103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1406

 

Introduced 2/6/2023, by Sen. Win Stoller

 

SYNOPSIS AS INTRODUCED:
 
805 ILCS 5/15.35  from Ch. 32, par. 15.35
805 ILCS 5/15.65  from Ch. 32, par. 15.65
805 ILCS 5/15.98 new

    Amends the Business Corporation Act of 1983. Provides that, in the case of a domestic or foreign corporation, no payment is required for a franchise tax that would have been due and payable on or after January 1, 2024. Repeals those Sections on January 1, 2025. Directs the Legislative Reference Bureau to prepare a bill effecting necessary changes to conform the statutes to the changes made by the amendatory Act. Effective immediately.


LRB103 04503 HLH 49509 b

 

 

A BILL FOR

 

SB1406LRB103 04503 HLH 49509 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Business Corporation Act of 1983 is amended
5by changing Sections 15.35 and 15.65 and by adding Section
615.98 as follows:
 
7    (805 ILCS 5/15.35)  (from Ch. 32, par. 15.35)
8    (Text of Section from P.A. 102-16)
9    Sec. 15.35. Franchise taxes payable by domestic
10corporations. For the privilege of exercising its franchises
11in this State, each domestic corporation shall pay to the
12Secretary of State the following franchise taxes, computed on
13the basis, at the rates and for the periods prescribed in this
14Act:
15        (a) An initial franchise tax at the time of filing its
16    first report of issuance of shares.
17        (b) An additional franchise tax at the time of filing
18    (1) a report of the issuance of additional shares, or (2) a
19    report of an increase in paid-in capital without the
20    issuance of shares, or (3) an amendment to the articles of
21    incorporation or a report of cumulative changes in paid-in
22    capital, whenever any amendment or such report discloses
23    an increase in its paid-in capital over the amount thereof

 

 

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1    last reported in any document, other than an annual
2    report, interim annual report or final transition annual
3    report required by this Act to be filed in the office of
4    the Secretary of State.
5        (c) An additional franchise tax at the time of filing
6    a report of paid-in capital following a statutory merger
7    or consolidation, which discloses that the paid-in capital
8    of the surviving or new corporation immediately after the
9    merger or consolidation is greater than the sum of the
10    paid-in capital of all of the merged or consolidated
11    corporations as last reported by them in any documents,
12    other than annual reports, required by this Act to be
13    filed in the office of the Secretary of State; and in
14    addition, the surviving or new corporation shall be liable
15    for a further additional franchise tax on the paid-in
16    capital of each of the merged or consolidated corporations
17    as last reported by them in any document, other than an
18    annual report, required by this Act to be filed with the
19    Secretary of State from their taxable year end to the next
20    succeeding anniversary month or, in the case of a
21    corporation which has established an extended filing
22    month, the extended filing month of the surviving or new
23    corporation; however if the taxable year ends within the
24    2-month period immediately preceding the anniversary month
25    or, in the case of a corporation which has established an
26    extended filing month, the extended filing month of the

 

 

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1    surviving or new corporation the tax will be computed to
2    the anniversary month or, in the case of a corporation
3    which has established an extended filing month, the
4    extended filing month of the surviving or new corporation
5    in the next succeeding calendar year.
6        (d) An annual franchise tax payable each year with the
7    annual report which the corporation is required by this
8    Act to file.
9    On or after January 1, 2020 and before prior to January 1,
102021, the first $30 in liability is exempt from the tax imposed
11under this Section. On or after January 1, 2021 and before
12January 1, 2022, the first $1,000 in liability is exempt from
13the tax imposed under this Section. On or after January 1, 2022
14and before January 1, 2023, the first $10,000 in liability is
15exempt from the tax imposed under this Section. On or after
16January 1, 2023 and before January 1, 2024, the first $100,000
17in liability is exempt from the tax imposed under this
18Section. The provisions of this Section shall not require the
19payment of any franchise tax that would otherwise have been
20due and payable on or after January 1, 2024. There shall be no
21refunds or proration of franchise tax for any taxes due and
22payable on or after January 1, 2024 on the basis that a portion
23of the corporation's taxable year extends beyond January 1,
242024. Public Act 101-9 shall not affect any right accrued or
25established, or any liability or penalty incurred prior to
26January 1, 2024.

 

 

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1    This Section is repealed on January 1, 2025.
2(Source: P.A. 101-9, eff. 6-5-19; 102-16, eff. 6-17-21.)
 
3    (Text of Section from P.A. 102-282)
4    Sec. 15.35. Franchise taxes payable by domestic
5corporations. For the privilege of exercising its franchises
6in this State, each domestic corporation shall pay to the
7Secretary of State the following franchise taxes, computed on
8the basis, at the rates and for the periods prescribed in this
9Act:
10        (a) An initial franchise tax at the time of filing its
11    first report of issuance of shares.
12        (b) An additional franchise tax at the time of filing
13    (1) a report of the issuance of additional shares, or (2) a
14    report of an increase in paid-in capital without the
15    issuance of shares, or (3) an amendment to the articles of
16    incorporation or a report of cumulative changes in paid-in
17    capital, whenever any amendment or such report discloses
18    an increase in its paid-in capital over the amount thereof
19    last reported in any document, other than an annual
20    report, interim annual report or final transition annual
21    report required by this Act to be filed in the office of
22    the Secretary of State.
23        (c) An additional franchise tax at the time of filing
24    a report of paid-in capital following a statutory merger
25    or consolidation, which discloses that the paid-in capital

 

 

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1    of the surviving or new corporation immediately after the
2    merger or consolidation is greater than the sum of the
3    paid-in capital of all of the merged or consolidated
4    corporations as last reported by them in any documents,
5    other than annual reports, required by this Act to be
6    filed in the office of the Secretary of State; and in
7    addition, the surviving or new corporation shall be liable
8    for a further additional franchise tax on the paid-in
9    capital of each of the merged or consolidated corporations
10    as last reported by them in any document, other than an
11    annual report, required by this Act to be filed with the
12    Secretary of State from their taxable year end to the next
13    succeeding anniversary month or, in the case of a
14    corporation which has established an extended filing
15    month, the extended filing month of the surviving or new
16    corporation; however if the taxable year ends within the
17    2-month period immediately preceding the anniversary month
18    or, in the case of a corporation which has established an
19    extended filing month, the extended filing month of the
20    surviving or new corporation the tax will be computed to
21    the anniversary month or, in the case of a corporation
22    which has established an extended filing month, the
23    extended filing month of the surviving or new corporation
24    in the next succeeding calendar year.
25        (d) An annual franchise tax payable each year with the
26    annual report which the corporation is required by this

 

 

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1    Act to file.
2    On or after January 1, 2020 and before prior to January 1,
32021, the first $30 in liability is exempt from the tax imposed
4under this Section. On or after January 1, 2021 and before
5prior to January 1, 2022, the first $1,000 in liability is
6exempt from the tax imposed under this Section. On or after
7January 1, 2022 and before prior to January 1, 2023, the first
8$10,000 in liability is exempt from the tax imposed under this
9Section. On or after January 1, 2023 and before prior to
10January 1, 2024, the first $100,000 in liability is exempt
11from the tax imposed under this Section. The provisions of
12this Section shall not require the payment of any franchise
13tax that would otherwise have been due and payable on or after
14January 1, 2024. There shall be no refunds or proration of
15franchise tax for any taxes due and payable on or after January
161, 2024 on the basis that a portion of the corporation's
17taxable year extends beyond January 1, 2024. Public Act 101-9
18shall not affect any right accrued or established, or any
19liability or penalty incurred prior to January 1, 2024.
20    This Section is repealed on January 1, 2025 December 31,
212024.
22(Source: P.A. 101-9, eff. 6-5-19; 102-282, eff. 1-1-22.)
 
23    (Text of Section from P.A. 102-558)
24    Sec. 15.35. Franchise taxes payable by domestic
25corporations. For the privilege of exercising its franchises

 

 

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1in this State, each domestic corporation shall pay to the
2Secretary of State the following franchise taxes, computed on
3the basis, at the rates and for the periods prescribed in this
4Act:
5        (a) An initial franchise tax at the time of filing its
6    first report of issuance of shares.
7        (b) An additional franchise tax at the time of filing
8    (1) a report of the issuance of additional shares, or (2) a
9    report of an increase in paid-in capital without the
10    issuance of shares, or (3) an amendment to the articles of
11    incorporation or a report of cumulative changes in paid-in
12    capital, whenever any amendment or such report discloses
13    an increase in its paid-in capital over the amount thereof
14    last reported in any document, other than an annual
15    report, interim annual report or final transition annual
16    report required by this Act to be filed in the office of
17    the Secretary of State.
18        (c) An additional franchise tax at the time of filing
19    a report of paid-in capital following a statutory merger
20    or consolidation, which discloses that the paid-in capital
21    of the surviving or new corporation immediately after the
22    merger or consolidation is greater than the sum of the
23    paid-in capital of all of the merged or consolidated
24    corporations as last reported by them in any documents,
25    other than annual reports, required by this Act to be
26    filed in the office of the Secretary of State; and in

 

 

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1    addition, the surviving or new corporation shall be liable
2    for a further additional franchise tax on the paid-in
3    capital of each of the merged or consolidated corporations
4    as last reported by them in any document, other than an
5    annual report, required by this Act to be filed with the
6    Secretary of State from their taxable year end to the next
7    succeeding anniversary month or, in the case of a
8    corporation which has established an extended filing
9    month, the extended filing month of the surviving or new
10    corporation; however if the taxable year ends within the
11    2-month period immediately preceding the anniversary month
12    or, in the case of a corporation which has established an
13    extended filing month, the extended filing month of the
14    surviving or new corporation the tax will be computed to
15    the anniversary month or, in the case of a corporation
16    which has established an extended filing month, the
17    extended filing month of the surviving or new corporation
18    in the next succeeding calendar year.
19        (d) An annual franchise tax payable each year with the
20    annual report which the corporation is required by this
21    Act to file.
22    On or after January 1, 2020 and before prior to January 1,
232021, the first $30 in liability is exempt from the tax imposed
24under this Section. On or after January 1, 2021 and before
25prior to January 1, 2022, the first $1,000 in liability is
26exempt from the tax imposed under this Section. On or after

 

 

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1January 1, 2022 and before prior to January 1, 2023, the first
2$10,000 in liability is exempt from the tax imposed under this
3Section. On or after January 1, 2023 and before prior to
4January 1, 2024, the first $100,000 in liability is exempt
5from the tax imposed under this Section. The provisions of
6this Section shall not require the payment of any franchise
7tax that would otherwise have been due and payable on or after
8January 1, 2024. There shall be no refunds or proration of
9franchise tax for any taxes due and payable on or after January
101, 2024 on the basis that a portion of the corporation's
11taxable year extends beyond January 1, 2024. Public Act 101-9
12shall not affect any right accrued or established, or any
13liability or penalty incurred prior to January 1, 2024.
14    This Section is repealed on January 1, 2025 December 31,
152025.
16(Source: P.A. 101-9, eff. 6-5-19; 102-558, eff. 8-20-21.)
 
17    (805 ILCS 5/15.65)  (from Ch. 32, par. 15.65)
18    Sec. 15.65. Franchise taxes payable by foreign
19corporations. For the privilege of exercising its authority to
20transact such business in this State as set out in its
21application therefor or any amendment thereto, each foreign
22corporation shall pay to the Secretary of State the following
23franchise taxes, computed on the basis, at the rates and for
24the periods prescribed in this Act:
25        (a) An initial franchise tax at the time of filing its

 

 

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1    application for authority to transact business in this
2    State.
3        (b) An additional franchise tax at the time of filing
4    (1) a report of the issuance of additional shares, or (2) a
5    report of an increase in paid-in capital without the
6    issuance of shares, or (3) a report of cumulative changes
7    in paid-in capital or a report of an exchange or
8    reclassification of shares, whenever any such report
9    discloses an increase in its paid-in capital over the
10    amount thereof last reported in any document, other than
11    an annual report, interim annual report or final
12    transition annual report, required by this Act to be filed
13    in the office of the Secretary of State.
14        (c) Whenever the corporation shall be a party to a
15    statutory merger and shall be the surviving corporation,
16    an additional franchise tax at the time of filing its
17    report following merger, if such report discloses that the
18    amount represented in this State of its paid-in capital
19    immediately after the merger is greater than the aggregate
20    of the amounts represented in this State of the paid-in
21    capital of such of the merged corporations as were
22    authorized to transact business in this State at the time
23    of the merger, as last reported by them in any documents,
24    other than annual reports, required by this Act to be
25    filed in the office of the Secretary of State; and in
26    addition, the surviving corporation shall be liable for a

 

 

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1    further additional franchise tax on the paid-in capital of
2    each of the merged corporations as last reported by them
3    in any document, other than an annual report, required by
4    this Act to be filed with the Secretary of State, from
5    their taxable year end to the next succeeding anniversary
6    month or, in the case of a corporation which has
7    established an extended filing month, the extended filing
8    month of the surviving corporation; however if the taxable
9    year ends within the 2-month period immediately preceding
10    the anniversary month or the extended filing month of the
11    surviving corporation, the tax will be computed to the
12    anniversary or, extended filing month of the surviving
13    corporation in the next succeeding calendar year.
14        (d) An annual franchise tax payable each year with any
15    annual report which the corporation is required by this
16    Act to file.
17    On or after January 1, 2020 and before prior to January 1,
182021, the first $30 in liability is exempt from the tax imposed
19under this Section. On or after January 1, 2021 and before
20January 1, 2024, the first $1,000 in liability is exempt from
21the tax imposed under this Section. The provisions of this
22Section shall not require the payment of any franchise tax
23that would otherwise have been due and payable on or after
24January 1, 2024. There shall be no refunds or proration of
25franchise tax for any taxes due and payable on or after January
261, 2024 on the basis that a portion of the corporation's

 

 

SB1406- 12 -LRB103 04503 HLH 49509 b

1taxable year extends beyond January 1, 2024. This amendatory
2Act of the 103rd General Assembly shall not affect any right
3accrued or established, or any liability or penalty incurred
4prior to January 1, 2024.
5    This Section is repealed on January 1, 2025.
6(Source: P.A. 101-9, eff. 6-5-19; 102-16, eff. 6-17-21;
7102-558, eff. 8-20-21; 102-813, eff. 5-13-22.)
 
8    (805 ILCS 5/15.98 new)
9    Sec. 15.98. Preparation of bill. The Legislative Reference
10Bureau shall prepare for introduction in the 2024 spring
11session of the General Assembly a bill effecting such changes
12in the statutes as may be necessary to conform the statutes to
13the changes in law made by this amendatory Act of the 103rd
14General Assembly.
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.