Full Text of SB0483 100th General Assembly
SB0483sam001 100TH GENERAL ASSEMBLY | Sen. Kwame Raoul Filed: 5/24/2017
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| 1 | | AMENDMENT TO SENATE BILL 483
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 483 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Income Tax Act is amended by | 5 | | changing Section 304 as follows:
| 6 | | (35 ILCS 5/304) (from Ch. 120, par. 3-304)
| 7 | | Sec. 304. Business income of persons other than residents.
| 8 | | (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 |
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| 1 | | factor (if any), the payroll factor (if any) and 200% of the
| 2 | | sales factor (if any), and the denominator of which is 4 | 3 | | reduced by the
number of factors other than the sales factor | 4 | | which have a denominator
of zero and by an additional 2 if the | 5 | | sales factor has a denominator of zero.
For tax years ending on | 6 | | or after December 31, 1998, and except as otherwise
provided by | 7 | | this Section, persons other than
residents who derive business | 8 | | income from this State and one or more other
states shall | 9 | | compute their apportionment factor by weighting their | 10 | | property,
payroll, and sales factors as provided in
subsection | 11 | | (h) of this Section.
| 12 | | (1) Property factor.
| 13 | | (A) The property factor is a fraction, the numerator of | 14 | | which is the
average value of the person's real and | 15 | | tangible personal property owned
or rented and used in the | 16 | | trade or business in this State during the
taxable year and | 17 | | the denominator of which is the average value of all
the | 18 | | person's real and tangible personal property owned or | 19 | | rented and
used in the trade or business during the taxable | 20 | | year.
| 21 | | (B) Property owned by the person is valued at its | 22 | | original cost.
Property rented by the person is valued at 8 | 23 | | times the net annual rental
rate. Net annual rental rate is | 24 | | the annual rental rate paid by the
person less any annual | 25 | | rental rate received by the person from
sub-rentals.
| 26 | | (C) The average value of property shall be determined |
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| 1 | | by averaging
the values at the beginning and ending of the | 2 | | taxable year but the
Director may require the averaging of | 3 | | monthly values during the taxable
year if reasonably | 4 | | required to reflect properly the average value of the
| 5 | | person's property.
| 6 | | (2) Payroll factor.
| 7 | | (A) The payroll factor is a fraction, the numerator of | 8 | | which is the
total amount paid in this State during the | 9 | | taxable year by the person
for compensation, and the | 10 | | denominator of which is the total compensation
paid | 11 | | everywhere during the taxable year.
| 12 | | (B) Compensation is paid in this State if:
| 13 | | (i) The individual's service is performed entirely | 14 | | within this
State;
| 15 | | (ii) The individual's service is performed both | 16 | | within and without
this State, but the service | 17 | | performed without this State is incidental
to the | 18 | | individual's service performed within this State; or
| 19 | | (iii) Some of the service is performed within this | 20 | | State and either
the base of operations, or if there is | 21 | | no base of operations, the place
from which the service | 22 | | is directed or controlled is within this State,
or the | 23 | | base of operations or the place from which the service | 24 | | is
directed or controlled is not in any state in which | 25 | | some part of the
service is performed, but the | 26 | | individual's residence is in this State ; .
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| 1 | | (iv) The individual's service is performed both | 2 | | within and without this State, the individual is not | 3 | | eligible for compensation under subdivisions (ii) and | 4 | | (iii) of this subparagraph (B), and the compensation is | 5 | | paid for services performed only within this State; or | 6 | | (v) (iv) Compensation paid to nonresident | 7 | | professional athletes. | 8 | | (a) General. The Illinois source income of a | 9 | | nonresident individual who is a member of a | 10 | | professional athletic team includes the portion of the | 11 | | individual's total compensation for services performed | 12 | | as a member of a professional athletic team during the | 13 | | taxable year which the number of duty days spent within | 14 | | this State performing services for the team in any | 15 | | manner during the taxable year bears to the total | 16 | | number of duty days spent both within and without this | 17 | | State during the taxable year. | 18 | | (b) Travel days. Travel days that do not involve | 19 | | either a game, practice, team meeting, or other similar | 20 | | team event are not considered duty days spent in this | 21 | | State. However, such travel days are considered in the | 22 | | total duty days spent both within and without this | 23 | | State. | 24 | | (c) Definitions. For purposes of this subpart (v) | 25 | | (iv) : | 26 | | (1) The term "professional athletic team" |
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| 1 | | includes, but is not limited to, any professional | 2 | | baseball, basketball, football, soccer, or hockey | 3 | | team. | 4 | | (2) The term "member of a professional | 5 | | athletic team" includes those employees who are | 6 | | active players, players on the disabled list, and | 7 | | any other persons required to travel and who travel | 8 | | with and perform services on behalf of a | 9 | | professional athletic team on a regular basis. | 10 | | This includes, but is not limited to, coaches, | 11 | | managers, and trainers. | 12 | | (3) Except as provided in items (C) and (D) of | 13 | | this subpart (3), the term "duty days" means all | 14 | | days during the taxable year from the beginning of | 15 | | the professional athletic team's official | 16 | | pre-season training period through the last game | 17 | | in which the team competes or is scheduled to | 18 | | compete. Duty days shall be counted for the year in | 19 | | which they occur, including where a team's | 20 | | official pre-season training period through the | 21 | | last game in which the team competes or is | 22 | | scheduled to compete, occurs during more than one | 23 | | tax year. | 24 | | (A) Duty days shall also include days on | 25 | | which a member of a professional athletic team | 26 | | performs service for a team on a date that does |
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| 1 | | not fall within the foregoing period (e.g., | 2 | | participation in instructional leagues, the | 3 | | "All Star Game", or promotional "caravans"). | 4 | | Performing a service for a professional | 5 | | athletic team includes conducting training and | 6 | | rehabilitation activities, when such | 7 | | activities are conducted at team facilities. | 8 | | (B) Also included in duty days are game | 9 | | days, practice days, days spent at team | 10 | | meetings, promotional caravans, preseason | 11 | | training camps, and days served with the team | 12 | | through all post-season games in which the team | 13 | | competes or is scheduled to compete. | 14 | | (C) Duty days for any person who joins a | 15 | | team during the period from the beginning of | 16 | | the professional athletic team's official | 17 | | pre-season training period through the last | 18 | | game in which the team competes, or is | 19 | | scheduled to compete, shall begin on the day | 20 | | that person joins the team. Conversely, duty | 21 | | days for any person who leaves a team during | 22 | | this period shall end on the day that person | 23 | | leaves the team. Where a person switches teams | 24 | | during a taxable year, a separate duty-day | 25 | | calculation shall be made for the period the | 26 | | person was with each team. |
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| 1 | | (D) Days for which a member of a | 2 | | professional athletic team is not compensated | 3 | | and is not performing services for the team in | 4 | | any manner, including days when such member of | 5 | | a professional athletic team has been | 6 | | suspended without pay and prohibited from | 7 | | performing any services for the team, shall not | 8 | | be treated as duty days. | 9 | | (E) Days for which a member of a | 10 | | professional athletic team is on the disabled | 11 | | list and does not conduct rehabilitation | 12 | | activities at facilities of the team, and is | 13 | | not otherwise performing services for the team | 14 | | in Illinois, shall not be considered duty days | 15 | | spent in this State. All days on the disabled | 16 | | list, however, are considered to be included in | 17 | | total duty days spent both within and without | 18 | | this State. | 19 | | (4) The term "total compensation for services | 20 | | performed as a member of a professional athletic | 21 | | team" means the total compensation received during | 22 | | the taxable year for services performed: | 23 | | (A) from the beginning of the official | 24 | | pre-season training period through the last | 25 | | game in which the team competes or is scheduled | 26 | | to compete during that taxable year; and |
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| 1 | | (B) during the taxable year on a date which | 2 | | does not fall within the foregoing period | 3 | | (e.g., participation in instructional leagues, | 4 | | the "All Star Game", or promotional caravans). | 5 | | This compensation shall include, but is not | 6 | | limited to, salaries, wages, bonuses as described | 7 | | in this subpart, and any other type of compensation | 8 | | paid during the taxable year to a member of a | 9 | | professional athletic team for services performed | 10 | | in that year. This compensation does not include | 11 | | strike benefits, severance pay, termination pay, | 12 | | contract or option year buy-out payments, | 13 | | expansion or relocation payments, or any other | 14 | | payments not related to services performed for the | 15 | | team. | 16 | | For purposes of this subparagraph, "bonuses" | 17 | | included in "total compensation for services | 18 | | performed as a member of a professional athletic | 19 | | team" subject to the allocation described in | 20 | | Section 302(c)(1) are: bonuses earned as a result | 21 | | of play (i.e., performance bonuses) during the | 22 | | season, including bonuses paid for championship, | 23 | | playoff or "bowl" games played by a team, or for | 24 | | selection to all-star league or other honorary | 25 | | positions; and bonuses paid for signing a | 26 | | contract, unless the payment of the signing bonus |
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| 1 | | is not conditional upon the signee playing any | 2 | | games for the team or performing any subsequent | 3 | | services for the team or even making the team, the | 4 | | signing bonus is payable separately from the | 5 | | salary and any other compensation, and the signing | 6 | | bonus is nonrefundable ; or .
| 7 | | (3) Sales factor.
| 8 | | (A) The sales factor is a fraction, the numerator of | 9 | | which is the
total sales of the person in this State during | 10 | | the taxable year, and the
denominator of which is the total | 11 | | sales of the person everywhere during
the taxable year.
| 12 | | (B) Sales of tangible personal property are in this | 13 | | State if:
| 14 | | (i) The property is delivered or shipped to a | 15 | | purchaser, other than
the United States government, | 16 | | within this State regardless of the f. o.
b. point or | 17 | | other conditions of the sale; or
| 18 | | (ii) The property is shipped from an office, store, | 19 | | warehouse,
factory or other place of storage in this | 20 | | State and either the purchaser
is the United States | 21 | | government or the person is not taxable in the
state of | 22 | | the purchaser; provided, however, that premises owned | 23 | | or leased
by a person who has independently contracted | 24 | | with the seller for the printing
of newspapers, | 25 | | periodicals or books shall not be deemed to be an | 26 | | office,
store, warehouse, factory or other place of |
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| 1 | | storage for purposes of this
Section.
Sales of tangible | 2 | | personal property are not in this State if the
seller | 3 | | and purchaser would be members of the same unitary | 4 | | business group
but for the fact that either the seller | 5 | | or purchaser is a person with 80%
or more of total | 6 | | business activity outside of the United States and the
| 7 | | property is purchased for resale.
| 8 | | (B-1) Patents, copyrights, trademarks, and similar | 9 | | items of intangible
personal property.
| 10 | | (i) Gross receipts from the licensing, sale, or | 11 | | other disposition of a
patent, copyright, trademark, | 12 | | or similar item of intangible personal property, other | 13 | | than gross receipts governed by paragraph (B-7) of this | 14 | | item (3),
are in this State to the extent the item is | 15 | | utilized in this State during the
year the gross | 16 | | receipts are included in gross income.
| 17 | | (ii) Place of utilization.
| 18 | | (I) A patent is utilized in a state to the | 19 | | extent that it is employed
in production, | 20 | | fabrication, manufacturing, or other processing in | 21 | | the state or
to the extent that a patented product | 22 | | is produced in the state. If a patent is
utilized | 23 | | in
more than one state, the extent to which it is | 24 | | utilized in any one state shall
be a fraction equal | 25 | | to the gross receipts of the licensee or purchaser | 26 | | from
sales or leases of items produced, |
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| 1 | | fabricated, manufactured, or processed
within that | 2 | | state using the patent and of patented items | 3 | | produced within that
state, divided by the total of | 4 | | such gross receipts for all states in which the
| 5 | | patent is utilized.
| 6 | | (II) A copyright is utilized in a state to the | 7 | | extent that printing or
other publication | 8 | | originates in the state. If a copyright is utilized | 9 | | in more
than one state, the extent to which it is | 10 | | utilized in any one state shall be a
fraction equal | 11 | | to the gross receipts from sales or licenses of | 12 | | materials
printed or published in that state | 13 | | divided by the total of such gross receipts
for all | 14 | | states in which the copyright is utilized.
| 15 | | (III) Trademarks and other items of intangible | 16 | | personal property
governed by this paragraph (B-1) | 17 | | are utilized in the state in which the
commercial | 18 | | domicile of the licensee or purchaser is located.
| 19 | | (iii) If the state of utilization of an item of | 20 | | property governed by
this paragraph (B-1) cannot be | 21 | | determined from the taxpayer's books and
records or | 22 | | from the books and records of any person related to the | 23 | | taxpayer
within the meaning of Section 267(b) of the | 24 | | Internal Revenue Code, 26 U.S.C.
267, the gross
| 25 | | receipts attributable to that item shall be excluded | 26 | | from both the numerator
and the denominator of the |
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| 1 | | sales factor.
| 2 | | (B-2) Gross receipts from the license, sale, or other | 3 | | disposition of
patents, copyrights, trademarks, and | 4 | | similar items of intangible personal
property, other than | 5 | | gross receipts governed by paragraph (B-7) of this item | 6 | | (3), may be included in the numerator or denominator of the | 7 | | sales factor
only if gross receipts from licenses, sales, | 8 | | or other disposition of such items
comprise more than 50% | 9 | | of the taxpayer's total gross receipts included in gross
| 10 | | income during the tax year and during each of the 2 | 11 | | immediately preceding tax
years; provided that, when a | 12 | | taxpayer is a member of a unitary business group,
such | 13 | | determination shall be made on the basis of the gross | 14 | | receipts of the
entire unitary business group.
| 15 | | (B-5) For taxable years ending on or after December 31, | 16 | | 2008, except as provided in subsections (ii) through (vii), | 17 | | receipts from the sale of telecommunications service or | 18 | | mobile telecommunications service are in this State if the | 19 | | customer's service address is in this State. | 20 | | (i) For purposes of this subparagraph (B-5), the | 21 | | following terms have the following meanings: | 22 | | "Ancillary services" means services that are | 23 | | associated with or incidental to the provision of | 24 | | "telecommunications services", including but not | 25 | | limited to "detailed telecommunications billing", | 26 | | "directory assistance", "vertical service", and "voice |
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| 1 | | mail services". | 2 | | "Air-to-Ground Radiotelephone service" means a | 3 | | radio service, as that term is defined in 47 CFR 22.99, | 4 | | in which common carriers are authorized to offer and | 5 | | provide radio telecommunications service for hire to | 6 | | subscribers in aircraft. | 7 | | "Call-by-call Basis" means any method of charging | 8 | | for telecommunications services where the price is | 9 | | measured by individual calls. | 10 | | "Communications Channel" means a physical or | 11 | | virtual path of communications over which signals are | 12 | | transmitted between or among customer channel | 13 | | termination points. | 14 | | "Conference bridging service" means an "ancillary | 15 | | service" that links two or more participants of an | 16 | | audio or video conference call and may include the | 17 | | provision of a telephone number. "Conference bridging | 18 | | service" does not include the "telecommunications | 19 | | services" used to reach the conference bridge. | 20 | | "Customer Channel Termination Point" means the | 21 | | location where the customer either inputs or receives | 22 | | the communications. | 23 | | "Detailed telecommunications billing service" | 24 | | means an "ancillary service" of separately stating | 25 | | information pertaining to individual calls on a | 26 | | customer's billing statement. |
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| 1 | | "Directory assistance" means an "ancillary | 2 | | service" of providing telephone number information, | 3 | | and/or address information. | 4 | | "Home service provider" means the facilities based | 5 | | carrier or reseller with which the customer contracts | 6 | | for the provision of mobile telecommunications | 7 | | services. | 8 | | "Mobile telecommunications service" means | 9 | | commercial mobile radio service, as defined in Section | 10 | | 20.3 of Title 47 of the Code of Federal Regulations as | 11 | | in effect on June 1, 1999. | 12 | | "Place of primary use" means the street address | 13 | | representative of where the customer's use of the | 14 | | telecommunications service primarily occurs, which | 15 | | must be the residential street address or the primary | 16 | | business street address of the customer. In the case of | 17 | | mobile telecommunications services, "place of primary | 18 | | use" must be within the licensed service area of the | 19 | | home service provider. | 20 | | "Post-paid telecommunication service" means the | 21 | | telecommunications service obtained by making a | 22 | | payment on a call-by-call basis either through the use | 23 | | of a credit card or payment mechanism such as a bank | 24 | | card, travel card, credit card, or debit card, or by | 25 | | charge made to a telephone number which is not | 26 | | associated with the origination or termination of the |
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| 1 | | telecommunications service. A post-paid calling | 2 | | service includes telecommunications service, except a | 3 | | prepaid wireless calling service, that would be a | 4 | | prepaid calling service except it is not exclusively a | 5 | | telecommunication service. | 6 | | "Prepaid telecommunication service" means the | 7 | | right to access exclusively telecommunications | 8 | | services, which must be paid for in advance and which | 9 | | enables the origination of calls using an access number | 10 | | or authorization code, whether manually or | 11 | | electronically dialed, and that is sold in | 12 | | predetermined units or dollars of which the number | 13 | | declines with use in a known amount. | 14 | | "Prepaid Mobile telecommunication service" means a | 15 | | telecommunications service that provides the right to | 16 | | utilize mobile wireless service as well as other | 17 | | non-telecommunication services, including but not | 18 | | limited to ancillary services, which must be paid for | 19 | | in advance that is sold in predetermined units or | 20 | | dollars of which the number declines with use in a | 21 | | known amount. | 22 | | "Private communication service" means a | 23 | | telecommunication service that entitles the customer | 24 | | to exclusive or priority use of a communications | 25 | | channel or group of channels between or among | 26 | | termination points, regardless of the manner in which |
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| 1 | | such channel or channels are connected, and includes | 2 | | switching capacity, extension lines, stations, and any | 3 | | other associated services that are provided in | 4 | | connection with the use of such channel or channels. | 5 | | "Service address" means: | 6 | | (a) The location of the telecommunications | 7 | | equipment to which a customer's call is charged and | 8 | | from which the call originates or terminates, | 9 | | regardless of where the call is billed or paid; | 10 | | (b) If the location in line (a) is not known, | 11 | | service address means the origination point of the | 12 | | signal of the telecommunications services first | 13 | | identified by either the seller's | 14 | | telecommunications system or in information | 15 | | received by the seller from its service provider | 16 | | where the system used to transport such signals is | 17 | | not that of the seller; and | 18 | | (c) If the locations in line (a) and line (b) | 19 | | are not known, the service address means the | 20 | | location of the customer's place of primary use. | 21 | | "Telecommunications service" means the electronic | 22 | | transmission, conveyance, or routing of voice, data, | 23 | | audio, video, or any other information or signals to a | 24 | | point, or between or among points. The term | 25 | | "telecommunications service" includes such | 26 | | transmission, conveyance, or routing in which computer |
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| 1 | | processing applications are used to act on the form, | 2 | | code or protocol of the content for purposes of | 3 | | transmission, conveyance or routing without regard to | 4 | | whether such service is referred to as voice over | 5 | | Internet protocol services or is classified by the | 6 | | Federal Communications Commission as enhanced or value | 7 | | added. "Telecommunications service" does not include: | 8 | | (a) Data processing and information services | 9 | | that allow data to be generated, acquired, stored, | 10 | | processed, or retrieved and delivered by an | 11 | | electronic transmission to a purchaser when such | 12 | | purchaser's primary purpose for the underlying | 13 | | transaction is the processed data or information; | 14 | | (b) Installation or maintenance of wiring or | 15 | | equipment on a customer's premises; | 16 | | (c) Tangible personal property; | 17 | | (d) Advertising, including but not limited to | 18 | | directory advertising ; . | 19 | | (e) Billing and collection services provided | 20 | | to third parties; | 21 | | (f) Internet access service; | 22 | | (g) Radio and television audio and video | 23 | | programming services, regardless of the medium, | 24 | | including the furnishing of transmission, | 25 | | conveyance and routing of such services by the | 26 | | programming service provider. Radio and television |
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| 1 | | audio and video programming services shall include | 2 | | but not be limited to cable service as defined in | 3 | | 47 USC 522(6) and audio and video programming | 4 | | services delivered by commercial mobile radio | 5 | | service providers, as defined in 47 CFR 20.3; | 6 | | (h) "Ancillary services"; or | 7 | | (i) Digital products "delivered | 8 | | electronically", including but not limited to | 9 | | software, music, video, reading materials or ring | 10 | | tones. | 11 | | "Vertical service" means an "ancillary service" | 12 | | that is offered in connection with one or more | 13 | | "telecommunications services", which offers advanced | 14 | | calling features that allow customers to identify | 15 | | callers and to manage multiple calls and call | 16 | | connections, including "conference bridging services". | 17 | | "Voice mail service" means an "ancillary service" | 18 | | that enables the customer to store, send or receive | 19 | | recorded messages. "Voice mail service" does not | 20 | | include any "vertical services" that the customer may | 21 | | be required to have in order to utilize the "voice mail | 22 | | service". | 23 | | (ii) Receipts from the sale of telecommunications | 24 | | service sold on an individual call-by-call basis are in | 25 | | this State if either of the following applies: | 26 | | (a) The call both originates and terminates in |
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| 1 | | this State. | 2 | | (b) The call either originates or terminates | 3 | | in this State and the service address is located in | 4 | | this State. | 5 | | (iii) Receipts from the sale of postpaid | 6 | | telecommunications service at retail are in this State | 7 | | if the origination point of the telecommunication | 8 | | signal, as first identified by the service provider's | 9 | | telecommunication system or as identified by | 10 | | information received by the seller from its service | 11 | | provider if the system used to transport | 12 | | telecommunication signals is not the seller's, is | 13 | | located in this State. | 14 | | (iv) Receipts from the sale of prepaid | 15 | | telecommunications service or prepaid mobile | 16 | | telecommunications service at retail are in this State | 17 | | if the purchaser obtains the prepaid card or similar | 18 | | means of conveyance at a location in this State. | 19 | | Receipts from recharging a prepaid telecommunications | 20 | | service or mobile telecommunications service is in | 21 | | this State if the purchaser's billing information | 22 | | indicates a location in this State. | 23 | | (v) Receipts from the sale of private | 24 | | communication services are in this State as follows: | 25 | | (a) 100% of receipts from charges imposed at | 26 | | each channel termination point in this State. |
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| 1 | | (b) 100% of receipts from charges for the total | 2 | | channel mileage between each channel termination | 3 | | point in this State. | 4 | | (c) 50% of the total receipts from charges for | 5 | | service segments when those segments are between 2 | 6 | | customer channel termination points, 1 of which is | 7 | | located in this State and the other is located | 8 | | outside of this State, which segments are | 9 | | separately charged. | 10 | | (d) The receipts from charges for service | 11 | | segments with a channel termination point located | 12 | | in this State and in two or more other states, and | 13 | | which segments are not separately billed, are in | 14 | | this State based on a percentage determined by | 15 | | dividing the number of customer channel | 16 | | termination points in this State by the total | 17 | | number of customer channel termination points. | 18 | | (vi) Receipts from charges for ancillary services | 19 | | for telecommunications service sold to customers at | 20 | | retail are in this State if the customer's primary | 21 | | place of use of telecommunications services associated | 22 | | with those ancillary services is in this State. If the | 23 | | seller of those ancillary services cannot determine | 24 | | where the associated telecommunications are located, | 25 | | then the ancillary services shall be based on the | 26 | | location of the purchaser. |
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| 1 | | (vii) Receipts to access a carrier's network or | 2 | | from the sale of telecommunication services or | 3 | | ancillary services for resale are in this State as | 4 | | follows: | 5 | | (a) 100% of the receipts from access fees | 6 | | attributable to intrastate telecommunications | 7 | | service that both originates and terminates in | 8 | | this State. | 9 | | (b) 50% of the receipts from access fees | 10 | | attributable to interstate telecommunications | 11 | | service if the interstate call either originates | 12 | | or terminates in this State. | 13 | | (c) 100% of the receipts from interstate end | 14 | | user access line charges, if the customer's | 15 | | service address is in this State. As used in this | 16 | | subdivision, "interstate end user access line | 17 | | charges" includes, but is not limited to, the | 18 | | surcharge approved by the federal communications | 19 | | commission and levied pursuant to 47 CFR 69. | 20 | | (d) Gross receipts from sales of | 21 | | telecommunication services or from ancillary | 22 | | services for telecommunications services sold to | 23 | | other telecommunication service providers for | 24 | | resale shall be sourced to this State using the | 25 | | apportionment concepts used for non-resale | 26 | | receipts of telecommunications services if the |
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| 1 | | information is readily available to make that | 2 | | determination. If the information is not readily | 3 | | available, then the taxpayer may use any other | 4 | | reasonable and consistent method. | 5 | | (B-7) For taxable years ending on or after December 31, | 6 | | 2008, receipts from the sale of broadcasting services are | 7 | | in this State if the broadcasting services are received in | 8 | | this State. For purposes of this paragraph (B-7), the | 9 | | following terms have the following meanings: | 10 | | "Advertising revenue" means consideration received | 11 | | by the taxpayer in exchange for broadcasting services | 12 | | or allowing the broadcasting of commercials or | 13 | | announcements in connection with the broadcasting of | 14 | | film or radio programming, from sponsorships of the | 15 | | programming, or from product placements in the | 16 | | programming. | 17 | | "Audience factor" means the ratio that the | 18 | | audience or subscribers located in this State of a | 19 | | station, a network, or a cable system bears to the | 20 | | total audience or total subscribers for that station, | 21 | | network, or cable system. The audience factor for film | 22 | | or radio programming shall be determined by reference | 23 | | to the books and records of the taxpayer or by | 24 | | reference to published rating statistics provided the | 25 | | method used by the taxpayer is consistently used from | 26 | | year to year for this purpose and fairly represents the |
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| 1 | | taxpayer's activity in this State. | 2 | | "Broadcast" or "broadcasting" or "broadcasting | 3 | | services" means the transmission or provision of film | 4 | | or radio programming, whether through the public | 5 | | airwaves, by cable, by direct or indirect satellite | 6 | | transmission, or by any other means of communication, | 7 | | either through a station, a network, or a cable system. | 8 | | "Film" or "film programming" means the broadcast | 9 | | on television of any and all performances, events, or | 10 | | productions, including but not limited to news, | 11 | | sporting events, plays, stories, or other literary, | 12 | | commercial, educational, or artistic works, either | 13 | | live or through the use of video tape, disc, or any | 14 | | other type of format or medium. Each episode of a | 15 | | series of films produced for television shall | 16 | | constitute separate "film" notwithstanding that the | 17 | | series relates to the same principal subject and is | 18 | | produced during one or more tax periods. | 19 | | "Radio" or "radio programming" means the broadcast | 20 | | on radio of any and all performances, events, or | 21 | | productions, including but not limited to news, | 22 | | sporting events, plays, stories, or other literary, | 23 | | commercial, educational, or artistic works, either | 24 | | live or through the use of an audio tape, disc, or any | 25 | | other format or medium. Each episode in a series of | 26 | | radio programming produced for radio broadcast shall |
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| 1 | | constitute a separate "radio programming" | 2 | | notwithstanding that the series relates to the same | 3 | | principal subject and is produced during one or more | 4 | | tax periods. | 5 | | (i) In the case of advertising revenue from | 6 | | broadcasting, the customer is the advertiser and | 7 | | the service is received in this State if the | 8 | | commercial domicile of the advertiser is in this | 9 | | State. | 10 | | (ii) In the case where film or radio | 11 | | programming is broadcast by a station, a network, | 12 | | or a cable system for a fee or other remuneration | 13 | | received from the recipient of the broadcast, the | 14 | | portion of the service that is received in this | 15 | | State is measured by the portion of the recipients | 16 | | of the broadcast located in this State. | 17 | | Accordingly, the fee or other remuneration for | 18 | | such service that is included in the Illinois | 19 | | numerator of the sales factor is the total of those | 20 | | fees or other remuneration received from | 21 | | recipients in Illinois. For purposes of this | 22 | | paragraph, a taxpayer may determine the location | 23 | | of the recipients of its broadcast using the | 24 | | address of the recipient shown in its contracts | 25 | | with the recipient or using the billing address of | 26 | | the recipient in the taxpayer's records. |
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| 1 | | (iii) In the case where film or radio | 2 | | programming is broadcast by a station, a network, | 3 | | or a cable system for a fee or other remuneration | 4 | | from the person providing the programming, the | 5 | | portion of the broadcast service that is received | 6 | | by such station, network, or cable system in this | 7 | | State is measured by the portion of recipients of | 8 | | the broadcast located in this State. Accordingly, | 9 | | the amount of revenue related to such an | 10 | | arrangement that is included in the Illinois | 11 | | numerator of the sales factor is the total fee or | 12 | | other total remuneration from the person providing | 13 | | the programming related to that broadcast | 14 | | multiplied by the Illinois audience factor for | 15 | | that broadcast. | 16 | | (iv) In the case where film or radio | 17 | | programming is provided by a taxpayer that is a | 18 | | network or station to a customer for broadcast in | 19 | | exchange for a fee or other remuneration from that | 20 | | customer the broadcasting service is received at | 21 | | the location of the office of the customer from | 22 | | which the services were ordered in the regular | 23 | | course of the customer's trade or business. | 24 | | Accordingly, in such a case the revenue derived by | 25 | | the taxpayer that is included in the taxpayer's | 26 | | Illinois numerator of the sales factor is the |
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| 1 | | revenue from such customers who receive the | 2 | | broadcasting service in Illinois. | 3 | | (v) In the case where film or radio programming | 4 | | is provided by a taxpayer that is not a network or | 5 | | station to another person for broadcasting in | 6 | | exchange for a fee or other remuneration from that | 7 | | person, the broadcasting service is received at | 8 | | the location of the office of the customer from | 9 | | which the services were ordered in the regular | 10 | | course of the customer's trade or business. | 11 | | Accordingly, in such a case the revenue derived by | 12 | | the taxpayer that is included in the taxpayer's | 13 | | Illinois numerator of the sales factor is the | 14 | | revenue from such customers who receive the | 15 | | broadcasting service in Illinois. | 16 | | (B-8) Gross receipts from winnings under the Illinois | 17 | | Lottery Law from the assignment of a prize under Section | 18 | | 13.1 of the Illinois Lottery Law are received in this | 19 | | State. This paragraph (B-8) applies only to taxable years | 20 | | ending on or after December 31, 2013. | 21 | | (C) For taxable years ending before December 31, 2008, | 22 | | sales, other than sales governed by paragraphs (B), (B-1), | 23 | | (B-2), and (B-8) are in
this State if:
| 24 | | (i) The income-producing activity is performed in | 25 | | this State; or
| 26 | | (ii) The income-producing activity is performed |
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| 1 | | both within and
without this State and a greater | 2 | | proportion of the income-producing
activity is | 3 | | performed within this State than without this State, | 4 | | based
on performance costs.
| 5 | | (C-5) For taxable years ending on or after December 31, | 6 | | 2008, sales, other than sales governed by paragraphs (B), | 7 | | (B-1), (B-2), (B-5), and (B-7), are in this State if any of | 8 | | the following criteria are met: | 9 | | (i) Sales from the sale or lease of real property | 10 | | are in this State if the property is located in this | 11 | | State. | 12 | | (ii) Sales from the lease or rental of tangible | 13 | | personal property are in this State if the property is | 14 | | located in this State during the rental period. Sales | 15 | | from the lease or rental of tangible personal property | 16 | | that is characteristically moving property, including, | 17 | | but not limited to, motor vehicles, rolling stock, | 18 | | aircraft, vessels, or mobile equipment are in this | 19 | | State to the extent that the property is used in this | 20 | | State. | 21 | | (iii) In the case of interest, net gains (but not | 22 | | less than zero) and other items of income from | 23 | | intangible personal property, the sale is in this State | 24 | | if: | 25 | | (a) in the case of a taxpayer who is a dealer | 26 | | in the item of intangible personal property within |
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| 1 | | the meaning of Section 475 of the Internal Revenue | 2 | | Code, the income or gain is received from a | 3 | | customer in this State. For purposes of this | 4 | | subparagraph, a customer is in this State if the | 5 | | customer is an individual, trust or estate who is a | 6 | | resident of this State and, for all other | 7 | | customers, if the customer's commercial domicile | 8 | | is in this State. Unless the dealer has actual | 9 | | knowledge of the residence or commercial domicile | 10 | | of a customer during a taxable year, the customer | 11 | | shall be deemed to be a customer in this State if | 12 | | the billing address of the customer, as shown in | 13 | | the records of the dealer, is in this State; or | 14 | | (b) in all other cases, if the | 15 | | income-producing activity of the taxpayer is | 16 | | performed in this State or, if the | 17 | | income-producing activity of the taxpayer is | 18 | | performed both within and without this State, if a | 19 | | greater proportion of the income-producing | 20 | | activity of the taxpayer is performed within this | 21 | | State than in any other state, based on performance | 22 | | costs. | 23 | | (iv) Sales of services are in this State if the | 24 | | services are received in this State. For the purposes | 25 | | of this section, gross receipts from the performance of | 26 | | services provided to a corporation, partnership, or |
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| 1 | | trust may only be attributed to a state where that | 2 | | corporation, partnership, or trust has a fixed place of | 3 | | business. If the state where the services are received | 4 | | is not readily determinable or is a state where the | 5 | | corporation, partnership, or trust receiving the | 6 | | service does not have a fixed place of business, the | 7 | | services shall be deemed to be received at the location | 8 | | of the office of the customer from which the services | 9 | | were ordered in the regular course of the customer's | 10 | | trade or business. If the ordering office cannot be | 11 | | determined, the services shall be deemed to be received | 12 | | at the office of the customer to which the services are | 13 | | billed. If the taxpayer is not taxable in the state in | 14 | | which the services are received, the sale must be | 15 | | excluded from both the numerator and the denominator of | 16 | | the sales factor. The Department shall adopt rules | 17 | | prescribing where specific types of service are | 18 | | received, including, but not limited to, publishing, | 19 | | and utility service.
| 20 | | (D) For taxable years ending on or after December 31, | 21 | | 1995, the following
items of income shall not be included | 22 | | in the numerator or denominator of the
sales factor: | 23 | | dividends; amounts included under Section 78 of the | 24 | | Internal
Revenue Code; and Subpart F income as defined in | 25 | | Section 952 of the Internal
Revenue Code.
No inference | 26 | | shall be drawn from the enactment of this paragraph (D) in
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| 1 | | construing this Section for taxable years ending before | 2 | | December 31, 1995.
| 3 | | (E) Paragraphs (B-1) and (B-2) shall apply to tax years | 4 | | ending on or
after December 31, 1999, provided that a | 5 | | taxpayer may elect to apply the
provisions of these | 6 | | paragraphs to prior tax years. Such election shall be made
| 7 | | in the form and manner prescribed by the Department, shall | 8 | | be irrevocable, and
shall apply to all tax years; provided | 9 | | that, if a taxpayer's Illinois income
tax liability for any | 10 | | tax year, as assessed under Section 903 prior to January
1, | 11 | | 1999, was computed in a manner contrary to the provisions | 12 | | of paragraphs
(B-1) or (B-2), no refund shall be payable to | 13 | | the taxpayer for that tax year to
the extent such refund is | 14 | | the result of applying the provisions of paragraph
(B-1) or | 15 | | (B-2) retroactively. In the case of a unitary business | 16 | | group, such
election shall apply to all members of such | 17 | | group for every tax year such group
is in existence, but | 18 | | shall not apply to any taxpayer for any period during
which | 19 | | that taxpayer is not a member of such group.
| 20 | | (b) Insurance companies.
| 21 | | (1) In general. Except as otherwise
provided by | 22 | | paragraph (2), business income of an insurance company for | 23 | | a
taxable year shall be apportioned to this State by | 24 | | multiplying such
income by a fraction, the numerator of | 25 | | which is the direct premiums
written for insurance upon | 26 | | property or risk in this State, and the
denominator of |
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| 1 | | which is the direct premiums written for insurance upon
| 2 | | property or risk everywhere. For purposes of this | 3 | | subsection, the term
"direct premiums written" means the | 4 | | total amount of direct premiums
written, assessments and | 5 | | annuity considerations as reported for the
taxable year on | 6 | | the annual statement filed by the company with the
Illinois | 7 | | Director of Insurance in the form approved by the National
| 8 | | Convention of Insurance Commissioners
or such other form as | 9 | | may be
prescribed in lieu thereof.
| 10 | | (2) Reinsurance. If the principal source of premiums | 11 | | written by an
insurance company consists of premiums for | 12 | | reinsurance accepted by it,
the business income of such | 13 | | company shall be apportioned to this State
by multiplying | 14 | | such income by a fraction, the numerator of which is the
| 15 | | sum of (i) direct premiums written for insurance upon | 16 | | property or risk
in this State, plus (ii) premiums written | 17 | | for reinsurance accepted in
respect of property or risk in | 18 | | this State, and the denominator of which
is the sum of | 19 | | (iii) direct premiums written for insurance upon property
| 20 | | or risk everywhere, plus (iv) premiums written for | 21 | | reinsurance accepted
in respect of property or risk | 22 | | everywhere. For purposes of this
paragraph, premiums | 23 | | written for reinsurance accepted in respect of
property or | 24 | | risk in this State, whether or not otherwise determinable,
| 25 | | may, at the election of the company, be determined on the | 26 | | basis of the
proportion which premiums written for |
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| 1 | | reinsurance accepted from
companies commercially domiciled | 2 | | in Illinois bears to premiums written
for reinsurance | 3 | | accepted from all sources, or, alternatively, in the
| 4 | | proportion which the sum of the direct premiums written for | 5 | | insurance
upon property or risk in this State by each | 6 | | ceding company from which
reinsurance is accepted bears to | 7 | | the sum of the total direct premiums
written by each such | 8 | | ceding company for the taxable year. The election made by a | 9 | | company under this paragraph for its first taxable year | 10 | | ending on or after December 31, 2011, shall be binding for | 11 | | that company for that taxable year and for all subsequent | 12 | | taxable years, and may be altered only with the written | 13 | | permission of the Department, which shall not be | 14 | | unreasonably withheld.
| 15 | | (c) Financial organizations.
| 16 | | (1) In general. For taxable years ending before | 17 | | December 31, 2008, business income of a financial
| 18 | | organization shall be apportioned to this State by | 19 | | multiplying such
income by a fraction, the numerator of | 20 | | which is its business income from
sources within this | 21 | | State, and the denominator of which is its business
income | 22 | | from all sources. For the purposes of this subsection, the
| 23 | | business income of a financial organization from sources | 24 | | within this
State is the sum of the amounts referred to in | 25 | | subparagraphs (A) through
(E) following, but excluding the | 26 | | adjusted income of an international banking
facility as |
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| 1 | | determined in paragraph (2):
| 2 | | (A) Fees, commissions or other compensation for | 3 | | financial services
rendered within this State;
| 4 | | (B) Gross profits from trading in stocks, bonds or | 5 | | other securities
managed within this State;
| 6 | | (C) Dividends, and interest from Illinois | 7 | | customers, which are received
within this State;
| 8 | | (D) Interest charged to customers at places of | 9 | | business maintained
within this State for carrying | 10 | | debit balances of margin accounts,
without deduction | 11 | | of any costs incurred in carrying such accounts; and
| 12 | | (E) Any other gross income resulting from the | 13 | | operation as a
financial organization within this | 14 | | State. In computing the amounts
referred to in | 15 | | paragraphs (A) through (E) of this subsection, any | 16 | | amount
received by a member of an affiliated group | 17 | | (determined under Section
1504(a) of the Internal | 18 | | Revenue Code but without reference to whether
any such | 19 | | corporation is an "includible corporation" under | 20 | | Section
1504(b) of the Internal Revenue Code) from | 21 | | another member of such group
shall be included only to | 22 | | the extent such amount exceeds expenses of the
| 23 | | recipient directly related thereto.
| 24 | | (2) International Banking Facility. For taxable years | 25 | | ending before December 31, 2008:
| 26 | | (A) Adjusted Income. The adjusted income of an |
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| 1 | | international banking
facility is its income reduced | 2 | | by the amount of the floor amount.
| 3 | | (B) Floor Amount. The floor amount shall be the | 4 | | amount, if any,
determined
by multiplying the income of | 5 | | the international banking facility by a fraction,
not | 6 | | greater than one, which is determined as follows:
| 7 | | (i) The numerator shall be:
| 8 | | The average aggregate, determined on a | 9 | | quarterly basis, of the
financial
organization's | 10 | | loans to banks in foreign countries, to foreign | 11 | | domiciled
borrowers (except where secured | 12 | | primarily by real estate) and to foreign
| 13 | | governments and other foreign official | 14 | | institutions, as reported for its
branches, | 15 | | agencies and offices within the state on its | 16 | | "Consolidated Report
of Condition", Schedule A, | 17 | | Lines 2.c., 5.b., and 7.a., which was filed with
| 18 | | the Federal Deposit Insurance Corporation and | 19 | | other regulatory authorities,
for the year 1980, | 20 | | minus
| 21 | | The average aggregate, determined on a | 22 | | quarterly basis, of such loans
(other
than loans of | 23 | | an international banking facility), as reported by | 24 | | the financial
institution for its branches, | 25 | | agencies and offices within the state, on
the | 26 | | corresponding Schedule and lines of the |
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| 1 | | Consolidated Report of Condition
for the current | 2 | | taxable year, provided, however, that in no case | 3 | | shall the
amount determined in this clause (the | 4 | | subtrahend) exceed the amount determined
in the | 5 | | preceding clause (the minuend); and
| 6 | | (ii) the denominator shall be the average | 7 | | aggregate, determined on a
quarterly basis, of the | 8 | | international banking facility's loans to banks in
| 9 | | foreign countries, to foreign domiciled borrowers | 10 | | (except where secured
primarily by real estate) | 11 | | and to foreign governments and other foreign
| 12 | | official institutions, which were recorded in its | 13 | | financial accounts for
the current taxable year.
| 14 | | (C) Change to Consolidated Report of Condition and | 15 | | in Qualification.
In the event the Consolidated Report | 16 | | of Condition which is filed with the
Federal Deposit | 17 | | Insurance Corporation and other regulatory authorities | 18 | | is
altered so that the information required for | 19 | | determining the floor amount
is not found on Schedule | 20 | | A, lines 2.c., 5.b. and 7.a., the financial
institution | 21 | | shall notify the Department and the Department may, by
| 22 | | regulations or otherwise, prescribe or authorize the | 23 | | use of an alternative
source for such information. The | 24 | | financial institution shall also notify
the Department | 25 | | should its international banking facility fail to | 26 | | qualify as
such, in whole or in part, or should there |
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| 1 | | be any amendment or change to
the Consolidated Report | 2 | | of Condition, as originally filed, to the extent
such | 3 | | amendment or change alters the information used in | 4 | | determining the floor
amount.
| 5 | | (3) For taxable years ending on or after December 31, | 6 | | 2008, the business income of a financial organization shall | 7 | | be apportioned to this State by multiplying such income by | 8 | | a fraction, the numerator of which is its gross receipts | 9 | | from sources in this State or otherwise attributable to | 10 | | this State's marketplace and the denominator of which is | 11 | | its gross receipts everywhere during the taxable year. | 12 | | "Gross receipts" for purposes of this subparagraph (3) | 13 | | means gross income, including net taxable gain on | 14 | | disposition of assets, including securities and money | 15 | | market instruments, when derived from transactions and | 16 | | activities in the regular course of the financial | 17 | | organization's trade or business. The following examples | 18 | | are illustrative:
| 19 | | (i) Receipts from the lease or rental of real or | 20 | | tangible personal property are in this State if the | 21 | | property is located in this State during the rental | 22 | | period. Receipts from the lease or rental of tangible | 23 | | personal property that is characteristically moving | 24 | | property, including, but not limited to, motor | 25 | | vehicles, rolling stock, aircraft, vessels, or mobile | 26 | | equipment are from sources in this State to the extent |
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| 1 | | that the property is used in this State. | 2 | | (ii) Interest income, commissions, fees, gains on | 3 | | disposition, and other receipts from assets in the | 4 | | nature of loans that are secured primarily by real | 5 | | estate or tangible personal property are from sources | 6 | | in this State if the security is located in this State. | 7 | | (iii) Interest income, commissions, fees, gains on | 8 | | disposition, and other receipts from consumer loans | 9 | | that are not secured by real or tangible personal | 10 | | property are from sources in this State if the debtor | 11 | | is a resident of this State. | 12 | | (iv) Interest income, commissions, fees, gains on | 13 | | disposition, and other receipts from commercial loans | 14 | | and installment obligations that are not secured by | 15 | | real or tangible personal property are from sources in | 16 | | this State if the proceeds of the loan are to be | 17 | | applied in this State. If it cannot be determined where | 18 | | the funds are to be applied, the income and receipts | 19 | | are from sources in this State if the office of the | 20 | | borrower from which the loan was negotiated in the | 21 | | regular course of business is located in this State. If | 22 | | the location of this office cannot be determined, the | 23 | | income and receipts shall be excluded from the | 24 | | numerator and denominator of the sales factor.
| 25 | | (v) Interest income, fees, gains on disposition, | 26 | | service charges, merchant discount income, and other |
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| 1 | | receipts from credit card receivables are from sources | 2 | | in this State if the card charges are regularly billed | 3 | | to a customer in this State. | 4 | | (vi) Receipts from the performance of services, | 5 | | including, but not limited to, fiduciary, advisory, | 6 | | and brokerage services, are in this State if the | 7 | | services are received in this State within the meaning | 8 | | of subparagraph (a)(3)(C-5)(iv) of this Section. | 9 | | (vii) Receipts from the issuance of travelers | 10 | | checks and money orders are from sources in this State | 11 | | if the checks and money orders are issued from a | 12 | | location within this State. | 13 | | (viii) Receipts from investment assets and | 14 | | activities and trading assets and activities are | 15 | | included in the receipts factor as follows: | 16 | | (1) Interest, dividends, net gains (but not | 17 | | less than zero) and other income from investment | 18 | | assets and activities from trading assets and | 19 | | activities shall be included in the receipts | 20 | | factor. Investment assets and activities and | 21 | | trading assets and activities include but are not | 22 | | limited to: investment securities; trading account | 23 | | assets; federal funds; securities purchased and | 24 | | sold under agreements to resell or repurchase; | 25 | | options; futures contracts; forward contracts; | 26 | | notional principal contracts such as swaps; |
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| 1 | | equities; and foreign currency transactions. With | 2 | | respect to the investment and trading assets and | 3 | | activities described in subparagraphs (A) and (B) | 4 | | of this paragraph, the receipts factor shall | 5 | | include the amounts described in such | 6 | | subparagraphs. | 7 | | (A) The receipts factor shall include the | 8 | | amount by which interest from federal funds | 9 | | sold and securities purchased under resale | 10 | | agreements exceeds interest expense on federal | 11 | | funds purchased and securities sold under | 12 | | repurchase agreements. | 13 | | (B) The receipts factor shall include the | 14 | | amount by which interest, dividends, gains and | 15 | | other income from trading assets and | 16 | | activities, including but not limited to | 17 | | assets and activities in the matched book, in | 18 | | the arbitrage book, and foreign currency | 19 | | transactions, exceed amounts paid in lieu of | 20 | | interest, amounts paid in lieu of dividends, | 21 | | and losses from such assets and activities. | 22 | | (2) The numerator of the receipts factor | 23 | | includes interest, dividends, net gains (but not | 24 | | less than zero), and other income from investment | 25 | | assets and activities and from trading assets and | 26 | | activities described in paragraph (1) of this |
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| 1 | | subsection that are attributable to this State. | 2 | | (A) The amount of interest, dividends, net | 3 | | gains (but not less than zero), and other | 4 | | income from investment assets and activities | 5 | | in the investment account to be attributed to | 6 | | this State and included in the numerator is | 7 | | determined by multiplying all such income from | 8 | | such assets and activities by a fraction, the | 9 | | numerator of which is the gross income from | 10 | | such assets and activities which are properly | 11 | | assigned to a fixed place of business of the | 12 | | taxpayer within this State and the denominator | 13 | | of which is the gross income from all such | 14 | | assets and activities. | 15 | | (B) The amount of interest from federal | 16 | | funds sold and purchased and from securities | 17 | | purchased under resale agreements and | 18 | | securities sold under repurchase agreements | 19 | | attributable to this State and included in the | 20 | | numerator is determined by multiplying the | 21 | | amount described in subparagraph (A) of | 22 | | paragraph (1) of this subsection from such | 23 | | funds and such securities by a fraction, the | 24 | | numerator of which is the gross income from | 25 | | such funds and such securities which are | 26 | | properly assigned to a fixed place of business |
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| 1 | | of the taxpayer within this State and the | 2 | | denominator of which is the gross income from | 3 | | all such funds and such securities. | 4 | | (C) The amount of interest, dividends, | 5 | | gains, and other income from trading assets and | 6 | | activities, including but not limited to | 7 | | assets and activities in the matched book, in | 8 | | the arbitrage book and foreign currency | 9 | | transactions (but excluding amounts described | 10 | | in subparagraphs (A) or (B) of this paragraph), | 11 | | attributable to this State and included in the | 12 | | numerator is determined by multiplying the | 13 | | amount described in subparagraph (B) of | 14 | | paragraph (1) of this subsection by a fraction, | 15 | | the numerator of which is the gross income from | 16 | | such trading assets and activities which are | 17 | | properly assigned to a fixed place of business | 18 | | of the taxpayer within this State and the | 19 | | denominator of which is the gross income from | 20 | | all such assets and activities. | 21 | | (D) Properly assigned, for purposes of | 22 | | this paragraph (2) of this subsection, means | 23 | | the investment or trading asset or activity is | 24 | | assigned to the fixed place of business with | 25 | | which it has a preponderance of substantive | 26 | | contacts. An investment or trading asset or |
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| 1 | | activity assigned by the taxpayer to a fixed | 2 | | place of business without the State shall be | 3 | | presumed to have been properly assigned if: | 4 | | (i) the taxpayer has assigned, in the | 5 | | regular course of its business, such asset | 6 | | or activity on its records to a fixed place | 7 | | of business consistent with federal or | 8 | | state regulatory requirements; | 9 | | (ii) such assignment on its records is | 10 | | based upon substantive contacts of the | 11 | | asset or activity to such fixed place of | 12 | | business; and | 13 | | (iii) the taxpayer uses such records | 14 | | reflecting assignment of such assets or | 15 | | activities for the filing of all state and | 16 | | local tax returns for which an assignment | 17 | | of such assets or activities to a fixed | 18 | | place of business is required. | 19 | | (E) The presumption of proper assignment | 20 | | of an investment or trading asset or activity | 21 | | provided in subparagraph (D) of paragraph (2) | 22 | | of this subsection may be rebutted upon a | 23 | | showing by the Department, supported by a | 24 | | preponderance of the evidence, that the | 25 | | preponderance of substantive contacts | 26 | | regarding such asset or activity did not occur |
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| 1 | | at the fixed place of business to which it was | 2 | | assigned on the taxpayer's records. If the | 3 | | fixed place of business that has a | 4 | | preponderance of substantive contacts cannot | 5 | | be determined for an investment or trading | 6 | | asset or activity to which the presumption in | 7 | | subparagraph (D) of paragraph (2) of this | 8 | | subsection does not apply or with respect to | 9 | | which that presumption has been rebutted, that | 10 | | asset or activity is properly assigned to the | 11 | | state in which the taxpayer's commercial | 12 | | domicile is located. For purposes of this | 13 | | subparagraph (E), it shall be presumed, | 14 | | subject to rebuttal, that taxpayer's | 15 | | commercial domicile is in the state of the | 16 | | United States or the District of Columbia to | 17 | | which the greatest number of employees are | 18 | | regularly connected with the management of the | 19 | | investment or trading income or out of which | 20 | | they are working, irrespective of where the | 21 | | services of such employees are performed, as of | 22 | | the last day of the taxable year.
| 23 | | (4) (Blank). | 24 | | (5) (Blank). | 25 | | (c-1) Federally regulated exchanges. For taxable years | 26 | | ending on or after December 31, 2012, business income of a |
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| 1 | | federally regulated exchange shall, at the option of the | 2 | | federally regulated exchange, be apportioned to this State by | 3 | | multiplying such income by a fraction, the numerator of which | 4 | | is its business income from sources within this State, and the | 5 | | denominator of which is its business income from all sources. | 6 | | For purposes of this subsection, the business income within | 7 | | this State of a federally regulated exchange is the sum of the | 8 | | following: | 9 | | (1) Receipts attributable to transactions executed on | 10 | | a physical trading floor if that physical trading floor is | 11 | | located in this State. | 12 | | (2) Receipts attributable to all other matching, | 13 | | execution, or clearing transactions, including without | 14 | | limitation receipts from the provision of matching, | 15 | | execution, or clearing services to another entity, | 16 | | multiplied by (i) for taxable years ending on or after | 17 | | December 31, 2012 but before December 31, 2013, 63.77%; and | 18 | | (ii) for taxable years ending on or after December 31, | 19 | | 2013, 27.54%. | 20 | | (3) All other receipts not governed by subparagraphs | 21 | | (1) or (2) of this subsection (c-1), to the extent the | 22 | | receipts would be characterized as "sales in this State" | 23 | | under item (3) of subsection (a) of this Section. | 24 | | "Federally regulated exchange" means (i) a "registered | 25 | | entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B), | 26 | | or (C), (ii) an "exchange" or "clearing agency" within the |
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| 1 | | meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such | 2 | | entities regulated under any successor regulatory structure to | 3 | | the foregoing, and (iv) all taxpayers who are members of the | 4 | | same unitary business group as a federally regulated exchange, | 5 | | determined without regard to the prohibition in Section | 6 | | 1501(a)(27) of this Act against including in a unitary business | 7 | | group taxpayers who are ordinarily required to apportion | 8 | | business income under different subsections of this Section; | 9 | | provided that this subparagraph (iv) shall apply only if 50% or | 10 | | more of the business receipts of the unitary business group | 11 | | determined by application of this subparagraph (iv) for the | 12 | | taxable year are attributable to the matching, execution, or | 13 | | clearing of transactions conducted by an entity described in | 14 | | subparagraph (i), (ii), or (iii) of this paragraph. | 15 | | In no event shall the Illinois apportionment percentage | 16 | | computed in accordance with this subsection (c-1) for any | 17 | | taxpayer for any tax year be less than the Illinois | 18 | | apportionment percentage computed under this subsection (c-1) | 19 | | for that taxpayer for the first full tax year ending on or | 20 | | after December 31, 2013 for which this subsection (c-1) applied | 21 | | to the taxpayer. | 22 | | (d) Transportation services. For taxable years ending | 23 | | before December 31, 2008, business income derived from | 24 | | furnishing
transportation services shall be apportioned to | 25 | | this State in accordance
with paragraphs (1) and (2):
| 26 | | (1) Such business income (other than that derived from
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| 1 | | transportation by pipeline) shall be apportioned to this | 2 | | State by
multiplying such income by a fraction, the | 3 | | numerator of which is the
revenue miles of the person in | 4 | | this State, and the denominator of which
is the revenue | 5 | | miles of the person everywhere. For purposes of this
| 6 | | paragraph, a revenue mile is the transportation of 1 | 7 | | passenger or 1 net
ton of freight the distance of 1 mile | 8 | | for a consideration. Where a
person is engaged in the | 9 | | transportation of both passengers and freight,
the | 10 | | fraction above referred to shall be determined by means of | 11 | | an
average of the passenger revenue mile fraction and the | 12 | | freight revenue
mile fraction, weighted to reflect the | 13 | | person's
| 14 | | (A) relative railway operating income from total | 15 | | passenger and total
freight service, as reported to the | 16 | | Interstate Commerce Commission, in
the case of | 17 | | transportation by railroad, and
| 18 | | (B) relative gross receipts from passenger and | 19 | | freight
transportation, in case of transportation | 20 | | other than by railroad.
| 21 | | (2) Such business income derived from transportation | 22 | | by pipeline
shall be apportioned to this State by | 23 | | multiplying such income by a
fraction, the numerator of | 24 | | which is the revenue miles of the person in
this State, and | 25 | | the denominator of which is the revenue miles of the
person | 26 | | everywhere. For the purposes of this paragraph, a revenue |
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| 1 | | mile is
the transportation by pipeline of 1 barrel of oil, | 2 | | 1,000 cubic feet of
gas, or of any specified quantity of | 3 | | any other substance, the distance
of 1 mile for a | 4 | | consideration.
| 5 | | (3) For taxable years ending on or after December 31, | 6 | | 2008, business income derived from providing | 7 | | transportation services other than airline services shall | 8 | | be apportioned to this State by using a fraction, (a) the | 9 | | numerator of which shall be (i) all receipts from any | 10 | | movement or shipment of people, goods, mail, oil, gas, or | 11 | | any other substance (other than by airline) that both | 12 | | originates and terminates in this State, plus (ii) that | 13 | | portion of the person's gross receipts from movements or | 14 | | shipments of people, goods, mail, oil, gas, or any other | 15 | | substance (other than by airline) that originates in one | 16 | | state or jurisdiction and terminates in another state or | 17 | | jurisdiction, that is determined by the ratio that the | 18 | | miles traveled in this State bears to total miles | 19 | | everywhere and (b) the denominator of which shall be all | 20 | | revenue derived from the movement or shipment of people, | 21 | | goods, mail, oil, gas, or any other substance (other than | 22 | | by airline). Where a taxpayer is engaged in the | 23 | | transportation of both passengers and freight, the | 24 | | fraction above referred to shall first be determined | 25 | | separately for passenger miles and freight miles. Then an | 26 | | average of the passenger miles fraction and the freight |
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| 1 | | miles fraction shall be weighted to reflect the taxpayer's: | 2 | | (A) relative railway operating income from total | 3 | | passenger and total freight service, as reported to the | 4 | | Surface Transportation Board, in the case of | 5 | | transportation by railroad; and | 6 | | (B) relative gross receipts from passenger and | 7 | | freight transportation, in case of transportation | 8 | | other than by railroad.
| 9 | | (4) For taxable years ending on or after December 31, | 10 | | 2008, business income derived from furnishing airline
| 11 | | transportation services shall be apportioned to this State | 12 | | by
multiplying such income by a fraction, the numerator of | 13 | | which is the
revenue miles of the person in this State, and | 14 | | the denominator of which
is the revenue miles of the person | 15 | | everywhere. For purposes of this
paragraph, a revenue mile | 16 | | is the transportation of one passenger or one net
ton of | 17 | | freight the distance of one mile for a consideration. If a
| 18 | | person is engaged in the transportation of both passengers | 19 | | and freight,
the fraction above referred to shall be | 20 | | determined by means of an
average of the passenger revenue | 21 | | mile fraction and the freight revenue
mile fraction, | 22 | | weighted to reflect the person's relative gross receipts | 23 | | from passenger and freight
airline transportation.
| 24 | | (e) Combined apportionment. Where 2 or more persons are | 25 | | engaged in
a unitary business as described in subsection | 26 | | (a)(27) of
Section 1501,
a part of which is conducted in this |
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| 1 | | State by one or more members of the
group, the business income | 2 | | attributable to this State by any such member
or members shall | 3 | | be apportioned by means of the combined apportionment method.
| 4 | | (f) Alternative allocation. If the allocation and | 5 | | apportionment
provisions of subsections (a) through (e) and of | 6 | | subsection (h) do not, for taxable years ending before December | 7 | | 31, 2008, fairly represent the
extent of a person's business | 8 | | activity in this State, or, for taxable years ending on or | 9 | | after December 31, 2008, fairly represent the market for the | 10 | | person's goods, services, or other sources of business income, | 11 | | the person may
petition for, or the Director may, without a | 12 | | petition, permit or require, in respect of all or any part
of | 13 | | the person's business activity, if reasonable:
| 14 | | (1) Separate accounting;
| 15 | | (2) The exclusion of any one or more factors;
| 16 | | (3) The inclusion of one or more additional factors | 17 | | which will
fairly represent the person's business | 18 | | activities or market in this State; or
| 19 | | (4) The employment of any other method to effectuate an | 20 | | equitable
allocation and apportionment of the person's | 21 | | business income.
| 22 | | (g) Cross reference. For allocation of business income by | 23 | | residents,
see Section 301(a).
| 24 | | (h) For tax years ending on or after December 31, 1998, the | 25 | | apportionment
factor of persons who apportion their business | 26 | | income to this State under
subsection (a) shall be equal to:
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| 1 | | (1) for tax years ending on or after December 31, 1998 | 2 | | and before December
31, 1999, 16 2/3% of the property | 3 | | factor plus 16 2/3% of the payroll factor
plus
66 2/3% of | 4 | | the sales factor;
| 5 | | (2) for tax years ending on or after December 31, 1999 | 6 | | and before December
31,
2000, 8 1/3% of the property factor | 7 | | plus 8 1/3% of the payroll factor plus 83
1/3%
of the sales | 8 | | factor;
| 9 | | (3) for tax years ending on or after December 31, 2000, | 10 | | the sales factor.
| 11 | | If, in any tax year ending on or after December 31, 1998 and | 12 | | before December
31, 2000, the denominator of the payroll, | 13 | | property, or sales factor is zero,
the apportionment
factor | 14 | | computed in paragraph (1) or (2) of this subsection for that | 15 | | year shall
be divided by an amount equal to 100% minus the | 16 | | percentage weight given to each
factor whose denominator is | 17 | | equal to zero.
| 18 | | (Source: P.A. 98-478, eff. 1-1-14; 98-496, eff. 1-1-14; 98-756, | 19 | | eff. 7-16-14; 99-642, eff. 7-28-16; revised 11-14-16.)
| 20 | | Section 99. Effective date. This Act takes effect upon | 21 | | becoming law.".
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