Public Act 90-0491 of the 90th General Assembly
Public Act 90-0491
SB856 Enrolled LRB9000732KDcbA
AN ACT in relation to taxes, amending named Acts.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Civil Administrative Code of Illinois is
amended by changing Section 39b52 and adding 39b53 as
follows:
(20 ILCS 2505/39b52)
Sec. 39b52. Collection of past due support. Upon
certification of past due child support amounts from the
Department of Public Aid, the Department of Revenue may
collect the delinquency in any manner authorized for the
collection of any tax administered by the Department of
Revenue a delinquent personal income tax liability. The
Department of Revenue shall notify the Department of Public
Aid when the delinquency or any portion of the delinquency
has been collected under this Section. Any child support
delinquency collected by the Department of Revenue, including
those amounts that result in overpayment of a child support
delinquency, shall be deposited in, or transferred to, the
Child Support Enforcement Trust Fund. The Department of
Revenue may implement this Section through the use of
emergency rules in accordance with Section 5-45 of the
Illinois Administrative Procedure Act. For purposes of the
Illinois Administrative Procedure Act, the adoption of rules
to implement this Section shall be considered an emergency
and necessary for the public interest, safety, and welfare.
(Source: P.A. 89-6, eff. 12-31-95.)
(20 ILCS 2505/39b53 new)
Sec. 39b53. Income Tax Reciprocal Agreements.
(a) Reciprocal agreement cost study. The Department of
Revenue shall study the use and cost effectiveness of all
reciprocal agreements entered into under the authority of
Sections 302 and 701 of the Illinois Income Tax Act. The
Department shall report to the General Assembly as to the
fiscal impact on Illinois income tax collections of each of
the reciprocal agreements by January 1, 1999 and every 5
years thereafter. The Department of Revenue shall have the
authority to require that employers provide all information
necessary to complete the study on income tax withholding
returns filed with the Department under Section 704 of the
Illinois Income Tax Act. The Department shall have the
authority to require that employees provide all information
necessary to complete the study on individual income tax
returns filed under Section 502 of the Illinois Income Tax
Act.
(b) Revocation of reciprocal agreements. Upon receipt
of the cost study or at any time thereafter, the General
Assembly may adopt a joint resolution by an affirmative vote
of a majority of each house directing the Director of Revenue
to revoke any reciprocal agreement with any other state that
results in a loss of revenue to the State of Illinois. Any
joint resolution shall specify the date upon which the
reciprocal agreement is to be revoked, which date shall be no
sooner than the beginning of the next subsequent calendar
year that is at least 6 months after the adoption of the
joint resolution.
(c) Authority to enter into compensation agreements.
Before any revocation by joint resolution adopted by the
General Assembly under subsection (b), the Director of
Revenue shall have the authority to enter into a compensation
or rebating agreement with any reciprocal state. Any
compensation agreement shall provide that the reciprocal
state shall provide a rebate to the State of Illinois to
compensate for the loss of revenue. The Director of Revenue
shall have the authority to enter into agreements with
reciprocal states to contract with any third party mutually
agreed to by the Director and the reciprocal state to
establish a rebate or compensation amount.
Section 10. The State Finance Act is amended by changing
Sections 6z-18 and 6z-20 as follows:
(30 ILCS 105/6z-18) (from Ch. 127, par. 142z-18)
Sec. 6z-18. A portion of the money paid into the Local
Government Tax Fund from sales of food for human consumption
which is to be consumed off the premises where it is sold
(other than alcoholic beverages, soft drinks and food which
has been prepared for immediate consumption) and prescription
and nonprescription medicines, drugs, medical appliances and
insulin, urine testing materials, syringes and needles used
by diabetics, which occurred in municipalities, shall be
distributed to each municipality based upon the sales which
occurred in that municipality. The remainder shall be
distributed to each county based upon the sales which
occurred in the unincorporated area of that county.
A portion of the money paid into the Local Government Tax
Fund from the 6.25% general use tax rate on the selling price
of tangible personal property which is purchased outside
Illinois at retail from a retailer and which is titled or
registered by any agency of this State's government shall be
distributed to municipalities as provided in this paragraph.
Each municipality shall receive the amount attributable to
sales for which Illinois addresses for titling or
registration purposes are given as being in such
municipality. The remainder of the money paid into the Local
Government Tax Fund from such sales shall be distributed to
counties. Each county shall receive the amount attributable
to sales for which Illinois addresses for titling or
registration purposes are given as being located in the
unincorporated area of such county.
A portion of the money paid into the Local Government Tax
Fund from the 6.25% general rate on sales subject to taxation
under the Retailers' Occupation Tax Act and the Service
Occupation Tax Act, which occurred in municipalities, shall
be distributed to each municipality, based upon the sales
which occurred in that municipality. The remainder shall be
distributed to each county, based upon the sales which
occurred in the unincorporated area of such county.
For the purpose of determining allocation to the local
government unit, a retail sale by a producer of coal or other
mineral mined in Illinois is a sale at retail at the place
where the coal or other mineral mined in Illinois is
extracted from the earth. This paragraph does not apply to
coal or other mineral when it is delivered or shipped by the
seller to the purchaser at a point outside Illinois so that
the sale is exempt under the United States Constitution as a
sale in interstate or foreign commerce.
Whenever the Department determines that a refund of money
paid into the Local Government Tax Fund should be made to a
claimant instead of issuing a credit memorandum, the
Department shall notify the State Comptroller, who shall
cause the order to be drawn for the amount specified, and to
the person named, in such notification from the Department.
Such refund shall be paid by the State Treasurer out of the
Local Government Tax Fund.
On or before the 25th day of each calendar month, the
Department shall prepare and certify to the Comptroller the
disbursement of stated sums of money to named municipalities
and counties, the municipalities and counties to be those
entitled to distribution of taxes or penalties paid to the
Department during the second preceding calendar month. The
amount to be paid to each municipality or county shall be the
amount (not including credit memoranda) collected during the
second preceding calendar month by the Department and paid
into the Local Government Tax Fund, plus an amount the
Department determines is necessary to offset any amounts
which were erroneously paid to a different taxing body, and
not including an amount equal to the amount of refunds made
during the second preceding calendar month by the Department,
and not including any amount which the Department determines
is necessary to offset any amounts which are payable to a
different taxing body but were erroneously paid to the
municipality or county. Within 10 days after receipt, by the
Comptroller, of the disbursement certification to the
municipalities and counties, provided for in this Section to
be given to the Comptroller by the Department, the
Comptroller shall cause the orders to be drawn for the
respective amounts in accordance with the directions
contained in such certification.
When certifying the amount of monthly disbursement to a
municipality or county under this Section, the Department
shall increase or decrease that amount by an amount necessary
to offset any misallocation of previous disbursements. The
offset amount shall be the amount erroneously disbursed
within the 6 months preceding the time a misallocation is
discovered.
The provisions directing the distributions from the
special fund in the State Treasury provided for in this
Section shall constitute an irrevocable and continuing
appropriation of all amounts as provided herein. The State
Treasurer and State Comptroller are hereby authorized to make
distributions as provided in this Section.
In construing any development, redevelopment, annexation,
preannexation or other lawful agreement in effect prior to
September 1, 1990, which describes or refers to receipts from
a county or municipal retailers' occupation tax, use tax or
service occupation tax which now cannot be imposed, such
description or reference shall be deemed to include the
replacement revenue for such abolished taxes, distributed
from the Local Government Tax Fund.
(Source: P.A. 86-928; 86-1481.)
(30 ILCS 105/6z-20) (from Ch. 127, par. 142z-20)
Sec. 6z-20. Of the money received from the 6.25% general
rate on sales subject to taxation under the Retailers'
Occupation Tax Act and Service Occupation Tax Act and paid
into the County and Mass Transit District Fund, distribution
to the Regional Transportation Authority tax fund, created
pursuant to Section 4.03 of the Regional Transportation
Authority Act, for deposit therein shall be made based upon
the retail sales occurring in a county having more than
3,000,000 inhabitants. The remainder shall be distributed to
each county having 3,000,000 or fewer inhabitants based upon
the retail sales occurring in each such county.
For the purpose of determining allocation to the local
government unit, a retail sale by a producer of coal or other
mineral mined in Illinois is a sale at retail at the place
where the coal or other mineral mined in Illinois is
extracted from the earth. This paragraph does not apply to
coal or other mineral when it is delivered or shipped by the
seller to the purchaser at a point outside Illinois so that
the sale is exempt under the United States Constitution as a
sale in interstate or foreign commerce.
Of the money received from the 6.25% general use tax rate
on tangible personal property which is purchased outside
Illinois at retail from a retailer and which is titled or
registered by any agency of this State's government and paid
into the County and Mass Transit District Fund, the amount
for which Illinois addresses for titling or registration
purposes are given as being in each county having more than
3,000,000 inhabitants shall be distributed into the Regional
Transportation Authority tax fund, created pursuant to
Section 4.03 of the Regional Transportation Authority Act.
The remainder of the money paid from such sales shall be
distributed to each county based on sales for which Illinois
addresses for titling or registration purposes are given as
being located in the county. Any money paid into the
Regional Transportation Authority Occupation and Use Tax
Replacement Fund from the County and Mass Transit District
Fund prior to January 14, 1991, which has not been paid to
the Authority prior to that date, shall be transferred to the
Regional Transportation Authority tax fund.
Whenever the Department determines that a refund of money
paid into the County and Mass Transit District Fund should be
made to a claimant instead of issuing a credit memorandum,
the Department shall notify the State Comptroller, who shall
cause the order to be drawn for the amount specified, and to
the person named, in such notification from the Department.
Such refund shall be paid by the State Treasurer out of the
County and Mass Transit District Fund.
On or before the 25th day of each calendar month, the
Department shall prepare and certify to the Comptroller the
disbursement of stated sums of money to the Regional
Transportation Authority and to named counties, the counties
to be those entitled to distribution, as hereinabove
provided, of taxes or penalties paid to the Department during
the second preceding calendar month. The amount to be paid
to the Regional Transportation Authority and each county
having 3,000,000 or fewer inhabitants shall be the amount
(not including credit memoranda) collected during the second
preceding calendar month by the Department and paid into the
County and Mass Transit District Fund, plus an amount the
Department determines is necessary to offset any amounts
which were erroneously paid to a different taxing body, and
not including an amount equal to the amount of refunds made
during the second preceding calendar month by the Department,
and not including any amount which the Department determines
is necessary to offset any amounts which were payable to a
different taxing body but were erroneously paid to the
Regional Transportation Authority or county. Within 10 days
after receipt, by the Comptroller, of the disbursement
certification to the Regional Transportation Authority and
counties, provided for in this Section to be given to the
Comptroller by the Department, the Comptroller shall cause
the orders to be drawn for the respective amounts in
accordance with the directions contained in such
certification.
When certifying the amount of a monthly disbursement to
the Regional Transportation Authority or to a county under
this Section, the Department shall increase or decrease that
amount by an amount necessary to offset any misallocation of
previous disbursements. The offset amount shall be the
amount erroneously disbursed within the 6 months preceding
the time a misallocation is discovered.
The provisions directing the distributions from the
special fund in the State Treasury provided for in this
Section and from the Regional Transportation Authority tax
fund created by Section 4.03 of the Regional Transportation
Authority Act shall constitute an irrevocable and continuing
appropriation of all amounts as provided herein. The State
Treasurer and State Comptroller are hereby authorized to make
distributions as provided in this Section.
In construing any development, redevelopment, annexation,
preannexation or other lawful agreement in effect prior to
September 1, 1990, which describes or refers to receipts from
a county or municipal retailers' occupation tax, use tax or
service occupation tax which now cannot be imposed, such
description or reference shall be deemed to include the
replacement revenue for such abolished taxes, distributed
from the County and Mass Transit District Fund or Local
Government Distributive Fund, as the case may be.
(Source: P.A. 86-928; 86-1481; 87-435.)
Section 15. The Illinois Income Tax Act is amended by
changing Sections 203, 301, 302, 506, 701, 905, 911, and 917
and adding Section 806 as follows:
(35 ILCS 5/203) (from Ch. 120, par. 2-203)
Sec. 203. Base income defined.
(a) Individuals.
(1) In general. In the case of an individual, base
income means an amount equal to the taxpayer's adjusted
gross income for the taxable year as modified by
paragraph (2).
(2) Modifications. The adjusted gross income
referred to in paragraph (1) shall be modified by adding
thereto the sum of the following amounts:
(A) An amount equal to all amounts paid or
accrued to the taxpayer as interest or dividends
during the taxable year to the extent excluded from
gross income in the computation of adjusted gross
income, except stock dividends of qualified public
utilities described in Section 305(e) of the
Internal Revenue Code;
(B) An amount equal to the amount of tax
imposed by this Act to the extent deducted from
gross income in the computation of adjusted gross
income for the taxable year;
(C) An amount equal to the amount received
during the taxable year as a recovery or refund of
real property taxes paid with respect to the
taxpayer's principal residence under the Revenue Act
of 1939 and for which a deduction was previously
taken under subparagraph (L) of this paragraph (2)
prior to July 1, 1991, the retrospective application
date of Article 4 of Public Act 87-17. In the case
of multi-unit or multi-use structures and farm
dwellings, the taxes on the taxpayer's principal
residence shall be that portion of the total taxes
for the entire property which is attributable to
such principal residence;
(D) An amount equal to the amount of the
capital gain deduction allowable under the Internal
Revenue Code, to the extent deducted from gross
income in the computation of adjusted gross income;
and
(D-5) An amount, to the extent not included in
adjusted gross income, equal to the amount of money
withdrawn by the taxpayer in the taxable year from a
medical care savings account and the interest earned
on the account in the taxable year of a withdrawal
pursuant to subsection (b) of Section 20 of the
Medical Care Savings Account Act;
and by deducting from the total so obtained the sum of
the following amounts:
(E) Any amount included in such total in
respect of any compensation (including but not
limited to any compensation paid or accrued to a
serviceman while a prisoner of war or missing in
action) paid to a resident by reason of being on
active duty in the Armed Forces of the United States
and in respect of any compensation paid or accrued
to a resident who as a governmental employee was a
prisoner of war or missing in action, and in respect
of any compensation paid to a resident in 1971 or
thereafter for annual training performed pursuant to
Sections 502 and 503, Title 32, United States Code
as a member of the Illinois National Guard;
(F) An amount equal to all amounts included in
such total pursuant to the provisions of Sections
402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
408 of the Internal Revenue Code, or included in
such total as distributions under the provisions of
any retirement or disability plan for employees of
any governmental agency or unit, or retirement
payments to retired partners, which payments are
excluded in computing net earnings from self
employment by Section 1402 of the Internal Revenue
Code and regulations adopted pursuant thereto;
(G) The valuation limitation amount;
(H) An amount equal to the amount of any tax
imposed by this Act which was refunded to the
taxpayer and included in such total for the taxable
year;
(I) An amount equal to all amounts included in
such total pursuant to the provisions of Section 111
of the Internal Revenue Code as a recovery of items
previously deducted from adjusted gross income in
the computation of taxable income;
(J) An amount equal to those dividends
included in such total which were paid by a
corporation which conducts business operations in an
Enterprise Zone or zones created under the Illinois
Enterprise Zone Act, and conducts substantially all
of its operations in an Enterprise Zone or zones;
(K) An amount equal to those dividends
included in such total that were paid by a
corporation that conducts business operations in a
federally designated Foreign Trade Zone or Sub-Zone
and that is designated a High Impact Business
located in Illinois; provided that dividends
eligible for the deduction provided in subparagraph
(J) of paragraph (2) of this subsection shall not be
eligible for the deduction provided under this
subparagraph (K);
(L) For taxable years ending after December
31, 1983, an amount equal to all social security
benefits and railroad retirement benefits included
in such total pursuant to Sections 72(r) and 86 of
the Internal Revenue Code;
(M) With the exception of any amounts
subtracted under subparagraph (N), an amount equal
to the sum of all amounts disallowed as deductions
by Sections 171(a) (2), and 265(2) of the Internal
Revenue Code of 1954, as now or hereafter amended,
and all amounts of expenses allocable to interest
and disallowed as deductions by Section 265(1) of
the Internal Revenue Code of 1954, as now or
hereafter amended;
(N) An amount equal to all amounts included in
such total which are exempt from taxation by this
State either by reason of its statutes or
Constitution or by reason of the Constitution,
treaties or statutes of the United States; provided
that, in the case of any statute of this State that
exempts income derived from bonds or other
obligations from the tax imposed under this Act, the
amount exempted shall be the interest net of bond
premium amortization;
(O) An amount equal to any contribution made
to a job training project established pursuant to
the Tax Increment Allocation Redevelopment Act;
(P) An amount equal to the amount of the
deduction used to compute the federal income tax
credit for restoration of substantial amounts held
under claim of right for the taxable year pursuant
to Section 1341 of the Internal Revenue Code of
1986;
(Q) An amount equal to any amounts included in
such total, received by the taxpayer as an
acceleration in the payment of life, endowment or
annuity benefits in advance of the time they would
otherwise be payable as an indemnity for a terminal
illness;
(R) An amount equal to the amount of any
federal or State bonus paid to veterans of the
Persian Gulf War;
(S) An amount, to the extent included in
adjusted gross income, equal to the amount of a
contribution made in the taxable year on behalf of
the taxpayer to a medical care savings account
established under the Medical Care Savings Account
Act to the extent the contribution is accepted by
the account administrator as provided in that Act;
(T) An amount, to the extent included in
adjusted gross income, equal to the amount of
interest earned in the taxable year on a medical
care savings account established under the Medical
Care Savings Account Act on behalf of the taxpayer,
other than interest added pursuant to item (D-5) of
this paragraph (2);
(U) For one taxable year beginning on or after
January 1, 1994, an amount equal to the total amount
of tax imposed and paid under subsections (a) and
(b) of Section 201 of this Act on grant amounts
received by the taxpayer under the Nursing Home
Grant Assistance Act during the taxpayer's taxable
years 1992 and 1993; and
(V) Beginning with tax years ending on or
after December 31, 1995 and ending with tax years
ending on or before December 31, 1999, an amount
equal to the amount paid by a taxpayer who is a
self-employed taxpayer, a partner of a partnership,
or a shareholder in a Subchapter S corporation for
health insurance or long-term care insurance for
that taxpayer or that taxpayer's spouse or
dependents, to the extent that the amount paid for
that health insurance or long-term care insurance
may be deducted under Section 213 of the Internal
Revenue Code of 1986, has not been deducted on the
federal income tax return of the taxpayer, and does
not exceed the taxable income attributable to that
taxpayer's income, self-employment income, or
Subchapter S corporation income; except that no
deduction shall be allowed under this item (V) if
the taxpayer is eligible to participate in any
health insurance or long-term care insurance plan of
an employer of the taxpayer or the taxpayer's
spouse. The amount of the health insurance and
long-term care insurance subtracted under this item
(V) shall be determined by multiplying total health
insurance and long-term care insurance premiums paid
by the taxpayer times a number that represents the
fractional percentage of eligible medical expenses
under Section 213 of the Internal Revenue Code of
1986 not actually deducted on the taxpayer's federal
income tax return.
(b) Corporations.
(1) In general. In the case of a corporation, base
income means an amount equal to the taxpayer's taxable
income for the taxable year as modified by paragraph (2).
(2) Modifications. The taxable income referred to
in paragraph (1) shall be modified by adding thereto the
sum of the following amounts:
(A) An amount equal to all amounts paid or
accrued to the taxpayer as interest and all
distributions received from regulated investment
companies during the taxable year to the extent
excluded from gross income in the computation of
taxable income;
(B) An amount equal to the amount of tax
imposed by this Act to the extent deducted from
gross income in the computation of taxable income
for the taxable year;
(C) In the case of a regulated investment
company or real estate investment trust, an amount
equal to the excess of (i) the net long-term capital
gain for the taxable year, over (ii) the amount of
the capital gain dividends designated as such in
accordance with Section 852(b)(3)(C) or Section
857(b)(3)(C) of the Internal Revenue Code and any
amount designated under Section 852(b)(3)(D) of the
Internal Revenue Code, attributable to the taxable
year.
This amendatory Act of 1995 is declarative of existing
law and is not a new enactment.
(D) The amount of any net operating loss
deduction taken in arriving at taxable income, other
than a net operating loss carried forward from a
taxable year ending prior to December 31, 1986; and
(E) For taxable years in which a net operating
loss carryback or carryforward from a taxable year
ending prior to December 31, 1986 is an element of
taxable income under paragraph (1) of subsection (e)
or subparagraph (E) of paragraph (2) of subsection
(e), the amount by which addition modifications
other than those provided by this subparagraph (E)
exceeded subtraction modifications in such earlier
taxable year, with the following limitations applied
in the order that they are listed:
(i) the addition modification relating to
the net operating loss carried back or forward
to the taxable year from any taxable year
ending prior to December 31, 1986 shall be
reduced by the amount of addition modification
under this subparagraph (E) which related to
that net operating loss and which was taken
into account in calculating the base income of
an earlier taxable year, and
(ii) the addition modification relating
to the net operating loss carried back or
forward to the taxable year from any taxable
year ending prior to December 31, 1986 shall
not exceed the amount of such carryback or
carryforward;
For taxable years in which there is a net
operating loss carryback or carryforward from more
than one other taxable year ending prior to December
31, 1986, the addition modification provided in this
subparagraph (E) shall be the sum of the amounts
computed independently under the preceding
provisions of this subparagraph (E) for each such
taxable year,
and by deducting from the total so obtained the sum of
the following amounts:
(F) An amount equal to the amount of any tax
imposed by this Act which was refunded to the
taxpayer and included in such total for the taxable
year;
(G) An amount equal to any amount included in
such total under Section 78 of the Internal Revenue
Code;
(H) In the case of a regulated investment
company, an amount equal to the amount of exempt
interest dividends as defined in subsection (b) (5)
of Section 852 of the Internal Revenue Code, paid to
shareholders for the taxable year;
(I) With the exception of any amounts
subtracted under subparagraph (J), an amount equal
to the sum of all amounts disallowed as deductions
by Sections 171(a) (2), and 265(a)(2) and amounts
disallowed as interest expense by Section 291(a)(3)
of the Internal Revenue Code, as now or hereafter
amended, and all amounts of expenses allocable to
interest and disallowed as deductions by Section
265(a)(1) of the Internal Revenue Code, as now or
hereafter amended;
(J) An amount equal to all amounts included in
such total which are exempt from taxation by this
State either by reason of its statutes or
Constitution or by reason of the Constitution,
treaties or statutes of the United States; provided
that, in the case of any statute of this State that
exempts income derived from bonds or other
obligations from the tax imposed under this Act, the
amount exempted shall be the interest net of bond
premium amortization;
(K) An amount equal to those dividends
included in such total which were paid by a
corporation which conducts business operations in an
Enterprise Zone or zones created under the Illinois
Enterprise Zone Act and conducts substantially all
of its operations in an Enterprise Zone or zones;
(L) An amount equal to those dividends
included in such total that were paid by a
corporation that conducts business operations in a
federally designated Foreign Trade Zone or Sub-Zone
and that is designated a High Impact Business
located in Illinois; provided that dividends
eligible for the deduction provided in subparagraph
(K) of paragraph 2 of this subsection shall not be
eligible for the deduction provided under this
subparagraph (L);
(M) For any taxpayer that is a financial
organization within the meaning of Section 304(c) of
this Act, an amount included in such total as
interest income from a loan or loans made by such
taxpayer to a borrower, to the extent that such a
loan is secured by property which is eligible for
the Enterprise Zone Investment Credit. To determine
the portion of a loan or loans that is secured by
property eligible for a Section 201(h) investment
credit to the borrower, the entire principal amount
of the loan or loans between the taxpayer and the
borrower should be divided into the basis of the
Section 201(h) investment credit property which
secures the loan or loans, using for this purpose
the original basis of such property on the date that
it was placed in service in the Enterprise Zone.
The subtraction modification available to taxpayer
in any year under this subsection shall be that
portion of the total interest paid by the borrower
with respect to such loan attributable to the
eligible property as calculated under the previous
sentence;
(M-1) For any taxpayer that is a financial
organization within the meaning of Section 304(c) of
this Act, an amount included in such total as
interest income from a loan or loans made by such
taxpayer to a borrower, to the extent that such a
loan is secured by property which is eligible for
the High Impact Business Investment Credit. To
determine the portion of a loan or loans that is
secured by property eligible for a Section 201(i)
investment credit to the borrower, the entire
principal amount of the loan or loans between the
taxpayer and the borrower should be divided into the
basis of the Section 201(i) investment credit
property which secures the loan or loans, using for
this purpose the original basis of such property on
the date that it was placed in service in a
federally designated Foreign Trade Zone or Sub-Zone
located in Illinois. No taxpayer that is eligible
for the deduction provided in subparagraph (M) of
paragraph (2) of this subsection shall be eligible
for the deduction provided under this subparagraph
(M-1). The subtraction modification available to
taxpayers in any year under this subsection shall be
that portion of the total interest paid by the
borrower with respect to such loan attributable to
the eligible property as calculated under the
previous sentence;
(N) Two times any contribution made during the
taxable year to a designated zone organization to
the extent that the contribution (i) qualifies as a
charitable contribution under subsection (c) of
Section 170 of the Internal Revenue Code and (ii)
must, by its terms, be used for a project approved
by the Department of Commerce and Community Affairs
under Section 11 of the Illinois Enterprise Zone
Act;
(O) An amount equal to: (i) 85% for taxable
years ending on or before December 31, 1992, or, a
percentage equal to the percentage allowable under
Section 243(a)(1) of the Internal Revenue Code of
1986 for taxable years ending after December 31,
1992, of the amount by which dividends included in
taxable income and received from a corporation that
is not created or organized under the laws of the
United States or any state or political subdivision
thereof, including, for taxable years ending on or
after December 31, 1988, dividends received or
deemed received or paid or deemed paid under
Sections 951 through 964 of the Internal Revenue
Code, exceed the amount of the modification provided
under subparagraph (G) of paragraph (2) of this
subsection (b) which is related to such dividends;
plus (ii) 100% of the amount by which dividends,
included in taxable income and received, including,
for taxable years ending on or after December 31,
1988, dividends received or deemed received or paid
or deemed paid under Sections 951 through 964 of the
Internal Revenue Code, from any such corporation
specified in clause (i) that would but for the
provisions of Section 1504 (b) (3) of the Internal
Revenue Code be treated as a member of the
affiliated group which includes the dividend
recipient, exceed the amount of the modification
provided under subparagraph (G) of paragraph (2) of
this subsection (b) which is related to such
dividends;
(P) An amount equal to any contribution made
to a job training project established pursuant to
the Tax Increment Allocation Redevelopment Act; and
(Q) An amount equal to the amount of the
deduction used to compute the federal income tax
credit for restoration of substantial amounts held
under claim of right for the taxable year pursuant
to Section 1341 of the Internal Revenue Code of
1986.
(3) Special rule. For purposes of paragraph (2)
(A), "gross income" in the case of a life insurance
company, for tax years ending on and after December 31,
1994, shall mean the gross investment income for the
taxable year.
(c) Trusts and estates.
(1) In general. In the case of a trust or estate,
base income means an amount equal to the taxpayer's
taxable income for the taxable year as modified by
paragraph (2).
(2) Modifications. Subject to the provisions of
paragraph (3), the taxable income referred to in
paragraph (1) shall be modified by adding thereto the sum
of the following amounts:
(A) An amount equal to all amounts paid or
accrued to the taxpayer as interest or dividends
during the taxable year to the extent excluded from
gross income in the computation of taxable income;
(B) In the case of (i) an estate, $600; (ii) a
trust which, under its governing instrument, is
required to distribute all of its income currently,
$300; and (iii) any other trust, $100, but in each
such case, only to the extent such amount was
deducted in the computation of taxable income;
(C) An amount equal to the amount of tax
imposed by this Act to the extent deducted from
gross income in the computation of taxable income
for the taxable year;
(D) The amount of any net operating loss
deduction taken in arriving at taxable income, other
than a net operating loss carried forward from a
taxable year ending prior to December 31, 1986;
(E) For taxable years in which a net operating
loss carryback or carryforward from a taxable year
ending prior to December 31, 1986 is an element of
taxable income under paragraph (1) of subsection (e)
or subparagraph (E) of paragraph (2) of subsection
(e), the amount by which addition modifications
other than those provided by this subparagraph (E)
exceeded subtraction modifications in such taxable
year, with the following limitations applied in the
order that they are listed:
(i) the addition modification relating to
the net operating loss carried back or forward
to the taxable year from any taxable year
ending prior to December 31, 1986 shall be
reduced by the amount of addition modification
under this subparagraph (E) which related to
that net operating loss and which was taken
into account in calculating the base income of
an earlier taxable year, and
(ii) the addition modification relating
to the net operating loss carried back or
forward to the taxable year from any taxable
year ending prior to December 31, 1986 shall
not exceed the amount of such carryback or
carryforward;
For taxable years in which there is a net
operating loss carryback or carryforward from more
than one other taxable year ending prior to December
31, 1986, the addition modification provided in this
subparagraph (E) shall be the sum of the amounts
computed independently under the preceding
provisions of this subparagraph (E) for each such
taxable year;
(F) For taxable years ending on or after
January 1, 1989, an amount equal to the tax deducted
pursuant to Section 164 of the Internal Revenue Code
if the trust or estate is claiming the same tax for
purposes of the Illinois foreign tax credit under
Section 601 of this Act; and
(G) An amount equal to the amount of the
capital gain deduction allowable under the Internal
Revenue Code, to the extent deducted from gross
income in the computation of taxable income;
and by deducting from the total so obtained the sum of
the following amounts:
(H) An amount equal to all amounts included in
such total pursuant to the provisions of Sections
402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and
408 of the Internal Revenue Code or included in such
total as distributions under the provisions of any
retirement or disability plan for employees of any
governmental agency or unit, or retirement payments
to retired partners, which payments are excluded in
computing net earnings from self employment by
Section 1402 of the Internal Revenue Code and
regulations adopted pursuant thereto;
(I) The valuation limitation amount;
(J) An amount equal to the amount of any tax
imposed by this Act which was refunded to the
taxpayer and included in such total for the taxable
year;
(K) An amount equal to all amounts included in
taxable income as modified by subparagraphs (A),
(B), (C), (D), (E), (F) and (G) which are exempt
from taxation by this State either by reason of its
statutes or Constitution or by reason of the
Constitution, treaties or statutes of the United
States; provided that, in the case of any statute of
this State that exempts income derived from bonds or
other obligations from the tax imposed under this
Act, the amount exempted shall be the interest net
of bond premium amortization;
(L) With the exception of any amounts
subtracted under subparagraph (K), an amount equal
to the sum of all amounts disallowed as deductions
by Sections 171(a) (2) and 265(a)(2) of the Internal
Revenue Code, as now or hereafter amended, and all
amounts of expenses allocable to interest and
disallowed as deductions by Section 265(1) of the
Internal Revenue Code of 1954, as now or hereafter
amended;
(M) An amount equal to those dividends
included in such total which were paid by a
corporation which conducts business operations in an
Enterprise Zone or zones created under the Illinois
Enterprise Zone Act and conducts substantially all
of its operations in an Enterprise Zone or Zones;
(N) An amount equal to any contribution made
to a job training project established pursuant to
the Tax Increment Allocation Redevelopment Act;
(O) An amount equal to those dividends
included in such total that were paid by a
corporation that conducts business operations in a
federally designated Foreign Trade Zone or Sub-Zone
and that is designated a High Impact Business
located in Illinois; provided that dividends
eligible for the deduction provided in subparagraph
(M) of paragraph (2) of this subsection shall not be
eligible for the deduction provided under this
subparagraph (O); and
(P) An amount equal to the amount of the
deduction used to compute the federal income tax
credit for restoration of substantial amounts held
under claim of right for the taxable year pursuant
to Section 1341 of the Internal Revenue Code of
1986.
(3) Limitation. The amount of any modification
otherwise required under this subsection shall, under
regulations prescribed by the Department, be adjusted by
any amounts included therein which were properly paid,
credited, or required to be distributed, or permanently
set aside for charitable purposes pursuant to Internal
Revenue Code Section 642(c) during the taxable year.
(d) Partnerships.
(1) In general. In the case of a partnership, base
income means an amount equal to the taxpayer's taxable
income for the taxable year as modified by paragraph (2).
(2) Modifications. The taxable income referred to
in paragraph (1) shall be modified by adding thereto the
sum of the following amounts:
(A) An amount equal to all amounts paid or
accrued to the taxpayer as interest or dividends
during the taxable year to the extent excluded from
gross income in the computation of taxable income;
(B) An amount equal to the amount of tax
imposed by this Act to the extent deducted from
gross income for the taxable year; and
(C) The amount of deductions allowed to the
partnership pursuant to Section 707 (c) of the
Internal Revenue Code in calculating its taxable
income;
(D) An amount equal to the amount of the
capital gain deduction allowable under the Internal
Revenue Code, to the extent deducted from gross
income in the computation of taxable income;
and by deducting from the total so obtained the following
amounts:
(E) The valuation limitation amount;
(F) An amount equal to the amount of any tax
imposed by this Act which was refunded to the
taxpayer and included in such total for the taxable
year;
(G) An amount equal to all amounts included in
taxable income as modified by subparagraphs (A),
(B), (C) and (D) which are exempt from taxation by
this State either by reason of its statutes or
Constitution or by reason of the Constitution,
treaties or statutes of the United States; provided
that, in the case of any statute of this State that
exempts income derived from bonds or other
obligations from the tax imposed under this Act, the
amount exempted shall be the interest net of bond
premium amortization;
(H) Any income of the partnership which
constitutes personal service income as defined in
Section 1348 (b) (1) of the Internal Revenue Code
(as in effect December 31, 1981) or a reasonable
allowance for compensation paid or accrued for
services rendered by partners to the partnership,
whichever is greater;
(I) An amount equal to all amounts of income
distributable to an entity subject to the Personal
Property Tax Replacement Income Tax imposed by
subsections (c) and (d) of Section 201 of this Act
including amounts distributable to organizations
exempt from federal income tax by reason of Section
501(a) of the Internal Revenue Code;
(J) With the exception of any amounts
subtracted under subparagraph (G), an amount equal
to the sum of all amounts disallowed as deductions
by Sections 171(a) (2), and 265(2) of the Internal
Revenue Code of 1954, as now or hereafter amended,
and all amounts of expenses allocable to interest
and disallowed as deductions by Section 265(1) of
the Internal Revenue Code, as now or hereafter
amended;
(K) An amount equal to those dividends
included in such total which were paid by a
corporation which conducts business operations in an
Enterprise Zone or zones created under the Illinois
Enterprise Zone Act, enacted by the 82nd General
Assembly, and which does not conduct such operations
other than in an Enterprise Zone or Zones;
(L) An amount equal to any contribution made
to a job training project established pursuant to
the Real Property Tax Increment Allocation
Redevelopment Act;
(M) An amount equal to those dividends
included in such total that were paid by a
corporation that conducts business operations in a
federally designated Foreign Trade Zone or Sub-Zone
and that is designated a High Impact Business
located in Illinois; provided that dividends
eligible for the deduction provided in subparagraph
(K) of paragraph (2) of this subsection shall not be
eligible for the deduction provided under this
subparagraph (M); and
(N) An amount equal to the amount of the
deduction used to compute the federal income tax
credit for restoration of substantial amounts held
under claim of right for the taxable year pursuant
to Section 1341 of the Internal Revenue Code of
1986.
(e) Gross income; adjusted gross income; taxable income.
(1) In general. Subject to the provisions of
paragraph (2) and subsection (b) (3), for purposes of
this Section and Section 803(e), a taxpayer's gross
income, adjusted gross income, or taxable income for the
taxable year shall mean the amount of gross income,
adjusted gross income or taxable income properly
reportable for federal income tax purposes for the
taxable year under the provisions of the Internal Revenue
Code. Taxable income may be less than zero. However, for
taxable years ending on or after December 31, 1986, net
operating loss carryforwards from taxable years ending
prior to December 31, 1986, may not exceed the sum of
federal taxable income for the taxable year before net
operating loss deduction, plus the excess of addition
modifications over subtraction modifications for the
taxable year. For taxable years ending prior to December
31, 1986, taxable income may never be an amount in excess
of the net operating loss for the taxable year as defined
in subsections (c) and (d) of Section 172 of the Internal
Revenue Code, provided that when taxable income of a
corporation (other than a Subchapter S corporation),
trust, or estate is less than zero and addition
modifications, other than those provided by subparagraph
(E) of paragraph (2) of subsection (b) for corporations
or subparagraph (E) of paragraph (2) of subsection (c)
for trusts and estates, exceed subtraction modifications,
an addition modification must be made under those
subparagraphs for any other taxable year to which the
taxable income less than zero (net operating loss) is
applied under Section 172 of the Internal Revenue Code or
under subparagraph (E) of paragraph (2) of this
subsection (e) applied in conjunction with Section 172 of
the Internal Revenue Code.
(2) Special rule. For purposes of paragraph (1) of
this subsection, the taxable income properly reportable
for federal income tax purposes shall mean:
(A) Certain life insurance companies. In the
case of a life insurance company subject to the tax
imposed by Section 801 of the Internal Revenue Code,
life insurance company taxable income, plus the
amount of distribution from pre-1984 policyholder
surplus accounts as calculated under Section 815a of
the Internal Revenue Code;
(B) Certain other insurance companies. In the
case of mutual insurance companies subject to the
tax imposed by Section 831 of the Internal Revenue
Code, insurance company taxable income;
(C) Regulated investment companies. In the
case of a regulated investment company subject to
the tax imposed by Section 852 of the Internal
Revenue Code, investment company taxable income;
(D) Real estate investment trusts. In the
case of a real estate investment trust subject to
the tax imposed by Section 857 of the Internal
Revenue Code, real estate investment trust taxable
income;
(E) Consolidated corporations. In the case of
a corporation which is a member of an affiliated
group of corporations filing a consolidated income
tax return for the taxable year for federal income
tax purposes, taxable income determined as if such
corporation had filed a separate return for federal
income tax purposes for the taxable year and each
preceding taxable year for which it was a member of
an affiliated group. For purposes of this
subparagraph, the taxpayer's separate taxable income
shall be determined as if the election provided by
Section 243(b) (2) of the Internal Revenue Code had
been in effect for all such years;
(F) Cooperatives. In the case of a
cooperative corporation or association, the taxable
income of such organization determined in accordance
with the provisions of Section 1381 through 1388 of
the Internal Revenue Code;
(G) Subchapter S corporations. In the case
of: (i) a Subchapter S corporation for which there
is in effect an election for the taxable year under
Section 1362 of the Internal Revenue Code, the
taxable income of such corporation determined in
accordance with Section 1363(b) of the Internal
Revenue Code, except that taxable income shall take
into account those items which are required by
Section 1363(b)(1) of the Internal Revenue Code to
be separately stated; and (ii) a Subchapter S
corporation for which there is in effect a federal
election to opt out of the provisions of the
Subchapter S Revision Act of 1982 and have applied
instead the prior federal Subchapter S rules as in
effect on July 1, 1982, the taxable income of such
corporation determined in accordance with the
federal Subchapter S rules as in effect on July 1,
1982; and
(H) Partnerships. In the case of a
partnership, taxable income determined in accordance
with Section 703 of the Internal Revenue Code,
except that taxable income shall take into account
those items which are required by Section 703(a)(1)
to be separately stated but which would be taken
into account by an individual in calculating his
taxable income.
(f) Valuation limitation amount.
(1) In general. The valuation limitation amount
referred to in subsections (a) (2) (G), (c) (2) (I) and
(d)(2) (E) is an amount equal to:
(A) The sum of the pre-August 1, 1969
appreciation amounts (to the extent consisting of
gain reportable under the provisions of Section 1245
or 1250 of the Internal Revenue Code) for all
property in respect of which such gain was reported
for the taxable year; plus
(B) The lesser of (i) the sum of the
pre-August 1, 1969 appreciation amounts (to the
extent consisting of capital gain) for all property
in respect of which such gain was reported for
federal income tax purposes for the taxable year, or
(ii) the net capital gain for the taxable year,
reduced in either case by any amount of such gain
included in the amount determined under subsection
(a) (2) (F) or (c) (2) (H).
(2) Pre-August 1, 1969 appreciation amount.
(A) If the fair market value of property
referred to in paragraph (1) was readily
ascertainable on August 1, 1969, the pre-August 1,
1969 appreciation amount for such property is the
lesser of (i) the excess of such fair market value
over the taxpayer's basis (for determining gain) for
such property on that date (determined under the
Internal Revenue Code as in effect on that date), or
(ii) the total gain realized and reportable for
federal income tax purposes in respect of the sale,
exchange or other disposition of such property.
(B) If the fair market value of property
referred to in paragraph (1) was not readily
ascertainable on August 1, 1969, the pre-August 1,
1969 appreciation amount for such property is that
amount which bears the same ratio to the total gain
reported in respect of the property for federal
income tax purposes for the taxable year, as the
number of full calendar months in that part of the
taxpayer's holding period for the property ending
July 31, 1969 bears to the number of full calendar
months in the taxpayer's entire holding period for
the property.
(C) The Department shall prescribe such
regulations as may be necessary to carry out the
purposes of this paragraph.
(g) Double deductions. Unless specifically provided
otherwise, nothing in this Section shall permit the same item
to be deducted more than once.
(h) Legislative intention. Except as expressly provided
by this Section there shall be no modifications or
limitations on the amounts of income, gain, loss or deduction
taken into account in determining gross income, adjusted
gross income or taxable income for federal income tax
purposes for the taxable year, or in the amount of such items
entering into the computation of base income and net income
under this Act for such taxable year, whether in respect of
property values as of August 1, 1969 or otherwise.
(Source: P.A. 88-195; 88-648, eff. 9-16-94; 88-669, eff.
11-29-94; 88-670, eff. 12-2-94; 89-89, eff. 6-30-95; 89-235,
eff. 8-4-95; 89-418, eff. 11-15-95; 89-460, eff. 5-24-96;
89-626, eff. 8-9-96.)
(35 ILCS 5/301) (from Ch. 120, par. 3-301)
Sec. 301. General Rule.
(a) Residents. All items of income or deduction which
were taken into account in the computation of base income for
the taxable year by a resident shall be allocated to this
State.
(b) Part-year residents. All items of income or
deduction which were taken into account in the computation of
base income for the taxable year by a part-year resident
shall, for that part of the year the part-year resident was a
resident of this State, be allocated to this State and, for
the remaining part of the year, be allocated to this State
only to the extent provided by Section 302, 303 or 304
(relating to compensation, nonbusiness income and business
income, respectively).
(c) Other persons.
(1) In general. Any item of income or deduction
which was taken into account in the computation of base
income for the taxable year by any person other than a
resident and which is referred to in Section 302, 303 or
304 (relating to compensation, nonbusiness income and
business income, respectively) shall be allocated to this
State only to the extent provided by such section.
(2) Unspecified items. Any item of income or
deduction which was taken into account in the computation
of base income for the taxable year by any person other
than a resident and which is not otherwise specifically
allocated or apportioned pursuant to Section 302, 303 or
304 (including, without limitation, interest, dividends,
items of income taken into account under the provisions
of Sections 401 through 425 of the Internal Revenue Code,
and benefit payments received by a beneficiary of a
supplemental unemployment benefit trust which is referred
to in Section 501(c)(17) of the Internal Revenue Code):
(A) in the case of an individual, trust or
estate, shall not be allocated to this State; and
(B) in the case of a corporation, trust, or a
partnership, shall be allocated to this State if the
taxpayer had its commercial domicile in this State
at the time such item was paid, incurred or accrued.
(Source: P.A. 82-609.)
(35 ILCS 5/302) (from Ch. 120, par. 3-302)
Sec. 302. Compensation paid to nonresidents.
(a) In general. All items of compensation paid in this
State (as determined under Section 304(a)(2)(B)) to an
individual who is a nonresident at the time of such payment
and all items of deduction directly allocable thereto, shall
be allocated to this State.
(b) Reciprocal exemption. The Director may enter into an
agreement with the taxing authorities of any state which
imposes a tax on or measured by income to provide that
compensation paid in such state to residents of this State
shall be exempt from such tax; in such case, any compensation
paid in this State to residents of such state shall not be
allocated to this State. All reciprocal agreements shall be
subject to the requirements of Section 39b53 of the Civil
Administrative Code of Illinois.
(c) Cross references.
(1) For allocation of amounts received by
nonresidents from certain employee trusts, see Section
301(b)(2).
(2) For allocation of compensation by residents,
see Section 301(a).
(Source: P.A. 77-1379.)
(35 ILCS 5/506) (from Ch. 120, par. 5-506)
Sec. 506. Federal Returns. (a) In general. Any person
required to make a return for a taxable year under this Act
may, at any time that a deficiency could be assessed or a
refund claimed under this Act in respect of any item reported
or properly reportable on such return or any amendment
thereof, be required to furnish to the Department a true and
correct copy of any return which may pertain to such item and
which was filed by such person under the provisions of the
Internal Revenue Code.
(b) Changes affecting federal income tax. In the event
the taxable income, any item of income or deduction, or the
income tax liability, or any tax credit reported in a federal
income tax return of any person for any year is altered by
amendment of such return or as a result of any other
recomputation or redetermination of federal taxable income or
loss, and such alteration reflects a change or settlement
with respect to any item or items, affecting the computation
of such person's net income, net loss, or of any credit
provided by Article 2 of this Act base income for any year
under this Act, or in the number of personal exemptions
allowable to such person under Section 151 of the Internal
Revenue Code, such person shall notify the Department of such
alteration. Such notification shall be in the form of an
amended return or such other form as the Department may by
regulations prescribe, shall contain the person's name and
address and such other information as the Department may by
regulations prescribe, shall be signed by such person or his
duly authorized representative, and shall be filed not later
than 120 days after such alteration has been agreed to or
finally determined for federal income tax purposes or any
federal income tax deficiency or refund, tentative carryback
adjustment, abatement or credit resulting therefrom has been
assessed or paid, whichever shall first occur.
(Source: P.A. 86-905.)
(35 ILCS 5/701) (from Ch. 120, par. 7-701)
Sec. 701. Requirement and Amount of Withholding.
(a) In General.
Every employer maintaining an office or transacting
business within this State and required under the provisions
of the Internal Revenue Code to withhold a tax on:
(1) compensation paid in this State (as determined
under Section 304 (a) (2) (B) to an individual; or
(2) payments described in subsection (b) shall
deduct and withhold from such compensation for each
payroll period (as defined in Section 3401 of the
Internal Revenue Code) an amount equal to the amount by
which such individual's compensation exceeds the
proportionate part of this withholding exemption
(computed as provided in Section 702) attributable to the
payroll period for which such compensation is payable
multiplied by a percentage equal to the percentage tax
rate for individuals provided in subsection (b) of
Section 201.
(b) Payment to Residents.
Any payment (including compensation) to a resident by a
payor maintaining an office or transacting business within
this State and on which withholding of tax is required under
the provisions of the Internal Revenue Code shall be deemed
to be compensation paid in this State by an employer to an
employee for the purposes of Article 7 and Section 601 (b)
(1) to the extent such payment is included in the recipient's
base income and not subjected to withholding by another
state.
(c) Special Definitions.
Withholding shall be considered required under the
provisions of the Internal Revenue Code to the extent the
Internal Revenue Code either requires withholding or allows
for voluntary withholding the payor and recipient have
entered into such a voluntary withholding agreement. For the
purposes of Article 7 and Section 1002 (c) the term
"employer" includes any payor who is required to withhold tax
pursuant to this Section.
(d) Reciprocal Exemption.
The Director may enter into an agreement with the taxing
authorities of any state which imposes a tax on or measured
by income to provide that compensation paid in such state to
residents of this State shall be exempt from withholding of
such tax; in such case, any compensation paid in this State
to residents of such state shall be exempt from withholding.
All reciprocal agreements shall be subject to the
requirements of Section 39b53 of the Civil Administrative
Code of Illinois.
(e) Notwithstanding subsection (a) (2) of this Section,
no withholding is required on payments for which withholding
is required under Section 3405 or 3406 of the Internal
Revenue Code of 1954.
(Source: P.A. 85-731; 86-1475.)
(35 ILCS 5/806 new)
Sec. 806. Exemption from penalty. An individual
taxpayer shall not be subject to a penalty for failing to pay
estimated tax as required by Section 803 if the taxpayer is
65 years of age or older and is a permanent resident of a
nursing home. For purposes of this Section, "nursing home"
means a skilled nursing or intermediate long term care
facility that is subject to licensure by the Illinois
Department of Public Health under the Nursing Home Care Act.
(35 ILCS 5/905) (from Ch. 120, par. 9-905)
Sec. 905. Limitations on Notices of Deficiency.
(a) In general. Except as otherwise provided in this
Act:
(1) A notice of deficiency shall be issued not
later than 3 years after the date the return was filed,
and
(2) No deficiency shall be assessed or collected
with respect to the year for which the return was filed
unless such notice is issued within such period.
(b) Omission of more than 25% of income. If the taxpayer
omits from base income an amount properly includible therein
which is in excess of 25% of the amount of base income stated
in the return, a notice of deficiency may be issued not later
than 6 years after the return was filed. For purposes of this
paragraph, there shall not be taken into account any amount
which is omitted in the return if such amount is disclosed in
the return, or in a statement attached to the return, in a
manner adequate to apprise the Department of the nature and
the amount of such item.
(c) No return or fraudulent return. If no return is
filed or a false and fraudulent return is filed with intent
to evade the tax imposed by this Act, a notice of deficiency
may be issued at any time.
(d) Failure to report federal change. If a taxpayer
fails to notify the Department in any case where notification
is required by Section 304(c) or 506(b), or fails to report a
change or correction which is treated in the same manner as
if it were a deficiency for federal income tax purposes, a
notice of deficiency may be issued at any time.
(e) Report of federal change. In any case where
notification of an alteration is given as required by Section
506(b), a notice of deficiency may be issued at any time
within 2 years after the date such notification is given,
provided, however, that the amount of any proposed assessment
set forth in such notice shall be limited to the amount of
any deficiency resulting under this Act from recomputation of
the taxpayer's net income, net loss, or Article 2 credits
base income for the taxable year after giving effect to the
item or items reflected in the reported alteration.
(f) Extension by agreement. Where, before the expiration
of the time prescribed in this section for the issuance of a
notice of deficiency, both the Department and the taxpayer
shall have consented in writing to its issuance after such
time, such notice may be issued at any time prior to the
expiration of the period agreed upon. The period so agreed
upon may be extended by subsequent agreements in writing made
before the expiration of the period previously agreed upon.
(g) Erroneous refunds. In any case in which there has
been an erroneous refund of tax payable under this Act, a
notice of deficiency may be issued at any time within 2 years
from the making of such refund, or within 5 years from the
making of such refund if it appears that any part of the
refund was induced by fraud or the misrepresentation of a
material fact, provided, however, that the amount of any
proposed assessment set forth in such notice shall be limited
to the amount of such erroneous refund.
Beginning July 1, 1993, in any case in which there has
been a refund of tax payable under this Act attributable to a
net loss carryback as provided for in Section 207, and that
refund is subsequently determined to be an erroneous refund
due to a reduction in the amount of the net loss which was
originally carried back, a notice of deficiency for the
erroneous refund amount may be issued at any time during the
same time period in which a notice of deficiency can be
issued on the loss year creating the carryback amount and
subsequent erroneous refund. The amount of any proposed
assessment set forth in the notice shall be limited to the
amount of such erroneous refund.
(h) Time return deemed filed. For purposes of this
Section a tax return filed before the last day prescribed by
law (including any extension thereof) shall be deemed to have
been filed on such last day.
(i) Request for prompt determination of liability. For
purposes of Subsection (a)(1), in the case of a tax return
required under this Act in respect of a decedent, or by his
estate during the period of administration, or by a
corporation, the period referred to in such Subsection shall
be 18 months after a written request for prompt determination
of liability is filed with the Department (at such time and
in such form and manner as the Department shall by
regulations prescribe) by the executor, administrator, or
other fiduciary representing the estate of such decedent, or
by such corporation, but not more than 3 years after the date
the return was filed. This Subsection shall not apply in the
case of a corporation unless:
(1) (A) Such written request notifies the
Department that the corporation contemplates dissolution
at or before the expiration of such 18-month period, (B)
the dissolution is begun in good faith before the
expiration of such 18-month period, and (C) the
dissolution is completed;
(2) (A) Such written request notifies the
Department that a dissolution has in good faith been
begun, and (B) the dissolution is completed; or
(3) A dissolution has been completed at the time
such written request is made.
(j) Withholding tax. In the case of returns required
under Article 7 of this Act (with respect to any amounts
withheld as tax or any amounts required to have been withheld
as tax) a notice of deficiency shall be issued not later than
3 years after the 15th day of the 4th month following the
close of the calendar year in which such withholding was
required.
(k) Penalties for failure to make information reports.
A notice of deficiency for the penalties provided by
Subsection 1405.1(c) of this Act may not be issued more than
3 years after the due date of the reports with respect to
which the penalties are asserted.
(l) Penalty for failure to file withholding returns. A
notice of deficiency for penalties provided by Section 1004
of this Act for taxpayer's failure to file withholding
returns may not be issued more than three years after the
15th day of the 4th month following the close of the calendar
year in which the withholding giving rise to taxpayer's
obligation to file those returns occurred.
(m) Transferee liability. A notice of deficiency may be
issued to a transferee relative to a liability asserted under
Section 1405 during time periods defined as follows:
1) Initial Transferee. In the case of the
liability of an initial transferee, up to 2 years after
the expiration of the period of limitation for assessment
against the transferor, except that if a court proceeding
for review of the assessment against the transferor has
begun, then up to 2 years after the return of the
certified copy of the judgment in the court proceeding.
2) Transferee of Transferee. In the case of the
liability of a transferee, up to 2 years after the
expiration of the period of limitation for assessment
against the preceding transferee, but not more than 3
years after the expiration of the period of limitation
for assessment against the initial transferor; except
that if, before the expiration of the period of
limitation for the assessment of the liability of the
transferee, a court proceeding for the collection of the
tax or liability in respect thereof has been begun
against the initial transferor or the last preceding
transferee, as the case may be, then the period of
limitation for assessment of the liability of the
transferee shall expire 2 years after the return of the
certified copy of the judgment in the court proceeding.
(Source: P.A. 88-195.)
(35 ILCS 5/911) (from Ch. 120, par. 9-911)
Sec. 911. Limitations on Claims for Refund. (a) In
general. Except as otherwise provided in this Act:
(1) A claim for refund shall be filed not later than 3
years after the date the return was filed (in the case of
returns required under Article 7 of this Act respecting any
amounts withheld as tax, not later than 3 years after the
15th day of the 4th month following the close of the calendar
year in which such withholding was made), or one year after
the date the tax was paid, whichever is the later; and
(2) No credit or refund shall be allowed or made with
respect to the year for which the claim was filed unless such
claim is filed within such period.
(b) Federal changes. (1) In general. In any case where
notification of an alteration is required by Section 506 (b),
a claim for refund may be filed within 2 years after the date
on which such notification was due (regardless of whether
such notice was given), but the amount recoverable pursuant
to a claim filed under this Section shall be limited to the
amount of any overpayment resulting under this Act from
recomputation of the taxpayer's net income, net loss, or
Article 2 credits base income for the taxable year after
giving effect to the item or items reflected in the
alteration required to be reported.
(2) Tentative carryback adjustments paid before January
1, 1974. If, as the result of the payment before January 1,
1974 of a federal tentative carryback adjustment, a
notification of an alteration is required under Section 506
(b), a claim for refund may be filed at any time before
January 1, 1976, but the amount recoverable pursuant to a
claim filed under this Section shall be limited to the amount
of any overpayment resulting under this Act from
recomputation of the taxpayer's base income for the taxable
year after giving effect to the federal alteration resulting
from the tentative carryback adjustment irrespective of any
limitation imposed in paragraph (l) of this subsection.
(c) Extension by agreement. Where, before the
expiration of the time prescribed in this section for the
filing of a claim for refund, both the Department and the
claimant shall have consented in writing to its filing after
such time, such claim may be filed at any time prior to the
expiration of the period agreed upon. The period so agreed
upon may be extended by subsequent agreements in writing made
before the expiration of the period previously agreed upon.
(d) Limit on amount of credit or refund.
(1) Limit where claim filed within 3-year period. If
the claim was filed by the claimant during the 3-year period
prescribed in subsection (a), the amount of the credit or
refund shall not exceed the portion of the tax paid within
the period, immediately preceding the filing of the claim,
equal to 3 years plus the period of any extension of time for
filing the return.
(2) Limit where claim not filed within 3-year period.
If the claim was not filed within such 3-year period, the
amount of the credit or refund shall not exceed the portion
of the tax paid during the one year immediately preceding the
filing of the claim.
(e) Time return deemed filed. For purposes of this
section a tax return filed before the last day prescribed by
law for the filing of such return (including any extensions
thereof) shall be deemed to have been filed on such last day.
(f) No claim for refund based on the taxpayer's taking a
credit for estimated tax payments as provided by Section 601
(b) (2) or for any amount paid by a taxpayer pursuant to
Section 602(a) or for any amount of credit for tax withheld
pursuant to Section 701 may be filed more than 3 years after
the due date, as provided by Section 505, of the return which
was required to be filed relative to the taxable year for
which the payments were made or for which the tax was
withheld. The changes in this subsection (f) made by this
amendatory Act of 1987 shall apply to all taxable years
ending on or after December 31, 1969.
(g) Special Period of Limitation with Respect to Net
Loss Carrybacks. If the claim for refund relates to an
overpayment attributable to a net loss carryback as provided
by Section 207, in lieu of the 3 year period of limitation
prescribed in subsection (a), the period shall be that period
which ends 3 years after the time prescribed by law for
filing the return (including extensions thereof) for the
taxable year of the net loss which results in such carryback,
or the period prescribed in subsection (c) in respect of such
taxable year, whichever expires later. In the case of such a
claim, the amount of the refund may exceed the portion of the
tax paid within the period provided in subsection (d) to the
extent of the amount of the overpayment attributable to such
carryback.
(Source: P.A. 86-905.)
(35 ILCS 5/917) (from Ch. 120, par. 9-917)
(Text of Section before amendment by P.A. 89-507)
Sec. 917. Confidentiality and information sharing.
(a) Confidentiality. Except as provided in this Section,
all information received by the Department from returns filed
under this Act, or from any investigation conducted under the
provisions of this Act, shall be confidential, except for
official purposes within the Department or pursuant to
official procedures for collection of any State tax or
pursuant to an investigation or audit by the Illinois State
Scholarship Commission of a delinquent student loan or
monetary award or enforcement of any civil or criminal
penalty or sanction imposed by this Act or by another statute
imposing a State tax, and any person who divulges any such
information in any manner, except for such purposes and
pursuant to order of the Director or in accordance with a
proper judicial order, shall be guilty of a Class A
misdemeanor. However, the provisions of this paragraph are
not applicable to information furnished to a licensed
attorney representing the taxpayer where an appeal or a
protest has been filed on behalf of the taxpayer.
(b) Public information. Nothing contained in this Act
shall prevent the Director from publishing or making
available to the public the names and addresses of persons
filing returns under this Act, or from publishing or making
available reasonable statistics concerning the operation of
the tax wherein the contents of returns are grouped into
aggregates in such a way that the information contained in
any individual return shall not be disclosed.
(c) Governmental agencies. The Director may make
available to the Secretary of the Treasury of the United
States or his delegate, or the proper officer or his delegate
of any other state imposing a tax upon or measured by income,
for exclusively official purposes, information received by
the Department in the administration of this Act, but such
permission shall be granted only if the United States or such
other state, as the case may be, grants the Department
substantially similar privileges. The Director may exchange
information with the Illinois Department of Public Aid for
the purpose of verifying sources and amounts of income and
for other purposes directly connected with the administration
of this Act and The Illinois Public Aid Code. The Director
may exchange information with the Director of the Department
of Employment Security for the purpose of verifying sources
and amounts of income and for other purposes directly
connected with the administration of this Act and Acts
administered by the Department of Employment Security. The
Director may make available to the Illinois Industrial
Commission information regarding employers for the purpose of
verifying the insurance coverage required under the Workers'
Compensation Act and Workers' Occupational Diseases Act.
The Director may make available to any State agency,
including the Illinois Supreme Court, which licenses persons
to engage in any occupation, information that a person
licensed by such agency has failed to file returns under this
Act or pay the tax, penalty and interest shown therein, or
has failed to pay any final assessment of tax, penalty or
interest due under this Act. The Director may also make
available to the Secretary of State information that a
corporation which has been issued a certificate of
incorporation by the Secretary of State has failed to file
returns under this Act or pay the tax, penalty and interest
shown therein, or has failed to pay any final assessment of
tax, penalty or interest due under this Act. An assessment is
final when all proceedings in court for review of such
assessment have terminated or the time for the taking thereof
has expired without such proceedings being instituted. For
taxable years ending on or after December 31, 1987, the
Director may make available to the Director or principal
officer of any Department of the State of Illinois,
information that a person employed by such Department has
failed to file returns under this Act or pay the tax, penalty
and interest shown therein. For purposes of this paragraph,
the word "Department" shall have the same meaning as provided
in Section 3 of the State Employees Group Insurance Act of
1971.
(d) The Director shall make available for public
inspection in the Department's principal office and for
publication, at cost, administrative decisions issued on or
after January 1, 1995. These decisions are to be made
available in a manner so that the following taxpayer
information is not disclosed:
(1) The names, addresses, and identification
numbers of the taxpayer, related entities, and employees.
(2) At the sole discretion of the Director, trade
secrets or other confidential information identified as
such by the taxpayer, no later than 30 days after receipt
of an administrative decision, by such means as the
Department shall provide by rule.
The Director shall determine the appropriate extent of
the deletions allowed in paragraph (2). In the event the
taxpayer does not submit deletions, the Director shall make
only the deletions specified in paragraph (1).
The Director shall make available for public inspection
and publication an administrative decision within 180 days
after the issuance of the administrative decision. The term
"administrative decision" has the same meaning as defined in
Section 3-101 of Article III of the Code of Civil Procedure.
Costs collected under this Section shall be paid into the Tax
Compliance and Administration Fund.
(e) Nothing contained in this Act shall prevent the
Director from divulging information to any person pursuant to
a request or authorization made by the taxpayer, by an
authorized representative of the taxpayer, or, in the case of
information related to a joint return, by the spouse filing
the joint return with the taxpayer.
(Source: P.A. 88-669, eff. 11-29-94.)
(Text of Section after amendment by P.A. 89-507)
Sec. 917. Confidentiality and information sharing.
(a) Confidentiality. Except as provided in this Section,
all information received by the Department from returns filed
under this Act, or from any investigation conducted under the
provisions of this Act, shall be confidential, except for
official purposes within the Department or pursuant to
official procedures for collection of any State tax or
pursuant to an investigation or audit by the Illinois State
Scholarship Commission of a delinquent student loan or
monetary award or enforcement of any civil or criminal
penalty or sanction imposed by this Act or by another statute
imposing a State tax, and any person who divulges any such
information in any manner, except for such purposes and
pursuant to order of the Director or in accordance with a
proper judicial order, shall be guilty of a Class A
misdemeanor. However, the provisions of this paragraph are
not applicable to information furnished to a licensed
attorney representing the taxpayer where an appeal or a
protest has been filed on behalf of the taxpayer.
(b) Public information. Nothing contained in this Act
shall prevent the Director from publishing or making
available to the public the names and addresses of persons
filing returns under this Act, or from publishing or making
available reasonable statistics concerning the operation of
the tax wherein the contents of returns are grouped into
aggregates in such a way that the information contained in
any individual return shall not be disclosed.
(c) Governmental agencies. The Director may make
available to the Secretary of the Treasury of the United
States or his delegate, or the proper officer or his delegate
of any other state imposing a tax upon or measured by income,
for exclusively official purposes, information received by
the Department in the administration of this Act, but such
permission shall be granted only if the United States or such
other state, as the case may be, grants the Department
substantially similar privileges. The Director may exchange
information with the Illinois Department of Public Aid and
the Department of Human Services (acting as successor to the
Department of Public Aid under the Department of Human
Services Act) for the purpose of verifying sources and
amounts of income and for other purposes directly connected
with the administration of this Act and the Illinois Public
Aid Code. The Director may exchange information with the
Director of the Department of Employment Security for the
purpose of verifying sources and amounts of income and for
other purposes directly connected with the administration of
this Act and Acts administered by the Department of
Employment Security. The Director may make available to the
Illinois Industrial Commission information regarding
employers for the purpose of verifying the insurance coverage
required under the Workers' Compensation Act and Workers'
Occupational Diseases Act.
The Director may make available to any State agency,
including the Illinois Supreme Court, which licenses persons
to engage in any occupation, information that a person
licensed by such agency has failed to file returns under this
Act or pay the tax, penalty and interest shown therein, or
has failed to pay any final assessment of tax, penalty or
interest due under this Act. The Director may also make
available to the Secretary of State information that a
corporation which has been issued a certificate of
incorporation by the Secretary of State has failed to file
returns under this Act or pay the tax, penalty and interest
shown therein, or has failed to pay any final assessment of
tax, penalty or interest due under this Act. An assessment is
final when all proceedings in court for review of such
assessment have terminated or the time for the taking thereof
has expired without such proceedings being instituted. For
taxable years ending on or after December 31, 1987, the
Director may make available to the Director or principal
officer of any Department of the State of Illinois,
information that a person employed by such Department has
failed to file returns under this Act or pay the tax, penalty
and interest shown therein. For purposes of this paragraph,
the word "Department" shall have the same meaning as provided
in Section 3 of the State Employees Group Insurance Act of
1971.
(d) The Director shall make available for public
inspection in the Department's principal office and for
publication, at cost, administrative decisions issued on or
after January 1, 1995. These decisions are to be made
available in a manner so that the following taxpayer
information is not disclosed:
(1) The names, addresses, and identification
numbers of the taxpayer, related entities, and employees.
(2) At the sole discretion of the Director, trade
secrets or other confidential information identified as
such by the taxpayer, no later than 30 days after receipt
of an administrative decision, by such means as the
Department shall provide by rule.
The Director shall determine the appropriate extent of
the deletions allowed in paragraph (2). In the event the
taxpayer does not submit deletions, the Director shall make
only the deletions specified in paragraph (1).
The Director shall make available for public inspection
and publication an administrative decision within 180 days
after the issuance of the administrative decision. The term
"administrative decision" has the same meaning as defined in
Section 3-101 of Article III of the Code of Civil Procedure.
Costs collected under this Section shall be paid into the Tax
Compliance and Administration Fund.
(e) Nothing contained in this Act shall prevent the
Director from divulging information to any person pursuant to
a request or authorization made by the taxpayer, by an
authorized representative of the taxpayer, or, in the case of
information related to a joint return, by the spouse filing
the joint return with the taxpayer.
(Source: P.A. 88-669, eff. 11-29-94; 89-507, eff. 7-1-97.)
Section 20. The Use Tax Act is amended by changing
Sections 9 and 20 as follows:
(35 ILCS 105/9) (from Ch. 120, par. 439.9)
Sec. 9. Except as to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered
with an agency of this State, each retailer required or
authorized to collect the tax imposed by this Act shall pay
to the Department the amount of such tax (except as otherwise
provided) at the time when he is required to file his return
for the period during which such tax was collected, less a
discount of 2.1% prior to January 1, 1990, and 1.75% on and
after January 1, 1990, or $5 per calendar year, whichever is
greater, which is allowed to reimburse the retailer for
expenses incurred in collecting the tax, keeping records,
preparing and filing returns, remitting the tax and supplying
data to the Department on request. In the case of retailers
who report and pay the tax on a transaction by transaction
basis, as provided in this Section, such discount shall be
taken with each such tax remittance instead of when such
retailer files his periodic return. A retailer need not
remit that part of any tax collected by him to the extent
that he is required to remit and does remit the tax imposed
by the Retailers' Occupation Tax Act, with respect to the
sale of the same property.
Where such tangible personal property is sold under a
conditional sales contract, or under any other form of sale
wherein the payment of the principal sum, or a part thereof,
is extended beyond the close of the period for which the
return is filed, the retailer, in collecting the tax (except
as to motor vehicles, watercraft, aircraft, and trailers that
are required to be registered with an agency of this State),
may collect for each tax return period, only the tax
applicable to that part of the selling price actually
received during such tax return period.
Except as provided in this Section, on or before the
twentieth day of each calendar month, such retailer shall
file a return for the preceding calendar month. Such return
shall be filed on forms prescribed by the Department and
shall furnish such information as the Department may
reasonably require.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter.
The taxpayer shall also file a return with the Department for
each of the first two months of each calendar quarter, on or
before the twentieth day of the following calendar month,
stating:
1. The name of the seller;
2. The address of the principal place of business
from which he engages in the business of selling tangible
personal property at retail in this State;
3. The total amount of taxable receipts received by
him during the preceding calendar month from sales of
tangible personal property by him during such preceding
calendar month, including receipts from charge and time
sales, but less all deductions allowed by law;
4. The amount of credit provided in Section 2d of
this Act;
5. The amount of tax due;
5-5. The signature of the taxpayer; and
6. Such other reasonable information as the
Department may require.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to
be due on the return shall be deemed assessed.
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who has
an average monthly tax liability of $100,000 or more shall
make all payments required by rules of the Department by
electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. The term "average
monthly tax liability" means the sum of the taxpayer's
liabilities under this Act, and under all other State and
local occupation and use tax laws administered by the
Department, for the immediately preceding calendar year
divided by 12.
Before August 1 of each year beginning in 1993, the
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers required
to make payments by electronic funds transfer shall make
those payments for a minimum of one year beginning on October
1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic
funds transfer and any taxpayers authorized to voluntarily
make payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
If the taxpayer's average monthly tax liability to the
Department under this Act, the Retailers' Occupation Tax Act,
the Service Occupation Tax Act, the Service Use Tax Act was
$10,000 or more during the preceding 4 complete calendar
quarters, he shall file a return with the Department each
month by the 20th day of the month next following the month
during which such tax liability is incurred and shall make
payments to the Department on or before the 7th, 15th, 22nd
and last day of the month during which such liability is
incurred. If the month during which such tax liability is
incurred began prior to January 1, 1985, each payment shall
be in an amount equal to 1/4 of the taxpayer's actual
liability for the month or an amount set by the Department
not to exceed 1/4 of the average monthly liability of the
taxpayer to the Department for the preceding 4 complete
calendar quarters (excluding the month of highest liability
and the month of lowest liability in such 4 quarter period).
If the month during which such tax liability is incurred
begins on or after January 1, 1985, and prior to January 1,
1987, each payment shall be in an amount equal to 22.5% of
the taxpayer's actual liability for the month or 27.5% of the
taxpayer's liability for the same calendar month of the
preceding year. If the month during which such tax liability
is incurred begins on or after January 1, 1987, and prior to
January 1, 1988, each payment shall be in an amount equal to
22.5% of the taxpayer's actual liability for the month or
26.25% of the taxpayer's liability for the same calendar
month of the preceding year. If the month during which such
tax liability is incurred begins on or after January 1, 1988,
and prior to January 1, 1989, or begins on or after January
1, 1996, each payment shall be in an amount equal to 22.5% of
the taxpayer's actual liability for the month or 25% of the
taxpayer's liability for the same calendar month of the
preceding year. If the month during which such tax liability
is incurred begins on or after January 1, 1989, and prior to
January 1, 1996, each payment shall be in an amount equal to
22.5% of the taxpayer's actual liability for the month or 25%
of the taxpayer's liability for the same calendar month of
the preceding year or 100% of the taxpayer's actual liability
for the quarter monthly reporting period. The amount of such
quarter monthly payments shall be credited against the final
tax liability of the taxpayer's return for that month. Once
applicable, the requirement of the making of quarter monthly
payments to the Department shall continue until such
taxpayer's average monthly liability to the Department during
the preceding 4 complete calendar quarters (excluding the
month of highest liability and the month of lowest liability)
is less than $9,000, or until such taxpayer's average monthly
liability to the Department as computed for each calendar
quarter of the 4 preceding complete calendar quarter period
is less than $10,000. However, if a taxpayer can show the
Department that a substantial change in the taxpayer's
business has occurred which causes the taxpayer to anticipate
that his average monthly tax liability for the reasonably
foreseeable future will fall below $10,000, then such
taxpayer may petition the Department for change in such
taxpayer's reporting status. The Department shall change
such taxpayer's reporting status unless it finds that such
change is seasonal in nature and not likely to be long term.
If any such quarter monthly payment is not paid at the time
or in the amount required by this Section, then the taxpayer
shall be liable for penalties and interest on taxpayer's 2.1%
or 1.75% vendors' discount shall be reduced by 2.1% or 1.75%,
as the case may be, of the difference between the minimum
amount due and the amount of such quarter monthly payment
actually and timely paid and the taxpayer shall be liable for
penalties and interest on such difference, except insofar as
the taxpayer has previously made payments for that month to
the Department in excess of the minimum payments previously
due as provided in this Section. The Department shall make
reasonable rules and regulations to govern the quarter
monthly payment amount and quarter monthly payment dates for
taxpayers who file on other than a calendar monthly basis.
If any such payment provided for in this Section exceeds
the taxpayer's liabilities under this Act, the Retailers'
Occupation Tax Act, the Service Occupation Tax Act and the
Service Use Tax Act, as shown by an original monthly return,
the Department shall issue to the taxpayer a credit
memorandum no later than 30 days after the date of payment,
which memorandum may be submitted by the taxpayer to the
Department in payment of tax liability subsequently to be
remitted by the taxpayer to the Department or be assigned by
the taxpayer to a similar taxpayer under this Act, the
Retailers' Occupation Tax Act, the Service Occupation Tax Act
or the Service Use Tax Act, in accordance with reasonable
rules and regulations to be prescribed by the Department,
except that if such excess payment is shown on an original
monthly return and is made after December 31, 1986, no credit
memorandum shall be issued, unless requested by the taxpayer.
If no such request is made, the taxpayer may credit such
excess payment against tax liability subsequently to be
remitted by the taxpayer to the Department under this Act,
the Retailers' Occupation Tax Act, the Service Occupation Tax
Act or the Service Use Tax Act, in accordance with reasonable
rules and regulations prescribed by the Department. If the
Department subsequently determines that all or any part of
the credit taken was not actually due to the taxpayer, the
taxpayer's 2.1% or 1.75% vendor's discount shall be reduced
by 2.1% or 1.75% of the difference between the credit taken
and that actually due, and the taxpayer shall be liable for
penalties and interest on such difference.
If the retailer is otherwise required to file a monthly
return and if the retailer's average monthly tax liability to
the Department does not exceed $200, the Department may
authorize his returns to be filed on a quarter annual basis,
with the return for January, February, and March of a given
year being due by April 20 of such year; with the return for
April, May and June of a given year being due by July 20 of
such year; with the return for July, August and September of
a given year being due by October 20 of such year, and with
the return for October, November and December of a given year
being due by January 20 of the following year.
If the retailer is otherwise required to file a monthly
or quarterly return and if the retailer's average monthly tax
liability to the Department does not exceed $50, the
Department may authorize his returns to be filed on an annual
basis, with the return for a given year being due by January
20 of the following year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as
monthly returns.
Notwithstanding any other provision in this Act
concerning the time within which a retailer may file his
return, in the case of any retailer who ceases to engage in a
kind of business which makes him responsible for filing
returns under this Act, such retailer shall file a final
return under this Act with the Department not more than one
month after discontinuing such business.
In addition, with respect to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered
with an agency of this State, every retailer selling this
kind of tangible personal property shall file, with the
Department, upon a form to be prescribed and supplied by the
Department, a separate return for each such item of tangible
personal property which the retailer sells, except that
where, in the same transaction, a retailer of aircraft,
watercraft, motor vehicles or trailers transfers more than
one aircraft, watercraft, motor vehicle or trailer to another
aircraft, watercraft, motor vehicle or trailer retailer for
the purpose of resale, that seller for resale may report the
transfer of all the aircraft, watercraft, motor vehicles or
trailers involved in that transaction to the Department on
the same uniform invoice-transaction reporting return form.
For purposes of this Section, "watercraft" means a Class 2,
Class 3, or Class 4 watercraft as defined in Section 3-2 of
the Boat Registration and Safety Act, a personal watercraft,
or any boat equipped with an inboard motor.
The transaction reporting return in the case of motor
vehicles or trailers that are required to be registered with
an agency of this State, shall be the same document as the
Uniform Invoice referred to in Section 5-402 of the Illinois
Vehicle Code and must show the name and address of the
seller; the name and address of the purchaser; the amount of
the selling price including the amount allowed by the
retailer for traded-in property, if any; the amount allowed
by the retailer for the traded-in tangible personal property,
if any, to the extent to which Section 2 of this Act allows
an exemption for the value of traded-in property; the balance
payable after deducting such trade-in allowance from the
total selling price; the amount of tax due from the retailer
with respect to such transaction; the amount of tax collected
from the purchaser by the retailer on such transaction (or
satisfactory evidence that such tax is not due in that
particular instance, if that is claimed to be the fact); the
place and date of the sale; a sufficient identification of
the property sold; such other information as is required in
Section 5-402 of the Illinois Vehicle Code, and such other
information as the Department may reasonably require.
The transaction reporting return in the case of
watercraft and aircraft must show the name and address of the
seller; the name and address of the purchaser; the amount of
the selling price including the amount allowed by the
retailer for traded-in property, if any; the amount allowed
by the retailer for the traded-in tangible personal property,
if any, to the extent to which Section 2 of this Act allows
an exemption for the value of traded-in property; the balance
payable after deducting such trade-in allowance from the
total selling price; the amount of tax due from the retailer
with respect to such transaction; the amount of tax collected
from the purchaser by the retailer on such transaction (or
satisfactory evidence that such tax is not due in that
particular instance, if that is claimed to be the fact); the
place and date of the sale, a sufficient identification of
the property sold, and such other information as the
Department may reasonably require.
Such transaction reporting return shall be filed not
later than 20 days after the date of delivery of the item
that is being sold, but may be filed by the retailer at any
time sooner than that if he chooses to do so. The
transaction reporting return and tax remittance or proof of
exemption from the tax that is imposed by this Act may be
transmitted to the Department by way of the State agency with
which, or State officer with whom, the tangible personal
property must be titled or registered (if titling or
registration is required) if the Department and such agency
or State officer determine that this procedure will expedite
the processing of applications for title or registration.
With each such transaction reporting return, the retailer
shall remit the proper amount of tax due (or shall submit
satisfactory evidence that the sale is not taxable if that is
the case), to the Department or its agents, whereupon the
Department shall issue, in the purchaser's name, a tax
receipt (or a certificate of exemption if the Department is
satisfied that the particular sale is tax exempt) which such
purchaser may submit to the agency with which, or State
officer with whom, he must title or register the tangible
personal property that is involved (if titling or
registration is required) in support of such purchaser's
application for an Illinois certificate or other evidence of
title or registration to such tangible personal property.
No retailer's failure or refusal to remit tax under this
Act precludes a user, who has paid the proper tax to the
retailer, from obtaining his certificate of title or other
evidence of title or registration (if titling or registration
is required) upon satisfying the Department that such user
has paid the proper tax (if tax is due) to the retailer. The
Department shall adopt appropriate rules to carry out the
mandate of this paragraph.
If the user who would otherwise pay tax to the retailer
wants the transaction reporting return filed and the payment
of tax or proof of exemption made to the Department before
the retailer is willing to take these actions and such user
has not paid the tax to the retailer, such user may certify
to the fact of such delay by the retailer, and may (upon the
Department being satisfied of the truth of such
certification) transmit the information required by the
transaction reporting return and the remittance for tax or
proof of exemption directly to the Department and obtain his
tax receipt or exemption determination, in which event the
transaction reporting return and tax remittance (if a tax
payment was required) shall be credited by the Department to
the proper retailer's account with the Department, but
without the 2.1% or 1.75% discount provided for in this
Section being allowed. When the user pays the tax directly
to the Department, he shall pay the tax in the same amount
and in the same form in which it would be remitted if the tax
had been remitted to the Department by the retailer.
Where a retailer collects the tax with respect to the
selling price of tangible personal property which he sells
and the purchaser thereafter returns such tangible personal
property and the retailer refunds the selling price thereof
to the purchaser, such retailer shall also refund, to the
purchaser, the tax so collected from the purchaser. When
filing his return for the period in which he refunds such tax
to the purchaser, the retailer may deduct the amount of the
tax so refunded by him to the purchaser from any other use
tax which such retailer may be required to pay or remit to
the Department, as shown by such return, if the amount of the
tax to be deducted was previously remitted to the Department
by such retailer. If the retailer has not previously
remitted the amount of such tax to the Department, he is
entitled to no deduction under this Act upon refunding such
tax to the purchaser.
Any retailer filing a return under this Section shall
also include (for the purpose of paying tax thereon) the
total tax covered by such return upon the selling price of
tangible personal property purchased by him at retail from a
retailer, but as to which the tax imposed by this Act was not
collected from the retailer filing such return, and such
retailer shall remit the amount of such tax to the Department
when filing such return.
If experience indicates such action to be practicable,
the Department may prescribe and furnish a combination or
joint return which will enable retailers, who are required to
file returns hereunder and also under the Retailers'
Occupation Tax Act, to furnish all the return information
required by both Acts on the one form.
Where the retailer has more than one business registered
with the Department under separate registration under this
Act, such retailer may not file each return that is due as a
single return covering all such registered businesses, but
shall file separate returns for each such registered
business.
Beginning January 1, 1990, each month the Department
shall pay into the State and Local Sales Tax Reform Fund, a
special fund in the State Treasury which is hereby created,
the net revenue realized for the preceding month from the 1%
tax on sales of food for human consumption which is to be
consumed off the premises where it is sold (other than
alcoholic beverages, soft drinks and food which has been
prepared for immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances and
insulin, urine testing materials, syringes and needles used
by diabetics.
Beginning January 1, 1990, each month the Department
shall pay into the County and Mass Transit District Fund 4%
of the net revenue realized for the preceding month from the
6.25% general rate on the selling price of tangible personal
property which is purchased outside Illinois at retail from a
retailer and which is titled or registered by an agency of
this State's government.
Beginning January 1, 1990, each month the Department
shall pay into the State and Local Sales Tax Reform Fund, a
special fund in the State Treasury, 20% of the net revenue
realized for the preceding month from the 6.25% general rate
on the selling price of tangible personal property, other
than tangible personal property which is purchased outside
Illinois at retail from a retailer and which is titled or
registered by an agency of this State's government.
Beginning January 1, 1990, each month the Department
shall pay into the Local Government Tax Fund 16% of the net
revenue realized for the preceding month from the 6.25%
general rate on the selling price of tangible personal
property which is purchased outside Illinois at retail from a
retailer and which is titled or registered by an agency of
this State's government.
Of the remainder of the moneys received by the Department
pursuant to this Act, (a) 1.75% thereof shall be paid into
the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
and on and after July 1, 1989, 3.8% thereof shall be paid
into the Build Illinois Fund; provided, however, that if in
any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
as the case may be, of the moneys received by the Department
and required to be paid into the Build Illinois Fund pursuant
to Section 3 of the Retailers' Occupation Tax Act, Section 9
of the Use Tax Act, Section 9 of the Service Use Tax Act, and
Section 9 of the Service Occupation Tax Act, such Acts being
hereinafter called the "Tax Acts" and such aggregate of 2.2%
or 3.8%, as the case may be, of moneys being hereinafter
called the "Tax Act Amount", and (2) the amount transferred
to the Build Illinois Fund from the State and Local Sales Tax
Reform Fund shall be less than the Annual Specified Amount
(as defined in Section 3 of the Retailers' Occupation Tax
Act), an amount equal to the difference shall be immediately
paid into the Build Illinois Fund from other moneys received
by the Department pursuant to the Tax Acts; and further
provided, that if on the last business day of any month the
sum of (1) the Tax Act Amount required to be deposited into
the Build Illinois Bond Account in the Build Illinois Fund
during such month and (2) the amount transferred during such
month to the Build Illinois Fund from the State and Local
Sales Tax Reform Fund shall have been less than 1/12 of the
Annual Specified Amount, an amount equal to the difference
shall be immediately paid into the Build Illinois Fund from
other moneys received by the Department pursuant to the Tax
Acts; and, further provided, that in no event shall the
payments required under the preceding proviso result in
aggregate payments into the Build Illinois Fund pursuant to
this clause (b) for any fiscal year in excess of the greater
of (i) the Tax Act Amount or (ii) the Annual Specified Amount
for such fiscal year; and, further provided, that the amounts
payable into the Build Illinois Fund under this clause (b)
shall be payable only until such time as the aggregate amount
on deposit under each trust indenture securing Bonds issued
and outstanding pursuant to the Build Illinois Bond Act is
sufficient, taking into account any future investment income,
to fully provide, in accordance with such indenture, for the
defeasance of or the payment of the principal of, premium, if
any, and interest on the Bonds secured by such indenture and
on any Bonds expected to be issued thereafter and all fees
and costs payable with respect thereto, all as certified by
the Director of the Bureau of the Budget. If on the last
business day of any month in which Bonds are outstanding
pursuant to the Build Illinois Bond Act, the aggregate of the
moneys deposited in the Build Illinois Bond Account in the
Build Illinois Fund in such month shall be less than the
amount required to be transferred in such month from the
Build Illinois Bond Account to the Build Illinois Bond
Retirement and Interest Fund pursuant to Section 13 of the
Build Illinois Bond Act, an amount equal to such deficiency
shall be immediately paid from other moneys received by the
Department pursuant to the Tax Acts to the Build Illinois
Fund; provided, however, that any amounts paid to the Build
Illinois Fund in any fiscal year pursuant to this sentence
shall be deemed to constitute payments pursuant to clause (b)
of the preceding sentence and shall reduce the amount
otherwise payable for such fiscal year pursuant to clause (b)
of the preceding sentence. The moneys received by the
Department pursuant to this Act and required to be deposited
into the Build Illinois Fund are subject to the pledge, claim
and charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois
Fund as provided in the preceding paragraph or in any
amendment thereto hereafter enacted, the following specified
monthly installment of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority provided under Section 8.25f of the
State Finance Act, but not in excess of the sums designated
as "Total Deposit", shall be deposited in the aggregate from
collections under Section 9 of the Use Tax Act, Section 9 of
the Service Use Tax Act, Section 9 of the Service Occupation
Tax Act, and Section 3 of the Retailers' Occupation Tax Act
into the McCormick Place Expansion Project Fund in the
specified fiscal years.
Fiscal Year Total Deposit
1993 $0
1994 53,000,000
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 84,000,000
2003 89,000,000
2004 and 93,000,000
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and