Rep. Michael W. Tryon

Filed: 2/25/2011

 

 


 

 


 
09700HB1049ham001LRB097 05178 HLH 51609 a

1
AMENDMENT TO HOUSE BILL 1049

2    AMENDMENT NO. ______. Amend House Bill 1049 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) 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            (v) Compensation paid to nonresident State
20        legislators. The Illinois source income of a
21        nonresident individual who is a member of a State
22        legislature, other than the Illinois General Assembly,
23        includes the portion of the individual's total
24        compensation for services performed as a legislator
25        when the legislator is physically located in Illinois
26        for the purpose of denying a quorum to the legislative

 

 

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1        body of which he or she is a member. The segment of a
2        nonresident legislator's total compensation for
3        services covering time periods when the legislator is
4        in Illinois for legitimate legislative business, other
5        than denial of a quorum, or for the purpose of
6        receiving required health care or assisting a member of
7        legislator's family to receive required health care
8        shall not be included in Illinois source income.
9            (c) Definitions. For purposes of this subpart
10        (iv):
11                (1) The term "professional athletic team"
12            includes, but is not limited to, any professional
13            baseball, basketball, football, soccer, or hockey
14            team.
15                (2) The term "member of a professional
16            athletic team" includes those employees who are
17            active players, players on the disabled list, and
18            any other persons required to travel and who travel
19            with and perform services on behalf of a
20            professional athletic team on a regular basis.
21            This includes, but is not limited to, coaches,
22            managers, and trainers.
23                (3) Except as provided in items (C) and (D) of
24            this subpart (3), the term "duty days" means all
25            days during the taxable year from the beginning of
26            the professional athletic team's official

 

 

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1            pre-season training period through the last game
2            in which the team competes or is scheduled to
3            compete. Duty days shall be counted for the year in
4            which they occur, including where a team's
5            official pre-season training period through the
6            last game in which the team competes or is
7            scheduled to compete, occurs during more than one
8            tax year.
9                    (A) Duty days shall also include days on
10                which a member of a professional athletic team
11                performs service for a team on a date that does
12                not fall within the foregoing period (e.g.,
13                participation in instructional leagues, the
14                "All Star Game", or promotional "caravans").
15                Performing a service for a professional
16                athletic team includes conducting training and
17                rehabilitation activities, when such
18                activities are conducted at team facilities.
19                    (B) Also included in duty days are game
20                days, practice days, days spent at team
21                meetings, promotional caravans, preseason
22                training camps, and days served with the team
23                through all post-season games in which the team
24                competes or is scheduled to compete.
25                    (C) Duty days for any person who joins a
26                team during the period from the beginning of

 

 

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1                the professional athletic team's official
2                pre-season training period through the last
3                game in which the team competes, or is
4                scheduled to compete, shall begin on the day
5                that person joins the team. Conversely, duty
6                days for any person who leaves a team during
7                this period shall end on the day that person
8                leaves the team. Where a person switches teams
9                during a taxable year, a separate duty-day
10                calculation shall be made for the period the
11                person was with each team.
12                    (D) Days for which a member of a
13                professional athletic team is not compensated
14                and is not performing services for the team in
15                any manner, including days when such member of
16                a professional athletic team has been
17                suspended without pay and prohibited from
18                performing any services for the team, shall not
19                be treated as duty days.
20                    (E) Days for which a member of a
21                professional athletic team is on the disabled
22                list and does not conduct rehabilitation
23                activities at facilities of the team, and is
24                not otherwise performing services for the team
25                in Illinois, shall not be considered duty days
26                spent in this State. All days on the disabled

 

 

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1                list, however, are considered to be included in
2                total duty days spent both within and without
3                this State.
4                (4) The term "total compensation for services
5            performed as a member of a professional athletic
6            team" means the total compensation received during
7            the taxable year for services performed:
8                    (A) from the beginning of the official
9                pre-season training period through the last
10                game in which the team competes or is scheduled
11                to compete during that taxable year; and
12                    (B) during the taxable year on a date which
13                does not fall within the foregoing period
14                (e.g., participation in instructional leagues,
15                the "All Star Game", or promotional caravans).
16                This compensation shall include, but is not
17            limited to, salaries, wages, bonuses as described
18            in this subpart, and any other type of compensation
19            paid during the taxable year to a member of a
20            professional athletic team for services performed
21            in that year. This compensation does not include
22            strike benefits, severance pay, termination pay,
23            contract or option year buy-out payments,
24            expansion or relocation payments, or any other
25            payments not related to services performed for the
26            team.

 

 

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1                For purposes of this subparagraph, "bonuses"
2            included in "total compensation for services
3            performed as a member of a professional athletic
4            team" subject to the allocation described in
5            Section 302(c)(1) are: bonuses earned as a result
6            of play (i.e., performance bonuses) during the
7            season, including bonuses paid for championship,
8            playoff or "bowl" games played by a team, or for
9            selection to all-star league or other honorary
10            positions; and bonuses paid for signing a
11            contract, unless the payment of the signing bonus
12            is not conditional upon the signee playing any
13            games for the team or performing any subsequent
14            services for the team or even making the team, the
15            signing bonus is payable separately from the
16            salary and any other compensation, and the signing
17            bonus is nonrefundable.
18    (3) Sales factor.
19        (A) The sales factor is a fraction, the numerator of
20    which is the total sales of the person in this State during
21    the taxable year, and the denominator of which is the total
22    sales of the person everywhere during the taxable year.
23        (B) Sales of tangible personal property are in this
24    State if:
25            (i) The property is delivered or shipped to a
26        purchaser, other than the United States government,

 

 

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1        within this State regardless of the f. o. b. point or
2        other conditions of the sale; or
3            (ii) The property is shipped from an office, store,
4        warehouse, factory or other place of storage in this
5        State and either the purchaser is the United States
6        government or the person is not taxable in the state of
7        the purchaser; provided, however, that premises owned
8        or leased by a person who has independently contracted
9        with the seller for the printing of newspapers,
10        periodicals or books shall not be deemed to be an
11        office, store, warehouse, factory or other place of
12        storage for purposes of this Section. Sales of tangible
13        personal property are not in this State if the seller
14        and purchaser would be members of the same unitary
15        business group but for the fact that either the seller
16        or purchaser is a person with 80% or more of total
17        business activity outside of the United States and the
18        property is purchased for resale.
19        (B-1) Patents, copyrights, trademarks, and similar
20    items of intangible personal property.
21            (i) Gross receipts from the licensing, sale, or
22        other disposition of a patent, copyright, trademark,
23        or similar item of intangible personal property, other
24        than gross receipts governed by paragraph (B-7) of this
25        item (3), are in this State to the extent the item is
26        utilized in this State during the year the gross

 

 

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1        receipts are included in gross income.
2            (ii) Place of utilization.
3                (I) A patent is utilized in a state to the
4            extent that it is employed in production,
5            fabrication, manufacturing, or other processing in
6            the state or to the extent that a patented product
7            is produced in the state. If a patent is utilized
8            in more than one state, the extent to which it is
9            utilized in any one state shall be a fraction equal
10            to the gross receipts of the licensee or purchaser
11            from sales or leases of items produced,
12            fabricated, manufactured, or processed within that
13            state using the patent and of patented items
14            produced within that state, divided by the total of
15            such gross receipts for all states in which the
16            patent is utilized.
17                (II) A copyright is utilized in a state to the
18            extent that printing or other publication
19            originates in the state. If a copyright is utilized
20            in more than one state, the extent to which it is
21            utilized in any one state shall be a fraction equal
22            to the gross receipts from sales or licenses of
23            materials printed or published in that state
24            divided by the total of such gross receipts for all
25            states in which the copyright is utilized.
26                (III) Trademarks and other items of intangible

 

 

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1            personal property governed by this paragraph (B-1)
2            are utilized in the state in which the commercial
3            domicile of the licensee or purchaser is located.
4            (iii) If the state of utilization of an item of
5        property governed by this paragraph (B-1) cannot be
6        determined from the taxpayer's books and records or
7        from the books and records of any person related to the
8        taxpayer within the meaning of Section 267(b) of the
9        Internal Revenue Code, 26 U.S.C. 267, the gross
10        receipts attributable to that item shall be excluded
11        from both the numerator and the denominator of the
12        sales factor.
13        (B-2) Gross receipts from the license, sale, or other
14    disposition of patents, copyrights, trademarks, and
15    similar items of intangible personal property, other than
16    gross receipts governed by paragraph (B-7) of this item
17    (3), may be included in the numerator or denominator of the
18    sales factor only if gross receipts from licenses, sales,
19    or other disposition of such items comprise more than 50%
20    of the taxpayer's total gross receipts included in gross
21    income during the tax year and during each of the 2
22    immediately preceding tax years; provided that, when a
23    taxpayer is a member of a unitary business group, such
24    determination shall be made on the basis of the gross
25    receipts of the entire unitary business group.
26        (B-5) For taxable years ending on or after December 31,

 

 

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1    2008, except as provided in subsections (ii) through (vii),
2    receipts from the sale of telecommunications service or
3    mobile telecommunications service are in this State if the
4    customer's service address is in this State.
5            (i) For purposes of this subparagraph (B-5), the
6        follow terms have the following meanings:
7            "Ancillary services" means services that are
8        associated with or incidental to the provision of
9        "telecommunications services", including but not
10        limited to "detailed telecommunications billing",
11        "directory assistance", "vertical service", and "voice
12        mail services".
13            "Air-to-Ground Radiotelephone service" means a
14        radio service, as that term is defined in 47 CFR 22.99,
15        in which common carriers are authorized to offer and
16        provide radio telecommunications service for hire to
17        subscribers in aircraft.
18            "Call-by-call Basis" means any method of charging
19        for telecommunications services where the price is
20        measured by individual calls.
21            "Communications Channel" means a physical or
22        virtual path of communications over which signals are
23        transmitted between or among customer channel
24        termination points.
25            "Conference bridging service" means an "ancillary
26        service" that links two or more participants of an

 

 

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1        audio or video conference call and may include the
2        provision of a telephone number. "Conference bridging
3        service" does not include the "telecommunications
4        services" used to reach the conference bridge.
5            "Customer Channel Termination Point" means the
6        location where the customer either inputs or receives
7        the communications.
8            "Detailed telecommunications billing service"
9        means an "ancillary service" of separately stating
10        information pertaining to individual calls on a
11        customer's billing statement.
12            "Directory assistance" means an "ancillary
13        service" of providing telephone number information,
14        and/or address information.
15            "Home service provider" means the facilities based
16        carrier or reseller with which the customer contracts
17        for the provision of mobile telecommunications
18        services.
19            "Mobile telecommunications service" means
20        commercial mobile radio service, as defined in Section
21        20.3 of Title 47 of the Code of Federal Regulations as
22        in effect on June 1, 1999.
23            "Place of primary use" means the street address
24        representative of where the customer's use of the
25        telecommunications service primarily occurs, which
26        must be the residential street address or the primary

 

 

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1        business street address of the customer. In the case of
2        mobile telecommunications services, "place of primary
3        use" must be within the licensed service area of the
4        home service provider.
5            "Post-paid telecommunication service" means the
6        telecommunications service obtained by making a
7        payment on a call-by-call basis either through the use
8        of a credit card or payment mechanism such as a bank
9        card, travel card, credit card, or debit card, or by
10        charge made to a telephone number which is not
11        associated with the origination or termination of the
12        telecommunications service. A post-paid calling
13        service includes telecommunications service, except a
14        prepaid wireless calling service, that would be a
15        prepaid calling service except it is not exclusively a
16        telecommunication service.
17            "Prepaid telecommunication service" means the
18        right to access exclusively telecommunications
19        services, which must be paid for in advance and which
20        enables the origination of calls using an access number
21        or authorization code, whether manually or
22        electronically dialed, and that is sold in
23        predetermined units or dollars of which the number
24        declines with use in a known amount.
25            "Prepaid Mobile telecommunication service" means a
26        telecommunications service that provides the right to

 

 

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1        utilize mobile wireless service as well as other
2        non-telecommunication services, including but not
3        limited to ancillary services, which must be paid for
4        in advance that is sold in predetermined units or
5        dollars of which the number declines with use in a
6        known amount.
7            "Private communication service" means a
8        telecommunication service that entitles the customer
9        to exclusive or priority use of a communications
10        channel or group of channels between or among
11        termination points, regardless of the manner in which
12        such channel or channels are connected, and includes
13        switching capacity, extension lines, stations, and any
14        other associated services that are provided in
15        connection with the use of such channel or channels.
16            "Service address" means:
17                (a) The location of the telecommunications
18            equipment to which a customer's call is charged and
19            from which the call originates or terminates,
20            regardless of where the call is billed or paid;
21                (b) If the location in line (a) is not known,
22            service address means the origination point of the
23            signal of the telecommunications services first
24            identified by either the seller's
25            telecommunications system or in information
26            received by the seller from its service provider

 

 

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1            where the system used to transport such signals is
2            not that of the seller; and
3                (c) If the locations in line (a) and line (b)
4            are not known, the service address means the
5            location of the customer's place of primary use.
6            "Telecommunications service" means the electronic
7        transmission, conveyance, or routing of voice, data,
8        audio, video, or any other information or signals to a
9        point, or between or among points. The term
10        "telecommunications service" includes such
11        transmission, conveyance, or routing in which computer
12        processing applications are used to act on the form,
13        code or protocol of the content for purposes of
14        transmission, conveyance or routing without regard to
15        whether such service is referred to as voice over
16        Internet protocol services or is classified by the
17        Federal Communications Commission as enhanced or value
18        added. "Telecommunications service" does not include:
19                (a) Data processing and information services
20            that allow data to be generated, acquired, stored,
21            processed, or retrieved and delivered by an
22            electronic transmission to a purchaser when such
23            purchaser's primary purpose for the underlying
24            transaction is the processed data or information;
25                (b) Installation or maintenance of wiring or
26            equipment on a customer's premises;

 

 

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1                (c) Tangible personal property;
2                (d) Advertising, including but not limited to
3            directory advertising.
4                (e) Billing and collection services provided
5            to third parties;
6                (f) Internet access service;
7                (g) Radio and television audio and video
8            programming services, regardless of the medium,
9            including the furnishing of transmission,
10            conveyance and routing of such services by the
11            programming service provider. Radio and television
12            audio and video programming services shall include
13            but not be limited to cable service as defined in
14            47 USC 522(6) and audio and video programming
15            services delivered by commercial mobile radio
16            service providers, as defined in 47 CFR 20.3;
17                (h) "Ancillary services"; or
18                (i) Digital products "delivered
19            electronically", including but not limited to
20            software, music, video, reading materials or ring
21            tones.
22            "Vertical service" means an "ancillary service"
23        that is offered in connection with one or more
24        "telecommunications services", which offers advanced
25        calling features that allow customers to identify
26        callers and to manage multiple calls and call

 

 

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1        connections, including "conference bridging services".
2            "Voice mail service" means an "ancillary service"
3        that enables the customer to store, send or receive
4        recorded messages. "Voice mail service" does not
5        include any "vertical services" that the customer may
6        be required to have in order to utilize the "voice mail
7        service".
8            (ii) Receipts from the sale of telecommunications
9        service sold on an individual call-by-call basis are in
10        this State if either of the following applies:
11                (a) The call both originates and terminates in
12            this State.
13                (b) The call either originates or terminates
14            in this State and the service address is located in
15            this State.
16            (iii) Receipts from the sale of postpaid
17        telecommunications service at retail are in this State
18        if the origination point of the telecommunication
19        signal, as first identified by the service provider's
20        telecommunication system or as identified by
21        information received by the seller from its service
22        provider if the system used to transport
23        telecommunication signals is not the seller's, is
24        located in this State.
25            (iv) Receipts from the sale of prepaid
26        telecommunications service or prepaid mobile

 

 

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1        telecommunications service at retail are in this State
2        if the purchaser obtains the prepaid card or similar
3        means of conveyance at a location in this State.
4        Receipts from recharging a prepaid telecommunications
5        service or mobile telecommunications service is in
6        this State if the purchaser's billing information
7        indicates a location in this State.
8            (v) Receipts from the sale of private
9        communication services are in this State as follows:
10                (a) 100% of receipts from charges imposed at
11            each channel termination point in this State.
12                (b) 100% of receipts from charges for the total
13            channel mileage between each channel termination
14            point in this State.
15                (c) 50% of the total receipts from charges for
16            service segments when those segments are between 2
17            customer channel termination points, 1 of which is
18            located in this State and the other is located
19            outside of this State, which segments are
20            separately charged.
21                (d) The receipts from charges for service
22            segments with a channel termination point located
23            in this State and in two or more other states, and
24            which segments are not separately billed, are in
25            this State based on a percentage determined by
26            dividing the number of customer channel

 

 

09700HB1049ham001- 21 -LRB097 05178 HLH 51609 a

1            termination points in this State by the total
2            number of customer channel termination points.
3            (vi) Receipts from charges for ancillary services
4        for telecommunications service sold to customers at
5        retail are in this State if the customer's primary
6        place of use of telecommunications services associated
7        with those ancillary services is in this State. If the
8        seller of those ancillary services cannot determine
9        where the associated telecommunications are located,
10        then the ancillary services shall be based on the
11        location of the purchaser.
12            (vii) Receipts to access a carrier's network or
13        from the sale of telecommunication services or
14        ancillary services for resale are in this State as
15        follows:
16                (a) 100% of the receipts from access fees
17            attributable to intrastate telecommunications
18            service that both originates and terminates in
19            this State.
20                (b) 50% of the receipts from access fees
21            attributable to interstate telecommunications
22            service if the interstate call either originates
23            or terminates in this State.
24                (c) 100% of the receipts from interstate end
25            user access line charges, if the customer's
26            service address is in this State. As used in this

 

 

09700HB1049ham001- 22 -LRB097 05178 HLH 51609 a

1            subdivision, "interstate end user access line
2            charges" includes, but is not limited to, the
3            surcharge approved by the federal communications
4            commission and levied pursuant to 47 CFR 69.
5                (d) Gross receipts from sales of
6            telecommunication services or from ancillary
7            services for telecommunications services sold to
8            other telecommunication service providers for
9            resale shall be sourced to this State using the
10            apportionment concepts used for non-resale
11            receipts of telecommunications services if the
12            information is readily available to make that
13            determination. If the information is not readily
14            available, then the taxpayer may use any other
15            reasonable and consistent method.
16        (B-7) For taxable years ending on or after December 31,
17    2008, receipts from the sale of broadcasting services are
18    in this State if the broadcasting services are received in
19    this State. For purposes of this paragraph (B-7), the
20    following terms have the following meanings:
21            "Advertising revenue" means consideration received
22        by the taxpayer in exchange for broadcasting services
23        or allowing the broadcasting of commercials or
24        announcements in connection with the broadcasting of
25        film or radio programming, from sponsorships of the
26        programming, or from product placements in the

 

 

09700HB1049ham001- 23 -LRB097 05178 HLH 51609 a

1        programming.
2            "Audience factor" means the ratio that the
3        audience or subscribers located in this State of a
4        station, a network, or a cable system bears to the
5        total audience or total subscribers for that station,
6        network, or cable system. The audience factor for film
7        or radio programming shall be determined by reference
8        to the books and records of the taxpayer or by
9        reference to published rating statistics provided the
10        method used by the taxpayer is consistently used from
11        year to year for this purpose and fairly represents the
12        taxpayer's activity in this State.
13            "Broadcast" or "broadcasting" or "broadcasting
14        services" means the transmission or provision of film
15        or radio programming, whether through the public
16        airwaves, by cable, by direct or indirect satellite
17        transmission, or by any other means of communication,
18        either through a station, a network, or a cable system.
19            "Film" or "film programming" means the broadcast
20        on television 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 video tape, disc, or any
25        other type of format or medium. Each episode of a
26        series of films produced for television shall

 

 

09700HB1049ham001- 24 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 25 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 26 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 27 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 28 -LRB097 05178 HLH 51609 a

1            (iii) In the case of interest, net gains (but not
2        less than zero) and other items of income from
3        intangible personal property, the sale is in this State
4        if:
5                (a) in the case of a taxpayer who is a dealer
6            in the item of intangible personal property within
7            the meaning of Section 475 of the Internal Revenue
8            Code, the income or gain is received from a
9            customer in this State. For purposes of this
10            subparagraph, a customer is in this State if the
11            customer is an individual, trust or estate who is a
12            resident of this State and, for all other
13            customers, if the customer's commercial domicile
14            is in this State. Unless the dealer has actual
15            knowledge of the residence or commercial domicile
16            of a customer during a taxable year, the customer
17            shall be deemed to be a customer in this State if
18            the billing address of the customer, as shown in
19            the records of the dealer, is in this State; or
20                (b) in all other cases, if the
21            income-producing activity of the taxpayer is
22            performed in this State or, if the
23            income-producing activity of the taxpayer is
24            performed both within and without this State, if a
25            greater proportion of the income-producing
26            activity of the taxpayer is performed within this

 

 

09700HB1049ham001- 29 -LRB097 05178 HLH 51609 a

1            State than in any other state, based on performance
2            costs.
3            (iv) Sales of services are in this State if the
4        services are received in this State. For the purposes
5        of this section, gross receipts from the performance of
6        services provided to a corporation, partnership, or
7        trust may only be attributed to a state where that
8        corporation, partnership, or trust has a fixed place of
9        business. If the state where the services are received
10        is not readily determinable or is a state where the
11        corporation, partnership, or trust receiving the
12        service does not have a fixed place of business, the
13        services shall be deemed to be received at the location
14        of the office of the customer from which the services
15        were ordered in the regular course of the customer's
16        trade or business. If the ordering office cannot be
17        determined, the services shall be deemed to be received
18        at the office of the customer to which the services are
19        billed. If the taxpayer is not taxable in the state in
20        which the services are received, the sale must be
21        excluded from both the numerator and the denominator of
22        the sales factor. The Department shall adopt rules
23        prescribing where specific types of service are
24        received, including, but not limited to, publishing,
25        and utility service.
26        (D) For taxable years ending on or after December 31,

 

 

09700HB1049ham001- 30 -LRB097 05178 HLH 51609 a

1    1995, the following items of income shall not be included
2    in the numerator or denominator of the sales factor:
3    dividends; amounts included under Section 78 of the
4    Internal Revenue Code; and Subpart F income as defined in
5    Section 952 of the Internal Revenue Code. No inference
6    shall be drawn from the enactment of this paragraph (D) in
7    construing this Section for taxable years ending before
8    December 31, 1995.
9        (E) Paragraphs (B-1) and (B-2) shall apply to tax years
10    ending on or after December 31, 1999, provided that a
11    taxpayer may elect to apply the provisions of these
12    paragraphs to prior tax years. Such election shall be made
13    in the form and manner prescribed by the Department, shall
14    be irrevocable, and shall apply to all tax years; provided
15    that, if a taxpayer's Illinois income tax liability for any
16    tax year, as assessed under Section 903 prior to January 1,
17    1999, was computed in a manner contrary to the provisions
18    of paragraphs (B-1) or (B-2), no refund shall be payable to
19    the taxpayer for that tax year to the extent such refund is
20    the result of applying the provisions of paragraph (B-1) or
21    (B-2) retroactively. In the case of a unitary business
22    group, such election shall apply to all members of such
23    group for every tax year such group is in existence, but
24    shall not apply to any taxpayer for any period during which
25    that taxpayer is not a member of such group.
26    (b) Insurance companies.

 

 

09700HB1049ham001- 31 -LRB097 05178 HLH 51609 a

1        (1) In general. Except as otherwise provided by
2    paragraph (2), business income of an insurance company for
3    a taxable year shall be apportioned to this State by
4    multiplying such income by a fraction, the numerator of
5    which is the direct premiums written for insurance upon
6    property or risk in this State, and the denominator of
7    which is the direct premiums written for insurance upon
8    property or risk everywhere. For purposes of this
9    subsection, the term "direct premiums written" means the
10    total amount of direct premiums written, assessments and
11    annuity considerations as reported for the taxable year on
12    the annual statement filed by the company with the Illinois
13    Director of Insurance in the form approved by the National
14    Convention of Insurance Commissioners or such other form as
15    may be prescribed in lieu thereof.
16        (2) Reinsurance. If the principal source of premiums
17    written by an insurance company consists of premiums for
18    reinsurance accepted by it, the business income of such
19    company shall be apportioned to this State by multiplying
20    such income by a fraction, the numerator of which is the
21    sum of (i) direct premiums written for insurance upon
22    property or risk in this State, plus (ii) premiums written
23    for reinsurance accepted in respect of property or risk in
24    this State, and the denominator of which is the sum of
25    (iii) direct premiums written for insurance upon property
26    or risk everywhere, plus (iv) premiums written for

 

 

09700HB1049ham001- 32 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 33 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 34 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 35 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 36 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 37 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 38 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 39 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 40 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 41 -LRB097 05178 HLH 51609 a

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

 

 

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1                contacts. An investment or trading asset or
2                activity assigned by the taxpayer to a fixed
3                place of business without the State shall be
4                presumed to have been properly assigned if:
5                        (i) the taxpayer has assigned, in the
6                    regular course of its business, such asset
7                    or activity on its records to a fixed place
8                    of business consistent with federal or
9                    state regulatory requirements;
10                        (ii) such assignment on its records is
11                    based upon substantive contacts of the
12                    asset or activity to such fixed place of
13                    business; and
14                        (iii) the taxpayer uses such records
15                    reflecting assignment of such assets or
16                    activities for the filing of all state and
17                    local tax returns for which an assignment
18                    of such assets or activities to a fixed
19                    place of business is required.
20                    (E) The presumption of proper assignment
21                of an investment or trading asset or activity
22                provided in subparagraph (D) of paragraph (2)
23                of this subsection may be rebutted upon a
24                showing by the Department, supported by a
25                preponderance of the evidence, that the
26                preponderance of substantive contacts

 

 

09700HB1049ham001- 43 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 44 -LRB097 05178 HLH 51609 a

1before December 31, 2008, business income derived from
2furnishing transportation services shall be apportioned to
3this State in accordance with paragraphs (1) and (2):
4        (1) Such business income (other than that derived from
5    transportation by pipeline) shall be apportioned to this
6    State by multiplying such income by a fraction, the
7    numerator of which is the revenue miles of the person in
8    this State, and the denominator of which is the revenue
9    miles of the person everywhere. For purposes of this
10    paragraph, a revenue mile is the transportation of 1
11    passenger or 1 net ton of freight the distance of 1 mile
12    for a consideration. Where a person is engaged in the
13    transportation of both passengers and freight, the
14    fraction above referred to shall be determined by means of
15    an average of the passenger revenue mile fraction and the
16    freight revenue mile fraction, weighted to reflect the
17    person's
18            (A) relative railway operating income from total
19        passenger and total freight service, as reported to the
20        Interstate Commerce Commission, in the case of
21        transportation by railroad, and
22            (B) relative gross receipts from passenger and
23        freight transportation, in case of transportation
24        other than by railroad.
25        (2) Such business income derived from transportation
26    by pipeline shall be apportioned to this State by

 

 

09700HB1049ham001- 45 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 46 -LRB097 05178 HLH 51609 a

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

 

 

09700HB1049ham001- 47 -LRB097 05178 HLH 51609 a

1    from passenger and freight airline transportation.
2    (e) Combined apportionment. Where 2 or more persons are
3engaged in a unitary business as described in subsection
4(a)(27) of Section 1501, a part of which is conducted in this
5State by one or more members of the group, the business income
6attributable to this State by any such member or members shall
7be apportioned by means of the combined apportionment method.
8    (f) Alternative allocation. If the allocation and
9apportionment provisions of subsections (a) through (e) and of
10subsection (h) do not fairly represent the extent of a person's
11business activity in this State, the person may petition for,
12or the Director may, without a petition, permit or require, in
13respect of all or any part of the person's business activity,
14if reasonable:
15        (1) Separate accounting;
16        (2) The exclusion of any one or more factors;
17        (3) The inclusion of one or more additional factors
18    which will fairly represent the person's business
19    activities in this State; or
20        (4) The employment of any other method to effectuate an
21    equitable allocation and apportionment of the person's
22    business income.
23    (g) Cross reference. For allocation of business income by
24residents, see Section 301(a).
25    (h) For tax years ending on or after December 31, 1998, the
26apportionment factor of persons who apportion their business

 

 

09700HB1049ham001- 48 -LRB097 05178 HLH 51609 a

1income to this State under subsection (a) shall be equal to:
2        (1) for tax years ending on or after December 31, 1998
3    and before December 31, 1999, 16 2/3% of the property
4    factor plus 16 2/3% of the payroll factor plus 66 2/3% of
5    the sales factor;
6        (2) for tax years ending on or after December 31, 1999
7    and before December 31, 2000, 8 1/3% of the property factor
8    plus 8 1/3% of the payroll factor plus 83 1/3% of the sales
9    factor;
10        (3) for tax years ending on or after December 31, 2000,
11    the sales factor.
12If, in any tax year ending on or after December 31, 1998 and
13before December 31, 2000, the denominator of the payroll,
14property, or sales factor is zero, the apportionment factor
15computed in paragraph (1) or (2) of this subsection for that
16year shall be divided by an amount equal to 100% minus the
17percentage weight given to each factor whose denominator is
18equal to zero.
19(Source: P.A. 95-233, eff. 8-16-07; 95-707, eff. 1-11-08;
2096-763, eff. 8-25-09.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.".