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| Public Act 096-0763 |
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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 | ||||
changing Section 304 as follows:
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(35 ILCS 5/304) (from Ch. 120, par. 3-304)
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Sec. 304. Business income of persons other than residents.
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(a) In general. The business income of a person other than | ||||
a
resident shall be allocated to this State if such person's | ||||
business
income is derived solely from this State. If a person | ||||
other than a
resident derives business income from this State | ||||
and one or more other
states, then, for tax years ending on or | ||||
before December 30, 1998, and
except as otherwise provided by | ||||
this Section, such
person's business income shall be | ||||
apportioned to this State by
multiplying the income by a | ||||
fraction, the numerator of which is the sum
of the property | ||||
factor (if any), the payroll factor (if any) and 200% of the
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sales factor (if any), and the denominator of which is 4 | ||||
reduced by the
number of factors other than the sales factor | ||||
which have a denominator
of zero and by an additional 2 if the | ||||
sales factor has a denominator of zero.
For tax years ending on | ||||
or after December 31, 1998, and except as otherwise
provided by | ||||
this Section, persons other than
residents who derive business | ||||
income from this State and one or more other
states shall | ||
compute their apportionment factor by weighting their | ||
property,
payroll, and sales factors as provided in
subsection | ||
(h) of this Section.
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(1) Property factor.
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(A) The property factor is a fraction, the numerator of | ||
which is the
average value of the person's real and | ||
tangible personal property owned
or rented and used in the | ||
trade or business in this State during the
taxable year and | ||
the denominator of which is the average value of all
the | ||
person's real and tangible personal property owned or | ||
rented and
used in the trade or business during the taxable | ||
year.
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(B) Property owned by the person is valued at its | ||
original cost.
Property rented by the person is valued at 8 | ||
times the net annual rental
rate. Net annual rental rate is | ||
the annual rental rate paid by the
person less any annual | ||
rental rate received by the person from
sub-rentals.
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(C) The average value of property shall be determined | ||
by averaging
the values at the beginning and ending of the | ||
taxable year but the
Director may require the averaging of | ||
monthly values during the taxable
year if reasonably | ||
required to reflect properly the average value of the
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person's property.
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(2) Payroll factor.
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(A) The payroll factor is a fraction, the numerator of | ||
which is the
total amount paid in this State during the | ||
taxable year by the person
for compensation, and the | ||
denominator of which is the total compensation
paid | ||
everywhere during the taxable year.
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(B) Compensation is paid in this State if:
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(i) The individual's service is performed entirely | ||
within this
State;
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(ii) The individual's service is performed both | ||
within and without
this State, but the service | ||
performed without this State is incidental
to the | ||
individual's service performed within this State; or
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(iii) Some of the service is performed within this | ||
State and either
the base of operations, or if there is | ||
no base of operations, the place
from which the service | ||
is directed or controlled is within this State,
or the | ||
base of operations or the place from which the service | ||
is
directed or controlled is not in any state in which | ||
some part of the
service is performed, but the | ||
individual's residence is in this State.
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(iv) Compensation paid to nonresident professional | ||
athletes. | ||
(a) General. The Illinois source income of a | ||
nonresident individual who is a member of a | ||
professional athletic team includes the portion of the | ||
individual's total compensation for services performed | ||
as a member of a professional athletic team during the | ||
taxable year which the number of duty days spent within | ||
this State performing services for the team in any | ||
manner during the taxable year bears to the total | ||
number of duty days spent both within and without this | ||
State during the taxable year. | ||
(b) Travel days. Travel days that do not involve | ||
either a game, practice, team meeting, or other similar | ||
team event are not considered duty days spent in this | ||
State. However, such travel days are considered in the | ||
total duty days spent both within and without this | ||
State. | ||
(c) Definitions. For purposes of this subpart | ||
(iv): | ||
(1) The term "professional athletic team" | ||
includes, but is not limited to, any professional | ||
baseball, basketball, football, soccer, or hockey | ||
team. | ||
(2) The term "member of a professional | ||
athletic team" includes those employees who are | ||
active players, players on the disabled list, and | ||
any other persons required to travel and who travel | ||
with and perform services on behalf of a | ||
professional athletic team on a regular basis. | ||
This includes, but is not limited to, coaches, | ||
managers, and trainers. | ||
(3) Except as provided in items (C) and (D) of | ||
this subpart (3), the term "duty days" means all | ||
days during the taxable year from the beginning of | ||
the professional athletic team's official | ||
pre-season training period through the last game | ||
in which the team competes or is scheduled to | ||
compete. Duty days shall be counted for the year in | ||
which they occur, including where a team's | ||
official pre-season training period through the | ||
last game in which the team competes or is | ||
scheduled to compete, occurs during more than one | ||
tax year. | ||
(A) Duty days shall also include days on | ||
which a member of a professional athletic team | ||
performs service for a team on a date that does | ||
not fall within the foregoing period (e.g., | ||
participation in instructional leagues, the | ||
"All Star Game", or promotional "caravans"). | ||
Performing a service for a professional | ||
athletic team includes conducting training and | ||
rehabilitation activities, when such | ||
activities are conducted at team facilities. | ||
(B) Also included in duty days are game | ||
days, practice days, days spent at team | ||
meetings, promotional caravans, preseason | ||
training camps, and days served with the team | ||
through all post-season games in which the team | ||
competes or is scheduled to compete. | ||
(C) Duty days for any person who joins a | ||
team during the period from the beginning of | ||
the professional athletic team's official | ||
pre-season training period through the last | ||
game in which the team competes, or is | ||
scheduled to compete, shall begin on the day | ||
that person joins the team. Conversely, duty | ||
days for any person who leaves a team during | ||
this period shall end on the day that person | ||
leaves the team. Where a person switches teams | ||
during a taxable year, a separate duty-day | ||
calculation shall be made for the period the | ||
person was with each team. | ||
(D) Days for which a member of a | ||
professional athletic team is not compensated | ||
and is not performing services for the team in | ||
any manner, including days when such member of | ||
a professional athletic team has been | ||
suspended without pay and prohibited from | ||
performing any services for the team, shall not | ||
be treated as duty days. | ||
(E) Days for which a member of a | ||
professional athletic team is on the disabled | ||
list and does not conduct rehabilitation | ||
activities at facilities of the team, and is | ||
not otherwise performing services for the team | ||
in Illinois, shall not be considered duty days | ||
spent in this State. All days on the disabled | ||
list, however, are considered to be included in | ||
total duty days spent both within and without | ||
this State. | ||
(4) The term "total compensation for services | ||
performed as a member of a professional athletic | ||
team" means the total compensation received during | ||
the taxable year for services performed: | ||
(A) from the beginning of the official | ||
pre-season training period through the last | ||
game in which the team competes or is scheduled | ||
to compete during that taxable year; and | ||
(B) during the taxable year on a date which | ||
does not fall within the foregoing period | ||
(e.g., participation in instructional leagues, | ||
the "All Star Game", or promotional caravans). | ||
This compensation shall include, but is not | ||
limited to, salaries, wages, bonuses as described | ||
in this subpart, and any other type of compensation | ||
paid during the taxable year to a member of a | ||
professional athletic team for services performed | ||
in that year. This compensation does not include | ||
strike benefits, severance pay, termination pay, | ||
contract or option year buy-out payments, | ||
expansion or relocation payments, or any other | ||
payments not related to services performed for the | ||
team. | ||
For purposes of this subparagraph, "bonuses" | ||
included in "total compensation for services | ||
performed as a member of a professional athletic | ||
team" subject to the allocation described in | ||
Section 302(c)(1) are: bonuses earned as a result | ||
of play (i.e., performance bonuses) during the | ||
season, including bonuses paid for championship, | ||
playoff or "bowl" games played by a team, or for | ||
selection to all-star league or other honorary | ||
positions; and bonuses paid for signing a | ||
contract, unless the payment of the signing bonus | ||
is not conditional upon the signee playing any | ||
games for the team or performing any subsequent | ||
services for the team or even making the team, the | ||
signing bonus is payable separately from the | ||
salary and any other compensation, and the signing | ||
bonus is nonrefundable.
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(3) Sales factor.
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(A) The sales factor is a fraction, the numerator of | ||
which is the
total sales of the person in this State during | ||
the taxable year, and the
denominator of which is the total | ||
sales of the person everywhere during
the taxable year.
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(B) Sales of tangible personal property are in this | ||
State if:
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(i) The property is delivered or shipped to a | ||
purchaser, other than
the United States government, | ||
within this State regardless of the f. o.
b. point or | ||
other conditions of the sale; or
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(ii) The property is shipped from an office, store, | ||
warehouse,
factory or other place of storage in this | ||
State and either the purchaser
is the United States | ||
government or the person is not taxable in the
state of | ||
the purchaser; provided, however, that premises owned | ||
or leased
by a person who has independently contracted | ||
with the seller for the printing
of newspapers, | ||
periodicals or books shall not be deemed to be an | ||
office,
store, warehouse, factory or other place of | ||
storage for purposes of this
Section.
Sales of tangible | ||
personal property are not in this State if the
seller | ||
and purchaser would be members of the same unitary | ||
business group
but for the fact that either the seller | ||
or purchaser is a person with 80%
or more of total | ||
business activity outside of the United States and the
| ||
property is purchased for resale.
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(B-1) Patents, copyrights, trademarks, and similar | ||
items of intangible
personal property.
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(i) Gross receipts from the licensing, sale, or | ||
other disposition of a
patent, copyright, trademark, | ||
or similar item of intangible personal property, other | ||
than gross receipts governed by paragraph (B-7) of this | ||
item (3),
are in this State to the extent the item is | ||
utilized in this State during the
year the gross | ||
receipts are included in gross income.
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(ii) Place of utilization.
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(I) A patent is utilized in a state to the | ||
extent that it is employed
in production, | ||
fabrication, manufacturing, or other processing in | ||
the state or
to the extent that a patented product | ||
is produced in the state. If a patent is
utilized | ||
in
more than one state, the extent to which it is | ||
utilized in any one state shall
be a fraction equal | ||
to the gross receipts of the licensee or purchaser | ||
from
sales or leases of items produced, | ||
fabricated, manufactured, or processed
within that | ||
state using the patent and of patented items | ||
produced within that
state, divided by the total of | ||
such gross receipts for all states in which the
| ||
patent is utilized.
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(II) A copyright is utilized in a state to the | ||
extent that printing or
other publication | ||
originates in the state. If a copyright is utilized | ||
in more
than one state, the extent to which it is | ||
utilized in any one state shall be a
fraction equal | ||
to the gross receipts from sales or licenses of | ||
materials
printed or published in that state | ||
divided by the total of such gross receipts
for all | ||
states in which the copyright is utilized.
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(III) Trademarks and other items of intangible | ||
personal property
governed by this paragraph (B-1) | ||
are utilized in the state in which the
commercial | ||
domicile of the licensee or purchaser is located.
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(iii) If the state of utilization of an item of | ||
property governed by
this paragraph (B-1) cannot be | ||
determined from the taxpayer's books and
records or | ||
from the books and records of any person related to the | ||
taxpayer
within the meaning of Section 267(b) of the | ||
Internal Revenue Code, 26 U.S.C.
267, the gross
| ||
receipts attributable to that item shall be excluded | ||
from both the numerator
and the denominator of the | ||
sales factor.
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(B-2) Gross receipts from the license, sale, or other | ||
disposition of
patents, copyrights, trademarks, and | ||
similar items of intangible personal
property, other than | ||
gross receipts governed by paragraph (B-7) of this item | ||
(3), may be included in the numerator or denominator of the | ||
sales factor
only if gross receipts from licenses, sales, | ||
or other disposition of such items
comprise more than 50% | ||
of the taxpayer's total gross receipts included in gross
| ||
income during the tax year and during each of the 2 | ||
immediately preceding tax
years; provided that, when a | ||
taxpayer is a member of a unitary business group,
such | ||
determination shall be made on the basis of the gross | ||
receipts of the
entire unitary business group.
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(B-5) For taxable years ending on or after December 31, | ||
2008, except as provided in subsections (ii) through (vii), | ||
receipts from the sale of telecommunications service or | ||
mobile telecommunications service are in this State if the | ||
customer's service address is in this State. | ||
(i) For purposes of this subparagraph (B-5), the | ||
follow terms have the following meanings: | ||
"Ancillary services" means services that are | ||
associated with or incidental to the provision of | ||
"telecommunications services", including but not | ||
limited to "detailed telecommunications billing", | ||
"directory assistance", "vertical service", and "voice | ||
mail services". | ||
"Air-to-Ground Radiotelephone service" means a | ||
radio service, as that term is defined in 47 CFR 22.99, | ||
in which common carriers are authorized to offer and | ||
provide radio telecommunications service for hire to | ||
subscribers in aircraft. | ||
"Call-by-call Basis" means any method of charging | ||
for telecommunications services where the price is | ||
measured by individual calls. | ||
"Communications Channel" means a physical or | ||
virtual path of communications over which signals are | ||
transmitted between or among customer channel | ||
termination points. | ||
"Conference bridging service" means an "ancillary | ||
service" that links two or more participants of an | ||
audio or video conference call and may include the | ||
provision of a telephone number. "Conference bridging | ||
service" does not include the "telecommunications | ||
services" used to reach the conference bridge. | ||
"Customer Channel Termination Point" means the | ||
location where the customer either inputs or receives | ||
the communications. | ||
"Detailed telecommunications billing service" | ||
means an "ancillary service" of separately stating | ||
information pertaining to individual calls on a | ||
customer's billing statement. | ||
"Directory assistance" means an "ancillary | ||
service" of providing telephone number information, | ||
and/or address information. | ||
"Home service provider" means the facilities based | ||
carrier or reseller with which the customer contracts | ||
for the provision of mobile telecommunications | ||
services. | ||
"Mobile telecommunications service" means | ||
commercial mobile radio service, as defined in Section | ||
20.3 of Title 47 of the Code of Federal Regulations as | ||
in effect on June 1, 1999. | ||
"Place of primary use" means the street address | ||
representative of where the customer's use of the | ||
telecommunications service primarily occurs, which | ||
must be the residential street address or the primary | ||
business street address of the customer. In the case of | ||
mobile telecommunications services, "place of primary | ||
use" must be within the licensed service area of the | ||
home service provider. | ||
"Post-paid telecommunication service" means the | ||
telecommunications service obtained by making a | ||
payment on a call-by-call basis either through the use | ||
of a credit card or payment mechanism such as a bank | ||
card, travel card, credit card, or debit card, or by | ||
charge made to a telephone number which is not | ||
associated with the origination or termination of the | ||
telecommunications service. A post-paid calling | ||
service includes telecommunications service, except a | ||
prepaid wireless calling service, that would be a | ||
prepaid calling service except it is not exclusively a | ||
telecommunication service. | ||
"Prepaid telecommunication service" means the | ||
right to access exclusively telecommunications | ||
services, which must be paid for in advance and which | ||
enables the origination of calls using an access number | ||
or authorization code, whether manually or | ||
electronically dialed, and that is sold in | ||
predetermined units or dollars of which the number | ||
declines with use in a known amount. | ||
"Prepaid Mobile telecommunication service" means a | ||
telecommunications service that provides the right to | ||
utilize mobile wireless service as well as other | ||
non-telecommunication services, including but not | ||
limited to ancillary services, which must be paid for | ||
in advance that is sold in predetermined units or | ||
dollars of which the number declines with use in a | ||
known amount. | ||
"Private communication service" means a | ||
telecommunication service that entitles the customer | ||
to exclusive or priority use of a communications | ||
channel or group of channels between or among | ||
termination points, regardless of the manner in which | ||
such channel or channels are connected, and includes | ||
switching capacity, extension lines, stations, and any | ||
other associated services that are provided in | ||
connection with the use of such channel or channels. | ||
"Service address" means: | ||
(a) The location of the telecommunications | ||
equipment to which a customer's call is charged and | ||
from which the call originates or terminates, | ||
regardless of where the call is billed or paid; | ||
(b) If the location in line (a) is not known, | ||
service address means the origination point of the | ||
signal of the telecommunications services first | ||
identified by either the seller's | ||
telecommunications system or in information | ||
received by the seller from its service provider | ||
where the system used to transport such signals is | ||
not that of the seller; and | ||
(c) If the locations in line (a) and line (b) | ||
are not known, the service address means the | ||
location of the customer's place of primary use. | ||
"Telecommunications service" means the electronic | ||
transmission, conveyance, or routing of voice, data, | ||
audio, video, or any other information or signals to a | ||
point, or between or among points. The term | ||
"telecommunications service" includes such | ||
transmission, conveyance, or routing in which computer | ||
processing applications are used to act on the form, | ||
code or protocol of the content for purposes of | ||
transmission, conveyance or routing without regard to | ||
whether such service is referred to as voice over | ||
Internet protocol services or is classified by the | ||
Federal Communications Commission as enhanced or value | ||
added. "Telecommunications service" does not include: | ||
(a) Data processing and information services | ||
that allow data to be generated, acquired, stored, | ||
processed, or retrieved and delivered by an | ||
electronic transmission to a purchaser when such | ||
purchaser's primary purpose for the underlying | ||
transaction is the processed data or information; | ||
(b) Installation or maintenance of wiring or | ||
equipment on a customer's premises; | ||
(c) Tangible personal property; | ||
(d) Advertising, including but not limited to | ||
directory advertising. | ||
(e) Billing and collection services provided | ||
to third parties; | ||
(f) Internet access service; | ||
(g) Radio and television audio and video | ||
programming services, regardless of the medium, | ||
including the furnishing of transmission, | ||
conveyance and routing of such services by the | ||
programming service provider. Radio and television | ||
audio and video programming services shall include | ||
but not be limited to cable service as defined in | ||
47 USC 522(6) and audio and video programming | ||
services delivered by commercial mobile radio | ||
service providers, as defined in 47 CFR 20.3; | ||
(h) "Ancillary services"; or | ||
(i) Digital products "delivered | ||
electronically", including but not limited to | ||
software, music, video, reading materials or ring | ||
tones. | ||
"Vertical service" means an "ancillary service" | ||
that is offered in connection with one or more | ||
"telecommunications services", which offers advanced | ||
calling features that allow customers to identify | ||
callers and to manage multiple calls and call | ||
connections, including "conference bridging services". | ||
"Voice mail service" means an "ancillary service" | ||
that enables the customer to store, send or receive | ||
recorded messages. "Voice mail service" does not | ||
include any "vertical services" that the customer may | ||
be required to have in order to utilize the "voice mail | ||
service". | ||
(ii) Receipts from the sale of telecommunications | ||
service sold on an individual call-by-call basis are in | ||
this State if either of the following applies: | ||
(a) The call both originates and terminates in | ||
this State. | ||
(b) The call either originates or terminates | ||
in this State and the service address is located in | ||
this State. | ||
(iii) Receipts from the sale of postpaid | ||
telecommunications service at retail are in this State | ||
if the origination point of the telecommunication | ||
signal, as first identified by the service provider's | ||
telecommunication system or as identified by | ||
information received by the seller from its service | ||
provider if the system used to transport | ||
telecommunication signals is not the seller's, is | ||
located in this State. | ||
(iv) Receipts from the sale of prepaid | ||
telecommunications service or prepaid mobile | ||
telecommunications service at retail are in this State | ||
if the purchaser obtains the prepaid card or similar | ||
means of conveyance at a location in this State. | ||
Receipts from recharging a prepaid telecommunications | ||
service or mobile telecommunications service is in | ||
this State if the purchaser's billing information | ||
indicates a location in this State. | ||
(v) Receipts from the sale of private | ||
communication services are in this State as follows: | ||
(a) 100% of receipts from charges imposed at | ||
each channel termination point in this State. | ||
(b) 100% of receipts from charges for the total | ||
channel mileage between each channel termination | ||
point in this State. | ||
(c) 50% of the total receipts from charges for | ||
service segments when those segments are between 2 | ||
customer channel termination points, 1 of which is | ||
located in this State and the other is located | ||
outside of this State, which segments are | ||
separately charged. | ||
(d) The receipts from charges for service | ||
segments with a channel termination point located | ||
in this State and in two or more other states, and | ||
which segments are not separately billed, are in | ||
this State based on a percentage determined by | ||
dividing the number of customer channel | ||
termination points in this State by the total | ||
number of customer channel termination points. | ||
(vi) Receipts from charges for ancillary services | ||
for telecommunications service sold to customers at | ||
retail are in this State if the customer's primary | ||
place of use of telecommunications services associated | ||
with those ancillary services is in this State. If the | ||
seller of those ancillary services cannot determine | ||
where the associated telecommunications are located, | ||
then the ancillary services shall be based on the | ||
location of the purchaser. | ||
(vii) Receipts to access a carrier's network or | ||
from the sale of telecommunication services or | ||
ancillary services for resale are in this State as | ||
follows: | ||
(a) 100% of the receipts from access fees | ||
attributable to intrastate telecommunications | ||
service that both originates and terminates in | ||
this State. | ||
(b) 50% of the receipts from access fees | ||
attributable to interstate telecommunications | ||
service if the interstate call either originates | ||
or terminates in this State. | ||
(c) 100% of the receipts from interstate end | ||
user access line charges, if the customer's | ||
service address is in this State. As used in this | ||
subdivision, "interstate end user access line | ||
charges" includes, but is not limited to, the | ||
surcharge approved by the federal communications | ||
commission and levied pursuant to 47 CFR 69. | ||
(d) Gross receipts from sales of | ||
telecommunication services or from ancillary | ||
services for telecommunications services sold to | ||
other telecommunication service providers for | ||
resale shall be sourced to this State using the | ||
apportionment concepts used for non-resale | ||
receipts of telecommunications services if the | ||
information is readily available to make that | ||
determination. If the information is not readily | ||
available, then the taxpayer may use any other | ||
reasonable and consistent method. | ||
(B-7) For taxable years ending on or after December 31, | ||
2008, receipts from the sale of broadcasting services are | ||
in this State if the broadcasting services are received in | ||
this State. For purposes of this paragraph (B-7), the | ||
following terms have the following meanings: | ||
"Advertising revenue" means consideration received | ||
by the taxpayer in exchange for broadcasting services | ||
or allowing the broadcasting of commercials or | ||
announcements in connection with the broadcasting of | ||
film or radio programming, from sponsorships of the | ||
programming, or from product placements in the | ||
programming. | ||
"Audience factor" means the ratio that the | ||
audience or subscribers located in this State of a | ||
station, a network, or a cable system bears to the | ||
total audience or total subscribers for that station, | ||
network, or cable system. The audience factor for film | ||
or radio programming shall be determined by reference | ||
to the books and records of the taxpayer or by | ||
reference to published rating statistics provided the | ||
method used by the taxpayer is consistently used from | ||
year to year for this purpose and fairly represents the | ||
taxpayer's activity in this State. | ||
"Broadcast" or "broadcasting" or "broadcasting | ||
services" means the transmission or provision of film | ||
or radio programming, whether through the public | ||
airwaves, by cable, by direct or indirect satellite | ||
transmission, or by any other means of communication, | ||
either through a station, a network, or a cable system. | ||
"Film" or "film programming" means the broadcast | ||
on television of any and all performances, events, or | ||
productions, including but not limited to news, | ||
sporting events, plays, stories, or other literary, | ||
commercial, educational, or artistic works, either | ||
live or through the use of video tape, disc, or any | ||
other type of format or medium. Each episode of a | ||
series of films produced for television shall | ||
constitute separate "film" notwithstanding that the | ||
series relates to the same principal subject and is | ||
produced during one or more tax periods. | ||
"Radio" or "radio programming" means the broadcast | ||
on radio of any and all performances, events, or | ||
productions, including but not limited to news, | ||
sporting events, plays, stories, or other literary, | ||
commercial, educational, or artistic works, either | ||
live or through the use of an audio tape, disc, or any | ||
other format or medium. Each episode in a series of | ||
radio programming produced for radio broadcast shall | ||
constitute a separate "radio programming" | ||
notwithstanding that the series relates to the same | ||
principal subject and is produced during one or more | ||
tax periods. | ||
(i) In the case of advertising revenue from | ||
broadcasting, the customer is the advertiser and | ||
the service is received in this State if the | ||
commercial domicile of the advertiser is in this | ||
State. | ||
(ii) In the case where film or radio | ||
programming is broadcast by a station, a network, | ||
or a cable system for a fee or other remuneration | ||
received from the recipient of the broadcast, the | ||
portion of the service that is received in this | ||
State is measured by the portion of the recipients | ||
of the broadcast located in this State. | ||
Accordingly, the fee or other remuneration for | ||
such service that is included in the Illinois | ||
numerator of the sales factor is the total of those | ||
fees or other remuneration received from | ||
recipients in Illinois. For purposes of this | ||
paragraph, a taxpayer may determine the location | ||
of the recipients of its broadcast using the | ||
address of the recipient shown in its contracts | ||
with the recipient or using the billing address of | ||
the recipient in the taxpayer's records. | ||
(iii) In the case where film or radio | ||
programming is broadcast by a station, a network, | ||
or a cable system for a fee or other remuneration | ||
from the person providing the programming, the | ||
portion of the broadcast service that is received | ||
by such station, network, or cable system in this | ||
State is measured by the portion of recipients of | ||
the broadcast located in this State. Accordingly, | ||
the amount of revenue related to such an | ||
arrangement that is included in the Illinois | ||
numerator of the sales factor is the total fee or | ||
other total remuneration from the person providing | ||
the programming related to that broadcast | ||
multiplied by the Illinois audience factor for | ||
that broadcast. | ||
(iv) In the case where film or radio | ||
programming is provided by a taxpayer that is a | ||
network or station to a customer for broadcast in | ||
exchange for a fee or other remuneration from that | ||
customer the broadcasting service is received at | ||
the location of the office of the customer from | ||
which the services were ordered in the regular | ||
course of the customer's trade or business. | ||
Accordingly, in such a case the revenue derived by | ||
the taxpayer that is included in the taxpayer's | ||
Illinois numerator of the sales factor is the | ||
revenue from such customers who receive the | ||
broadcasting service in Illinois. | ||
(v) In the case where film or radio programming | ||
is provided by a taxpayer that is not a network or | ||
station to another person for broadcasting in | ||
exchange for a fee or other remuneration from that | ||
person, the broadcasting service is received at | ||
the location of the office of the customer from | ||
which the services were ordered in the regular | ||
course of the customer's trade or business. | ||
Accordingly, in such a case the revenue derived by | ||
the taxpayer that is included in the taxpayer's | ||
Illinois numerator of the sales factor is the | ||
revenue from such customers who receive the | ||
broadcasting service in Illinois.
| ||
(C) For taxable years ending before December 31, 2008, | ||
sales, other than sales governed by paragraphs (B), (B-1), | ||
and (B-2), are in
this State if:
| ||
(i) The income-producing activity is performed in | ||
this State; or
| ||
(ii) The income-producing activity is performed | ||
both within and
without this State and a greater | ||
proportion of the income-producing
activity is | ||
performed within this State than without this State, | ||
based
on performance costs.
| ||
(C-5) For taxable years ending on or after December 31, | ||
2008, sales, other than sales governed by paragraphs (B), | ||
(B-1), (B-2), and (B-5), and (B-7), are in this State if | ||
any of the following criteria are met: | ||
(i) Sales from the sale or lease of real property | ||
are in this State if the property is located in this | ||
State. | ||
(ii) Sales from the lease or rental of tangible | ||
personal property are in this State if the property is | ||
located in this State during the rental period. Sales | ||
from the lease or rental of tangible personal property | ||
that is characteristically moving property, including, | ||
but not limited to, motor vehicles, rolling stock, | ||
aircraft, vessels, or mobile equipment are in this | ||
State to the extent that the property is used in this | ||
State. | ||
(iii) In the case of interest, net gains (but not | ||
less than zero) and other items of income from | ||
intangible personal property, the sale is in this State | ||
if: | ||
(a) in the case of a taxpayer who is a dealer | ||
in the item of intangible personal property within | ||
the meaning of Section 475 of the Internal Revenue | ||
Code, the income or gain is received from a | ||
customer in this State. For purposes of this | ||
subparagraph, a customer is in this State if the | ||
customer is an individual, trust or estate who is a | ||
resident of this State and, for all other | ||
customers, if the customer's commercial domicile | ||
is in this State. Unless the dealer has actual | ||
knowledge of the residence or commercial domicile | ||
of a customer during a taxable year, the customer | ||
shall be deemed to be a customer in this State if | ||
the billing address of the customer, as shown in | ||
the records of the dealer, is in this State; or | ||
(b) in all other cases, if the | ||
income-producing activity of the taxpayer is | ||
performed in this State or, if the | ||
income-producing activity of the taxpayer is | ||
performed both within and without this State, if a | ||
greater proportion of the income-producing | ||
activity of the taxpayer is performed within this | ||
State than in any other state, based on performance | ||
costs. | ||
(iv) Sales of services are in this State if the | ||
services are received in this State. For the purposes | ||
of this section, gross receipts from the performance of | ||
services provided to a corporation, partnership, or | ||
trust may only be attributed to a state where that | ||
corporation, partnership, or trust has a fixed place of | ||
business. If the state where the services are received | ||
is not readily determinable or is a state where the | ||
corporation, partnership, or trust receiving the | ||
service does not have a fixed place of business, the | ||
services shall be deemed to be received at the location | ||
of the office of the customer from which the services | ||
were ordered in the regular course of the customer's | ||
trade or business. If the ordering office cannot be | ||
determined, the services shall be deemed to be received | ||
at the office of the customer to which the services are | ||
billed. If the taxpayer is not taxable in the state in | ||
which the services are received, the sale must be | ||
excluded from both the numerator and the denominator of | ||
the sales factor. The Department shall adopt rules | ||
prescribing where specific types of service are | ||
received, including, but not limited to, broadcast, | ||
cable, advertising, publishing, and utility service.
| ||
(D) For taxable years ending on or after December 31, | ||
1995, the following
items of income shall not be included | ||
in the numerator or denominator of the
sales factor: | ||
dividends; amounts included under Section 78 of the | ||
Internal
Revenue Code; and Subpart F income as defined in | ||
Section 952 of the Internal
Revenue Code.
No inference | ||
shall be drawn from the enactment of this paragraph (D) in
| ||
construing this Section for taxable years ending before | ||
December 31, 1995.
| ||
(E) Paragraphs (B-1) and (B-2) shall apply to tax years | ||
ending on or
after December 31, 1999, provided that a | ||
taxpayer may elect to apply the
provisions of these | ||
paragraphs to prior tax years. Such election shall be made
| ||
in the form and manner prescribed by the Department, shall | ||
be irrevocable, and
shall apply to all tax years; provided | ||
that, if a taxpayer's Illinois income
tax liability for any | ||
tax year, as assessed under Section 903 prior to January
1, | ||
1999, was computed in a manner contrary to the provisions | ||
of paragraphs
(B-1) or (B-2), no refund shall be payable to | ||
the taxpayer for that tax year to
the extent such refund is | ||
the result of applying the provisions of paragraph
(B-1) or | ||
(B-2) retroactively. In the case of a unitary business | ||
group, such
election shall apply to all members of such | ||
group for every tax year such group
is in existence, but | ||
shall not apply to any taxpayer for any period during
which | ||
that taxpayer is not a member of such group.
| ||
(b) Insurance companies.
| ||
(1) In general. Except as otherwise
provided by | ||
paragraph (2), business income of an insurance company for | ||
a
taxable year shall be apportioned to this State by | ||
multiplying such
income by a fraction, the numerator of | ||
which is the direct premiums
written for insurance upon | ||
property or risk in this State, and the
denominator of | ||
which is the direct premiums written for insurance upon
| ||
property or risk everywhere. For purposes of this | ||
subsection, the term
"direct premiums written" means the | ||
total amount of direct premiums
written, assessments and | ||
annuity considerations as reported for the
taxable year on | ||
the annual statement filed by the company with the
Illinois | ||
Director of Insurance in the form approved by the National
| ||
Convention of Insurance Commissioners
or such other form as | ||
may be
prescribed in lieu thereof.
| ||
(2) Reinsurance. If the principal source of premiums | ||
written by an
insurance company consists of premiums for | ||
reinsurance accepted by it,
the business income of such | ||
company shall be apportioned to this State
by multiplying | ||
such income by a fraction, the numerator of which is the
| ||
sum of (i) direct premiums written for insurance upon | ||
property or risk
in this State, plus (ii) premiums written | ||
for reinsurance accepted in
respect of property or risk in | ||
this State, and the denominator of which
is the sum of | ||
(iii) direct premiums written for insurance upon property
| ||
or risk everywhere, plus (iv) premiums written for | ||
reinsurance accepted
in respect of property or risk | ||
everywhere. For taxable years ending before December 31, | ||
2008, for purposes of this
paragraph, premiums written for | ||
reinsurance accepted in respect of
property or risk in this | ||
State, whether or not otherwise determinable,
may, at the | ||
election of the company, be determined on the basis of the
| ||
proportion which premiums written for reinsurance accepted | ||
from
companies commercially domiciled in Illinois bears to | ||
premiums written
for reinsurance accepted from all | ||
sources, or, alternatively, in the
proportion which the sum | ||
of the direct premiums written for insurance
upon property | ||
or risk in this State by each ceding company from which
| ||
reinsurance is accepted bears to the sum of the total | ||
direct premiums
written by each such ceding company for the | ||
taxable year.
| ||
(c) Financial organizations.
| ||
(1) In general. For taxable years ending before | ||
December 31, 2008, business income of a financial
| ||
organization shall be apportioned to this State by | ||
multiplying such
income by a fraction, the numerator of | ||
which is its business income from
sources within this | ||
State, and the denominator of which is its business
income | ||
from all sources. For the purposes of this subsection, the
| ||
business income of a financial organization from sources | ||
within this
State is the sum of the amounts referred to in | ||
subparagraphs (A) through
(E) following, but excluding the | ||
adjusted income of an international banking
facility as | ||
determined in paragraph (2):
| ||
(A) Fees, commissions or other compensation for | ||
financial services
rendered within this State;
| ||
(B) Gross profits from trading in stocks, bonds or | ||
other securities
managed within this State;
| ||
(C) Dividends, and interest from Illinois | ||
customers, which are received
within this State;
| ||
(D) Interest charged to customers at places of | ||
business maintained
within this State for carrying | ||
debit balances of margin accounts,
without deduction | ||
of any costs incurred in carrying such accounts; and
| ||
(E) Any other gross income resulting from the | ||
operation as a
financial organization within this | ||
State. In computing the amounts
referred to in | ||
paragraphs (A) through (E) of this subsection, any | ||
amount
received by a member of an affiliated group | ||
(determined under Section
1504(a) of the Internal | ||
Revenue Code but without reference to whether
any such | ||
corporation is an "includible corporation" under | ||
Section
1504(b) of the Internal Revenue Code) from | ||
another member of such group
shall be included only to | ||
the extent such amount exceeds expenses of the
| ||
recipient directly related thereto.
| ||
(2) International Banking Facility. For taxable years | ||
ending before December 31, 2008:
| ||
(A) Adjusted Income. The adjusted income of an | ||
international banking
facility is its income reduced | ||
by the amount of the floor amount.
| ||
(B) Floor Amount. The floor amount shall be the | ||
amount, if any,
determined
by multiplying the income of | ||
the international banking facility by a fraction,
not | ||
greater than one, which is determined as follows:
| ||
(i) The numerator shall be:
| ||
The average aggregate, determined on a | ||
quarterly basis, of the
financial
organization's | ||
loans to banks in foreign countries, to foreign | ||
domiciled
borrowers (except where secured | ||
primarily by real estate) and to foreign
| ||
governments and other foreign official | ||
institutions, as reported for its
branches, | ||
agencies and offices within the state on its | ||
"Consolidated Report
of Condition", Schedule A, | ||
Lines 2.c., 5.b., and 7.a., which was filed with
| ||
the Federal Deposit Insurance Corporation and | ||
other regulatory authorities,
for the year 1980, | ||
minus
| ||
The average aggregate, determined on a | ||
quarterly basis, of such loans
(other
than loans of | ||
an international banking facility), as reported by | ||
the financial
institution for its branches, | ||
agencies and offices within the state, on
the | ||
corresponding Schedule and lines of the | ||
Consolidated Report of Condition
for the current | ||
taxable year, provided, however, that in no case | ||
shall the
amount determined in this clause (the | ||
subtrahend) exceed the amount determined
in the | ||
preceding clause (the minuend); and
| ||
(ii) the denominator shall be the average | ||
aggregate, determined on a
quarterly basis, of the | ||
international banking facility's loans to banks in
| ||
foreign countries, to foreign domiciled borrowers | ||
(except where secured
primarily by real estate) | ||
and to foreign governments and other foreign
| ||
official institutions, which were recorded in its | ||
financial accounts for
the current taxable year.
| ||
(C) Change to Consolidated Report of Condition and | ||
in Qualification.
In the event the Consolidated Report | ||
of Condition which is filed with the
Federal Deposit | ||
Insurance Corporation and other regulatory authorities | ||
is
altered so that the information required for | ||
determining the floor amount
is not found on Schedule | ||
A, lines 2.c., 5.b. and 7.a., the financial
institution | ||
shall notify the Department and the Department may, by
| ||
regulations or otherwise, prescribe or authorize the | ||
use of an alternative
source for such information. The | ||
financial institution shall also notify
the Department | ||
should its international banking facility fail to | ||
qualify as
such, in whole or in part, or should there | ||
be any amendment or change to
the Consolidated Report | ||
of Condition, as originally filed, to the extent
such | ||
amendment or change alters the information used in | ||
determining the floor
amount.
| ||
(3) For taxable years ending on or after December 31, | ||
2008, the business income of a financial organization shall | ||
be apportioned to this State by multiplying such income by | ||
a fraction, the numerator of which is its gross receipts | ||
from sources in this State or otherwise attributable to | ||
this State's marketplace and the denominator of which is | ||
its gross receipts everywhere during the taxable year. | ||
"Gross receipts" for purposes of this subparagraph (3) | ||
means gross income, including net taxable gain on | ||
disposition of assets, including securities and money | ||
market instruments, when derived from transactions and | ||
activities in the regular course of the financial | ||
organization's trade or business. The following examples | ||
are illustrative:
| ||
(i) Receipts from the lease or rental of real or | ||
tangible personal property are in this State if the | ||
property is located in this State during the rental | ||
period. Receipts from the lease or rental of tangible | ||
personal property that is characteristically moving | ||
property, including, but not limited to, motor | ||
vehicles, rolling stock, aircraft, vessels, or mobile | ||
equipment are from sources in this State to the extent | ||
that the property is used in this State. | ||
(ii) Interest income, commissions, fees, gains on | ||
disposition, and other receipts from assets in the | ||
nature of loans that are secured primarily by real | ||
estate or tangible personal property are from sources | ||
in this State if the security is located in this State. | ||
(iii) Interest income, commissions, fees, gains on | ||
disposition, and other receipts from consumer loans | ||
that are not secured by real or tangible personal | ||
property are from sources in this State if the debtor | ||
is a resident of this State. | ||
(iv) Interest income, commissions, fees, gains on | ||
disposition, and other receipts from commercial loans | ||
and installment obligations that are not secured by | ||
real or tangible personal property are from sources in | ||
this State if the proceeds of the loan are to be | ||
applied in this State. If it cannot be determined where | ||
the funds are to be applied, the income and receipts | ||
are from sources in this State if the office of the | ||
borrower from which the loan was negotiated in the | ||
regular course of business is located in this State. If | ||
the location of this office cannot be determined, the | ||
income and receipts shall be excluded from the | ||
numerator and denominator of the sales factor.
| ||
(v) Interest income, fees, gains on disposition, | ||
service charges, merchant discount income, and other | ||
receipts from credit card receivables are from sources | ||
in this State if the card charges are regularly billed | ||
to a customer in this State. | ||
(vi) Receipts from the performance of services, | ||
including, but not limited to, fiduciary, advisory, | ||
and brokerage services, are in this State if the | ||
services are received in this State within the meaning | ||
of subparagraph (a)(3)(C-5)(iv) of this Section. | ||
(vii) Receipts from the issuance of travelers | ||
checks and money orders are from sources in this State | ||
if the checks and money orders are issued from a | ||
location within this State. | ||
(viii) Receipts from investment assets and | ||
activities and trading assets and activities are | ||
included in the receipts factor as follows: | ||
(1) Interest, dividends, net gains (but not | ||
less than zero) and other income from investment | ||
assets and activities from trading assets and | ||
activities shall be included in the receipts | ||
factor. Investment assets and activities and | ||
trading assets and activities include but are not | ||
limited to: investment securities; trading account | ||
assets; federal funds; securities purchased and | ||
sold under agreements to resell or repurchase; | ||
options; futures contracts; forward contracts; | ||
notional principal contracts such as swaps; | ||
equities; and foreign currency transactions. With | ||
respect to the investment and trading assets and | ||
activities described in subparagraphs (A) and (B) | ||
of this paragraph, the receipts factor shall | ||
include the amounts described in such | ||
subparagraphs. | ||
(A) The receipts factor shall include the | ||
amount by which interest from federal funds | ||
sold and securities purchased under resale | ||
agreements exceeds interest expense on federal | ||
funds purchased and securities sold under | ||
repurchase agreements. | ||
(B) The receipts factor shall include the | ||
amount by which interest, dividends, gains and | ||
other income from trading assets and | ||
activities, including but not limited to | ||
assets and activities in the matched book, in | ||
the arbitrage book, and foreign currency | ||
transactions, exceed amounts paid in lieu of | ||
interest, amounts paid in lieu of dividends, | ||
and losses from such assets and activities. | ||
(2) The numerator of the receipts factor | ||
includes interest, dividends, net gains (but not | ||
less than zero), and other income from investment | ||
assets and activities and from trading assets and | ||
activities described in paragraph (1) of this | ||
subsection that are attributable to this State. | ||
(A) The amount of interest, dividends, net | ||
gains (but not less than zero), and other | ||
income from investment assets and activities | ||
in the investment account to be attributed to | ||
this State and included in the numerator is | ||
determined by multiplying all such income from | ||
such assets and activities by a fraction, the | ||
numerator of which is the gross income from | ||
such assets and activities which are properly | ||
assigned to a fixed place of business of the | ||
taxpayer within this State and the denominator | ||
of which is the gross income from all such | ||
assets and activities. | ||
(B) The amount of interest from federal | ||
funds sold and purchased and from securities | ||
purchased under resale agreements and | ||
securities sold under repurchase agreements | ||
attributable to this State and included in the | ||
numerator is determined by multiplying the | ||
amount described in subparagraph (A) of | ||
paragraph (1) of this subsection from such | ||
funds and such securities by a fraction, the | ||
numerator of which is the gross income from | ||
such funds and such securities which are | ||
properly assigned to a fixed place of business | ||
of the taxpayer within this State and the | ||
denominator of which is the gross income from | ||
all such funds and such securities. | ||
(C) The amount of interest, dividends, | ||
gains, and other income from trading assets and | ||
activities, including but not limited to | ||
assets and activities in the matched book, in | ||
the arbitrage book and foreign currency | ||
transactions (but excluding amounts described | ||
in subparagraphs (A) or (B) of this paragraph), | ||
attributable to this State and included in the | ||
numerator is determined by multiplying the | ||
amount described in subparagraph (B) of | ||
paragraph (1) of this subsection by a fraction, | ||
the numerator of which is the gross income from | ||
such trading assets and activities which are | ||
properly assigned to a fixed place of business | ||
of the taxpayer within this State and the | ||
denominator of which is the gross income from | ||
all such assets and activities. | ||
(D) Properly assigned, for purposes of | ||
this paragraph (2) of this subsection, means | ||
the investment or trading asset or activity is | ||
assigned to the fixed place of business with | ||
which it has a preponderance of substantive | ||
contacts. An investment or trading asset or | ||
activity assigned by the taxpayer to a fixed | ||
place of business without the State shall be | ||
presumed to have been properly assigned if: | ||
(i) the taxpayer has assigned, in the | ||
regular course of its business, such asset | ||
or activity on its records to a fixed place | ||
of business consistent with federal or | ||
state regulatory requirements; | ||
(ii) such assignment on its records is | ||
based upon substantive contacts of the | ||
asset or activity to such fixed place of | ||
business; and | ||
(iii) the taxpayer uses such records | ||
reflecting assignment of such assets or | ||
activities for the filing of all state and | ||
local tax returns for which an assignment | ||
of such assets or activities to a fixed | ||
place of business is required. | ||
(E) The presumption of proper assignment | ||
of an investment or trading asset or activity | ||
provided in subparagraph (D) of paragraph (2) | ||
of this subsection may be rebutted upon a | ||
showing by the Department, supported by a | ||
preponderance of the evidence, that the | ||
preponderance of substantive contacts | ||
regarding such asset or activity did not occur | ||
at the fixed place of business to which it was | ||
assigned on the taxpayer's records. If the | ||
fixed place of business that has a | ||
preponderance of substantive contacts cannot | ||
be determined for an investment or trading | ||
asset or activity to which the presumption in | ||
subparagraph (D) of paragraph (2) of this | ||
subsection does not apply or with respect to | ||
which that presumption has been rebutted, that | ||
asset or activity is properly assigned to the | ||
state in which the taxpayer's commercial | ||
domicile is located. For purposes of this | ||
subparagraph (E), it shall be presumed, | ||
subject to rebuttal, that taxpayer's | ||
commercial domicile is in the state of the | ||
United States or the District of Columbia to | ||
which the greatest number of employees are | ||
regularly connected with the management of the | ||
investment or trading income or out of which | ||
they are working, irrespective of where the | ||
services of such employees are performed, as of | ||
the last day of the taxable year.
| ||
(4) (Blank). | ||
(5) (Blank). | ||
(d) Transportation services. For taxable years ending | ||
before December 31, 2008, business income derived from | ||
furnishing
transportation services shall be apportioned to | ||
this State in accordance
with paragraphs (1) and (2):
| ||
(1) Such business income (other than that derived from
| ||
transportation by pipeline) shall be apportioned to this | ||
State by
multiplying such income by a fraction, the | ||
numerator of which is the
revenue miles of the person in | ||
this State, and the denominator of which
is the revenue | ||
miles of the person everywhere. For purposes of this
| ||
paragraph, a revenue mile is the transportation of 1 | ||
passenger or 1 net
ton of freight the distance of 1 mile | ||
for a consideration. Where a
person is engaged in the | ||
transportation of both passengers and freight,
the | ||
fraction above referred to shall be determined by means of | ||
an
average of the passenger revenue mile fraction and the | ||
freight revenue
mile fraction, weighted to reflect the | ||
person's
| ||
(A) relative railway operating income from total | ||
passenger and total
freight service, as reported to the | ||
Interstate Commerce Commission, in
the case of | ||
transportation by railroad, and
| ||
(B) relative gross receipts from passenger and | ||
freight
transportation, in case of transportation | ||
other than by railroad.
| ||
(2) Such business income derived from transportation | ||
by pipeline
shall be apportioned to this State by | ||
multiplying such income by a
fraction, the numerator of | ||
which is the revenue miles of the person in
this State, and | ||
the denominator of which is the revenue miles of the
person | ||
everywhere. For the purposes of this paragraph, a revenue | ||
mile is
the transportation by pipeline of 1 barrel of oil, | ||
1,000 cubic feet of
gas, or of any specified quantity of | ||
any other substance, the distance
of 1 mile for a | ||
consideration.
| ||
(3) For taxable years ending on or after December 31, | ||
2008, business income derived from providing | ||
transportation services other than airline services shall | ||
be apportioned to this State by using a fraction, (a) the | ||
numerator of which shall be (i) all receipts from any | ||
movement or shipment of people, goods, mail, oil, gas, or | ||
any other substance (other than by airline) that both | ||
originates and terminates in this State, plus (ii) that | ||
portion of the person's gross receipts from movements or | ||
shipments of people, goods, mail, oil, gas, or any other | ||
substance (other than by airline) that originates in one | ||
state or jurisdiction and terminates in another state or | ||
jurisdiction, that is determined by the ratio that the | ||
miles traveled in this State bears to total miles | ||
everywhere and (b) the denominator of which shall be all | ||
revenue derived from the movement or shipment of people, | ||
goods, mail, oil, gas, or any other substance (other than | ||
by airline). Where a taxpayer is engaged in the | ||
transportation of both passengers and freight, the | ||
fraction above referred to shall first be determined | ||
separately for passenger miles and freight miles. Then an | ||
average of the passenger miles fraction and the freight | ||
miles fraction shall be weighted to reflect the taxpayer's: | ||
(A) relative railway operating income from total | ||
passenger and total freight service, as reported to the | ||
Surface Transportation Board, in the case of | ||
transportation by railroad; and
| ||
(B) relative gross receipts from passenger and | ||
freight transportation, in case of transportation | ||
other than by railroad.
| ||
(4) For taxable years ending on or after December 31, | ||
2008, business income derived from furnishing airline
| ||
transportation services shall be apportioned to this State | ||
by
multiplying such income by a fraction, the numerator of | ||
which is the
revenue miles of the person in this State, and | ||
the denominator of which
is the revenue miles of the person | ||
everywhere. For purposes of this
paragraph, a revenue mile | ||
is the transportation of one passenger or one net
ton of | ||
freight the distance of one mile for a consideration. If a
| ||
person is engaged in the transportation of both passengers | ||
and freight,
the fraction above referred to shall be | ||
determined by means of an
average of the passenger revenue | ||
mile fraction and the freight revenue
mile fraction, | ||
weighted to reflect the person's relative gross receipts | ||
from passenger and freight
airline transportation.
| ||
(e) Combined apportionment. Where 2 or more persons are | ||
engaged in
a unitary business as described in subsection | ||
(a)(27) of
Section 1501,
a part of which is conducted in this | ||
State by one or more members of the
group, the business income | ||
attributable to this State by any such member
or members shall | ||
be apportioned by means of the combined apportionment method.
| ||
(f) Alternative allocation. If the allocation and | ||
apportionment
provisions of subsections (a) through (e) and of | ||
subsection (h) do not
fairly represent the
extent of a person's | ||
business activity in this State, the person may
petition for, | ||
or the Director may, without a petition, permit or require, in | ||
respect of all or any part
of the person's business activity, | ||
if reasonable:
| ||
(1) Separate accounting;
| ||
(2) The exclusion of any one or more factors;
| ||
(3) The inclusion of one or more additional factors | ||
which will
fairly represent the person's business | ||
activities in this State; or
| ||
(4) The employment of any other method to effectuate an | ||
equitable
allocation and apportionment of the person's | ||
business income.
| ||
(g) Cross reference. For allocation of business income by | ||
residents,
see Section 301(a).
| ||
(h) For tax years ending on or after December 31, 1998, the | ||
apportionment
factor of persons who apportion their business | ||
income to this State under
subsection (a) shall be equal to:
| ||
(1) for tax years ending on or after December 31, 1998 | ||
and before December
31, 1999, 16 2/3% of the property | ||
factor plus 16 2/3% of the payroll factor
plus
66 2/3% of | ||
the sales factor;
| ||
(2) for tax years ending on or after December 31, 1999 | ||
and before December
31,
2000, 8 1/3% of the property factor | ||
plus 8 1/3% of the payroll factor plus 83
1/3%
of the sales | ||
factor;
| ||
(3) for tax years ending on or after December 31, 2000, | ||
the sales factor.
| ||
If, in any tax year ending on or after December 31, 1998 and | ||
before December
31, 2000, the denominator of the payroll, | ||
property, or sales factor is zero,
the apportionment
factor | ||
computed in paragraph (1) or (2) of this subsection for that | ||
year shall
be divided by an amount equal to 100% minus the | ||
percentage weight given to each
factor whose denominator is | ||
equal to zero.
| ||
(Source: P.A. 94-247, eff. 1-1-06; 95-233, eff. 8-16-07; | ||
95-707, eff. 1-11-08.)
| ||
Section 10. The Property Tax Code is amended by changing | ||
Section 15-65 as follows:
| ||
(35 ILCS 200/15-65)
| ||
Sec. 15-65. Charitable purposes. All property of the | ||
following is exempt
when actually and exclusively used for | ||
charitable or beneficent purposes, and
not leased or otherwise | ||
used with a view to profit:
| ||
(a) Institutions of public charity.
| ||
(b) Beneficent and charitable organizations | ||
incorporated in any state of
the United States, including | ||
organizations whose owner, and no other person,
uses the | ||
property exclusively for the distribution, sale, or resale | ||
of donated
goods and related activities and uses all the | ||
income from those activities to
support the charitable, | ||
religious or beneficent activities of the owner,
whether or | ||
not such activities occur on the property.
| ||
(c) Old people's homes, facilities for persons with a | ||
developmental
disability, and not-for-profit organizations | ||
providing services or facilities
related to the goals of | ||
educational, social and physical development, if, upon
| ||
making application for the exemption, the applicant | ||
provides affirmative
evidence that the home or facility or | ||
organization is an exempt organization
under paragraph (3) | ||
of Section 501(c) of the Internal Revenue Code or its
| ||
successor, and either: (i) the bylaws of the home or | ||
facility or not-for-profit
organization provide for a | ||
waiver or reduction, based on an individual's
ability to | ||
pay, of any entrance fee, assignment of assets, or fee for | ||
services,
or (ii) the home or facility is qualified, built | ||
or financed under Section 202
of the National Housing Act | ||
of 1959, as amended.
| ||
An applicant that has been granted an exemption under | ||
this subsection on
the basis that its bylaws provide for a | ||
waiver or reduction, based on an
individual's ability to | ||
pay, of any entrance fee, assignment of assets, or fee
for | ||
services may be periodically reviewed by the Department to | ||
determine if the
waiver or reduction was a past policy or | ||
is a current policy. The Department
may revoke the | ||
exemption if it finds that the policy for waiver or | ||
reduction is
no longer current.
| ||
If a not-for-profit organization leases property that | ||
is otherwise exempt
under this subsection to an | ||
organization that conducts an activity on the
leased | ||
premises that would entitle the lessee to an exemption from | ||
real estate
taxes if the lessee were the owner of the | ||
property, then the leased property
is exempt.
| ||
(d) Not-for-profit health maintenance organizations | ||
certified by the
Director of the Illinois Department of | ||
Insurance under the Health Maintenance
Organization Act, | ||
including any health maintenance organization that
| ||
provides services to members at prepaid rates approved by | ||
the Illinois
Department of Insurance if the membership of | ||
the organization is sufficiently
large or of indefinite | ||
classes so that the community is benefited by its
| ||
operation. No exemption shall apply to any hospital or | ||
health maintenance
organization which has been adjudicated | ||
by a court of competent jurisdiction to
have denied | ||
admission to any person because of race, color, creed, sex | ||
or
national origin.
| ||
(e) All free public libraries.
| ||
(f) Historical societies.
| ||
Property otherwise qualifying for an exemption under this | ||
Section shall not
lose its exemption because the legal title is | ||
held (i) by an entity that is
organized solely to hold that | ||
title and that qualifies under paragraph (2) of
Section 501(c) | ||
of the Internal Revenue Code or its successor, whether or not
| ||
that entity receives rent from the charitable organization for | ||
the repair and
maintenance of the property, (ii) by an entity | ||
that is organized as
a
partnership or limited liability | ||
company, in which the charitable organization, or an affiliate | ||
or
subsidiary of the charitable organization, is a general | ||
partner of the partnership or managing member of the limited | ||
liability company, for the
purposes of owning and operating a | ||
residential rental property that has
received an allocation of | ||
Low Income Housing Tax Credits for 100%
of the dwelling units | ||
under Section 42 of the Internal Revenue
Code of 1986, as | ||
amended, or (iii) for any assessment year including and | ||
subsequent to
January 1, 1996 for which an application for | ||
exemption has been filed and a
decision on which has not become | ||
final and nonappealable, by a limited
liability company | ||
organized under the Limited Liability Company Act provided
that | ||
(A) the limited liability company receives a notification from | ||
the
Internal Revenue Service that it qualifies under paragraph | ||
(2) or (3) of
Section 501(c) of the Internal Revenue Code; (B) | ||
the limited liability
company's sole member or
members, as that | ||
term is used in Section 1-5 of the Limited Liability Company
| ||
Act, are the institutions of public charity that actually and | ||
exclusively use
the property for charitable and beneficent | ||
purposes; (B) the limited liability company is a disregarded | ||
entity for federal and Illinois income tax purposes and, as a | ||
result, the limited liability company is deemed exempt from | ||
income tax liability by virtue of the Internal Revenue Code | ||
Section 501(c)(3) status of its sole member or members; and (C) | ||
the limited
liability company does not lease the property or | ||
otherwise use it with a view
to profit.
| ||
(Source: P.A. 91-416, eff. 8-6-99; 92-382, eff. 8-16-01.)
| ||
Section 99. Effective date. This Act takes effect upon | ||
becoming law.
| ||