Full Text of SB0512 99th General Assembly
SB0512sam001 99TH GENERAL ASSEMBLY | Sen. Mattie Hunter Filed: 3/4/2016
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| 1 | | AMENDMENT TO SENATE BILL 512
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 512 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The 21st Century Workforce Development Fund Act | 5 | | is amended by changing Section 15 as follows: | 6 | | (30 ILCS 787/15)
| 7 | | Sec. 15. Use of Fund. | 8 | | (a) Role of Fund. Subject to appropriation, resources from | 9 | | the Fund are intended to be used flexibly to support innovative | 10 | | and locally-driven strategies, to leverage other funding | 11 | | sources, and to fill gaps in existing workforce development | 12 | | resources in Illinois. They are not intended to supplant | 13 | | existing workforce development resources. | 14 | | (b) Distribution of funds. Funds shall be distributed | 15 | | through competitive grantmaking processes administered by the | 16 | | Department and overseen by the Advisory Committee. No more than |
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| 1 | | 6% of funds used for grants may be retained by the Department | 2 | | for administrative costs or for program evaluation or technical | 3 | | assistance activities. | 4 | | (c) Grantmaking. The Department must administer funds | 5 | | through competitive grantmaking in accordance with the | 6 | | priorities described in this Act. Grantmaking must be used to | 7 | | support workforce development strategies consistent with the | 8 | | priorities outlined in this Act. Strategies may include, but | 9 | | are not limited to the following: | 10 | | (i) Expanded grantmaking for existing State workforce | 11 | | development strategies, including the Job Training and | 12 | | Economic Development Program and programs designed to | 13 | | increase the number of persons traditionally | 14 | | underrepresented in the building trades, specifically | 15 | | minorities and women. | 16 | | (ii) Workforce development initiatives that help the | 17 | | least skilled adults access employment and education | 18 | | opportunities, including transitional jobs programs and | 19 | | educational bridge programming that integrate basic | 20 | | education and occupational skills training. | 21 | | (iii) Sectoral strategies that develop | 22 | | industry-specific workforce education and training | 23 | | services that lead to existing or expected jobs with | 24 | | identified employers and that include services to ensure | 25 | | that low-income, low-skilled adults can be served. | 26 | | (iv) Support for the development and implementation of |
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| 1 | | workforce education and training programs in the energy | 2 | | efficiency, renewable energy, and pollution control | 3 | | cleanup and prevention industries. | 4 | | (v) Support for planning activities that: ensure that | 5 | | workforce development and education needs of low-skilled | 6 | | adults are integrated into industry-specific career | 7 | | pathways; analyze labor market data to track workforce | 8 | | trends in the State's energy-related initiatives; or | 9 | | increase the capacity of communities to provide workforce | 10 | | services to low-income, low-skilled adults.
| 11 | | (d) Allowable expenditures. Grant funds are limited to | 12 | | expenditures for the following: | 13 | | (i) Basic skills training, adult education, | 14 | | occupational training, job readiness training, and | 15 | | soft-skills training for which financial aid is otherwise | 16 | | not available.
| 17 | | (ii) Workforce development-related services including | 18 | | mentoring, job development, support services, | 19 | | transportation assistance, and wage subsidies, that are | 20 | | tied to participation in training and employment.
| 21 | | (iii) Capacity building, program development, and | 22 | | technical assistance activities necessary for the | 23 | | development and implementation of new workforce education | 24 | | and training strategies.
| 25 | | No more than 5% of any grant may be used for administrative | 26 | | costs.
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| 1 | | (e) Eligible applicants. For grants under this Section, | 2 | | eligible applicants include the following:
| 3 | | (i) Any private, public, and non-profit entities that | 4 | | provide education, training, and workforce development | 5 | | services to low-income individuals. | 6 | | (ii) Educational institutions. | 7 | | (iii) Labor and business associations.
| 8 | | (f) No chargebacks. Notwithstanding any other provision of | 9 | | law, the 21st Century Workforce Development Fund is not subject | 10 | | to sweeps, administrative charges or chargebacks, or any other | 11 | | fiscal or budgetary maneuver that would in any way transfer any | 12 | | funds from the 21st Century Workforce Development Fund into any | 13 | | other fund of the State. | 14 | | (Source: P.A. 96-771, eff. 8-28-09; 97-581, eff. 8-26-11.) | 15 | | Section 10. The Illinois Income Tax Act is amended by | 16 | | changing Sections 901 and 1501 as follows: | 17 | | (35 ILCS 5/901) (from Ch. 120, par. 9-901) | 18 | | Sec. 901. Collection authority. | 19 | | (a) In general. | 20 | | The Department shall collect the taxes imposed by this Act. | 21 | | The Department
shall collect certified past due child support | 22 | | amounts under Section 2505-650
of the Department of Revenue Law | 23 | | (20 ILCS 2505/2505-650). Except as
provided in subsections (c), | 24 | | (e), (f), (g), and (h) , and (i) of this Section, money |
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| 1 | | collected
pursuant to subsections (a) and (b) of Section 201 of | 2 | | this Act shall be
paid into the General Revenue Fund in the | 3 | | State treasury; money
collected pursuant to subsections (c) and | 4 | | (d) of Section 201 of this Act
shall be paid into the Personal | 5 | | Property Tax Replacement Fund, a special
fund in the State | 6 | | Treasury; and money collected under Section 2505-650 of the
| 7 | | Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
| 8 | | into the
Child Support Enforcement Trust Fund, a special fund | 9 | | outside the State
Treasury, or
to the State
Disbursement Unit | 10 | | established under Section 10-26 of the Illinois Public Aid
| 11 | | Code, as directed by the Department of Healthcare and Family | 12 | | Services. | 13 | | (b) Local Government Distributive Fund. | 14 | | Beginning August 1, 1969, and continuing through June 30, | 15 | | 1994, the Treasurer
shall transfer each month from the General | 16 | | Revenue Fund to a special fund in
the State treasury, to be | 17 | | known as the "Local Government Distributive Fund", an
amount | 18 | | equal to 1/12 of the net revenue realized from the tax imposed | 19 | | by
subsections (a) and (b) of Section 201 of this Act during | 20 | | the preceding month.
Beginning July 1, 1994, and continuing | 21 | | through June 30, 1995, the Treasurer
shall transfer each month | 22 | | from the General Revenue Fund to the Local Government
| 23 | | Distributive Fund an amount equal to 1/11 of the net revenue | 24 | | realized from the
tax imposed by subsections (a) and (b) of | 25 | | Section 201 of this Act during the
preceding month. Beginning | 26 | | July 1, 1995 and continuing through January 31, 2011, the |
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| 1 | | Treasurer shall transfer each
month from the General Revenue | 2 | | Fund to the Local Government Distributive Fund
an amount equal | 3 | | to the net of (i) 1/10 of the net revenue realized from the
tax | 4 | | imposed by
subsections (a) and (b) of Section 201 of the | 5 | | Illinois Income Tax Act during
the preceding month
(ii) minus, | 6 | | beginning July 1, 2003 and ending June 30, 2004, $6,666,666, | 7 | | and
beginning July 1,
2004,
zero. Beginning February 1, 2011, | 8 | | and continuing through January 31, 2015, the Treasurer shall | 9 | | transfer each month from the General Revenue Fund to the Local | 10 | | Government Distributive Fund an amount equal to the sum of (i) | 11 | | 6% (10% of the ratio of the 3% individual income tax rate prior | 12 | | to 2011 to the 5% individual income tax rate after 2010) of the | 13 | | net revenue realized from the tax imposed by subsections (a) | 14 | | and (b) of Section 201 of this Act upon individuals, trusts, | 15 | | and estates during the preceding month and (ii) 6.86% (10% of | 16 | | the ratio of the 4.8% corporate income tax rate prior to 2011 | 17 | | to the 7% corporate income tax rate after 2010) of the net | 18 | | revenue realized from the tax imposed by subsections (a) and | 19 | | (b) of Section 201 of this Act upon corporations during the | 20 | | preceding month. Beginning February 1, 2015 and continuing | 21 | | through January 31, 2025, the Treasurer shall transfer each | 22 | | month from the General Revenue Fund to the Local Government | 23 | | Distributive Fund an amount equal to the sum of (i) 8% (10% of | 24 | | the ratio of the 3% individual income tax rate prior to 2011 to | 25 | | the 3.75% individual income tax rate after 2014) of the net | 26 | | revenue realized from the tax imposed by subsections (a) and |
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| 1 | | (b) of Section 201 of this Act upon individuals, trusts, and | 2 | | estates during the preceding month and (ii) 9.14% (10% of the | 3 | | ratio of the 4.8% corporate income tax rate prior to 2011 to | 4 | | the 5.25% corporate income tax rate after 2014) of the net | 5 | | revenue realized from the tax imposed by subsections (a) and | 6 | | (b) of Section 201 of this Act upon corporations during the | 7 | | preceding month. Beginning February 1, 2025, the Treasurer | 8 | | shall transfer each month from the General Revenue Fund to the | 9 | | Local Government Distributive Fund an amount equal to the sum | 10 | | of (i) 9.23% (10% of the ratio of the 3% individual income tax | 11 | | rate prior to 2011 to the 3.25% individual income tax rate | 12 | | after 2024) of the net revenue realized from the tax imposed by | 13 | | subsections (a) and (b) of Section 201 of this Act upon | 14 | | individuals, trusts, and estates during the preceding month and | 15 | | (ii) 10% of the net revenue realized from the tax imposed by | 16 | | subsections (a) and (b) of Section 201 of this Act upon | 17 | | corporations during the preceding month. Net revenue realized | 18 | | for a month shall be defined as the
revenue from the tax | 19 | | imposed by subsections (a) and (b) of Section 201 of this
Act | 20 | | which is deposited in the General Revenue Fund, the Education | 21 | | Assistance
Fund, the Income Tax Surcharge Local Government | 22 | | Distributive Fund, the Fund for the Advancement of Education, | 23 | | and the Commitment to Human Services Fund during the
month | 24 | | minus the amount paid out of the General Revenue Fund in State | 25 | | warrants
during that same month as refunds to taxpayers for | 26 | | overpayment of liability
under the tax imposed by subsections |
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| 1 | | (a) and (b) of Section 201 of this Act. | 2 | | Beginning on August 26, 2014 (the effective date of Public | 3 | | Act 98-1052), the Comptroller shall perform the transfers | 4 | | required by this subsection (b) no later than 60 days after he | 5 | | or she receives the certification from the Treasurer as | 6 | | provided in Section 1 of the State Revenue Sharing Act. | 7 | | (c) Deposits Into Income Tax Refund Fund. | 8 | | (1) Beginning on January 1, 1989 and thereafter, the | 9 | | Department shall
deposit a percentage of the amounts | 10 | | collected pursuant to subsections (a)
and (b)(1), (2), and | 11 | | (3), of Section 201 of this Act into a fund in the State
| 12 | | treasury known as the Income Tax Refund Fund. The | 13 | | Department shall deposit 6%
of such amounts during the | 14 | | period beginning January 1, 1989 and ending on June
30, | 15 | | 1989. Beginning with State fiscal year 1990 and for each | 16 | | fiscal year
thereafter, the percentage deposited into the | 17 | | Income Tax Refund Fund during a
fiscal year shall be the | 18 | | Annual Percentage. For fiscal years 1999 through
2001, the | 19 | | Annual Percentage shall be 7.1%.
For fiscal year 2003, the | 20 | | Annual Percentage shall be 8%.
For fiscal year 2004, the | 21 | | Annual Percentage shall be 11.7%. Upon the effective date | 22 | | of this amendatory Act of the 93rd General Assembly, the | 23 | | Annual Percentage shall be 10% for fiscal year 2005. For | 24 | | fiscal year 2006, the Annual Percentage shall be 9.75%. For | 25 | | fiscal
year 2007, the Annual Percentage shall be 9.75%. For | 26 | | fiscal year 2008, the Annual Percentage shall be 7.75%. For |
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| 1 | | fiscal year 2009, the Annual Percentage shall be 9.75%. For | 2 | | fiscal year 2010, the Annual Percentage shall be 9.75%. For | 3 | | fiscal year 2011, the Annual Percentage shall be 8.75%. For | 4 | | fiscal year 2012, the Annual Percentage shall be 8.75%. For | 5 | | fiscal year 2013, the Annual Percentage shall be 9.75%. For | 6 | | fiscal year 2014, the Annual Percentage shall be 9.5%. For | 7 | | fiscal year 2015, the Annual Percentage shall be 10%. For | 8 | | all other
fiscal years, the
Annual Percentage shall be | 9 | | calculated as a fraction, the numerator of which
shall be | 10 | | the amount of refunds approved for payment by the | 11 | | Department during
the preceding fiscal year as a result of | 12 | | overpayment of tax liability under
subsections (a) and | 13 | | (b)(1), (2), and (3) of Section 201 of this Act plus the
| 14 | | amount of such refunds remaining approved but unpaid at the | 15 | | end of the
preceding fiscal year, minus the amounts | 16 | | transferred into the Income Tax
Refund Fund from the | 17 | | Tobacco Settlement Recovery Fund, and
the denominator of | 18 | | which shall be the amounts which will be collected pursuant
| 19 | | to subsections (a) and (b)(1), (2), and (3) of Section 201 | 20 | | of this Act during
the preceding fiscal year; except that | 21 | | in State fiscal year 2002, the Annual
Percentage shall in | 22 | | no event exceed 7.6%. The Director of Revenue shall
certify | 23 | | the Annual Percentage to the Comptroller on the last | 24 | | business day of
the fiscal year immediately preceding the | 25 | | fiscal year for which it is to be
effective. | 26 | | (2) Beginning on January 1, 1989 and thereafter, the |
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| 1 | | Department shall
deposit a percentage of the amounts | 2 | | collected pursuant to subsections (a)
and (b)(6), (7), and | 3 | | (8), (c) and (d) of Section 201
of this Act into a fund in | 4 | | the State treasury known as the Income Tax
Refund Fund. The | 5 | | Department shall deposit 18% of such amounts during the
| 6 | | period beginning January 1, 1989 and ending on June 30, | 7 | | 1989. Beginning
with State fiscal year 1990 and for each | 8 | | fiscal year thereafter, the
percentage deposited into the | 9 | | Income Tax Refund Fund during a fiscal year
shall be the | 10 | | Annual Percentage. For fiscal years 1999, 2000, and 2001, | 11 | | the
Annual Percentage shall be 19%.
For fiscal year 2003, | 12 | | the Annual Percentage shall be 27%. For fiscal year
2004, | 13 | | the Annual Percentage shall be 32%.
Upon the effective date | 14 | | of this amendatory Act of the 93rd General Assembly, the | 15 | | Annual Percentage shall be 24% for fiscal year 2005.
For | 16 | | fiscal year 2006, the Annual Percentage shall be 20%. For | 17 | | fiscal
year 2007, the Annual Percentage shall be 17.5%. For | 18 | | fiscal year 2008, the Annual Percentage shall be 15.5%. For | 19 | | fiscal year 2009, the Annual Percentage shall be 17.5%. For | 20 | | fiscal year 2010, the Annual Percentage shall be 17.5%. For | 21 | | fiscal year 2011, the Annual Percentage shall be 17.5%. For | 22 | | fiscal year 2012, the Annual Percentage shall be 17.5%. For | 23 | | fiscal year 2013, the Annual Percentage shall be 14%. For | 24 | | fiscal year 2014, the Annual Percentage shall be 13.4%. For | 25 | | fiscal year 2015, the Annual Percentage shall be 14%. For | 26 | | all other fiscal years, the Annual
Percentage shall be |
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| 1 | | calculated
as a fraction, the numerator of which shall be | 2 | | the amount of refunds
approved for payment by the | 3 | | Department during the preceding fiscal year as
a result of | 4 | | overpayment of tax liability under subsections (a) and | 5 | | (b)(6),
(7), and (8), (c) and (d) of Section 201 of this | 6 | | Act plus the
amount of such refunds remaining approved but | 7 | | unpaid at the end of the
preceding fiscal year, and the | 8 | | denominator of
which shall be the amounts which will be | 9 | | collected pursuant to subsections (a)
and (b)(6), (7), and | 10 | | (8), (c) and (d) of Section 201 of this Act during the
| 11 | | preceding fiscal year; except that in State fiscal year | 12 | | 2002, the Annual
Percentage shall in no event exceed 23%. | 13 | | The Director of Revenue shall
certify the Annual Percentage | 14 | | to the Comptroller on the last business day of
the fiscal | 15 | | year immediately preceding the fiscal year for which it is | 16 | | to be
effective. | 17 | | (3) The Comptroller shall order transferred and the | 18 | | Treasurer shall
transfer from the Tobacco Settlement | 19 | | Recovery Fund to the Income Tax Refund
Fund (i) $35,000,000 | 20 | | in January, 2001, (ii) $35,000,000 in January, 2002, and
| 21 | | (iii) $35,000,000 in January, 2003. | 22 | | (d) Expenditures from Income Tax Refund Fund. | 23 | | (1) Beginning January 1, 1989, money in the Income Tax | 24 | | Refund Fund
shall be expended exclusively for the purpose | 25 | | of paying refunds resulting
from overpayment of tax | 26 | | liability under Section 201 of this Act, for paying
rebates |
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| 1 | | under Section 208.1 in the event that the amounts in the | 2 | | Homeowners'
Tax Relief Fund are insufficient for that | 3 | | purpose,
and for
making transfers pursuant to this | 4 | | subsection (d). | 5 | | (2) The Director shall order payment of refunds | 6 | | resulting from
overpayment of tax liability under Section | 7 | | 201 of this Act from the
Income Tax Refund Fund only to the | 8 | | extent that amounts collected pursuant
to Section 201 of | 9 | | this Act and transfers pursuant to this subsection (d)
and | 10 | | item (3) of subsection (c) have been deposited and retained | 11 | | in the
Fund. | 12 | | (3) As soon as possible after the end of each fiscal | 13 | | year, the Director
shall
order transferred and the State | 14 | | Treasurer and State Comptroller shall
transfer from the | 15 | | Income Tax Refund Fund to the Personal Property Tax
| 16 | | Replacement Fund an amount, certified by the Director to | 17 | | the Comptroller,
equal to the excess of the amount | 18 | | collected pursuant to subsections (c) and
(d) of Section | 19 | | 201 of this Act deposited into the Income Tax Refund Fund
| 20 | | during the fiscal year over the amount of refunds resulting | 21 | | from
overpayment of tax liability under subsections (c) and | 22 | | (d) of Section 201
of this Act paid from the Income Tax | 23 | | Refund Fund during the fiscal year. | 24 | | (4) As soon as possible after the end of each fiscal | 25 | | year, the Director shall
order transferred and the State | 26 | | Treasurer and State Comptroller shall
transfer from the |
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| 1 | | Personal Property Tax Replacement Fund to the Income Tax
| 2 | | Refund Fund an amount, certified by the Director to the | 3 | | Comptroller, equal
to the excess of the amount of refunds | 4 | | resulting from overpayment of tax
liability under | 5 | | subsections (c) and (d) of Section 201 of this Act paid
| 6 | | from the Income Tax Refund Fund during the fiscal year over | 7 | | the amount
collected pursuant to subsections (c) and (d) of | 8 | | Section 201 of this Act
deposited into the Income Tax | 9 | | Refund Fund during the fiscal year. | 10 | | (4.5) As soon as possible after the end of fiscal year | 11 | | 1999 and of each
fiscal year
thereafter, the Director shall | 12 | | order transferred and the State Treasurer and
State | 13 | | Comptroller shall transfer from the Income Tax Refund Fund | 14 | | to the General
Revenue Fund any surplus remaining in the | 15 | | Income Tax Refund Fund as of the end
of such fiscal year; | 16 | | excluding for fiscal years 2000, 2001, and 2002
amounts | 17 | | attributable to transfers under item (3) of subsection (c) | 18 | | less refunds
resulting from the earned income tax credit. | 19 | | (5) This Act shall constitute an irrevocable and | 20 | | continuing
appropriation from the Income Tax Refund Fund | 21 | | for the purpose of paying
refunds upon the order of the | 22 | | Director in accordance with the provisions of
this Section. | 23 | | (e) Deposits into the Education Assistance Fund and the | 24 | | Income Tax
Surcharge Local Government Distributive Fund. | 25 | | On July 1, 1991, and thereafter, of the amounts collected | 26 | | pursuant to
subsections (a) and (b) of Section 201 of this Act, |
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| 1 | | minus deposits into the
Income Tax Refund Fund, the Department | 2 | | shall deposit 7.3% into the
Education Assistance Fund in the | 3 | | State Treasury. Beginning July 1, 1991,
and continuing through | 4 | | January 31, 1993, of the amounts collected pursuant to
| 5 | | subsections (a) and (b) of Section 201 of the Illinois Income | 6 | | Tax Act, minus
deposits into the Income Tax Refund Fund, the | 7 | | Department shall deposit 3.0%
into the Income Tax Surcharge | 8 | | Local Government Distributive Fund in the State
Treasury. | 9 | | Beginning February 1, 1993 and continuing through June 30, | 10 | | 1993, of
the amounts collected pursuant to subsections (a) and | 11 | | (b) of Section 201 of the
Illinois Income Tax Act, minus | 12 | | deposits into the Income Tax Refund Fund, the
Department shall | 13 | | deposit 4.4% into the Income Tax Surcharge Local Government
| 14 | | Distributive Fund in the State Treasury. Beginning July 1, | 15 | | 1993, and
continuing through June 30, 1994, of the amounts | 16 | | collected under subsections
(a) and (b) of Section 201 of this | 17 | | Act, minus deposits into the Income Tax
Refund Fund, the | 18 | | Department shall deposit 1.475% into the Income Tax Surcharge
| 19 | | Local Government Distributive Fund in the State Treasury. | 20 | | (f) Deposits into the Fund for the Advancement of | 21 | | Education. Beginning February 1, 2015, the Department shall | 22 | | deposit the following portions of the revenue realized from the | 23 | | tax imposed upon individuals, trusts, and estates by | 24 | | subsections (a) and (b) of Section 201 of this Act during the | 25 | | preceding month, minus deposits into the Income Tax Refund | 26 | | Fund, into the Fund for the Advancement of Education: |
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| 1 | | (1) beginning February 1, 2015, and prior to February | 2 | | 1, 2025, 1/30; and | 3 | | (2) beginning February 1, 2025, 1/26. | 4 | | If the rate of tax imposed by subsection (a) and (b) of | 5 | | Section 201 is reduced pursuant to Section 201.5 of this Act, | 6 | | the Department shall not make the deposits required by this | 7 | | subsection (f) on or after the effective date of the reduction. | 8 | | (g) Deposits into the Commitment to Human Services Fund. | 9 | | Beginning February 1, 2015, the Department shall deposit the | 10 | | following portions of the revenue realized from the tax imposed | 11 | | upon individuals, trusts, and estates by subsections (a) and | 12 | | (b) of Section 201 of this Act during the preceding month, | 13 | | minus deposits into the Income Tax Refund Fund, into the | 14 | | Commitment to Human Services Fund: | 15 | | (1) beginning February 1, 2015, and prior to February | 16 | | 1, 2025, 1/30; and | 17 | | (2) beginning February 1, 2025, 1/26. | 18 | | If the rate of tax imposed by subsection (a) and (b) of | 19 | | Section 201 is reduced pursuant to Section 201.5 of this Act, | 20 | | the Department shall not make the deposits required by this | 21 | | subsection (g) on or after the effective date of the reduction. | 22 | | (h) Deposits into the Tax Compliance and Administration | 23 | | Fund. Beginning on the first day of the first calendar month to | 24 | | occur on or after August 26, 2014 (the effective date of Public | 25 | | Act 98-1098), each month the Department shall pay into the Tax | 26 | | Compliance and Administration Fund, to be used, subject to |
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| 1 | | appropriation, to fund additional auditors and compliance | 2 | | personnel at the Department, an amount equal to 1/12 of 5% of | 3 | | the cash receipts collected during the preceding fiscal year by | 4 | | the Audit Bureau of the Department from the tax imposed by | 5 | | subsections (a), (b), (c), and (d) of Section 201 of this Act, | 6 | | net of deposits into the Income Tax Refund Fund made from those | 7 | | cash receipts. | 8 | | (i) Deposits into the 21st Century Workforce Development | 9 | | Fund. On and after the effective date of this amendatory Act of | 10 | | the 99th General Assembly, the Department shall deposit into | 11 | | the 21st Century Workforce Development Fund each month an | 12 | | amount equal to all of the revenue realized from the tax | 13 | | imposed by subsections (a) and (b) of Section 201 of this Act | 14 | | during the preceding month, net of any deposits into the Income | 15 | | tax Refund Fund, that is attributable to the changes made to | 16 | | Section 1501 of this Act by this amendatory Act of the 99th | 17 | | General Assembly. | 18 | | (Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14; | 19 | | 98-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff. | 20 | | 7-20-15.)
| 21 | | (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
| 22 | | Sec. 1501. Definitions.
| 23 | | (a) In general. When used in this Act, where not
otherwise | 24 | | distinctly expressed or manifestly incompatible with the | 25 | | intent
thereof:
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| 1 | | (1) Business income. The term "business income" means | 2 | | all income that may be treated as apportionable business | 3 | | income under the Constitution of the United States. | 4 | | Business income is net of the deductions allocable thereto. | 5 | | Such term does not include compensation
or the deductions | 6 | | allocable thereto.
For each taxable year beginning on or | 7 | | after January 1, 2003, a taxpayer may
elect to treat all | 8 | | income other than compensation as business income. This
| 9 | | election shall be made in accordance with rules adopted by | 10 | | the Department and,
once made, shall be irrevocable.
| 11 | | (1.5) Captive real estate investment trust:
| 12 | | (A) The term "captive real estate investment | 13 | | trust" means a corporation, trust, or association:
| 14 | | (i) that is considered a real estate | 15 | | investment trust for the taxable year under | 16 | | Section 856 of the Internal Revenue Code;
| 17 | | (ii) the certificates of beneficial interest | 18 | | or shares of which are not regularly traded on an | 19 | | established securities market; and | 20 | | (iii) of which more than 50% of the voting | 21 | | power or value of the beneficial interest or | 22 | | shares, at any time during the last half of the | 23 | | taxable year, is owned or controlled, directly, | 24 | | indirectly, or constructively, by a single | 25 | | corporation. | 26 | | (B) The term "captive real estate investment |
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| 1 | | trust" does not include: | 2 | | (i) a real estate investment trust of which | 3 | | more than 50% of the voting power or value of the | 4 | | beneficial interest or shares is owned or | 5 | | controlled, directly, indirectly, or | 6 | | constructively, by: | 7 | | (a) a real estate investment trust, other | 8 | | than a captive real estate investment trust; | 9 | | (b) a person who is exempt from taxation | 10 | | under Section 501 of the Internal Revenue Code, | 11 | | and who is not required to treat income | 12 | | received from the real estate investment trust | 13 | | as unrelated business taxable income under | 14 | | Section 512 of the Internal Revenue Code; | 15 | | (c) a listed Australian property trust, if | 16 | | no more than 50% of the voting power or value | 17 | | of the beneficial interest or shares of that | 18 | | trust, at any time during the last half of the | 19 | | taxable year, is owned or controlled, directly | 20 | | or indirectly, by a single person; | 21 | | (d) an entity organized as a trust, | 22 | | provided a listed Australian property trust | 23 | | described in subparagraph (c) owns or | 24 | | controls, directly or indirectly, or | 25 | | constructively, 75% or more of the voting power | 26 | | or value of the beneficial interests or shares |
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| 1 | | of such entity; or | 2 | | (e) an entity that is organized outside of | 3 | | the laws of the United States and that | 4 | | satisfies all of the following criteria: | 5 | | (1) at least 75% of the entity's total | 6 | | asset value at the close of its taxable | 7 | | year is represented by real estate assets | 8 | | (as defined in Section 856(c)(5)(B) of the | 9 | | Internal Revenue Code, thereby including | 10 | | shares or certificates of beneficial | 11 | | interest in any real estate investment | 12 | | trust), cash and cash equivalents, and | 13 | | U.S. Government securities; | 14 | | (2) the entity is not subject to tax on | 15 | | amounts that are distributed to its | 16 | | beneficial owners or is exempt from | 17 | | entity-level taxation; | 18 | | (3) the entity distributes at least | 19 | | 85% of its taxable income (as computed in | 20 | | the jurisdiction in which it is organized) | 21 | | to the holders of its shares or | 22 | | certificates of beneficial interest on an | 23 | | annual basis; | 24 | | (4) either (i) the shares or | 25 | | beneficial interests of the entity are | 26 | | regularly traded on an established |
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| 1 | | securities market or (ii) not more than 10% | 2 | | of the voting power or value in the entity | 3 | | is held, directly, indirectly, or | 4 | | constructively, by a single entity or | 5 | | individual; and | 6 | | (5) the entity is organized in a | 7 | | country that has entered into a tax treaty | 8 | | with the United States; or | 9 | | (ii) during its first taxable year for which it | 10 | | elects to be treated as a real estate investment | 11 | | trust under Section 856(c)(1) of the Internal | 12 | | Revenue Code, a real estate investment trust the | 13 | | certificates of beneficial interest or shares of | 14 | | which are not regularly traded on an established | 15 | | securities market, but only if the certificates of | 16 | | beneficial interest or shares of the real estate | 17 | | investment trust are regularly traded on an | 18 | | established securities market prior to the earlier | 19 | | of the due date (including extensions) for filing | 20 | | its return under this Act for that first taxable | 21 | | year or the date it actually files that return. | 22 | | (C) For the purposes of this subsection (1.5), the | 23 | | constructive ownership rules prescribed under Section | 24 | | 318(a) of the Internal Revenue Code, as modified by | 25 | | Section 856(d)(5) of the Internal Revenue Code, apply | 26 | | in determining the ownership of stock, assets, or net |
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| 1 | | profits of any person.
| 2 | | (D) For the purposes of this item (1.5), for | 3 | | taxable years ending on or after August 16, 2007, the | 4 | | voting power or value of the beneficial interest or | 5 | | shares of a real estate investment trust does not | 6 | | include any voting power or value of beneficial | 7 | | interest or shares in a real estate investment trust | 8 | | held directly or indirectly in a segregated asset | 9 | | account by a life insurance company (as described in | 10 | | Section 817 of the Internal Revenue Code) to the extent | 11 | | such voting power or value is for the benefit of | 12 | | entities or persons who are either immune from taxation | 13 | | or exempt from taxation under subtitle A of the | 14 | | Internal Revenue Code.
| 15 | | (2) Commercial domicile. The term "commercial | 16 | | domicile" means the
principal
place from which the trade or | 17 | | business of the taxpayer is directed or managed.
| 18 | | (3) Compensation. The term "compensation" means wages, | 19 | | salaries,
commissions
and any other form of remuneration | 20 | | paid to employees for personal services.
| 21 | | (4) Corporation. The term "corporation" includes | 22 | | associations, joint-stock
companies, insurance companies | 23 | | and cooperatives. Any entity, including a
limited | 24 | | liability company formed under the Illinois Limited | 25 | | Liability Company
Act, shall be treated as a corporation if | 26 | | it is so classified for federal
income tax purposes.
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| 1 | | (5) Department. The term "Department" means the | 2 | | Department of Revenue of
this State.
| 3 | | (6) Director. The term "Director" means the Director of | 4 | | Revenue of this
State.
| 5 | | (7) Fiduciary. The term "fiduciary" means a guardian, | 6 | | trustee, executor,
administrator, receiver, or any person | 7 | | acting in any fiduciary capacity for any
person.
| 8 | | (8) Financial organization.
| 9 | | (A) The term "financial organization" means
any
| 10 | | bank, bank holding company, trust company, savings | 11 | | bank, industrial bank,
land bank, safe deposit | 12 | | company, private banker, savings and loan association,
| 13 | | building and loan association, credit union, currency | 14 | | exchange, cooperative
bank, small loan company, sales | 15 | | finance company, investment company, or any
person | 16 | | which is owned by a bank or bank holding company. For | 17 | | the purpose of
this Section a "person" will include | 18 | | only those persons which a bank holding
company may | 19 | | acquire and hold an interest in, directly or | 20 | | indirectly, under the
provisions of the Bank Holding | 21 | | Company Act of 1956 (12 U.S.C. 1841, et seq.),
except | 22 | | where interests in any person must be disposed of | 23 | | within certain
required time limits under the Bank | 24 | | Holding Company Act of 1956.
| 25 | | (B) For purposes of subparagraph (A) of this | 26 | | paragraph, the term
"bank" includes (i) any entity that |
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| 1 | | is regulated by the Comptroller of the
Currency under | 2 | | the National Bank Act, or by the Federal Reserve Board, | 3 | | or by
the
Federal Deposit Insurance Corporation and | 4 | | (ii) any federally or State chartered
bank
operating as | 5 | | a credit card bank.
| 6 | | (C) For purposes of subparagraph (A) of this | 7 | | paragraph, the term
"sales finance company" has the | 8 | | meaning provided in the following item (i) or
(ii):
| 9 | | (i) A person primarily engaged in one or more | 10 | | of the following
businesses: the business of | 11 | | purchasing customer receivables, the business
of | 12 | | making loans upon the security of customer | 13 | | receivables, the
business of making loans for the | 14 | | express purpose of funding purchases of
tangible | 15 | | personal property or services by the borrower, or | 16 | | the business of
finance leasing. For purposes of | 17 | | this item (i), "customer receivable"
means:
| 18 | | (a) a retail installment contract or | 19 | | retail charge agreement within
the
meaning
of | 20 | | the Sales Finance Agency Act, the Retail | 21 | | Installment Sales Act, or the
Motor Vehicle | 22 | | Retail Installment Sales Act;
| 23 | | (b) an installment, charge, credit, or | 24 | | similar contract or agreement
arising from
the | 25 | | sale of tangible personal property or services | 26 | | in a transaction involving
a deferred payment |
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| 1 | | price payable in one or more installments | 2 | | subsequent
to the sale; or
| 3 | | (c) the outstanding balance of a contract | 4 | | or agreement described in
provisions
(a) or (b) | 5 | | of this item (i).
| 6 | | A customer receivable need not provide for | 7 | | payment of interest on
deferred
payments. A sales | 8 | | finance company may purchase a customer receivable | 9 | | from, or
make a loan secured by a customer | 10 | | receivable to, the seller in the original
| 11 | | transaction or to a person who purchased the | 12 | | customer receivable directly or
indirectly from | 13 | | that seller.
| 14 | | (ii) A corporation meeting each of the | 15 | | following criteria:
| 16 | | (a) the corporation must be a member of an | 17 | | "affiliated group" within
the
meaning of | 18 | | Section 1504(a) of the Internal Revenue Code, | 19 | | determined
without regard to Section 1504(b) | 20 | | of the Internal Revenue Code;
| 21 | | (b) more than 50% of the gross income of | 22 | | the corporation for the
taxable
year
must be | 23 | | interest income derived from qualifying loans. | 24 | | A "qualifying
loan" is a loan made to a member | 25 | | of the corporation's affiliated group that
| 26 | | originates customer receivables (within the |
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| 1 | | meaning of item (i)) or to whom
customer | 2 | | receivables originated by a member of the | 3 | | affiliated group have been
transferred, to
the | 4 | | extent the average outstanding balance of | 5 | | loans from that corporation
to members of its | 6 | | affiliated group during the taxable year do not | 7 | | exceed
the limitation amount for that | 8 | | corporation. The "limitation amount" for a
| 9 | | corporation is the average outstanding | 10 | | balances during the taxable year of
customer | 11 | | receivables (within the meaning of item (i)) | 12 | | originated by
all members of the affiliated | 13 | | group.
If the average outstanding balances of | 14 | | the
loans made by a corporation to members of | 15 | | its affiliated group exceed the
limitation | 16 | | amount, the interest income of that | 17 | | corporation from qualifying
loans shall be | 18 | | equal to its interest income from loans to | 19 | | members of its
affiliated groups times a | 20 | | fraction equal to the limitation amount | 21 | | divided by
the average outstanding balances of | 22 | | the loans made by that corporation to
members | 23 | | of its affiliated group;
| 24 | | (c) the total of all shareholder's equity | 25 | | (including, without
limitation,
paid-in
| 26 | | capital on common and preferred stock and |
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| 1 | | retained earnings) of the
corporation plus the | 2 | | total of all of its loans, advances, and other
| 3 | | obligations payable or owed to members of its | 4 | | affiliated group may not
exceed 20% of the | 5 | | total assets of the corporation at any time | 6 | | during the tax
year; and
| 7 | | (d) more than 50% of all interest-bearing | 8 | | obligations of the
affiliated group payable to | 9 | | persons outside the group determined in | 10 | | accordance
with generally accepted accounting | 11 | | principles must be obligations of the
| 12 | | corporation.
| 13 | | This amendatory Act of the 91st General Assembly is | 14 | | declaratory of
existing
law.
| 15 | | (D) Subparagraphs
(B) and (C) of this paragraph are | 16 | | declaratory of
existing law and apply retroactively, | 17 | | for all tax years beginning on or before
December 31, | 18 | | 1996,
to all original returns, to all amended returns | 19 | | filed no later than 30
days after the effective date of | 20 | | this amendatory Act of 1996, and to all
notices issued | 21 | | on or before the effective date of this amendatory Act | 22 | | of 1996
under subsection (a) of Section 903, subsection | 23 | | (a) of Section 904,
subsection (e) of Section 909, or | 24 | | Section 912.
A taxpayer that is a "financial | 25 | | organization" that engages in any transaction
with an | 26 | | affiliate shall be a "financial organization" for all |
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| 1 | | purposes of this
Act.
| 2 | | (E) For all tax years beginning on or
before | 3 | | December 31, 1996, a taxpayer that falls within the | 4 | | definition
of a
"financial organization" under | 5 | | subparagraphs (B) or (C) of this paragraph, but
who | 6 | | does
not fall within the definition of a "financial | 7 | | organization" under the Proposed
Regulations issued by | 8 | | the Department of Revenue on July 19, 1996, may
| 9 | | irrevocably elect to apply the Proposed Regulations | 10 | | for all of those years as
though the Proposed | 11 | | Regulations had been lawfully promulgated, adopted, | 12 | | and in
effect for all of those years. For purposes of | 13 | | applying subparagraphs (B) or
(C) of
this
paragraph to | 14 | | all of those years, the election allowed by this | 15 | | subparagraph
applies only to the taxpayer making the | 16 | | election and to those members of the
taxpayer's unitary | 17 | | business group who are ordinarily required to | 18 | | apportion
business income under the same subsection of | 19 | | Section 304 of this Act as the
taxpayer making the | 20 | | election. No election allowed by this subparagraph | 21 | | shall
be made under a claim
filed under subsection (d) | 22 | | of Section 909 more than 30 days after the
effective | 23 | | date of this amendatory Act of 1996.
| 24 | | (F) Finance Leases. For purposes of this | 25 | | subsection, a finance lease
shall be treated as a loan | 26 | | or other extension of credit, rather than as a
lease,
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| 1 | | regardless of how the transaction is characterized for | 2 | | any other purpose,
including the purposes of any | 3 | | regulatory agency to which the lessor is subject.
A | 4 | | finance lease is any transaction in the form of a lease | 5 | | in which the lessee
is treated as the owner of the | 6 | | leased asset entitled to any deduction for
| 7 | | depreciation allowed under Section 167 of the Internal | 8 | | Revenue Code.
| 9 | | (9) Fiscal year. The term "fiscal year" means an | 10 | | accounting period of
12 months ending on the last day of | 11 | | any month other than December.
| 12 | | (9.5) Fixed place of business. The term "fixed place of | 13 | | business" has the same meaning as that term is given in | 14 | | Section 864 of the Internal Revenue Code and the related | 15 | | Treasury regulations.
| 16 | | (10) Includes and including. The terms "includes" and | 17 | | "including" when
used in a definition contained in this Act | 18 | | shall not be deemed to exclude
other things otherwise | 19 | | within the meaning of the term defined.
| 20 | | (11) Internal Revenue Code. The term "Internal Revenue | 21 | | Code" means the
United States Internal Revenue Code of 1954 | 22 | | or any successor law or laws
relating to federal income | 23 | | taxes in effect for the taxable year.
| 24 | | (11.5) Investment partnership. | 25 | | (A) The term "investment partnership" means any | 26 | | entity that is treated as a partnership for federal |
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| 1 | | income tax purposes that meets the following | 2 | | requirements: | 3 | | (i) no less than 90% of the partnership's cost | 4 | | of its total assets consists of qualifying | 5 | | investment securities, deposits at banks or other | 6 | | financial institutions, and office space and | 7 | | equipment reasonably necessary to carry on its | 8 | | activities as an investment partnership; | 9 | | (ii) no less than 90% of its gross income | 10 | | consists of interest, dividends, and gains from | 11 | | the sale or exchange of qualifying investment | 12 | | securities; and
| 13 | | (iii) the partnership is not a dealer in | 14 | | qualifying investment securities. | 15 | | (B) For purposes of this paragraph (11.5), the term | 16 | | "qualifying investment securities" includes all of the | 17 | | following:
| 18 | | (i) common stock, including preferred or debt | 19 | | securities convertible into common stock, and | 20 | | preferred stock; | 21 | | (ii) bonds, debentures, and other debt | 22 | | securities; | 23 | | (iii) foreign and domestic currency deposits | 24 | | secured by federal, state, or local governmental | 25 | | agencies; | 26 | | (iv) mortgage or asset-backed securities |
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| 1 | | secured by federal, state, or local governmental | 2 | | agencies; | 3 | | (v) repurchase agreements and loan | 4 | | participations; | 5 | | (vi) foreign currency exchange contracts and | 6 | | forward and futures contracts on foreign | 7 | | currencies; | 8 | | (vii) stock and bond index securities and | 9 | | futures contracts and other similar financial | 10 | | securities and futures contracts on those | 11 | | securities;
| 12 | | (viii) options for the purchase or sale of any | 13 | | of the securities, currencies, contracts, or | 14 | | financial instruments described in items (i) to | 15 | | (vii), inclusive;
| 16 | | (ix) regulated futures contracts;
| 17 | | (x) commodities (not described in Section | 18 | | 1221(a)(1) of the Internal Revenue Code) or | 19 | | futures, forwards, and options with respect to | 20 | | such commodities, provided, however, that any item | 21 | | of a physical commodity to which title is actually | 22 | | acquired in the partnership's capacity as a dealer | 23 | | in such commodity shall not be a qualifying | 24 | | investment security;
| 25 | | (xi) derivatives; and
| 26 | | (xii) a partnership interest in another |
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| 1 | | partnership that is an investment partnership.
| 2 | | (12) Mathematical error. The term "mathematical error" | 3 | | includes the
following types of errors, omissions, or | 4 | | defects in a return filed by a
taxpayer which prevents | 5 | | acceptance of the return as filed for processing:
| 6 | | (A) arithmetic errors or incorrect computations on | 7 | | the return or
supporting schedules;
| 8 | | (B) entries on the wrong lines;
| 9 | | (C) omission of required supporting forms or | 10 | | schedules or the omission
of the information in whole | 11 | | or in part called for thereon; and
| 12 | | (D) an attempt to claim, exclude, deduct, or | 13 | | improperly report, in a
manner
directly contrary to the | 14 | | provisions of the Act and regulations thereunder
any | 15 | | item of income, exemption, deduction, or credit.
| 16 | | (13) Nonbusiness income. The term "nonbusiness income" | 17 | | means all income
other than business income or | 18 | | compensation.
| 19 | | (14) Nonresident. The term "nonresident" means a | 20 | | person who is not a
resident.
| 21 | | (15) Paid, incurred and accrued. The terms "paid", | 22 | | "incurred" and
"accrued"
shall be construed according to | 23 | | the method of accounting upon the basis
of which the | 24 | | person's base income is computed under this Act.
| 25 | | (16) Partnership and partner. The term "partnership" | 26 | | includes a syndicate,
group, pool, joint venture or other |
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| 1 | | unincorporated organization, through
or by means of which | 2 | | any business, financial operation, or venture is carried
| 3 | | on, and which is not, within the meaning of this Act, a | 4 | | trust or estate
or a corporation; and the term "partner" | 5 | | includes a member in such syndicate,
group, pool, joint | 6 | | venture or organization.
| 7 | | The term "partnership" includes any entity, including | 8 | | a limited
liability company formed under the Illinois
| 9 | | Limited Liability Company Act, classified as a partnership | 10 | | for federal income tax purposes.
| 11 | | The term "partnership" does not include a syndicate, | 12 | | group, pool,
joint venture, or other unincorporated | 13 | | organization established for the
sole purpose of playing | 14 | | the Illinois State Lottery.
| 15 | | (17) Part-year resident. The term "part-year resident" | 16 | | means an individual
who became a resident during the | 17 | | taxable year or ceased to be a resident
during the taxable | 18 | | year. Under Section 1501(a)(20)(A)(i) residence
commences | 19 | | with presence in this State for other than a temporary or | 20 | | transitory
purpose and ceases with absence from this State | 21 | | for other than a temporary or
transitory purpose. Under | 22 | | Section 1501(a)(20)(A)(ii) residence commences
with the | 23 | | establishment of domicile in this State and ceases with the
| 24 | | establishment of domicile in another State.
| 25 | | (18) Person. The term "person" shall be construed to | 26 | | mean and include
an individual, a trust, estate, |
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| 1 | | partnership, association, firm, company,
corporation, | 2 | | limited liability company, or fiduciary. For purposes of | 3 | | Section
1301 and 1302 of this Act, a "person" means (i) an | 4 | | individual, (ii) a
corporation, (iii) an officer, agent, or | 5 | | employee of a
corporation, (iv) a member, agent or employee | 6 | | of a partnership, or (v)
a member,
manager, employee, | 7 | | officer, director, or agent of a limited liability company
| 8 | | who in such capacity commits an offense specified in | 9 | | Section 1301 and 1302.
| 10 | | (18A) Records. The term "records" includes all data | 11 | | maintained by the
taxpayer, whether on paper, microfilm, | 12 | | microfiche, or any type of
machine-sensible data | 13 | | compilation.
| 14 | | (19) Regulations. The term "regulations" includes | 15 | | rules promulgated and
forms prescribed by the Department.
| 16 | | (20) Resident. The term "resident" means:
| 17 | | (A) an individual (i) who is
in this State for | 18 | | other than a temporary or transitory purpose during the
| 19 | | taxable year; or (ii) who is domiciled in this State | 20 | | but is absent from
the State for a temporary or | 21 | | transitory purpose during the taxable year;
| 22 | | (B) The estate of a decedent who at his or her | 23 | | death was domiciled in
this
State;
| 24 | | (C) A trust created by a will of a decedent who at | 25 | | his death was
domiciled
in this State; and
| 26 | | (D) An irrevocable trust, the grantor of which was |
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| 1 | | domiciled in this
State
at the time such trust became | 2 | | irrevocable. For purpose of this subparagraph,
a trust | 3 | | shall be considered irrevocable to the extent that the | 4 | | grantor is
not treated as the owner thereof under | 5 | | Sections 671 through 678 of the Internal
Revenue Code.
| 6 | | (21) Sales. The term "sales" means all gross receipts | 7 | | of the taxpayer
not allocated under Sections 301, 302 and | 8 | | 303.
| 9 | | (22) State. The term "state" when applied to a | 10 | | jurisdiction other than
this State means any state of the | 11 | | United States, the District of Columbia,
the Commonwealth | 12 | | of Puerto Rico, any Territory or Possession of the United
| 13 | | States, and any foreign country, or any political | 14 | | subdivision of any of the
foregoing. For purposes of the | 15 | | foreign tax credit under Section 601, the
term "state" | 16 | | means any state of the United States, the District of | 17 | | Columbia,
the Commonwealth of Puerto Rico, and any | 18 | | territory or possession of the
United States, or any | 19 | | political subdivision of any of the foregoing,
effective | 20 | | for tax years ending on or after December 31, 1989.
| 21 | | (23) Taxable year. The term "taxable year" means the | 22 | | calendar year, or
the fiscal year ending during such | 23 | | calendar year, upon the basis of which
the base income is | 24 | | computed under this Act. "Taxable year" means, in the
case | 25 | | of a return made for a fractional part of a year under the | 26 | | provisions
of this Act, the period for which such return is |
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| 1 | | made.
| 2 | | (24) Taxpayer. The term "taxpayer" means any person | 3 | | subject to the tax
imposed by this Act.
| 4 | | (25) International banking facility. The term | 5 | | international banking
facility shall have the same meaning | 6 | | as is set forth in the Illinois Banking
Act or as is set | 7 | | forth in the laws of the United States or regulations of
| 8 | | the Board of Governors of the Federal Reserve System.
| 9 | | (26) Income Tax Return Preparer.
| 10 | | (A) The term "income tax return preparer"
means any | 11 | | person who prepares for compensation, or who employs | 12 | | one or more
persons to prepare for compensation, any | 13 | | return of tax imposed by this Act
or any claim for | 14 | | refund of tax imposed by this Act. The preparation of a
| 15 | | substantial portion of a return or claim for refund | 16 | | shall be treated as
the preparation of that return or | 17 | | claim for refund.
| 18 | | (B) A person is not an income tax return preparer | 19 | | if all he or she does
is
| 20 | | (i) furnish typing, reproducing, or other | 21 | | mechanical assistance;
| 22 | | (ii) prepare returns or claims for refunds for | 23 | | the employer by whom he
or she is regularly and | 24 | | continuously employed;
| 25 | | (iii) prepare as a fiduciary returns or claims | 26 | | for refunds for any
person; or
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| 1 | | (iv) prepare claims for refunds for a taxpayer | 2 | | in response to any
notice
of deficiency issued to | 3 | | that taxpayer or in response to any waiver of
| 4 | | restriction after the commencement of an audit of | 5 | | that taxpayer or of another
taxpayer if a | 6 | | determination in the audit of the other taxpayer | 7 | | directly or
indirectly affects the tax liability | 8 | | of the taxpayer whose claims he or she is
| 9 | | preparing.
| 10 | | (27) Unitary business group. | 11 | | (A) The term "unitary business group" means
a group | 12 | | of persons related through common ownership whose | 13 | | business activities
are integrated with, dependent | 14 | | upon and contribute to each other. The group
will not | 15 | | include those members whose business activity outside | 16 | | the United
States is 80% or more of any such member's | 17 | | total business activity; for
purposes of this | 18 | | paragraph and clause (a)(3)(B)(ii) of Section 304,
| 19 | | business
activity within the United States shall be | 20 | | measured by means of the factors
ordinarily applicable | 21 | | under subsections (a), (b), (c), (d), or (h)
of Section
| 22 | | 304 except that, in the case of members ordinarily | 23 | | required to apportion
business income by means of the 3 | 24 | | factor formula of property, payroll and sales
| 25 | | specified in subsection (a) of Section 304, including | 26 | | the
formula as weighted in subsection (h) of Section |
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| 1 | | 304, such members shall
not use the sales factor in the | 2 | | computation and the results of the property
and payroll | 3 | | factor computations of subsection (a) of Section 304 | 4 | | shall be
divided by 2 (by one if either
the property or | 5 | | payroll factor has a denominator of zero). The | 6 | | computation
required by the preceding sentence shall, | 7 | | in each case, involve the division of
the member's | 8 | | property, payroll, or revenue miles in the United | 9 | | States,
insurance premiums on property or risk in the | 10 | | United States, or financial
organization business | 11 | | income from sources within the United States, as the
| 12 | | case may be, by the respective worldwide figures for | 13 | | such items. Common
ownership in the case of | 14 | | corporations is the direct or indirect control or
| 15 | | ownership of more than 50% of the outstanding voting | 16 | | stock of the persons
carrying on unitary business | 17 | | activity. Unitary business activity can
ordinarily be | 18 | | illustrated where the activities of the members are: | 19 | | (1) in the
same general line (such as manufacturing, | 20 | | wholesaling, retailing of tangible
personal property, | 21 | | insurance, transportation or finance); or (2) are | 22 | | steps in a
vertically structured enterprise or process | 23 | | (such as the steps involved in the
production of | 24 | | natural resources, which might include exploration, | 25 | | mining,
refining, and marketing); and, in either | 26 | | instance, the members are functionally
integrated |
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| 1 | | through the exercise of strong centralized management | 2 | | (where, for
example, authority over such matters as | 3 | | purchasing, financing, tax compliance,
product line, | 4 | | personnel, marketing and capital investment is not | 5 | | left to each
member).
| 6 | | (B) In no event, for tax years ending prior to June | 7 | | 30, 2016, shall any
unitary business group include | 8 | | members
which are ordinarily required to apportion | 9 | | business income under different
subsections of Section | 10 | | 304 except that for tax years ending on or after
| 11 | | December 31, 1987 this prohibition shall not apply to a | 12 | | holding company that would otherwise be a member of a | 13 | | unitary business group with taxpayers that apportion | 14 | | business income under any of subsections (b), (c), | 15 | | (c-1), or (d) of Section 304. If a unitary business
| 16 | | group would, but for the preceding sentence, include | 17 | | members that are
ordinarily required to apportion | 18 | | business income under different subsections of
Section | 19 | | 304, then for each subsection of Section 304 for which | 20 | | there are two or
more members, there shall be a | 21 | | separate unitary business group composed of such
| 22 | | members. For purposes of the preceding two sentences, a | 23 | | member is "ordinarily
required to apportion business | 24 | | income" under a particular subsection of Section
304 if | 25 | | it would be required to use the apportionment method | 26 | | prescribed by such
subsection except for the fact that |
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| 1 | | it derives business income solely from
Illinois. As | 2 | | used in this paragraph, the phrase "United States" | 3 | | means only the 50 states and the District of Columbia, | 4 | | but does not include any territory or possession of the | 5 | | United States or any area over which the United States | 6 | | has asserted jurisdiction or claimed exclusive rights | 7 | | with respect to the exploration for or exploitation of | 8 | | natural resources.
This paragraph (B) does not apply | 9 | | for tax years ending on or after June 30, 2016. | 10 | | (C) Holding companies. | 11 | | (i) For purposes of this subparagraph, a | 12 | | "holding company" is a corporation (other than a | 13 | | corporation that is a financial organization under | 14 | | paragraph (8) of this subsection (a) of Section | 15 | | 1501 because it is a bank holding company under the | 16 | | provisions of the Bank Holding Company Act of 1956 | 17 | | (12 U.S.C. 1841, et seq.) or because it is owned by | 18 | | a bank or a bank holding company) that owns a | 19 | | controlling interest in one or more other | 20 | | taxpayers ("controlled taxpayers"); that, during | 21 | | the period that includes the taxable year and the 2 | 22 | | immediately preceding taxable years or, if the | 23 | | corporation was formed during the current or | 24 | | immediately preceding taxable year, the taxable | 25 | | years in which the corporation has been in | 26 | | existence, derived substantially all its gross |
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| 1 | | income from dividends, interest, rents, royalties, | 2 | | fees or other charges received from controlled | 3 | | taxpayers for the provision of services, and gains | 4 | | on the sale or other disposition of interests in | 5 | | controlled taxpayers or in property leased or | 6 | | licensed to controlled taxpayers or used by the | 7 | | taxpayer in providing services to controlled | 8 | | taxpayers; and that incurs no substantial expenses | 9 | | other than expenses (including interest and other | 10 | | costs of borrowing) incurred in connection with | 11 | | the acquisition and holding of interests in | 12 | | controlled taxpayers and in the provision of | 13 | | services to controlled taxpayers or in the leasing | 14 | | or licensing of property to controlled taxpayers. | 15 | | (ii) The income of a holding company which is a | 16 | | member of more than one unitary business group | 17 | | shall be included in each unitary business group of | 18 | | which it is a member on a pro rata basis, by | 19 | | including in each unitary business group that | 20 | | portion of the base income of the holding company | 21 | | that bears the same proportion to the total base | 22 | | income of the holding company as the gross receipts | 23 | | of the unitary business group bears to the combined | 24 | | gross receipts of all unitary business groups (in | 25 | | both cases without regard to the holding company) | 26 | | or on any other reasonable basis, consistently |
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| 1 | | applied. | 2 | | (iii) A holding company shall apportion its | 3 | | business income under the subsection of Section | 4 | | 304 used by the other members of its unitary | 5 | | business group. The apportionment factors of a | 6 | | holding company which would be a member of more | 7 | | than one unitary business group shall be included | 8 | | with the apportionment factors of each unitary | 9 | | business group of which it is a member on a pro | 10 | | rata basis using the same method used in clause | 11 | | (ii). | 12 | | (iv) The provisions of this subparagraph (C) | 13 | | are intended to clarify existing law. | 14 | | (D) If including the base income and factors of a | 15 | | holding company in more than one unitary business group | 16 | | under subparagraph (C) does not fairly reflect the | 17 | | degree of integration between the holding company and | 18 | | one or more of the unitary business groups, the | 19 | | dependence of the holding company and one or more of | 20 | | the unitary business groups upon each other, or the | 21 | | contributions between the holding company and one or | 22 | | more of the unitary business groups, the holding | 23 | | company may petition the Director, under the | 24 | | procedures provided under Section 304(f), for | 25 | | permission to include all base income and factors of | 26 | | the holding company only with members of a unitary |
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| 1 | | business group apportioning their business income | 2 | | under one subsection of subsections (a), (b), (c), or | 3 | | (d) of Section 304. If the petition is granted, the | 4 | | holding company shall be included in a unitary business | 5 | | group only with persons apportioning their business | 6 | | income under the selected subsection of Section 304 | 7 | | until the Director grants a petition of the holding | 8 | | company either to be included in more than one unitary | 9 | | business group under subparagraph (C) or to include its | 10 | | base income and factors only with members of a unitary | 11 | | business group apportioning their business income | 12 | | under a different subsection of Section 304. | 13 | | (E) If the unitary business group members' | 14 | | accounting periods differ,
the common parent's | 15 | | accounting period or, if there is no common parent, the
| 16 | | accounting period of the member that is expected to | 17 | | have, on a recurring basis,
the greatest Illinois | 18 | | income tax liability must be used to determine whether | 19 | | to
use the apportionment method provided in subsection | 20 | | (a) or subsection (h) of
Section 304. The
prohibition | 21 | | against membership in a unitary business group for | 22 | | taxpayers
ordinarily required to apportion income | 23 | | under different subsections of Section
304 does not | 24 | | apply to taxpayers required to apportion income under | 25 | | subsection
(a) and subsection (h) of Section
304. The | 26 | | provisions of this amendatory Act of 1998 apply to tax
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| 1 | | years ending on or after December 31, 1998.
| 2 | | (28) Subchapter S corporation. The term "Subchapter S | 3 | | corporation"
means a corporation for which there is in | 4 | | effect an election under Section
1362 of the Internal | 5 | | Revenue Code, or for which there is a federal election
to | 6 | | opt out of the provisions of the Subchapter S Revision Act | 7 | | of 1982 and
have applied instead the prior federal | 8 | | Subchapter S rules as in effect on July
1, 1982.
| 9 | | (30) Foreign person. The term "foreign person" means | 10 | | any person who is a nonresident alien individual and any | 11 | | nonindividual entity, regardless of where created or | 12 | | organized, whose business activity outside the United | 13 | | States is 80% or more of the entity's total business | 14 | | activity.
| 15 | | (b) Other definitions.
| 16 | | (1) Words denoting number, gender, and so forth,
when | 17 | | used in this Act, where not otherwise distinctly expressed | 18 | | or manifestly
incompatible with the intent thereof:
| 19 | | (A) Words importing the singular include and apply | 20 | | to several persons,
parties or things;
| 21 | | (B) Words importing the plural include the | 22 | | singular; and
| 23 | | (C) Words importing the masculine gender include | 24 | | the feminine as well.
| 25 | | (2) "Company" or "association" as including successors |
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| 1 | | and assigns. The
word "company" or "association", when used | 2 | | in reference to a corporation,
shall be deemed to embrace | 3 | | the words "successors and assigns of such company
or | 4 | | association", and in like manner as if these last-named | 5 | | words, or words
of similar import, were expressed.
| 6 | | (3) Other terms. Any term used in any Section of this | 7 | | Act with respect
to the application of, or in connection | 8 | | with, the provisions of any other
Section of this Act shall | 9 | | have the same meaning as in such other Section.
| 10 | | (Source: P.A. 99-213, eff. 7-31-15.)".
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