Rep. Barbara Flynn Currie

Filed: 5/26/2009

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1739

2     AMENDMENT NO. ______. Amend Senate Bill 1739 by replacing
3 everything after the enacting clause with the following:
 
4     "Section 5. The Illinois Income Tax Act is amended by
5 changing 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
9 a resident shall be allocated to this State if such person's
10 business income is derived solely from this State. If a person
11 other than a resident derives business income from this State
12 and one or more other states, then, for tax years ending on or
13 before December 30, 1998, and except as otherwise provided by
14 this Section, such person's business income shall be
15 apportioned to this State by multiplying the income by a
16 fraction, the numerator of which is the sum of the property

 

 

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1 factor (if any), the payroll factor (if any) and 200% of the
2 sales factor (if any), and the denominator of which is 4
3 reduced by the number of factors other than the sales factor
4 which have a denominator of zero and by an additional 2 if the
5 sales factor has a denominator of zero. For tax years ending on
6 or after December 31, 1998, and except as otherwise provided by
7 this Section, persons other than residents who derive business
8 income from this State and one or more other states shall
9 compute their apportionment factor by weighting their
10 property, 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) Compensation paid to nonresident professional
2         athletes.
3             (a) General. The Illinois source income of a
4         nonresident individual who is a member of a
5         professional athletic team includes the portion of the
6         individual's total compensation for services performed
7         as a member of a professional athletic team during the
8         taxable year which the number of duty days spent within
9         this State performing services for the team in any
10         manner during the taxable year bears to the total
11         number of duty days spent both within and without this
12         State during the taxable year.
13             (b) Travel days. Travel days that do not involve
14         either a game, practice, team meeting, or other similar
15         team event are not considered duty days spent in this
16         State. However, such travel days are considered in the
17         total duty days spent both within and without this
18         State.
19             (c) Definitions. For purposes of this subpart
20         (iv):
21                 (1) The term "professional athletic team"
22             includes, but is not limited to, any professional
23             baseball, basketball, football, soccer, or hockey
24             team.
25                 (2) The term "member of a professional
26             athletic team" includes those employees who are

 

 

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

 

 

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

 

 

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

 

 

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1             limited to, salaries, wages, bonuses as described
2             in this subpart, and any other type of compensation
3             paid during the taxable year to a member of a
4             professional athletic team for services performed
5             in that year. This compensation does not include
6             strike benefits, severance pay, termination pay,
7             contract or option year buy-out payments,
8             expansion or relocation payments, or any other
9             payments not related to services performed for the
10             team.
11                 For purposes of this subparagraph, "bonuses"
12             included in "total compensation for services
13             performed as a member of a professional athletic
14             team" subject to the allocation described in
15             Section 302(c)(1) are: bonuses earned as a result
16             of play (i.e., performance bonuses) during the
17             season, including bonuses paid for championship,
18             playoff or "bowl" games played by a team, or for
19             selection to all-star league or other honorary
20             positions; and bonuses paid for signing a
21             contract, unless the payment of the signing bonus
22             is not conditional upon the signee playing any
23             games for the team or performing any subsequent
24             services for the team or even making the team, the
25             signing bonus is payable separately from the
26             salary and any other compensation, and the signing

 

 

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1             bonus is nonrefundable.
2     (3) Sales factor.
3         (A) The sales factor is a fraction, the numerator of
4     which is the total sales of the person in this State during
5     the taxable year, and the denominator of which is the total
6     sales of the person everywhere during the taxable year.
7         (B) Sales of tangible personal property are in this
8     State if:
9             (i) The property is delivered or shipped to a
10         purchaser, other than the United States government,
11         within this State regardless of the f. o. b. point or
12         other conditions of the sale; or
13             (ii) The property is shipped from an office, store,
14         warehouse, factory or other place of storage in this
15         State and either the purchaser is the United States
16         government or the person is not taxable in the state of
17         the purchaser; provided, however, that premises owned
18         or leased by a person who has independently contracted
19         with the seller for the printing of newspapers,
20         periodicals or books shall not be deemed to be an
21         office, store, warehouse, factory or other place of
22         storage for purposes of this Section. Sales of tangible
23         personal property are not in this State if the seller
24         and purchaser would be members of the same unitary
25         business group but for the fact that either the seller
26         or purchaser is a person with 80% or more of total

 

 

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1         business activity outside of the United States and the
2         property is purchased for resale.
3         (B-1) Patents, copyrights, trademarks, and similar
4     items of intangible personal property.
5             (i) Gross receipts from the licensing, sale, or
6         other disposition of a patent, copyright, trademark,
7         or similar item of intangible personal property, other
8         than gross receipts governed by paragraph (B-7) of this
9         item (3), are in this State to the extent the item is
10         utilized in this State during the year the gross
11         receipts are included in gross income.
12             (ii) Place of utilization.
13                 (I) A patent is utilized in a state to the
14             extent that it is employed in production,
15             fabrication, manufacturing, or other processing in
16             the state or to the extent that a patented product
17             is produced in the state. If a patent is utilized
18             in more than one state, the extent to which it is
19             utilized in any one state shall be a fraction equal
20             to the gross receipts of the licensee or purchaser
21             from sales or leases of items produced,
22             fabricated, manufactured, or processed within that
23             state using the patent and of patented items
24             produced within that state, divided by the total of
25             such gross receipts for all states in which the
26             patent is utilized.

 

 

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1                 (II) A copyright is utilized in a state to the
2             extent that printing or other publication
3             originates in the state. If a copyright is utilized
4             in more than one state, the extent to which it is
5             utilized in any one state shall be a fraction equal
6             to the gross receipts from sales or licenses of
7             materials printed or published in that state
8             divided by the total of such gross receipts for all
9             states in which the copyright is utilized.
10                 (III) Trademarks and other items of intangible
11             personal property governed by this paragraph (B-1)
12             are utilized in the state in which the commercial
13             domicile of the licensee or purchaser is located.
14             (iii) If the state of utilization of an item of
15         property governed by this paragraph (B-1) cannot be
16         determined from the taxpayer's books and records or
17         from the books and records of any person related to the
18         taxpayer within the meaning of Section 267(b) of the
19         Internal Revenue Code, 26 U.S.C. 267, the gross
20         receipts attributable to that item shall be excluded
21         from both the numerator and the denominator of the
22         sales factor.
23         (B-2) Gross receipts from the license, sale, or other
24     disposition of patents, copyrights, trademarks, and
25     similar items of intangible personal property, other than
26     gross receipts governed by paragraph (B-7) of this item

 

 

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1     (3), may be included in the numerator or denominator of the
2     sales factor only if gross receipts from licenses, sales,
3     or other disposition of such items comprise more than 50%
4     of the taxpayer's total gross receipts included in gross
5     income during the tax year and during each of the 2
6     immediately preceding tax years; provided that, when a
7     taxpayer is a member of a unitary business group, such
8     determination shall be made on the basis of the gross
9     receipts of the entire unitary business group.
10         (B-5) For taxable years ending on or after December 31,
11     2008, except as provided in subsections (ii) through (vii),
12     receipts from the sale of telecommunications service or
13     mobile telecommunications service are in this State if the
14     customer's service address is in this State.
15             (i) For purposes of this subparagraph (B-5), the
16         follow terms have the following meanings:
17             "Ancillary services" means services that are
18         associated with or incidental to the provision of
19         "telecommunications services", including but not
20         limited to "detailed telecommunications billing",
21         "directory assistance", "vertical service", and "voice
22         mail services".
23             "Air-to-Ground Radiotelephone service" means a
24         radio service, as that term is defined in 47 CFR 22.99,
25         in which common carriers are authorized to offer and
26         provide radio telecommunications service for hire to

 

 

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1         subscribers in aircraft.
2             "Call-by-call Basis" means any method of charging
3         for telecommunications services where the price is
4         measured by individual calls.
5             "Communications Channel" means a physical or
6         virtual path of communications over which signals are
7         transmitted between or among customer channel
8         termination points.
9             "Conference bridging service" means an "ancillary
10         service" that links two or more participants of an
11         audio or video conference call and may include the
12         provision of a telephone number. "Conference bridging
13         service" does not include the "telecommunications
14         services" used to reach the conference bridge.
15             "Customer Channel Termination Point" means the
16         location where the customer either inputs or receives
17         the communications.
18             "Detailed telecommunications billing service"
19         means an "ancillary service" of separately stating
20         information pertaining to individual calls on a
21         customer's billing statement.
22             "Directory assistance" means an "ancillary
23         service" of providing telephone number information,
24         and/or address information.
25             "Home service provider" means the facilities based
26         carrier or reseller with which the customer contracts

 

 

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1         for the provision of mobile telecommunications
2         services.
3             "Mobile telecommunications service" means
4         commercial mobile radio service, as defined in Section
5         20.3 of Title 47 of the Code of Federal Regulations as
6         in effect on June 1, 1999.
7             "Place of primary use" means the street address
8         representative of where the customer's use of the
9         telecommunications service primarily occurs, which
10         must be the residential street address or the primary
11         business street address of the customer. In the case of
12         mobile telecommunications services, "place of primary
13         use" must be within the licensed service area of the
14         home service provider.
15             "Post-paid telecommunication service" means the
16         telecommunications service obtained by making a
17         payment on a call-by-call basis either through the use
18         of a credit card or payment mechanism such as a bank
19         card, travel card, credit card, or debit card, or by
20         charge made to a telephone number which is not
21         associated with the origination or termination of the
22         telecommunications service. A post-paid calling
23         service includes telecommunications service, except a
24         prepaid wireless calling service, that would be a
25         prepaid calling service except it is not exclusively a
26         telecommunication service.

 

 

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1             "Prepaid telecommunication service" means the
2         right to access exclusively telecommunications
3         services, which must be paid for in advance and which
4         enables the origination of calls using an access number
5         or authorization code, whether manually or
6         electronically dialed, and that is sold in
7         predetermined units or dollars of which the number
8         declines with use in a known amount.
9             "Prepaid Mobile telecommunication service" means a
10         telecommunications service that provides the right to
11         utilize mobile wireless service as well as other
12         non-telecommunication services, including but not
13         limited to ancillary services, which must be paid for
14         in advance that is sold in predetermined units or
15         dollars of which the number declines with use in a
16         known amount.
17             "Private communication service" means a
18         telecommunication service that entitles the customer
19         to exclusive or priority use of a communications
20         channel or group of channels between or among
21         termination points, regardless of the manner in which
22         such channel or channels are connected, and includes
23         switching capacity, extension lines, stations, and any
24         other associated services that are provided in
25         connection with the use of such channel or channels.
26             "Service address" means:

 

 

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1                 (a) The location of the telecommunications
2             equipment to which a customer's call is charged and
3             from which the call originates or terminates,
4             regardless of where the call is billed or paid;
5                 (b) If the location in line (a) is not known,
6             service address means the origination point of the
7             signal of the telecommunications services first
8             identified by either the seller's
9             telecommunications system or in information
10             received by the seller from its service provider
11             where the system used to transport such signals is
12             not that of the seller; and
13                 (c) If the locations in line (a) and line (b)
14             are not known, the service address means the
15             location of the customer's place of primary use.
16             "Telecommunications service" means the electronic
17         transmission, conveyance, or routing of voice, data,
18         audio, video, or any other information or signals to a
19         point, or between or among points. The term
20         "telecommunications service" includes such
21         transmission, conveyance, or routing in which computer
22         processing applications are used to act on the form,
23         code or protocol of the content for purposes of
24         transmission, conveyance or routing without regard to
25         whether such service is referred to as voice over
26         Internet protocol services or is classified by the

 

 

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1         Federal Communications Commission as enhanced or value
2         added. "Telecommunications service" does not include:
3                 (a) Data processing and information services
4             that allow data to be generated, acquired, stored,
5             processed, or retrieved and delivered by an
6             electronic transmission to a purchaser when such
7             purchaser's primary purpose for the underlying
8             transaction is the processed data or information;
9                 (b) Installation or maintenance of wiring or
10             equipment on a customer's premises;
11                 (c) Tangible personal property;
12                 (d) Advertising, including but not limited to
13             directory advertising.
14                 (e) Billing and collection services provided
15             to third parties;
16                 (f) Internet access service;
17                 (g) Radio and television audio and video
18             programming services, regardless of the medium,
19             including the furnishing of transmission,
20             conveyance and routing of such services by the
21             programming service provider. Radio and television
22             audio and video programming services shall include
23             but not be limited to cable service as defined in
24             47 USC 522(6) and audio and video programming
25             services delivered by commercial mobile radio
26             service providers, as defined in 47 CFR 20.3;

 

 

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

 

 

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1         telecommunications service at retail are in this State
2         if the origination point of the telecommunication
3         signal, as first identified by the service provider's
4         telecommunication system or as identified by
5         information received by the seller from its service
6         provider if the system used to transport
7         telecommunication signals is not the seller's, is
8         located in this State.
9             (iv) Receipts from the sale of prepaid
10         telecommunications service or prepaid mobile
11         telecommunications service at retail are in this State
12         if the purchaser obtains the prepaid card or similar
13         means of conveyance at a location in this State.
14         Receipts from recharging a prepaid telecommunications
15         service or mobile telecommunications service is in
16         this State if the purchaser's billing information
17         indicates a location in this State.
18             (v) Receipts from the sale of private
19         communication services are in this State as follows:
20                 (a) 100% of receipts from charges imposed at
21             each channel termination point in this State.
22                 (b) 100% of receipts from charges for the total
23             channel mileage between each channel termination
24             point in this State.
25                 (c) 50% of the total receipts from charges for
26             service segments when those segments are between 2

 

 

09600SB1739ham001 - 20 - LRB096 09705 HLH 27428 a

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

 

 

09600SB1739ham001 - 21 - LRB096 09705 HLH 27428 a

1             attributable to intrastate telecommunications
2             service that both originates and terminates in
3             this State.
4                 (b) 50% of the receipts from access fees
5             attributable to interstate telecommunications
6             service if the interstate call either originates
7             or terminates in this State.
8                 (c) 100% of the receipts from interstate end
9             user access line charges, if the customer's
10             service address is in this State. As used in this
11             subdivision, "interstate end user access line
12             charges" includes, but is not limited to, the
13             surcharge approved by the federal communications
14             commission and levied pursuant to 47 CFR 69.
15                 (d) Gross receipts from sales of
16             telecommunication services or from ancillary
17             services for telecommunications services sold to
18             other telecommunication service providers for
19             resale shall be sourced to this State using the
20             apportionment concepts used for non-resale
21             receipts of telecommunications services if the
22             information is readily available to make that
23             determination. If the information is not readily
24             available, then the taxpayer may use any other
25             reasonable and consistent method.
26         (B-7) For taxable years ending on or after December 31,

 

 

09600SB1739ham001 - 22 - LRB096 09705 HLH 27428 a

1     2008, receipts from the sale of broadcasting services are
2     in this State if the broadcasting services are received in
3     this State. For purposes of this paragraph (B-7), the
4     following terms have the following meanings:
5             "Advertising revenue" means consideration received
6         by the taxpayer in exchange for broadcasting services
7         or allowing the broadcasting of commercials or
8         announcements in connection with the broadcasting of
9         film or radio programming, from sponsorships of the
10         programming, or from product placements in the
11         programming.
12             "Audience factor" means the ratio that the
13         audience or subscribers located in this State of a
14         station, a network, or a cable system bears to the
15         total audience or total subscribers for that station,
16         network, or cable system. The audience factor for film
17         or radio programming shall be determined by reference
18         to the books and records of the taxpayer or by
19         reference to published rating statistics provided the
20         method used by the taxpayer is consistently used from
21         year to year for this purpose and fairly represents the
22         taxpayer's activity in this State.
23             "Broadcast" or "broadcasting" or "broadcasting
24         services" means the transmission or provision of film
25         or radio programming, whether through the public
26         airwaves, by cable, by direct or indirect satellite

 

 

09600SB1739ham001 - 23 - LRB096 09705 HLH 27428 a

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

 

 

09600SB1739ham001 - 24 - LRB096 09705 HLH 27428 a

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

 

 

09600SB1739ham001 - 25 - LRB096 09705 HLH 27428 a

1             by such station, network, or cable system in this
2             State is measured by the portion of recipients of
3             the broadcast located in this State. Accordingly,
4             the amount of revenue related to such an
5             arrangement that is included in the Illinois
6             numerator of the sales factor is the total fee or
7             other total remuneration from the person providing
8             the programming related to that broadcast
9             multiplied by the Illinois audience factor for
10             that broadcast.
11                 (iv) In the case where film or radio
12             programming is provided by a taxpayer that is a
13             network or station to a customer for broadcast in
14             exchange for a fee or other remuneration from that
15             customer the broadcasting service is received at
16             the location of the office of the customer from
17             which the services were ordered in the regular
18             course of the customer's trade or business.
19             Accordingly, in such a case the revenue derived by
20             the taxpayer that is included in the taxpayer's
21             Illinois numerator of the sales factor is the
22             revenue from such customers who receive the
23             broadcasting service in Illinois.
24                 (v) In the case where film or radio programming
25             is provided by a taxpayer that is not a network or
26             station to another person for broadcasting in

 

 

09600SB1739ham001 - 26 - LRB096 09705 HLH 27428 a

1             exchange for a fee or other remuneration from that
2             person, the broadcasting service is received at
3             the location of the office of the customer from
4             which the services were ordered in the regular
5             course of the customer's trade or business.
6             Accordingly, in such a case the revenue derived by
7             the taxpayer that is included in the taxpayer's
8             Illinois numerator of the sales factor is the
9             revenue from such customers who receive the
10             broadcasting service in Illinois.
11         (C) For taxable years ending before December 31, 2008,
12     sales, other than sales governed by paragraphs (B), (B-1),
13     and (B-2), are in this State if:
14             (i) The income-producing activity is performed in
15         this State; or
16             (ii) The income-producing activity is performed
17         both within and without this State and a greater
18         proportion of the income-producing activity is
19         performed within this State than without this State,
20         based on performance costs.
21         (C-5) For taxable years ending on or after December 31,
22     2008, sales, other than sales governed by paragraphs (B),
23     (B-1), (B-2), and (B-5), and (B-7), are in this State if
24     any of the following criteria are met:
25             (i) Sales from the sale or lease of real property
26         are in this State if the property is located in this

 

 

09600SB1739ham001 - 27 - LRB096 09705 HLH 27428 a

1         State.
2             (ii) Sales from the lease or rental of tangible
3         personal property are in this State if the property is
4         located in this State during the rental period. Sales
5         from the lease or rental of tangible personal property
6         that is characteristically moving property, including,
7         but not limited to, motor vehicles, rolling stock,
8         aircraft, vessels, or mobile equipment are in this
9         State to the extent that the property is used in this
10         State.
11             (iii) In the case of interest, net gains (but not
12         less than zero) and other items of income from
13         intangible personal property, the sale is in this State
14         if:
15                 (a) in the case of a taxpayer who is a dealer
16             in the item of intangible personal property within
17             the meaning of Section 475 of the Internal Revenue
18             Code, the income or gain is received from a
19             customer in this State. For purposes of this
20             subparagraph, a customer is in this State if the
21             customer is an individual, trust or estate who is a
22             resident of this State and, for all other
23             customers, if the customer's commercial domicile
24             is in this State. Unless the dealer has actual
25             knowledge of the residence or commercial domicile
26             of a customer during a taxable year, the customer

 

 

09600SB1739ham001 - 28 - LRB096 09705 HLH 27428 a

1             shall be deemed to be a customer in this State if
2             the billing address of the customer, as shown in
3             the records of the dealer, is in this State; or
4                 (b) in all other cases, if the
5             income-producing activity of the taxpayer is
6             performed in this State or, if the
7             income-producing activity of the taxpayer is
8             performed both within and without this State, if a
9             greater proportion of the income-producing
10             activity of the taxpayer is performed within this
11             State than in any other state, based on performance
12             costs.
13             (iv) Sales of services are in this State if the
14         services are received in this State. For the purposes
15         of this section, gross receipts from the performance of
16         services provided to a corporation, partnership, or
17         trust may only be attributed to a state where that
18         corporation, partnership, or trust has a fixed place of
19         business. If the state where the services are received
20         is not readily determinable or is a state where the
21         corporation, partnership, or trust receiving the
22         service does not have a fixed place of business, the
23         services shall be deemed to be received at the location
24         of the office of the customer from which the services
25         were ordered in the regular course of the customer's
26         trade or business. If the ordering office cannot be

 

 

09600SB1739ham001 - 29 - LRB096 09705 HLH 27428 a

1         determined, the services shall be deemed to be received
2         at the office of the customer to which the services are
3         billed. If the taxpayer is not taxable in the state in
4         which the services are received, the sale must be
5         excluded from both the numerator and the denominator of
6         the sales factor. The Department shall adopt rules
7         prescribing where specific types of service are
8         received, including, but not limited to, broadcast,
9         cable, advertising, publishing, and utility service.
10         (D) For taxable years ending on or after December 31,
11     1995, the following items of income shall not be included
12     in the numerator or denominator of the sales factor:
13     dividends; amounts included under Section 78 of the
14     Internal Revenue Code; and Subpart F income as defined in
15     Section 952 of the Internal Revenue Code. No inference
16     shall be drawn from the enactment of this paragraph (D) in
17     construing this Section for taxable years ending before
18     December 31, 1995.
19         (E) Paragraphs (B-1) and (B-2) shall apply to tax years
20     ending on or after December 31, 1999, provided that a
21     taxpayer may elect to apply the provisions of these
22     paragraphs to prior tax years. Such election shall be made
23     in the form and manner prescribed by the Department, shall
24     be irrevocable, and shall apply to all tax years; provided
25     that, if a taxpayer's Illinois income tax liability for any
26     tax year, as assessed under Section 903 prior to January 1,

 

 

09600SB1739ham001 - 30 - LRB096 09705 HLH 27428 a

1     1999, was computed in a manner contrary to the provisions
2     of paragraphs (B-1) or (B-2), no refund shall be payable to
3     the taxpayer for that tax year to the extent such refund is
4     the result of applying the provisions of paragraph (B-1) or
5     (B-2) retroactively. In the case of a unitary business
6     group, such election shall apply to all members of such
7     group for every tax year such group is in existence, but
8     shall not apply to any taxpayer for any period during which
9     that taxpayer is not a member of such group.
10     (b) Insurance companies.
11         (1) In general. Except as otherwise provided by
12     paragraph (2), business income of an insurance company for
13     a taxable year shall be apportioned to this State by
14     multiplying such income by a fraction, the numerator of
15     which is the direct premiums written for insurance upon
16     property or risk in this State, and the denominator of
17     which is the direct premiums written for insurance upon
18     property or risk everywhere. For purposes of this
19     subsection, the term "direct premiums written" means the
20     total amount of direct premiums written, assessments and
21     annuity considerations as reported for the taxable year on
22     the annual statement filed by the company with the Illinois
23     Director of Insurance in the form approved by the National
24     Convention of Insurance Commissioners or such other form as
25     may be prescribed in lieu thereof.
26         (2) Reinsurance. If the principal source of premiums

 

 

09600SB1739ham001 - 31 - LRB096 09705 HLH 27428 a

1     written by an insurance company consists of premiums for
2     reinsurance accepted by it, the business income of such
3     company shall be apportioned to this State by multiplying
4     such income by a fraction, the numerator of which is the
5     sum of (i) direct premiums written for insurance upon
6     property or risk in this State, plus (ii) premiums written
7     for reinsurance accepted in respect of property or risk in
8     this State, and the denominator of which is the sum of
9     (iii) direct premiums written for insurance upon property
10     or risk everywhere, plus (iv) premiums written for
11     reinsurance accepted in respect of property or risk
12     everywhere. For taxable years ending before December 31,
13     2008, for purposes of this paragraph, premiums written for
14     reinsurance accepted in respect of property or risk in this
15     State, whether or not otherwise determinable, may, at the
16     election of the company, be determined on the basis of the
17     proportion which premiums written for reinsurance accepted
18     from companies commercially domiciled in Illinois bears to
19     premiums written for reinsurance accepted from all
20     sources, or, alternatively, in the proportion which the sum
21     of the direct premiums written for insurance upon property
22     or risk in this State by each ceding company from which
23     reinsurance is accepted bears to the sum of the total
24     direct premiums written by each such ceding company for the
25     taxable year.
26     (c) Financial organizations.

 

 

09600SB1739ham001 - 32 - LRB096 09705 HLH 27428 a

1         (1) In general. For taxable years ending before
2     December 31, 2008, business income of a financial
3     organization shall be apportioned to this State by
4     multiplying such income by a fraction, the numerator of
5     which is its business income from sources within this
6     State, and the denominator of which is its business income
7     from all sources. For the purposes of this subsection, the
8     business income of a financial organization from sources
9     within this State is the sum of the amounts referred to in
10     subparagraphs (A) through (E) following, but excluding the
11     adjusted income of an international banking facility as
12     determined in paragraph (2):
13             (A) Fees, commissions or other compensation for
14         financial services rendered within this State;
15             (B) Gross profits from trading in stocks, bonds or
16         other securities managed within this State;
17             (C) Dividends, and interest from Illinois
18         customers, which are received within this State;
19             (D) Interest charged to customers at places of
20         business maintained within this State for carrying
21         debit balances of margin accounts, without deduction
22         of any costs incurred in carrying such accounts; and
23             (E) Any other gross income resulting from the
24         operation as a financial organization within this
25         State. In computing the amounts referred to in
26         paragraphs (A) through (E) of this subsection, any

 

 

09600SB1739ham001 - 33 - LRB096 09705 HLH 27428 a

1         amount received by a member of an affiliated group
2         (determined under Section 1504(a) of the Internal
3         Revenue Code but without reference to whether any such
4         corporation is an "includible corporation" under
5         Section 1504(b) of the Internal Revenue Code) from
6         another member of such group shall be included only to
7         the extent such amount exceeds expenses of the
8         recipient directly related thereto.
9         (2) International Banking Facility. For taxable years
10     ending before December 31, 2008:
11             (A) Adjusted Income. The adjusted income of an
12         international banking facility is its income reduced
13         by the amount of the floor amount.
14             (B) Floor Amount. The floor amount shall be the
15         amount, if any, determined by multiplying the income of
16         the international banking facility by a fraction, not
17         greater than one, which is determined as follows:
18                 (i) The numerator shall be:
19                 The average aggregate, determined on a
20             quarterly basis, of the financial organization's
21             loans to banks in foreign countries, to foreign
22             domiciled borrowers (except where secured
23             primarily by real estate) and to foreign
24             governments and other foreign official
25             institutions, as reported for its branches,
26             agencies and offices within the state on its

 

 

09600SB1739ham001 - 34 - LRB096 09705 HLH 27428 a

1             "Consolidated Report of Condition", Schedule A,
2             Lines 2.c., 5.b., and 7.a., which was filed with
3             the Federal Deposit Insurance Corporation and
4             other regulatory authorities, for the year 1980,
5             minus
6                 The average aggregate, determined on a
7             quarterly basis, of such loans (other than loans of
8             an international banking facility), as reported by
9             the financial institution for its branches,
10             agencies and offices within the state, on the
11             corresponding Schedule and lines of the
12             Consolidated Report of Condition for the current
13             taxable year, provided, however, that in no case
14             shall the amount determined in this clause (the
15             subtrahend) exceed the amount determined in the
16             preceding clause (the minuend); and
17                 (ii) the denominator shall be the average
18             aggregate, determined on a quarterly basis, of the
19             international banking facility's loans to banks in
20             foreign countries, to foreign domiciled borrowers
21             (except where secured primarily by real estate)
22             and to foreign governments and other foreign
23             official institutions, which were recorded in its
24             financial accounts for the current taxable year.
25             (C) Change to Consolidated Report of Condition and
26         in Qualification. In the event the Consolidated Report

 

 

09600SB1739ham001 - 35 - LRB096 09705 HLH 27428 a

1         of Condition which is filed with the Federal Deposit
2         Insurance Corporation and other regulatory authorities
3         is altered so that the information required for
4         determining the floor amount is not found on Schedule
5         A, lines 2.c., 5.b. and 7.a., the financial institution
6         shall notify the Department and the Department may, by
7         regulations or otherwise, prescribe or authorize the
8         use of an alternative source for such information. The
9         financial institution shall also notify the Department
10         should its international banking facility fail to
11         qualify as such, in whole or in part, or should there
12         be any amendment or change to the Consolidated Report
13         of Condition, as originally filed, to the extent such
14         amendment or change alters the information used in
15         determining the floor amount.
16         (3) For taxable years ending on or after December 31,
17     2008, the business income of a financial organization shall
18     be apportioned to this State by multiplying such income by
19     a fraction, the numerator of which is its gross receipts
20     from sources in this State or otherwise attributable to
21     this State's marketplace and the denominator of which is
22     its gross receipts everywhere during the taxable year.
23     "Gross receipts" for purposes of this subparagraph (3)
24     means gross income, including net taxable gain on
25     disposition of assets, including securities and money
26     market instruments, when derived from transactions and

 

 

09600SB1739ham001 - 36 - LRB096 09705 HLH 27428 a

1     activities in the regular course of the financial
2     organization's trade or business. The following examples
3     are illustrative:
4             (i) Receipts from the lease or rental of real or
5         tangible personal property are in this State if the
6         property is located in this State during the rental
7         period. Receipts from the lease or rental of tangible
8         personal property that is characteristically moving
9         property, including, but not limited to, motor
10         vehicles, rolling stock, aircraft, vessels, or mobile
11         equipment are from sources in this State to the extent
12         that the property is used in this State.
13             (ii) Interest income, commissions, fees, gains on
14         disposition, and other receipts from assets in the
15         nature of loans that are secured primarily by real
16         estate or tangible personal property are from sources
17         in this State if the security is located in this State.
18             (iii) Interest income, commissions, fees, gains on
19         disposition, and other receipts from consumer loans
20         that are not secured by real or tangible personal
21         property are from sources in this State if the debtor
22         is a resident of this State.
23             (iv) Interest income, commissions, fees, gains on
24         disposition, and other receipts from commercial loans
25         and installment obligations that are not secured by
26         real or tangible personal property are from sources in

 

 

09600SB1739ham001 - 37 - LRB096 09705 HLH 27428 a

1         this State if the proceeds of the loan are to be
2         applied in this State. If it cannot be determined where
3         the funds are to be applied, the income and receipts
4         are from sources in this State if the office of the
5         borrower from which the loan was negotiated in the
6         regular course of business is located in this State. If
7         the location of this office cannot be determined, the
8         income and receipts shall be excluded from the
9         numerator and denominator of the sales factor.
10             (v) Interest income, fees, gains on disposition,
11         service charges, merchant discount income, and other
12         receipts from credit card receivables are from sources
13         in this State if the card charges are regularly billed
14         to a customer in this State.
15             (vi) Receipts from the performance of services,
16         including, but not limited to, fiduciary, advisory,
17         and brokerage services, are in this State if the
18         services are received in this State within the meaning
19         of subparagraph (a)(3)(C-5)(iv) of this Section.
20             (vii) Receipts from the issuance of travelers
21         checks and money orders are from sources in this State
22         if the checks and money orders are issued from a
23         location within this State.
24             (viii) Receipts from investment assets and
25         activities and trading assets and activities are
26         included in the receipts factor as follows:

 

 

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1                 (1) Interest, dividends, net gains (but not
2             less than zero) and other income from investment
3             assets and activities from trading assets and
4             activities shall be included in the receipts
5             factor. Investment assets and activities and
6             trading assets and activities include but are not
7             limited to: investment securities; trading account
8             assets; federal funds; securities purchased and
9             sold under agreements to resell or repurchase;
10             options; futures contracts; forward contracts;
11             notional principal contracts such as swaps;
12             equities; and foreign currency transactions. With
13             respect to the investment and trading assets and
14             activities described in subparagraphs (A) and (B)
15             of this paragraph, the receipts factor shall
16             include the amounts described in such
17             subparagraphs.
18                     (A) The receipts factor shall include the
19                 amount by which interest from federal funds
20                 sold and securities purchased under resale
21                 agreements exceeds interest expense on federal
22                 funds purchased and securities sold under
23                 repurchase agreements.
24                     (B) The receipts factor shall include the
25                 amount by which interest, dividends, gains and
26                 other income from trading assets and

 

 

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1                 activities, including but not limited to
2                 assets and activities in the matched book, in
3                 the arbitrage book, and foreign currency
4                 transactions, exceed amounts paid in lieu of
5                 interest, amounts paid in lieu of dividends,
6                 and losses from such assets and activities.
7                 (2) The numerator of the receipts factor
8             includes interest, dividends, net gains (but not
9             less than zero), and other income from investment
10             assets and activities and from trading assets and
11             activities described in paragraph (1) of this
12             subsection that are attributable to this State.
13                     (A) The amount of interest, dividends, net
14                 gains (but not less than zero), and other
15                 income from investment assets and activities
16                 in the investment account to be attributed to
17                 this State and included in the numerator is
18                 determined by multiplying all such income from
19                 such assets and activities by a fraction, the
20                 numerator of which is the gross income from
21                 such assets and activities which are properly
22                 assigned to a fixed place of business of the
23                 taxpayer within this State and the denominator
24                 of which is the gross income from all such
25                 assets and activities.
26                     (B) The amount of interest from federal

 

 

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

 

 

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1                 such trading assets and activities which are
2                 properly assigned to a fixed place of business
3                 of the taxpayer within this State and the
4                 denominator of which is the gross income from
5                 all such assets and activities.
6                     (D) Properly assigned, for purposes of
7                 this paragraph (2) of this subsection, means
8                 the investment or trading asset or activity is
9                 assigned to the fixed place of business with
10                 which it has a preponderance of substantive
11                 contacts. An investment or trading asset or
12                 activity assigned by the taxpayer to a fixed
13                 place of business without the State shall be
14                 presumed to have been properly assigned if:
15                         (i) the taxpayer has assigned, in the
16                     regular course of its business, such asset
17                     or activity on its records to a fixed place
18                     of business consistent with federal or
19                     state regulatory requirements;
20                         (ii) such assignment on its records is
21                     based upon substantive contacts of the
22                     asset or activity to such fixed place of
23                     business; and
24                         (iii) the taxpayer uses such records
25                     reflecting assignment of such assets or
26                     activities for the filing of all state and

 

 

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1                     local tax returns for which an assignment
2                     of such assets or activities to a fixed
3                     place of business is required.
4                     (E) The presumption of proper assignment
5                 of an investment or trading asset or activity
6                 provided in subparagraph (D) of paragraph (2)
7                 of this subsection may be rebutted upon a
8                 showing by the Department, supported by a
9                 preponderance of the evidence, that the
10                 preponderance of substantive contacts
11                 regarding such asset or activity did not occur
12                 at the fixed place of business to which it was
13                 assigned on the taxpayer's records. If the
14                 fixed place of business that has a
15                 preponderance of substantive contacts cannot
16                 be determined for an investment or trading
17                 asset or activity to which the presumption in
18                 subparagraph (D) of paragraph (2) of this
19                 subsection does not apply or with respect to
20                 which that presumption has been rebutted, that
21                 asset or activity is properly assigned to the
22                 state in which the taxpayer's commercial
23                 domicile is located. For purposes of this
24                 subparagraph (E), it shall be presumed,
25                 subject to rebuttal, that taxpayer's
26                 commercial domicile is in the state of the

 

 

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1                 United States or the District of Columbia to
2                 which the greatest number of employees are
3                 regularly connected with the management of the
4                 investment or trading income or out of which
5                 they are working, irrespective of where the
6                 services of such employees are performed, as of
7                 the last day of the taxable year.
8         (4) (Blank).
9         (5) (Blank).
10     (d) Transportation services. For taxable years ending
11 before December 31, 2008, business income derived from
12 furnishing transportation services shall be apportioned to
13 this State in accordance with paragraphs (1) and (2):
14         (1) Such business income (other than that derived from
15     transportation by pipeline) shall be apportioned to this
16     State by multiplying such income by a fraction, the
17     numerator of which is the revenue miles of the person in
18     this State, and the denominator of which is the revenue
19     miles of the person everywhere. For purposes of this
20     paragraph, a revenue mile is the transportation of 1
21     passenger or 1 net ton of freight the distance of 1 mile
22     for a consideration. Where a person is engaged in the
23     transportation of both passengers and freight, the
24     fraction above referred to shall be determined by means of
25     an average of the passenger revenue mile fraction and the
26     freight revenue mile fraction, weighted to reflect the

 

 

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1     person's
2             (A) relative railway operating income from total
3         passenger and total freight service, as reported to the
4         Interstate Commerce Commission, 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         (2) Such business income derived from transportation
10     by pipeline shall be apportioned to this State by
11     multiplying such income by a fraction, the numerator of
12     which is the revenue miles of the person in this State, and
13     the denominator of which is the revenue miles of the person
14     everywhere. For the purposes of this paragraph, a revenue
15     mile is the transportation by pipeline of 1 barrel of oil,
16     1,000 cubic feet of gas, or of any specified quantity of
17     any other substance, the distance of 1 mile for a
18     consideration.
19         (3) For taxable years ending on or after December 31,
20     2008, business income derived from providing
21     transportation services other than airline services shall
22     be apportioned to this State by using a fraction, (a) the
23     numerator of which shall be (i) all receipts from any
24     movement or shipment of people, goods, mail, oil, gas, or
25     any other substance (other than by airline) that both
26     originates and terminates in this State, plus (ii) that

 

 

09600SB1739ham001 - 45 - LRB096 09705 HLH 27428 a

1     portion of the person's gross receipts from movements or
2     shipments of people, goods, mail, oil, gas, or any other
3     substance (other than by airline) that originates in one
4     state or jurisdiction and terminates in another state or
5     jurisdiction, that is determined by the ratio that the
6     miles traveled in this State bears to total miles
7     everywhere and (b) the denominator of which shall be all
8     revenue derived from the movement or shipment of people,
9     goods, mail, oil, gas, or any other substance (other than
10     by airline). Where a taxpayer is engaged in the
11     transportation of both passengers and freight, the
12     fraction above referred to shall first be determined
13     separately for passenger miles and freight miles. Then an
14     average of the passenger miles fraction and the freight
15     miles fraction shall be weighted to reflect the taxpayer's:
16             (A) relative railway operating income from total
17         passenger and total freight service, as reported to the
18         Surface Transportation Board, in the case of
19         transportation by railroad; and
20             (B) relative gross receipts from passenger and
21         freight transportation, in case of transportation
22         other than by railroad.
23         (4) For taxable years ending on or after December 31,
24     2008, business income derived from furnishing airline
25     transportation services shall be apportioned to this State
26     by multiplying such income by a fraction, the numerator of

 

 

09600SB1739ham001 - 46 - LRB096 09705 HLH 27428 a

1     which is the revenue miles of the person in this State, and
2     the denominator of which is the revenue miles of the person
3     everywhere. For purposes of this paragraph, a revenue mile
4     is the transportation of one passenger or one net ton of
5     freight the distance of one mile for a consideration. If a
6     person is engaged in the transportation of both passengers
7     and freight, the fraction above referred to shall be
8     determined by means of an average of the passenger revenue
9     mile fraction and the freight revenue mile fraction,
10     weighted to reflect the person's relative gross receipts
11     from passenger and freight airline transportation.
12     (e) Combined apportionment. Where 2 or more persons are
13 engaged in a unitary business as described in subsection
14 (a)(27) of Section 1501, a part of which is conducted in this
15 State by one or more members of the group, the business income
16 attributable to this State by any such member or members shall
17 be apportioned by means of the combined apportionment method.
18     (f) Alternative allocation. If the allocation and
19 apportionment provisions of subsections (a) through (e) and of
20 subsection (h) do not fairly represent the extent of a person's
21 business activity in this State, the person may petition for,
22 or the Director may, without a petition, permit or require, in
23 respect of all or any part of the person's business activity,
24 if reasonable:
25         (1) Separate accounting;
26         (2) The exclusion of any one or more factors;

 

 

09600SB1739ham001 - 47 - LRB096 09705 HLH 27428 a

1         (3) The inclusion of one or more additional factors
2     which will fairly represent the person's business
3     activities in this State; or
4         (4) The employment of any other method to effectuate an
5     equitable allocation and apportionment of the person's
6     business income.
7     (g) Cross reference. For allocation of business income by
8 residents, see Section 301(a).
9     (h) For tax years ending on or after December 31, 1998, the
10 apportionment factor of persons who apportion their business
11 income to this State under subsection (a) shall be equal to:
12         (1) for tax years ending on or after December 31, 1998
13     and before December 31, 1999, 16 2/3% of the property
14     factor plus 16 2/3% of the payroll factor plus 66 2/3% of
15     the sales factor;
16         (2) for tax years ending on or after December 31, 1999
17     and before December 31, 2000, 8 1/3% of the property factor
18     plus 8 1/3% of the payroll factor plus 83 1/3% of the sales
19     factor;
20         (3) for tax years ending on or after December 31, 2000,
21     the sales factor.
22 If, in any tax year ending on or after December 31, 1998 and
23 before December 31, 2000, the denominator of the payroll,
24 property, or sales factor is zero, the apportionment factor
25 computed in paragraph (1) or (2) of this subsection for that
26 year shall be divided by an amount equal to 100% minus the

 

 

09600SB1739ham001 - 48 - LRB096 09705 HLH 27428 a

1 percentage weight given to each factor whose denominator is
2 equal to zero.
3 (Source: P.A. 94-247, eff. 1-1-06; 95-233, eff. 8-16-07;
4 95-707, eff. 1-11-08.)
 
5     Section 10. The Property Tax Code is amended by changing
6 Section 15-65 as follows:
 
7     (35 ILCS 200/15-65)
8     Sec. 15-65. Charitable purposes. All property of the
9 following is exempt when actually and exclusively used for
10 charitable or beneficent purposes, and not leased or otherwise
11 used with a view to profit:
12         (a) Institutions of public charity.
13         (b) Beneficent and charitable organizations
14     incorporated in any state of the United States, including
15     organizations whose owner, and no other person, uses the
16     property exclusively for the distribution, sale, or resale
17     of donated goods and related activities and uses all the
18     income from those activities to support the charitable,
19     religious or beneficent activities of the owner, whether or
20     not such activities occur on the property.
21         (c) Old people's homes, facilities for persons with a
22     developmental disability, and not-for-profit organizations
23     providing services or facilities related to the goals of
24     educational, social and physical development, if, upon

 

 

09600SB1739ham001 - 49 - LRB096 09705 HLH 27428 a

1     making application for the exemption, the applicant
2     provides affirmative evidence that the home or facility or
3     organization is an exempt organization under paragraph (3)
4     of Section 501(c) of the Internal Revenue Code or its
5     successor, and either: (i) the bylaws of the home or
6     facility or not-for-profit organization provide for a
7     waiver or reduction, based on an individual's ability to
8     pay, of any entrance fee, assignment of assets, or fee for
9     services, or (ii) the home or facility is qualified, built
10     or financed under Section 202 of the National Housing Act
11     of 1959, as amended.
12         An applicant that has been granted an exemption under
13     this subsection on the basis that its bylaws provide for a
14     waiver or reduction, based on an individual's ability to
15     pay, of any entrance fee, assignment of assets, or fee for
16     services may be periodically reviewed by the Department to
17     determine if the waiver or reduction was a past policy or
18     is a current policy. The Department may revoke the
19     exemption if it finds that the policy for waiver or
20     reduction is no longer current.
21         If a not-for-profit organization leases property that
22     is otherwise exempt under this subsection to an
23     organization that conducts an activity on the leased
24     premises that would entitle the lessee to an exemption from
25     real estate taxes if the lessee were the owner of the
26     property, then the leased property is exempt.

 

 

09600SB1739ham001 - 50 - LRB096 09705 HLH 27428 a

1         (d) Not-for-profit health maintenance organizations
2     certified by the Director of the Illinois Department of
3     Insurance under the Health Maintenance Organization Act,
4     including any health maintenance organization that
5     provides services to members at prepaid rates approved by
6     the Illinois Department of Insurance if the membership of
7     the organization is sufficiently large or of indefinite
8     classes so that the community is benefited by its
9     operation. No exemption shall apply to any hospital or
10     health maintenance organization which has been adjudicated
11     by a court of competent jurisdiction to have denied
12     admission to any person because of race, color, creed, sex
13     or national origin.
14         (e) All free public libraries.
15         (f) Historical societies.
16     Property otherwise qualifying for an exemption under this
17 Section shall not lose its exemption because the legal title is
18 held (i) by an entity that is organized solely to hold that
19 title and that qualifies under paragraph (2) of Section 501(c)
20 of the Internal Revenue Code or its successor, whether or not
21 that entity receives rent from the charitable organization for
22 the repair and maintenance of the property, (ii) by an entity
23 that is organized as a partnership or limited liability
24 company, in which the charitable organization, or an affiliate
25 or subsidiary of the charitable organization, is a general
26 partner of the partnership or managing member of the limited

 

 

09600SB1739ham001 - 51 - LRB096 09705 HLH 27428 a

1 liability company, for the purposes of owning and operating a
2 residential rental property that has received an allocation of
3 Low Income Housing Tax Credits for 100% of the dwelling units
4 under Section 42 of the Internal Revenue Code of 1986, as
5 amended, or (iii) for any assessment year including and
6 subsequent to January 1, 1996 for which an application for
7 exemption has been filed and a decision on which has not become
8 final and nonappealable, by a limited liability company
9 organized under the Limited Liability Company Act provided that
10 (A) the limited liability company receives a notification from
11 the Internal Revenue Service that it qualifies under paragraph
12 (2) or (3) of Section 501(c) of the Internal Revenue Code; (B)
13 the limited liability company's sole member or members, as that
14 term is used in Section 1-5 of the Limited Liability Company
15 Act, are the institutions of public charity that actually and
16 exclusively use the property for charitable and beneficent
17 purposes; (B) the limited liability company is a disregarded
18 entity for federal and Illinois income tax purposes and, as a
19 result, the limited liability company is deemed exempt from
20 income tax liability by virtue of the Internal Revenue Code
21 Section 501(c)(3) status of its sole member or members; and (C)
22 the limited liability company does not lease the property or
23 otherwise use it with a view to profit.
24 (Source: P.A. 91-416, eff. 8-6-99; 92-382, eff. 8-16-01.)
 
25     Section 99. Effective date. This Act takes effect upon

 

 

09600SB1739ham001 - 52 - LRB096 09705 HLH 27428 a

1 becoming law.".