House Sponsors: CURRIE-MOORE,ANDREA-MURPHY. Senate Sponsors: RAUSCHENBERGER Short description: INCOME TAX-INSURANCE BUSINESS Synopsis of Bill as introduced: Amends the Illinois Income Tax Act. Adds a subtraction modification from base income in the case of an S corporation in an amount equal to all amounts of income allocable to a shareholder subject to the Personal Property Tax Replacement Income Tax. Provides an income tax credit for certain partners of a partnership and certain shareholders of S corporations if those partners or shareholders qualified their partnerships or S corporations for a subtraction modification for the Personal Property Tax Replacement Income Tax. Increases the threshold for the required payment of estimated taxes from $250 to $500 for non-corporations required to pay estimated taxes. Excludes from the definition of "partnership" any entity that elects to be excluded from the application of the Partners and Partnership subchapter of the Internal Revenue Code under certain provisions of that subchapter. Makes other changes. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act to replace references to specific local occupation and use taxes with a reference to "any local occupation or use tax administered by the Department". Makes other changes. Further amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that a retailer of aircraft, watercraft, motor vehicles, or trailers who transfers more than one of these items to a purchaser for use as qualifying rolling stock may report the transfer of all of the items involved in that transaction to the Department of Revenue on the same reporting form. Amends the Cigarette Tax Act and the Cigarette Use Tax Act. Adds a provision allowing distributors 20 days to protest a Department of Revenue decision regarding a distributor's license and adds provisions regarding hearings. Effective January 1, 2001. HOUSE AMENDMENT NO. 1. Adds reference to: 220 ILCS 5/8-403.1 from Ch. 111 2/3, par. 8-403.1 In the subtraction modification for Subchapter S corporations in the Illinois Income Tax Act, exempts the subtraction modification from the sunset provisions of the Act. Amends the Public Utilities Act. Provides that the Department of Revenue (now, the State Treasurer) shall prescribe the forms to be filed by and collect payments from qualified solid waste energy facilities based on the kilowatt hours of electricity sold by them. FISCAL NOTE, H-AM 1 (Department of Revenue) The Department cannot determine the actual loss in replacement revenues from allowing Subchapter S corporations a subtraction modification for income distributable to shareholders subject to replacement tax, or from provisions concerning investment credits allocations in partnerships, but believes the losses in replacement tax revenues to be minimal. Increasing the threshold for making estimated payments to $500 will translate into approximately 11,000 fewer penalties being assessed which equates to about $1 million (at an average tax penalty assess- ment of $90). However, not all of this $1 million can be viewed as lost revenue, due to the fact that much of this penalty is subsequently abated in the reasonable cause penalty abatement process. Including rolling stock in the provisions allowing filing only one sales/use tax return to cover multiple sales/ purchases of certain exempt items will cause a decrease in processing costs at the Department, but no loss to the State. Adding protest provisions to the Cigarette Tax and Cigarette Use Tax Acts creates an indeterminable, but very minimal, fiscal impact to the State. Requiring use tax to be paid on tangible personal property that must be titled or registered with the federal government would create State revenues (each such airplane used subsequently in Illinois will generate an estimated $1.87 million in additional use tax revenues for Illinois). HOUSE AMENDMENT NO. 2. Deletes reference to: 35 ILCS 105/3-70 35 ILCS 115/3-5 In the Illinois Income Tax Act removes the exclusion from the definition of "partnership" of an entity that elects to be excluded from the application of the Partners and Partnership subchapter of the Internal Revenue Code under certain provisions of that subchapter. In the Use Tax Act removes the changes to a Section concerning property acquired by a nonresident. In the Service Occupation Tax Act removes the changes to the exemptions Section. FISCAL NOTE, H-AM 1,2 (Department of Revenue) The fiscal impact of H-am 1 remains unchanged. H-am 2 makes technical changes and creates no fiscal impact. STATE MANDATES NOTE, H-AM 1,2 (Department of Commerce and Community Affairs) This legislation does not create a State mandate. HOME RULE NOTE, H-AM 1,2 (Department of Commerce and Community Affairs) This legislation does not contain language indicating a pre-emption of home rule powers and functions. SENATE AMENDMENT NO. 1. Deletes reference to: 35 ILCS 105/3-5 35 ILCS 105/9 35 ILCS 105/10 35 ILCS 105/22 35 ILCS 110/20 35 ILCS 115/20 35 ILCS 120/3 35 ILCS 120/6 35 ILCS 130/4 35 ILCS 130/6 35 ILCS 135/4 35 ILCS 135/6 220 ILCS 5/8-403.1 Adds reference to: 35 ILCS 5/502 from Ch. 120, par. 5-502 Deletes everything except the changes made to the Illinois Income Tax Act. Makes an additional change to the Illinois Income Tax Act to provide that, for taxable years ending on or after December 31, 1999, the Department may, by regulation, permit any persons transacting an insurance business organized under a Lloyds plan of operation to file composite returns reflecting the income of such persons allocable to Illinois and the tax rates applicable to such persons and to make composite tax payments and shall, by regulation, also provide that the income and apportionment factors attributable to the transaction of an insurance business organized under a Lloyds plan of operation by any person joining in the filing of a composite return shall, for purposes of allocating and apportioning income and computing net income, be excluded from any other income and apportionment factors of that person or of any unitary business group to which that person may belong. Last action on Bill: PUBLIC ACT.............................. 91-0913 Last action date: 00-07-07 Location: House Amendments to Bill: AMENDMENTS ADOPTED: HOUSE - 2 SENATE - 1 END OF INQUIRY Full Text Bill Status