Sen. Kwame Raoul

Filed: 5/24/2017

 

 


 

 


 
10000SB0483sam001LRB100 05147 HLH 26954 a

1
AMENDMENT TO SENATE BILL 483

2    AMENDMENT NO. ______. Amend Senate Bill 483 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Income Tax Act is amended by
5changing Section 304 as follows:
 
6    (35 ILCS 5/304)  (from Ch. 120, par. 3-304)
7    Sec. 304. Business income of persons other than residents.
8    (a) In general. The business income of a person other than
9a resident shall be allocated to this State if such person's
10business income is derived solely from this State. If a person
11other than a resident derives business income from this State
12and one or more other states, then, for tax years ending on or
13before December 30, 1998, and except as otherwise provided by
14this Section, such person's business income shall be
15apportioned to this State by multiplying the income by a
16fraction, the numerator of which is the sum of the property

 

 

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1factor (if any), the payroll factor (if any) and 200% of the
2sales factor (if any), and the denominator of which is 4
3reduced by the number of factors other than the sales factor
4which have a denominator of zero and by an additional 2 if the
5sales factor has a denominator of zero. For tax years ending on
6or after December 31, 1998, and except as otherwise provided by
7this Section, persons other than residents who derive business
8income from this State and one or more other states shall
9compute their apportionment factor by weighting their
10property, payroll, and sales factors as provided in subsection
11(h) of this Section.
12    (1) Property factor.
13        (A) The property factor is a fraction, the numerator of
14    which is the average value of the person's real and
15    tangible personal property owned or rented and used in the
16    trade or business in this State during the taxable year and
17    the denominator of which is the average value of all the
18    person's real and tangible personal property owned or
19    rented and used in the trade or business during the taxable
20    year.
21        (B) Property owned by the person is valued at its
22    original cost. Property rented by the person is valued at 8
23    times the net annual rental rate. Net annual rental rate is
24    the annual rental rate paid by the person less any annual
25    rental rate received by the person from sub-rentals.
26        (C) The average value of property shall be determined

 

 

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1    by averaging the values at the beginning and ending of the
2    taxable year but the Director may require the averaging of
3    monthly values during the taxable year if reasonably
4    required to reflect properly the average value of the
5    person's property.
6    (2) Payroll factor.
7        (A) The payroll factor is a fraction, the numerator of
8    which is the total amount paid in this State during the
9    taxable year by the person for compensation, and the
10    denominator of which is the total compensation paid
11    everywhere during the taxable year.
12        (B) Compensation is paid in this State if:
13            (i) The individual's service is performed entirely
14        within this State;
15            (ii) The individual's service is performed both
16        within and without this State, but the service
17        performed without this State is incidental to the
18        individual's service performed within this State; or
19            (iii) 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 service
22        is directed or controlled is within this State, or the
23        base of operations or the place from which the service
24        is directed or controlled is not in any state in which
25        some part of the service is performed, but the
26        individual's residence is in this State; .

 

 

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1            (iv) The individual's service is performed both
2        within and without this State, the individual is not
3        eligible for compensation under subdivisions (ii) and
4        (iii) of this subparagraph (B), and the compensation is
5        paid for services performed only within this State; or
6            (v) (iv) Compensation paid to nonresident
7        professional athletes.
8            (a) General. The Illinois source income of a
9        nonresident individual who is a member of a
10        professional athletic team includes the portion of the
11        individual's total compensation for services performed
12        as a member of a professional athletic team during the
13        taxable year which the number of duty days spent within
14        this State performing services for the team in any
15        manner during the taxable year bears to the total
16        number of duty days spent both within and without this
17        State during the taxable year.
18            (b) Travel days. Travel days that do not involve
19        either a game, practice, team meeting, or other similar
20        team event are not considered duty days spent in this
21        State. However, such travel days are considered in the
22        total duty days spent both within and without this
23        State.
24            (c) Definitions. For purposes of this subpart (v)
25        (iv):
26                (1) The term "professional athletic team"

 

 

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1            includes, but is not limited to, any professional
2            baseball, basketball, football, soccer, or hockey
3            team.
4                (2) The term "member of a professional
5            athletic team" includes those employees who are
6            active players, players on the disabled list, and
7            any other persons required to travel and who travel
8            with and perform services on behalf of a
9            professional athletic team on a regular basis.
10            This includes, but is not limited to, coaches,
11            managers, and trainers.
12                (3) Except as provided in items (C) and (D) of
13            this subpart (3), the term "duty days" means all
14            days during the taxable year from the beginning of
15            the professional athletic team's official
16            pre-season training period through the last game
17            in which the team competes or is scheduled to
18            compete. Duty days shall be counted for the year in
19            which they occur, including where a team's
20            official pre-season training period through the
21            last game in which the team competes or is
22            scheduled to compete, occurs during more than one
23            tax year.
24                    (A) Duty days shall also include days on
25                which a member of a professional athletic team
26                performs service for a team on a date that does

 

 

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1                not fall within the foregoing period (e.g.,
2                participation in instructional leagues, the
3                "All Star Game", or promotional "caravans").
4                Performing a service for a professional
5                athletic team includes conducting training and
6                rehabilitation activities, when such
7                activities are conducted at team facilities.
8                    (B) Also included in duty days are game
9                days, practice days, days spent at team
10                meetings, promotional caravans, preseason
11                training camps, and days served with the team
12                through all post-season games in which the team
13                competes or is scheduled to compete.
14                    (C) Duty days for any person who joins a
15                team during the period from the beginning of
16                the professional athletic team's official
17                pre-season training period through the last
18                game in which the team competes, or is
19                scheduled to compete, shall begin on the day
20                that person joins the team. Conversely, duty
21                days for any person who leaves a team during
22                this period shall end on the day that person
23                leaves the team. Where a person switches teams
24                during a taxable year, a separate duty-day
25                calculation shall be made for the period the
26                person was with each team.

 

 

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1                    (D) Days for which a member of a
2                professional athletic team is not compensated
3                and is not performing services for the team in
4                any manner, including days when such member of
5                a professional athletic team has been
6                suspended without pay and prohibited from
7                performing any services for the team, shall not
8                be treated as duty days.
9                    (E) Days for which a member of a
10                professional athletic team is on the disabled
11                list and does not conduct rehabilitation
12                activities at facilities of the team, and is
13                not otherwise performing services for the team
14                in Illinois, shall not be considered duty days
15                spent in this State. All days on the disabled
16                list, however, are considered to be included in
17                total duty days spent both within and without
18                this State.
19                (4) The term "total compensation for services
20            performed as a member of a professional athletic
21            team" means the total compensation received during
22            the taxable year for services performed:
23                    (A) from the beginning of the official
24                pre-season training period through the last
25                game in which the team competes or is scheduled
26                to compete during that taxable year; and

 

 

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1                    (B) during the taxable year on a date which
2                does not fall within the foregoing period
3                (e.g., participation in instructional leagues,
4                the "All Star Game", or promotional caravans).
5                This compensation shall include, but is not
6            limited to, salaries, wages, bonuses as described
7            in this subpart, and any other type of compensation
8            paid during the taxable year to a member of a
9            professional athletic team for services performed
10            in that year. This compensation does not include
11            strike benefits, severance pay, termination pay,
12            contract or option year buy-out payments,
13            expansion or relocation payments, or any other
14            payments not related to services performed for the
15            team.
16                For purposes of this subparagraph, "bonuses"
17            included in "total compensation for services
18            performed as a member of a professional athletic
19            team" subject to the allocation described in
20            Section 302(c)(1) are: bonuses earned as a result
21            of play (i.e., performance bonuses) during the
22            season, including bonuses paid for championship,
23            playoff or "bowl" games played by a team, or for
24            selection to all-star league or other honorary
25            positions; and bonuses paid for signing a
26            contract, unless the payment of the signing bonus

 

 

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1            is not conditional upon the signee playing any
2            games for the team or performing any subsequent
3            services for the team or even making the team, the
4            signing bonus is payable separately from the
5            salary and any other compensation, and the signing
6            bonus is nonrefundable; or .
7    (3) Sales factor.
8        (A) The sales factor is a fraction, the numerator of
9    which is the total sales of the person in this State during
10    the taxable year, and the denominator of which is the total
11    sales of the person everywhere during the taxable year.
12        (B) Sales of tangible personal property are in this
13    State if:
14            (i) The property is delivered or shipped to a
15        purchaser, other than the United States government,
16        within this State regardless of the f. o. b. point or
17        other conditions of the sale; or
18            (ii) The property is shipped from an office, store,
19        warehouse, factory or other place of storage in this
20        State and either the purchaser is the United States
21        government or the person is not taxable in the state of
22        the purchaser; provided, however, that premises owned
23        or leased by a person who has independently contracted
24        with the seller for the printing of newspapers,
25        periodicals or books shall not be deemed to be an
26        office, store, warehouse, factory or other place of

 

 

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1        storage for purposes of this Section. Sales of tangible
2        personal property are not in this State if the seller
3        and purchaser would be members of the same unitary
4        business group but for the fact that either the seller
5        or purchaser is a person with 80% or more of total
6        business activity outside of the United States and the
7        property is purchased for 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 this
14        item (3), are in this State to the extent the item is
15        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 equal
25            to the gross receipts of the licensee or purchaser
26            from sales or leases of items produced,

 

 

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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 of
4            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 utilized
9            in more than one state, the extent to which it is
10            utilized in any one state shall be a fraction equal
11            to the gross receipts from sales or licenses of
12            materials printed or published in that state
13            divided by the total of such gross receipts for all
14            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

 

 

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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 the
7    sales factor only if gross receipts from licenses, sales,
8    or other disposition of such items comprise more than 50%
9    of the taxpayer's total gross receipts included in gross
10    income during the tax year and during each of the 2
11    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 31,
16    2008, except as provided in subsections (ii) through (vii),
17    receipts from the sale of telecommunications service or
18    mobile telecommunications service are in this State if the
19    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

 

 

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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.

 

 

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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 of
17        mobile telecommunications services, "place of primary
18        use" must be within the licensed service area of the
19        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

 

 

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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 number
10        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

 

 

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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 and
8            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

 

 

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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 to
18            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

 

 

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1            audio and video programming services shall include
2            but not be limited to cable service as defined in
3            47 USC 522(6) and audio and video programming
4            services delivered by commercial mobile radio
5            service providers, as defined in 47 CFR 20.3;
6                (h) "Ancillary services"; or
7                (i) Digital products "delivered
8            electronically", including but not limited to
9            software, music, video, reading materials or ring
10            tones.
11            "Vertical service" means an "ancillary service"
12        that is offered in connection with one or more
13        "telecommunications services", which offers advanced
14        calling features that allow customers to identify
15        callers and to manage multiple calls and call
16        connections, including "conference bridging services".
17            "Voice mail service" means an "ancillary service"
18        that enables the customer to store, send or receive
19        recorded messages. "Voice mail service" does not
20        include any "vertical services" that the customer may
21        be required to have in order to utilize the "voice mail
22        service".
23            (ii) Receipts from the sale of telecommunications
24        service sold on an individual call-by-call basis are in
25        this State if either of the following applies:
26                (a) The call both originates and terminates in

 

 

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1            this State.
2                (b) The call either originates or terminates
3            in this State and the service address is located in
4            this State.
5            (iii) Receipts from the sale of postpaid
6        telecommunications service at retail are in this State
7        if the origination point of the telecommunication
8        signal, as first identified by the service provider's
9        telecommunication system or as identified by
10        information received by the seller from its service
11        provider if the system used to transport
12        telecommunication signals is not the seller's, is
13        located in this State.
14            (iv) Receipts from the sale of prepaid
15        telecommunications service or prepaid mobile
16        telecommunications service at retail are in this State
17        if the purchaser obtains the prepaid card or similar
18        means of conveyance at a location in this State.
19        Receipts from recharging a prepaid telecommunications
20        service or mobile telecommunications service is in
21        this State if the purchaser's billing information
22        indicates a location in this State.
23            (v) Receipts from the sale of private
24        communication services are in this State as follows:
25                (a) 100% of receipts from charges imposed at
26            each channel termination point in this State.

 

 

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1                (b) 100% of receipts from charges for the total
2            channel mileage between each channel termination
3            point in this State.
4                (c) 50% of the total receipts from charges for
5            service segments when those segments are between 2
6            customer channel termination points, 1 of which is
7            located in this State and the other is located
8            outside of this State, which segments are
9            separately charged.
10                (d) The receipts from charges for service
11            segments with a channel termination point located
12            in this State and in two or more other states, and
13            which segments are not separately billed, are in
14            this State based on a percentage determined by
15            dividing the number of customer channel
16            termination points in this State by the total
17            number of customer channel termination points.
18            (vi) Receipts from charges for ancillary services
19        for telecommunications service sold to customers at
20        retail are in this State if the customer's primary
21        place of use of telecommunications services associated
22        with those ancillary services is in this State. If the
23        seller of those ancillary services cannot determine
24        where the associated telecommunications are located,
25        then the ancillary services shall be based on the
26        location of the purchaser.

 

 

10000SB0483sam001- 21 -LRB100 05147 HLH 26954 a

1            (vii) Receipts to access a carrier's network or
2        from the sale of telecommunication services or
3        ancillary services for resale are in this State as
4        follows:
5                (a) 100% of the receipts from access fees
6            attributable to intrastate telecommunications
7            service that both originates and terminates in
8            this State.
9                (b) 50% of the receipts from access fees
10            attributable to interstate telecommunications
11            service if the interstate call either originates
12            or terminates in this State.
13                (c) 100% of the receipts from interstate end
14            user access line charges, if the customer's
15            service address is in this State. As used in this
16            subdivision, "interstate end user access line
17            charges" includes, but is not limited to, the
18            surcharge approved by the federal communications
19            commission and levied pursuant to 47 CFR 69.
20                (d) Gross receipts from sales of
21            telecommunication services or from ancillary
22            services for telecommunications services sold to
23            other telecommunication service providers for
24            resale shall be sourced to this State using the
25            apportionment concepts used for non-resale
26            receipts of telecommunications services if the

 

 

10000SB0483sam001- 22 -LRB100 05147 HLH 26954 a

1            information is readily available to make that
2            determination. If the information is not readily
3            available, then the taxpayer may use any other
4            reasonable and consistent method.
5        (B-7) For taxable years ending on or after December 31,
6    2008, receipts from the sale of broadcasting services are
7    in this State if the broadcasting services are received in
8    this State. For purposes of this paragraph (B-7), the
9    following terms have the following meanings:
10            "Advertising revenue" means consideration received
11        by the taxpayer in exchange for broadcasting services
12        or allowing the broadcasting of commercials or
13        announcements in connection with the broadcasting of
14        film or radio programming, from sponsorships of the
15        programming, or from product placements in the
16        programming.
17            "Audience factor" means the ratio that the
18        audience or subscribers located in this State of a
19        station, a network, or a cable system bears to the
20        total audience or total subscribers for that station,
21        network, or cable system. The audience factor for film
22        or radio programming shall be determined by reference
23        to the books and records of the taxpayer or by
24        reference to published rating statistics provided the
25        method used by the taxpayer is consistently used from
26        year to year for this purpose and fairly represents the

 

 

10000SB0483sam001- 23 -LRB100 05147 HLH 26954 a

1        taxpayer's activity in this State.
2            "Broadcast" or "broadcasting" or "broadcasting
3        services" means the transmission or provision of film
4        or radio programming, whether through the public
5        airwaves, by cable, by direct or indirect satellite
6        transmission, or by any other means of communication,
7        either through a station, a network, or a cable system.
8            "Film" or "film programming" means the broadcast
9        on television of any and all performances, events, or
10        productions, including but not limited to news,
11        sporting events, plays, stories, or other literary,
12        commercial, educational, or artistic works, either
13        live or through the use of video tape, disc, or any
14        other type of format or medium. Each episode of a
15        series of films produced for television shall
16        constitute separate "film" notwithstanding that the
17        series relates to the same principal subject and is
18        produced during one or more tax periods.
19            "Radio" or "radio programming" means the broadcast
20        on radio of any and all performances, events, or
21        productions, including but not limited to news,
22        sporting events, plays, stories, or other literary,
23        commercial, educational, or artistic works, either
24        live or through the use of an audio tape, disc, or any
25        other format or medium. Each episode in a series of
26        radio programming produced for radio broadcast shall

 

 

10000SB0483sam001- 24 -LRB100 05147 HLH 26954 a

1        constitute a separate "radio programming"
2        notwithstanding that the series relates to the same
3        principal subject and is produced during one or more
4        tax periods.
5                (i) In the case of advertising revenue from
6            broadcasting, the customer is the advertiser and
7            the service is received in this State if the
8            commercial domicile of the advertiser is in this
9            State.
10                (ii) In the case where film or radio
11            programming is broadcast by a station, a network,
12            or a cable system for a fee or other remuneration
13            received from the recipient of the broadcast, the
14            portion of the service that is received in this
15            State is measured by the portion of the recipients
16            of the broadcast located in this State.
17            Accordingly, the fee or other remuneration for
18            such service that is included in the Illinois
19            numerator of the sales factor is the total of those
20            fees or other remuneration received from
21            recipients in Illinois. For purposes of this
22            paragraph, a taxpayer may determine the location
23            of the recipients of its broadcast using the
24            address of the recipient shown in its contracts
25            with the recipient or using the billing address of
26            the recipient in the taxpayer's records.

 

 

10000SB0483sam001- 25 -LRB100 05147 HLH 26954 a

1                (iii) In the case where film or radio
2            programming is broadcast by a station, a network,
3            or a cable system for a fee or other remuneration
4            from the person providing the programming, the
5            portion of the broadcast service that is received
6            by such station, network, or cable system in this
7            State is measured by the portion of recipients of
8            the broadcast located in this State. Accordingly,
9            the amount of revenue related to such an
10            arrangement that is included in the Illinois
11            numerator of the sales factor is the total fee or
12            other total remuneration from the person providing
13            the programming related to that broadcast
14            multiplied by the Illinois audience factor for
15            that broadcast.
16                (iv) In the case where film or radio
17            programming is provided by a taxpayer that is a
18            network or station to a customer for broadcast in
19            exchange for a fee or other remuneration from that
20            customer the broadcasting service is received at
21            the location of the office of the customer from
22            which the services were ordered in the regular
23            course of the customer's trade or business.
24            Accordingly, in such a case the revenue derived by
25            the taxpayer that is included in the taxpayer's
26            Illinois numerator of the sales factor is the

 

 

10000SB0483sam001- 26 -LRB100 05147 HLH 26954 a

1            revenue from such customers who receive the
2            broadcasting service in Illinois.
3                (v) In the case where film or radio programming
4            is provided by a taxpayer that is not a network or
5            station to another person for broadcasting in
6            exchange for a fee or other remuneration from that
7            person, the broadcasting service is received at
8            the location of the office of the customer from
9            which the services were ordered in the regular
10            course of the customer's trade or business.
11            Accordingly, in such a case the revenue derived by
12            the taxpayer that is included in the taxpayer's
13            Illinois numerator of the sales factor is the
14            revenue from such customers who receive the
15            broadcasting service in Illinois.
16        (B-8) Gross receipts from winnings under the Illinois
17    Lottery Law from the assignment of a prize under Section
18    13.1 of the Illinois Lottery Law are received in this
19    State. This paragraph (B-8) applies only to taxable years
20    ending on or after December 31, 2013.
21        (C) For taxable years ending before December 31, 2008,
22    sales, other than sales governed by paragraphs (B), (B-1),
23    (B-2), and (B-8) are in this State if:
24            (i) The income-producing activity is performed in
25        this State; or
26            (ii) The income-producing activity is performed

 

 

10000SB0483sam001- 27 -LRB100 05147 HLH 26954 a

1        both within and without this State and a greater
2        proportion of the income-producing activity is
3        performed within this State than without this State,
4        based on performance costs.
5        (C-5) For taxable years ending on or after December 31,
6    2008, sales, other than sales governed by paragraphs (B),
7    (B-1), (B-2), (B-5), and (B-7), are in this State if any of
8    the following criteria are met:
9            (i) Sales from the sale or lease of real property
10        are in this State if the property is located in this
11        State.
12            (ii) Sales from the lease or rental of tangible
13        personal property are in this State if the property is
14        located in this State during the rental period. Sales
15        from the lease or rental of tangible personal property
16        that is characteristically moving property, including,
17        but not limited to, motor vehicles, rolling stock,
18        aircraft, vessels, or mobile equipment are in this
19        State to the extent that the property is used in this
20        State.
21            (iii) In the case of interest, net gains (but not
22        less than zero) and other items of income from
23        intangible personal property, the sale is in this State
24        if:
25                (a) in the case of a taxpayer who is a dealer
26            in the item of intangible personal property within

 

 

10000SB0483sam001- 28 -LRB100 05147 HLH 26954 a

1            the meaning of Section 475 of the Internal Revenue
2            Code, the income or gain is received from a
3            customer in this State. For purposes of this
4            subparagraph, a customer is in this State if the
5            customer is an individual, trust or estate who is a
6            resident of this State and, for all other
7            customers, if the customer's commercial domicile
8            is in this State. Unless the dealer has actual
9            knowledge of the residence or commercial domicile
10            of a customer during a taxable year, the customer
11            shall be deemed to be a customer in this State if
12            the billing address of the customer, as shown in
13            the records of the dealer, is in this State; or
14                (b) in all other cases, if the
15            income-producing activity of the taxpayer is
16            performed in this State or, if the
17            income-producing activity of the taxpayer is
18            performed both within and without this State, if a
19            greater proportion of the income-producing
20            activity of the taxpayer is performed within this
21            State than in any other state, based on performance
22            costs.
23            (iv) Sales of services are in this State if the
24        services are received in this State. For the purposes
25        of this section, gross receipts from the performance of
26        services provided to a corporation, partnership, or

 

 

10000SB0483sam001- 29 -LRB100 05147 HLH 26954 a

1        trust may only be attributed to a state where that
2        corporation, partnership, or trust has a fixed place of
3        business. If the state where the services are received
4        is not readily determinable or is a state where the
5        corporation, partnership, or trust receiving the
6        service does not have a fixed place of business, the
7        services shall be deemed to be received at the location
8        of the office of the customer from which the services
9        were ordered in the regular course of the customer's
10        trade or business. If the ordering office cannot be
11        determined, the services shall be deemed to be received
12        at the office of the customer to which the services are
13        billed. If the taxpayer is not taxable in the state in
14        which the services are received, the sale must be
15        excluded from both the numerator and the denominator of
16        the sales factor. The Department shall adopt rules
17        prescribing where specific types of service are
18        received, including, but not limited to, publishing,
19        and utility service.
20        (D) For taxable years ending on or after December 31,
21    1995, the following items of income shall not be included
22    in the numerator or denominator of the sales factor:
23    dividends; amounts included under Section 78 of the
24    Internal Revenue Code; and Subpart F income as defined in
25    Section 952 of the Internal Revenue Code. No inference
26    shall be drawn from the enactment of this paragraph (D) in

 

 

10000SB0483sam001- 30 -LRB100 05147 HLH 26954 a

1    construing this Section for taxable years ending before
2    December 31, 1995.
3        (E) Paragraphs (B-1) and (B-2) shall apply to tax years
4    ending on or after December 31, 1999, provided that a
5    taxpayer may elect to apply the provisions of these
6    paragraphs to prior tax years. Such election shall be made
7    in the form and manner prescribed by the Department, shall
8    be irrevocable, and shall apply to all tax years; provided
9    that, if a taxpayer's Illinois income tax liability for any
10    tax year, as assessed under Section 903 prior to January 1,
11    1999, was computed in a manner contrary to the provisions
12    of paragraphs (B-1) or (B-2), no refund shall be payable to
13    the taxpayer for that tax year to the extent such refund is
14    the result of applying the provisions of paragraph (B-1) or
15    (B-2) retroactively. In the case of a unitary business
16    group, such election shall apply to all members of such
17    group for every tax year such group is in existence, but
18    shall not apply to any taxpayer for any period during which
19    that taxpayer is not a member of such group.
20    (b) Insurance companies.
21        (1) In general. Except as otherwise provided by
22    paragraph (2), business income of an insurance company for
23    a taxable year shall be apportioned to this State by
24    multiplying such income by a fraction, the numerator of
25    which is the direct premiums written for insurance upon
26    property or risk in this State, and the denominator of

 

 

10000SB0483sam001- 31 -LRB100 05147 HLH 26954 a

1    which is the direct premiums written for insurance upon
2    property or risk everywhere. For purposes of this
3    subsection, the term "direct premiums written" means the
4    total amount of direct premiums written, assessments and
5    annuity considerations as reported for the taxable year on
6    the annual statement filed by the company with the Illinois
7    Director of Insurance in the form approved by the National
8    Convention of Insurance Commissioners or such other form as
9    may be prescribed in lieu thereof.
10        (2) Reinsurance. If the principal source of premiums
11    written by an insurance company consists of premiums for
12    reinsurance accepted by it, the business income of such
13    company shall be apportioned to this State by multiplying
14    such income by a fraction, the numerator of which is the
15    sum of (i) direct premiums written for insurance upon
16    property or risk in this State, plus (ii) premiums written
17    for reinsurance accepted in respect of property or risk in
18    this State, and the denominator of which is the sum of
19    (iii) direct premiums written for insurance upon property
20    or risk everywhere, plus (iv) premiums written for
21    reinsurance accepted in respect of property or risk
22    everywhere. For purposes of this paragraph, premiums
23    written for reinsurance accepted in respect of property or
24    risk in this State, whether or not otherwise determinable,
25    may, at the election of the company, be determined on the
26    basis of the proportion which premiums written for

 

 

10000SB0483sam001- 32 -LRB100 05147 HLH 26954 a

1    reinsurance accepted from companies commercially domiciled
2    in Illinois bears to premiums written for reinsurance
3    accepted from all sources, or, alternatively, in the
4    proportion which the sum of the direct premiums written for
5    insurance upon property or risk in this State by each
6    ceding company from which reinsurance is accepted bears to
7    the sum of the total direct premiums written by each such
8    ceding company for the taxable year. The election made by a
9    company under this paragraph for its first taxable year
10    ending on or after December 31, 2011, shall be binding for
11    that company for that taxable year and for all subsequent
12    taxable years, and may be altered only with the written
13    permission of the Department, which shall not be
14    unreasonably withheld.
15    (c) Financial organizations.
16        (1) In general. For taxable years ending before
17    December 31, 2008, business income of a financial
18    organization shall be apportioned to this State by
19    multiplying such income by a fraction, the numerator of
20    which is its business income from sources within this
21    State, and the denominator of which is its business income
22    from all sources. For the purposes of this subsection, the
23    business income of a financial organization from sources
24    within this State is the sum of the amounts referred to in
25    subparagraphs (A) through (E) following, but excluding the
26    adjusted income of an international banking facility as

 

 

10000SB0483sam001- 33 -LRB100 05147 HLH 26954 a

1    determined in paragraph (2):
2            (A) Fees, commissions or other compensation for
3        financial services rendered within this State;
4            (B) Gross profits from trading in stocks, bonds or
5        other securities managed within this State;
6            (C) Dividends, and interest from Illinois
7        customers, which are received within this State;
8            (D) Interest charged to customers at places of
9        business maintained within this State for carrying
10        debit balances of margin accounts, without deduction
11        of any costs incurred in carrying such accounts; and
12            (E) Any other gross income resulting from the
13        operation as a financial organization within this
14        State. In computing the amounts referred to in
15        paragraphs (A) through (E) of this subsection, any
16        amount received by a member of an affiliated group
17        (determined under Section 1504(a) of the Internal
18        Revenue Code but without reference to whether any such
19        corporation is an "includible corporation" under
20        Section 1504(b) of the Internal Revenue Code) from
21        another member of such group shall be included only to
22        the extent such amount exceeds expenses of the
23        recipient directly related thereto.
24        (2) International Banking Facility. For taxable years
25    ending before December 31, 2008:
26            (A) Adjusted Income. The adjusted income of an

 

 

10000SB0483sam001- 34 -LRB100 05147 HLH 26954 a

1        international banking facility is its income reduced
2        by the amount of the floor amount.
3            (B) Floor Amount. The floor amount shall be the
4        amount, if any, determined by multiplying the income of
5        the international banking facility by a fraction, not
6        greater than one, which is determined as follows:
7                (i) The numerator shall be:
8                The average aggregate, determined on a
9            quarterly basis, of the financial organization's
10            loans to banks in foreign countries, to foreign
11            domiciled borrowers (except where secured
12            primarily by real estate) and to foreign
13            governments and other foreign official
14            institutions, as reported for its branches,
15            agencies and offices within the state on its
16            "Consolidated Report of Condition", Schedule A,
17            Lines 2.c., 5.b., and 7.a., which was filed with
18            the Federal Deposit Insurance Corporation and
19            other regulatory authorities, for the year 1980,
20            minus
21                The average aggregate, determined on a
22            quarterly basis, of such loans (other than loans of
23            an international banking facility), as reported by
24            the financial institution for its branches,
25            agencies and offices within the state, on the
26            corresponding Schedule and lines of the

 

 

10000SB0483sam001- 35 -LRB100 05147 HLH 26954 a

1            Consolidated Report of Condition for the current
2            taxable year, provided, however, that in no case
3            shall the amount determined in this clause (the
4            subtrahend) exceed the amount determined in the
5            preceding clause (the minuend); and
6                (ii) the denominator shall be the average
7            aggregate, determined on a quarterly basis, of the
8            international banking facility's loans to banks in
9            foreign countries, to foreign domiciled borrowers
10            (except where secured primarily by real estate)
11            and to foreign governments and other foreign
12            official institutions, which were recorded in its
13            financial accounts for the current taxable year.
14            (C) Change to Consolidated Report of Condition and
15        in Qualification. In the event the Consolidated Report
16        of Condition which is filed with the Federal Deposit
17        Insurance Corporation and other regulatory authorities
18        is altered so that the information required for
19        determining the floor amount is not found on Schedule
20        A, lines 2.c., 5.b. and 7.a., the financial institution
21        shall notify the Department and the Department may, by
22        regulations or otherwise, prescribe or authorize the
23        use of an alternative source for such information. The
24        financial institution shall also notify the Department
25        should its international banking facility fail to
26        qualify as such, in whole or in part, or should there

 

 

10000SB0483sam001- 36 -LRB100 05147 HLH 26954 a

1        be any amendment or change to the Consolidated Report
2        of Condition, as originally filed, to the extent such
3        amendment or change alters the information used in
4        determining the floor amount.
5        (3) For taxable years ending on or after December 31,
6    2008, the business income of a financial organization shall
7    be apportioned to this State by multiplying such income by
8    a fraction, the numerator of which is its gross receipts
9    from sources in this State or otherwise attributable to
10    this State's marketplace and the denominator of which is
11    its gross receipts everywhere during the taxable year.
12    "Gross receipts" for purposes of this subparagraph (3)
13    means gross income, including net taxable gain on
14    disposition of assets, including securities and money
15    market instruments, when derived from transactions and
16    activities in the regular course of the financial
17    organization's trade or business. The following examples
18    are illustrative:
19            (i) Receipts from the lease or rental of real or
20        tangible personal property are in this State if the
21        property is located in this State during the rental
22        period. Receipts from the lease or rental of tangible
23        personal property that is characteristically moving
24        property, including, but not limited to, motor
25        vehicles, rolling stock, aircraft, vessels, or mobile
26        equipment are from sources in this State to the extent

 

 

10000SB0483sam001- 37 -LRB100 05147 HLH 26954 a

1        that the property is used in this State.
2            (ii) Interest income, commissions, fees, gains on
3        disposition, and other receipts from assets in the
4        nature of loans that are secured primarily by real
5        estate or tangible personal property are from sources
6        in this State if the security is located in this State.
7            (iii) Interest income, commissions, fees, gains on
8        disposition, and other receipts from consumer loans
9        that are not secured by real or tangible personal
10        property are from sources in this State if the debtor
11        is a resident of this State.
12            (iv) Interest income, commissions, fees, gains on
13        disposition, and other receipts from commercial loans
14        and installment obligations that are not secured by
15        real or tangible personal property are from sources in
16        this State if the proceeds of the loan are to be
17        applied in this State. If it cannot be determined where
18        the funds are to be applied, the income and receipts
19        are from sources in this State if the office of the
20        borrower from which the loan was negotiated in the
21        regular course of business is located in this State. If
22        the location of this office cannot be determined, the
23        income and receipts shall be excluded from the
24        numerator and denominator of the sales factor.
25            (v) Interest income, fees, gains on disposition,
26        service charges, merchant discount income, and other

 

 

10000SB0483sam001- 38 -LRB100 05147 HLH 26954 a

1        receipts from credit card receivables are from sources
2        in this State if the card charges are regularly billed
3        to a customer in this State.
4            (vi) Receipts from the performance of services,
5        including, but not limited to, fiduciary, advisory,
6        and brokerage services, are in this State if the
7        services are received in this State within the meaning
8        of subparagraph (a)(3)(C-5)(iv) of this Section.
9            (vii) Receipts from the issuance of travelers
10        checks and money orders are from sources in this State
11        if the checks and money orders are issued from a
12        location within this State.
13            (viii) Receipts from investment assets and
14        activities and trading assets and activities are
15        included in the receipts factor as follows:
16                (1) Interest, dividends, net gains (but not
17            less than zero) and other income from investment
18            assets and activities from trading assets and
19            activities shall be included in the receipts
20            factor. Investment assets and activities and
21            trading assets and activities include but are not
22            limited to: investment securities; trading account
23            assets; federal funds; securities purchased and
24            sold under agreements to resell or repurchase;
25            options; futures contracts; forward contracts;
26            notional principal contracts such as swaps;

 

 

10000SB0483sam001- 39 -LRB100 05147 HLH 26954 a

1            equities; and foreign currency transactions. With
2            respect to the investment and trading assets and
3            activities described in subparagraphs (A) and (B)
4            of this paragraph, the receipts factor shall
5            include the amounts described in such
6            subparagraphs.
7                    (A) The receipts factor shall include the
8                amount by which interest from federal funds
9                sold and securities purchased under resale
10                agreements exceeds interest expense on federal
11                funds purchased and securities sold under
12                repurchase agreements.
13                    (B) The receipts factor shall include the
14                amount by which interest, dividends, gains and
15                other income from trading assets and
16                activities, including but not limited to
17                assets and activities in the matched book, in
18                the arbitrage book, and foreign currency
19                transactions, exceed amounts paid in lieu of
20                interest, amounts paid in lieu of dividends,
21                and losses from such assets and activities.
22                (2) The numerator of the receipts factor
23            includes interest, dividends, net gains (but not
24            less than zero), and other income from investment
25            assets and activities and from trading assets and
26            activities described in paragraph (1) of this

 

 

10000SB0483sam001- 40 -LRB100 05147 HLH 26954 a

1            subsection that are attributable to this State.
2                    (A) The amount of interest, dividends, net
3                gains (but not less than zero), and other
4                income from investment assets and activities
5                in the investment account to be attributed to
6                this State and included in the numerator is
7                determined by multiplying all such income from
8                such assets and activities by a fraction, the
9                numerator of which is the gross income from
10                such assets and activities which are properly
11                assigned to a fixed place of business of the
12                taxpayer within this State and the denominator
13                of which is the gross income from all such
14                assets and activities.
15                    (B) The amount of interest from federal
16                funds sold and purchased and from securities
17                purchased under resale agreements and
18                securities sold under repurchase agreements
19                attributable to this State and included in the
20                numerator is determined by multiplying the
21                amount described in subparagraph (A) of
22                paragraph (1) of this subsection from such
23                funds and such securities by a fraction, the
24                numerator of which is the gross income from
25                such funds and such securities which are
26                properly assigned to a fixed place of business

 

 

10000SB0483sam001- 41 -LRB100 05147 HLH 26954 a

1                of the taxpayer within this State and the
2                denominator of which is the gross income from
3                all such funds and such securities.
4                    (C) The amount of interest, dividends,
5                gains, and other income from trading assets and
6                activities, including but not limited to
7                assets and activities in the matched book, in
8                the arbitrage book and foreign currency
9                transactions (but excluding amounts described
10                in subparagraphs (A) or (B) of this paragraph),
11                attributable to this State and included in the
12                numerator is determined by multiplying the
13                amount described in subparagraph (B) of
14                paragraph (1) of this subsection by a fraction,
15                the numerator of which is the gross income from
16                such trading assets and activities which are
17                properly assigned to a fixed place of business
18                of the taxpayer within this State and the
19                denominator of which is the gross income from
20                all such assets and activities.
21                    (D) Properly assigned, for purposes of
22                this paragraph (2) of this subsection, means
23                the investment or trading asset or activity is
24                assigned to the fixed place of business with
25                which it has a preponderance of substantive
26                contacts. An investment or trading asset or

 

 

10000SB0483sam001- 42 -LRB100 05147 HLH 26954 a

1                activity assigned by the taxpayer to a fixed
2                place of business without the State shall be
3                presumed to have been properly assigned if:
4                        (i) the taxpayer has assigned, in the
5                    regular course of its business, such asset
6                    or activity on its records to a fixed place
7                    of business consistent with federal or
8                    state regulatory requirements;
9                        (ii) such assignment on its records is
10                    based upon substantive contacts of the
11                    asset or activity to such fixed place of
12                    business; and
13                        (iii) the taxpayer uses such records
14                    reflecting assignment of such assets or
15                    activities for the filing of all state and
16                    local tax returns for which an assignment
17                    of such assets or activities to a fixed
18                    place of business is required.
19                    (E) The presumption of proper assignment
20                of an investment or trading asset or activity
21                provided in subparagraph (D) of paragraph (2)
22                of this subsection may be rebutted upon a
23                showing by the Department, supported by a
24                preponderance of the evidence, that the
25                preponderance of substantive contacts
26                regarding such asset or activity did not occur

 

 

10000SB0483sam001- 43 -LRB100 05147 HLH 26954 a

1                at the fixed place of business to which it was
2                assigned on the taxpayer's records. If the
3                fixed place of business that has a
4                preponderance of substantive contacts cannot
5                be determined for an investment or trading
6                asset or activity to which the presumption in
7                subparagraph (D) of paragraph (2) of this
8                subsection does not apply or with respect to
9                which that presumption has been rebutted, that
10                asset or activity is properly assigned to the
11                state in which the taxpayer's commercial
12                domicile is located. For purposes of this
13                subparagraph (E), it shall be presumed,
14                subject to rebuttal, that taxpayer's
15                commercial domicile is in the state of the
16                United States or the District of Columbia to
17                which the greatest number of employees are
18                regularly connected with the management of the
19                investment or trading income or out of which
20                they are working, irrespective of where the
21                services of such employees are performed, as of
22                the last day of the taxable year.
23        (4) (Blank).
24        (5) (Blank).
25    (c-1) Federally regulated exchanges. For taxable years
26ending on or after December 31, 2012, business income of a

 

 

10000SB0483sam001- 44 -LRB100 05147 HLH 26954 a

1federally regulated exchange shall, at the option of the
2federally regulated exchange, be apportioned to this State by
3multiplying such income by a fraction, the numerator of which
4is its business income from sources within this State, and the
5denominator of which is its business income from all sources.
6For purposes of this subsection, the business income within
7this State of a federally regulated exchange is the sum of the
8following:
9        (1) Receipts attributable to transactions executed on
10    a physical trading floor if that physical trading floor is
11    located in this State.
12        (2) Receipts attributable to all other matching,
13    execution, or clearing transactions, including without
14    limitation receipts from the provision of matching,
15    execution, or clearing services to another entity,
16    multiplied by (i) for taxable years ending on or after
17    December 31, 2012 but before December 31, 2013, 63.77%; and
18    (ii) for taxable years ending on or after December 31,
19    2013, 27.54%.
20        (3) All other receipts not governed by subparagraphs
21    (1) or (2) of this subsection (c-1), to the extent the
22    receipts would be characterized as "sales in this State"
23    under item (3) of subsection (a) of this Section.
24    "Federally regulated exchange" means (i) a "registered
25entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B),
26or (C), (ii) an "exchange" or "clearing agency" within the

 

 

10000SB0483sam001- 45 -LRB100 05147 HLH 26954 a

1meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such
2entities regulated under any successor regulatory structure to
3the foregoing, and (iv) all taxpayers who are members of the
4same unitary business group as a federally regulated exchange,
5determined without regard to the prohibition in Section
61501(a)(27) of this Act against including in a unitary business
7group taxpayers who are ordinarily required to apportion
8business income under different subsections of this Section;
9provided that this subparagraph (iv) shall apply only if 50% or
10more of the business receipts of the unitary business group
11determined by application of this subparagraph (iv) for the
12taxable year are attributable to the matching, execution, or
13clearing of transactions conducted by an entity described in
14subparagraph (i), (ii), or (iii) of this paragraph.
15    In no event shall the Illinois apportionment percentage
16computed in accordance with this subsection (c-1) for any
17taxpayer for any tax year be less than the Illinois
18apportionment percentage computed under this subsection (c-1)
19for that taxpayer for the first full tax year ending on or
20after December 31, 2013 for which this subsection (c-1) applied
21to the taxpayer.
22    (d) Transportation services. For taxable years ending
23before December 31, 2008, business income derived from
24furnishing transportation services shall be apportioned to
25this State in accordance with paragraphs (1) and (2):
26        (1) Such business income (other than that derived from

 

 

10000SB0483sam001- 46 -LRB100 05147 HLH 26954 a

1    transportation by pipeline) shall be apportioned to this
2    State by multiplying such income by a fraction, the
3    numerator of which is the revenue miles of the person in
4    this State, and the denominator of which is the revenue
5    miles of the person everywhere. For purposes of this
6    paragraph, a revenue mile is the transportation of 1
7    passenger or 1 net ton of freight the distance of 1 mile
8    for a consideration. Where a person is engaged in the
9    transportation of both passengers and freight, the
10    fraction above referred to shall be determined by means of
11    an average of the passenger revenue mile fraction and the
12    freight revenue mile fraction, weighted to reflect the
13    person's
14            (A) relative railway operating income from total
15        passenger and total freight service, as reported to the
16        Interstate Commerce Commission, in the case of
17        transportation by railroad, and
18            (B) relative gross receipts from passenger and
19        freight transportation, in case of transportation
20        other than by railroad.
21        (2) Such business income derived from transportation
22    by pipeline shall be apportioned to this State by
23    multiplying such income by a fraction, the numerator of
24    which is the revenue miles of the person in this State, and
25    the denominator of which is the revenue miles of the person
26    everywhere. For the purposes of this paragraph, a revenue

 

 

10000SB0483sam001- 47 -LRB100 05147 HLH 26954 a

1    mile is the transportation by pipeline of 1 barrel of oil,
2    1,000 cubic feet of gas, or of any specified quantity of
3    any other substance, the distance of 1 mile for a
4    consideration.
5        (3) For taxable years ending on or after December 31,
6    2008, business income derived from providing
7    transportation services other than airline services shall
8    be apportioned to this State by using a fraction, (a) the
9    numerator of which shall be (i) all receipts from any
10    movement or shipment of people, goods, mail, oil, gas, or
11    any other substance (other than by airline) that both
12    originates and terminates in this State, plus (ii) that
13    portion of the person's gross receipts from movements or
14    shipments of people, goods, mail, oil, gas, or any other
15    substance (other than by airline) that originates in one
16    state or jurisdiction and terminates in another state or
17    jurisdiction, that is determined by the ratio that the
18    miles traveled in this State bears to total miles
19    everywhere and (b) the denominator of which shall be all
20    revenue derived from the movement or shipment of people,
21    goods, mail, oil, gas, or any other substance (other than
22    by airline). Where a taxpayer is engaged in the
23    transportation of both passengers and freight, the
24    fraction above referred to shall first be determined
25    separately for passenger miles and freight miles. Then an
26    average of the passenger miles fraction and the freight

 

 

10000SB0483sam001- 48 -LRB100 05147 HLH 26954 a

1    miles fraction shall be weighted to reflect the taxpayer's:
2            (A) relative railway operating income from total
3        passenger and total freight service, as reported to the
4        Surface Transportation Board, in the case of
5        transportation by railroad; and
6            (B) relative gross receipts from passenger and
7        freight transportation, in case of transportation
8        other than by railroad.
9        (4) For taxable years ending on or after December 31,
10    2008, business income derived from furnishing airline
11    transportation services shall be apportioned to this State
12    by multiplying such income by a fraction, the numerator of
13    which is the revenue miles of the person in this State, and
14    the denominator of which is the revenue miles of the person
15    everywhere. For purposes of this paragraph, a revenue mile
16    is the transportation of one passenger or one net ton of
17    freight the distance of one mile for a consideration. If a
18    person is engaged in the transportation of both passengers
19    and freight, the fraction above referred to shall be
20    determined by means of an average of the passenger revenue
21    mile fraction and the freight revenue mile fraction,
22    weighted to reflect the person's relative gross receipts
23    from passenger and freight airline transportation.
24    (e) Combined apportionment. Where 2 or more persons are
25engaged in a unitary business as described in subsection
26(a)(27) of Section 1501, a part of which is conducted in this

 

 

10000SB0483sam001- 49 -LRB100 05147 HLH 26954 a

1State by one or more members of the group, the business income
2attributable to this State by any such member or members shall
3be apportioned by means of the combined apportionment method.
4    (f) Alternative allocation. If the allocation and
5apportionment provisions of subsections (a) through (e) and of
6subsection (h) do not, for taxable years ending before December
731, 2008, fairly represent the extent of a person's business
8activity in this State, or, for taxable years ending on or
9after December 31, 2008, fairly represent the market for the
10person's goods, services, or other sources of business income,
11the person may petition for, or the Director may, without a
12petition, permit or require, in respect of all or any part of
13the person's business activity, if reasonable:
14        (1) Separate accounting;
15        (2) The exclusion of any one or more factors;
16        (3) The inclusion of one or more additional factors
17    which will fairly represent the person's business
18    activities or market in this State; or
19        (4) The employment of any other method to effectuate an
20    equitable allocation and apportionment of the person's
21    business income.
22    (g) Cross reference. For allocation of business income by
23residents, see Section 301(a).
24    (h) For tax years ending on or after December 31, 1998, the
25apportionment factor of persons who apportion their business
26income to this State under subsection (a) shall be equal to:

 

 

10000SB0483sam001- 50 -LRB100 05147 HLH 26954 a

1        (1) for tax years ending on or after December 31, 1998
2    and before December 31, 1999, 16 2/3% of the property
3    factor plus 16 2/3% of the payroll factor plus 66 2/3% of
4    the sales factor;
5        (2) for tax years ending on or after December 31, 1999
6    and before December 31, 2000, 8 1/3% of the property factor
7    plus 8 1/3% of the payroll factor plus 83 1/3% of the sales
8    factor;
9        (3) for tax years ending on or after December 31, 2000,
10    the sales factor.
11If, in any tax year ending on or after December 31, 1998 and
12before December 31, 2000, the denominator of the payroll,
13property, or sales factor is zero, the apportionment factor
14computed in paragraph (1) or (2) of this subsection for that
15year shall be divided by an amount equal to 100% minus the
16percentage weight given to each factor whose denominator is
17equal to zero.
18(Source: P.A. 98-478, eff. 1-1-14; 98-496, eff. 1-1-14; 98-756,
19eff. 7-16-14; 99-642, eff. 7-28-16; revised 11-14-16.)
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.".