Full Text of SB2628 93rd General Assembly
SB2628 93RD GENERAL ASSEMBLY
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93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004 SB2628
Introduced 2/4/2004, by Kathleen L. Wojcik SYNOPSIS AS INTRODUCED: |
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35 ILCS 5/303 |
from Ch. 120, par. 3-303 |
35 ILCS 5/710 |
from Ch. 120, par. 7-710 |
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Amends the Illinois Income Tax Act. Provides that payments made after December 31, 2004 of winnings from gambling games conducted on a riverboat licensed under the
Riverboat Gambling Act are allocable to this State. Requires payors to withhold such winnings if they are $5,000 or more. On January 1, 2005 changes from $1,000 to $5,000 the threshold above which withholding is required for lottery winnings. Effective immediately.
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A BILL FOR
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SB2628 |
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LRB093 19192 SJM 46526 b |
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| AN ACT concerning taxes.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Income Tax Act is amended by | 5 |
| changing Sections 303 and 710 as follows:
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| (35 ILCS 5/303) (from Ch. 120, par. 3-303)
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| Sec. 303. Nonbusiness income of persons other than | 8 |
| residents.
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| (a) In general. Any item of capital gain or loss, and any
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| item of income from rents or royalties from real or tangible | 11 |
| personal
property, interest, dividends, and patent or | 12 |
| copyright royalties, and prizes
awarded under the Illinois | 13 |
| Lottery Law and winnings from gambling games conducted on a | 14 |
| riverboat licensed under the Riverboat Gambling Act , to the | 15 |
| extent such item constitutes
nonbusiness income, together with | 16 |
| any item of deduction directly allocable
thereto, shall be | 17 |
| allocated by any person other than a resident as provided
in | 18 |
| this Section.
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| (b) Capital gains and losses. (1) Real property. Capital | 20 |
| gains and
losses from sales or exchanges of real property are | 21 |
| allocable to this State
if the property is located in this | 22 |
| State.
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| (2) Tangible personal property. Capital gains and losses | 24 |
| from sales
or exchanges of tangible personal property are | 25 |
| allocable to this State if,
at the time of such sale or | 26 |
| exchange:
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| (A) The property had its situs in this State; or
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| (B) The taxpayer had its commercial domicile in this State | 29 |
| and was not
taxable in the state in which the property had its | 30 |
| situs.
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| (3) Intangibles. Capital gains and losses from sales or | 32 |
| exchanges of
intangible personal property are allocable to this |
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SB2628 |
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LRB093 19192 SJM 46526 b |
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| State if the taxpayer
had its commercial domicile in this State | 2 |
| at the time of such sale or
exchange.
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| (c) Rents and royalties. (1) Real property. Rents and | 4 |
| royalties
from real property are allocable to this State if the | 5 |
| property is located
in this State.
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| (2) Tangible personal property. Rents and royalties from | 7 |
| tangible
personal property are allocable to this State:
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| (A) If and to the extent that the property is utilized in | 9 |
| this State; or
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| (B) In their entirety if, at the time such rents or | 11 |
| royalties were paid
or accrued, the taxpayer had its commercial | 12 |
| domicile in this State and was
not organized under the laws of | 13 |
| or taxable with respect to such rents or
royalties in the state | 14 |
| in which the property was utilized.
The extent of utilization | 15 |
| of tangible personal property in a state is
determined by | 16 |
| multiplying the rents or royalties derived from such property
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| by a fraction, the numerator of which is the number of days of | 18 |
| physical
location of the property in the state during the | 19 |
| rental or royalty period
in the taxable year and the | 20 |
| denominator of which is the number of days of
physical location | 21 |
| of the property everywhere during all rental or royalty
periods | 22 |
| in the taxable year. If the physical location of the property
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| during the rental or royalty period is unknown or | 24 |
| unascertainable by the
taxpayer, tangible personal property is | 25 |
| utilized in the state in which the
property was located at the | 26 |
| time the rental or royalty payer obtained
possession.
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| (d) Patent and copyright royalties.
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| (1) Allocation. Patent and copyright royalties are | 29 |
| allocable to this
State:
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| (A) If and to the extent that the patent or copyright is | 31 |
| utilized by the
payer in this State; or
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| (B) If and to the extent that the patent or copyright is | 33 |
| utilized by the
payer in a state in which the taxpayer is not | 34 |
| taxable with respect to such
royalties and, at the time such | 35 |
| royalties were paid or accrued, the
taxpayer had its commercial | 36 |
| domicile in this State.
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| (2) Utilization.
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| (A) A patent is utilized in a state to the extent that it | 3 |
| is employed in
production, fabrication, manufacturing or other | 4 |
| processing in the state or
to the extent that a patented | 5 |
| product is produced in the state. If the
basis of receipts from | 6 |
| patent royalties does not permit allocation to
states or if the | 7 |
| accounting procedures do not reflect states of
utilization, the | 8 |
| patent is utilized in this State if the taxpayer has its
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| commercial domicile in this State.
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| (B) A copyright is utilized in a state to the extent that | 11 |
| printing or
other publication originates in the state. If the | 12 |
| basis of receipts from
copyright royalties does not permit | 13 |
| allocation to states or if the
accounting procedures do not | 14 |
| reflect states of utilization, the copyright
is utilized in | 15 |
| this State if the taxpayer has its commercial domicile in
this | 16 |
| State.
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| (e) Illinois lottery and gambling winnings
prizes . Prizes | 18 |
| awarded under the " Illinois Lottery
Law ", approved December 14, | 19 |
| 1973, are allocable to this State. Payments made after December | 20 |
| 31, 2004 of winnings from gambling games conducted on a | 21 |
| riverboat licensed under the
Riverboat Gambling Act are | 22 |
| allocable to this State.
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| (f) Taxability in other state. For purposes of allocation | 24 |
| of income
pursuant to this Section, a taxpayer is taxable in | 25 |
| another state if:
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| (1) In that state he is subject to a net income tax, a | 27 |
| franchise tax
measured by net income, a franchise tax for the | 28 |
| privilege of doing
business, or a corporate stock tax; or
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| (2) That state has jurisdiction to subject the taxpayer to | 30 |
| a net income
tax regardless of whether, in fact, the state does | 31 |
| or does not.
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| (g) Cross references. (1) For allocation of interest and | 33 |
| dividends by
persons other than residents, see Section | 34 |
| 301(c)(2).
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| (2) For allocation of nonbusiness income by residents, see | 36 |
| Section
301(a).
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| (Source: P.A. 79-743.)
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| (35 ILCS 5/710) (from Ch. 120, par. 7-710)
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| Sec. 710. Withholding from lottery and gambling
winnings.
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| (a) In General. | 5 |
| (1) Any person
making a payment to a resident or | 6 |
| nonresident of winnings under the Illinois
Lottery Law and | 7 |
| not required to withhold Illinois income tax from such | 8 |
| payment
under Subsection (b) of Section 701 of this Act | 9 |
| because those winnings are
not subject to Federal income | 10 |
| tax withholding, must withhold Illinois income
tax from | 11 |
| such payment at a rate equal to the percentage tax rate for | 12 |
| individuals
provided in subsection (b) of Section 201, | 13 |
| provided that withholding is
not required if such payment | 14 |
| of winnings is less than $5,000 ( $1,000 , for payments made | 15 |
| before January 1, 2005) .
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| (2) Any person making a payment after December 31, 2004 | 17 |
| to a resident or
nonresident of winnings from gambling
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| games conducted on a riverboat licensed under the Riverboat | 19 |
| Gambling Act, and
not required to withhold Illinois income | 20 |
| tax from such payment under subsection
(b) of Section 701 | 21 |
| of this Act because those winnings are not subject to
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| federal income tax withholding, must withhold Illinois | 23 |
| income tax from such
payment at a rate equal to the | 24 |
| percentage tax rate for individuals provided in
subsection | 25 |
| (b) of Section 201, provided that withholding is not | 26 |
| required if
such payment of winnings is less than $5,000.
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| (b) Credit for taxes withheld. Any amount withheld under | 28 |
| Subsection (a)
shall be a credit against the Illinois income | 29 |
| tax liability of the person
to whom the payment of winnings was | 30 |
| made for the taxable year in which that
person incurred an | 31 |
| Illinois income tax liability with respect to those winnings.
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| (Source: P.A. 85-731.)
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| Section 99. Effective date. This Act takes effect upon | 34 |
| becoming law.
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