Full Text of SB0405 97th General Assembly
SB0405sam001 97TH GENERAL ASSEMBLY | Sen. John J. Cullerton Filed: 10/24/2011
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| 1 | | AMENDMENT TO SENATE BILL 405
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 405 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Sections 201 and 304 as follows: | 6 | | (35 ILCS 5/201) (from Ch. 120, par. 2-201) | 7 | | Sec. 201. Tax Imposed. | 8 | | (a) In general. A tax measured by net income is hereby | 9 | | imposed on every
individual, corporation, trust and estate for | 10 | | each taxable year ending
after July 31, 1969 on the privilege | 11 | | of earning or receiving income in or
as a resident of this | 12 | | State. Such tax shall be in addition to all other
occupation or | 13 | | privilege taxes imposed by this State or by any municipal
| 14 | | corporation or political subdivision thereof. | 15 | | (b) Rates. The tax imposed by subsection (a) of this | 16 | | Section shall be
determined as follows, except as adjusted by |
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| 1 | | subsection (d-1): | 2 | | (1) In the case of an individual, trust or estate, for | 3 | | taxable years
ending prior to July 1, 1989, an amount equal | 4 | | to 2 1/2% of the taxpayer's
net income for the taxable | 5 | | year. | 6 | | (2) In the case of an individual, trust or estate, for | 7 | | taxable years
beginning prior to July 1, 1989 and ending | 8 | | after June 30, 1989, an amount
equal to the sum of (i) 2 | 9 | | 1/2% of the taxpayer's net income for the period
prior to | 10 | | July 1, 1989, as calculated under Section 202.3, and (ii) | 11 | | 3% of the
taxpayer's net income for the period after June | 12 | | 30, 1989, as calculated
under Section 202.3. | 13 | | (3) In the case of an individual, trust or estate, for | 14 | | taxable years
beginning after June 30, 1989, and ending | 15 | | prior to January 1, 2011, an amount equal to 3% of the | 16 | | taxpayer's net
income for the taxable year. | 17 | | (4) In the case of an individual, trust, or estate, for | 18 | | taxable years beginning prior to January 1, 2011, and | 19 | | ending after December 31, 2010, an amount equal to the sum | 20 | | of (i) 3% of the taxpayer's net income for the period prior | 21 | | to January 1, 2011, as calculated under Section 202.5, and | 22 | | (ii) 5% of the taxpayer's net income for the period after | 23 | | December 31, 2010, as calculated under Section 202.5. | 24 | | (5) In the case of an individual, trust, or estate, for | 25 | | taxable years beginning on or after January 1, 2011, and | 26 | | ending prior to January 1, 2015, an amount equal to 5% of |
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| 1 | | the taxpayer's net income for the taxable year. | 2 | | (5.1) In the case of an individual, trust, or estate, | 3 | | for taxable years beginning prior to January 1, 2015, and | 4 | | ending after December 31, 2014, an amount equal to the sum | 5 | | of (i) 5% of the taxpayer's net income for the period prior | 6 | | to January 1, 2015, as calculated under Section 202.5, and | 7 | | (ii) 3.75% of the taxpayer's net income for the period | 8 | | after December 31, 2014, as calculated under Section 202.5. | 9 | | (5.2) In the case of an individual, trust, or estate, | 10 | | for taxable years beginning on or after January 1, 2015, | 11 | | and ending prior to January 1, 2025, an amount equal to | 12 | | 3.75% of the taxpayer's net income for the taxable year. | 13 | | (5.3) In the case of an individual, trust, or estate, | 14 | | for taxable years beginning prior to January 1, 2025, and | 15 | | ending after December 31, 2024, an amount equal to the sum | 16 | | of (i) 3.75% of the taxpayer's net income for the period | 17 | | prior to January 1, 2025, as calculated under Section | 18 | | 202.5, and (ii) 3.25% of the taxpayer's net income for the | 19 | | period after December 31, 2024, as calculated under Section | 20 | | 202.5. | 21 | | (5.4) In the case of an individual, trust, or estate, | 22 | | for taxable years beginning on or after January 1, 2025, an | 23 | | amount equal to 3.25% of the taxpayer's net income for the | 24 | | taxable year. | 25 | | (6) In the case of a corporation, for taxable years
| 26 | | ending prior to July 1, 1989, an amount equal to 4% of the
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| 1 | | taxpayer's net income for the taxable year. | 2 | | (7) In the case of a corporation, for taxable years | 3 | | beginning prior to
July 1, 1989 and ending after June 30, | 4 | | 1989, an amount equal to the sum of
(i) 4% of the | 5 | | taxpayer's net income for the period prior to July 1, 1989,
| 6 | | as calculated under Section 202.3, and (ii) 4.8% of the | 7 | | taxpayer's net
income for the period after June 30, 1989, | 8 | | as calculated under Section
202.3. | 9 | | (8) In the case of a corporation, for taxable years | 10 | | beginning after
June 30, 1989, and ending prior to January | 11 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net | 12 | | income for the
taxable year. | 13 | | (9) In the case of a corporation, for taxable years | 14 | | beginning prior to January 1, 2011, and ending after | 15 | | December 31, 2010, an amount equal to the sum of (i) 4.8% | 16 | | of the taxpayer's net income for the period prior to | 17 | | January 1, 2011, as calculated under Section 202.5, and | 18 | | (ii) 7% of the taxpayer's net income for the period after | 19 | | December 31, 2010, as calculated under Section 202.5. | 20 | | (10) In the case of a corporation, for taxable years | 21 | | beginning on or after January 1, 2011, and ending prior to | 22 | | January 1, 2015, an amount equal to 7% of the taxpayer's | 23 | | net income for the taxable year. | 24 | | (11) In the case of a corporation, for taxable years | 25 | | beginning prior to January 1, 2015, and ending after | 26 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
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| 1 | | the taxpayer's net income for the period prior to January | 2 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% | 3 | | of the taxpayer's net income for the period after December | 4 | | 31, 2014, as calculated under Section 202.5. | 5 | | (12) In the case of a corporation, for taxable years | 6 | | beginning on or after January 1, 2015, and ending prior to | 7 | | January 1, 2025, an amount equal to 5.25% of the taxpayer's | 8 | | net income for the taxable year. | 9 | | (13) In the case of a corporation, for taxable years | 10 | | beginning prior to January 1, 2025, and ending after | 11 | | December 31, 2024, an amount equal to the sum of (i) 5.25% | 12 | | of the taxpayer's net income for the period prior to | 13 | | January 1, 2025, as calculated under Section 202.5, and | 14 | | (ii) 4.8% of the taxpayer's net income for the period after | 15 | | December 31, 2024, as calculated under Section 202.5. | 16 | | (14) In the case of a corporation, for taxable years | 17 | | beginning on or after January 1, 2025, an amount equal to | 18 | | 4.8% of the taxpayer's net income for the taxable year. | 19 | | The rates under this subsection (b) are subject to the | 20 | | provisions of Section 201.5. | 21 | | (c) Personal Property Tax Replacement Income Tax.
| 22 | | Beginning on July 1, 1979 and thereafter, in addition to such | 23 | | income
tax, there is also hereby imposed the Personal Property | 24 | | Tax Replacement
Income Tax measured by net income on every | 25 | | corporation (including Subchapter
S corporations), partnership | 26 | | and trust, for each taxable year ending after
June 30, 1979. |
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| 1 | | Such taxes are imposed on the privilege of earning or
receiving | 2 | | income in or as a resident of this State. The Personal Property
| 3 | | Tax Replacement Income Tax shall be in addition to the income | 4 | | tax imposed
by subsections (a) and (b) of this Section and in | 5 | | addition to all other
occupation or privilege taxes imposed by | 6 | | this State or by any municipal
corporation or political | 7 | | subdivision thereof. | 8 | | (d) Additional Personal Property Tax Replacement Income | 9 | | Tax Rates.
The personal property tax replacement income tax | 10 | | imposed by this subsection
and subsection (c) of this Section | 11 | | in the case of a corporation, other
than a Subchapter S | 12 | | corporation and except as adjusted by subsection (d-1),
shall | 13 | | be an additional amount equal to
2.85% of such taxpayer's net | 14 | | income for the taxable year, except that
beginning on January | 15 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this | 16 | | subsection shall be reduced to 2.5%, and in the case of a
| 17 | | partnership, trust or a Subchapter S corporation shall be an | 18 | | additional
amount equal to 1.5% of such taxpayer's net income | 19 | | for the taxable year. | 20 | | (d-1) Rate reduction for certain foreign insurers. In the | 21 | | case of a
foreign insurer, as defined by Section 35A-5 of the | 22 | | Illinois Insurance Code,
whose state or country of domicile | 23 | | imposes on insurers domiciled in Illinois
a retaliatory tax | 24 | | (excluding any insurer
whose premiums from reinsurance assumed | 25 | | are 50% or more of its total insurance
premiums as determined | 26 | | under paragraph (2) of subsection (b) of Section 304,
except |
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| 1 | | that for purposes of this determination premiums from | 2 | | reinsurance do
not include premiums from inter-affiliate | 3 | | reinsurance arrangements),
beginning with taxable years ending | 4 | | on or after December 31, 1999,
the sum of
the rates of tax | 5 | | imposed by subsections (b) and (d) shall be reduced (but not
| 6 | | increased) to the rate at which the total amount of tax imposed | 7 | | under this Act,
net of all credits allowed under this Act, | 8 | | shall equal (i) the total amount of
tax that would be imposed | 9 | | on the foreign insurer's net income allocable to
Illinois for | 10 | | the taxable year by such foreign insurer's state or country of
| 11 | | domicile if that net income were subject to all income taxes | 12 | | and taxes
measured by net income imposed by such foreign | 13 | | insurer's state or country of
domicile, net of all credits | 14 | | allowed or (ii) a rate of zero if no such tax is
imposed on such | 15 | | income by the foreign insurer's state of domicile.
For the | 16 | | purposes of this subsection (d-1), an inter-affiliate includes | 17 | | a
mutual insurer under common management. | 18 | | (1) For the purposes of subsection (d-1), in no event | 19 | | shall the sum of the
rates of tax imposed by subsections | 20 | | (b) and (d) be reduced below the rate at
which the sum of: | 21 | | (A) the total amount of tax imposed on such foreign | 22 | | insurer under
this Act for a taxable year, net of all | 23 | | credits allowed under this Act, plus | 24 | | (B) the privilege tax imposed by Section 409 of the | 25 | | Illinois Insurance
Code, the fire insurance company | 26 | | tax imposed by Section 12 of the Fire
Investigation |
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| 1 | | Act, and the fire department taxes imposed under | 2 | | Section 11-10-1
of the Illinois Municipal Code, | 3 | | equals 1.25% for taxable years ending prior to December 31, | 4 | | 2003, or
1.75% for taxable years ending on or after | 5 | | December 31, 2003, of the net
taxable premiums written for | 6 | | the taxable year,
as described by subsection (1) of Section | 7 | | 409 of the Illinois Insurance Code.
This paragraph will in | 8 | | no event increase the rates imposed under subsections
(b) | 9 | | and (d). | 10 | | (2) Any reduction in the rates of tax imposed by this | 11 | | subsection shall be
applied first against the rates imposed | 12 | | by subsection (b) and only after the
tax imposed by | 13 | | subsection (a) net of all credits allowed under this | 14 | | Section
other than the credit allowed under subsection (i) | 15 | | has been reduced to zero,
against the rates imposed by | 16 | | subsection (d). | 17 | | This subsection (d-1) is exempt from the provisions of | 18 | | Section 250. | 19 | | (e) Investment credit. A taxpayer shall be allowed a credit
| 20 | | against the Personal Property Tax Replacement Income Tax for
| 21 | | investment in qualified property. | 22 | | (1) A taxpayer shall be allowed a credit equal to .5% | 23 | | of
the basis of qualified property placed in service during | 24 | | the taxable year,
provided such property is placed in | 25 | | service on or after
July 1, 1984. There shall be allowed an | 26 | | additional credit equal
to .5% of the basis of qualified |
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| 1 | | property placed in service during the
taxable year, | 2 | | provided such property is placed in service on or
after | 3 | | July 1, 1986, and the taxpayer's base employment
within | 4 | | Illinois has increased by 1% or more over the preceding | 5 | | year as
determined by the taxpayer's employment records | 6 | | filed with the
Illinois Department of Employment Security. | 7 | | Taxpayers who are new to
Illinois shall be deemed to have | 8 | | met the 1% growth in base employment for
the first year in | 9 | | which they file employment records with the Illinois
| 10 | | Department of Employment Security. The provisions added to | 11 | | this Section by
Public Act 85-1200 (and restored by Public | 12 | | Act 87-895) shall be
construed as declaratory of existing | 13 | | law and not as a new enactment. If,
in any year, the | 14 | | increase in base employment within Illinois over the
| 15 | | preceding year is less than 1%, the additional credit shall | 16 | | be limited to that
percentage times a fraction, the | 17 | | numerator of which is .5% and the denominator
of which is | 18 | | 1%, but shall not exceed .5%. The investment credit shall | 19 | | not be
allowed to the extent that it would reduce a | 20 | | taxpayer's liability in any tax
year below zero, nor may | 21 | | any credit for qualified property be allowed for any
year | 22 | | other than the year in which the property was placed in | 23 | | service in
Illinois. For tax years ending on or after | 24 | | December 31, 1987, and on or
before December 31, 1988, the | 25 | | credit shall be allowed for the tax year in
which the | 26 | | property is placed in service, or, if the amount of the |
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| 1 | | credit
exceeds the tax liability for that year, whether it | 2 | | exceeds the original
liability or the liability as later | 3 | | amended, such excess may be carried
forward and applied to | 4 | | the tax liability of the 5 taxable years following
the | 5 | | excess credit years if the taxpayer (i) makes investments | 6 | | which cause
the creation of a minimum of 2,000 full-time | 7 | | equivalent jobs in Illinois,
(ii) is located in an | 8 | | enterprise zone established pursuant to the Illinois
| 9 | | Enterprise Zone Act and (iii) is certified by the | 10 | | Department of Commerce
and Community Affairs (now | 11 | | Department of Commerce and Economic Opportunity) as | 12 | | complying with the requirements specified in
clause (i) and | 13 | | (ii) by July 1, 1986. The Department of Commerce and
| 14 | | Community Affairs (now Department of Commerce and Economic | 15 | | Opportunity) shall notify the Department of Revenue of all | 16 | | such
certifications immediately. For tax years ending | 17 | | after December 31, 1988,
the credit shall be allowed for | 18 | | the tax year in which the property is
placed in service, | 19 | | or, if the amount of the credit exceeds the tax
liability | 20 | | for that year, whether it exceeds the original liability or | 21 | | the
liability as later amended, such excess may be carried | 22 | | forward and applied
to the tax liability of the 5 taxable | 23 | | years following the excess credit
years. The credit shall | 24 | | be applied to the earliest year for which there is
a | 25 | | liability. If there is credit from more than one tax year | 26 | | that is
available to offset a liability, earlier credit |
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| 1 | | shall be applied first. | 2 | | (2) The term "qualified property" means property | 3 | | which: | 4 | | (A) is tangible, whether new or used, including | 5 | | buildings and structural
components of buildings and | 6 | | signs that are real property, but not including
land or | 7 | | improvements to real property that are not a structural | 8 | | component of a
building such as landscaping, sewer | 9 | | lines, local access roads, fencing, parking
lots, and | 10 | | other appurtenances; | 11 | | (B) is depreciable pursuant to Section 167 of the | 12 | | Internal Revenue Code,
except that "3-year property" | 13 | | as defined in Section 168(c)(2)(A) of that
Code is not | 14 | | eligible for the credit provided by this subsection | 15 | | (e); | 16 | | (C) is acquired by purchase as defined in Section | 17 | | 179(d) of
the Internal Revenue Code; | 18 | | (D) is used in Illinois by a taxpayer who is | 19 | | primarily engaged in
manufacturing, or in mining coal | 20 | | or fluorite, or in retailing, or was placed in service | 21 | | on or after July 1, 2006 in a River Edge Redevelopment | 22 | | Zone established pursuant to the River Edge | 23 | | Redevelopment Zone Act; and | 24 | | (E) has not previously been used in Illinois in | 25 | | such a manner and by
such a person as would qualify for | 26 | | the credit provided by this subsection
(e) or |
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| 1 | | subsection (f). | 2 | | (3) For purposes of this subsection (e), | 3 | | "manufacturing" means
the material staging and production | 4 | | of tangible personal property by
procedures commonly | 5 | | regarded as manufacturing, processing, fabrication, or
| 6 | | assembling which changes some existing material into new | 7 | | shapes, new
qualities, or new combinations. For purposes of | 8 | | this subsection
(e) the term "mining" shall have the same | 9 | | meaning as the term "mining" in
Section 613(c) of the | 10 | | Internal Revenue Code. For purposes of this subsection
(e), | 11 | | the term "retailing" means the sale of tangible personal | 12 | | property for use or consumption and not for resale, or
| 13 | | services rendered in conjunction with the sale of tangible | 14 | | personal property for use or consumption and not for | 15 | | resale. For purposes of this subsection (e), "tangible | 16 | | personal property" has the same meaning as when that term | 17 | | is used in the Retailers' Occupation Tax Act, and, for | 18 | | taxable years ending after December 31, 2008, does not | 19 | | include the generation, transmission, or distribution of | 20 | | electricity. | 21 | | (4) The basis of qualified property shall be the basis
| 22 | | used to compute the depreciation deduction for federal | 23 | | income tax purposes. | 24 | | (5) If the basis of the property for federal income tax | 25 | | depreciation
purposes is increased after it has been placed | 26 | | in service in Illinois by
the taxpayer, the amount of such |
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| 1 | | increase shall be deemed property placed
in service on the | 2 | | date of such increase in basis. | 3 | | (6) The term "placed in service" shall have the same
| 4 | | meaning as under Section 46 of the Internal Revenue Code. | 5 | | (7) If during any taxable year, any property ceases to
| 6 | | be qualified property in the hands of the taxpayer within | 7 | | 48 months after
being placed in service, or the situs of | 8 | | any qualified property is
moved outside Illinois within 48 | 9 | | months after being placed in service, the
Personal Property | 10 | | Tax Replacement Income Tax for such taxable year shall be
| 11 | | increased. Such increase shall be determined by (i) | 12 | | recomputing the
investment credit which would have been | 13 | | allowed for the year in which
credit for such property was | 14 | | originally allowed by eliminating such
property from such | 15 | | computation and, (ii) subtracting such recomputed credit
| 16 | | from the amount of credit previously allowed. For the | 17 | | purposes of this
paragraph (7), a reduction of the basis of | 18 | | qualified property resulting
from a redetermination of the | 19 | | purchase price shall be deemed a disposition
of qualified | 20 | | property to the extent of such reduction. | 21 | | (8) Unless the investment credit is extended by law, | 22 | | the
basis of qualified property shall not include costs | 23 | | incurred after
December 31, 2013, except for costs incurred | 24 | | pursuant to a binding
contract entered into on or before | 25 | | December 31, 2013. | 26 | | (9) Each taxable year ending before December 31, 2000, |
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| 1 | | a partnership may
elect to pass through to its
partners the | 2 | | credits to which the partnership is entitled under this | 3 | | subsection
(e) for the taxable year. A partner may use the | 4 | | credit allocated to him or her
under this paragraph only | 5 | | against the tax imposed in subsections (c) and (d) of
this | 6 | | Section. If the partnership makes that election, those | 7 | | credits shall be
allocated among the partners in the | 8 | | partnership in accordance with the rules
set forth in | 9 | | Section 704(b) of the Internal Revenue Code, and the rules
| 10 | | promulgated under that Section, and the allocated amount of | 11 | | the credits shall
be allowed to the partners for that | 12 | | taxable year. The partnership shall make
this election on | 13 | | its Personal Property Tax Replacement Income Tax return for
| 14 | | that taxable year. The election to pass through the credits | 15 | | shall be
irrevocable. | 16 | | For taxable years ending on or after December 31, 2000, | 17 | | a
partner that qualifies its
partnership for a subtraction | 18 | | under subparagraph (I) of paragraph (2) of
subsection (d) | 19 | | of Section 203 or a shareholder that qualifies a Subchapter | 20 | | S
corporation for a subtraction under subparagraph (S) of | 21 | | paragraph (2) of
subsection (b) of Section 203 shall be | 22 | | allowed a credit under this subsection
(e) equal to its | 23 | | share of the credit earned under this subsection (e) during
| 24 | | the taxable year by the partnership or Subchapter S | 25 | | corporation, determined in
accordance with the | 26 | | determination of income and distributive share of
income |
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| 1 | | under Sections 702 and 704 and Subchapter S of the Internal | 2 | | Revenue
Code. This paragraph is exempt from the provisions | 3 | | of Section 250. | 4 | | (f) Investment credit; Enterprise Zone; River Edge | 5 | | Redevelopment Zone. | 6 | | (1) A taxpayer shall be allowed a credit against the | 7 | | tax imposed
by subsections (a) and (b) of this Section for | 8 | | investment in qualified
property which is placed in service | 9 | | in an Enterprise Zone created
pursuant to the Illinois | 10 | | Enterprise Zone Act or, for property placed in service on | 11 | | or after July 1, 2006, a River Edge Redevelopment Zone | 12 | | established pursuant to the River Edge Redevelopment Zone | 13 | | Act. For partners, shareholders
of Subchapter S | 14 | | corporations, and owners of limited liability companies,
| 15 | | if the liability company is treated as a partnership for | 16 | | purposes of
federal and State income taxation, there shall | 17 | | be allowed a credit under
this subsection (f) to be | 18 | | determined in accordance with the determination
of income | 19 | | and distributive share of income under Sections 702 and 704 | 20 | | and
Subchapter S of the Internal Revenue Code. The credit | 21 | | shall be .5% of the
basis for such property. The credit | 22 | | shall be available only in the taxable
year in which the | 23 | | property is placed in service in the Enterprise Zone or | 24 | | River Edge Redevelopment Zone and
shall not be allowed to | 25 | | the extent that it would reduce a taxpayer's
liability for | 26 | | the tax imposed by subsections (a) and (b) of this Section |
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| 1 | | to
below zero. For tax years ending on or after December | 2 | | 31, 1985, the credit
shall be allowed for the tax year in | 3 | | which the property is placed in
service, or, if the amount | 4 | | of the credit exceeds the tax liability for that
year, | 5 | | whether it exceeds the original liability or the liability | 6 | | as later
amended, such excess may be carried forward and | 7 | | applied to the tax
liability of the 5 taxable years | 8 | | following the excess credit year.
The credit shall be | 9 | | applied to the earliest year for which there is a
| 10 | | liability. If there is credit from more than one tax year | 11 | | that is available
to offset a liability, the credit | 12 | | accruing first in time shall be applied
first. | 13 | | (2) The term qualified property means property which: | 14 | | (A) is tangible, whether new or used, including | 15 | | buildings and
structural components of buildings; | 16 | | (B) is depreciable pursuant to Section 167 of the | 17 | | Internal Revenue
Code, except that "3-year property" | 18 | | as defined in Section 168(c)(2)(A) of
that Code is not | 19 | | eligible for the credit provided by this subsection | 20 | | (f); | 21 | | (C) is acquired by purchase as defined in Section | 22 | | 179(d) of
the Internal Revenue Code; | 23 | | (D) is used in the Enterprise Zone or River Edge | 24 | | Redevelopment Zone by the taxpayer; and | 25 | | (E) has not been previously used in Illinois in | 26 | | such a manner and by
such a person as would qualify for |
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| 1 | | the credit provided by this subsection
(f) or | 2 | | subsection (e). | 3 | | (3) The basis of qualified property shall be the basis | 4 | | used to compute
the depreciation deduction for federal | 5 | | income tax purposes. | 6 | | (4) If the basis of the property for federal income tax | 7 | | depreciation
purposes is increased after it has been placed | 8 | | in service in the Enterprise
Zone or River Edge | 9 | | Redevelopment Zone by the taxpayer, the amount of such | 10 | | increase shall be deemed property
placed in service on the | 11 | | date of such increase in basis. | 12 | | (5) The term "placed in service" shall have the same | 13 | | meaning as under
Section 46 of the Internal Revenue Code. | 14 | | (6) If during any taxable year, any property ceases to | 15 | | be qualified
property in the hands of the taxpayer within | 16 | | 48 months after being placed
in service, or the situs of | 17 | | any qualified property is moved outside the
Enterprise Zone | 18 | | or River Edge Redevelopment Zone within 48 months after | 19 | | being placed in service, the tax
imposed under subsections | 20 | | (a) and (b) of this Section for such taxable year
shall be | 21 | | increased. Such increase shall be determined by (i) | 22 | | recomputing
the investment credit which would have been | 23 | | allowed for the year in which
credit for such property was | 24 | | originally allowed by eliminating such
property from such | 25 | | computation, and (ii) subtracting such recomputed credit
| 26 | | from the amount of credit previously allowed. For the |
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| 1 | | purposes of this
paragraph (6), a reduction of the basis of | 2 | | qualified property resulting
from a redetermination of the | 3 | | purchase price shall be deemed a disposition
of qualified | 4 | | property to the extent of such reduction. | 5 | | (7) There shall be allowed an additional credit equal | 6 | | to 0.5% of the basis of qualified property placed in | 7 | | service during the taxable year in a River Edge | 8 | | Redevelopment Zone, provided such property is placed in | 9 | | service on or after July 1, 2006, and the taxpayer's base | 10 | | employment within Illinois has increased by 1% or more over | 11 | | the preceding year as determined by the taxpayer's | 12 | | employment records filed with the Illinois Department of | 13 | | Employment Security. Taxpayers who are new to Illinois | 14 | | shall be deemed to have met the 1% growth in base | 15 | | employment for the first year in which they file employment | 16 | | records with the Illinois Department of Employment | 17 | | Security. If, in any year, the increase in base employment | 18 | | within Illinois over the preceding year is less than 1%, | 19 | | the additional credit shall be limited to that percentage | 20 | | times a fraction, the numerator of which is 0.5% and the | 21 | | denominator of which is 1%, but shall not exceed 0.5%.
| 22 | | (g) Jobs Tax Credit; Enterprise Zone, River Edge | 23 | | Redevelopment Zone, and Foreign Trade Zone or Sub-Zone. | 24 | | (1) A taxpayer conducting a trade or business in an | 25 | | enterprise zone
or a High Impact Business designated by the | 26 | | Department of Commerce and
Economic Opportunity or for |
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| 1 | | taxable years ending on or after December 31, 2006, in a | 2 | | River Edge Redevelopment Zone conducting a trade or | 3 | | business in a federally designated
Foreign Trade Zone or | 4 | | Sub-Zone shall be allowed a credit against the tax
imposed | 5 | | by subsections (a) and (b) of this Section in the amount of | 6 | | $500
per eligible employee hired to work in the zone during | 7 | | the taxable year. | 8 | | (2) To qualify for the credit: | 9 | | (A) the taxpayer must hire 5 or more eligible | 10 | | employees to work in an
enterprise zone, River Edge | 11 | | Redevelopment Zone, or federally designated Foreign | 12 | | Trade Zone or Sub-Zone
during the taxable year; | 13 | | (B) the taxpayer's total employment within the | 14 | | enterprise zone, River Edge Redevelopment Zone, or
| 15 | | federally designated Foreign Trade Zone or Sub-Zone | 16 | | must
increase by 5 or more full-time employees beyond | 17 | | the total employed in that
zone at the end of the | 18 | | previous tax year for which a jobs tax
credit under | 19 | | this Section was taken, or beyond the total employed by | 20 | | the
taxpayer as of December 31, 1985, whichever is | 21 | | later; and | 22 | | (C) the eligible employees must be employed 180 | 23 | | consecutive days in
order to be deemed hired for | 24 | | purposes of this subsection. | 25 | | (3) An "eligible employee" means an employee who is: | 26 | | (A) Certified by the Department of Commerce and |
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| 1 | | Economic Opportunity
as "eligible for services" | 2 | | pursuant to regulations promulgated in
accordance with | 3 | | Title II of the Job Training Partnership Act, Training
| 4 | | Services for the Disadvantaged or Title III of the Job | 5 | | Training Partnership
Act, Employment and Training | 6 | | Assistance for Dislocated Workers Program. | 7 | | (B) Hired after the enterprise zone, River Edge | 8 | | Redevelopment Zone, or federally designated Foreign
| 9 | | Trade Zone or Sub-Zone was designated or the trade or
| 10 | | business was located in that zone, whichever is later. | 11 | | (C) Employed in the enterprise zone, River Edge | 12 | | Redevelopment Zone, or Foreign Trade Zone or
Sub-Zone. | 13 | | An employee is employed in an
enterprise zone or | 14 | | federally designated Foreign Trade Zone or Sub-Zone
if | 15 | | his services are rendered there or it is the base of
| 16 | | operations for the services performed. | 17 | | (D) A full-time employee working 30 or more hours | 18 | | per week. | 19 | | (4) For tax years ending on or after December 31, 1985 | 20 | | and prior to
December 31, 1988, the credit shall be allowed | 21 | | for the tax year in which
the eligible employees are hired. | 22 | | For tax years ending on or after
December 31, 1988, the | 23 | | credit shall be allowed for the tax year immediately
| 24 | | following the tax year in which the eligible employees are | 25 | | hired. If the
amount of the credit exceeds the tax | 26 | | liability for that year, whether it
exceeds the original |
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| 1 | | liability or the liability as later amended, such
excess | 2 | | may be carried forward and applied to the tax liability of | 3 | | the 5
taxable years following the excess credit year. The | 4 | | credit shall be
applied to the earliest year for which | 5 | | there is a liability. If there is
credit from more than one | 6 | | tax year that is available to offset a liability,
earlier | 7 | | credit shall be applied first. | 8 | | (5) The Department of Revenue shall promulgate such | 9 | | rules and regulations
as may be deemed necessary to carry | 10 | | out the purposes of this subsection (g). | 11 | | (6) The credit shall be available for eligible | 12 | | employees hired on or
after January 1, 1986. | 13 | | (h) Investment credit; High Impact Business. | 14 | | (1) Subject to subsections (b) and (b-5) of Section
5.5 | 15 | | of the Illinois Enterprise Zone Act, a taxpayer shall be | 16 | | allowed a credit
against the tax imposed by subsections (a) | 17 | | and (b) of this Section for
investment in qualified
| 18 | | property which is placed in service by a Department of | 19 | | Commerce and Economic Opportunity
designated High Impact | 20 | | Business. The credit shall be .5% of the basis
for such | 21 | | property. The credit shall not be available (i) until the | 22 | | minimum
investments in qualified property set forth in | 23 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
| 24 | | Enterprise Zone Act have been satisfied
or (ii) until the | 25 | | time authorized in subsection (b-5) of the Illinois
| 26 | | Enterprise Zone Act for entities designated as High Impact |
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| 1 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and | 2 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone | 3 | | Act, and shall not be allowed to the extent that it would
| 4 | | reduce a taxpayer's liability for the tax imposed by | 5 | | subsections (a) and (b) of
this Section to below zero. The | 6 | | credit applicable to such investments shall be
taken in the | 7 | | taxable year in which such investments have been completed. | 8 | | The
credit for additional investments beyond the minimum | 9 | | investment by a designated
high impact business authorized | 10 | | under subdivision (a)(3)(A) of Section 5.5 of
the Illinois | 11 | | Enterprise Zone Act shall be available only in the taxable | 12 | | year in
which the property is placed in service and shall | 13 | | not be allowed to the extent
that it would reduce a | 14 | | taxpayer's liability for the tax imposed by subsections
(a) | 15 | | and (b) of this Section to below zero.
For tax years ending | 16 | | on or after December 31, 1987, the credit shall be
allowed | 17 | | for the tax year in which the property is placed in | 18 | | service, or, if
the amount of the credit exceeds the tax | 19 | | liability for that year, whether
it exceeds the original | 20 | | liability or the liability as later amended, such
excess | 21 | | may be carried forward and applied to the tax liability of | 22 | | the 5
taxable years following the excess credit year. The | 23 | | credit shall be
applied to the earliest year for which | 24 | | there is a liability. If there is
credit from more than one | 25 | | tax year that is available to offset a liability,
the | 26 | | credit accruing first in time shall be applied first. |
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| 1 | | Changes made in this subdivision (h)(1) by Public Act | 2 | | 88-670
restore changes made by Public Act 85-1182 and | 3 | | reflect existing law. | 4 | | (2) The term qualified property means property which: | 5 | | (A) is tangible, whether new or used, including | 6 | | buildings and
structural components of buildings; | 7 | | (B) is depreciable pursuant to Section 167 of the | 8 | | Internal Revenue
Code, except that "3-year property" | 9 | | as defined in Section 168(c)(2)(A) of
that Code is not | 10 | | eligible for the credit provided by this subsection | 11 | | (h); | 12 | | (C) is acquired by purchase as defined in Section | 13 | | 179(d) of the
Internal Revenue Code; and | 14 | | (D) is not eligible for the Enterprise Zone | 15 | | Investment Credit provided
by subsection (f) of this | 16 | | Section. | 17 | | (3) The basis of qualified property shall be the basis | 18 | | used to compute
the depreciation deduction for federal | 19 | | income tax purposes. | 20 | | (4) If the basis of the property for federal income tax | 21 | | depreciation
purposes is increased after it has been placed | 22 | | in service in a federally
designated Foreign Trade Zone or | 23 | | Sub-Zone located in Illinois by the taxpayer,
the amount of | 24 | | such increase shall be deemed property placed in service on
| 25 | | the date of such increase in basis. | 26 | | (5) The term "placed in service" shall have the same |
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| 1 | | meaning as under
Section 46 of the Internal Revenue Code. | 2 | | (6) If during any taxable year ending on or before | 3 | | December 31, 1996,
any property ceases to be qualified
| 4 | | property in the hands of the taxpayer within 48 months | 5 | | after being placed
in service, or the situs of any | 6 | | qualified property is moved outside
Illinois within 48 | 7 | | months after being placed in service, the tax imposed
under | 8 | | subsections (a) and (b) of this Section for such taxable | 9 | | year shall
be increased. Such increase shall be determined | 10 | | by (i) recomputing the
investment credit which would have | 11 | | been allowed for the year in which
credit for such property | 12 | | was originally allowed by eliminating such
property from | 13 | | such computation, and (ii) subtracting such recomputed | 14 | | credit
from the amount of credit previously allowed. For | 15 | | the purposes of this
paragraph (6), a reduction of the | 16 | | basis of qualified property resulting
from a | 17 | | redetermination of the purchase price shall be deemed a | 18 | | disposition
of qualified property to the extent of such | 19 | | reduction. | 20 | | (7) Beginning with tax years ending after December 31, | 21 | | 1996, if a
taxpayer qualifies for the credit under this | 22 | | subsection (h) and thereby is
granted a tax abatement and | 23 | | the taxpayer relocates its entire facility in
violation of | 24 | | the explicit terms and length of the contract under Section
| 25 | | 18-183 of the Property Tax Code, the tax imposed under | 26 | | subsections
(a) and (b) of this Section shall be increased |
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| 1 | | for the taxable year
in which the taxpayer relocated its | 2 | | facility by an amount equal to the
amount of credit | 3 | | received by the taxpayer under this subsection (h). | 4 | | (i) Credit for Personal Property Tax Replacement Income | 5 | | Tax.
For tax years ending prior to December 31, 2003, a credit | 6 | | shall be allowed
against the tax imposed by
subsections (a) and | 7 | | (b) of this Section for the tax imposed by subsections (c)
and | 8 | | (d) of this Section. This credit shall be computed by | 9 | | multiplying the tax
imposed by subsections (c) and (d) of this | 10 | | Section by a fraction, the numerator
of which is base income | 11 | | allocable to Illinois and the denominator of which is
Illinois | 12 | | base income, and further multiplying the product by the tax | 13 | | rate
imposed by subsections (a) and (b) of this Section. | 14 | | Any credit earned on or after December 31, 1986 under
this | 15 | | subsection which is unused in the year
the credit is computed | 16 | | because it exceeds the tax liability imposed by
subsections (a) | 17 | | and (b) for that year (whether it exceeds the original
| 18 | | liability or the liability as later amended) may be carried | 19 | | forward and
applied to the tax liability imposed by subsections | 20 | | (a) and (b) of the 5
taxable years following the excess credit | 21 | | year, provided that no credit may
be carried forward to any | 22 | | year ending on or
after December 31, 2003. This credit shall be
| 23 | | applied first to the earliest year for which there is a | 24 | | liability. If
there is a credit under this subsection from more | 25 | | than one tax year that is
available to offset a liability the | 26 | | earliest credit arising under this
subsection shall be applied |
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| 1 | | first. | 2 | | If, during any taxable year ending on or after December 31, | 3 | | 1986, the
tax imposed by subsections (c) and (d) of this | 4 | | Section for which a taxpayer
has claimed a credit under this | 5 | | subsection (i) is reduced, the amount of
credit for such tax | 6 | | shall also be reduced. Such reduction shall be
determined by | 7 | | recomputing the credit to take into account the reduced tax
| 8 | | imposed by subsections (c) and (d). If any portion of the
| 9 | | reduced amount of credit has been carried to a different | 10 | | taxable year, an
amended return shall be filed for such taxable | 11 | | year to reduce the amount of
credit claimed. | 12 | | (j) Training expense credit. Beginning with tax years | 13 | | ending on or
after December 31, 1986 and prior to December 31, | 14 | | 2003, a taxpayer shall be
allowed a credit against the
tax | 15 | | imposed by subsections (a) and (b) under this Section
for all | 16 | | amounts paid or accrued, on behalf of all persons
employed by | 17 | | the taxpayer in Illinois or Illinois residents employed
outside | 18 | | of Illinois by a taxpayer, for educational or vocational | 19 | | training in
semi-technical or technical fields or semi-skilled | 20 | | or skilled fields, which
were deducted from gross income in the | 21 | | computation of taxable income. The
credit against the tax | 22 | | imposed by subsections (a) and (b) shall be 1.6% of
such | 23 | | training expenses. For partners, shareholders of subchapter S
| 24 | | corporations, and owners of limited liability companies, if the | 25 | | liability
company is treated as a partnership for purposes of | 26 | | federal and State income
taxation, there shall be allowed a |
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| 1 | | credit under this subsection (j) to be
determined in accordance | 2 | | with the determination of income and distributive
share of | 3 | | income under Sections 702 and 704 and subchapter S of the | 4 | | Internal
Revenue Code. | 5 | | Any credit allowed under this subsection which is unused in | 6 | | the year
the credit is earned may be carried forward to each of | 7 | | the 5 taxable
years following the year for which the credit is | 8 | | first computed until it is
used. This credit shall be applied | 9 | | first to the earliest year for which
there is a liability. If | 10 | | there is a credit under this subsection from more
than one tax | 11 | | year that is available to offset a liability the earliest
| 12 | | credit arising under this subsection shall be applied first. No | 13 | | carryforward
credit may be claimed in any tax year ending on or | 14 | | after
December 31, 2003. | 15 | | (k) Research and development credit. | 16 | | For tax years ending after July 1, 1990 and prior to
| 17 | | December 31, 2003, and beginning again for tax years ending on | 18 | | or after December 31, 2004, and ending prior to January 1, 2016 | 19 | | January 1, 2011 , a taxpayer shall be
allowed a credit against | 20 | | the tax imposed by subsections (a) and (b) of this
Section for | 21 | | increasing research activities in this State. The credit
| 22 | | allowed against the tax imposed by subsections (a) and (b) | 23 | | shall be equal
to 6 1/2% of the qualifying expenditures for | 24 | | increasing research activities
in this State. For partners, | 25 | | shareholders of subchapter S corporations, and
owners of | 26 | | limited liability companies, if the liability company is |
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| 1 | | treated as a
partnership for purposes of federal and State | 2 | | income taxation, there shall be
allowed a credit under this | 3 | | subsection to be determined in accordance with the
| 4 | | determination of income and distributive share of income under | 5 | | Sections 702 and
704 and subchapter S of the Internal Revenue | 6 | | Code. | 7 | | For purposes of this subsection, "qualifying expenditures" | 8 | | means the
qualifying expenditures as defined for the federal | 9 | | credit for increasing
research activities which would be | 10 | | allowable under Section 41 of the
Internal Revenue Code and | 11 | | which are conducted in this State, "qualifying
expenditures for | 12 | | increasing research activities in this State" means the
excess | 13 | | of qualifying expenditures for the taxable year in which | 14 | | incurred
over qualifying expenditures for the base period, | 15 | | "qualifying expenditures
for the base period" means the average | 16 | | of the qualifying expenditures for
each year in the base | 17 | | period, and "base period" means the 3 taxable years
immediately | 18 | | preceding the taxable year for which the determination is
being | 19 | | made. | 20 | | Any credit in excess of the tax liability for the taxable | 21 | | year
may be carried forward. A taxpayer may elect to have the
| 22 | | unused credit shown on its final completed return carried over | 23 | | as a credit
against the tax liability for the following 5 | 24 | | taxable years or until it has
been fully used, whichever occurs | 25 | | first; provided that no credit earned in a tax year ending | 26 | | prior to December 31, 2003 may be carried forward to any year |
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| 1 | | ending on or after December 31, 2003, and no credit may be | 2 | | carried forward to any taxable year ending on or after January | 3 | | 1, 2016 January 1, 2011 . | 4 | | If an unused credit is carried forward to a given year from | 5 | | 2 or more
earlier years, that credit arising in the earliest | 6 | | year will be applied
first against the tax liability for the | 7 | | given year. If a tax liability for
the given year still | 8 | | remains, the credit from the next earliest year will
then be | 9 | | applied, and so on, until all credits have been used or no tax
| 10 | | liability for the given year remains. Any remaining unused | 11 | | credit or
credits then will be carried forward to the next | 12 | | following year in which a
tax liability is incurred, except | 13 | | that no credit can be carried forward to
a year which is more | 14 | | than 5 years after the year in which the expense for
which the | 15 | | credit is given was incurred. | 16 | | No inference shall be drawn from this amendatory Act of the | 17 | | 91st General
Assembly in construing this Section for taxable | 18 | | years beginning before January
1, 1999. | 19 | | (l) Environmental Remediation Tax Credit. | 20 | | (i) For tax years ending after December 31, 1997 and on | 21 | | or before
December 31, 2001, a taxpayer shall be allowed a | 22 | | credit against the tax
imposed by subsections (a) and (b) | 23 | | of this Section for certain amounts paid
for unreimbursed | 24 | | eligible remediation costs, as specified in this | 25 | | subsection.
For purposes of this Section, "unreimbursed | 26 | | eligible remediation costs" means
costs approved by the |
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| 1 | | Illinois Environmental Protection Agency ("Agency") under
| 2 | | Section 58.14 of the Environmental Protection Act that were | 3 | | paid in performing
environmental remediation at a site for | 4 | | which a No Further Remediation Letter
was issued by the | 5 | | Agency and recorded under Section 58.10 of the | 6 | | Environmental
Protection Act. The credit must be claimed | 7 | | for the taxable year in which
Agency approval of the | 8 | | eligible remediation costs is granted. The credit is
not | 9 | | available to any taxpayer if the taxpayer or any related | 10 | | party caused or
contributed to, in any material respect, a | 11 | | release of regulated substances on,
in, or under the site | 12 | | that was identified and addressed by the remedial
action | 13 | | pursuant to the Site Remediation Program of the | 14 | | Environmental Protection
Act. After the Pollution Control | 15 | | Board rules are adopted pursuant to the
Illinois | 16 | | Administrative Procedure Act for the administration and | 17 | | enforcement of
Section 58.9 of the Environmental | 18 | | Protection Act, determinations as to credit
availability | 19 | | for purposes of this Section shall be made consistent with | 20 | | those
rules. For purposes of this Section, "taxpayer" | 21 | | includes a person whose tax
attributes the taxpayer has | 22 | | succeeded to under Section 381 of the Internal
Revenue Code | 23 | | and "related party" includes the persons disallowed a | 24 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of | 25 | | Section 267 of the Internal
Revenue Code by virtue of being | 26 | | a related taxpayer, as well as any of its
partners. The |
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| 1 | | credit allowed against the tax imposed by subsections (a) | 2 | | and
(b) shall be equal to 25% of the unreimbursed eligible | 3 | | remediation costs in
excess of $100,000 per site, except | 4 | | that the $100,000 threshold shall not apply
to any site | 5 | | contained in an enterprise zone as determined by the | 6 | | Department of
Commerce and Community Affairs (now | 7 | | Department of Commerce and Economic Opportunity). The | 8 | | total credit allowed shall not exceed
$40,000 per year with | 9 | | a maximum total of $150,000 per site. For partners and
| 10 | | shareholders of subchapter S corporations, there shall be | 11 | | allowed a credit
under this subsection to be determined in | 12 | | accordance with the determination of
income and | 13 | | distributive share of income under Sections 702 and 704 and
| 14 | | subchapter S of the Internal Revenue Code. | 15 | | (ii) A credit allowed under this subsection that is | 16 | | unused in the year
the credit is earned may be carried | 17 | | forward to each of the 5 taxable years
following the year | 18 | | for which the credit is first earned until it is used.
The | 19 | | term "unused credit" does not include any amounts of | 20 | | unreimbursed eligible
remediation costs in excess of the | 21 | | maximum credit per site authorized under
paragraph (i). | 22 | | This credit shall be applied first to the earliest year
for | 23 | | which there is a liability. If there is a credit under this | 24 | | subsection
from more than one tax year that is available to | 25 | | offset a liability, the
earliest credit arising under this | 26 | | subsection shall be applied first. A
credit allowed under |
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| 1 | | this subsection may be sold to a buyer as part of a sale
of | 2 | | all or part of the remediation site for which the credit | 3 | | was granted. The
purchaser of a remediation site and the | 4 | | tax credit shall succeed to the unused
credit and remaining | 5 | | carry-forward period of the seller. To perfect the
| 6 | | transfer, the assignor shall record the transfer in the | 7 | | chain of title for the
site and provide written notice to | 8 | | the Director of the Illinois Department of
Revenue of the | 9 | | assignor's intent to sell the remediation site and the | 10 | | amount of
the tax credit to be transferred as a portion of | 11 | | the sale. In no event may a
credit be transferred to any | 12 | | taxpayer if the taxpayer or a related party would
not be | 13 | | eligible under the provisions of subsection (i). | 14 | | (iii) For purposes of this Section, the term "site" | 15 | | shall have the same
meaning as under Section 58.2 of the | 16 | | Environmental Protection Act. | 17 | | (m) Education expense credit. Beginning with tax years | 18 | | ending after
December 31, 1999, a taxpayer who
is the custodian | 19 | | of one or more qualifying pupils shall be allowed a credit
| 20 | | against the tax imposed by subsections (a) and (b) of this | 21 | | Section for
qualified education expenses incurred on behalf of | 22 | | the qualifying pupils.
The credit shall be equal to 25% of | 23 | | qualified education expenses, but in no
event may the total | 24 | | credit under this subsection claimed by a
family that is the
| 25 | | custodian of qualifying pupils exceed $500. In no event shall a | 26 | | credit under
this subsection reduce the taxpayer's liability |
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| 1 | | under this Act to less than
zero. This subsection is exempt | 2 | | from the provisions of Section 250 of this
Act. | 3 | | For purposes of this subsection: | 4 | | "Qualifying pupils" means individuals who (i) are | 5 | | residents of the State of
Illinois, (ii) are under the age of | 6 | | 21 at the close of the school year for
which a credit is | 7 | | sought, and (iii) during the school year for which a credit
is | 8 | | sought were full-time pupils enrolled in a kindergarten through | 9 | | twelfth
grade education program at any school, as defined in | 10 | | this subsection. | 11 | | "Qualified education expense" means the amount incurred
on | 12 | | behalf of a qualifying pupil in excess of $250 for tuition, | 13 | | book fees, and
lab fees at the school in which the pupil is | 14 | | enrolled during the regular school
year. | 15 | | "School" means any public or nonpublic elementary or | 16 | | secondary school in
Illinois that is in compliance with Title | 17 | | VI of the Civil Rights Act of 1964
and attendance at which | 18 | | satisfies the requirements of Section 26-1 of the
School Code, | 19 | | except that nothing shall be construed to require a child to
| 20 | | attend any particular public or nonpublic school to qualify for | 21 | | the credit
under this Section. | 22 | | "Custodian" means, with respect to qualifying pupils, an | 23 | | Illinois resident
who is a parent, the parents, a legal | 24 | | guardian, or the legal guardians of the
qualifying pupils. | 25 | | (n) River Edge Redevelopment Zone site remediation tax | 26 | | credit.
|
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| 1 | | (i) For tax years ending on or after December 31, 2006, | 2 | | a taxpayer shall be allowed a credit against the tax | 3 | | imposed by subsections (a) and (b) of this Section for | 4 | | certain amounts paid for unreimbursed eligible remediation | 5 | | costs, as specified in this subsection. For purposes of | 6 | | this Section, "unreimbursed eligible remediation costs" | 7 | | means costs approved by the Illinois Environmental | 8 | | Protection Agency ("Agency") under Section 58.14a of the | 9 | | Environmental Protection Act that were paid in performing | 10 | | environmental remediation at a site within a River Edge | 11 | | Redevelopment Zone for which a No Further Remediation | 12 | | Letter was issued by the Agency and recorded under Section | 13 | | 58.10 of the Environmental Protection Act. The credit must | 14 | | be claimed for the taxable year in which Agency approval of | 15 | | the eligible remediation costs is granted. The credit is | 16 | | not available to any taxpayer if the taxpayer or any | 17 | | related party caused or contributed to, in any material | 18 | | respect, a release of regulated substances on, in, or under | 19 | | the site that was identified and addressed by the remedial | 20 | | action pursuant to the Site Remediation Program of the | 21 | | Environmental Protection Act. Determinations as to credit | 22 | | availability for purposes of this Section shall be made | 23 | | consistent with rules adopted by the Pollution Control | 24 | | Board pursuant to the Illinois Administrative Procedure | 25 | | Act for the administration and enforcement of Section 58.9 | 26 | | of the Environmental Protection Act. For purposes of this |
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| 1 | | Section, "taxpayer" includes a person whose tax attributes | 2 | | the taxpayer has succeeded to under Section 381 of the | 3 | | Internal Revenue Code and "related party" includes the | 4 | | persons disallowed a deduction for losses by paragraphs | 5 | | (b), (c), and (f)(1) of Section 267 of the Internal Revenue | 6 | | Code by virtue of being a related taxpayer, as well as any | 7 | | of its partners. The credit allowed against the tax imposed | 8 | | by subsections (a) and (b) shall be equal to 25% of the | 9 | | unreimbursed eligible remediation costs in excess of | 10 | | $100,000 per site. | 11 | | (ii) A credit allowed under this subsection that is | 12 | | unused in the year the credit is earned may be carried | 13 | | forward to each of the 5 taxable years following the year | 14 | | for which the credit is first earned until it is used. This | 15 | | credit shall be applied first to the earliest year for | 16 | | which there is a liability. If there is a credit under this | 17 | | subsection from more than one tax year that is available to | 18 | | offset a liability, the earliest credit arising under this | 19 | | subsection shall be applied first. A credit allowed under | 20 | | this subsection may be sold to a buyer as part of a sale of | 21 | | all or part of the remediation site for which the credit | 22 | | was granted. The purchaser of a remediation site and the | 23 | | tax credit shall succeed to the unused credit and remaining | 24 | | carry-forward period of the seller. To perfect the | 25 | | transfer, the assignor shall record the transfer in the | 26 | | chain of title for the site and provide written notice to |
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| 1 | | the Director of the Illinois Department of Revenue of the | 2 | | assignor's intent to sell the remediation site and the | 3 | | amount of the tax credit to be transferred as a portion of | 4 | | the sale. In no event may a credit be transferred to any | 5 | | taxpayer if the taxpayer or a related party would not be | 6 | | eligible under the provisions of subsection (i). | 7 | | (iii) For purposes of this Section, the term "site" | 8 | | shall have the same meaning as under Section 58.2 of the | 9 | | Environmental Protection Act. | 10 | | (Source: P.A. 96-115, eff. 7-31-09; 96-116, eff. 7-31-09; | 11 | | 96-937, eff. 6-23-10; 96-1000, eff. 7-2-10; 96-1496, eff. | 12 | | 1-13-11; 97-2, eff. 5-6-11.)
| 13 | | (35 ILCS 5/304) (from Ch. 120, par. 3-304)
| 14 | | Sec. 304. Business income of persons other than residents.
| 15 | | (a) In general. The business income of a person other than | 16 | | a
resident shall be allocated to this State if such person's | 17 | | business
income is derived solely from this State. If a person | 18 | | other than a
resident derives business income from this State | 19 | | and one or more other
states, then, for tax years ending on or | 20 | | before December 30, 1998, and
except as otherwise provided by | 21 | | this Section, such
person's business income shall be | 22 | | apportioned to this State by
multiplying the income by a | 23 | | fraction, the numerator of which is the sum
of the property | 24 | | factor (if any), the payroll factor (if any) and 200% of the
| 25 | | sales factor (if any), and the denominator of which is 4 |
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| 1 | | reduced by the
number of factors other than the sales factor | 2 | | which have a denominator
of zero and by an additional 2 if the | 3 | | sales factor has a denominator of zero.
For tax years ending on | 4 | | or after December 31, 1998, and except as otherwise
provided by | 5 | | this Section, persons other than
residents who derive business | 6 | | income from this State and one or more other
states shall | 7 | | compute their apportionment factor by weighting their | 8 | | property,
payroll, and sales factors as provided in
subsection | 9 | | (h) of this Section.
| 10 | | (1) Property factor.
| 11 | | (A) The property factor is a fraction, the numerator of | 12 | | which is the
average value of the person's real and | 13 | | tangible personal property owned
or rented and used in the | 14 | | trade or business in this State during the
taxable year and | 15 | | the denominator of which is the average value of all
the | 16 | | person's real and tangible personal property owned or | 17 | | rented and
used in the trade or business during the taxable | 18 | | year.
| 19 | | (B) Property owned by the person is valued at its | 20 | | original cost.
Property rented by the person is valued at 8 | 21 | | times the net annual rental
rate. Net annual rental rate is | 22 | | the annual rental rate paid by the
person less any annual | 23 | | rental rate received by the person from
sub-rentals.
| 24 | | (C) The average value of property shall be determined | 25 | | by averaging
the values at the beginning and ending of the | 26 | | taxable year but the
Director may require the averaging of |
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| 1 | | monthly values during the taxable
year if reasonably | 2 | | required to reflect properly the average value of the
| 3 | | person's property.
| 4 | | (2) Payroll factor.
| 5 | | (A) The payroll factor is a fraction, the numerator of | 6 | | which is the
total amount paid in this State during the | 7 | | taxable year by the person
for compensation, and the | 8 | | denominator of which is the total compensation
paid | 9 | | everywhere during the taxable year.
| 10 | | (B) Compensation is paid in this State if:
| 11 | | (i) The individual's service is performed entirely | 12 | | within this
State;
| 13 | | (ii) The individual's service is performed both | 14 | | within and without
this State, but the service | 15 | | performed without this State is incidental
to the | 16 | | individual's service performed within this State; or
| 17 | | (iii) Some of the service is performed within this | 18 | | State and either
the base of operations, or if there is | 19 | | no base of operations, the place
from which the service | 20 | | is directed or controlled is within this State,
or the | 21 | | base of operations or the place from which the service | 22 | | is
directed or controlled is not in any state in which | 23 | | some part of the
service is performed, but the | 24 | | individual's residence is in this State.
| 25 | | (iv) Compensation paid to nonresident professional | 26 | | athletes. |
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| 1 | | (a) General. The Illinois source income of a | 2 | | nonresident individual who is a member of a | 3 | | professional athletic team includes the portion of the | 4 | | individual's total compensation for services performed | 5 | | as a member of a professional athletic team during the | 6 | | taxable year which the number of duty days spent within | 7 | | this State performing services for the team in any | 8 | | manner during the taxable year bears to the total | 9 | | number of duty days spent both within and without this | 10 | | State during the taxable year. | 11 | | (b) Travel days. Travel days that do not involve | 12 | | either a game, practice, team meeting, or other similar | 13 | | team event are not considered duty days spent in this | 14 | | State. However, such travel days are considered in the | 15 | | total duty days spent both within and without this | 16 | | State. | 17 | | (c) Definitions. For purposes of this subpart | 18 | | (iv): | 19 | | (1) The term "professional athletic team" | 20 | | includes, but is not limited to, any professional | 21 | | baseball, basketball, football, soccer, or hockey | 22 | | team. | 23 | | (2) The term "member of a professional | 24 | | athletic team" includes those employees who are | 25 | | active players, players on the disabled list, and | 26 | | any other persons required to travel and who travel |
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| 1 | | with and perform services on behalf of a | 2 | | professional athletic team on a regular basis. | 3 | | This includes, but is not limited to, coaches, | 4 | | managers, and trainers. | 5 | | (3) Except as provided in items (C) and (D) of | 6 | | this subpart (3), the term "duty days" means all | 7 | | days during the taxable year from the beginning of | 8 | | the professional athletic team's official | 9 | | pre-season training period through the last game | 10 | | in which the team competes or is scheduled to | 11 | | compete. Duty days shall be counted for the year in | 12 | | which they occur, including where a team's | 13 | | official pre-season training period through the | 14 | | last game in which the team competes or is | 15 | | scheduled to compete, occurs during more than one | 16 | | tax year. | 17 | | (A) Duty days shall also include days on | 18 | | which a member of a professional athletic team | 19 | | performs service for a team on a date that does | 20 | | not fall within the foregoing period (e.g., | 21 | | participation in instructional leagues, the | 22 | | "All Star Game", or promotional "caravans"). | 23 | | Performing a service for a professional | 24 | | athletic team includes conducting training and | 25 | | rehabilitation activities, when such | 26 | | activities are conducted at team facilities. |
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| 1 | | (B) Also included in duty days are game | 2 | | days, practice days, days spent at team | 3 | | meetings, promotional caravans, preseason | 4 | | training camps, and days served with the team | 5 | | through all post-season games in which the team | 6 | | competes or is scheduled to compete. | 7 | | (C) Duty days for any person who joins a | 8 | | team during the period from the beginning of | 9 | | the professional athletic team's official | 10 | | pre-season training period through the last | 11 | | game in which the team competes, or is | 12 | | scheduled to compete, shall begin on the day | 13 | | that person joins the team. Conversely, duty | 14 | | days for any person who leaves a team during | 15 | | this period shall end on the day that person | 16 | | leaves the team. Where a person switches teams | 17 | | during a taxable year, a separate duty-day | 18 | | calculation shall be made for the period the | 19 | | person was with each team. | 20 | | (D) Days for which a member of a | 21 | | professional athletic team is not compensated | 22 | | and is not performing services for the team in | 23 | | any manner, including days when such member of | 24 | | a professional athletic team has been | 25 | | suspended without pay and prohibited from | 26 | | performing any services for the team, shall not |
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| 1 | | be treated as duty days. | 2 | | (E) Days for which a member of a | 3 | | professional athletic team is on the disabled | 4 | | list and does not conduct rehabilitation | 5 | | activities at facilities of the team, and is | 6 | | not otherwise performing services for the team | 7 | | in Illinois, shall not be considered duty days | 8 | | spent in this State. All days on the disabled | 9 | | list, however, are considered to be included in | 10 | | total duty days spent both within and without | 11 | | this State. | 12 | | (4) The term "total compensation for services | 13 | | performed as a member of a professional athletic | 14 | | team" means the total compensation received during | 15 | | the taxable year for services performed: | 16 | | (A) from the beginning of the official | 17 | | pre-season training period through the last | 18 | | game in which the team competes or is scheduled | 19 | | to compete during that taxable year; and | 20 | | (B) during the taxable year on a date which | 21 | | does not fall within the foregoing period | 22 | | (e.g., participation in instructional leagues, | 23 | | the "All Star Game", or promotional caravans). | 24 | | This compensation shall include, but is not | 25 | | limited to, salaries, wages, bonuses as described | 26 | | in this subpart, and any other type of compensation |
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| 1 | | paid during the taxable year to a member of a | 2 | | professional athletic team for services performed | 3 | | in that year. This compensation does not include | 4 | | strike benefits, severance pay, termination pay, | 5 | | contract or option year buy-out payments, | 6 | | expansion or relocation payments, or any other | 7 | | payments not related to services performed for the | 8 | | team. | 9 | | For purposes of this subparagraph, "bonuses" | 10 | | included in "total compensation for services | 11 | | performed as a member of a professional athletic | 12 | | team" subject to the allocation described in | 13 | | Section 302(c)(1) are: bonuses earned as a result | 14 | | of play (i.e., performance bonuses) during the | 15 | | season, including bonuses paid for championship, | 16 | | playoff or "bowl" games played by a team, or for | 17 | | selection to all-star league or other honorary | 18 | | positions; and bonuses paid for signing a | 19 | | contract, unless the payment of the signing bonus | 20 | | is not conditional upon the signee playing any | 21 | | games for the team or performing any subsequent | 22 | | services for the team or even making the team, the | 23 | | signing bonus is payable separately from the | 24 | | salary and any other compensation, and the signing | 25 | | bonus is nonrefundable.
| 26 | | (3) Sales factor.
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| 1 | | (A) The sales factor is a fraction, the numerator of | 2 | | which is the
total sales of the person in this State during | 3 | | the taxable year, and the
denominator of which is the total | 4 | | sales of the person everywhere during
the taxable year.
| 5 | | (B) Sales of tangible personal property are in this | 6 | | State if:
| 7 | | (i) The property is delivered or shipped to a | 8 | | purchaser, other than
the United States government, | 9 | | within this State regardless of the f. o.
b. point or | 10 | | other conditions of the sale; or
| 11 | | (ii) The property is shipped from an office, store, | 12 | | warehouse,
factory or other place of storage in this | 13 | | State and either the purchaser
is the United States | 14 | | government or the person is not taxable in the
state of | 15 | | the purchaser; provided, however, that premises owned | 16 | | or leased
by a person who has independently contracted | 17 | | with the seller for the printing
of newspapers, | 18 | | periodicals or books shall not be deemed to be an | 19 | | office,
store, warehouse, factory or other place of | 20 | | storage for purposes of this
Section.
Sales of tangible | 21 | | personal property are not in this State if the
seller | 22 | | and purchaser would be members of the same unitary | 23 | | business group
but for the fact that either the seller | 24 | | or purchaser is a person with 80%
or more of total | 25 | | business activity outside of the United States and the
| 26 | | property is purchased for resale.
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| 1 | | (B-1) Patents, copyrights, trademarks, and similar | 2 | | items of intangible
personal property.
| 3 | | (i) Gross receipts from the licensing, sale, or | 4 | | other disposition of a
patent, copyright, trademark, | 5 | | or similar item of intangible personal property, other | 6 | | than gross receipts governed by paragraph (B-7) of this | 7 | | item (3),
are in this State to the extent the item is | 8 | | utilized in this State during the
year the gross | 9 | | receipts are included in gross income.
| 10 | | (ii) Place of utilization.
| 11 | | (I) A patent is utilized in a state to the | 12 | | extent that it is employed
in production, | 13 | | fabrication, manufacturing, or other processing in | 14 | | the state or
to the extent that a patented product | 15 | | is produced in the state. If a patent is
utilized | 16 | | in
more than one state, the extent to which it is | 17 | | utilized in any one state shall
be a fraction equal | 18 | | to the gross receipts of the licensee or purchaser | 19 | | from
sales or leases of items produced, | 20 | | fabricated, manufactured, or processed
within that | 21 | | state using the patent and of patented items | 22 | | produced within that
state, divided by the total of | 23 | | such gross receipts for all states in which the
| 24 | | patent is utilized.
| 25 | | (II) A copyright is utilized in a state to the | 26 | | extent that printing or
other publication |
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| 1 | | originates in the state. If a copyright is utilized | 2 | | in more
than one state, the extent to which it is | 3 | | utilized in any one state shall be a
fraction equal | 4 | | to the gross receipts from sales or licenses of | 5 | | materials
printed or published in that state | 6 | | divided by the total of such gross receipts
for all | 7 | | states in which the copyright is utilized.
| 8 | | (III) Trademarks and other items of intangible | 9 | | personal property
governed by this paragraph (B-1) | 10 | | are utilized in the state in which the
commercial | 11 | | domicile of the licensee or purchaser is located.
| 12 | | (iii) If the state of utilization of an item of | 13 | | property governed by
this paragraph (B-1) cannot be | 14 | | determined from the taxpayer's books and
records or | 15 | | from the books and records of any person related to the | 16 | | taxpayer
within the meaning of Section 267(b) of the | 17 | | Internal Revenue Code, 26 U.S.C.
267, the gross
| 18 | | receipts attributable to that item shall be excluded | 19 | | from both the numerator
and the denominator of the | 20 | | sales factor.
| 21 | | (B-2) Gross receipts from the license, sale, or other | 22 | | disposition of
patents, copyrights, trademarks, and | 23 | | similar items of intangible personal
property, other than | 24 | | gross receipts governed by paragraph (B-7) of this item | 25 | | (3), may be included in the numerator or denominator of the | 26 | | sales factor
only if gross receipts from licenses, sales, |
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| 1 | | or other disposition of such items
comprise more than 50% | 2 | | of the taxpayer's total gross receipts included in gross
| 3 | | income during the tax year and during each of the 2 | 4 | | immediately preceding tax
years; provided that, when a | 5 | | taxpayer is a member of a unitary business group,
such | 6 | | determination shall be made on the basis of the gross | 7 | | receipts of the
entire unitary business group.
| 8 | | (B-5) For taxable years ending on or after December 31, | 9 | | 2008, except as provided in subsections (ii) through (vii), | 10 | | receipts from the sale of telecommunications service or | 11 | | mobile telecommunications service are in this State if the | 12 | | customer's service address is in this State. | 13 | | (i) For purposes of this subparagraph (B-5), the | 14 | | following terms have the following meanings: | 15 | | "Ancillary services" means services that are | 16 | | associated with or incidental to the provision of | 17 | | "telecommunications services", including but not | 18 | | limited to "detailed telecommunications billing", | 19 | | "directory assistance", "vertical service", and "voice | 20 | | mail services". | 21 | | "Air-to-Ground Radiotelephone service" means a | 22 | | radio service, as that term is defined in 47 CFR 22.99, | 23 | | in which common carriers are authorized to offer and | 24 | | provide radio telecommunications service for hire to | 25 | | subscribers in aircraft. | 26 | | "Call-by-call Basis" means any method of charging |
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| 1 | | for telecommunications services where the price is | 2 | | measured by individual calls. | 3 | | "Communications Channel" means a physical or | 4 | | virtual path of communications over which signals are | 5 | | transmitted between or among customer channel | 6 | | termination points. | 7 | | "Conference bridging service" means an "ancillary | 8 | | service" that links two or more participants of an | 9 | | audio or video conference call and may include the | 10 | | provision of a telephone number. "Conference bridging | 11 | | service" does not include the "telecommunications | 12 | | services" used to reach the conference bridge. | 13 | | "Customer Channel Termination Point" means the | 14 | | location where the customer either inputs or receives | 15 | | the communications. | 16 | | "Detailed telecommunications billing service" | 17 | | means an "ancillary service" of separately stating | 18 | | information pertaining to individual calls on a | 19 | | customer's billing statement. | 20 | | "Directory assistance" means an "ancillary | 21 | | service" of providing telephone number information, | 22 | | and/or address information. | 23 | | "Home service provider" means the facilities based | 24 | | carrier or reseller with which the customer contracts | 25 | | for the provision of mobile telecommunications | 26 | | services. |
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| 1 | | "Mobile telecommunications service" means | 2 | | commercial mobile radio service, as defined in Section | 3 | | 20.3 of Title 47 of the Code of Federal Regulations as | 4 | | in effect on June 1, 1999. | 5 | | "Place of primary use" means the street address | 6 | | representative of where the customer's use of the | 7 | | telecommunications service primarily occurs, which | 8 | | must be the residential street address or the primary | 9 | | business street address of the customer. In the case of | 10 | | mobile telecommunications services, "place of primary | 11 | | use" must be within the licensed service area of the | 12 | | home service provider. | 13 | | "Post-paid telecommunication service" means the | 14 | | telecommunications service obtained by making a | 15 | | payment on a call-by-call basis either through the use | 16 | | of a credit card or payment mechanism such as a bank | 17 | | card, travel card, credit card, or debit card, or by | 18 | | charge made to a telephone number which is not | 19 | | associated with the origination or termination of the | 20 | | telecommunications service. A post-paid calling | 21 | | service includes telecommunications service, except a | 22 | | prepaid wireless calling service, that would be a | 23 | | prepaid calling service except it is not exclusively a | 24 | | telecommunication service. | 25 | | "Prepaid telecommunication service" means the | 26 | | right to access exclusively telecommunications |
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| 1 | | services, which must be paid for in advance and which | 2 | | enables the origination of calls using an access number | 3 | | or authorization code, whether manually or | 4 | | electronically dialed, and that is sold in | 5 | | predetermined units or dollars of which the number | 6 | | declines with use in a known amount. | 7 | | "Prepaid Mobile telecommunication service" means a | 8 | | telecommunications service that provides the right to | 9 | | utilize mobile wireless service as well as other | 10 | | non-telecommunication services, including but not | 11 | | limited to ancillary services, which must be paid for | 12 | | in advance that is sold in predetermined units or | 13 | | dollars of which the number declines with use in a | 14 | | known amount. | 15 | | "Private communication service" means a | 16 | | telecommunication service that entitles the customer | 17 | | to exclusive or priority use of a communications | 18 | | channel or group of channels between or among | 19 | | termination points, regardless of the manner in which | 20 | | such channel or channels are connected, and includes | 21 | | switching capacity, extension lines, stations, and any | 22 | | other associated services that are provided in | 23 | | connection with the use of such channel or channels. | 24 | | "Service address" means: | 25 | | (a) The location of the telecommunications | 26 | | equipment to which a customer's call is charged and |
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| 1 | | from which the call originates or terminates, | 2 | | regardless of where the call is billed or paid; | 3 | | (b) If the location in line (a) is not known, | 4 | | service address means the origination point of the | 5 | | signal of the telecommunications services first | 6 | | identified by either the seller's | 7 | | telecommunications system or in information | 8 | | received by the seller from its service provider | 9 | | where the system used to transport such signals is | 10 | | not that of the seller; and | 11 | | (c) If the locations in line (a) and line (b) | 12 | | are not known, the service address means the | 13 | | location of the customer's place of primary use. | 14 | | "Telecommunications service" means the electronic | 15 | | transmission, conveyance, or routing of voice, data, | 16 | | audio, video, or any other information or signals to a | 17 | | point, or between or among points. The term | 18 | | "telecommunications service" includes such | 19 | | transmission, conveyance, or routing in which computer | 20 | | processing applications are used to act on the form, | 21 | | code or protocol of the content for purposes of | 22 | | transmission, conveyance or routing without regard to | 23 | | whether such service is referred to as voice over | 24 | | Internet protocol services or is classified by the | 25 | | Federal Communications Commission as enhanced or value | 26 | | added. "Telecommunications service" does not include: |
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| 1 | | (a) Data processing and information services | 2 | | that allow data to be generated, acquired, stored, | 3 | | processed, or retrieved and delivered by an | 4 | | electronic transmission to a purchaser when such | 5 | | purchaser's primary purpose for the underlying | 6 | | transaction is the processed data or information; | 7 | | (b) Installation or maintenance of wiring or | 8 | | equipment on a customer's premises; | 9 | | (c) Tangible personal property; | 10 | | (d) Advertising, including but not limited to | 11 | | directory advertising. | 12 | | (e) Billing and collection services provided | 13 | | to third parties; | 14 | | (f) Internet access service; | 15 | | (g) Radio and television audio and video | 16 | | programming services, regardless of the medium, | 17 | | including the furnishing of transmission, | 18 | | conveyance and routing of such services by the | 19 | | programming service provider. Radio and television | 20 | | audio and video programming services shall include | 21 | | but not be limited to cable service as defined in | 22 | | 47 USC 522(6) and audio and video programming | 23 | | services delivered by commercial mobile radio | 24 | | service providers, as defined in 47 CFR 20.3; | 25 | | (h) "Ancillary services"; or | 26 | | (i) Digital products "delivered |
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| 1 | | electronically", including but not limited to | 2 | | software, music, video, reading materials or ring | 3 | | tones. | 4 | | "Vertical service" means an "ancillary service" | 5 | | that is offered in connection with one or more | 6 | | "telecommunications services", which offers advanced | 7 | | calling features that allow customers to identify | 8 | | callers and to manage multiple calls and call | 9 | | connections, including "conference bridging services". | 10 | | "Voice mail service" means an "ancillary service" | 11 | | that enables the customer to store, send or receive | 12 | | recorded messages. "Voice mail service" does not | 13 | | include any "vertical services" that the customer may | 14 | | be required to have in order to utilize the "voice mail | 15 | | service". | 16 | | (ii) Receipts from the sale of telecommunications | 17 | | service sold on an individual call-by-call basis are in | 18 | | this State if either of the following applies: | 19 | | (a) The call both originates and terminates in | 20 | | this State. | 21 | | (b) The call either originates or terminates | 22 | | in this State and the service address is located in | 23 | | this State. | 24 | | (iii) Receipts from the sale of postpaid | 25 | | telecommunications service at retail are in this State | 26 | | if the origination point of the telecommunication |
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| 1 | | signal, as first identified by the service provider's | 2 | | telecommunication system or as identified by | 3 | | information received by the seller from its service | 4 | | provider if the system used to transport | 5 | | telecommunication signals is not the seller's, is | 6 | | located in this State. | 7 | | (iv) Receipts from the sale of prepaid | 8 | | telecommunications service or prepaid mobile | 9 | | telecommunications service at retail are in this State | 10 | | if the purchaser obtains the prepaid card or similar | 11 | | means of conveyance at a location in this State. | 12 | | Receipts from recharging a prepaid telecommunications | 13 | | service or mobile telecommunications service is in | 14 | | this State if the purchaser's billing information | 15 | | indicates a location in this State. | 16 | | (v) Receipts from the sale of private | 17 | | communication services are in this State as follows: | 18 | | (a) 100% of receipts from charges imposed at | 19 | | each channel termination point in this State. | 20 | | (b) 100% of receipts from charges for the total | 21 | | channel mileage between each channel termination | 22 | | point in this State. | 23 | | (c) 50% of the total receipts from charges for | 24 | | service segments when those segments are between 2 | 25 | | customer channel termination points, 1 of which is | 26 | | located in this State and the other is located |
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| 1 | | outside of this State, which segments are | 2 | | separately charged. | 3 | | (d) The receipts from charges for service | 4 | | segments with a channel termination point located | 5 | | in this State and in two or more other states, and | 6 | | which segments are not separately billed, are in | 7 | | this State based on a percentage determined by | 8 | | dividing the number of customer channel | 9 | | termination points in this State by the total | 10 | | number of customer channel termination points. | 11 | | (vi) Receipts from charges for ancillary services | 12 | | for telecommunications service sold to customers at | 13 | | retail are in this State if the customer's primary | 14 | | place of use of telecommunications services associated | 15 | | with those ancillary services is in this State. If the | 16 | | seller of those ancillary services cannot determine | 17 | | where the associated telecommunications are located, | 18 | | then the ancillary services shall be based on the | 19 | | location of the purchaser. | 20 | | (vii) Receipts to access a carrier's network or | 21 | | from the sale of telecommunication services or | 22 | | ancillary services for resale are in this State as | 23 | | follows: | 24 | | (a) 100% of the receipts from access fees | 25 | | attributable to intrastate telecommunications | 26 | | service that both originates and terminates in |
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| 1 | | this State. | 2 | | (b) 50% of the receipts from access fees | 3 | | attributable to interstate telecommunications | 4 | | service if the interstate call either originates | 5 | | or terminates in this State. | 6 | | (c) 100% of the receipts from interstate end | 7 | | user access line charges, if the customer's | 8 | | service address is in this State. As used in this | 9 | | subdivision, "interstate end user access line | 10 | | charges" includes, but is not limited to, the | 11 | | surcharge approved by the federal communications | 12 | | commission and levied pursuant to 47 CFR 69. | 13 | | (d) Gross receipts from sales of | 14 | | telecommunication services or from ancillary | 15 | | services for telecommunications services sold to | 16 | | other telecommunication service providers for | 17 | | resale shall be sourced to this State using the | 18 | | apportionment concepts used for non-resale | 19 | | receipts of telecommunications services if the | 20 | | information is readily available to make that | 21 | | determination. If the information is not readily | 22 | | available, then the taxpayer may use any other | 23 | | reasonable and consistent method. | 24 | | (B-7) For taxable years ending on or after December 31, | 25 | | 2008, receipts from the sale of broadcasting services are | 26 | | in this State if the broadcasting services are received in |
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| 1 | | this State. For purposes of this paragraph (B-7), the | 2 | | following terms have the following meanings: | 3 | | "Advertising revenue" means consideration received | 4 | | by the taxpayer in exchange for broadcasting services | 5 | | or allowing the broadcasting of commercials or | 6 | | announcements in connection with the broadcasting of | 7 | | film or radio programming, from sponsorships of the | 8 | | programming, or from product placements in the | 9 | | programming. | 10 | | "Audience factor" means the ratio that the | 11 | | audience or subscribers located in this State of a | 12 | | station, a network, or a cable system bears to the | 13 | | total audience or total subscribers for that station, | 14 | | network, or cable system. The audience factor for film | 15 | | or radio programming shall be determined by reference | 16 | | to the books and records of the taxpayer or by | 17 | | reference to published rating statistics provided the | 18 | | method used by the taxpayer is consistently used from | 19 | | year to year for this purpose and fairly represents the | 20 | | taxpayer's activity in this State. | 21 | | "Broadcast" or "broadcasting" or "broadcasting | 22 | | services" means the transmission or provision of film | 23 | | or radio programming, whether through the public | 24 | | airwaves, by cable, by direct or indirect satellite | 25 | | transmission, or by any other means of communication, | 26 | | either through a station, a network, or a cable system. |
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| 1 | | "Film" or "film programming" means the broadcast | 2 | | on television of any and all performances, events, or | 3 | | productions, including but not limited to news, | 4 | | sporting events, plays, stories, or other literary, | 5 | | commercial, educational, or artistic works, either | 6 | | live or through the use of video tape, disc, or any | 7 | | other type of format or medium. Each episode of a | 8 | | series of films produced for television shall | 9 | | constitute separate "film" notwithstanding that the | 10 | | series relates to the same principal subject and is | 11 | | produced during one or more tax periods. | 12 | | "Radio" or "radio programming" means the broadcast | 13 | | on radio of any and all performances, events, or | 14 | | productions, including but not limited to news, | 15 | | sporting events, plays, stories, or other literary, | 16 | | commercial, educational, or artistic works, either | 17 | | live or through the use of an audio tape, disc, or any | 18 | | other format or medium. Each episode in a series of | 19 | | radio programming produced for radio broadcast shall | 20 | | constitute a separate "radio programming" | 21 | | notwithstanding that the series relates to the same | 22 | | principal subject and is produced during one or more | 23 | | tax periods. | 24 | | (i) In the case of advertising revenue from | 25 | | broadcasting, the customer is the advertiser and | 26 | | the service is received in this State if the |
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| 1 | | commercial domicile of the advertiser is in this | 2 | | State. | 3 | | (ii) In the case where film or radio | 4 | | programming is broadcast by a station, a network, | 5 | | or a cable system for a fee or other remuneration | 6 | | received from the recipient of the broadcast, the | 7 | | portion of the service that is received in this | 8 | | State is measured by the portion of the recipients | 9 | | of the broadcast located in this State. | 10 | | Accordingly, the fee or other remuneration for | 11 | | such service that is included in the Illinois | 12 | | numerator of the sales factor is the total of those | 13 | | fees or other remuneration received from | 14 | | recipients in Illinois. For purposes of this | 15 | | paragraph, a taxpayer may determine the location | 16 | | of the recipients of its broadcast using the | 17 | | address of the recipient shown in its contracts | 18 | | with the recipient or using the billing address of | 19 | | the recipient in the taxpayer's records. | 20 | | (iii) In the case where film or radio | 21 | | programming is broadcast by a station, a network, | 22 | | or a cable system for a fee or other remuneration | 23 | | from the person providing the programming, the | 24 | | portion of the broadcast service that is received | 25 | | by such station, network, or cable system in this | 26 | | State is measured by the portion of recipients of |
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| 1 | | the broadcast located in this State. Accordingly, | 2 | | the amount of revenue related to such an | 3 | | arrangement that is included in the Illinois | 4 | | numerator of the sales factor is the total fee or | 5 | | other total remuneration from the person providing | 6 | | the programming related to that broadcast | 7 | | multiplied by the Illinois audience factor for | 8 | | that broadcast. | 9 | | (iv) In the case where film or radio | 10 | | programming is provided by a taxpayer that is a | 11 | | network or station to a customer for broadcast in | 12 | | exchange for a fee or other remuneration from that | 13 | | customer the broadcasting service is received at | 14 | | the location of the office of the customer from | 15 | | which the services were ordered in the regular | 16 | | course of the customer's trade or business. | 17 | | Accordingly, in such a case the revenue derived by | 18 | | the taxpayer that is included in the taxpayer's | 19 | | Illinois numerator of the sales factor is the | 20 | | revenue from such customers who receive the | 21 | | broadcasting service in Illinois. | 22 | | (v) In the case where film or radio programming | 23 | | is provided by a taxpayer that is not a network or | 24 | | station to another person for broadcasting in | 25 | | exchange for a fee or other remuneration from that | 26 | | person, the broadcasting service is received at |
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| 1 | | the location of the office of the customer from | 2 | | which the services were ordered in the regular | 3 | | course of the customer's trade or business. | 4 | | Accordingly, in such a case the revenue derived by | 5 | | the taxpayer that is included in the taxpayer's | 6 | | Illinois numerator of the sales factor is the | 7 | | revenue from such customers who receive the | 8 | | broadcasting service in Illinois.
| 9 | | (C) For taxable years ending before December 31, 2008, | 10 | | sales, other than sales governed by paragraphs (B), (B-1), | 11 | | and (B-2), are in
this State if:
| 12 | | (i) The income-producing activity is performed in | 13 | | this State; or
| 14 | | (ii) The income-producing activity is performed | 15 | | both within and
without this State and a greater | 16 | | proportion of the income-producing
activity is | 17 | | performed within this State than without this State, | 18 | | based
on performance costs.
| 19 | | (C-5) For taxable years ending on or after December 31, | 20 | | 2008, sales, other than sales governed by paragraphs (B), | 21 | | (B-1), (B-2), (B-5), and (B-7), are in this State if any of | 22 | | the following criteria are met: | 23 | | (i) Sales from the sale or lease of real property | 24 | | are in this State if the property is located in this | 25 | | State. | 26 | | (ii) Sales from the lease or rental of tangible |
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| 1 | | personal property are in this State if the property is | 2 | | located in this State during the rental period. Sales | 3 | | from the lease or rental of tangible personal property | 4 | | that is characteristically moving property, including, | 5 | | but not limited to, motor vehicles, rolling stock, | 6 | | aircraft, vessels, or mobile equipment are in this | 7 | | State to the extent that the property is used in this | 8 | | State. | 9 | | (iii) In the case of interest, net gains (but not | 10 | | less than zero) and other items of income from | 11 | | intangible personal property, the sale is in this State | 12 | | if: | 13 | | (a) in the case of a taxpayer who is a dealer | 14 | | in the item of intangible personal property within | 15 | | the meaning of Section 475 of the Internal Revenue | 16 | | Code, the income or gain is received from a | 17 | | customer in this State. For purposes of this | 18 | | subparagraph, a customer is in this State if the | 19 | | customer is an individual, trust or estate who is a | 20 | | resident of this State and, for all other | 21 | | customers, if the customer's commercial domicile | 22 | | is in this State. Unless the dealer has actual | 23 | | knowledge of the residence or commercial domicile | 24 | | of a customer during a taxable year, the customer | 25 | | shall be deemed to be a customer in this State if | 26 | | the billing address of the customer, as shown in |
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| 1 | | the records of the dealer, is in this State; or | 2 | | (b) in all other cases, if the | 3 | | income-producing activity of the taxpayer is | 4 | | performed in this State or, if the | 5 | | income-producing activity of the taxpayer is | 6 | | performed both within and without this State, if a | 7 | | greater proportion of the income-producing | 8 | | activity of the taxpayer is performed within this | 9 | | State than in any other state, based on performance | 10 | | costs. | 11 | | (iv) Sales of services are in this State if the | 12 | | services are received in this State. For the purposes | 13 | | of this section, gross receipts from the performance of | 14 | | services provided to a corporation, partnership, or | 15 | | trust may only be attributed to a state where that | 16 | | corporation, partnership, or trust has a fixed place of | 17 | | business. If the state where the services are received | 18 | | is not readily determinable or is a state where the | 19 | | corporation, partnership, or trust receiving the | 20 | | service does not have a fixed place of business, the | 21 | | services shall be deemed to be received at the location | 22 | | of the office of the customer from which the services | 23 | | were ordered in the regular course of the customer's | 24 | | trade or business. If the ordering office cannot be | 25 | | determined, the services shall be deemed to be received | 26 | | at the office of the customer to which the services are |
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| 1 | | billed. If the taxpayer is not taxable in the state in | 2 | | which the services are received, the sale must be | 3 | | excluded from both the numerator and the denominator of | 4 | | the sales factor. The Department shall adopt rules | 5 | | prescribing where specific types of service are | 6 | | received, including, but not limited to, publishing, | 7 | | and utility service.
| 8 | | (D) For taxable years ending on or after December 31, | 9 | | 1995, the following
items of income shall not be included | 10 | | in the numerator or denominator of the
sales factor: | 11 | | dividends; amounts included under Section 78 of the | 12 | | Internal
Revenue Code; and Subpart F income as defined in | 13 | | Section 952 of the Internal
Revenue Code.
No inference | 14 | | shall be drawn from the enactment of this paragraph (D) in
| 15 | | construing this Section for taxable years ending before | 16 | | December 31, 1995.
| 17 | | (E) Paragraphs (B-1) and (B-2) shall apply to tax years | 18 | | ending on or
after December 31, 1999, provided that a | 19 | | taxpayer may elect to apply the
provisions of these | 20 | | paragraphs to prior tax years. Such election shall be made
| 21 | | in the form and manner prescribed by the Department, shall | 22 | | be irrevocable, and
shall apply to all tax years; provided | 23 | | that, if a taxpayer's Illinois income
tax liability for any | 24 | | tax year, as assessed under Section 903 prior to January
1, | 25 | | 1999, was computed in a manner contrary to the provisions | 26 | | of paragraphs
(B-1) or (B-2), no refund shall be payable to |
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| 1 | | the taxpayer for that tax year to
the extent such refund is | 2 | | the result of applying the provisions of paragraph
(B-1) or | 3 | | (B-2) retroactively. In the case of a unitary business | 4 | | group, such
election shall apply to all members of such | 5 | | group for every tax year such group
is in existence, but | 6 | | shall not apply to any taxpayer for any period during
which | 7 | | that taxpayer is not a member of such group.
| 8 | | (b) Insurance companies.
| 9 | | (1) In general. Except as otherwise
provided by | 10 | | paragraph (2), business income of an insurance company for | 11 | | a
taxable year shall be apportioned to this State by | 12 | | multiplying such
income by a fraction, the numerator of | 13 | | which is the direct premiums
written for insurance upon | 14 | | property or risk in this State, and the
denominator of | 15 | | which is the direct premiums written for insurance upon
| 16 | | property or risk everywhere. For purposes of this | 17 | | subsection, the term
"direct premiums written" means the | 18 | | total amount of direct premiums
written, assessments and | 19 | | annuity considerations as reported for the
taxable year on | 20 | | the annual statement filed by the company with the
Illinois | 21 | | Director of Insurance in the form approved by the National
| 22 | | Convention of Insurance Commissioners
or such other form as | 23 | | may be
prescribed in lieu thereof.
| 24 | | (2) Reinsurance. If the principal source of premiums | 25 | | written by an
insurance company consists of premiums for | 26 | | reinsurance accepted by it,
the business income of such |
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| 1 | | company shall be apportioned to this State
by multiplying | 2 | | such income by a fraction, the numerator of which is the
| 3 | | sum of (i) direct premiums written for insurance upon | 4 | | property or risk
in this State, plus (ii) premiums written | 5 | | for reinsurance accepted in
respect of property or risk in | 6 | | this State, and the denominator of which
is the sum of | 7 | | (iii) direct premiums written for insurance upon property
| 8 | | or risk everywhere, plus (iv) premiums written for | 9 | | reinsurance accepted
in respect of property or risk | 10 | | everywhere. For purposes of this
paragraph, premiums | 11 | | written for reinsurance accepted in respect of
property or | 12 | | risk in this State, whether or not otherwise determinable,
| 13 | | may, at the election of the company, be determined on the | 14 | | basis of the
proportion which premiums written for | 15 | | reinsurance accepted from
companies commercially domiciled | 16 | | in Illinois bears to premiums written
for reinsurance | 17 | | accepted from all sources, or, alternatively, in the
| 18 | | proportion which the sum of the direct premiums written for | 19 | | insurance
upon property or risk in this State by each | 20 | | ceding company from which
reinsurance is accepted bears to | 21 | | the sum of the total direct premiums
written by each such | 22 | | ceding company for the taxable year. The election made by a | 23 | | company under this paragraph for its first taxable year | 24 | | ending on or after December 31, 2011, shall be binding for | 25 | | that company for that taxable year and for all subsequent | 26 | | taxable years, and may be altered only with the written |
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| 1 | | permission of the Department, which shall not be | 2 | | unreasonably withheld.
| 3 | | (c) Financial organizations.
| 4 | | (1) In general. For taxable years ending before | 5 | | December 31, 2008, business income of a financial
| 6 | | organization shall be apportioned to this State by | 7 | | multiplying such
income by a fraction, the numerator of | 8 | | which is its business income from
sources within this | 9 | | State, and the denominator of which is its business
income | 10 | | from all sources. For the purposes of this subsection, the
| 11 | | business income of a financial organization from sources | 12 | | within this
State is the sum of the amounts referred to in | 13 | | subparagraphs (A) through
(E) following, but excluding the | 14 | | adjusted income of an international banking
facility as | 15 | | determined in paragraph (2):
| 16 | | (A) Fees, commissions or other compensation for | 17 | | financial services
rendered within this State;
| 18 | | (B) Gross profits from trading in stocks, bonds or | 19 | | other securities
managed within this State;
| 20 | | (C) Dividends, and interest from Illinois | 21 | | customers, which are received
within this State;
| 22 | | (D) Interest charged to customers at places of | 23 | | business maintained
within this State for carrying | 24 | | debit balances of margin accounts,
without deduction | 25 | | of any costs incurred in carrying such accounts; and
| 26 | | (E) Any other gross income resulting from the |
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| 1 | | operation as a
financial organization within this | 2 | | State. In computing the amounts
referred to in | 3 | | paragraphs (A) through (E) of this subsection, any | 4 | | amount
received by a member of an affiliated group | 5 | | (determined under Section
1504(a) of the Internal | 6 | | Revenue Code but without reference to whether
any such | 7 | | corporation is an "includible corporation" under | 8 | | Section
1504(b) of the Internal Revenue Code) from | 9 | | another member of such group
shall be included only to | 10 | | the extent such amount exceeds expenses of the
| 11 | | recipient directly related thereto.
| 12 | | (2) International Banking Facility. For taxable years | 13 | | ending before December 31, 2008:
| 14 | | (A) Adjusted Income. The adjusted income of an | 15 | | international banking
facility is its income reduced | 16 | | by the amount of the floor amount.
| 17 | | (B) Floor Amount. The floor amount shall be the | 18 | | amount, if any,
determined
by multiplying the income of | 19 | | the international banking facility by a fraction,
not | 20 | | greater than one, which is determined as follows:
| 21 | | (i) The numerator shall be:
| 22 | | The average aggregate, determined on a | 23 | | quarterly basis, of the
financial
organization's | 24 | | loans to banks in foreign countries, to foreign | 25 | | domiciled
borrowers (except where secured | 26 | | primarily by real estate) and to foreign
|
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| 1 | | governments and other foreign official | 2 | | institutions, as reported for its
branches, | 3 | | agencies and offices within the state on its | 4 | | "Consolidated Report
of Condition", Schedule A, | 5 | | Lines 2.c., 5.b., and 7.a., which was filed with
| 6 | | the Federal Deposit Insurance Corporation and | 7 | | other regulatory authorities,
for the year 1980, | 8 | | minus
| 9 | | The average aggregate, determined on a | 10 | | quarterly basis, of such loans
(other
than loans of | 11 | | an international banking facility), as reported by | 12 | | the financial
institution for its branches, | 13 | | agencies and offices within the state, on
the | 14 | | corresponding Schedule and lines of the | 15 | | Consolidated Report of Condition
for the current | 16 | | taxable year, provided, however, that in no case | 17 | | shall the
amount determined in this clause (the | 18 | | subtrahend) exceed the amount determined
in the | 19 | | preceding clause (the minuend); and
| 20 | | (ii) the denominator shall be the average | 21 | | aggregate, determined on a
quarterly basis, of the | 22 | | international banking facility's loans to banks in
| 23 | | foreign countries, to foreign domiciled borrowers | 24 | | (except where secured
primarily by real estate) | 25 | | and to foreign governments and other foreign
| 26 | | official institutions, which were recorded in its |
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| 1 | | financial accounts for
the current taxable year.
| 2 | | (C) Change to Consolidated Report of Condition and | 3 | | in Qualification.
In the event the Consolidated Report | 4 | | of Condition which is filed with the
Federal Deposit | 5 | | Insurance Corporation and other regulatory authorities | 6 | | is
altered so that the information required for | 7 | | determining the floor amount
is not found on Schedule | 8 | | A, lines 2.c., 5.b. and 7.a., the financial
institution | 9 | | shall notify the Department and the Department may, by
| 10 | | regulations or otherwise, prescribe or authorize the | 11 | | use of an alternative
source for such information. The | 12 | | financial institution shall also notify
the Department | 13 | | should its international banking facility fail to | 14 | | qualify as
such, in whole or in part, or should there | 15 | | be any amendment or change to
the Consolidated Report | 16 | | of Condition, as originally filed, to the extent
such | 17 | | amendment or change alters the information used in | 18 | | determining the floor
amount.
| 19 | | (3) For taxable years ending on or after December 31, | 20 | | 2008, the business income of a financial organization shall | 21 | | be apportioned to this State by multiplying such income by | 22 | | a fraction, the numerator of which is its gross receipts | 23 | | from sources in this State or otherwise attributable to | 24 | | this State's marketplace and the denominator of which is | 25 | | its gross receipts everywhere during the taxable year. | 26 | | "Gross receipts" for purposes of this subparagraph (3) |
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| 1 | | means gross income, including net taxable gain on | 2 | | disposition of assets, including securities and money | 3 | | market instruments, when derived from transactions and | 4 | | activities in the regular course of the financial | 5 | | organization's trade or business. The following examples | 6 | | are illustrative:
| 7 | | (i) Receipts from the lease or rental of real or | 8 | | tangible personal property are in this State if the | 9 | | property is located in this State during the rental | 10 | | period. Receipts from the lease or rental of tangible | 11 | | personal property that is characteristically moving | 12 | | property, including, but not limited to, motor | 13 | | vehicles, rolling stock, aircraft, vessels, or mobile | 14 | | equipment are from sources in this State to the extent | 15 | | that the property is used in this State. | 16 | | (ii) Interest income, commissions, fees, gains on | 17 | | disposition, and other receipts from assets in the | 18 | | nature of loans that are secured primarily by real | 19 | | estate or tangible personal property are from sources | 20 | | in this State if the security is located in this State. | 21 | | (iii) Interest income, commissions, fees, gains on | 22 | | disposition, and other receipts from consumer loans | 23 | | that are not secured by real or tangible personal | 24 | | property are from sources in this State if the debtor | 25 | | is a resident of this State. | 26 | | (iv) Interest income, commissions, fees, gains on |
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| 1 | | disposition, and other receipts from commercial loans | 2 | | and installment obligations that are not secured by | 3 | | real or tangible personal property are from sources in | 4 | | this State if the proceeds of the loan are to be | 5 | | applied in this State. If it cannot be determined where | 6 | | the funds are to be applied, the income and receipts | 7 | | are from sources in this State if the office of the | 8 | | borrower from which the loan was negotiated in the | 9 | | regular course of business is located in this State. If | 10 | | the location of this office cannot be determined, the | 11 | | income and receipts shall be excluded from the | 12 | | numerator and denominator of the sales factor.
| 13 | | (v) Interest income, fees, gains on disposition, | 14 | | service charges, merchant discount income, and other | 15 | | receipts from credit card receivables are from sources | 16 | | in this State if the card charges are regularly billed | 17 | | to a customer in this State. | 18 | | (vi) Receipts from the performance of services, | 19 | | including, but not limited to, fiduciary, advisory, | 20 | | and brokerage services, are in this State if the | 21 | | services are received in this State within the meaning | 22 | | of subparagraph (a)(3)(C-5)(iv) of this Section. | 23 | | (vii) Receipts from the issuance of travelers | 24 | | checks and money orders are from sources in this State | 25 | | if the checks and money orders are issued from a | 26 | | location within this State. |
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| 1 | | (viii) Receipts from investment assets and | 2 | | activities and trading assets and activities are | 3 | | included in the receipts factor as follows: | 4 | | (1) Interest, dividends, net gains (but not | 5 | | less than zero) and other income from investment | 6 | | assets and activities from trading assets and | 7 | | activities shall be included in the receipts | 8 | | factor. Investment assets and activities and | 9 | | trading assets and activities include but are not | 10 | | limited to: investment securities; trading account | 11 | | assets; federal funds; securities purchased and | 12 | | sold under agreements to resell or repurchase; | 13 | | options; futures contracts; forward contracts; | 14 | | notional principal contracts such as swaps; | 15 | | equities; and foreign currency transactions. With | 16 | | respect to the investment and trading assets and | 17 | | activities described in subparagraphs (A) and (B) | 18 | | of this paragraph, the receipts factor shall | 19 | | include the amounts described in such | 20 | | subparagraphs. | 21 | | (A) The receipts factor shall include the | 22 | | amount by which interest from federal funds | 23 | | sold and securities purchased under resale | 24 | | agreements exceeds interest expense on federal | 25 | | funds purchased and securities sold under | 26 | | repurchase agreements. |
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| 1 | | (B) The receipts factor shall include the | 2 | | amount by which interest, dividends, gains and | 3 | | other income from trading assets and | 4 | | activities, including but not limited to | 5 | | assets and activities in the matched book, in | 6 | | the arbitrage book, and foreign currency | 7 | | transactions, exceed amounts paid in lieu of | 8 | | interest, amounts paid in lieu of dividends, | 9 | | and losses from such assets and activities. | 10 | | (2) The numerator of the receipts factor | 11 | | includes interest, dividends, net gains (but not | 12 | | less than zero), and other income from investment | 13 | | assets and activities and from trading assets and | 14 | | activities described in paragraph (1) of this | 15 | | subsection that are attributable to this State. | 16 | | (A) The amount of interest, dividends, net | 17 | | gains (but not less than zero), and other | 18 | | income from investment assets and activities | 19 | | in the investment account to be attributed to | 20 | | this State and included in the numerator is | 21 | | determined by multiplying all such income from | 22 | | such assets and activities by a fraction, the | 23 | | numerator of which is the gross income from | 24 | | such assets and activities which are properly | 25 | | assigned to a fixed place of business of the | 26 | | taxpayer within this State and the denominator |
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| 1 | | of which is the gross income from all such | 2 | | assets and activities. | 3 | | (B) The amount of interest from federal | 4 | | funds sold and purchased and from securities | 5 | | purchased under resale agreements and | 6 | | securities sold under repurchase agreements | 7 | | attributable to this State and included in the | 8 | | numerator is determined by multiplying the | 9 | | amount described in subparagraph (A) of | 10 | | paragraph (1) of this subsection from such | 11 | | funds and such securities by a fraction, the | 12 | | numerator of which is the gross income from | 13 | | such funds and such securities which are | 14 | | properly assigned to a fixed place of business | 15 | | of the taxpayer within this State and the | 16 | | denominator of which is the gross income from | 17 | | all such funds and such securities. | 18 | | (C) The amount of interest, dividends, | 19 | | gains, and other income from trading assets and | 20 | | activities, including but not limited to | 21 | | assets and activities in the matched book, in | 22 | | the arbitrage book and foreign currency | 23 | | transactions (but excluding amounts described | 24 | | in subparagraphs (A) or (B) of this paragraph), | 25 | | attributable to this State and included in the | 26 | | numerator is determined by multiplying the |
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| 1 | | amount described in subparagraph (B) of | 2 | | paragraph (1) of this subsection by a fraction, | 3 | | the numerator of which is the gross income from | 4 | | such trading assets and activities which are | 5 | | properly assigned to a fixed place of business | 6 | | of the taxpayer within this State and the | 7 | | denominator of which is the gross income from | 8 | | all such assets and activities. | 9 | | (D) Properly assigned, for purposes of | 10 | | this paragraph (2) of this subsection, means | 11 | | the investment or trading asset or activity is | 12 | | assigned to the fixed place of business with | 13 | | which it has a preponderance of substantive | 14 | | contacts. An investment or trading asset or | 15 | | activity assigned by the taxpayer to a fixed | 16 | | place of business without the State shall be | 17 | | presumed to have been properly assigned if: | 18 | | (i) the taxpayer has assigned, in the | 19 | | regular course of its business, such asset | 20 | | or activity on its records to a fixed place | 21 | | of business consistent with federal or | 22 | | state regulatory requirements; | 23 | | (ii) such assignment on its records is | 24 | | based upon substantive contacts of the | 25 | | asset or activity to such fixed place of | 26 | | business; and |
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| 1 | | (iii) the taxpayer uses such records | 2 | | reflecting assignment of such assets or | 3 | | activities for the filing of all state and | 4 | | local tax returns for which an assignment | 5 | | of such assets or activities to a fixed | 6 | | place of business is required. | 7 | | (E) The presumption of proper assignment | 8 | | of an investment or trading asset or activity | 9 | | provided in subparagraph (D) of paragraph (2) | 10 | | of this subsection may be rebutted upon a | 11 | | showing by the Department, supported by a | 12 | | preponderance of the evidence, that the | 13 | | preponderance of substantive contacts | 14 | | regarding such asset or activity did not occur | 15 | | at the fixed place of business to which it was | 16 | | assigned on the taxpayer's records. If the | 17 | | fixed place of business that has a | 18 | | preponderance of substantive contacts cannot | 19 | | be determined for an investment or trading | 20 | | asset or activity to which the presumption in | 21 | | subparagraph (D) of paragraph (2) of this | 22 | | subsection does not apply or with respect to | 23 | | which that presumption has been rebutted, that | 24 | | asset or activity is properly assigned to the | 25 | | state in which the taxpayer's commercial | 26 | | domicile is located. For purposes of this |
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| 1 | | subparagraph (E), it shall be presumed, | 2 | | subject to rebuttal, that taxpayer's | 3 | | commercial domicile is in the state of the | 4 | | United States or the District of Columbia to | 5 | | which the greatest number of employees are | 6 | | regularly connected with the management of the | 7 | | investment or trading income or out of which | 8 | | they are working, irrespective of where the | 9 | | services of such employees are performed, as of | 10 | | the last day of the taxable year.
| 11 | | (4) (Blank). | 12 | | (5) (Blank). | 13 | | (c-1) Federally-regulated exchanges, execution platforms, | 14 | | and clearinghouses. For taxable years ending on or after | 15 | | December 31, 2011, business income of federally-regulated | 16 | | exchanges, execution platforms, and clearinghouses (as defined | 17 | | in this subsection) shall, at the option of the | 18 | | federally-regulated exchange, execution platform, or | 19 | | clearinghouse, be apportioned to this State by multiplying such | 20 | | income by a fraction, the numerator of which is its business | 21 | | income from sources within this State, and the denominator of | 22 | | which is its business income from all sources. For purposes of | 23 | | this subsection, the business income of a federally-regulated | 24 | | exchange, execution platform, and clearinghouse from sources | 25 | | within this State is the sum of the amounts referred to in | 26 | | subparagraphs (1) through (8) following: |
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| 1 | | (1) 100% of receipts attributable to transactions | 2 | | executed via open outcry on a physical trading floor | 3 | | located in this State. | 4 | | (2) 27.54% of receipts attributable to transactions | 5 | | matched or executed by means of an electronic transaction | 6 | | system, including where a taxpayer provides electronic | 7 | | matching or execution services for another exchange or | 8 | | execution platform. | 9 | | (3) 27.54% of receipts attributable to the clearing of | 10 | | transactions not matched or executed on the taxpayer's | 11 | | physical trading floor or electronic transaction systems, | 12 | | including "ex-pit" transaction fees and post-trade | 13 | | transaction fees, and including where a taxpayer provides | 14 | | clearing services for another clearinghouse. | 15 | | (4) Receipts attributable to licensing, sale, or other | 16 | | disposition of a patent, copyright, trademark, or similar | 17 | | item of intangible personal property are sourced in | 18 | | accordance with the rules contained in paragraph (B-1) of | 19 | | item (3) of subsection (a) of this Section. | 20 | | (5) Sales from the sale or lease of real property are | 21 | | in this State if the property is located in this State. | 22 | | (6) Sales from the lease or rental of tangible personal | 23 | | property are in this State if the property is located in | 24 | | this State during the rental period. | 25 | | (7) In the case of interest, net gains (but not less | 26 | | than zero), and other items of income from intangible |
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| 1 | | personal property, the sale is in this State if: | 2 | | (A) in the case of a taxpayer who is a dealer in | 3 | | the item of intangible personal property within the | 4 | | meaning of Section 475 of the Internal Revenue Code, or | 5 | | who regularly engages in the sale, licensing, leasing, | 6 | | assignment, or other disposition of any type of | 7 | | intangible personal property and would be a dealer with | 8 | | respect to such property under Section 475 if the | 9 | | property were a "security" as defined under Section | 10 | | 475(c)(2) of the Internal Revenue Code, the income or | 11 | | gain is received from a customer in this State; for | 12 | | example, Taxpayer regularly grants limited, | 13 | | non-exclusive licenses to use and distribute its | 14 | | proprietary data and data it gathers from other | 15 | | sources; taxpayer is not a dealer "in securities" under | 16 | | Section 475; however, Taxpayer is a "dealer in the item | 17 | | of intangible personal property" (the data) for | 18 | | purposes of this Section; for purposes of this | 19 | | subparagraph, a customer is in this State if the | 20 | | customer is an individual, trust, or estate who is a | 21 | | resident of this State and, for all other customers, if | 22 | | the customer's commercial domicile is in this State; | 23 | | unless the dealer has actual knowledge of the residence | 24 | | or commercial domicile of a customer during a taxable | 25 | | year, the customer shall be deemed to be a customer in | 26 | | this State if the billing address of the customer, as |
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| 1 | | shown in the records of the dealer, is in this State; | 2 | | or | 3 | | (B) in all other cases, the income-producing | 4 | | activity of the taxpayer is performed in this State or, | 5 | | if the income-producing activity of the taxpayer is | 6 | | performed both within and without this State, a greater | 7 | | proportion of the income-producing activity of the | 8 | | taxpayer is performed within this State than in any | 9 | | other state, based on performance costs. | 10 | | (8) All other sales of services not covered by (1) | 11 | | through (7) of this subsection are in this State if the | 12 | | services are received in this State. For the purposes of | 13 | | this subsection, gross receipts from the performance of | 14 | | services provided to a corporation, partnership, or trust | 15 | | may only be attributed to a state where that corporation, | 16 | | partnership, or trust has a fixed place of business. If the | 17 | | state where the services are received is not readily | 18 | | determinable or is a state where the corporation, | 19 | | partnership, or trust receiving the service does not have a | 20 | | fixed place of business, the services shall be deemed to be | 21 | | received at the location of the office of the customer from | 22 | | which the services were ordered in the regular course of | 23 | | the customer's trade or business. If the ordering office | 24 | | cannot be determined, the services shall be deemed to be | 25 | | received at the office of the customer to which the | 26 | | services are billed. |
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| 1 | | "Federally-regulated exchanges, execution platforms, and | 2 | | clearinghouses", as used in this subsection, means a designated | 3 | | contract market, swap execution facility, or derivatives | 4 | | clearing organization regulated by the U.S. Commodity Futures | 5 | | Trading Commission, or a securities exchange, security-based | 6 | | swap execution facility, or securities clearinghouse regulated | 7 | | by the U. S. Securities and Exchange Commission, including any | 8 | | institution engaged in comparable trading or clearing | 9 | | activities that is regulated by any successor designated | 10 | | federal regulatory agency to one or both of the foregoing | 11 | | agencies. | 12 | | The special industry rules for federally-regulated | 13 | | exchanges, execution platforms, and clearinghouses shall apply | 14 | | to all entities satisfying the statutory definition of this | 15 | | subsection and all unitary affiliates, including holding | 16 | | companies. | 17 | | If the federally-regulated exchange, execution platform, | 18 | | or clearinghouse chooses not to apportion its income according | 19 | | to this subsection (c-1), its business income shall be | 20 | | apportioned to this State in accordance
with subsection (a) of | 21 | | this Section. | 22 | | In no event shall the Illinois apportionment percentage | 23 | | computed in accordance with this subsection (c-1) for any | 24 | | taxpayer for any tax year be less than the Illinois | 25 | | apportionment percentage computed under this subsection (c-1) | 26 | | for that taxpayer for the first full tax year for which this |
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| 1 | | subsection (c-1) applied to the taxpayer. | 2 | | (d) Transportation services. For taxable years ending | 3 | | before December 31, 2008, business income derived from | 4 | | furnishing
transportation services shall be apportioned to | 5 | | this State in accordance
with paragraphs (1) and (2):
| 6 | | (1) Such business income (other than that derived from
| 7 | | transportation by pipeline) shall be apportioned to this | 8 | | State by
multiplying such income by a fraction, the | 9 | | numerator of which is the
revenue miles of the person in | 10 | | this State, and the denominator of which
is the revenue | 11 | | miles of the person everywhere. For purposes of this
| 12 | | paragraph, a revenue mile is the transportation of 1 | 13 | | passenger or 1 net
ton of freight the distance of 1 mile | 14 | | for a consideration. Where a
person is engaged in the | 15 | | transportation of both passengers and freight,
the | 16 | | fraction above referred to shall be determined by means of | 17 | | an
average of the passenger revenue mile fraction and the | 18 | | freight revenue
mile fraction, weighted to reflect the | 19 | | person's
| 20 | | (A) relative railway operating income from total | 21 | | passenger and total
freight service, as reported to the | 22 | | Interstate Commerce Commission, in
the case of | 23 | | transportation by railroad, and
| 24 | | (B) relative gross receipts from passenger and | 25 | | freight
transportation, in case of transportation | 26 | | other than by railroad.
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| 1 | | (2) Such business income derived from transportation | 2 | | by pipeline
shall be apportioned to this State by | 3 | | multiplying such income by a
fraction, the numerator of | 4 | | which is the revenue miles of the person in
this State, and | 5 | | the denominator of which is the revenue miles of the
person | 6 | | everywhere. For the purposes of this paragraph, a revenue | 7 | | mile is
the transportation by pipeline of 1 barrel of oil, | 8 | | 1,000 cubic feet of
gas, or of any specified quantity of | 9 | | any other substance, the distance
of 1 mile for a | 10 | | consideration.
| 11 | | (3) For taxable years ending on or after December 31, | 12 | | 2008, business income derived from providing | 13 | | transportation services other than airline services shall | 14 | | be apportioned to this State by using a fraction, (a) the | 15 | | numerator of which shall be (i) all receipts from any | 16 | | movement or shipment of people, goods, mail, oil, gas, or | 17 | | any other substance (other than by airline) that both | 18 | | originates and terminates in this State, plus (ii) that | 19 | | portion of the person's gross receipts from movements or | 20 | | shipments of people, goods, mail, oil, gas, or any other | 21 | | substance (other than by airline) that originates in one | 22 | | state or jurisdiction and terminates in another state or | 23 | | jurisdiction, that is determined by the ratio that the | 24 | | miles traveled in this State bears to total miles | 25 | | everywhere and (b) the denominator of which shall be all | 26 | | revenue derived from the movement or shipment of people, |
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| 1 | | goods, mail, oil, gas, or any other substance (other than | 2 | | by airline). Where a taxpayer is engaged in the | 3 | | transportation of both passengers and freight, the | 4 | | fraction above referred to shall first be determined | 5 | | separately for passenger miles and freight miles. Then an | 6 | | average of the passenger miles fraction and the freight | 7 | | miles fraction shall be weighted to reflect the taxpayer's: | 8 | | (A) relative railway operating income from total | 9 | | passenger and total freight service, as reported to the | 10 | | Surface Transportation Board, in the case of | 11 | | transportation by railroad; and
| 12 | | (B) relative gross receipts from passenger and | 13 | | freight transportation, in case of transportation | 14 | | other than by railroad.
| 15 | | (4) For taxable years ending on or after December 31, | 16 | | 2008, business income derived from furnishing airline
| 17 | | transportation services shall be apportioned to this State | 18 | | by
multiplying such income by a fraction, the numerator of | 19 | | which is the
revenue miles of the person in this State, and | 20 | | the denominator of which
is the revenue miles of the person | 21 | | everywhere. For purposes of this
paragraph, a revenue mile | 22 | | is the transportation of one passenger or one net
ton of | 23 | | freight the distance of one mile for a consideration. If a
| 24 | | person is engaged in the transportation of both passengers | 25 | | and freight,
the fraction above referred to shall be | 26 | | determined by means of an
average of the passenger revenue |
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| 1 | | mile fraction and the freight revenue
mile fraction, | 2 | | weighted to reflect the person's relative gross receipts | 3 | | from passenger and freight
airline transportation.
| 4 | | (e) Combined apportionment. Where 2 or more persons are | 5 | | engaged in
a unitary business as described in subsection | 6 | | (a)(27) of
Section 1501,
a part of which is conducted in this | 7 | | State by one or more members of the
group, the business income | 8 | | attributable to this State by any such member
or members shall | 9 | | be apportioned by means of the combined apportionment method.
| 10 | | (f) Alternative allocation. If the allocation and | 11 | | apportionment
provisions of subsections (a) through (e) and of | 12 | | subsection (h) do not
fairly represent the
extent of a person's | 13 | | business activity in this State, the person may
petition for, | 14 | | or the Director may, without a petition, permit or require, in | 15 | | respect of all or any part
of the person's business activity, | 16 | | if reasonable:
| 17 | | (1) Separate accounting;
| 18 | | (2) The exclusion of any one or more factors;
| 19 | | (3) The inclusion of one or more additional factors | 20 | | which will
fairly represent the person's business | 21 | | activities in this State; or
| 22 | | (4) The employment of any other method to effectuate an | 23 | | equitable
allocation and apportionment of the person's | 24 | | business income.
| 25 | | (g) Cross reference. For allocation of business income by | 26 | | residents,
see Section 301(a).
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| 1 | | (h) For tax years ending on or after December 31, 1998, the | 2 | | apportionment
factor of persons who apportion their business | 3 | | income to this State under
subsection (a) shall be equal to:
| 4 | | (1) for tax years ending on or after December 31, 1998 | 5 | | and before December
31, 1999, 16 2/3% of the property | 6 | | factor plus 16 2/3% of the payroll factor
plus
66 2/3% of | 7 | | the sales factor;
| 8 | | (2) for tax years ending on or after December 31, 1999 | 9 | | and before December
31,
2000, 8 1/3% of the property factor | 10 | | plus 8 1/3% of the payroll factor plus 83
1/3%
of the sales | 11 | | factor;
| 12 | | (3) for tax years ending on or after December 31, 2000, | 13 | | the sales factor.
| 14 | | If, in any tax year ending on or after December 31, 1998 and | 15 | | before December
31, 2000, the denominator of the payroll, | 16 | | property, or sales factor is zero,
the apportionment
factor | 17 | | computed in paragraph (1) or (2) of this subsection for that | 18 | | year shall
be divided by an amount equal to 100% minus the | 19 | | percentage weight given to each
factor whose denominator is | 20 | | equal to zero.
| 21 | | (Source: P.A. 96-763, eff. 8-25-09; 97-507, eff. 8-23-11.)
| 22 | | Section 99. Effective date. This Act takes effect upon | 23 | | becoming law.".
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