Full Text of SB2209 93rd General Assembly
SB2209ham001 93RD GENERAL ASSEMBLY
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Revenue Committee
Filed: 5/19/2004
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| AMENDMENT TO SENATE BILL 2209
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| AMENDMENT NO. ______. Amend Senate Bill 2209 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 5. The Illinois Income Tax Act is amended by | 5 |
| changing Section 304 as follows:
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| (35 ILCS 5/304) (from Ch. 120, par. 3-304)
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| Sec. 304. Business income of persons other than residents.
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| (a) In general. The business income of a person other than | 9 |
| a
resident shall be allocated to this State if such person's | 10 |
| business
income is derived solely from this State. If a person | 11 |
| other than a
resident derives business income from this State | 12 |
| and one or more other
states, then, for tax years ending on or | 13 |
| before December 30, 1998, and
except as otherwise provided by | 14 |
| this Section, such
person's business income shall be | 15 |
| apportioned to this State by
multiplying the income by a | 16 |
| fraction, the numerator of which is the sum
of the property | 17 |
| factor (if any), the payroll factor (if any) and 200% of the
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| sales factor (if any), and the denominator of which is 4 | 19 |
| reduced by the
number of factors other than the sales factor | 20 |
| which have a denominator
of zero and by an additional 2 if the | 21 |
| sales factor has a denominator of zero.
For tax years ending on | 22 |
| or after December 31, 1998, and except as otherwise
provided by | 23 |
| this Section, persons other than
residents who derive business | 24 |
| income from this State and one or more other
states shall |
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| compute their apportionment factor by weighting their | 2 |
| property,
payroll, and sales factors as provided in
subsection | 3 |
| (h) of this Section.
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| (1) Property factor.
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| (A) The property factor is a fraction, the numerator of | 6 |
| which is the
average value of the person's real and | 7 |
| tangible personal property owned
or rented and used in the | 8 |
| trade or business in this State during the
taxable year and | 9 |
| the denominator of which is the average value of all
the | 10 |
| person's real and tangible personal property owned or | 11 |
| rented and
used in the trade or business during the taxable | 12 |
| year.
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| (B) Property owned by the person is valued at its | 14 |
| original cost.
Property rented by the person is valued at 8 | 15 |
| times the net annual rental
rate. Net annual rental rate is | 16 |
| the annual rental rate paid by the
person less any annual | 17 |
| rental rate received by the person from
sub-rentals.
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| (C) The average value of property shall be determined | 19 |
| by averaging
the values at the beginning and ending of the | 20 |
| taxable year but the
Director may require the averaging of | 21 |
| monthly values during the taxable
year if reasonably | 22 |
| required to reflect properly the average value of the
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| person's property.
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| (2) Payroll factor.
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| (A) The payroll factor is a fraction, the numerator of | 26 |
| which is the
total amount paid in this State during the | 27 |
| taxable year by the person
for compensation, and the | 28 |
| denominator of which is the total compensation
paid | 29 |
| everywhere during the taxable year.
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| (B) Compensation is paid in this State if:
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| (i) The individual's service is performed entirely | 32 |
| within this
State;
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| (ii) The individual's service is performed both | 34 |
| within and without
this State, but the service |
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| performed without this State is incidental
to the | 2 |
| individual's service performed within this State; or
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| (iii) Some of the service is performed within this | 4 |
| State and either
the base of operations, or if there is | 5 |
| no base of operations, the place
from which the service | 6 |
| is directed or controlled is within this State,
or the | 7 |
| base of operations or the place from which the service | 8 |
| is
directed or controlled is not in any state in which | 9 |
| some part of the
service is performed, but the | 10 |
| individual's residence is in this State.
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| Beginning with taxable years ending on or after | 12 |
| December 31, 1992, for
residents of states that impose a | 13 |
| comparable tax liability on residents of this State, for
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| purposes of item (i) of this paragraph (B), in the case of | 15 |
| persons who
perform personal services under personal | 16 |
| service contracts for sports
performances, services by | 17 |
| that person at a sporting event taking place in
Illinois | 18 |
| shall be deemed to be a performance entirely within this | 19 |
| State.
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| (3) Sales factor.
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| (A) The sales factor is a fraction, the numerator of | 22 |
| which is the
total sales of the person in this State during | 23 |
| the taxable year, and the
denominator of which is the total | 24 |
| sales of the person everywhere during
the taxable year.
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| (B) Sales of tangible personal property are in this | 26 |
| State if:
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| (i) The property is delivered or shipped to a | 28 |
| purchaser, other than
the United States government, | 29 |
| within this State regardless of the f. o.
b. point or | 30 |
| other conditions of the sale; or
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| (ii) The property is shipped from an office, store, | 32 |
| warehouse,
factory or other place of storage in this | 33 |
| State and either the purchaser
is the United States | 34 |
| government or the person is not taxable in the
state of |
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| the purchaser; provided, however, that premises owned | 2 |
| or leased
by a person who has independently contracted | 3 |
| with the seller for the printing
of newspapers, | 4 |
| periodicals or books shall not be deemed to be an | 5 |
| office,
store, warehouse, factory or other place of | 6 |
| storage for purposes of this
Section. For taxable years | 7 |
| ending before December 31, 2004, sales
Sales of | 8 |
| tangible personal property are not in this State if the
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| seller and purchaser would be members of the same | 10 |
| unitary business group
but for the fact that either the | 11 |
| seller or purchaser is a person with 80%
or more of | 12 |
| total business activity outside of the United States | 13 |
| and the
property is purchased for resale.
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| (B-1) Patents, copyrights, trademarks, and similar | 15 |
| items of intangible
personal property.
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| (i) Gross receipts from the licensing, sale, or | 17 |
| other disposition of a
patent, copyright, trademark, | 18 |
| or similar item of intangible personal property
are in | 19 |
| this State to the extent the item is utilized in this | 20 |
| State during the
year the gross receipts are included | 21 |
| in gross income.
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| (ii) Place of utilization.
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| (I) A patent is utilized in a state to the | 24 |
| extent that it is employed
in production, | 25 |
| fabrication, manufacturing, or other processing in | 26 |
| the state or
to the extent that a patented product | 27 |
| is produced in the state. If a patent is
utilized | 28 |
| in
more than one state, the extent to which it is | 29 |
| utilized in any one state shall
be a fraction equal | 30 |
| to the gross receipts of the licensee or purchaser | 31 |
| from
sales or leases of items produced, | 32 |
| fabricated, manufactured, or processed
within that | 33 |
| state using the patent and of patented items | 34 |
| produced within that
state, divided by the total of |
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| such gross receipts for all states in which the
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| patent is utilized.
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| (II) A copyright is utilized in a state to the | 4 |
| extent that printing or
other publication | 5 |
| originates in the state. If a copyright is utilized | 6 |
| in more
than one state, the extent to which it is | 7 |
| utilized in any one state shall be a
fraction equal | 8 |
| to the gross receipts from sales or licenses of | 9 |
| materials
printed or published in that state | 10 |
| divided by the total of such gross receipts
for all | 11 |
| states in which the copyright is utilized.
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| (III) Trademarks and other items of intangible | 13 |
| personal property
governed by this paragraph (B-1) | 14 |
| are utilized in the state in which the
commercial | 15 |
| domicile of the licensee or purchaser is located.
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| (iii) If the state of utilization of an item of | 17 |
| property governed by
this paragraph (B-1) cannot be | 18 |
| determined from the taxpayer's books and
records or | 19 |
| from the books and records of any person related to the | 20 |
| taxpayer
within the meaning of Section 267(b) of the | 21 |
| Internal Revenue Code, 26 U.S.C.
267, the gross
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| receipts attributable to that item shall be excluded | 23 |
| from both the numerator
and the denominator of the | 24 |
| sales factor.
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| (B-2) Gross receipts from the license, sale, or other | 26 |
| disposition of
patents, copyrights, trademarks, and | 27 |
| similar items of intangible personal
property may be | 28 |
| included in the numerator or denominator of the sales | 29 |
| factor
only if gross receipts from licenses, sales, or | 30 |
| other disposition of such items
comprise more than 50% of | 31 |
| the taxpayer's total gross receipts included in gross
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| income during the tax year and during each of the 2 | 33 |
| immediately preceding tax
years; provided that, when a | 34 |
| taxpayer is a member of a unitary business group,
such |
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| determination shall be made on the basis of the gross | 2 |
| receipts of the
entire unitary business group.
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| (C) For taxable years ending before December 31, 2004, | 4 |
| sales
Sales , other than sales governed by paragraphs (B) ,
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| and (B-1) , and (B-2) , are in
this State if:
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| (i) The income-producing activity is performed in | 7 |
| this State; or
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| (ii) The income-producing activity is performed | 9 |
| both within and
without this State and a greater | 10 |
| proportion of the income-producing
activity is | 11 |
| performed within this State than without this State, | 12 |
| based
on performance costs.
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| (C-5) For taxable years ending on or after December 31, | 14 |
| 2004, sales, other than sales governed by paragraphs (B), | 15 |
| (B-1), and (B-2), are in this State if the purchaser is in | 16 |
| this State or the sale is otherwise attributable to this | 17 |
| State's marketplace. The following examples are | 18 |
| illustrative: | 19 |
| (i) Sales from the sale or lease of real property | 20 |
| are in this State if the property is located in this | 21 |
| State. | 22 |
| (ii) Sales from the lease or rental of tangible | 23 |
| personal property are in this State if the property is | 24 |
| located in this State during the rental period. Sales | 25 |
| from the lease or rental of tangible personal property | 26 |
| that is characteristically moving property, including, | 27 |
| but not limited to, motor vehicles, rolling stock, | 28 |
| aircraft, vessels, or mobile equipment are in this | 29 |
| State to the extent that the property is used in this | 30 |
| State. | 31 |
| (iii) Sales of intangible personal property are in | 32 |
| this State if the purchaser realizes benefit from the | 33 |
| property in this State. If the purchaser realizes | 34 |
| benefit from the the property both within and without |
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| this State, the gross receipts from the sale shall be | 2 |
| divided among those states in which the taxpayer is | 3 |
| taxable in proportion to the benefit in each state. If | 4 |
| the proportionate benefit in this State cannot be | 5 |
| determined, the sale shall be excluded from both the | 6 |
| numerator and the denominator of the sales factor. | 7 |
| (iv) Sales of services are in this State if the | 8 |
| benefit of the service is realized in this State. If | 9 |
| the benefit of the service is realized both within and | 10 |
| without this State, the gross receipts from the sale | 11 |
| shall be divided among those states in which the | 12 |
| taxpayer is taxable in proportion to the benefit of | 13 |
| service realized in each state. If the proportionate | 14 |
| benefit in this State cannot be determined, the sale | 15 |
| shall be excluded from both the numerator and the | 16 |
| denominator of the sales factor. The Department may | 17 |
| adopt rules prescribing where the benefit of specific | 18 |
| types of service, including, but not limited to, | 19 |
| telecommunications, broadcast, cable, advertising, | 20 |
| publishing, and utility service, is realized.
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| (D) For taxable years ending on or after December 31, | 22 |
| 1995, the following
items of income shall not be included | 23 |
| in the numerator or denominator of the
sales factor: | 24 |
| dividends; amounts included under Section 78 of the | 25 |
| Internal
Revenue Code; and Subpart F income as defined in | 26 |
| Section 952 of the Internal
Revenue Code.
No inference | 27 |
| shall be drawn from the enactment of this paragraph (D) in
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| construing this Section for taxable years ending before | 29 |
| December 31, 1995.
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| (E) Paragraphs (B-1) and (B-2) shall apply to tax years | 31 |
| ending on or
after December 31, 1999, provided that a | 32 |
| taxpayer may elect to apply the
provisions of these | 33 |
| paragraphs to prior tax years. Such election shall be made
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| in the form and manner prescribed by the Department, shall |
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| be irrevocable, and
shall apply to all tax years; provided | 2 |
| that, if a taxpayer's Illinois income
tax liability for any | 3 |
| tax year, as assessed under Section 903 prior to January
1, | 4 |
| 1999, was computed in a manner contrary to the provisions | 5 |
| of paragraphs
(B-1) or (B-2), no refund shall be payable to | 6 |
| the taxpayer for that tax year to
the extent such refund is | 7 |
| the result of applying the provisions of paragraph
(B-1) or | 8 |
| (B-2) retroactively. In the case of a unitary business | 9 |
| group, such
election shall apply to all members of such | 10 |
| group for every tax year such group
is in existence, but | 11 |
| shall not apply to any taxpayer for any period during
which | 12 |
| that taxpayer is not a member of such group.
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| (b) Insurance companies.
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| (1) In general. Except as otherwise
provided by | 15 |
| paragraph (2), business income of an insurance company for | 16 |
| a
taxable year shall be apportioned to this State by | 17 |
| multiplying such
income by a fraction, the numerator of | 18 |
| which is the direct premiums
written for insurance upon | 19 |
| property or risk in this State, and the
denominator of | 20 |
| which is the direct premiums written for insurance upon
| 21 |
| property or risk everywhere. For purposes of this | 22 |
| subsection, the term
"direct premiums written" means the | 23 |
| total amount of direct premiums
written, assessments and | 24 |
| annuity considerations , and surplus line contracts, but | 25 |
| excluding deposit-type funds, as reported for the
taxable | 26 |
| year on the annual statement filed by the company with the
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| Illinois Director of Insurance in the form approved by the | 28 |
| National
Convention of Insurance Commissioners as filed by | 29 |
| the taxpayer with the Illinois Department of Insurance or, | 30 |
| if no report is filed with the Illinois Department of | 31 |
| Insurance, as filed by the taxpayer with its state of | 32 |
| domicile. If no such annual report is filed with any of the | 33 |
| United States for a particular year, "direct premiums | 34 |
| written" shall be determined by applying the instructions |
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| to the Illinois annual report form for that year
or such | 2 |
| other form as may be
prescribed in lieu thereof .
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| (2) Reinsurance. If the principal source of premiums | 4 |
| written by an
insurance company consists of premiums for | 5 |
| reinsurance accepted by it,
the business income of such | 6 |
| company shall be apportioned to this State
by multiplying | 7 |
| such income by a fraction, the numerator of which is the
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| sum of (i) direct premiums written for insurance upon | 9 |
| property or risk
in this State, plus (ii) premiums written | 10 |
| for reinsurance accepted in
respect of property or risk in | 11 |
| this State, and the denominator of which
is the sum of | 12 |
| (iii) direct premiums written for insurance upon property
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| or risk everywhere, plus (iv) premiums written for | 14 |
| reinsurance accepted
in respect of property or risk | 15 |
| everywhere. For taxable years ending before December 31, | 16 |
| 2004, for purposes of this
paragraph, premiums written for | 17 |
| reinsurance accepted in respect of
property or risk in this | 18 |
| State, whether or not otherwise determinable,
may, at the | 19 |
| election of the company, be determined on the basis of the
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| proportion which premiums written for reinsurance accepted | 21 |
| from
companies commercially domiciled in Illinois bears to | 22 |
| premiums written
for reinsurance accepted from all | 23 |
| sources, or, alternatively, in the
proportion which the sum | 24 |
| of the direct premiums written for insurance
upon property | 25 |
| or risk in this State by each ceding company from which
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| reinsurance is accepted bears to the sum of the total | 27 |
| direct premiums
written by each such ceding company for the | 28 |
| taxable year.
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| (c) Financial organizations.
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| (1) In general. For taxable years ending before | 31 |
| December 31, 2004, business
Business income of a financial
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| organization shall be apportioned to this State by | 33 |
| multiplying such
income by a fraction, the numerator of | 34 |
| which is its business income from
sources within this |
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| State, and the denominator of which is its business
income | 2 |
| from all sources. For the purposes of this subsection, the
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| business income of a financial organization from sources | 4 |
| within this
State is the sum of the amounts referred to in | 5 |
| subparagraphs (A) through
(E) following, but excluding the | 6 |
| adjusted income of an international banking
facility as | 7 |
| determined in paragraph (2):
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| (A) Fees, commissions or other compensation for | 9 |
| financial services
rendered within this State;
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| (B) Gross profits from trading in stocks, bonds or | 11 |
| other securities
managed within this State;
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| (C) Dividends, and interest from Illinois | 13 |
| customers, which are received
within this State;
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| (D) Interest charged to customers at places of | 15 |
| business maintained
within this State for carrying | 16 |
| debit balances of margin accounts,
without deduction | 17 |
| of any costs incurred in carrying such accounts; and
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| (E) Any other gross income resulting from the | 19 |
| operation as a
financial organization within this | 20 |
| State. In computing the amounts
referred to in | 21 |
| paragraphs (A) through (E) of this subsection, any | 22 |
| amount
received by a member of an affiliated group | 23 |
| (determined under Section
1504(a) of the Internal | 24 |
| Revenue Code but without reference to whether
any such | 25 |
| corporation is an "includible corporation" under | 26 |
| Section
1504(b) of the Internal Revenue Code) from | 27 |
| another member of such group
shall be included only to | 28 |
| the extent such amount exceeds expenses of the
| 29 |
| recipient directly related thereto.
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| (2) International Banking Facility. For taxable years | 31 |
| ending before December 31, 2004:
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| (A) Adjusted Income. The adjusted income of an | 33 |
| international banking
facility is its income reduced | 34 |
| by the amount of the floor amount.
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| (B) Floor Amount. The floor amount shall be the | 2 |
| amount, if any,
determined
by multiplying the income of | 3 |
| the international banking facility by a fraction,
not | 4 |
| greater than one, which is determined as follows:
| 5 |
| (i) The numerator shall be:
| 6 |
| The average aggregate, determined on a | 7 |
| quarterly basis, of the
financial
organization's | 8 |
| loans to banks in foreign countries, to foreign | 9 |
| domiciled
borrowers (except where secured | 10 |
| primarily by real estate) and to foreign
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| governments and other foreign official | 12 |
| institutions, as reported for its
branches, | 13 |
| agencies and offices within the state on its | 14 |
| "Consolidated Report
of Condition", Schedule A, | 15 |
| Lines 2.c., 5.b., and 7.a., which was filed with
| 16 |
| the Federal Deposit Insurance Corporation and | 17 |
| other regulatory authorities,
for the year 1980, | 18 |
| minus
| 19 |
| The average aggregate, determined on a | 20 |
| quarterly basis, of such loans
(other
than loans of | 21 |
| an international banking facility), as reported by | 22 |
| the financial
institution for its branches, | 23 |
| agencies and offices within the state, on
the | 24 |
| corresponding Schedule and lines of the | 25 |
| Consolidated Report of Condition
for the current | 26 |
| taxable year, provided, however, that in no case | 27 |
| shall the
amount determined in this clause (the | 28 |
| subtrahend) exceed the amount determined
in the | 29 |
| preceding clause (the minuend); and
| 30 |
| (ii) the denominator shall be the average | 31 |
| aggregate, determined on a
quarterly basis, of the | 32 |
| international banking facility's loans to banks in
| 33 |
| foreign countries, to foreign domiciled borrowers | 34 |
| (except where secured
primarily by real estate) |
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| and to foreign governments and other foreign
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| official institutions, which were recorded in its | 3 |
| financial accounts for
the current taxable year.
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| (C) Change to Consolidated Report of Condition and | 5 |
| in Qualification.
In the event the Consolidated Report | 6 |
| of Condition which is filed with the
Federal Deposit | 7 |
| Insurance Corporation and other regulatory authorities | 8 |
| is
altered so that the information required for | 9 |
| determining the floor amount
is not found on Schedule | 10 |
| A, lines 2.c., 5.b. and 7.a., the financial
institution | 11 |
| shall notify the Department and the Department may, by
| 12 |
| regulations or otherwise, prescribe or authorize the | 13 |
| use of an alternative
source for such information. The | 14 |
| financial institution shall also notify
the Department | 15 |
| should its international banking facility fail to | 16 |
| qualify as
such, in whole or in part, or should there | 17 |
| be any amendment or change to
the Consolidated Report | 18 |
| of Condition, as originally filed, to the extent
such | 19 |
| amendment or change alters the information used in | 20 |
| determining the floor
amount.
| 21 |
| (3) For taxable years ending on or after December 31, | 22 |
| 2004, the business income of a financial organization shall | 23 |
| be apportioned to this State by multiplying such income by | 24 |
| a fraction, the numerator of which is its gross receipts | 25 |
| from sources in this State or otherwise attributable to | 26 |
| this State's marketplace and the denominator of which is | 27 |
| its gross receipts everywhere during the taxable year. | 28 |
| "Gross receipts" for purposes of this subparagraph (3) | 29 |
| means gross income, including net taxable gain on | 30 |
| disposition of assets, including securities and money | 31 |
| market instruments, when derived from transactions and | 32 |
| activities in the regular course of the financial | 33 |
| organization's trade or business. If a person derives | 34 |
| business income from activities in addition to the |
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| provision of financial services, this subparagraph (3) | 2 |
| shall apply only to its business income from financial | 3 |
| services, and its other business income shall be | 4 |
| apportioned to this State under the applicable provisions | 5 |
| of this Section. The following examples are illustrative:
| 6 |
| (i) Receipts from the lease or rental of real or | 7 |
| tangible personal property are in this State if the | 8 |
| property is located in this State during the rental | 9 |
| period. Receipts from the lease or rental of tangible | 10 |
| personal property that is characteristically moving | 11 |
| property, including, but not limited to, motor | 12 |
| vehicles, rolling stock, aircraft, vessels, or mobile | 13 |
| equipment are from sources in this State to the extent | 14 |
| that the property is used in this State. | 15 |
| (ii) Interest income, commissions, fees, gains on | 16 |
| disposition, and other receipts from assets in the | 17 |
| nature of loans that are secured primarily by real | 18 |
| estate or tangible personal property are from sources | 19 |
| in this State if the security is located in this State. | 20 |
| (iii) Interest income, commissions, fees, gains on | 21 |
| disposition, and other receipts from consumer loans | 22 |
| that are not secured by real or tangible personal | 23 |
| property are from sources in this State if the debtor | 24 |
| is a resident of this State. | 25 |
| (iv) Interest income, commissions, fees, gains on | 26 |
| disposition, and other receipts from commercial loans | 27 |
| and installment obligations that are not secured by | 28 |
| real or tangible personal property are from sources in | 29 |
| this State if the proceeds of the loan are to be | 30 |
| applied in this State. If it cannot be determined where | 31 |
| the funds are to be applied, the income and receipts | 32 |
| are from sources in this State if the office of the | 33 |
| borrower from which the loan was negotiated in the | 34 |
| regular course of business is located in this State. If |
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| the location of this office cannot be determined, the | 2 |
| income and receipts shall be excluded from the | 3 |
| numerator and denominator of the sales factor.
| 4 |
| (v) Interest income, fees, gains on disposition, | 5 |
| service charges, merchant discount income, and other | 6 |
| receipts from credit card receivables are from sources | 7 |
| in this State if the card charges are regularly billed | 8 |
| to a customer in this State. | 9 |
| (vi) Receipts from the performance of services, | 10 |
| including, but not limited to, fiduciary, advisory, | 11 |
| and brokerage services, are in this State if the | 12 |
| benefit of the service is realized in this State. If | 13 |
| the benefit of the service is realized both within and | 14 |
| without this State, the gross receipts from the sale | 15 |
| shall be divided among those states in which the | 16 |
| taxpayer is taxable in proportion to the benefit of | 17 |
| service realized in each state. If the proportionate | 18 |
| benefit in this State cannot be determined, the sale | 19 |
| shall be excluded from both the numerator and the | 20 |
| denominator of the gross receipts factor. | 21 |
| (vii) Receipts from the issuance of travelers | 22 |
| checks and money orders are from sources in this State | 23 |
| if the checks and money orders are issued from a | 24 |
| location within this State. | 25 |
| (viii) In the case of a financial organization that | 26 |
| accepts deposits, receipts from investments and from | 27 |
| money market instruments are apportioned to this State | 28 |
| based on the ratio that the total deposits of the | 29 |
| financial organization (including all members of the | 30 |
| financial organization's unitary group) from this | 31 |
| State, its residents, (including businesses with an | 32 |
| office or other place of business in this State), and | 33 |
| its political subdivisions, agencies, and | 34 |
| instrumentalities bear to total deposits everywhere. |
|
|
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| 1 |
| For purposes of this subdivision, deposits must be | 2 |
| attributed to this State under the preceding sentence, | 3 |
| whether or not the deposits are accepted or maintained | 4 |
| by the financial organization at locations within this | 5 |
| State. In the case of a financial organization that | 6 |
| does not accept deposits, receipts from investments in | 7 |
| securities and from money market instruments shall be | 8 |
| excluded from the numerator and the denominator of the | 9 |
| gross receipts factor.
| 10 |
| (4) As used in subparagraph (3), "deposit" includes but | 11 |
| is not limited to: | 12 |
| (i) the unpaid balance of money or its equivalent | 13 |
| received or held by a financial institution in the | 14 |
| usual course of business and for which it has given or | 15 |
| is obligated to give credit, either conditionally or | 16 |
| unconditionally, to a commercial, checking, savings, | 17 |
| time, or thrift account whether or not advance notice | 18 |
| is required to withdraw the credited funds, or which is | 19 |
| evidenced by its certificate of deposit, thrift | 20 |
| certificate, investment certificate, or certificate of | 21 |
| indebtedness, or other similar name, or a check or | 22 |
| draft drawn against a deposit account and certified by | 23 |
| the financial organization, or a letter of credit or a | 24 |
| traveler's check on which the financial organization | 25 |
| is primarily liable. However, without limiting the | 26 |
| generality of the term "money or its equivalent", any | 27 |
| such account or instrument must be regarded as | 28 |
| evidencing the receipt of the equivalent of money when | 29 |
| credited or issued in exchange for checks or drafts or | 30 |
| for a promissory note upon which the person obtaining | 31 |
| the credit or instrument is primarily or secondarily | 32 |
| liable, or for a charge against a deposit account, or | 33 |
| in settlement of checks, drafts, or other instruments | 34 |
| forwarded to the bank for collection; |
|
|
|
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| 1 |
| (ii) trust funds received or held by the financial | 2 |
| organization, whether held in the trust department or | 3 |
| held or deposited in any other department of the | 4 |
| financial organization; | 5 |
| (iii) money received or held by a financial | 6 |
| organization, or the credit given for money or its | 7 |
| equivalent received or held by a financial | 8 |
| organization, in the usual course of business for a | 9 |
| special or specific purpose, regardless of the legal | 10 |
| relationship so established. Under this paragraph, | 11 |
| "deposit" includes, but is not limited to, escrow | 12 |
| funds, funds held as security for an obligation due to | 13 |
| the financial organization or others, including funds | 14 |
| held as dealers reserves, or for securities loaned by | 15 |
| the financial organization, funds deposited by a | 16 |
| debtor to meet maturing obligations, funds deposited | 17 |
| as advance payment on subscriptions to United States | 18 |
| government securities, funds held for distribution or | 19 |
| purchase of securities, funds held to meet its | 20 |
| acceptances or letters of credit, and withheld taxes. | 21 |
| It does not include funds received by the financial | 22 |
| organization for immediate application to the | 23 |
| reduction of an indebtedness to the receiving | 24 |
| financial organization, or under condition that the | 25 |
| receipt of the funds immediately reduces or | 26 |
| extinguishes the indebtedness; | 27 |
| (iv) outstanding drafts, including advice of | 28 |
| another financial organization, cashier's checks, | 29 |
| money orders, or other officer's checks issued in the | 30 |
| usual course of business for any purpose, but not | 31 |
| including those issued in payment for services, | 32 |
| dividends, or purchases or other costs or expenses of | 33 |
| the financial organization itself; and | 34 |
| (v) money or its equivalent held as a credit |
|
|
|
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LRB093 15835 MKM 51235 a |
|
| 1 |
| balance by a financial organization on behalf of its | 2 |
| customer if the entity is engaged in soliciting and | 3 |
| holding such balances in the regular course of its | 4 |
| business.
| 5 |
| (5) As used in subparagraph (3), "money market | 6 |
| instruments" includes but is not limited to: | 7 |
| (i) Interest-bearing deposits, federal funds sold | 8 |
| and securities purchased under agreements to resell, | 9 |
| commercial paper, banker's acceptances, and purchased | 10 |
| certificates of deposit and similar instruments to the | 11 |
| extent that the instruments are reflected as assets | 12 |
| under generally accepted accounting principles. | 13 |
| "Securities" means corporate stock, bonds, and | 14 |
| other securities (including, for purposes of taxation | 15 |
| of gains on securities and for purchases under | 16 |
| agreements to resell, United States Treasury | 17 |
| securities, obligations of United States government | 18 |
| agencies and corporations, obligations of state and | 19 |
| political subdivisions, the interest on which is | 20 |
| exempt from Illinois income tax), participations in | 21 |
| securities backed by mortgages held by United States or | 22 |
| state government agencies, loan-backed securities, and | 23 |
| similar investments to the extent the investments are | 24 |
| reflected as assets under generally accepted | 25 |
| accounting principles. | 26 |
| (ii) For purposes of subparagraph (3), "money | 27 |
| market instruments" shall include investments in | 28 |
| investment partnerships, trusts, pools, funds, | 29 |
| investment companies, or any similar entity in | 30 |
| proportion to the investment of the entity in money | 31 |
| market instruments, and "securities" shall include | 32 |
| investments in investment partnerships, trusts, pools, | 33 |
| funds, investment companies, or any similar entity in | 34 |
| proportion to the investment of the entity in |
|
|
|
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| 1 |
| securities.
| 2 |
| (d) Transportation services. For taxable years ending | 3 |
| before December 31, 2004, business
Business income derived from | 4 |
| furnishing
transportation services shall be apportioned to | 5 |
| this State in accordance
with paragraphs (1) and (2):
| 6 |
| (1) Such business income (other than that derived from
| 7 |
| transportation by pipeline) shall be apportioned to this | 8 |
| State by
multiplying such income by a fraction, the | 9 |
| numerator of which is the
revenue miles of the person in | 10 |
| this State, and the denominator of which
is the revenue | 11 |
| miles of the person everywhere. For purposes of this
| 12 |
| paragraph, a revenue mile is the transportation of 1 | 13 |
| passenger or 1 net
ton of freight the distance of 1 mile | 14 |
| for a consideration. Where a
person is engaged in the | 15 |
| transportation of both passengers and freight,
the | 16 |
| fraction above referred to shall be determined by means of | 17 |
| an
average of the passenger revenue mile fraction and the | 18 |
| freight revenue
mile fraction, weighted to reflect the | 19 |
| person's
| 20 |
| (A) relative railway operating income from total | 21 |
| passenger and total
freight service, as reported to the | 22 |
| Interstate Commerce Commission, in
the case of | 23 |
| transportation by railroad, and
| 24 |
| (B) relative gross receipts from passenger and | 25 |
| freight
transportation, in case of transportation | 26 |
| other than by railroad.
| 27 |
| (2) Such business income derived from transportation | 28 |
| by pipeline
shall be apportioned to this State by | 29 |
| multiplying such income by a
fraction, the numerator of | 30 |
| which is the revenue miles of the person in
this State, and | 31 |
| the denominator of which is the revenue miles of the
person | 32 |
| everywhere. For the purposes of this paragraph, a revenue | 33 |
| mile is
the transportation by pipeline of 1 barrel of oil, | 34 |
| 1,000 cubic feet of
gas, or of any specified quantity of |
|
|
|
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|
| 1 |
| any other substance, the distance
of 1 mile for a | 2 |
| consideration.
| 3 |
| (3) For taxable years ending on or after December 31, | 4 |
| 2004, business income derived from providing | 5 |
| transportation services other than airline services shall | 6 |
| be apportioned to this State by using a fraction, (a) the | 7 |
| numerator of which shall be (i) all receipts from any | 8 |
| movement or shipment of people, goods, mail , oil, gas, or | 9 |
| any other substance (other than by airline) that both | 10 |
| originates and terminates in this State, plus (ii) that | 11 |
| portion of the person's gross receipts from movements or | 12 |
| shipments of people, goods, mail, oil, gas, or any other | 13 |
| substance (other than by airline) passing through, into, or | 14 |
| out of this State, that is determined by the ratio that the | 15 |
| miles traveled in this State bears to total miles from | 16 |
| point of origin to point of destination and (b) the | 17 |
| denominator of which shall be all revenue derived from the | 18 |
| movement or shipment of people, goods, mail, oil, gas, or | 19 |
| any other substance (other than by airline). If a person | 20 |
| derives business income from activities in addition to the | 21 |
| provision of transportation services (other than by | 22 |
| airline), this subsection shall apply only to its business | 23 |
| income from transportation services and its other business | 24 |
| income shall be apportioned to this State according to the | 25 |
| applicable provisions of this Section.
| 26 |
| (4) For taxable years ending on or after December 31, | 27 |
| 2004, business income derived from providing airline | 28 |
| services shall be apportioned to this State by using a | 29 |
| fraction, (a) the numerator of which shall be arrivals of | 30 |
| aircraft to and departures from this State weighted as to | 31 |
| cost of aircraft by type and (b) the denominator of which | 32 |
| shall be total arrivals and departures of aircraft weighted | 33 |
| as to cost of aircraft by type. If a person derives | 34 |
| business income from activities in addition to the |
|
|
|
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LRB093 15835 MKM 51235 a |
|
| 1 |
| provision of airline services, this subsection shall apply | 2 |
| only to its business income from airline services and its | 3 |
| other business income shall be apportioned to this State | 4 |
| under the applicable provisions of this Section.
| 5 |
| (e) Combined apportionment. Where 2 or more persons are | 6 |
| engaged in
a unitary business as described in subsection | 7 |
| (a)(27) of
Section 1501,
a part of which is conducted in this | 8 |
| State by one or more members of the
group, the business income | 9 |
| attributable to this State by any such member
or members shall | 10 |
| be apportioned by means of the combined apportionment method.
| 11 |
| (f) Alternative allocation. If the allocation and | 12 |
| apportionment
provisions of subsections (a) through (e) and of | 13 |
| subsection (h) do not
fairly represent the
extent of a person's | 14 |
| business activity in this State, the person may
petition for, | 15 |
| or the Director may , without a petition, permit or require, in | 16 |
| respect of all or any part
of the person's business activity, | 17 |
| if reasonable:
| 18 |
| (1) Separate accounting;
| 19 |
| (2) The exclusion of any one or more factors;
| 20 |
| (3) The inclusion of one or more additional factors | 21 |
| which will
fairly represent the person's business | 22 |
| activities in this State; or
| 23 |
| (4) The employment of any other method to effectuate an | 24 |
| equitable
allocation and apportionment of the person's | 25 |
| business income.
| 26 |
| (g) Cross reference. For allocation of business income by | 27 |
| residents,
see Section 301(a).
| 28 |
| (h) For tax years ending on or after December 31, 1998, the | 29 |
| apportionment
factor of persons who apportion their business | 30 |
| income to this State under
subsection (a) shall be equal to:
| 31 |
| (1) for tax years ending on or after December 31, 1998 | 32 |
| and before December
31, 1999, 16 2/3% of the property | 33 |
| factor plus 16 2/3% of the payroll factor
plus
66 2/3% of | 34 |
| the sales factor;
|
|
|
|
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|
| 1 |
| (2) for tax years ending on or after December 31, 1999 | 2 |
| and before December
31,
2000, 8 1/3% of the property factor | 3 |
| plus 8 1/3% of the payroll factor plus 83
1/3%
of the sales | 4 |
| factor;
| 5 |
| (3) for tax years ending on or after December 31, 2000, | 6 |
| the sales factor.
| 7 |
| If, in any tax year ending on or after December 31, 1998 and | 8 |
| before December
31, 2000, the denominator of the payroll, | 9 |
| property, or sales factor is zero,
the apportionment
factor | 10 |
| computed in paragraph (1) or (2) of this subsection for that | 11 |
| year shall
be divided by an amount equal to 100% minus the | 12 |
| percentage weight given to each
factor whose denominator is | 13 |
| equal to zero.
| 14 |
| (Source: P.A. 90-562, eff. 12-16-97; 90-613, eff. 7-9-98; | 15 |
| 91-541, eff.
8-13-99.)".
|
|