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Illinois Compiled Statutes
Information maintained by the Legislative Reference Bureau Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the Guide. Because the statute database is maintained primarily for legislative drafting purposes, statutory changes are sometimes included in the statute database before they take effect. If the source note at the end of a Section of the statutes includes a Public Act that has not yet taken effect, the version of the law that is currently in effect may have already been removed from the database and you should refer to that Public Act to see the changes made to the current law.
REVENUE (35 ILCS 5/) Illinois Income Tax Act. 35 ILCS 5/1001
(35 ILCS 5/1001) (from Ch. 120, par. 10-1001)
Sec. 1001. Failure to File Tax Returns.
(a) Failure to file tax return. In case of failure to file any
tax return required under this Act on the date prescribed therefor,
(determined with regard to any extensions of time for filing) there shall
be added as a penalty the amount prescribed by Section 3-3 of the Uniform
Penalty and Interest Act.
(b) Failure to disclose reportable transaction. Any taxpayer who fails to include on any return or statement any information with respect to a reportable transaction that is required under Section 501(b) of this Act to be included with such return or statement shall pay a penalty in the amount determined under this subsection. Such penalty shall be deemed assessed upon the date of filing of the return for the taxable year in which the taxpayer participates in the reportable transaction. A taxpayer shall not be considered to have complied with the requirements of Section 501(b) of this Act unless the disclosure statement filed with the Department includes all of the information required to be disclosed with respect to a reportable transaction pursuant to Section 6011 of the Internal Revenue Code, the regulations promulgated under that statute, and regulations promulgated by the Department under Section 501(b) of this Act. (1) Amount of penalty. Except as provided in | | paragraph (2), the amount of the penalty under this subsection shall be $15,000 for each failure to comply with the requirements of Section 501(b).
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| (2) Increase in penalty for listed transactions. In
| | the case of a failure to comply with the requirements of Section 501(b) with respect to a "listed transaction", the penalty under this subsection shall be $30,000 for each failure.
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| (3) Authority to rescind penalty. The
| | Department may rescind all or any portion of any penalty imposed by this subsection with respect to any violation, if:
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| (A) the violation is with respect to a reportable
| | transaction other than a listed transaction, and
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| (B) rescinding the penalty would promote
| | compliance with the requirements of this Act and effective tax administration.
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| A determination made under this subparagraph (3) may
| | be reviewed in any administrative or judicial proceeding.
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| (4) Coordination with other penalties. The penalty
| | imposed by this subsection is in addition to any penalty imposed by this Act or the Uniform Penalty and Interest Act. The doubling of penalties and interest authorized by the Illinois Tax Delinquency Amnesty Act (P.A. 93-26) are not applicable to the reportable penalties under subsection (b).
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| (c) The total penalty imposed under subsection (b) of this Section with respect to any taxable year shall not exceed 10% of the increase in net income (or reduction in Illinois net loss under Section 207 of this Act) that would result had the taxpayer not participated in any reportable transaction affecting its net income for such taxable year.
(Source: P.A. 95-707, eff. 1-11-08.)
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35 ILCS 5/1002
(35 ILCS 5/1002) (from Ch. 120, par. 10-1002)
Sec. 1002. Failure to Pay Tax.
(a) Negligence. If any part of a deficiency is due to negligence or
intentional disregard of rules and regulations (but without intent to
defraud) there shall be added to the tax as a penalty the amount prescribed
by Section 3-5 of the Uniform Penalty and Interest Act.
(b) Fraud. If any part of a deficiency is due to fraud, there
shall be added to the tax as a penalty the amount prescribed
by Section 3-6 of the Uniform Penalty and Interest Act.
(c) Nonwillful failure to pay withholding tax. If any employer, without
intent to evade or defeat any tax imposed by this Act or the payment
thereof, shall fail to make a return and pay a tax withheld by him at the
time required by or under the provisions of this Act, such employer shall
be liable for such taxes and shall pay the same together with the interest
and the penalty provided by Sections 3-2 and 3-3, respectively, of the
Uniform Penalty and Interest Act and such interest and penalty shall not be
charged to or collected from the employee by the employer.
(d) Willful failure to collect and pay over tax. Any person
required to collect, truthfully account for, and pay over the tax
imposed by this Act who willfully fails to collect such tax or
truthfully account for and pay over such tax or willfully attempts in
any manner to evade or defeat the tax or the payment thereof, shall, in
addition to other penalties provided by law, be liable for the penalty
imposed by Section 3-7 of the Uniform Penalty and Interest Act.
(e) Penalties assessable.
(1) In general. Except as otherwise provided in this | | Act or the Uniform Penalty and Interest Act, the penalties provided by this Act or by the Uniform Penalty and Interest Act shall be paid upon notice and demand and shall be assessed, collected, and paid in the same manner as taxes and any reference in this Act to the tax imposed by this Act shall be deemed also to refer to penalties provided by this Act or by the Uniform Penalty and Interest Act.
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(2) Procedure for assessing certain penalties. For
| | the purposes of Article 9 any penalty under Section 804(a) or Section 1001 shall be deemed assessed upon the filing of the return for the taxable year.
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(3) Procedure for assessing the penalty for failure
| | to file withholding returns or annual transmittal forms for wage and tax statements. The penalty imposed by Section 1004 will be asserted by the Department's issuance of a notice of deficiency. If taxpayer files a timely protest, the procedures of Section 908 will be followed. If taxpayer does not file a timely protest, the notice of deficiency will constitute an assessment pursuant to subsection (c) of Section 904.
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(4) Assessment of penalty under Section 1005(a).
| | The penalty imposed under Section 1005(a) shall be deemed assessed upon the assessment of the tax to which such penalty relates and shall be collected and paid on notice and demand in the same manner as the tax.
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| (f) Determination of deficiency. For purposes of subsections (a)
and (b), the amount shown as the tax by the taxpayer upon his return
shall be taken into account in determining the amount of the deficiency
only if such return was filed on or before the last day prescribed by
law for the filing of such return, including any extensions of the time
for such filing.
(Source: P.A. 97-507, eff. 8-23-11.)
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35 ILCS 5/1003
(35 ILCS 5/1003) (from Ch. 120, par. 10-1003)
Sec. 1003.
Interest on Deficiencies.
(a) In general. If any amount of tax imposed by this Act, including tax
withheld by an employer, is not paid on or before the date prescribed for
payment of such tax (determined without regard to any extensions), interest
on such amount shall be paid in the manner and at the rate prescribed in
Section 3-2 of the Uniform Penalty and Interest Act for the period from
such date to the date of payment of such amount, except that if
a waiver of restrictions under Section 907 on the assessment and collection
of such amount has been filed, and if notice and demand by the Director for
the payment of such amount is not made within 30 days after the filing of
such waiver, interest shall not be imposed on such amount for the period
beginning immediately after such 30th day and ending with the date of
notice and demand.
(b) Interest treated as tax. Interest prescribed under this Section
on any tax, including tax withheld by an employer, or on any penalty, shall
be deemed assessed upon the assessment of the tax or penalties to which
such interest relates and shall be collected and paid on notice and demand
in the same manner as tax. Any reference in this Act to the tax imposed by
this Act shall be deemed also to refer to interest imposed by this Section
on such tax.
(c) Exception as to estimated tax. This Section shall not apply to
any failure to pay estimated tax required by Section 803.
(Source: P.A. 87-205 .)
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35 ILCS 5/1004
(35 ILCS 5/1004) (from Ch. 120, par. 10-1004)
Sec. 1004.
Failure to file withholding returns or annual transmittal
forms for wage and tax statements. In addition to any other penalties imposed
by this Act, a taxpayer failing to file a quarterly return or the annual
transmittal form for wage and tax statements required by Section 704 or
regulations promulgated thereunder shall incur a penalty for each such failure
as prescribed by Section 3-3 of the Uniform Penalty and Interest Act.
(Source: P.A. 87-205 .)
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35 ILCS 5/1005
(35 ILCS 5/1005) (from Ch. 120, par. 10-1005)
Sec. 1005. Penalty for Underpayment of Tax.
(a) In general. If any amount of tax required to be shown on a return
prescribed by this Act is not paid on or before the date required for
filing such return (determined without regard to any extension of time to
file), a penalty shall be imposed in the manner and at the rate prescribed
by the Uniform Penalty and Interest Act.
(b) Reportable transaction penalty. If a taxpayer has a reportable transaction understatement for any taxable year, there shall be added to the tax an amount equal to 20% of the amount of that understatement. This penalty shall be deemed assessed upon the assessment of the tax to which such penalty relates and shall be collected and paid on notice and demand in the same manner as the tax. (1) Reportable transaction understatement. | | For purposes of this Section, the term "reportable transaction understatement" means the sum of subparagraphs (A) and (B):
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| (A) The product of (i) the amount of the increase
| | (if any) in Illinois net income, as determined by reference to the amount of post-apportioned income that results from a difference between the proper tax treatment of an item to which this subsection applies and the taxpayer's treatment of that item (as shown on the taxpayer's return of tax), including an amended return filed prior to the date the taxpayer is first contacted by the Department regarding the examination of the return, and (ii) the applicable tax rates under Section 201 of this Act.
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| (B) Special rules in the case of carrybacks and
| | carryovers. The penalty for an understatement of income attributable to a reportable transaction applies to any portion of an understatement for a year to which a loss, deduction, or credit is carried that is attributable to a reportable transaction for that year in which the carryback or carryover of the loss, deduction, or credit arises (the "loss or credit year").
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| (2) Items to which subsection applies.
| | This subsection shall apply to any item which is attributable to either of the following: (i) any listed transaction as defined in Treasury Regulations Section 1.6011-4, and (ii) any reportable transaction as defined in Treasury Regulations Section 1.6011-4 (other than a listed transaction) if a significant purpose of the transaction is the avoidance or evasion of federal income tax.
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| (3) Subsection (b) shall be applied by
| | substituting "30%" for "20%" with respect to the portion of any reportable transaction understatement with respect to which the requirements of (4)(B)(i) of this subsection are not met.
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| (4) Reasonable cause exception.
(A) In general. No penalty shall be
| | imposed under this subsection with respect to any portion of a reportable transaction understatement if it is shown that there was a reasonable cause for such portion and that the taxpayer acted in good faith with respect to such portion.
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| (B) Special rules. Subparagraph (A) does
| | not apply to any reportable transaction (including listed transaction) unless all of the following requirements are met:
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| (i) The relevant facts affecting the tax
| | treatment of the item are adequately disclosed in accordance with Section 501(b) of this Act. A taxpayer failing to adequately disclose in accordance with Section 501(b) shall be treated as meeting the requirements of this subparagraph (i) if the penalty for that failure was rescinded under Section 1001(b)(3) of this Act;
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| (ii) There is or was substantial authority
| | (iii) The taxpayer reasonably believed that
| | such treatment was more likely than not the proper treatment.
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| (C) Rules relating to reasonable belief. For
| | purposes of subparagraph (B), a taxpayer shall be treated as having a reasonable belief with respect to the tax treatment of an item only if such belief meets the requirements of this subparagraph (C):
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| (i) Such belief must be based on the facts
| | and law that exist at the time the return of tax that includes that tax treatment is filed;
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| (ii) Such belief must relate solely to the
| | taxpayer's chances of success on the merits of that treatment and does not take into account the possibility that the return will not be audited, that the treatment will not be raised on audit, or that the treatment will be resolved through settlement if it is raised; and
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| (iii) Such belief is not solely based on the
| | opinion of a disqualified tax advisor or on a disqualified opinion.
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| (5) Definitions.
(A) Disqualified tax advisor. The term
| | "disqualified tax advisor" is a tax advisor that meets any of the following conditions:
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| (I) Is a material advisor who participates in
| | the organization, management, promotion, or sale of the transaction or who is related (within the meaning of Sections 267(b) or 707(b)(1) of the Internal Revenue Code) to any person who so participates;
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| (II) Is compensated directly or indirectly by
| | a material advisor with respect to the transaction;
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| (III) Has a fee arrangement with respect to
| | the transaction that is contingent on all or part of the intended tax benefits from the transaction being sustained; or
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| (IV) As determined under regulations
| | prescribed by either the Secretary of the Treasury for federal income tax purposes or the Department, has a continuing financial interest with respect to the transaction.
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| (B) Disqualified opinion. The term
| | "disqualified opinion" means an opinion that meets any of the following conditions:
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| (I) Is based on unreasonable factual or legal
| | assumptions (including assumptions as to future events);
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| (II) Unreasonably relies on representations,
| | statements, findings, or agreements of the taxpayer or any other person;
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| (III) Does not identify and consider all
| | (IV) Fails to meet any other requirement as
| | either the Secretary of the Treasury for federal income tax purposes or the Department may prescribe.
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| (C) Material Advisor. The term "material
| | advisor" shall have substantially the same meaning as the same term is defined under Treasury Regulations Section 301.6112-1, (26 CFR 301.6112-1) and shall include any person that is a material advisor for federal income tax purposes under such regulation.
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| (6) Effective date. This subsection shall
| | apply to taxable years ending on and after December 31, 2004, except that a reportable transaction understatement shall include an understatement (as determined under paragraph (1)) with respect to any taxable year for which the limitations period on assessment has not expired as of January 1, 2005 that is attributable to a transaction which the taxpayer has entered into after February 28, 2000 and before December 31, 2004 that becomes a listed transaction (as defined in Treasury Regulations Section 1.6011-4(b)(2) at any time.
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| (c) 100% interest penalty. If a taxpayer has been contacted by the Internal Revenue Service or the Department regarding the use of a potential tax avoidance transaction with respect to a taxable year and has a deficiency with respect to such taxable year or years, there shall be added to the tax attributable to the potential tax avoidance transaction (determined as described in subsection (b)(1) of Section 1005) an amount equal to 100% of the interest assessed under the Uniform Penalty and Interest Act (determined without regard to subsection (f) of Section 3-2 of such Act) for the period beginning on the last date prescribed by law for the payment of such tax and ending on the date of the notice of deficiency. Such penalty shall be deemed assessed upon the assessment of the interest to which such penalty relates and shall be collected and paid in the same manner as such interest. The penalty imposed by this subsection is in addition to any penalty imposed by this Act or the Uniform Penalty and Interest Act. For purposes of this subsection and subsection (d) of this Section, the term "potential tax avoidance transaction" means any tax shelter as defined in Section 6111 of the Internal Revenue Code. This subsection shall apply to taxable years ending on and after December 31, 2004, except that the penalty may also be imposed with respect to any taxable year for which the limitations period on assessment has not expired as of January 1, 2005 that is attributable to a transaction in which the taxpayer has entered into after February 28, 2000 and before December 31, 2004, which transaction becomes a listed transaction (as defined in Treasury Regulations Section 1.6011-4(b)(2)) at any time.
(d) 150% interest rate. For taxable years ending on and after July 1, 2002, for any notice of deficiency issued before the taxpayer is contacted by the Internal Revenue Service or the Department regarding a potential tax avoidance transaction, the taxpayer is subject to interest as provided under Section 3-2 of the Uniform Penalty and Interest Act, but with respect to any deficiency attributable to a potential tax avoidance transaction, the taxpayer is subject to interest at a rate of 150% of the otherwise applicable rate.
(e) Coordination with other penalties. Except as provided in regulations, the penalties imposed by this Section are in addition to any other penalty imposed by this Act or the Uniform Penalty and Interest Act. The doubling of penalties and interest authorized by the Illinois Tax Delinquency Amnesty Act (P.A. 93-26), are not applicable to the reportable transaction penalties and interest under subsections (b), (c), and (d).
(Source: P.A. 93-840, eff. 7-30-04.)
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35 ILCS 5/1006
(35 ILCS 5/1006) (from Ch. 120, par. 10-1006)
Sec. 1006.
Frivolous Returns.
In addition to any other penalty
provided by this Act there is imposed a penalty of $500 upon any individual
who files a purported return that does not contain information from which
the substantial correctness of the stated tax liability can be determined
or contains information indicating that the stated tax liability is
substantially incorrect and such conduct is due to a desire to delay or
impede the administration of this Act or is due to a position that is
frivolous. This Section is applicable to returns filed for taxable years
ending on or after December 31, 1987.
(Source: P.A. 85-299.)
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35 ILCS 5/1007 (35 ILCS 5/1007) Sec. 1007. Failure to register tax shelter or maintain list.
(a) Penalty Imposed. Any person that fails to comply with the requirements of Section 1405.5 shall incur a penalty as provided in subsection (b). A person shall not be in compliance with the requirements of Section 1405.5 unless and until the required return has been filed and that return contains all of the information required to be included by the Secretary under federal law. (b) Amount of Penalty. The following penalties apply: (1) Except as provided in paragraph (2), the penalty | | imposed under subsection (a) with respect to any failure is $15,000.
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| (2) If the failure is with respect to a listed
| | transaction under subsection (c) of Section 1405.5, the penalty shall be $100,000.
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| (3) In the case of each failure to comply with the
| | requirements of subsection (a) or subsection (b) of Section 1405.6, the penalty shall be $15,000.
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| (4) If the failure is with respect to a listed
| | transaction under subsection (c) of Section 1405.6, the penalty shall be $100,000.
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| (c) Authority to rescind penalty. The Department may rescind all or any portion of any penalty imposed by this subsection with respect to any violation, if
(1) the violation is with respect to a reportable
| | transaction other than a listed transaction, and
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| (2) rescinding the penalty would promote compliance
| | with the requirements of this Act and effective tax administration.
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| (d) Coordination with other penalties. The penalty imposed by this Section is in addition to any penalty imposed by this Act or the Uniform Penalty and Interest Act.
(Source: P.A. 95-707, eff. 1-11-08.)
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35 ILCS 5/1008 (35 ILCS 5/1008) Sec. 1008. Promoting tax shelters.
Except as herein provided, the provisions of Section 6700 of the Internal Revenue Code shall apply for purposes of this Act as if such Section applied to an Illinois deduction, credit, exclusion from income, allocation or apportionment rule, or other Illinois tax benefit. Notwithstanding Section 6700(a) of the Internal Revenue Code, if an activity with respect to which a penalty imposed under Section 6700(a) of the Internal Revenue Code, as applied for purposes of this Act, involves a statement described in Section 6700(a)(2)(A) of the Internal Revenue Code, as applied for purposes of this Act, the amount of the penalty imposed under this Section shall be the greater of $10,000 or 50% of the gross income received (or to be received) from any person to whom such statement is furnished that is required to file a return under Section 502 of this Act.
(Source: P.A. 93-840, eff. 7-30-04.) |
35 ILCS 5/Art. 11
(35 ILCS 5/Art. 11 heading)
ARTICLE 11.
LIENS AND JEOPARDY ASSESSMENT.
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35 ILCS 5/1101
(35 ILCS 5/1101) (from Ch. 120, par. 11-1101)
Sec. 1101. Lien for Tax. (a) If any person liable to pay any tax
neglects or refuses to pay the same after demand, the amount (including any
interest, additional amount,
addition to tax, or assessable penalty, together with any costs that may
accrue in addition thereto) shall be a lien in favor of the State of
Illinois upon all property and rights to property, whether real or
personal, belonging to such person.
(b) Unless another date is specifically fixed by law, the lien imposed
by subsection (a) of this Section shall arise at the time the assessment is
made and shall continue until the liability for the amount so assessed (or
a judgment against the taxpayer arising out of such liability) is satisfied
or becomes unenforceable by reason of lapse of time.
(c) Deficiency procedure. If the lien arises from an assessment
pursuant to a notice of deficiency, such lien shall not attach and the
notice referred to in this Section shall not be filed until all proceedings
in court for review of such assessment have terminated or the time for the
taking thereof has expired without such proceedings being instituted.
(d) Notice of lien. The lien created by assessment shall
terminate unless a notice of lien is filed, as provided in Section 1103 hereof,
within 3 years from the date all proceedings in court for the review of
such assessment have terminated or the time for the taking thereof has
expired without such proceedings being instituted. Where the lien results
from the filing of a return without payment of the tax or penalty shown
therein to be due, the lien shall terminate unless a notice of lien is
filed within 3 years from the date such return was filed with the
Department.
For the purposes of this subsection (d), a tax return filed before the last
day prescribed by law, including any extension thereof, shall be deemed to
have been filed on such last day. The time limitation period on the Department's right to file a notice of lien shall not run (1) during any period of time in which the order of any court has the effect of enjoining or restraining the Department from filing such notice of lien, or (2) during the term of a repayment plan that taxpayer has entered into with the Department, as long as taxpayer remains in compliance with the terms of the repayment plan.
(Source: P.A. 97-507, eff. 8-23-11; 98-446, eff. 8-16-13.)
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35 ILCS 5/1102
(35 ILCS 5/1102) (from Ch. 120, par. 11-1102)
Sec. 1102. Jeopardy assessments.
(a) Jeopardy assessment and lien.
(1) Assessment. If the Department finds that a | | taxpayer is about to depart from the State, or to conceal himself or his property, or to do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect any amount of tax or penalties imposed under this Act unless court proceedings are brought without delay, or if the Department finds that the collection of such amount will be jeopardized by delay, the Department shall give the taxpayer notice of such findings and shall make demand for immediate return and payment of such amount, whereupon such amount shall be deemed assessed and shall become immediately due and payable.
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(2) Filing of lien. If the taxpayer, within 5 days
| | after such notice (or within such extension of time as the Department may grant), does not comply with such notice or show to the Department that the findings in such notice are erroneous, the Department may file a notice of jeopardy assessment lien in the State Tax Lien Registry and shall notify the taxpayer of such filing. Such jeopardy assessment lien shall have the same scope and effect as a statutory lien under this Act. The taxpayer is liable for any administrative fee imposed by the Department by rule in connection with the State Tax Lien Registry. The filing fees shall be paid to the Department in addition to payment of the tax, penalty, and interest included in the amount of the lien.
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(b) Termination of taxable year. In the case of a tax for a current
taxable year, the Director shall declare the taxable period of the taxpayer
immediately terminated and his notice and demand for a return and immediate
payment of the tax shall relate to the period declared terminated,
including therein income accrued and deductions incurred up to the date of
termination if not otherwise properly includible or deductible in respect
of such taxable year.
(c) Protest. If the taxpayer believes that he does not owe some or
all of the amount for which the jeopardy assessment lien against him has
been filed, or that no jeopardy to the revenue in fact exists, he may
protest within 20 days after being notified by the Department of the filing
of such jeopardy assessment lien and request a hearing, whereupon the
Department shall hold a hearing in conformity with the provisions of
Section 908 and, pursuant thereto, shall notify the taxpayer of its
decision as to whether or not such jeopardy assessment lien will be
released.
(Source: P.A. 100-22, eff. 1-1-18 .)
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35 ILCS 5/1103
(35 ILCS 5/1103) (from Ch. 120, par. 11-1103)
Sec. 1103. Filing and priority of liens.
(a) Filing in the State Tax Lien Registry.
Nothing in this Article shall be construed
to give the Department a preference over the rights of any bona fide
purchaser, holder of a security interest, mechanics lienor, mortgagee,
or judgment lien creditor arising prior
to the filing of a regular notice of lien or a notice of jeopardy
assessment lien in the State Tax Lien Registry. For purposes of this
Section, the term "bona fide," shall not include any mortgage of real or
personal property or any other credit transaction that results in the
mortgagee or the holder of the security acting as trustee for unsecured
creditors of the taxpayer mentioned in the notice of lien who executed such
chattel or real property mortgage or the document evidencing such credit
transaction. Such lien shall be inferior to the lien of general taxes,
special assessments and special taxes heretofore or hereafter levied by any
political subdivision of this State.
(b) Filing in the State Tax Lien Registry. In case title to land to be affected by
the notice of lien or notice of jeopardy assessment lien is registered
under the provisions of "An Act concerning land titles," approved May 1,
1897, as amended, such notice shall also be filed in the State Tax Lien Registry, and the Department shall not have a preference over the rights
of any bona fide purchaser, mortgagee, judgment creditor or other lien
holder arising prior to the registration of such notice.
(c) Index. The Department of Revenue shall maintain a State Tax Lien Index of all tax liens filed in the State Tax Lien Registry as provided for by the State Tax Lien Registration Act.
(d) (Blank).
(e) The taxpayer is liable for any filing fees imposed by the Department
for filing the lien in the State Tax Lien Registry and any filing fees imposed by the Department for the
release of that lien. The filing fees shall be paid to the Department in
addition to payment of the tax, penalty, and interest included in the amount of
the lien.
(Source: P.A. 100-22, eff. 1-1-18 .)
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35 ILCS 5/1104
(35 ILCS 5/1104) (from Ch. 120, par. 11-1104)
Sec. 1104.
Duration
of Lien.
The lien provided herein shall continue for 20 years from the date of
filing the notice of lien under the provisions of section 1103 unless
sooner released, or otherwise discharged.
The provisions of this amendatory Act of 1984 shall apply to any lien
which has not expired on or before the effective date of this amendatory
Act of 1984.
(Source: P.A. 83-1416.)
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35 ILCS 5/1105
(35 ILCS 5/1105) (from Ch. 120, par. 11-1105)
Sec. 1105. Release of liens.
(a) In general.
Upon payment by the taxpayer to the Department in cash or by guaranteed
remittance of an amount representing the filing fees and charges for the lien
and the filing fees and charges for the release of that lien,
the Department shall release all or any portion of
the property subject to any lien provided for in this Act
and file that complete or partial release of lien in the State Tax Lien Registry
if it determines
that the release will not endanger or jeopardize the collection of the
amount secured thereby.
(b) Judicial determination. If on judicial review the final judgment
of the court is that the taxpayer does not owe some or all of the amount
secured by the lien against him, or that no jeopardy to the revenue exists,
the Department shall release its lien to the extent of such finding of
nonliability, or to the extent of such finding of no jeopardy to the
revenue.
The taxpayer shall, however, be liable for the filing fee imposed by the
Department to file the lien and the filing fee imposed to release
the lien. The filing fees shall be paid to the Department.
(c) Payment. The Department shall also release its jeopardy
assessment lien against the taxpayer whenever the tax and penalty covered
by such lien, plus any interest which may be due
and an amount representing the filing fee to file the lien and the filing fee
imposed to release that lien, are paid
by the taxpayer to the Department in cash or by guaranteed remittance.
(d) Certificate of release. The Department shall issue a certificate
of complete or partial release of the lien
upon payment by the taxpayer to the Department in cash or by guaranteed
remittance of an amount representing the filing fee imposed by the Department to
file the lien and the filing fee imposed to release that lien:
(1) to the extent that the fair market value of any | | property subject to the lien exceeds the amount of the lien plus the amount of all prior liens upon such property;
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(2) to the extent that such lien shall become
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(3) to the extent that the amount of such lien is
| | paid by the person whose property is subject to such lien, together with any interest and penalty which may become due under this Act between the date when the notice of lien is filed and the date when the amount of such lien is paid;
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(4) to the extent that there is furnished to the
| | Department on a form to be approved and with a surety or sureties satisfactory to the Department a bond that is conditioned upon the payment of the amount of such lien, together with any interest which may become due under this Act after the notice of lien is filed, but before the amount thereof is fully paid;
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(5) to the extent and under the circumstances
| | specified in this Section.
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A certificate of complete or partial release of any lien shall be held
conclusive that the lien upon the property covered by the certificate is
extinguished to the extent indicated by such certificate.
Such release of lien shall be issued to the person, or his agent, against
whom the lien was obtained and shall contain in legible letters a statement as
follows:
FOR THE PROTECTION OF THE OWNER, THIS RELEASE SHALL
BE FILED IN THE STATE TAX LIEN REGISTRY.
(e) Filing. When a certificate of complete or partial release of lien
issued by the Department is filed in the State Tax Lien Registry, the Department
shall
permanently attach the certificate of release to the notice of lien or
notice of jeopardy assessment lien and shall enter the certificate of
release and the date in the "State Tax Lien Index" on the line where the
notice of lien or notice of jeopardy assessment lien is entered.
(Source: P.A. 100-22, eff. 1-1-18 .)
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35 ILCS 5/1106
(35 ILCS 5/1106) (from Ch. 120, par. 11-1106)
Sec. 1106.
Nonliability for Costs.
The Department shall not be required to furnish any bond nor to make a
deposit for or pay any costs or fees of any court or officer thereof in any
legal proceedings pursuant to the
provisions of this Act.
(Source: P.A. 83-358; 83-889.)
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35 ILCS 5/1107
(35 ILCS 5/1107) (from Ch. 120, par. 11-1107)
Sec. 1107.
Claim to Property.
Whenever any process, issued from any court
for the enforcement or collection of any liability created by this Act, shall
be levied by any sheriff or other authorized person upon any personal
property, and such property shall be claimed by any person other than the
defendant as exempt from enforcement
of a judgment thereon by virtue of the exemption laws of this State, then it shall be
the duty of the person making such claim to give notice in writing of his
claim and of his or her intention to prosecute the same, to the sheriff or
other person within 10 days after the making of the levy. On receiving such
notice, the sheriff or other person shall proceed in accordance with the
provisions of Part 2 of Article XII of the Code of Civil Procedure, as amended.
The giving of
such notice within the 10-day period shall be a condition precedent to any
judicial action against the sheriff or other authorized person
for wrongfully
levying, seizing or selling the property and any such person
who fails to give notice within the time shall be forever barred
from bringing any judicial action against such sheriff or
other person for injury or damages to
or conversion of said property.
(Source: P.A. 83-346.)
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35 ILCS 5/1108
(35 ILCS 5/1108) (from Ch. 120, par. 11-1108)
Sec. 1108.
Foreclosure on Real Property.
In addition to any other remedy provided for by the laws of this State,
and provided that no hearing or proceedings for review provided by this Act
shall be pending, and the time for the taking thereof shall have expired,
the Department may foreclose in the circuit court any
lien on real property for any tax or penalty imposed by this Act to the
same extent and in the same manner as in the enforcement of other liens.
Such proceedings to foreclose shall not be instituted more than 5 years
after the filing of the notice of lien under the provisions of Section
1103. The process, practice and procedure for such foreclosure shall be
the same as provided in the Civil Practice Law, as
amended.
(Source: P.A. 82-783.)
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35 ILCS 5/1109
(35 ILCS 5/1109) (from Ch. 120, par. 11-1109)
Sec. 1109. Demand and Seizure. In addition to any other remedy
provided for by the laws of this State, if the tax imposed by this Act
is not paid within the time required by this Act, the Department, or
some person designated by it, may cause a demand to be made on the
taxpayer for the payment thereof. If such tax remains unpaid for 10
days after such demand has been made and no proceedings have been taken
to review the same, the Department may issue a warrant directed to any
sheriff or other person authorized to serve process, commanding the
sheriff or other person to levy upon the property and rights to property
(whether real or personal, tangible or intangible) of the taxpayer, without
exemption, found within his jurisdiction, for the payment of the amount
thereof with the added penalties, interest and the cost of executing the
warrant. The term "levy" includes the power of distraint and seizure by any
means. In any case in which the warrant to levy has been issued, the
sheriff or other person to whom the warrant was directed may seize and sell
such property or rights to property. Such warrant
shall be returned to the Department together with the money collected by
virtue thereof within the time therein specified, which shall not be
less than 20 nor more than 90 days from the date of the warrant. The
sheriff or other person to whom such warrant is directed shall proceed in the
same manner as prescribed by law in respect to the enforcement against
property upon judgments by a court, and shall be entitled to the same
fees for his services in executing the warrant, to be collected in the
same manner. The Department, or some officer, employee or agent
designated by it, is hereby authorized to bid for and purchase any
property sold under the provisions hereof. No proceedings for a levy
under this Section shall be commenced more than 20 years after the latest
date for filing
of the notice of lien under the provisions of Section 1103, without regard
to whether such notice was actually filed.
Any officer or employee of the Department designated in writing by the
Director is authorized to serve process under this Section to levy upon
accounts or other intangible assets of a taxpayer held by a financial
organization, as defined in Section 1501 of this Act.
In addition to any other provisions of this Section, any officer or
employee of the Department designated in writing by the Director may levy
upon the following property and rights to property belonging to a taxpayer:
contractual payments, accounts and notes receivable and other evidences of
debt, and interest on bonds, by serving a notice of levy on the person
making such payment. Levy shall not be made until the Department has
caused a demand to be made on the taxpayer in the manner provided above.
In addition to any
other provisions
of this Section, any officer or employee of the Department designated in
writing by the Director, may levy upon the salary, wages, commissions and
bonuses of any employee, including
officers,
employees, or elected officials of the United States as authorized by
Section
5520a of the Government Organization and Employees Act (5 U.S.C. 5520a), but
not upon the salary or wages of officers, employees, or elected officials of
any state other than this State, by serving a notice of levy on the employer, as defined in
Section 701(d). Levy shall not be made until the Department has caused a
demand to be made on the employee in the manner provided above. The
provisions of Section 12-803 of the Code of Civil Procedure relating to
maximum compensation subject to collection under wage deduction orders shall
apply to all levies made upon compensation
under this Section.
To the extent of the amount due on the levy, the employer or other person
making payments to the taxpayer shall hold any non-exempt wages or other
payments due or which subsequently come due. The levy or balance due
thereon is a lien on wages or other payments due at the time of the service
of the notice of levy, and such lien shall continue as to subsequent
earnings and other payments until the total amount due upon the levy is
paid, except that such lien on subsequent earnings or other payments shall
terminate sooner if the employment relationship is terminated or if the
notice of levy is rescinded or modified. The employer or other person making
payments to the taxpayer shall file, on or before the return dates stated
in the notice of levy (which shall not be more often than bimonthly) a
written answer under oath to interrogatories, setting forth the amount due
as wages or other payments to the taxpayer for the payment periods ending
immediately prior to the appropriate return date. A lien obtained
hereunder shall have priority over any subsequent lien obtained pursuant to
Section 12-808 of the Code of Civil Procedure, except that liens for the
support of a spouse or dependent children shall have priority over all
liens obtained hereunder.
In any case where property or rights to property have been seized by an
officer of the Illinois State Police, or successor agency
thereto, under the authority of a warrant to levy issued by the Department
of Revenue, the Department of Revenue may take possession of and may sell
such property or rights to property and the Department of Revenue may
contract with third persons to conduct sales of such property or rights to
the property. In the conduct of such sales, the Department of Revenue
shall proceed in the same manner as is prescribed by law for proceeding
against property to enforce judgments which are entered by a circuit court
of this State. If, in the Department of Revenue's opinion, no offer to
purchase at such sale is acceptable and the State's interest would be
better served by retaining the property for sale at a later date, then the
Department may decline to accept any bid and may retain the property for
sale at a later date.
(Source: P.A. 102-538, eff. 8-20-21.)
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35 ILCS 5/1110
(35 ILCS 5/1110) (from Ch. 120, par. 11-1110)
Sec. 1110.
Redemption by State.
The provisions of sections 5g and 5h of the Retailers' Occupation Tax
Act (relating to time for redemption by the State of real estate sold at
judicial or execution sale) as in effect on the effective date of this Act,
or as subsequently amended, shall apply for purposes of this Act as if such
sections were set forth herein in their entirety.
(Source: P.A. 76-261.)
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35 ILCS 5/Art. 12
(35 ILCS 5/Art. 12 heading)
ARTICLE 12.
JUDICIAL REVIEW.
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35 ILCS 5/1201
(35 ILCS 5/1201) (from Ch. 120, par. 12-1201)
Sec. 1201. Administrative Review Law; Illinois Independent Tax Tribunal Act of 2012. The provisions of the Administrative Review Law, and the rules adopted
pursuant thereto, shall apply to and govern all proceedings for the
judicial review of final actions of the Department referred to in Sections
908 (d) and 910 (d). Such final actions shall constitute "administrative
decisions" as defined in Section 3-101 of the Code of Civil Procedure.
Notwithstanding any other provision of law, on and after July 1, 2013, the provisions of the Illinois Independent Tax Tribunal Act of 2012, and the rules adopted pursuant thereto, shall apply to and govern all proceedings for the judicial review of final administrative decisions of the Department that are subject to that Act, as defined in Section 1-70 of the Illinois Independent Tax Tribunal Act of 2012. (Source: P.A. 97-1129, eff. 8-28-12; 98-463, eff. 8-16-13.)
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35 ILCS 5/1202
(35 ILCS 5/1202) (from Ch. 120, par. 12-1202)
Sec. 1202. Venue. Except as otherwise provided in the Illinois Independent Tax Tribunal Act of 2012, the Circuit Court of the county wherein the taxpayer has his residence
or commercial domicile, or of Cook County in those cases where the taxpayer
does not have his residence or commercial domicile in this State, shall
have power to review all final administrative decisions of the Department
in administering the provisions of this Act.
(Source: P.A. 97-1129, eff. 8-28-12; 98-463, eff. 8-16-13.)
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35 ILCS 5/1203
(35 ILCS 5/1203) (from Ch. 120, par. 12-1203)
Sec. 1203.
Service, Certification and Dismissal.
(a) Service. Service upon the Director or the Assistant Director of
summons issued in an action to review a final administrative decision of
the Department shall be service upon the Department.
(b) Certification. The Department shall certify the record of its
proceedings if the taxpayer pays to it the sum of 75¢ per page of testimony
taken before the Department and 25¢ per page of all other matters contained
in such record, except that these charges may be waived where the
Department is satisfied that the aggrieved party is a poor person who
cannot afford to pay such charges.
(c) Dismissal. If payment for such record is not made by the taxpayer
within 30 days after notice from the Department or the Attorney General of
the cost thereof, the court in which the proceeding is pending, on motion
of the Department, shall dismiss the complaint and shall enter judgment
against the taxpayer and in favor of the Department in accordance with the
final action of the Department, together with interest on any deficiency to
the date of entry of the judgment, and also for costs.
(Source: P.A. 76-261 .)
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35 ILCS 5/1204
(35 ILCS 5/1204) (from Ch. 120, par. 12-1204)
Sec. 1204.
Modification of Assessment.
An assessment reviewed under this Article shall be deemed confirmed or
abated consistent with the final decision in such proceeding.
(Source: P.A. 76-261.)
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35 ILCS 5/Art. 13
(35 ILCS 5/Art. 13 heading)
ARTICLE 13.
CRIMES.
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35 ILCS 5/1301
(35 ILCS 5/1301) (from Ch. 120, par. 13-1301)
Sec. 1301. Willful and Fraudulent Acts. Any person who is subject to the provisions of this Act and who
willfully fails to file a return, or who files a fraudulent return, or who willfully attempts in any other
manner to evade or defeat any tax imposed by this Act or the payment
thereof, or any accountant or other agent who knowingly enters false
information on the return of any taxpayer under this Act, shall, in addition to
other penalties, be guilty of a Class 4 felony for the
first offense and a Class 3 felony for each subsequent
offense. Any person who is subject to this Act and who willfully violates
any rule or regulation of the Department
for the administration and enforcement of this Act or who fails to keep books
and records as required in this Act is, in addition to other penalties, guilty
of a Class A misdemeanor.
Any person whose commercial domicile or whose residence is in
this State and who is charged with a violation under this Section shall be
tried in the county where his commercial domicile or his residence is
located unless he asserts a right to be tried in another venue. A
prosecution for any act in violation of this Section may be
commenced at any time within 5 years of the commission of that act.
(Source: P.A. 94-1074, eff. 12-26-06.)
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35 ILCS 5/1302
(35 ILCS 5/1302) (from Ch. 120, par. 13-1302)
Sec. 1302. Willful Failure to Pay Over. Any person who accepts money that is due to the Department under this
Act from a taxpayer for the purpose of acting as the taxpayer's agent to
make the payment to the Department, but who willfully fails to remit such
payment to the Department when due, shall be guilty of a Class A misdemeanor.
Any such person who purports to make such payment by issuing or delivering
a check or other order upon a real or fictitious depository for the payment
of money, knowing that it will not be paid by the depository, shall be guilty
of a deceptive practice in violation of Section 17-1 of the Criminal Code
of 2012. Any person whose commercial domicile or whose
residence is in this State and who is charged with a violation under this
Section shall be tried in the county where his commercial domicile or his
residence is located unless he asserts a right to be tried in another
venue. A prosecution for any act in violation of this Section
may be commenced at any time within 5 years of the commission of that act.
(Source: P.A. 97-1150, eff. 1-25-13.)
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35 ILCS 5/Art. 14
(35 ILCS 5/Art. 14 heading)
ARTICLE 14.
MISCELLANEOUS PROVISIONS.
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35 ILCS 5/1401
(35 ILCS 5/1401) (from Ch. 120, par. 14-1401)
Sec. 1401.
Promulgation of Rules and Regulations.
(a) In general. The Department is authorized to make, promulgate and enforce
such reasonable rules and regulations, and to prescribe such forms, relating to
the administration and enforcement of the provisions of this Act, as it may
deem appropriate.
(b) Group administration for taxpayers that are members of a unitary
business group.
(1) For taxable years ending before December 31, | | 1993, the Department shall make, promulgate and enforce such reasonable rules and regulations, and prescribe such forms as it may deem appropriate, to permit all of the taxpayers that are corporations (other than Subchapter S corporations) having the same taxable year and that are members of the same unitary business group to elect to be treated as one taxpayer for purposes of any original return, amended return which includes the same taxpayers of the unitary group which joined in the election to file the original return, extension, claim for refund, assessment, collection and payment and determination of the group's tax liability under this Act. For taxable years ending on or after December 31, 1987, corporate members (other than Subchapter S corporations) of the same unitary business group making an election to be treated as one taxpayer are not required to have the same taxable year. The rules, regulations and forms promulgated under this subsection (b) shall not permit the election to be made for some, but not all, of the purposes enumerated above.
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(2) For taxable years ending on or after December 31,
| | 1993, the Department shall make, promulgate and enforce such reasonable rules and regulations, and prescribe such forms as it may deem appropriate, to require all taxpayers that are corporations (other than Subchapter S corporations) and that are members of the same unitary business groups to be treated as one taxpayer for purposes of any original return, amended return, which includes the same taxpayers of the unitary group which joined in filing the original return, extension, claim for refund, assessment, collection and payment and determination of the group's tax liability under this Act.
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(c) Offset among taxpayers that are members of a unitary business group.
For taxable years for which returns were filed prior to the applicable
date of Section 502(f), the Department shall make, promulgate and enforce
such reasonable rules and regulations, and prescribe such forms as it may
deem appropriate, to permit a taxpayer that is a member of a unitary
business group to elect, within the applicable period of limitation as
provided in Section 911, to credit any overpayment due the taxpayer for a
taxable year against the liability for the same taxable year of one or more
other taxpayers that are members of the same unitary business group for
that taxable year, except that when an audit has been conducted by the
Department, overpayments determined by the Department to be due a taxpayer
may be credited against the liability of one or more other members of the
same unitary group for any year within the period covered by the audit.
Such regulations shall include rules which provide that the amount of the
overpayment taken as a credit by a taxpayer under this Section shall be
treated, for all purposes under this Act, as having been paid by such
taxpayer at the time such payment was made.
(Source: P.A. 88-195.)
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35 ILCS 5/1402
(35 ILCS 5/1402) (from Ch. 120, par. 14-1402)
Sec. 1402. Notice.
Whenever notice is required by this Act, such notice may, if not
otherwise provided, be given or issued by mailing it by first-class mail addressed to the person concerned at his last known address.
Notice to a person who is under a legal disability or deceased, shall be
mailed to his last known address or, if the Department has received notice
of the existence of a fiduciary for such person or his estate, to such
fiduciary.
(Source: P.A. 97-507, eff. 8-23-11.)
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35 ILCS 5/1403
(35 ILCS 5/1403) (from Ch. 120, par. 14-1403)
Sec. 1403.
Substitution of Parties.
Whenever any proceeding provided by this Act is begun before the
Department, either by the Department or by a person subject to this Act,
and such person thereafter dies or becomes a person under legal disability
before such
proceeding is concluded, the legal representative of the deceased or
of the person under legal disability shall notify
the Department of such death or legal disability. The legal representative,
as such, shall
then be substituted
by the Department for such person. If the legal representative fails to
notify the Department of his appointment as such legal representative, the
Department may, upon its own motion, substitute such legal representative
in the proceeding pending before the Department for the person who died or
became under legal disability.
(Source: P.A. 83-706.)
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35 ILCS 5/1404
(35 ILCS 5/1404) (from Ch. 120, par. 14-1404)
Sec. 1404.
Appointment of Secretary of State as Agent for Service of
Process.
(a) In general. Any person who incurs tax liability under this Act, and
who removes from this State or conceals his whereabouts, shall be deemed
thereby to appoint the Secretary of State of Illinois his agent for service
of process or notice in any judicial or administrative proceeding under
this Act. Such process or notice shall be served by the Department on the
Secretary of State by leaving, at the office of the Secretary of State at
least 15 days before the return day of such process or notice, a true and
certified copy thereof, and by sending to the taxpayer by registered or
certified mail, a like and true certified copy with an endorsement thereon
of the service upon said Secretary of State, addressed to such taxpayer
at his last known address.
(b) Validity. Service of process or notice in the manner and under the
circumstances provided in this section, shall be of the same force and validity
as if served upon the taxpayer personally within this State. Proof of such
service upon the taxpayer in this State through the Secretary of State,
his agent, and by mailing to the last known address of the taxpayer may
be made in such judicial or administrative proceeding by the affidavit of
the Director, or by his duly authorized representative who made such service,
with a copy of the process or notice that was so served attached to such affidavit.
(Source: P.A. 76-261.)
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35 ILCS 5/1405
(35 ILCS 5/1405) (from Ch. 120, par. 14-1405)
Sec. 1405.
Transferees.
The liability of a transferee of property of a taxpayer for any tax,
penalty or interest due the Department under this Act, shall be
assessed, paid and collected in the same manner and subject to the same
provisions as in the case of the tax to which the
liability relates, except that the period of limitations for the issuance
of a notice of deficiency with respect to such liability shall be as provided
in Section 905 (m). The term "transferee" includes donee, heir, legatee
and distributee and bulk purchasers under Section 902 (d).
(Source: P.A. 84-1308.)
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35 ILCS 5/1405.1
(35 ILCS 5/1405.1) (from Ch. 120, par. 14-1405.1)
Sec. 1405.1.
Information Reports:
(a) Rents and royalties. Any person maintaining an office or transacting
business in Illinois and required under Sections 6041 and 6050N of the Internal
Revenue Code of 1986 to report to the U.S. Secretary of the Treasury payments
made to another person shall not also be required to file with the
Department copies of
those
reports. The person shall maintain, in a format available for review by the
Department, copies of the reports that include a payment of $1,000 or
more which is, in whole or part, for
one or more of the following:
(1) rents and royalties for real property located in | |
(2) rents and royalties for tangible personal
| | property if the tangible personal property was physically located in Illinois at any time during the rental period;
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(3) royalties paid on a patent which is employed in
| | production, fabrication, manufacturing, or other processing in Illinois;
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(4) royalties paid on a patented product which is
| | produced in Illinois; and
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(5) royalties paid on a copyright to compensate the
| | holder of the copyright for printing or other publication which originates in Illinois.
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(b) The Department of Revenue shall obtain from the United States
Agricultural Stabilization and Conservation Service and the Illinois Department
of Agriculture a list of non-resident owners of record of Illinois farmland.
The Department of Revenue shall utilize this list for the purpose of aiding the
Department in determining the Illinois tax liability under this Act of such
non-resident owners.
(Source: P.A. 89-399, eff. 8-20-95.)
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35 ILCS 5/1405.2
(35 ILCS 5/1405.2) (from Ch. 120, par. 14-1405.2)
Sec. 1405.2.
Information reports for payments made under contracts for
personal services:
(a) Payments made on or after January 1, 1989, under contracts for
personal services. Any person maintaining an office or transacting
business in Illinois shall maintain a record, in a format in which the record
is available to review by the Department, of all payments made
under contracts for personal services. Payments which meet all of the
following criteria are considered payments made under contracts for
personal services:
(1) the payment is made in the ordinary course of the | | trade or business of the payor;
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(2) the payment is made pursuant to a written
| | contract requiring the rendition of personal services;
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(3) the sum of the payment and other payments
| | required to be made under the contract during the same calendar year by the payor exceed $1000; and
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(4) the performance of the personal services
| | specified in the contract will necessitate the presence at sometime in Illinois of a particular individual or group of individuals; provided that no reporting will be required if there is certification that the individual or, if appropriate, group of individuals is composed solely of Illinois residents, and further provided that no reporting will be required if there is certification that the individual or, if appropriate, group of individuals is employed by a person maintaining an office in Illinois.
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(b) Information required to be maintained. The
information to be maintained in a format in which the information is
available for review by the Department shall specify the identifying numbers of persons
receiving the payments made under the contract for personal services, the
names of the persons receiving the payments, the addresses of the persons
receiving the payments, and the aggregate amount of payments made to each
person. The information shall also specify the identifying
number, name, and
address of the payor.
(c) Every person required to maintain information
under subsection (a) shall
furnish to each person with respect to whom the information is required a
copy of the information maintained for Department inspection.
Where the payment is made to a person or persons other than the
individual or group of individuals whose presence in Illinois was
necessitated by the contract, the written statement furnished to the
payment recipients shall state that such persons shall in turn inform the
individuals whose presence in Illinois was required, or their employer if
such individuals were employed, that the payment has been reported to the
Department of Revenue.
The written statement required under the preceding sentence shall be
furnished to the person on or before January 31 of the year following the
calendar year for which the report under subsection (a) was required
to be made.
(d) Penalties. Any person required to provide copies of information to
persons to whom payments are made under subsection
(c) of this Section who fails to do so shall be subject to the
penalty prescribed by Section 3-4 of the Uniform Penalty and Interest Act.
(Source: P.A. 89-399, eff. 8-20-95.)
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35 ILCS 5/1405.3
(35 ILCS 5/1405.3) (from Ch. 120, par. 14-1405.3)
Sec. 1405.3.
(a) Payments made on or after January 1, 1989, for prizes
or awards. Any person maintaining an office or transacting business in
Illinois shall maintain a record, in a format in which the record is subject
to review by the Department, of all payments, whether cash or
non-cash, made as prizes or awards. Payments which meet all of the
following criteria are considered payments of prizes or awards:
(1) the payment is made in the ordinary course of the | | trade or business of the payor,
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(2) the payment is in complete or partial
| | satisfaction of a prize or award in excess of $1000 won by a particular individual or group of individuals for themselves or their sponsors as a result of their participation and relative performance, or the participation and relative performance of an animal or motor vehicle which they own, in any contest staged wholly in Illinois provided that no reporting will be required if there is certification that the individual or group of individuals receiving the prize or award is composed solely of Illinois residents, and further provided that no reporting will be required if there is certification that the individual or group of individuals is employed by a person maintaining an office in Illinois.
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(b) Information required to be maintained. The
information to be maintained in a format in which the information is
available
for review by the Department shall specify the identifying numbers of persons
receiving the prize or award, the names of the persons receiving the prize
or award, the addresses of the persons receiving the prize or award, and
the aggregate amount of payments or the fair market value of the non-cash
prize or award received by each person. The information shall
also specify the
identifying number, name, and address of the payor.
(c) Every person required to maintain information
under subsection (a) shall
furnish to each person with respect to whom such information
is required to be maintained a
copy of the information maintained for Department inspection.
Where the payment is made to a person or persons other than the
individual or group of individuals receiving the prize or award, the
written statement furnished to the payment recipients shall state that such
persons shall in turn inform the individuals receiving the prize or award,
or their employer if such individuals were employed, that the payment has
been reported to the Department of Revenue.
The written statement required under the preceding sentence shall be
furnished to the person on or before January 31 of the year following the
calendar year for which the report under subsection (a) was required to
be made.
(d) Penalties. Any person required to provide copies of information to
persons to whom payments are made under subsection
(c) of this Section who fails to do so shall be subject to the
penalty prescribed by Section 3-4 of the Uniform Penalty and Interest Act.
(Source: P.A. 89-399, eff. 8-20-95.)
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35 ILCS 5/1405.4
(35 ILCS 5/1405.4)
Sec. 1405.4. Tax refund inquiries; response. The Department of Revenue
shall establish procedures to inform taxpayers of the status of their refunds and shall provide a response to each inquiry concerning refunds under this Act
within 10 days after receiving the inquiry.
(Source: P.A. 97-507, eff. 8-23-11.)
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35 ILCS 5/1405.5 (35 ILCS 5/1405.5)
Sec. 1405.5. Registration of tax shelters. (a) Federal tax shelter. Any material advisor required to make a return under Section 6111 of the Internal Revenue Code with respect to a reportable transaction shall send a duplicate of the return to the Department not later than the day on which the return is required to be filed under federal law. (b) (Blank). (c) Transactions subject to this Section. The provisions of this Section apply to any reportable transaction having a nexus with this State. For returns that must be filed under this Section on or after January 1, 2008, a reportable transaction has nexus with this State if, at the time the transaction is entered into, the transaction has one or more investors that is an Illinois taxpayer. For returns that must be filed under this Section prior to January 1, 2008, a tax shelter has a nexus with this State if it satisfies any of the following conditions: (1) is organized in this State; (2) is doing business in this State; or (3) is deriving income from sources in this State. (d) (Blank).
(Source: P.A. 95-707, eff. 1-11-08.) |
35 ILCS 5/1405.6 (35 ILCS 5/1405.6)
Sec. 1405.6. Investor lists. (a) Federal abusive tax shelter. Any person required to maintain a list under Section 6112 of the Internal Revenue Code shall furnish a duplicate of such list to the Department not later than the earlier of the time such list is required to be furnished to the Internal Revenue Service for inspection under Section 6112 of the Internal Revenue Code or the date of written request by the Department. (b) (Blank). (c) Transactions subject to this Section. The provisions of this Section apply to any reportable transaction having a nexus with this State. For lists that must be filed with the Department on or after January 1, 2008, a reportable transaction has nexus with this State if, at the time the transaction is entered into, the transaction has one or more investors that is an Illinois taxpayer. For lists that must be filed with the Department prior to January 1, 2008, a reportable transaction has nexus with this State if, at the time the transaction is: (1) Organized in this State; (2) Doing Business in this State; or (3) Deriving income from sources in this State.
(Source: P.A. 95-707, eff. 1-11-08.) |
35 ILCS 5/1406
(35 ILCS 5/1406) (from Ch. 120, par. 14-1406)
Sec. 1406.
Identifying Numbers.
(a) Supplying of identifying numbers. When required by regulations
prescribed by the Department:
(1) Inclusion in returns. Any person required under | | this Act to make a return, statement, or other document shall include in such return, statement, or other document such identifying number as may be prescribed for securing proper identification of such person.
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(2) Furnishing number to other persons. Any person
| | with respect to whom a return, statement, or other document is required under this Act to be made by another person shall furnish to such other person such identifying number as may be prescribed for securing his proper identification.
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(3) Furnishing number of another person. Any person
| | required under this Act to make a return, statement, or other document with respect to another person shall request from such other person, and shall include in any such return, statement, or other document, such identifying number as may be prescribed for securing proper identification of such other person.
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(b) Limitation.
(1) Except as provided in paragraph (2), a return of
| | any person with respect to his liability for tax, or any statement or other document in support thereof, shall not be considered for purposes of paragraphs (2) and (3) of subsection (a) as a return, statement, or other document with respect to another person.
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(2) For purposes of paragraphs (2) and (3) of
| | subsection (a), a return of an estate or trust with respect to its liability for tax, and any statement or other document in support thereof, shall be considered as a return, statement, or other document with respect to each beneficiary of such estate or trust.
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(c) Requirement of information. For purposes of this section, the
Department is authorized to require such information as may be necessary to
assign an identifying number to any person.
(Source: P.A. 76-261 .)
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35 ILCS 5/1407
(35 ILCS 5/1407) (from Ch. 120, par. 14-1407)
Sec. 1407.
Amounts Less than $1.
(a) Payments, refunds, etc. The
Department may by regulations provide that if a total amount of less than
$1 is payable, refundable or creditable, such amount may be disregarded
or, alternatively, shall be disregarded if it is less than 50 cents and
shall be increased to $1 if it is 50 cents or more.
(b) Rounding. The Department may by regulations provide that any amount
which is required to be shown or reported on any return or other document
under this Act shall, if such amount is not a whole-dollar amount, be increased
to the nearest whole-dollar amount in any case where the fractional part
of a dollar is 50 cents or more, and decreased to the nearest whole-dollar
amount where the fractional part of a dollar is less than 50 cents.
(Source: P.A. 76-261.)
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35 ILCS 5/1408
(35 ILCS 5/1408) (from Ch. 120, par. 14-1408)
Sec. 1408.
Except as otherwise provided in the Illinois Independent Tax Tribunal Act of 2012, the Illinois Administrative Procedure Act is hereby expressly
adopted and shall apply to all administrative rules and procedures of the
Department of Revenue under this Act, except that (1) paragraph (b) of Section
5-10 of the Illinois Administrative Procedure Act does not apply to final
orders, decisions and opinions of the Department, (2) subparagraph (a)2 of
Section 5-10 of the Illinois Administrative Procedure Act does not apply to
forms established by the Department for use under this Act, and (3) the
provisions of Section 10-45 of the Illinois Administrative Procedure Act
regarding proposals for decision are excluded and not applicable to the
Department under this Act.
(Source: P.A. 97-1129, eff. 8-28-12; 98-463, eff. 8-16-13.)
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35 ILCS 5/Art. 15
(35 ILCS 5/Art. 15 heading)
ARTICLE 15.
DEFINITIONS AND RULES OF INTERPRETATION.
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35 ILCS 5/1501
(35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
Sec. 1501. Definitions.
(a) In general. When used in this Act, where not
otherwise distinctly expressed or manifestly incompatible with the intent
thereof:
(1) Business income. The term "business income" means | | all income that may be treated as apportionable business income under the Constitution of the United States. Business income is net of the deductions allocable thereto. Such term does not include compensation or the deductions allocable thereto. For each taxable year beginning on or after January 1, 2003, a taxpayer may elect to treat all income other than compensation as business income. This election shall be made in accordance with rules adopted by the Department and, once made, shall be irrevocable.
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(1.5) Captive real estate investment trust:
(A) The term "captive real estate investment
| | trust" means a corporation, trust, or association:
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| (i) that is considered a real estate
| | investment trust for the taxable year under Section 856 of the Internal Revenue Code;
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| (ii) the certificates of beneficial interest
| | or shares of which are not regularly traded on an established securities market; and
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| (iii) of which more than 50% of the voting
| | power or value of the beneficial interest or shares, at any time during the last half of the taxable year, is owned or controlled, directly, indirectly, or constructively, by a single corporation.
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| (B) The term "captive real estate investment
| | (i) a real estate investment trust of which
| | more than 50% of the voting power or value of the beneficial interest or shares is owned or controlled, directly, indirectly, or constructively, by:
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| (a) a real estate investment trust, other
| | than a captive real estate investment trust;
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| (b) a person who is exempt from taxation
| | under Section 501 of the Internal Revenue Code, and who is not required to treat income received from the real estate investment trust as unrelated business taxable income under Section 512 of the Internal Revenue Code;
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| (c) a listed Australian property trust,
| | if no more than 50% of the voting power or value of the beneficial interest or shares of that trust, at any time during the last half of the taxable year, is owned or controlled, directly or indirectly, by a single person;
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| (d) an entity organized as a trust,
| | provided a listed Australian property trust described in subparagraph (c) owns or controls, directly or indirectly, or constructively, 75% or more of the voting power or value of the beneficial interests or shares of such entity; or
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| (e) an entity that is organized outside
| | of the laws of the United States and that satisfies all of the following criteria:
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| (1) at least 75% of the entity's
| | total asset value at the close of its taxable year is represented by real estate assets (as defined in Section 856(c)(5)(B) of the Internal Revenue Code, thereby including shares or certificates of beneficial interest in any real estate investment trust), cash and cash equivalents, and U.S. Government securities;
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| (2) the entity is not subject to tax
| | on amounts that are distributed to its beneficial owners or is exempt from entity-level taxation;
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| (3) the entity distributes at least
| | 85% of its taxable income (as computed in the jurisdiction in which it is organized) to the holders of its shares or certificates of beneficial interest on an annual basis;
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| (4) either (i) the shares or
| | beneficial interests of the entity are regularly traded on an established securities market or (ii) not more than 10% of the voting power or value in the entity is held, directly, indirectly, or constructively, by a single entity or individual; and
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| (5) the entity is organized in a
| | country that has entered into a tax treaty with the United States; or
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| (ii) during its first taxable year for which
| | it elects to be treated as a real estate investment trust under Section 856(c)(1) of the Internal Revenue Code, a real estate investment trust the certificates of beneficial interest or shares of which are not regularly traded on an established securities market, but only if the certificates of beneficial interest or shares of the real estate investment trust are regularly traded on an established securities market prior to the earlier of the due date (including extensions) for filing its return under this Act for that first taxable year or the date it actually files that return.
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| (C) For the purposes of this subsection (1.5),
| | the constructive ownership rules prescribed under Section 318(a) of the Internal Revenue Code, as modified by Section 856(d)(5) of the Internal Revenue Code, apply in determining the ownership of stock, assets, or net profits of any person.
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| (D) For the purposes of this item (1.5), for
| | taxable years ending on or after August 16, 2007, the voting power or value of the beneficial interest or shares of a real estate investment trust does not include any voting power or value of beneficial interest or shares in a real estate investment trust held directly or indirectly in a segregated asset account by a life insurance company (as described in Section 817 of the Internal Revenue Code) to the extent such voting power or value is for the benefit of entities or persons who are either immune from taxation or exempt from taxation under subtitle A of the Internal Revenue Code.
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| (2) Commercial domicile. The term "commercial
| | domicile" means the principal place from which the trade or business of the taxpayer is directed or managed.
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(3) Compensation. The term "compensation" means
| | wages, salaries, commissions and any other form of remuneration paid to employees for personal services.
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(4) Corporation. The term "corporation" includes
| | associations, joint-stock companies, insurance companies and cooperatives. Any entity, including a limited liability company formed under the Illinois Limited Liability Company Act, shall be treated as a corporation if it is so classified for federal income tax purposes.
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(5) Department. The term "Department" means the
| | Department of Revenue of this State.
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(6) Director. The term "Director" means the Director
| | of Revenue of this State.
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(7) Fiduciary. The term "fiduciary" means a guardian,
| | trustee, executor, administrator, receiver, or any person acting in any fiduciary capacity for any person.
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(8) Financial organization.
(A) The term "financial organization" means any
| | bank, bank holding company, trust company, savings bank, industrial bank, land bank, safe deposit company, private banker, savings and loan association, building and loan association, credit union, currency exchange, cooperative bank, small loan company, sales finance company, investment company, or any person which is owned by a bank or bank holding company. For the purpose of this Section a "person" will include only those persons which a bank holding company may acquire and hold an interest in, directly or indirectly, under the provisions of the Bank Holding Company Act of 1956 (12 U.S.C. 1841, et seq.), except where interests in any person must be disposed of within certain required time limits under the Bank Holding Company Act of 1956.
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(B) For purposes of subparagraph (A) of this
| | paragraph, the term "bank" includes (i) any entity that is regulated by the Comptroller of the Currency under the National Bank Act, or by the Federal Reserve Board, or by the Federal Deposit Insurance Corporation and (ii) any federally or State chartered bank operating as a credit card bank.
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(C) For purposes of subparagraph (A) of this
| | paragraph, the term "sales finance company" has the meaning provided in the following item (i) or (ii):
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(i) A person primarily engaged in one or more
| | of the following businesses: the business of purchasing customer receivables, the business of making loans upon the security of customer receivables, the business of making loans for the express purpose of funding purchases of tangible personal property or services by the borrower, or the business of finance leasing. For purposes of this item (i), "customer receivable" means:
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(a) a retail installment contract or
| | retail charge agreement within the meaning of the Sales Finance Agency Act, the Retail Installment Sales Act, or the Motor Vehicle Retail Installment Sales Act;
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(b) an installment, charge, credit, or
| | similar contract or agreement arising from the sale of tangible personal property or services in a transaction involving a deferred payment price payable in one or more installments subsequent to the sale; or
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(c) the outstanding balance of a contract
| | or agreement described in provisions (a) or (b) of this item (i).
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A customer receivable need not provide for
| | payment of interest on deferred payments. A sales finance company may purchase a customer receivable from, or make a loan secured by a customer receivable to, the seller in the original transaction or to a person who purchased the customer receivable directly or indirectly from that seller.
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(ii) A corporation meeting each of the
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(a) the corporation must be a member of
| | an "affiliated group" within the meaning of Section 1504(a) of the Internal Revenue Code, determined without regard to Section 1504(b) of the Internal Revenue Code;
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(b) more than 50% of the gross income of
| | the corporation for the taxable year must be interest income derived from qualifying loans. A "qualifying loan" is a loan made to a member of the corporation's affiliated group that originates customer receivables (within the meaning of item (i)) or to whom customer receivables originated by a member of the affiliated group have been transferred, to the extent the average outstanding balance of loans from that corporation to members of its affiliated group during the taxable year do not exceed the limitation amount for that corporation. The "limitation amount" for a corporation is the average outstanding balances during the taxable year of customer receivables (within the meaning of item (i)) originated by all members of the affiliated group. If the average outstanding balances of the loans made by a corporation to members of its affiliated group exceed the limitation amount, the interest income of that corporation from qualifying loans shall be equal to its interest income from loans to members of its affiliated groups times a fraction equal to the limitation amount divided by the average outstanding balances of the loans made by that corporation to members of its affiliated group;
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(c) the total of all shareholder's equity
| | (including, without limitation, paid-in capital on common and preferred stock and retained earnings) of the corporation plus the total of all of its loans, advances, and other obligations payable or owed to members of its affiliated group may not exceed 20% of the total assets of the corporation at any time during the tax year; and
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(d) more than 50% of all interest-bearing
| | obligations of the affiliated group payable to persons outside the group determined in accordance with generally accepted accounting principles must be obligations of the corporation.
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This amendatory Act of the 91st General Assembly
| | is declaratory of existing law.
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(D) Subparagraphs (B) and (C) of this paragraph
| | are declaratory of existing law and apply retroactively, for all tax years beginning on or before December 31, 1996, to all original returns, to all amended returns filed no later than 30 days after the effective date of this amendatory Act of 1996, and to all notices issued on or before the effective date of this amendatory Act of 1996 under subsection (a) of Section 903, subsection (a) of Section 904, subsection (e) of Section 909, or Section 912. A taxpayer that is a "financial organization" that engages in any transaction with an affiliate shall be a "financial organization" for all purposes of this Act.
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(E) For all tax years beginning on or before
| | December 31, 1996, a taxpayer that falls within the definition of a "financial organization" under subparagraphs (B) or (C) of this paragraph, but who does not fall within the definition of a "financial organization" under the Proposed Regulations issued by the Department of Revenue on July 19, 1996, may irrevocably elect to apply the Proposed Regulations for all of those years as though the Proposed Regulations had been lawfully promulgated, adopted, and in effect for all of those years. For purposes of applying subparagraphs (B) or (C) of this paragraph to all of those years, the election allowed by this subparagraph applies only to the taxpayer making the election and to those members of the taxpayer's unitary business group who are ordinarily required to apportion business income under the same subsection of Section 304 of this Act as the taxpayer making the election. No election allowed by this subparagraph shall be made under a claim filed under subsection (d) of Section 909 more than 30 days after the effective date of this amendatory Act of 1996.
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(F) Finance Leases. For purposes of this
| | subsection, a finance lease shall be treated as a loan or other extension of credit, rather than as a lease, regardless of how the transaction is characterized for any other purpose, including the purposes of any regulatory agency to which the lessor is subject. A finance lease is any transaction in the form of a lease in which the lessee is treated as the owner of the leased asset entitled to any deduction for depreciation allowed under Section 167 of the Internal Revenue Code.
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(9) Fiscal year. The term "fiscal year" means an
| | accounting period of 12 months ending on the last day of any month other than December.
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(9.5) Fixed place of business. The term "fixed place
| | of business" has the same meaning as that term is given in Section 864 of the Internal Revenue Code and the related Treasury regulations.
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| (10) Includes and including. The terms "includes" and
| | "including" when used in a definition contained in this Act shall not be deemed to exclude other things otherwise within the meaning of the term defined.
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(11) Internal Revenue Code. The term "Internal
| | Revenue Code" means the United States Internal Revenue Code of 1954 or any successor law or laws relating to federal income taxes in effect for the taxable year.
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(11.5) Investment partnership.
(A) For tax years ending before December 31,
| | 2023, the term "investment partnership" means any entity that is treated as a partnership for federal income tax purposes that meets the following requirements:
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| (i) no less than 90% of the partnership's
| | cost of its total assets consists of qualifying investment securities, deposits at banks or other financial institutions, and office space and equipment reasonably necessary to carry on its activities as an investment partnership;
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| (ii) no less than 90% of its gross
| | income consists of interest, dividends, and gains from the sale or exchange of qualifying investment securities; and
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| (iii) the partnership is not a dealer in
| | qualifying investment securities.
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| (A-5) For tax years ending on or after December
| | 31, 2023, the term "investment partnership" means any entity that is treated as a partnership for federal income tax purposes that meets the following requirements:
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| (i) no less than 90% of the partnership's
| | cost of its total assets consists of qualifying investment securities, deposits at banks or other financial institutions, and office space and equipment reasonably necessary to carry on its activities as an investment partnership; and
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| (ii) no less than 90% of its gross income
| | consists of interest, dividends, gains from the sale or exchange of qualifying investment securities, and the distributive share of partnership income from lower-tier partnership interests meeting the definition of qualifying investment security under subparagraph (B)(xiii); for the purposes of this subparagraph (ii), "gross income" does not include income from partnerships that are operating at a federal taxable loss.
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| (B) For purposes of this paragraph (11.5),
| | the term "qualifying investment securities" (other than, for tax years ending on or after December 31, 2023, securities with respect to which the taxpayer is required to apply the rules of Internal Revenue Code Section 475(a)) includes all of the following:
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| (i) common stock, including preferred or debt
| | securities convertible into common stock, and preferred stock;
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| (ii) bonds, debentures, and other debt
| | (iii) foreign and domestic currency deposits
| | secured by federal, state, or local governmental agencies;
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| (iv) mortgage or asset-backed securities
| | secured by federal, state, or local governmental agencies;
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| (v) repurchase agreements and loan
| | (vi) foreign currency exchange contracts and
| | forward and futures contracts on foreign currencies;
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| (vii) stock and bond index securities and
| | futures contracts and other similar financial securities and futures contracts on those securities;
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| (viii) options for the purchase or sale of
| | any of the securities, currencies, contracts, or financial instruments described in items (i) to (vii), inclusive;
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| (ix) regulated futures contracts;
(x) commodities (not described in Section
| | 1221(a)(1) of the Internal Revenue Code) or futures, forwards, and options with respect to such commodities, provided, however, that any item of a physical commodity to which title is actually acquired in the partnership's capacity as a dealer in such commodity shall not be a qualifying investment security;
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(xi) derivatives;
(xii) a partnership interest in another
| | partnership that is an investment partnership; and
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| (xiii) for tax years ending on or after
| | December 31, 2023, a partnership interest that, in the hands of the partnership, qualifies as a security within the meaning of subsection (a)(1) of Subchapter 77b of Chapter 2A of Title 15 of the United States Code.
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| (12) Mathematical error. The term "mathematical
| | error" includes the following types of errors, omissions, or defects in a return filed by a taxpayer which prevents acceptance of the return as filed for processing:
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(A) arithmetic errors or incorrect computations
| | on the return or supporting schedules;
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(B) entries on the wrong lines;
(C) omission of required supporting forms or
| | schedules or the omission of the information in whole or in part called for thereon; and
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(D) an attempt to claim, exclude, deduct, or
| | improperly report, in a manner directly contrary to the provisions of the Act and regulations thereunder any item of income, exemption, deduction, or credit.
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(13) Nonbusiness income. The term "nonbusiness
| | income" means all income other than business income or compensation.
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(14) Nonresident. The term "nonresident" means a
| | person who is not a resident.
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(15) Paid, incurred and accrued. The terms "paid",
| | "incurred" and "accrued" shall be construed according to the method of accounting upon the basis of which the person's base income is computed under this Act.
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(16) Partnership and partner. The term "partnership"
| | includes a syndicate, group, pool, joint venture or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on, and which is not, within the meaning of this Act, a trust or estate or a corporation; and the term "partner" includes a member in such syndicate, group, pool, joint venture or organization.
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The term "partnership" includes any entity, including
| | a limited liability company formed under the Illinois Limited Liability Company Act, classified as a partnership for federal income tax purposes.
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The term "partnership" does not include a syndicate,
| | group, pool, joint venture, or other unincorporated organization established for the sole purpose of playing the Illinois State Lottery.
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(17) Part-year resident. The term "part-year
| | resident" means an individual who became a resident during the taxable year or ceased to be a resident during the taxable year. Under Section 1501(a)(20)(A)(i) residence commences with presence in this State for other than a temporary or transitory purpose and ceases with absence from this State for other than a temporary or transitory purpose. Under Section 1501(a)(20)(A)(ii) residence commences with the establishment of domicile in this State and ceases with the establishment of domicile in another State.
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(18) Person. The term "person" shall be construed to
| | mean and include an individual, a trust, estate, partnership, association, firm, company, corporation, limited liability company, or fiduciary. For purposes of Section 1301 and 1302 of this Act, a "person" means (i) an individual, (ii) a corporation, (iii) an officer, agent, or employee of a corporation, (iv) a member, agent or employee of a partnership, or (v) a member, manager, employee, officer, director, or agent of a limited liability company who in such capacity commits an offense specified in Section 1301 and 1302.
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(18A) Records. The term "records" includes all data
| | maintained by the taxpayer, whether on paper, microfilm, microfiche, or any type of machine-sensible data compilation.
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(19) Regulations. The term "regulations" includes
| | rules promulgated and forms prescribed by the Department.
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(20) Resident. The term "resident" means:
(A) an individual (i) who is in this State for
| | other than a temporary or transitory purpose during the taxable year; or (ii) who is domiciled in this State but is absent from the State for a temporary or transitory purpose during the taxable year;
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(B) the estate of a decedent who at his or her
| | death was domiciled in this State;
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(C) a trust created by a will of a decedent who
| | at his death was domiciled in this State; and
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(D) an irrevocable trust, the grantor of which
| | was domiciled in this State at the time such trust became irrevocable. For purpose of this subparagraph, a trust shall be considered irrevocable to the extent that the grantor is not treated as the owner thereof under Sections 671 through 678 of the Internal Revenue Code.
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(21) Sales. The term "sales" means all gross receipts
| | of the taxpayer not allocated under Sections 301, 302 and 303.
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(22) State. The term "state" when applied to a
| | jurisdiction other than this State means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any Territory or Possession of the United States, and any foreign country, or any political subdivision of any of the foregoing. For purposes of the foreign tax credit under Section 601, the term "state" means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States, or any political subdivision of any of the foregoing, effective for tax years ending on or after December 31, 1989.
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(23) Taxable year. The term "taxable year" means the
| | calendar year, or the fiscal year ending during such calendar year, upon the basis of which the base income is computed under this Act. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of this Act, the period for which such return is made.
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(24) Taxpayer. The term "taxpayer" means any person
| | subject to the tax imposed by this Act.
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(25) International banking facility. The term
| | international banking facility shall have the same meaning as is set forth in the Illinois Banking Act or as is set forth in the laws of the United States or regulations of the Board of Governors of the Federal Reserve System.
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(26) Income Tax Return Preparer.
(A) The term "income tax return preparer" means
| | any person who prepares for compensation, or who employs one or more persons to prepare for compensation, any return of tax imposed by this Act or any claim for refund of tax imposed by this Act. The preparation of a substantial portion of a return or claim for refund shall be treated as the preparation of that return or claim for refund.
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(B) A person is not an income tax return preparer
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(i) furnish typing, reproducing, or other
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(ii) prepare returns or claims for refunds
| | for the employer by whom he or she is regularly and continuously employed;
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(iii) prepare as a fiduciary returns or
| | claims for refunds for any person; or
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(iv) prepare claims for refunds for a
| | taxpayer in response to any notice of deficiency issued to that taxpayer or in response to any waiver of restriction after the commencement of an audit of that taxpayer or of another taxpayer if a determination in the audit of the other taxpayer directly or indirectly affects the tax liability of the taxpayer whose claims he or she is preparing.
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(27) Unitary business group.
(A) The term "unitary business group" means a
| | group of persons related through common ownership whose business activities are integrated with, dependent upon and contribute to each other. The group will not include those members whose business activity outside the United States is 80% or more of any such member's total business activity; for purposes of this paragraph and clause (a)(3)(B)(ii) of Section 304, business activity within the United States shall be measured by means of the factors ordinarily applicable under subsections (a), (b), (c), (d), or (h) of Section 304 except that, in the case of members ordinarily required to apportion business income by means of the 3 factor formula of property, payroll and sales specified in subsection (a) of Section 304, including the formula as weighted in subsection (h) of Section 304, such members shall not use the sales factor in the computation and the results of the property and payroll factor computations of subsection (a) of Section 304 shall be divided by 2 (by one if either the property or payroll factor has a denominator of zero). The computation required by the preceding sentence shall, in each case, involve the division of the member's property, payroll, or revenue miles in the United States, insurance premiums on property or risk in the United States, or financial organization business income from sources within the United States, as the case may be, by the respective worldwide figures for such items. Common ownership in the case of corporations is the direct or indirect control or ownership of more than 50% of the outstanding voting stock of the persons carrying on unitary business activity. Unitary business activity can ordinarily be illustrated where the activities of the members are: (1) in the same general line (such as manufacturing, wholesaling, retailing of tangible personal property, insurance, transportation or finance); or (2) are steps in a vertically structured enterprise or process (such as the steps involved in the production of natural resources, which might include exploration, mining, refining, and marketing); and, in either instance, the members are functionally integrated through the exercise of strong centralized management (where, for example, authority over such matters as purchasing, financing, tax compliance, product line, personnel, marketing and capital investment is not left to each member).
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| (B) In no event, for taxable years ending prior
| | to December 31, 2017, shall any unitary business group include members which are ordinarily required to apportion business income under different subsections of Section 304 except that for tax years ending on or after December 31, 1987 this prohibition shall not apply to a holding company that would otherwise be a member of a unitary business group with taxpayers that apportion business income under any of subsections (b), (c), (c-1), or (d) of Section 304. If a unitary business group would, but for the preceding sentence, include members that are ordinarily required to apportion business income under different subsections of Section 304, then for each subsection of Section 304 for which there are two or more members, there shall be a separate unitary business group composed of such members. For purposes of the preceding two sentences, a member is "ordinarily required to apportion business income" under a particular subsection of Section 304 if it would be required to use the apportionment method prescribed by such subsection except for the fact that it derives business income solely from Illinois. As used in this paragraph, for taxable years ending before December 31, 2017, the phrase "United States" means only the 50 states and the District of Columbia, but does not include any territory or possession of the United States or any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources. For taxable years ending on or after December 31, 2017, the phrase "United States", as used in this paragraph, means only the 50 states, the District of Columbia, and any area over which the United States has asserted jurisdiction or claimed exclusive rights with respect to the exploration for or exploitation of natural resources, but does not include any territory or possession of the United States.
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| (C) Holding companies.
(i) For purposes of this subparagraph, a
| | "holding company" is a corporation (other than a corporation that is a financial organization under paragraph (8) of this subsection (a) of Section 1501 because it is a bank holding company under the provisions of the Bank Holding Company Act of 1956 (12 U.S.C. 1841, et seq.) or because it is owned by a bank or a bank holding company) that owns a controlling interest in one or more other taxpayers ("controlled taxpayers"); that, during the period that includes the taxable year and the 2 immediately preceding taxable years or, if the corporation was formed during the current or immediately preceding taxable year, the taxable years in which the corporation has been in existence, derived substantially all its gross income from dividends, interest, rents, royalties, fees or other charges received from controlled taxpayers for the provision of services, and gains on the sale or other disposition of interests in controlled taxpayers or in property leased or licensed to controlled taxpayers or used by the taxpayer in providing services to controlled taxpayers; and that incurs no substantial expenses other than expenses (including interest and other costs of borrowing) incurred in connection with the acquisition and holding of interests in controlled taxpayers and in the provision of services to controlled taxpayers or in the leasing or licensing of property to controlled taxpayers.
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| (ii) The income of a holding company which is
| | a member of more than one unitary business group shall be included in each unitary business group of which it is a member on a pro rata basis, by including in each unitary business group that portion of the base income of the holding company that bears the same proportion to the total base income of the holding company as the gross receipts of the unitary business group bears to the combined gross receipts of all unitary business groups (in both cases without regard to the holding company) or on any other reasonable basis, consistently applied.
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| (iii) A holding company shall apportion its
| | business income under the subsection of Section 304 used by the other members of its unitary business group. The apportionment factors of a holding company which would be a member of more than one unitary business group shall be included with the apportionment factors of each unitary business group of which it is a member on a pro rata basis using the same method used in clause (ii).
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| (iv) The provisions of this subparagraph (C)
| | are intended to clarify existing law.
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| (D) If including the base income and factors of a
| | holding company in more than one unitary business group under subparagraph (C) does not fairly reflect the degree of integration between the holding company and one or more of the unitary business groups, the dependence of the holding company and one or more of the unitary business groups upon each other, or the contributions between the holding company and one or more of the unitary business groups, the holding company may petition the Director, under the procedures provided under Section 304(f), for permission to include all base income and factors of the holding company only with members of a unitary business group apportioning their business income under one subsection of subsections (a), (b), (c), or (d) of Section 304. If the petition is granted, the holding company shall be included in a unitary business group only with persons apportioning their business income under the selected subsection of Section 304 until the Director grants a petition of the holding company either to be included in more than one unitary business group under subparagraph (C) or to include its base income and factors only with members of a unitary business group apportioning their business income under a different subsection of Section 304.
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| (E) If the unitary business group members'
| | accounting periods differ, the common parent's accounting period or, if there is no common parent, the accounting period of the member that is expected to have, on a recurring basis, the greatest Illinois income tax liability must be used to determine whether to use the apportionment method provided in subsection (a) or subsection (h) of Section 304. The prohibition against membership in a unitary business group for taxpayers ordinarily required to apportion income under different subsections of Section 304 does not apply to taxpayers required to apportion income under subsection (a) and subsection (h) of Section 304. The provisions of this amendatory Act of 1998 apply to tax years ending on or after December 31, 1998.
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(28) Subchapter S corporation. The term "Subchapter
| | S corporation" means a corporation for which there is in effect an election under Section 1362 of the Internal Revenue Code, or for which there is a federal election to opt out of the provisions of the Subchapter S Revision Act of 1982 and have applied instead the prior federal Subchapter S rules as in effect on July 1, 1982.
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(30) Foreign person. The term "foreign person" means
| | any person who is a nonresident individual who is a national or citizen of a country other than the United States and any nonindividual entity, regardless of where created or organized, whose business activity outside the United States is 80% or more of the entity's total business activity.
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(b) Other definitions.
(1) Words denoting number, gender, and so forth, when
| | used in this Act, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof:
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(A) Words importing the singular include and
| | apply to several persons, parties or things;
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(B) Words importing the plural include the
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(C) Words importing the masculine gender include
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(2) "Company" or "association" as including
| | successors and assigns. The word "company" or "association", when used in reference to a corporation, shall be deemed to embrace the words "successors and assigns of such company or association", and in like manner as if these last-named words, or words of similar import, were expressed.
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(3) Other terms. Any term used in any Section of this
| | Act with respect to the application of, or in connection with, the provisions of any other Section of this Act shall have the same meaning as in such other Section.
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(Source: P.A. 102-1030, eff. 5-27-22; 103-9, eff. 6-7-23.)
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35 ILCS 5/1502
(35 ILCS 5/1502) (from Ch. 120, par. 15-1502)
Sec. 1502.
Arrangement and Captions.
No inference, implication, or presumption of legislative construction
shall be drawn or made by reason of the location or grouping of any
particular Section or provision of this Act, nor shall any caption be given
any legal effect.
(Source: P.A. 76-261 .)
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35 ILCS 5/Art. 16
(35 ILCS 5/Art. 16 heading)
ARTICLE 16.
SEVERABILITY.
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35 ILCS 5/1601
(35 ILCS 5/1601) (from Ch. 120, par. 16-1601)
Sec. 1601.
Severability.
Any clause, sentence, section, provision or part of this Act or the
application thereof to any person or circumstance shall be adjudged to be
unconstitutional, the remainder of this Act or its application to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
(Source: P.A. 76-261.)
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35 ILCS 5/Art. 17
(35 ILCS 5/Art. 17 heading)
ARTICLE 17.
EFFECTIVE DATE
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35 ILCS 5/1701
(35 ILCS 5/1701) (from Ch. 120, par. 17-1701)
Sec. 1701.
Effective Date.
This Act shall take effect August 1, 1969.
(Source: P.A. 76-261.)
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