Illinois General Assembly - Full Text of HB0199
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Full Text of HB0199  99th General Assembly




State of Illinois
2015 and 2016


Introduced , by Rep. David Harris


35 ILCS 5/1501  from Ch. 120, par. 15-1501
805 ILCS 180/50-10

    Amends the Illinois Income Tax Act. In provisions providing that a unitary business group does not include members whose business activity outside the United States is 80% or more of that member's total business activity, provides that the phrase "United States" means only the 50 states, the District of Columbia, and any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources, but does not include any territory or possession of the United States (currently, for those purposes, "United States" means only the 50 states and the District of Columbia, but does not include any territory or possession of the United States or any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources). Amends the Limited Liability Company Act. Reduces the fees for filing articles of organization, applications for admission, and restated articles of organization to $125 for a series LLC (currently, $750) and $75 for all other LLCs (currently, $500).

LRB099 04147 HLH 24167 b






HB0199LRB099 04147 HLH 24167 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 Illinois Income Tax Act is amended by
5changing Section 1501 as follows:
6    (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)
7    Sec. 1501. Definitions.
8    (a) In general. When used in this Act, where not otherwise
9distinctly expressed or manifestly incompatible with the
10intent thereof:
11        (1) Business income. The term "business income" means
12    all income that may be treated as apportionable business
13    income under the Constitution of the United States.
14    Business income is net of the deductions allocable thereto.
15    Such term does not include compensation or the deductions
16    allocable thereto. For each taxable year beginning on or
17    after January 1, 2003, a taxpayer may elect to treat all
18    income other than compensation as business income. This
19    election shall be made in accordance with rules adopted by
20    the Department and, once made, shall be irrevocable.
21        (1.5) Captive real estate investment trust:
22            (A) The term "captive real estate investment
23        trust" means a corporation, trust, or association:



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1                (i) that is considered a real estate
2            investment trust for the taxable year under
3            Section 856 of the Internal Revenue Code;
4                (ii) the certificates of beneficial interest
5            or shares of which are not regularly traded on an
6            established securities market; and
7                (iii) of which more than 50% of the voting
8            power or value of the beneficial interest or
9            shares, at any time during the last half of the
10            taxable year, is owned or controlled, directly,
11            indirectly, or constructively, by a single
12            corporation.
13            (B) The term "captive real estate investment
14        trust" does not include:
15                (i) a real estate investment trust of which
16            more than 50% of the voting power or value of the
17            beneficial interest or shares is owned or
18            controlled, directly, indirectly, or
19            constructively, by:
20                    (a) a real estate investment trust, other
21                than a captive real estate investment trust;
22                    (b) a person who is exempt from taxation
23                under Section 501 of the Internal Revenue Code,
24                and who is not required to treat income
25                received from the real estate investment trust
26                as unrelated business taxable income under



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1                Section 512 of the Internal Revenue Code;
2                    (c) a listed Australian property trust, if
3                no more than 50% of the voting power or value
4                of the beneficial interest or shares of that
5                trust, at any time during the last half of the
6                taxable year, is owned or controlled, directly
7                or indirectly, by a single person;
8                    (d) an entity organized as a trust,
9                provided a listed Australian property trust
10                described in subparagraph (c) owns or
11                controls, directly or indirectly, or
12                constructively, 75% or more of the voting power
13                or value of the beneficial interests or shares
14                of such entity; or
15                    (e) an entity that is organized outside of
16                the laws of the United States and that
17                satisfies all of the following criteria:
18                        (1) at least 75% of the entity's total
19                    asset value at the close of its taxable
20                    year is represented by real estate assets
21                    (as defined in Section 856(c)(5)(B) of the
22                    Internal Revenue Code, thereby including
23                    shares or certificates of beneficial
24                    interest in any real estate investment
25                    trust), cash and cash equivalents, and
26                    U.S. Government securities;



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1                        (2) the entity is not subject to tax on
2                    amounts that are distributed to its
3                    beneficial owners or is exempt from
4                    entity-level taxation;
5                        (3) the entity distributes at least
6                    85% of its taxable income (as computed in
7                    the jurisdiction in which it is organized)
8                    to the holders of its shares or
9                    certificates of beneficial interest on an
10                    annual basis;
11                        (4) either (i) the shares or
12                    beneficial interests of the entity are
13                    regularly traded on an established
14                    securities market or (ii) not more than 10%
15                    of the voting power or value in the entity
16                    is held, directly, indirectly, or
17                    constructively, by a single entity or
18                    individual; and
19                        (5) the entity is organized in a
20                    country that has entered into a tax treaty
21                    with the United States; or
22                (ii) during its first taxable year for which it
23            elects to be treated as a real estate investment
24            trust under Section 856(c)(1) of the Internal
25            Revenue Code, a real estate investment trust the
26            certificates of beneficial interest or shares of



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1            which are not regularly traded on an established
2            securities market, but only if the certificates of
3            beneficial interest or shares of the real estate
4            investment trust are regularly traded on an
5            established securities market prior to the earlier
6            of the due date (including extensions) for filing
7            its return under this Act for that first taxable
8            year or the date it actually files that return.
9            (C) For the purposes of this subsection (1.5), the
10        constructive ownership rules prescribed under Section
11        318(a) of the Internal Revenue Code, as modified by
12        Section 856(d)(5) of the Internal Revenue Code, apply
13        in determining the ownership of stock, assets, or net
14        profits of any person.
15        (2) Commercial domicile. The term "commercial
16    domicile" means the principal place from which the trade or
17    business of the taxpayer is directed or managed.
18        (3) Compensation. The term "compensation" means wages,
19    salaries, commissions and any other form of remuneration
20    paid to employees for personal services.
21        (4) Corporation. The term "corporation" includes
22    associations, joint-stock companies, insurance companies
23    and cooperatives. Any entity, including a limited
24    liability company formed under the Illinois Limited
25    Liability Company Act, shall be treated as a corporation if
26    it is so classified for federal income tax purposes.



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1        (5) Department. The term "Department" means the
2    Department of Revenue of this State.
3        (6) Director. The term "Director" means the Director of
4    Revenue of this State.
5        (7) Fiduciary. The term "fiduciary" means a guardian,
6    trustee, executor, administrator, receiver, or any person
7    acting in any fiduciary capacity for any person.
8        (8) Financial organization.
9            (A) The term "financial organization" means any
10        bank, bank holding company, trust company, savings
11        bank, industrial bank, land bank, safe deposit
12        company, private banker, savings and loan association,
13        building and loan association, credit union, currency
14        exchange, cooperative bank, small loan company, sales
15        finance company, investment company, or any person
16        which is owned by a bank or bank holding company. For
17        the purpose of this Section a "person" will include
18        only those persons which a bank holding company may
19        acquire and hold an interest in, directly or
20        indirectly, under the provisions of the Bank Holding
21        Company Act of 1956 (12 U.S.C. 1841, et seq.), except
22        where interests in any person must be disposed of
23        within certain required time limits under the Bank
24        Holding Company Act of 1956.
25            (B) For purposes of subparagraph (A) of this
26        paragraph, the term "bank" includes (i) any entity that



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1        is regulated by the Comptroller of the Currency under
2        the National Bank Act, or by the Federal Reserve Board,
3        or by the Federal Deposit Insurance Corporation and
4        (ii) any federally or State chartered bank operating as
5        a credit card bank.
6            (C) For purposes of subparagraph (A) of this
7        paragraph, the term "sales finance company" has the
8        meaning provided in the following item (i) or (ii):
9                (i) A person primarily engaged in one or more
10            of the following businesses: the business of
11            purchasing customer receivables, the business of
12            making loans upon the security of customer
13            receivables, the business of making loans for the
14            express purpose of funding purchases of tangible
15            personal property or services by the borrower, or
16            the business of finance leasing. For purposes of
17            this item (i), "customer receivable" means:
18                    (a) a retail installment contract or
19                retail charge agreement within the meaning of
20                the Sales Finance Agency Act, the Retail
21                Installment Sales Act, or the Motor Vehicle
22                Retail Installment Sales Act;
23                    (b) an installment, charge, credit, or
24                similar contract or agreement arising from the
25                sale of tangible personal property or services
26                in a transaction involving a deferred payment



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1                price payable in one or more installments
2                subsequent to the sale; or
3                    (c) the outstanding balance of a contract
4                or agreement described in provisions (a) or (b)
5                of this item (i).
6                A customer receivable need not provide for
7            payment of interest on deferred payments. A sales
8            finance company may purchase a customer receivable
9            from, or make a loan secured by a customer
10            receivable to, the seller in the original
11            transaction or to a person who purchased the
12            customer receivable directly or indirectly from
13            that seller.
14                (ii) A corporation meeting each of the
15            following criteria:
16                    (a) the corporation must be a member of an
17                "affiliated group" within the meaning of
18                Section 1504(a) of the Internal Revenue Code,
19                determined without regard to Section 1504(b)
20                of the Internal Revenue Code;
21                    (b) more than 50% of the gross income of
22                the corporation for the taxable year must be
23                interest income derived from qualifying loans.
24                A "qualifying loan" is a loan made to a member
25                of the corporation's affiliated group that
26                originates customer receivables (within the



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1                meaning of item (i)) or to whom customer
2                receivables originated by a member of the
3                affiliated group have been transferred, to the
4                extent the average outstanding balance of
5                loans from that corporation to members of its
6                affiliated group during the taxable year do not
7                exceed the limitation amount for that
8                corporation. The "limitation amount" for a
9                corporation is the average outstanding
10                balances during the taxable year of customer
11                receivables (within the meaning of item (i))
12                originated by all members of the affiliated
13                group. If the average outstanding balances of
14                the loans made by a corporation to members of
15                its affiliated group exceed the limitation
16                amount, the interest income of that
17                corporation from qualifying loans shall be
18                equal to its interest income from loans to
19                members of its affiliated groups times a
20                fraction equal to the limitation amount
21                divided by the average outstanding balances of
22                the loans made by that corporation to members
23                of its affiliated group;
24                    (c) the total of all shareholder's equity
25                (including, without limitation, paid-in
26                capital on common and preferred stock and



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1                retained earnings) of the corporation plus the
2                total of all of its loans, advances, and other
3                obligations payable or owed to members of its
4                affiliated group may not exceed 20% of the
5                total assets of the corporation at any time
6                during the tax year; and
7                    (d) more than 50% of all interest-bearing
8                obligations of the affiliated group payable to
9                persons outside the group determined in
10                accordance with generally accepted accounting
11                principles must be obligations of the
12                corporation.
13            This amendatory Act of the 91st General Assembly is
14        declaratory of existing law.
15            (D) Subparagraphs (B) and (C) of this paragraph are
16        declaratory of existing law and apply retroactively,
17        for all tax years beginning on or before December 31,
18        1996, to all original returns, to all amended returns
19        filed no later than 30 days after the effective date of
20        this amendatory Act of 1996, and to all notices issued
21        on or before the effective date of this amendatory Act
22        of 1996 under subsection (a) of Section 903, subsection
23        (a) of Section 904, subsection (e) of Section 909, or
24        Section 912. A taxpayer that is a "financial
25        organization" that engages in any transaction with an
26        affiliate shall be a "financial organization" for all



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1        purposes of this Act.
2            (E) For all tax years beginning on or before
3        December 31, 1996, a taxpayer that falls within the
4        definition of a "financial organization" under
5        subparagraphs (B) or (C) of this paragraph, but who
6        does not fall within the definition of a "financial
7        organization" under the Proposed Regulations issued by
8        the Department of Revenue on July 19, 1996, may
9        irrevocably elect to apply the Proposed Regulations
10        for all of those years as though the Proposed
11        Regulations had been lawfully promulgated, adopted,
12        and in effect for all of those years. For purposes of
13        applying subparagraphs (B) or (C) of this paragraph to
14        all of those years, the election allowed by this
15        subparagraph applies only to the taxpayer making the
16        election and to those members of the taxpayer's unitary
17        business group who are ordinarily required to
18        apportion business income under the same subsection of
19        Section 304 of this Act as the taxpayer making the
20        election. No election allowed by this subparagraph
21        shall be made under a claim filed under subsection (d)
22        of Section 909 more than 30 days after the effective
23        date of this amendatory Act of 1996.
24            (F) Finance Leases. For purposes of this
25        subsection, a finance lease shall be treated as a loan
26        or other extension of credit, rather than as a lease,



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1        regardless of how the transaction is characterized for
2        any other purpose, including the purposes of any
3        regulatory agency to which the lessor is subject. A
4        finance lease is any transaction in the form of a lease
5        in which the lessee is treated as the owner of the
6        leased asset entitled to any deduction for
7        depreciation allowed under Section 167 of the Internal
8        Revenue Code.
9        (9) Fiscal year. The term "fiscal year" means an
10    accounting period of 12 months ending on the last day of
11    any month other than December.
12        (9.5) Fixed place of business. The term "fixed place of
13    business" has the same meaning as that term is given in
14    Section 864 of the Internal Revenue Code and the related
15    Treasury regulations.
16        (10) Includes and including. The terms "includes" and
17    "including" when used in a definition contained in this Act
18    shall not be deemed to exclude other things otherwise
19    within the meaning of the term defined.
20        (11) Internal Revenue Code. The term "Internal Revenue
21    Code" means the United States Internal Revenue Code of 1954
22    or any successor law or laws relating to federal income
23    taxes in effect for the taxable year.
24        (11.5) Investment partnership.
25            (A) The term "investment partnership" means any
26        entity that is treated as a partnership for federal



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1        income tax purposes that meets the following
2        requirements:
3                (i) no less than 90% of the partnership's cost
4            of its total assets consists of qualifying
5            investment securities, deposits at banks or other
6            financial institutions, and office space and
7            equipment reasonably necessary to carry on its
8            activities as an investment partnership;
9                (ii) no less than 90% of its gross income
10            consists of interest, dividends, and gains from
11            the sale or exchange of qualifying investment
12            securities; and
13                (iii) the partnership is not a dealer in
14            qualifying investment securities.
15            (B) For purposes of this paragraph (11.5), the term
16        "qualifying investment securities" includes all of the
17        following:
18                (i) common stock, including preferred or debt
19            securities convertible into common stock, and
20            preferred stock;
21                (ii) bonds, debentures, and other debt
22            securities;
23                (iii) foreign and domestic currency deposits
24            secured by federal, state, or local governmental
25            agencies;
26                (iv) mortgage or asset-backed securities



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1            secured by federal, state, or local governmental
2            agencies;
3                (v) repurchase agreements and loan
4            participations;
5                (vi) foreign currency exchange contracts and
6            forward and futures contracts on foreign
7            currencies;
8                (vii) stock and bond index securities and
9            futures contracts and other similar financial
10            securities and futures contracts on those
11            securities;
12                (viii) options for the purchase or sale of any
13            of the securities, currencies, contracts, or
14            financial instruments described in items (i) to
15            (vii), inclusive;
16                (ix) regulated futures contracts;
17                (x) commodities (not described in Section
18            1221(a)(1) of the Internal Revenue Code) or
19            futures, forwards, and options with respect to
20            such commodities, provided, however, that any item
21            of a physical commodity to which title is actually
22            acquired in the partnership's capacity as a dealer
23            in such commodity shall not be a qualifying
24            investment security;
25                (xi) derivatives; and
26                (xii) a partnership interest in another



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1            partnership that is an investment partnership.
2        (12) Mathematical error. The term "mathematical error"
3    includes the following types of errors, omissions, or
4    defects in a return filed by a taxpayer which prevents
5    acceptance of the return as filed for processing:
6            (A) arithmetic errors or incorrect computations on
7        the return or supporting schedules;
8            (B) entries on the wrong lines;
9            (C) omission of required supporting forms or
10        schedules or the omission of the information in whole
11        or in part called for thereon; and
12            (D) an attempt to claim, exclude, deduct, or
13        improperly report, in a manner directly contrary to the
14        provisions of the Act and regulations thereunder any
15        item of income, exemption, deduction, or credit.
16        (13) Nonbusiness income. The term "nonbusiness income"
17    means all income other than business income or
18    compensation.
19        (14) Nonresident. The term "nonresident" means a
20    person who is not a resident.
21        (15) Paid, incurred and accrued. The terms "paid",
22    "incurred" and "accrued" shall be construed according to
23    the method of accounting upon the basis of which the
24    person's base income is computed under this Act.
25        (16) Partnership and partner. The term "partnership"
26    includes a syndicate, group, pool, joint venture or other



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1    unincorporated organization, through or by means of which
2    any business, financial operation, or venture is carried
3    on, and which is not, within the meaning of this Act, a
4    trust or estate or a corporation; and the term "partner"
5    includes a member in such syndicate, group, pool, joint
6    venture or organization.
7        The term "partnership" includes any entity, including
8    a limited liability company formed under the Illinois
9    Limited Liability Company Act, classified as a partnership
10    for federal income tax purposes.
11        The term "partnership" does not include a syndicate,
12    group, pool, joint venture, or other unincorporated
13    organization established for the sole purpose of playing
14    the Illinois State Lottery.
15        (17) Part-year resident. The term "part-year resident"
16    means an individual who became a resident during the
17    taxable year or ceased to be a resident during the taxable
18    year. Under Section 1501(a)(20)(A)(i) residence commences
19    with presence in this State for other than a temporary or
20    transitory purpose and ceases with absence from this State
21    for other than a temporary or transitory purpose. Under
22    Section 1501(a)(20)(A)(ii) residence commences with the
23    establishment of domicile in this State and ceases with the
24    establishment of domicile in another State.
25        (18) Person. The term "person" shall be construed to
26    mean and include an individual, a trust, estate,



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1    partnership, association, firm, company, corporation,
2    limited liability company, or fiduciary. For purposes of
3    Section 1301 and 1302 of this Act, a "person" means (i) an
4    individual, (ii) a corporation, (iii) an officer, agent, or
5    employee of a corporation, (iv) a member, agent or employee
6    of a partnership, or (v) a member, manager, employee,
7    officer, director, or agent of a limited liability company
8    who in such capacity commits an offense specified in
9    Section 1301 and 1302.
10        (18A) Records. The term "records" includes all data
11    maintained by the taxpayer, whether on paper, microfilm,
12    microfiche, or any type of machine-sensible data
13    compilation.
14        (19) Regulations. The term "regulations" includes
15    rules promulgated and forms prescribed by the Department.
16        (20) Resident. The term "resident" means:
17            (A) an individual (i) who is in this State for
18        other than a temporary or transitory purpose during the
19        taxable year; or (ii) who is domiciled in this State
20        but is absent from the State for a temporary or
21        transitory purpose during the taxable year;
22            (B) The estate of a decedent who at his or her
23        death was domiciled in this State;
24            (C) A trust created by a will of a decedent who at
25        his death was domiciled in this State; and
26            (D) An irrevocable trust, the grantor of which was



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1        domiciled in this State at the time such trust became
2        irrevocable. For purpose of this subparagraph, a trust
3        shall be considered irrevocable to the extent that the
4        grantor is not treated as the owner thereof under
5        Sections 671 through 678 of the Internal Revenue Code.
6        (21) Sales. The term "sales" means all gross receipts
7    of the taxpayer not allocated under Sections 301, 302 and
8    303.
9        (22) State. The term "state" when applied to a
10    jurisdiction other than this State means any state of the
11    United States, the District of Columbia, the Commonwealth
12    of Puerto Rico, any Territory or Possession of the United
13    States, and any foreign country, or any political
14    subdivision of any of the foregoing. For purposes of the
15    foreign tax credit under Section 601, the term "state"
16    means any state of the United States, the District of
17    Columbia, the Commonwealth of Puerto Rico, and any
18    territory or possession of the United States, or any
19    political subdivision of any of the foregoing, effective
20    for tax years ending on or after December 31, 1989.
21        (23) Taxable year. The term "taxable year" means the
22    calendar year, or the fiscal year ending during such
23    calendar year, upon the basis of which the base income is
24    computed under this Act. "Taxable year" means, in the case
25    of a return made for a fractional part of a year under the
26    provisions of this Act, the period for which such return is



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1    made.
2        (24) Taxpayer. The term "taxpayer" means any person
3    subject to the tax imposed by this Act.
4        (25) International banking facility. The term
5    international banking facility shall have the same meaning
6    as is set forth in the Illinois Banking Act or as is set
7    forth in the laws of the United States or regulations of
8    the Board of Governors of the Federal Reserve System.
9        (26) Income Tax Return Preparer.
10            (A) The term "income tax return preparer" means any
11        person who prepares for compensation, or who employs
12        one or more persons to prepare for compensation, any
13        return of tax imposed by this Act or any claim for
14        refund of tax imposed by this Act. The preparation of a
15        substantial portion of a return or claim for refund
16        shall be treated as the preparation of that return or
17        claim for refund.
18            (B) A person is not an income tax return preparer
19        if all he or she does is
20                (i) furnish typing, reproducing, or other
21            mechanical assistance;
22                (ii) prepare returns or claims for refunds for
23            the employer by whom he or she is regularly and
24            continuously employed;
25                (iii) prepare as a fiduciary returns or claims
26            for refunds for any person; or



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1                (iv) prepare claims for refunds for a taxpayer
2            in response to any notice of deficiency issued to
3            that taxpayer or in response to any waiver of
4            restriction after the commencement of an audit of
5            that taxpayer or of another taxpayer if a
6            determination in the audit of the other taxpayer
7            directly or indirectly affects the tax liability
8            of the taxpayer whose claims he or she is
9            preparing.
10        (27) Unitary business group.
11            (A) The term "unitary business group" means a group
12        of persons related through common ownership whose
13        business activities are integrated with, dependent
14        upon and contribute to each other. The group will not
15        include those members whose business activity outside
16        the United States is 80% or more of any such member's
17        total business activity; for purposes of this
18        paragraph and clause (a)(3)(B)(ii) of Section 304,
19        business activity within the United States shall be
20        measured by means of the factors ordinarily applicable
21        under subsections (a), (b), (c), (d), or (h) of Section
22        304 except that, in the case of members ordinarily
23        required to apportion business income by means of the 3
24        factor formula of property, payroll and sales
25        specified in subsection (a) of Section 304, including
26        the formula as weighted in subsection (h) of Section



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1        304, such members shall not use the sales factor in the
2        computation and the results of the property and payroll
3        factor computations of subsection (a) of Section 304
4        shall be divided by 2 (by one if either the property or
5        payroll factor has a denominator of zero). The
6        computation required by the preceding sentence shall,
7        in each case, involve the division of the member's
8        property, payroll, or revenue miles in the United
9        States, insurance premiums on property or risk in the
10        United States, or financial organization business
11        income from sources within the United States, as the
12        case may be, by the respective worldwide figures for
13        such items. Common ownership in the case of
14        corporations is the direct or indirect control or
15        ownership of more than 50% of the outstanding voting
16        stock of the persons carrying on unitary business
17        activity. Unitary business activity can ordinarily be
18        illustrated where the activities of the members are:
19        (1) in the same general line (such as manufacturing,
20        wholesaling, retailing of tangible personal property,
21        insurance, transportation or finance); or (2) are
22        steps in a vertically structured enterprise or process
23        (such as the steps involved in the production of
24        natural resources, which might include exploration,
25        mining, refining, and marketing); and, in either
26        instance, the members are functionally integrated



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1        through the exercise of strong centralized management
2        (where, for example, authority over such matters as
3        purchasing, financing, tax compliance, product line,
4        personnel, marketing and capital investment is not
5        left to each member).
6            (B) In no event, shall any unitary business group
7        include members which are ordinarily required to
8        apportion business income under different subsections
9        of Section 304 except that for tax years ending on or
10        after December 31, 1987 this prohibition shall not
11        apply to a holding company that would otherwise be a
12        member of a unitary business group with taxpayers that
13        apportion business income under any of subsections
14        (b), (c), (c-1), or (d) of Section 304. If a unitary
15        business group would, but for the preceding sentence,
16        include members that are ordinarily required to
17        apportion business income under different subsections
18        of Section 304, then for each subsection of Section 304
19        for which there are two or more members, there shall be
20        a separate unitary business group composed of such
21        members. For purposes of the preceding two sentences, a
22        member is "ordinarily required to apportion business
23        income" under a particular subsection of Section 304 if
24        it would be required to use the apportionment method
25        prescribed by such subsection except for the fact that
26        it derives business income solely from Illinois. As



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1        used in this paragraph, for taxable years ending before
2        December 31, 2015, the phrase "United States" means
3        only the 50 states and the District of Columbia, but
4        does not include any territory or possession of the
5        United States or any area over which the United States
6        has asserted jurisdiction or claimed exclusive rights
7        with respect to the exploration for or exploitation of
8        natural resources. For taxable years ending on or after
9        December 31, 2015, the phrase "United States", as used
10        in this paragraph, means only the 50 states, the
11        District of Columbia, and any area over which the
12        United States has asserted jurisdiction or claimed
13        exclusive rights with respect to the exploration for or
14        exploitation of natural resources, but does not
15        include any territory or possession of the United
16        States.
17            (C) Holding companies.
18                (i) For purposes of this subparagraph, a
19            "holding company" is a corporation (other than a
20            corporation that is a financial organization under
21            paragraph (8) of this subsection (a) of Section
22            1501 because it is a bank holding company under the
23            provisions of the Bank Holding Company Act of 1956
24            (12 U.S.C. 1841, et seq.) or because it is owned by
25            a bank or a bank holding company) that owns a
26            controlling interest in one or more other



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1            taxpayers ("controlled taxpayers"); that, during
2            the period that includes the taxable year and the 2
3            immediately preceding taxable years or, if the
4            corporation was formed during the current or
5            immediately preceding taxable year, the taxable
6            years in which the corporation has been in
7            existence, derived substantially all its gross
8            income from dividends, interest, rents, royalties,
9            fees or other charges received from controlled
10            taxpayers for the provision of services, and gains
11            on the sale or other disposition of interests in
12            controlled taxpayers or in property leased or
13            licensed to controlled taxpayers or used by the
14            taxpayer in providing services to controlled
15            taxpayers; and that incurs no substantial expenses
16            other than expenses (including interest and other
17            costs of borrowing) incurred in connection with
18            the acquisition and holding of interests in
19            controlled taxpayers and in the provision of
20            services to controlled taxpayers or in the leasing
21            or licensing of property to controlled taxpayers.
22                (ii) The income of a holding company which is a
23            member of more than one unitary business group
24            shall be included in each unitary business group of
25            which it is a member on a pro rata basis, by
26            including in each unitary business group that



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1            portion of the base income of the holding company
2            that bears the same proportion to the total base
3            income of the holding company as the gross receipts
4            of the unitary business group bears to the combined
5            gross receipts of all unitary business groups (in
6            both cases without regard to the holding company)
7            or on any other reasonable basis, consistently
8            applied.
9                (iii) A holding company shall apportion its
10            business income under the subsection of Section
11            304 used by the other members of its unitary
12            business group. The apportionment factors of a
13            holding company which would be a member of more
14            than one unitary business group shall be included
15            with the apportionment factors of each unitary
16            business group of which it is a member on a pro
17            rata basis using the same method used in clause
18            (ii).
19                (iv) The provisions of this subparagraph (C)
20            are intended to clarify existing law.
21            (D) If including the base income and factors of a
22        holding company in more than one unitary business group
23        under subparagraph (C) does not fairly reflect the
24        degree of integration between the holding company and
25        one or more of the unitary business groups, the
26        dependence of the holding company and one or more of



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1        the unitary business groups upon each other, or the
2        contributions between the holding company and one or
3        more of the unitary business groups, the holding
4        company may petition the Director, under the
5        procedures provided under Section 304(f), for
6        permission to include all base income and factors of
7        the holding company only with members of a unitary
8        business group apportioning their business income
9        under one subsection of subsections (a), (b), (c), or
10        (d) of Section 304. If the petition is granted, the
11        holding company shall be included in a unitary business
12        group only with persons apportioning their business
13        income under the selected subsection of Section 304
14        until the Director grants a petition of the holding
15        company either to be included in more than one unitary
16        business group under subparagraph (C) or to include its
17        base income and factors only with members of a unitary
18        business group apportioning their business income
19        under a different subsection of Section 304.
20            (E) If the unitary business group members'
21        accounting periods differ, the common parent's
22        accounting period or, if there is no common parent, the
23        accounting period of the member that is expected to
24        have, on a recurring basis, the greatest Illinois
25        income tax liability must be used to determine whether
26        to use the apportionment method provided in subsection



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1        (a) or subsection (h) of Section 304. The prohibition
2        against membership in a unitary business group for
3        taxpayers ordinarily required to apportion income
4        under different subsections of Section 304 does not
5        apply to taxpayers required to apportion income under
6        subsection (a) and subsection (h) of Section 304. The
7        provisions of this amendatory Act of 1998 apply to tax
8        years ending on or after December 31, 1998.
9        (28) Subchapter S corporation. The term "Subchapter S
10    corporation" means a corporation for which there is in
11    effect an election under Section 1362 of the Internal
12    Revenue Code, or for which there is a federal election to
13    opt out of the provisions of the Subchapter S Revision Act
14    of 1982 and have applied instead the prior federal
15    Subchapter S rules as in effect on July 1, 1982.
16        (30) Foreign person. The term "foreign person" means
17    any person who is a nonresident alien individual and any
18    nonindividual entity, regardless of where created or
19    organized, whose business activity outside the United
20    States is 80% or more of the entity's total business
21    activity.
22    (b) Other definitions.
23        (1) Words denoting number, gender, and so forth, when
24    used in this Act, where not otherwise distinctly expressed
25    or manifestly incompatible with the intent thereof:



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1            (A) Words importing the singular include and apply
2        to several persons, parties or things;
3            (B) Words importing the plural include the
4        singular; and
5            (C) Words importing the masculine gender include
6        the feminine as well.
7        (2) "Company" or "association" as including successors
8    and assigns. The word "company" or "association", when used
9    in reference to a corporation, shall be deemed to embrace
10    the words "successors and assigns of such company or
11    association", and in like manner as if these last-named
12    words, or words of similar import, were expressed.
13        (3) Other terms. Any term used in any Section of this
14    Act with respect to the application of, or in connection
15    with, the provisions of any other Section of this Act shall
16    have the same meaning as in such other Section.
17(Source: P.A. 96-641, eff. 8-24-09; 97-507, eff. 8-23-11;
1897-636, eff. 6-1-12.)
19    Section 10. The Limited Liability Company Act is amended by
20changing Section 50-10 as follows:
21    (805 ILCS 180/50-10)
22    Sec. 50-10. Fees.
23    (a) The Secretary of State shall charge and collect in
24accordance with the provisions of this Act and rules



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1promulgated under its authority all of the following:
2        (1) Fees for filing documents.
3        (2) Miscellaneous charges.
4        (3) Fees for the sale of lists of filings and for
5    copies of any documents.
6    (b) The Secretary of State shall charge and collect for all
7of the following:
8        (1) Filing articles of organization (domestic),
9    application for admission (foreign), and restated articles
10    of organization (domestic), $75 $500. Notwithstanding the
11    foregoing, the fee for filing articles of organization
12    (domestic), application for admission (foreign), and
13    restated articles of organization (domestic) in connection
14    with a limited liability company with ability to establish
15    series pursuant to Section 37-40 of this Act is $125 $750.
16        (2) Filing articles of amendment or an amended
17    application for admission, $150.
18        (3) Filing articles of dissolution or application for
19    withdrawal, $100.
20        (4) Filing an application to reserve a name, $300.
21        (5) Filing a notice of cancellation of a reserved name,
22    $100.
23        (6) Filing a notice of a transfer of a reserved name,
24    $100.
25        (7) Registration of a name, $300.
26        (8) Renewal of registration of a name, $100.



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1        (9) Filing an application for use of an assumed name
2    under Section 1-20 of this Act, $150 for each year or part
3    thereof ending in 0 or 5, $120 for each year or part
4    thereof ending in 1 or 6, $90 for each year or part thereof
5    ending in 2 or 7, $60 for each year or part thereof ending
6    in 3 or 8, $30 for each year or part thereof ending in 4 or
7    9, and a renewal for each assumed name, $150.
8        (10) Filing an application for change or cancellation
9    of an assumed name, $100.
10        (11) Filing an annual report of a limited liability
11    company or foreign limited liability company, $250, if
12    filed as required by this Act, plus a penalty if
13    delinquent. Notwithstanding the foregoing, the fee for
14    filing an annual report of a limited liability company or
15    foreign limited liability company with ability to
16    establish series is $250 plus $50 for each series for which
17    a certificate of designation has been filed pursuant to
18    Section 37-40 of this Act and active on the last day of the
19    third month preceding the company's anniversary month,
20    plus a penalty if delinquent.
21        (12) Filing an application for reinstatement of a
22    limited liability company or foreign limited liability
23    company $500.
24        (13) Filing Articles of Merger, $100 plus $50 for each
25    party to the merger in excess of the first 2 parties.
26        (14) Filing an Agreement of Conversion or Statement of



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1    Conversion, $100.
2        (15) Filing a statement of change of address of
3    registered office or change of registered agent, or both,
4    or filing a statement of correction, $25.
5        (16) Filing a petition for refund, $15.
6        (17) Filing any other document, $100.
7        (18) Filing a certificate of designation of a limited
8    liability company with the ability to establish series
9    pursuant to Section 37-40 of this Act, $50.
10    (c) The Secretary of State shall charge and collect all of
11the following:
12        (1) For furnishing a copy or certified copy of any
13    document, instrument, or paper relating to a limited
14    liability company or foreign limited liability company, or
15    for a certificate, $25.
16        (2) For the transfer of information by computer process
17    media to any purchaser, fees established by rule.
18(Source: P.A. 97-839, eff. 7-20-12.)