 | | (except where secured
primarily by real estate) | 25 | | and to foreign governments and other foreign
| 26 | | official institutions, which were recorded in its |
| | | SB1582 Engrossed | - 47 - | LRB102 16047 HLH 21419 b |
|
| 1 | | financial accounts for
the current taxable year.
| 2 | | (C) Change to Consolidated Report of Condition and | 3 | | in Qualification.
In the event the Consolidated Report | 4 | | of Condition which is filed with the
Federal Deposit | 5 | | Insurance Corporation and other regulatory authorities | 6 | | is
altered so that the information required for | 7 | | determining the floor amount
is not found on Schedule | 8 | | A, lines 2.c., 5.b. and 7.a., the financial
| 9 | | institution shall notify the Department and the | 10 | | Department may, by
regulations or otherwise, prescribe | 11 | | or authorize the use of an alternative
source for such | 12 | | information. The financial institution shall also | 13 | | notify
the Department should its international banking | 14 | | facility fail to qualify as
such, in whole or in part, | 15 | | or should there be any amendment or change to
the | 16 | | Consolidated Report of Condition, as originally filed, | 17 | | to the extent
such amendment or change alters the | 18 | | information used in determining the floor
amount.
| 19 | | (3) For taxable years ending on or after December 31, | 20 | | 2008, the business income of a financial organization | 21 | | shall be apportioned to this State by multiplying such | 22 | | income by a fraction, the numerator of which is its gross | 23 | | receipts from sources in this State or otherwise | 24 | | attributable to this State's marketplace and the | 25 | | denominator of which is its gross receipts everywhere | 26 | | during the taxable year. "Gross receipts" for purposes of |
| | | SB1582 Engrossed | - 48 - | LRB102 16047 HLH 21419 b |
|
| 1 | | this subparagraph (3) means gross income, including net | 2 | | taxable gain on disposition of assets, including | 3 | | securities and money market instruments, when derived from | 4 | | transactions and activities in the regular course of the | 5 | | financial organization's trade or business. The following | 6 | | examples are illustrative:
| 7 | | (i) Receipts from the lease or rental of real or | 8 | | tangible personal property are in this State if the | 9 | | property is located in this State during the rental | 10 | | period. Receipts from the lease or rental of tangible | 11 | | personal property that is characteristically moving | 12 | | property, including, but not limited to, motor | 13 | | vehicles, rolling stock, aircraft, vessels, or mobile | 14 | | equipment are from sources in this State to the extent | 15 | | that the property is used in this State. | 16 | | (ii) Interest income, commissions, fees, gains on | 17 | | disposition, and other receipts from assets in the | 18 | | nature of loans that are secured primarily by real | 19 | | estate or tangible personal property are from sources | 20 | | in this State if the security is located in this State. | 21 | | (iii) Interest income, commissions, fees, gains on | 22 | | disposition, and other receipts from consumer loans | 23 | | that are not secured by real or tangible personal | 24 | | property are from sources in this State if the debtor | 25 | | is a resident of this State. | 26 | | (iv) Interest income, commissions, fees, gains on |
| | | SB1582 Engrossed | - 49 - | LRB102 16047 HLH 21419 b |
|
| 1 | | disposition, and other receipts from commercial loans | 2 | | and installment obligations that are not secured by | 3 | | real or tangible personal property are from sources in | 4 | | this State if the proceeds of the loan are to be | 5 | | applied in this State. If it cannot be determined | 6 | | where the funds are to be applied, the income and | 7 | | receipts are from sources in this State if the office | 8 | | of the borrower from which the loan was negotiated in | 9 | | the regular course of business is located in this | 10 | | State. If the location of this office cannot be | 11 | | determined, the income and receipts shall be excluded | 12 | | from the numerator and denominator of the sales | 13 | | factor.
| 14 | | (v) Interest income, fees, gains on disposition, | 15 | | service charges, merchant discount income, and other | 16 | | receipts from credit card receivables are from sources | 17 | | in this State if the card charges are regularly billed | 18 | | to a customer in this State. | 19 | | (vi) Receipts from the performance of services, | 20 | | including, but not limited to, fiduciary, advisory, | 21 | | and brokerage services, are in this State if the | 22 | | services are received in this State within the meaning | 23 | | of subparagraph (a)(3)(C-5)(iv) of this Section. | 24 | | (vii) Receipts from the issuance of travelers | 25 | | checks and money orders are from sources in this State | 26 | | if the checks and money orders are issued from a |
| | | SB1582 Engrossed | - 50 - | LRB102 16047 HLH 21419 b |
|
| 1 | | location within this State. | 2 | | (viii) Receipts from investment assets and | 3 | | activities and trading assets and activities are | 4 | | included in the receipts factor as follows: | 5 | | (1) Interest, dividends, net gains (but not | 6 | | less than zero) and other income from investment | 7 | | assets and activities from trading assets and | 8 | | activities shall be included in the receipts | 9 | | factor. Investment assets and activities and | 10 | | trading assets and activities include , but are not | 11 | | limited to: investment securities; trading account | 12 | | assets; federal funds; securities purchased and | 13 | | sold under agreements to resell or repurchase; | 14 | | options; futures contracts; forward contracts; | 15 | | notional principal contracts such as swaps; | 16 | | equities; and foreign currency transactions. With | 17 | | respect to the investment and trading assets and | 18 | | activities described in subparagraphs (A) and (B) | 19 | | of this paragraph, the receipts factor shall | 20 | | include the amounts described in such | 21 | | subparagraphs. | 22 | | (A) The receipts factor shall include the | 23 | | amount by which interest from federal funds | 24 | | sold and securities purchased under resale | 25 | | agreements exceeds interest expense on federal | 26 | | funds purchased and securities sold under |
| | | SB1582 Engrossed | - 51 - | LRB102 16047 HLH 21419 b |
|
| 1 | | repurchase agreements. | 2 | | (B) The receipts factor shall include the | 3 | | amount by which interest, dividends, gains and | 4 | | other income from trading assets and | 5 | | activities, including , but not limited to , | 6 | | assets and activities in the matched book, in | 7 | | the arbitrage book, and foreign currency | 8 | | transactions, exceed amounts paid in lieu of | 9 | | interest, amounts paid in lieu of dividends, | 10 | | and losses from such assets and activities. | 11 | | (2) The numerator of the receipts factor | 12 | | includes interest, dividends, net gains (but not | 13 | | less than zero), and other income from investment | 14 | | assets and activities and from trading assets and | 15 | | activities described in paragraph (1) of this | 16 | | subsection that are attributable to this State. | 17 | | (A) The amount of interest, dividends, net | 18 | | gains (but not less than zero), and other | 19 | | income from investment assets and activities | 20 | | in the investment account to be attributed to | 21 | | this State and included in the numerator is | 22 | | determined by multiplying all such income from | 23 | | such assets and activities by a fraction, the | 24 | | numerator of which is the gross income from | 25 | | such assets and activities which are properly | 26 | | assigned to a fixed place of business of the |
| | | SB1582 Engrossed | - 52 - | LRB102 16047 HLH 21419 b |
|
| 1 | | taxpayer within this State and the denominator | 2 | | of which is the gross income from all such | 3 | | assets and activities. | 4 | | (B) The amount of interest from federal | 5 | | funds sold and purchased and from securities | 6 | | purchased under resale agreements and | 7 | | securities sold under repurchase agreements | 8 | | attributable to this State and included in the | 9 | | numerator is determined by multiplying the | 10 | | amount described in subparagraph (A) of | 11 | | paragraph (1) of this subsection from such | 12 | | funds and such securities by a fraction, the | 13 | | numerator of which is the gross income from | 14 | | such funds and such securities which are | 15 | | properly assigned to a fixed place of business | 16 | | of the taxpayer within this State and the | 17 | | denominator of which is the gross income from | 18 | | all such funds and such securities. | 19 | | (C) The amount of interest, dividends, | 20 | | gains, and other income from trading assets | 21 | | and activities, including , but not limited to , | 22 | | assets and activities in the matched book, in | 23 | | the arbitrage book and foreign currency | 24 | | transactions (but excluding amounts described | 25 | | in subparagraphs (A) or (B) of this | 26 | | paragraph), attributable to this State and |
| | | SB1582 Engrossed | - 53 - | LRB102 16047 HLH 21419 b |
|
| 1 | | included in the numerator is determined by | 2 | | multiplying the amount described in | 3 | | subparagraph (B) of paragraph (1) of this | 4 | | subsection by a fraction, the numerator of | 5 | | which is the gross income from such trading | 6 | | assets and activities which are properly | 7 | | assigned to a fixed place of business of the | 8 | | taxpayer within this State and the denominator | 9 | | of which is the gross income from all such | 10 | | assets and activities. | 11 | | (D) Properly assigned, for purposes of | 12 | | this paragraph (2) of this subsection, means | 13 | | the investment or trading asset or activity is | 14 | | assigned to the fixed place of business with | 15 | | which it has a preponderance of substantive | 16 | | contacts. An investment or trading asset or | 17 | | activity assigned by the taxpayer to a fixed | 18 | | place of business without the State shall be | 19 | | presumed to have been properly assigned if: | 20 | | (i) the taxpayer has assigned, in the | 21 | | regular course of its business, such asset | 22 | | or activity on its records to a fixed | 23 | | place of business consistent with federal | 24 | | or state regulatory requirements; | 25 | | (ii) such assignment on its records is | 26 | | based upon substantive contacts of the |
| | | SB1582 Engrossed | - 54 - | LRB102 16047 HLH 21419 b |
|
| 1 | | asset or activity to such fixed place of | 2 | | business; and | 3 | | (iii) the taxpayer uses such records | 4 | | reflecting assignment of such assets or | 5 | | activities for the filing of all state and | 6 | | local tax returns for which an assignment | 7 | | of such assets or activities to a fixed | 8 | | place of business is required. | 9 | | (E) The presumption of proper assignment | 10 | | of an investment or trading asset or activity | 11 | | provided in subparagraph (D) of paragraph (2) | 12 | | of this subsection may be rebutted upon a | 13 | | showing by the Department, supported by a | 14 | | preponderance of the evidence, that the | 15 | | preponderance of substantive contacts | 16 | | regarding such asset or activity did not occur | 17 | | at the fixed place of business to which it was | 18 | | assigned on the taxpayer's records. If the | 19 | | fixed place of business that has a | 20 | | preponderance of substantive contacts cannot | 21 | | be determined for an investment or trading | 22 | | asset or activity to which the presumption in | 23 | | subparagraph (D) of paragraph (2) of this | 24 | | subsection does not apply or with respect to | 25 | | which that presumption has been rebutted, that | 26 | | asset or activity is properly assigned to the |
| | | SB1582 Engrossed | - 55 - | LRB102 16047 HLH 21419 b |
|
| 1 | | state in which the taxpayer's commercial | 2 | | domicile is located. For purposes of this | 3 | | subparagraph (E), it shall be presumed, | 4 | | subject to rebuttal, that taxpayer's | 5 | | commercial domicile is in the state of the | 6 | | United States or the District of Columbia to | 7 | | which the greatest number of employees are | 8 | | regularly connected with the management of the | 9 | | investment or trading income or out of which | 10 | | they are working, irrespective of where the | 11 | | services of such employees are performed, as | 12 | | of the last day of the taxable year.
| 13 | | (4) (Blank). | 14 | | (5) (Blank). | 15 | | (c-1) Federally regulated exchanges. For taxable years | 16 | | ending on or after December 31, 2012, business income of a | 17 | | federally regulated exchange shall, at the option of the | 18 | | federally regulated exchange, be apportioned to this State by | 19 | | multiplying such income by a fraction, the numerator of which | 20 | | is its business income from sources within this State, and the | 21 | | denominator of which is its business income from all sources. | 22 | | For purposes of this subsection, the business income within | 23 | | this State of a federally regulated exchange is the sum of the | 24 | | following: | 25 | | (1) Receipts attributable to transactions executed on | 26 | | a physical trading floor if that physical trading floor is |
| | | SB1582 Engrossed | - 56 - | LRB102 16047 HLH 21419 b |
|
| 1 | | located in this State. | 2 | | (2) Receipts attributable to all other matching, | 3 | | execution, or clearing transactions, including without | 4 | | limitation receipts from the provision of matching, | 5 | | execution, or clearing services to another entity, | 6 | | multiplied by (i) for taxable years ending on or after | 7 | | December 31, 2012 but before December 31, 2013, 63.77%; | 8 | | and (ii) for taxable years ending on or after December 31, | 9 | | 2013, 27.54%. | 10 | | (3) All other receipts not governed by subparagraphs | 11 | | (1) or (2) of this subsection (c-1), to the extent the | 12 | | receipts would be characterized as "sales in this State" | 13 | | under item (3) of subsection (a) of this Section. | 14 | | "Federally regulated exchange" means (i) a "registered | 15 | | entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B), | 16 | | or (C), (ii) an "exchange" or "clearing agency" within the | 17 | | meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such | 18 | | entities regulated under any successor regulatory structure to | 19 | | the foregoing, and (iv) all taxpayers who are members of the | 20 | | same unitary business group as a federally regulated exchange, | 21 | | determined without regard to the prohibition in Section | 22 | | 1501(a)(27) of this Act against including in a unitary | 23 | | business group taxpayers who are ordinarily required to | 24 | | apportion business income under different subsections of this | 25 | | Section; provided that this subparagraph (iv) shall apply only | 26 | | if 50% or more of the business receipts of the unitary business |
| | | SB1582 Engrossed | - 57 - | LRB102 16047 HLH 21419 b |
|
| 1 | | group determined by application of this subparagraph (iv) for | 2 | | the taxable year are attributable to the matching, execution, | 3 | | or clearing of transactions conducted by an entity described | 4 | | in subparagraph (i), (ii), or (iii) of this paragraph. | 5 | | In no event shall the Illinois apportionment percentage | 6 | | computed in accordance with this subsection (c-1) for any | 7 | | taxpayer for any tax year be less than the Illinois | 8 | | apportionment percentage computed under this subsection (c-1) | 9 | | for that taxpayer for the first full tax year ending on or | 10 | | after December 31, 2013 for which this subsection (c-1) | 11 | | applied to the taxpayer. | 12 | | (d) Transportation services. For taxable years ending | 13 | | before December 31, 2008, business income derived from | 14 | | furnishing
transportation services shall be apportioned to | 15 | | this State in accordance
with paragraphs (1) and (2):
| 16 | | (1) Such business income (other than that derived from
| 17 | | transportation by pipeline) shall be apportioned to this | 18 | | State by
multiplying such income by a fraction, the | 19 | | numerator of which is the
revenue miles of the person in | 20 | | this State, and the denominator of which
is the revenue | 21 | | miles of the person everywhere. For purposes of this
| 22 | | paragraph, a revenue mile is the transportation of 1 | 23 | | passenger or 1 net
ton of freight the distance of 1 mile | 24 | | for a consideration. Where a
person is engaged in the | 25 | | transportation of both passengers and freight,
the | 26 | | fraction above referred to shall be determined by means of |
| | | SB1582 Engrossed | - 58 - | LRB102 16047 HLH 21419 b |
|
| 1 | | an
average of the passenger revenue mile fraction and the | 2 | | freight revenue
mile fraction, weighted to reflect the | 3 | | person's
| 4 | | (A) relative railway operating income from total | 5 | | passenger and total
freight service, as reported to | 6 | | the Interstate Commerce Commission, in
the case of | 7 | | transportation by railroad, and
| 8 | | (B) relative gross receipts from passenger and | 9 | | freight
transportation, in case of transportation | 10 | | other than by railroad.
| 11 | | (2) Such business income derived from transportation | 12 | | by pipeline
shall be apportioned to this State by | 13 | | multiplying such income by a
fraction, the numerator of | 14 | | which is the revenue miles of the person in
this State, and | 15 | | the denominator of which is the revenue miles of the
| 16 | | person everywhere. For the purposes of this paragraph, a | 17 | | revenue mile is
the transportation by pipeline of 1 barrel | 18 | | of oil, 1,000 cubic feet of
gas, or of any specified | 19 | | quantity of any other substance, the distance
of 1 mile | 20 | | for a consideration.
| 21 | | (3) For taxable years ending on or after December 31, | 22 | | 2008, business income derived from providing | 23 | | transportation services other than airline services shall | 24 | | be apportioned to this State by using a fraction, (a) the | 25 | | numerator of which shall be (i) all receipts from any | 26 | | movement or shipment of people, goods, mail, oil, gas, or |
| | | SB1582 Engrossed | - 59 - | LRB102 16047 HLH 21419 b |
|
| 1 | | any other substance (other than by airline) that both | 2 | | originates and terminates in this State, plus (ii) that | 3 | | portion of the person's gross receipts from movements or | 4 | | shipments of people, goods, mail, oil, gas, or any other | 5 | | substance (other than by airline) that originates in one | 6 | | state or jurisdiction and terminates in another state or | 7 | | jurisdiction, that is determined by the ratio that the | 8 | | miles traveled in this State bears to total miles | 9 | | everywhere and (b) the denominator of which shall be all | 10 | | revenue derived from the movement or shipment of people, | 11 | | goods, mail, oil, gas, or any other substance (other than | 12 | | by airline). Where a taxpayer is engaged in the | 13 | | transportation of both passengers and freight, the | 14 | | fraction above referred to shall first be determined | 15 | | separately for passenger miles and freight miles. Then an | 16 | | average of the passenger miles fraction and the freight | 17 | | miles fraction shall be weighted to reflect the | 18 | | taxpayer's: | 19 | | (A) relative railway operating income from total | 20 | | passenger and total freight service, as reported to | 21 | | the Surface Transportation Board, in the case of | 22 | | transportation by railroad; and | 23 | | (B) relative gross receipts from passenger and | 24 | | freight transportation, in case of transportation | 25 | | other than by railroad.
| 26 | | (4) For taxable years ending on or after December 31, |
| | | SB1582 Engrossed | - 60 - | LRB102 16047 HLH 21419 b |
|
| 1 | | 2008, business income derived from furnishing airline
| 2 | | transportation services shall be apportioned to this State | 3 | | by
multiplying such income by a fraction, the numerator of | 4 | | which is the
revenue miles of the person in this State, and | 5 | | the denominator of which
is the revenue miles of the | 6 | | person everywhere. For purposes of this
paragraph, a | 7 | | revenue mile is the transportation of one passenger or one | 8 | | net
ton of freight the distance of one mile for a | 9 | | consideration. If a
person is engaged in the | 10 | | transportation of both passengers and freight,
the | 11 | | fraction above referred to shall be determined by means of | 12 | | an
average of the passenger revenue mile fraction and the | 13 | | freight revenue
mile fraction, weighted to reflect the | 14 | | person's relative gross receipts from passenger and | 15 | | freight
airline transportation.
| 16 | | (e) Combined apportionment. Where 2 or more persons are | 17 | | engaged in
a unitary business as described in subsection | 18 | | (a)(27) of
Section 1501,
a part of which is conducted in this | 19 | | State by one or more members of the
group, the business income | 20 | | attributable to this State by any such member
or members shall | 21 | | be apportioned by means of the combined apportionment method.
| 22 | | (f) Alternative allocation. If the allocation and | 23 | | apportionment
provisions of subsections (a) through (e) and of | 24 | | subsection (h) do not, for taxable years ending before | 25 | | December 31, 2008, fairly represent the
extent of a person's | 26 | | business activity in this State, or, for taxable years ending |
| | | SB1582 Engrossed | - 61 - | LRB102 16047 HLH 21419 b |
|
| 1 | | on or after December 31, 2008, fairly represent the market for | 2 | | the person's goods, services, or other sources of business | 3 | | income, the person may
petition for, or the Director may, | 4 | | without a petition, permit or require, in respect of all or any | 5 | | part
of the person's business activity, if reasonable:
| 6 | | (1) Separate accounting;
| 7 | | (2) The exclusion of any one or more factors;
| 8 | | (3) The inclusion of one or more additional factors | 9 | | which will
fairly represent the person's business | 10 | | activities or market in this State; or
| 11 | | (4) The employment of any other method to effectuate | 12 | | an equitable
allocation and apportionment of the person's | 13 | | business income.
| 14 | | (g) Cross reference. For allocation of business income by | 15 | | residents,
see Section 301(a).
| 16 | | (h) For tax years ending on or after December 31, 1998, the | 17 | | apportionment
factor of persons who apportion their business | 18 | | income to this State under
subsection (a) shall be equal to:
| 19 | | (1) for tax years ending on or after December 31, 1998 | 20 | | and before December
31, 1999, 16 2/3% of the property | 21 | | factor plus 16 2/3% of the payroll factor
plus
66 2/3% of | 22 | | the sales factor;
| 23 | | (2) for tax years ending on or after December 31, 1999 | 24 | | and before December
31,
2000, 8 1/3% of the property | 25 | | factor plus 8 1/3% of the payroll factor plus 83
1/3%
of | 26 | | the sales factor;
|
| | | SB1582 Engrossed | - 62 - | LRB102 16047 HLH 21419 b |
|
| 1 | | (3) for tax years ending on or after December 31, | 2 | | 2000, the sales factor.
| 3 | | If, in any tax year ending on or after December 31, 1998 and | 4 | | before December
31, 2000, the denominator of the payroll, | 5 | | property, or sales factor is zero,
the apportionment
factor | 6 | | computed in paragraph (1) or (2) of this subsection for that | 7 | | year shall
be divided by an amount equal to 100% minus the | 8 | | percentage weight given to each
factor whose denominator is | 9 | | equal to zero.
| 10 | | (Source: P.A. 100-201, eff. 8-18-17; 101-31, eff. 6-28-19; | 11 | | 101-585, eff. 8-26-19; revised 9-12-19.)
| 12 | | (35 ILCS 5/710) (from Ch. 120, par. 7-710)
| 13 | | Sec. 710. Withholding from lottery , wagering, and gambling | 14 | | winnings. | 15 | | (a) In general. | 16 | | (1) Any person
making a payment to a resident or | 17 | | nonresident of winnings under the Illinois
Lottery Law and | 18 | | not required to withhold Illinois income tax from such | 19 | | payment
under Subsection (b) of Section 701 of this Act | 20 | | because those winnings are
not subject to Federal income | 21 | | tax withholding, must withhold Illinois income
tax from | 22 | | such payment at a rate equal to the percentage tax rate for | 23 | | individuals
provided in subsection (b) of Section 201, | 24 | | provided that withholding is
not required if such payment | 25 | | of winnings is less than $1,000.
|
| | | SB1582 Engrossed | - 63 - | LRB102 16047 HLH 21419 b |
|
| 1 | | (2) In the case of an assignment of a lottery prize | 2 | | under Section 13.1 of the Illinois Lottery Law, any person | 3 | | making a payment of the purchase price after December 31, | 4 | | 2013, shall withhold from the amount of each payment at a | 5 | | rate equal to the percentage tax rate for individuals | 6 | | provided in subsection (b) of Section 201. | 7 | | (3) Any person making a payment after December 31, | 8 | | 2019 to a resident or nonresident of
winnings from | 9 | | pari-mutuel wagering conducted at a wagering facility | 10 | | licensed under the Illinois Horse
Racing Act of 1975 or | 11 | | from gambling games conducted on a riverboat or in a | 12 | | casino or organization gaming
facility licensed under the | 13 | | Illinois Gambling Act must withhold Illinois income tax | 14 | | from such payment at a
rate equal to the percentage tax | 15 | | rate for individuals provided in subsection (b) of Section | 16 | | 201, provided that
the person making the payment is | 17 | | required to withhold under Section 3402(q) of the Internal | 18 | | Revenue Code. | 19 | | (4) Any person making a payment after December 31, | 20 | | 2021 to a resident or nonresident of winnings from sports | 21 | | wagering conducted in accordance with the Sports Wagering | 22 | | Act must withhold Illinois income tax from such payment at | 23 | | a rate equal to the percentage tax rate for individuals | 24 | | provided in subsection (b) of Section 201, provided that | 25 | | the person making the payment is required to withhold | 26 | | under Section 3402(q) of the Internal Revenue Code. |
| | | SB1582 Engrossed | - 64 - | LRB102 16047 HLH 21419 b |
|
| 1 | | (b) Credit for taxes withheld. Any amount withheld under | 2 | | Subsection (a)
shall be a credit against the Illinois income | 3 | | tax liability of the person
to whom the payment of winnings was | 4 | | made for the taxable year in which that
person incurred an | 5 | | Illinois income tax liability with respect to those winnings.
| 6 | | (Source: P.A. 101-31, eff. 6-28-19.)
| 7 | | (35 ILCS 5/902) (from Ch. 120, par. 9-902)
| 8 | | Sec. 902. 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 | 12 | | 903), give notice to each person liable
for any unpaid portion | 13 | | of such assessment, stating the amount unpaid and
demanding | 14 | | payment thereof. In the case of tax deemed assessed with the
| 15 | | filing of a return, the Director shall give notice no later | 16 | | than 3 years
after the date the return was filed. Upon receipt | 17 | | of any notice and demand
there shall be paid
at the place and | 18 | | time stated in such notice the amount stated in such
notice. | 19 | | Such notice shall be left at the dwelling or usual place of | 20 | | business
of such person or shall be sent by mail to the | 21 | | person's last known address.
| 22 | | (b) Judicial review. In the case of a deficiency deemed | 23 | | assessed under
Section 903(a)(2) after the filing of a | 24 | | protest, notice and demand shall
not be made with respect to | 25 | | such assessment until all proceedings in court
for the review |
| | | SB1582 Engrossed | - 65 - | LRB102 16047 HLH 21419 b |
|
| 1 | | of such assessment have terminated or the time for the
taking | 2 | | thereof has expired without such proceedings being instituted.
| 3 | | (c) Action for recovery of taxes. At any time that the | 4 | | Department might
commence proceedings for a levy under Section | 5 | | 1109, regardless of whether a
notice of lien was filed under | 6 | | the provisions of Section 1103, it may bring an
action in any | 7 | | court of competent jurisdiction within or without this State
| 8 | | in the name of the people of this State to recover the amount | 9 | | of any taxes,
penalties and interest due and unpaid under this | 10 | | Act. In such action, the
certificate of the Department showing | 11 | | the amount of the delinquency shall
be prima facie evidence of | 12 | | the correctness of such amount, its assessment
and of the | 13 | | compliance by the Department with all the provisions of this | 14 | | Act.
| 15 | | (d) Sales or transfers outside the usual course of
| 16 | | business-Report-Payment of Tax - Rights and duties of | 17 | | purchaser or
transferee - penalty. If any taxpayer, outside | 18 | | the usual course of his
business, sells or transfers the major | 19 | | part of any one or more of (A) the
stock of goods which he is | 20 | | engaged in the business of selling, or (B) the
furniture or | 21 | | fixtures, or (C) the machinery and equipment, or (D) the real
| 22 | | property, of any business that is subject to the provisions of | 23 | | this Act,
the purchaser or transferee of such assets shall, no | 24 | | later than 10 business days
before after the sale or transfer, | 25 | | file a notice of sale or transfer of business
assets with the
| 26 | | Chicago office of the Department disclosing the name and |
| | | SB1582 Engrossed | - 66 - | LRB102 16047 HLH 21419 b |
|
| 1 | | address of the
seller or transferor, the
name and address of | 2 | | the purchaser or transferee, the date of the sale or
transfer, | 3 | | a copy of the sales contract and financing agreements which | 4 | | shall
include a description of the property sold or | 5 | | transferred, the amount of
the purchase price or a statement | 6 | | of other consideration for the sale or
transfer, and the terms | 7 | | for payment of the purchase price, and such other
information | 8 | | as the Department may reasonably require. If the purchaser or
| 9 | | transferee fails to file the above described notice of sale | 10 | | with the
Department within the prescribed time, the purchaser | 11 | | or transferee shall be
personally liable to the Department for | 12 | | the amount
owed hereunder by the seller or transferor
but | 13 | | unpaid, up to the
amount of the reasonable value of the | 14 | | property acquired by the purchaser or
transferee. The | 15 | | purchaser or transferee shall pay the Department the
amount of | 16 | | tax, penalties, and interest owed by the seller or transferor
| 17 | | under this Act, to the extent they have
not been paid by the | 18 | | seller or transferor. The seller or transferor, or
the | 19 | | purchaser or transferee, at least 10 business days before the | 20 | | date of the sale
or transfer, may notify the Department of the | 21 | | intended sale or transfer
and request the Department to make a | 22 | | determination as to whether the seller
or transferor owes any
| 23 | | tax, penalty or
interest due under this Act. The Department | 24 | | shall take such steps as may
be appropriate to comply with such | 25 | | request.
| 26 | | Any order issued by the Department pursuant to this |
| | | SB1582 Engrossed | - 67 - | LRB102 16047 HLH 21419 b |
|
| 1 | | Section to withhold
from the purchase price shall be issued | 2 | | within 10 business days after the Department
receives | 3 | | notification of a sale as provided in this Section.
The | 4 | | purchaser or transferee shall withhold such portion of
the | 5 | | purchase price
as may be directed by the Department, but not to | 6 | | exceed a
minimum amount varying by type of business, as | 7 | | determined by the Department
pursuant to regulations, plus | 8 | | twice the outstanding unpaid liabilities and
twice the average | 9 | | liability of preceding filings times the number of
unfiled | 10 | | returns which were not filed when due,
to cover the amount of | 11 | | all tax, penalty, and interest due and
unpaid by the seller or | 12 | | transferor under this Act or, if the payment of
money or | 13 | | property is not involved, shall withhold the performance of | 14 | | the
condition that constitutes the consideration for the sale | 15 | | or transfer.
Within 60 business days after issuance of
the | 16 | | initial order to withhold, the Department shall provide | 17 | | written notice
to the purchaser or transferee of the actual | 18 | | amount of all taxes, penalties
and interest then due and | 19 | | whether or not additional amounts may become due
as a result of | 20 | | unpaid taxes required to be withheld by an employer, returns
| 21 | | which were not filed when due, pending assessments and audits | 22 | | not
completed. The purchaser or transferee shall continue to | 23 | | withhold the
amount directed to be withheld by the initial | 24 | | order or such lesser amount
as is specified by the final | 25 | | withholding order or to withhold the
performance of the | 26 | | condition which constitutes the consideration for the
sale or |
| | | SB1582 Engrossed | - 68 - | LRB102 16047 HLH 21419 b |
|
| 1 | | transfer
until
the purchaser or transferee receives from the | 2 | | Department a certificate showing
that no unpaid tax, penalty | 3 | | or interest is due from the seller
or transferor under this | 4 | | Act.
| 5 | | The purchaser or transferee is relieved of any duty to | 6 | | continue to
withhold from the purchase price and of any | 7 | | liability for tax, penalty,
or interest due hereunder from the | 8 | | seller or transferor if the Department
fails to notify the | 9 | | purchaser or transferee in the manner provided
herein of the | 10 | | amount to be withheld
within 10 business days after the sale or | 11 | | transfer has been reported to the
Department or within 60 | 12 | | business days after issuance of the initial order to
withhold, | 13 | | as the case may be.
The Department shall have the right to | 14 | | determine
amounts claimed on an estimated basis to allow for | 15 | | periods for which
returns were not filed when due, pending | 16 | | assessments and audits not
completed, however the purchaser or | 17 | | transferee shall be personally liable
only for the actual | 18 | | amount due when determined.
| 19 | | If the seller or transferor has failed to pay the tax, | 20 | | penalty, and
interest due from him hereunder and the | 21 | | Department makes timely
claim therefor against the purchaser | 22 | | or transferee as hereinabove provided,
then the purchaser
or | 23 | | transferee shall pay to the Department the amount so withheld | 24 | | from the
purchase price. If the purchaser or transferee fails | 25 | | to comply with the
requirements of this Section, the purchaser | 26 | | or transferee shall be
personally liable to the Department for |
| | | SB1582 Engrossed | - 69 - | LRB102 16047 HLH 21419 b |
|
| 1 | | the amount owed hereunder by
the seller or transferor up to the | 2 | | amount of the reasonable
value of the property acquired by the | 3 | | purchaser or transferee.
| 4 | | Any person who shall acquire any property or rights | 5 | | thereto which, at the
time of such acquisition, is subject to a | 6 | | valid lien in favor of the
Department, shall be personally | 7 | | liable to the Department for a sum equal to
the amount of | 8 | | taxes, penalties and interests, secured by such lien, but not
| 9 | | to exceed the reasonable value of such property acquired by | 10 | | him.
| 11 | | (Source: P.A. 94-776, eff. 5-19-06.)
|
|