Full Text of HB4454 95th General Assembly
HB4454eng 95TH GENERAL ASSEMBLY
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| AN ACT concerning revenue.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Income Tax Act is amended by | 5 |
| changing Section 404 as follows:
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| (35 ILCS 5/404) (from Ch. 120, par. 4-404)
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| Sec. 404. Reallocation of Items.
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| (a) If it appears to the Director determines that any | 9 |
| agreement, understanding or
arrangement exists between any | 10 |
| persons which causes any person's base
income allocable to this | 11 |
| State to be improperly or inaccurately reflected,
the Director | 12 |
| may adjust such items of income and deduction, and any related | 13 |
| apportionment factor
taken into account in allocating that | 14 |
| income to this State, to such extent as
may reasonably be | 15 |
| required to determine the base income of such person
properly | 16 |
| allocable to this State.
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| (b) Unless the principal purpose of the agreement, | 18 |
| understanding, or arrangement is for the avoidance of a tax on | 19 |
| or measured by net income imposed by any State, any adjustment | 20 |
| under this Section must be made in accordance with Section 482 | 21 |
| of the Internal Revenue Code, as amended, and any applicable | 22 |
| federal regulations. For any taxable year, unless established | 23 |
| by a preponderance of the evidence to the contrary, an |
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| agreement, understanding, or arrangement for the principal | 2 |
| purpose of avoidance of a tax on or measured by net income | 3 |
| imposed by any State is presumed to exist between one or more | 4 |
| members of a unitary business group and a person who would be a | 5 |
| member of that unitary business group if not for the | 6 |
| prohibitions in item (27) of subsection (a) of Section 1501 of | 7 |
| this Act against including in a unitary business group persons | 8 |
| who apportion their business incomes under different | 9 |
| subsections of Section 304 of this Act or against inclusion in | 10 |
| any unitary business group of a person who conducts 80% or more | 11 |
| of his or her business activity outside the United States, if | 12 |
| that excluded person: | 13 |
| (1) has de minimis real or tangible personal property | 14 |
| or payroll for the taxable year, as determined for purposes | 15 |
| of subsection (a) of Section 304 of this Act; | 16 |
| (2) earns a return for the taxable year on all of its | 17 |
| real and tangible personal property that is substantially | 18 |
| more than the aggregate return earned by the members of the | 19 |
| unitary business group on all of real and tangible personal | 20 |
| property of the unitary business group; for purposes of | 21 |
| this paragraph (2) the return on real and tangible personal | 22 |
| property of a person for a taxable year is equal to the | 23 |
| base income of that person for that taxable year, divided | 24 |
| by that person's real and tangible personal property for | 25 |
| that taxable year, as determined for purposes of subsection | 26 |
| (a) of Section 304 of this Act; or |
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| (3) conducts substantially all of its business | 2 |
| activity, as shown by gross receipts for the taxable year, | 3 |
| with one or more persons who are members of the unitary | 4 |
| business group or who would be members of that unitary | 5 |
| business group if not for the prohibitions in item (27) of | 6 |
| subsection (a) of Section 1501 of this Act against | 7 |
| including in a unitary business group persons who apportion | 8 |
| their business incomes under different subsections of | 9 |
| Section 304 of this Act or against inclusion in any unitary | 10 |
| business group of a person that conducts 80% or more of its | 11 |
| business activity outside the United States. | 12 |
| (c) The Director may not make an adjustment to base income | 13 |
| under this Section that has the same effect as retroactively | 14 |
| applying any amendments to this Act made by Public Act 93-0840, | 15 |
| Public Act 95-0233, or Public Act 95-0707. | 16 |
| (d) Notwithstanding any other rulemaking authority that | 17 |
| may exist, neither the Governor nor any agency or agency head | 18 |
| under the jurisdiction of the Governor has any authority to | 19 |
| make or promulgate rules to implement or enforce the provisions | 20 |
| of this amendatory Act of the 95th General Assembly. If, | 21 |
| however, the Governor believes that rules are necessary to | 22 |
| implement or enforce the provisions of this amendatory Act of | 23 |
| the 95th General Assembly, the Governor may suggest rules to | 24 |
| the General Assembly by filing them with the Clerk of the House | 25 |
| and the Secretary of the Senate and by requesting that the | 26 |
| General Assembly authorize such rulemaking by law, enact those |
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| suggested rules into law, or take any other appropriate action | 2 |
| in the General Assembly's discretion. Nothing contained in this | 3 |
| amendatory Act of the 95th General Assembly shall be | 4 |
| interpreted to grant rulemaking authority under any other | 5 |
| Illinois statute where such authority is not otherwise | 6 |
| explicitly given. For the purposes of this paragraph, "rules" | 7 |
| is given the meaning contained in Section 1-70 of the Illinois | 8 |
| Administrative Procedure Act, and "agency" and "agency head" | 9 |
| are given the meanings contained in Sections 1-20 and 1-25 of | 10 |
| the Illinois Administrative Procedure Act to the extent that | 11 |
| such definitions apply to agencies or agency heads under the | 12 |
| jurisdiction of the Governor. | 13 |
| (Source: P.A. 76-261.)
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| Section 99. Effective date. This Act takes effect upon | 15 |
| becoming law. |
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