99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB0199
 
Introduced , by Rep. David Harris
 
SYNOPSIS AS INTRODUCED:



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

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



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FISCAL NOTE ACT MAY APPLY
 
 
A BILL FOR
 


HB0199LRB099 04147 HLH 24167 b



1 AN ACT concerning revenue.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The Illinois Income Tax Act is amended by 
5changing Section 1501 as follows:




6 (35 ILCS 5/1501) (from Ch. 120, par. 15-1501)


7 Sec. 1501. Definitions. 

8 (a) In general. When used in this Act, where not
otherwise 
9distinctly expressed or manifestly incompatible with the 
10intent
thereof:


11  (1) Business income. The term "business income" means 
12 all income that may be treated as apportionable business 
13 income under the Constitution of the United States. 
14 Business income is net of the deductions allocable thereto. 
15 Such term does not include compensation
or the deductions 
16 allocable thereto.
For each taxable year beginning on or 
17 after January 1, 2003, a taxpayer may
elect to treat all 
18 income other than compensation as business income. This

19 election shall be made in accordance with rules adopted by 
20 the Department and,
once made, shall be irrevocable.

21  (1.5) Captive real estate investment trust:

22   (A) The term "captive real estate investment 
23 trust" means a corporation, trust, or association:

 
 
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1    (i) that is considered a real estate 
2 investment trust for the taxable year under 
3 Section 856 of the Internal Revenue Code;

4    (ii) the certificates of beneficial interest 
5 or shares of which are not regularly traded on an 
6 established securities market; and
7    (iii) of which more than 50% of the voting 
8 power or value of the beneficial interest or 
9 shares, at any time during the last half of the 
10 taxable year, is owned or controlled, directly, 
11 indirectly, or constructively, by a single 
12 corporation.
13   (B) The term "captive real estate investment 
14 trust" does not include:
15    (i) a real estate investment trust of which 
16 more than 50% of the voting power or value of the 
17 beneficial interest or shares is owned or 
18 controlled, directly, indirectly, or 
19 constructively, by:
20     (a) a real estate investment trust, other 
21 than a captive real estate investment trust;
22     (b) a person who is exempt from taxation 
23 under Section 501 of the Internal Revenue Code, 
24 and who is not required to treat income 
25 received from the real estate investment trust 
26 as unrelated business taxable income under 
 
 
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1 Section 512 of the Internal Revenue Code;
2     (c) a listed Australian property trust, if 
3 no more than 50% of the voting power or value 
4 of the beneficial interest or shares of that 
5 trust, at any time during the last half of the 
6 taxable year, is owned or controlled, directly 
7 or indirectly, by a single person;
8     (d) an entity organized as a trust, 
9 provided a listed Australian property trust 
10 described in subparagraph (c) owns or 
11 controls, directly or indirectly, or 
12 constructively, 75% or more of the voting power 
13 or value of the beneficial interests or shares 
14 of such entity; or
15     (e) an entity that is organized outside of 
16 the laws of the United States and that 
17 satisfies all of the following criteria:
18      (1) at least 75% of the entity's total 
19 asset value at the close of its taxable 
20 year is represented by real estate assets 
21 (as defined in Section 856(c)(5)(B) of the 
22 Internal Revenue Code, thereby including 
23 shares or certificates of beneficial 
24 interest in any real estate investment 
25 trust), cash and cash equivalents, and 
26 U.S. Government securities;
 
 
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1      (2) the entity is not subject to tax on 
2 amounts that are distributed to its 
3 beneficial owners or is exempt from 
4 entity-level taxation;
5      (3) the entity distributes at least 
6 85% of its taxable income (as computed in 
7 the jurisdiction in which it is organized) 
8 to the holders of its shares or 
9 certificates of beneficial interest on an 
10 annual basis;
11      (4) either (i) the shares or 
12 beneficial interests of the entity are 
13 regularly traded on an established 
14 securities market or (ii) not more than 10% 
15 of the voting power or value in the entity 
16 is held, directly, indirectly, or 
17 constructively, by a single entity or 
18 individual; and
19      (5) the entity is organized in a 
20 country that has entered into a tax treaty 
21 with the United States; or 
22    (ii) during its first taxable year for which it 
23 elects to be treated as a real estate investment 
24 trust under Section 856(c)(1) of the Internal 
25 Revenue Code, a real estate investment trust the 
26 certificates of beneficial interest or shares of 
 
 
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1 which are not regularly traded on an established 
2 securities market, but only if the certificates of 
3 beneficial interest or shares of the real estate 
4 investment trust are regularly traded on an 
5 established securities market prior to the earlier 
6 of the due date (including extensions) for filing 
7 its return under this Act for that first taxable 
8 year or the date it actually files that return.
9   (C) For the purposes of this subsection (1.5), the 
10 constructive ownership rules prescribed under Section 
11 318(a) of the Internal Revenue Code, as modified by 
12 Section 856(d)(5) of the Internal Revenue Code, apply 
13 in determining the ownership of stock, assets, or net 
14 profits of any person.


15  (2) Commercial domicile. The term "commercial 
16 domicile" means the
principal
place from which the trade or 
17 business of the taxpayer is directed or managed.


18  (3) Compensation. The term "compensation" means wages, 
19 salaries,
commissions
and any other form of remuneration 
20 paid to employees for personal services.


21  (4) Corporation. The term "corporation" includes 
22 associations, joint-stock
companies, insurance companies 
23 and cooperatives. Any entity, including a
limited 
24 liability company formed under the Illinois Limited 
25 Liability Company
Act, shall be treated as a corporation if 
26 it is so classified for federal
income tax purposes.



 
 
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1  (5) Department. The term "Department" means the 
2 Department of Revenue of
this State.


3  (6) Director. The term "Director" means the Director of 
4 Revenue of this
State.


5  (7) Fiduciary. The term "fiduciary" means a guardian, 
6 trustee, executor,
administrator, receiver, or any person 
7 acting in any fiduciary capacity for any
person.


8  (8) Financial organization.


9   (A) The term "financial organization" means
any

10 bank, bank holding company, trust company, savings 
11 bank, industrial bank,
land bank, safe deposit 
12 company, private banker, savings and loan association,

13 building and loan association, credit union, currency 
14 exchange, cooperative
bank, small loan company, sales 
15 finance company, investment company, or any
person 
16 which is owned by a bank or bank holding company. For 
17 the purpose of
this Section a "person" will include 
18 only those persons which a bank holding
company may 
19 acquire and hold an interest in, directly or 
20 indirectly, under the
provisions of the Bank Holding 
21 Company Act of 1956 (12 U.S.C. 1841, et seq.),
except 
22 where interests in any person must be disposed of 
23 within certain
required time limits under the Bank 
24 Holding Company Act of 1956.


25   (B) For purposes of subparagraph (A) of this 
26 paragraph, the term
"bank" includes (i) any entity that 
 
 
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1 is regulated by the Comptroller of the
Currency under 
2 the National Bank Act, or by the Federal Reserve Board, 
3 or by
the
Federal Deposit Insurance Corporation and 
4 (ii) any federally or State chartered
bank
operating as 
5 a credit card bank.


6   (C) For purposes of subparagraph (A) of this 
7 paragraph, the term
"sales finance company" has the 
8 meaning provided in the following item (i) or
(ii):


9    (i) A person primarily engaged in one or more 
10 of the following
businesses: the business of 
11 purchasing customer receivables, the business
of 
12 making loans upon the security of customer 
13 receivables, the
business of making loans for the 
14 express purpose of funding purchases of
tangible 
15 personal property or services by the borrower, or 
16 the business of
finance leasing. For purposes of 
17 this item (i), "customer receivable"
means:


18     (a) a retail installment contract or 
19 retail charge agreement within
the
meaning
of 
20 the Sales Finance Agency Act, the Retail 
21 Installment Sales Act, or the
Motor Vehicle 
22 Retail Installment Sales Act;


23     (b) an installment, charge, credit, or 
24 similar contract or agreement
arising from
the 
25 sale of tangible personal property or services 
26 in a transaction involving
a deferred payment 
 
 
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1 price payable in one or more installments 
2 subsequent
to the sale; or


3     (c) the outstanding balance of a contract 
4 or agreement described in
provisions
(a) or (b) 
5 of this item (i).


6    A customer receivable need not provide for 
7 payment of interest on
deferred
payments. A sales 
8 finance company may purchase a customer receivable 
9 from, or
make a loan secured by a customer 
10 receivable to, the seller in the original

11 transaction or to a person who purchased the 
12 customer receivable directly or
indirectly from 
13 that seller.


14    (ii) A corporation meeting each of the 
15 following criteria:


16     (a) the corporation must be a member of an 
17 "affiliated group" within
the
meaning of 
18 Section 1504(a) of the Internal Revenue Code, 
19 determined
without regard to Section 1504(b) 
20 of the Internal Revenue Code;


21     (b) more than 50% of the gross income of 
22 the corporation for the
taxable
year
must be 
23 interest income derived from qualifying loans. 
24 A "qualifying
loan" is a loan made to a member 
25 of the corporation's affiliated group that

26 originates customer receivables (within the 
 
 
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1 meaning of item (i)) or to whom
customer 
2 receivables originated by a member of the 
3 affiliated group have been
transferred, to
the 
4 extent the average outstanding balance of 
5 loans from that corporation
to members of its 
6 affiliated group during the taxable year do not 
7 exceed
the limitation amount for that 
8 corporation. The "limitation amount" for a

9 corporation is the average outstanding 
10 balances during the taxable year of
customer 
11 receivables (within the meaning of item (i)) 
12 originated by
all members of the affiliated 
13 group.
If the average outstanding balances of 
14 the
loans made by a corporation to members of 
15 its affiliated group exceed the
limitation 
16 amount, the interest income of that 
17 corporation from qualifying
loans shall be 
18 equal to its interest income from loans to 
19 members of its
affiliated groups times a 
20 fraction equal to the limitation amount 
21 divided by
the average outstanding balances of 
22 the loans made by that corporation to
members 
23 of its affiliated group;


24     (c) the total of all shareholder's equity 
25 (including, without
limitation,
paid-in

26 capital on common and preferred stock and 
 
 
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1 retained earnings) of the
corporation plus the 
2 total of all of its loans, advances, and other

3 obligations payable or owed to members of its 
4 affiliated group may not
exceed 20% of the 
5 total assets of the corporation at any time 
6 during the tax
year; and


7     (d) more than 50% of all interest-bearing 
8 obligations of the
affiliated group payable to 
9 persons outside the group determined in 
10 accordance
with generally accepted accounting 
11 principles must be obligations of the

12 corporation.


13   This amendatory Act of the 91st General Assembly is 
14 declaratory of
existing
law.


15   (D) Subparagraphs
(B) and (C) of this paragraph are 
16 declaratory of
existing law and apply retroactively, 
17 for all tax years beginning on or before
December 31, 
18 1996,
to all original returns, to all amended returns 
19 filed no later than 30
days after the effective date of 
20 this amendatory Act of 1996, and to all
notices issued 
21 on or before the effective date of this amendatory Act 
22 of 1996
under subsection (a) of Section 903, subsection 
23 (a) of Section 904,
subsection (e) of Section 909, or 
24 Section 912.
A taxpayer that is a "financial 
25 organization" that engages in any transaction
with an 
26 affiliate shall be a "financial organization" for all 
 
 
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1 purposes of this
Act.


2   (E) For all tax years beginning on or
before 
3 December 31, 1996, a taxpayer that falls within the 
4 definition
of a
"financial organization" under 
5 subparagraphs (B) or (C) of this paragraph, but
who 
6 does
not fall within the definition of a "financial 
7 organization" under the Proposed
Regulations issued by 
8 the Department of Revenue on July 19, 1996, may

9 irrevocably elect to apply the Proposed Regulations 
10 for all of those years as
though the Proposed 
11 Regulations had been lawfully promulgated, adopted, 
12 and in
effect for all of those years. For purposes of 
13 applying subparagraphs (B) or
(C) of
this
paragraph to 
14 all of those years, the election allowed by this 
15 subparagraph
applies only to the taxpayer making the 
16 election and to those members of the
taxpayer's unitary 
17 business group who are ordinarily required to 
18 apportion
business income under the same subsection of 
19 Section 304 of this Act as the
taxpayer making the 
20 election. No election allowed by this subparagraph 
21 shall
be made under a claim
filed under subsection (d) 
22 of Section 909 more than 30 days after the
effective 
23 date of this amendatory Act of 1996.


24   (F) Finance Leases. For purposes of this 
25 subsection, a finance lease
shall be treated as a loan 
26 or other extension of credit, rather than as a
lease,

 
 
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1 regardless of how the transaction is characterized for 
2 any other purpose,
including the purposes of any 
3 regulatory agency to which the lessor is subject.
A 
4 finance lease is any transaction in the form of a lease 
5 in which the lessee
is treated as the owner of the 
6 leased asset entitled to any deduction for

7 depreciation allowed under Section 167 of the Internal 
8 Revenue Code.


9  (9) Fiscal year. The term "fiscal year" means an 
10 accounting period of
12 months ending on the last day of 
11 any month other than December.

12  (9.5) Fixed place of business. The term "fixed place of 
13 business" has the same meaning as that term is given in 
14 Section 864 of the Internal Revenue Code and the related 
15 Treasury regulations. 

16  (10) Includes and including. The terms "includes" and 
17 "including" when
used in a definition contained in this Act 
18 shall not be deemed to exclude
other things otherwise 
19 within the meaning of the term defined.


20  (11) Internal Revenue Code. The term "Internal Revenue 
21 Code" means the
United States Internal Revenue Code of 1954 
22 or any successor law or laws
relating to federal income 
23 taxes in effect for the taxable year.

24  (11.5) Investment partnership.
25   (A) The term "investment partnership" means any 
26 entity that is treated as a partnership for federal 
 
 
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1 income tax purposes that meets the following 
2 requirements:
3    (i) no less than 90% of the partnership's cost 
4 of its total assets consists of qualifying 
5 investment securities, deposits at banks or other 
6 financial institutions, and office space and 
7 equipment reasonably necessary to carry on its 
8 activities as an investment partnership;
9    (ii) no less than 90% of its gross income 
10 consists of interest, dividends, and gains from 
11 the sale or exchange of qualifying investment 
12 securities; and

13    (iii) the partnership is not a dealer in 
14 qualifying investment securities.
15   (B) For purposes of this paragraph (11.5), the term 
16 "qualifying investment securities" includes all of the 
17 following:

18    (i) common stock, including preferred or debt 
19 securities convertible into common stock, and 
20 preferred stock;
21    (ii) bonds, debentures, and other debt 
22 securities;
23    (iii) foreign and domestic currency deposits 
24 secured by federal, state, or local governmental 
25 agencies;
26    (iv) mortgage or asset-backed securities 
 
 
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1 secured by federal, state, or local governmental 
2 agencies;
3    (v) repurchase agreements and loan 
4 participations;
5    (vi) foreign currency exchange contracts and 
6 forward and futures contracts on foreign 
7 currencies;
8    (vii) stock and bond index securities and 
9 futures contracts and other similar financial 
10 securities and futures contracts on those 
11 securities;

12    (viii) options for the purchase or sale of any 
13 of the securities, currencies, contracts, or 
14 financial instruments described in items (i) to 
15 (vii), inclusive;

16    (ix) regulated futures contracts;

17    (x) commodities (not described in Section 
18 1221(a)(1) of the Internal Revenue Code) or 
19 futures, forwards, and options with respect to 
20 such commodities, provided, however, that any item 
21 of a physical commodity to which title is actually 
22 acquired in the partnership's capacity as a dealer 
23 in such commodity shall not be a qualifying 
24 investment security;


25    (xi) derivatives; and

26    (xii) a partnership interest in another 
 
 
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1 partnership that is an investment partnership.


2  (12) Mathematical error. The term "mathematical error" 
3 includes the
following types of errors, omissions, or 
4 defects in a return filed by a
taxpayer which prevents 
5 acceptance of the return as filed for processing:


6   (A) arithmetic errors or incorrect computations on 
7 the return or
supporting schedules;


8   (B) entries on the wrong lines;


9   (C) omission of required supporting forms or 
10 schedules or the omission
of the information in whole 
11 or in part called for thereon; and


12   (D) an attempt to claim, exclude, deduct, or 
13 improperly report, in a
manner
directly contrary to the 
14 provisions of the Act and regulations thereunder
any 
15 item of income, exemption, deduction, or credit.


16  (13) Nonbusiness income. The term "nonbusiness income" 
17 means all income
other than business income or 
18 compensation.


19  (14) Nonresident. The term "nonresident" means a 
20 person who is not a
resident.


21  (15) Paid, incurred and accrued. The terms "paid", 
22 "incurred" and
"accrued"
shall be construed according to 
23 the method of accounting upon the basis
of which the 
24 person's base income is computed under this Act.


25  (16) Partnership and partner. The term "partnership" 
26 includes a syndicate,
group, pool, joint venture or other 
 
 
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1 unincorporated organization, through
or by means of which 
2 any business, financial operation, or venture is carried

3 on, and which is not, within the meaning of this Act, a 
4 trust or estate
or a corporation; and the term "partner" 
5 includes a member in such syndicate,
group, pool, joint 
6 venture or organization.


7  The term "partnership" includes any entity, including 
8 a limited
liability company formed under the Illinois

9 Limited Liability Company Act, classified as a partnership 
10 for federal income tax purposes.


11  The term "partnership" does not include a syndicate, 
12 group, pool,
joint venture, or other unincorporated 
13 organization established for the
sole purpose of playing 
14 the Illinois State Lottery.


15  (17) Part-year resident. The term "part-year resident" 
16 means an individual
who became a resident during the 
17 taxable year or ceased to be a resident
during the taxable 
18 year. Under Section 1501(a)(20)(A)(i) residence
commences 
19 with presence in this State for other than a temporary or 
20 transitory
purpose and ceases with absence from this State 
21 for other than a temporary or
transitory purpose. Under 
22 Section 1501(a)(20)(A)(ii) residence commences
with the 
23 establishment of domicile in this State and ceases with the

24 establishment of domicile in another State.


25  (18) Person. The term "person" shall be construed to 
26 mean and include
an individual, a trust, estate, 
 
 
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1 partnership, association, firm, company,
corporation, 
2 limited liability company, or fiduciary. For purposes of 
3 Section
1301 and 1302 of this Act, a "person" means (i) an 
4 individual, (ii) a
corporation, (iii) an officer, agent, or 
5 employee of a
corporation, (iv) a member, agent or employee 
6 of a partnership, or (v)
a member,
manager, employee, 
7 officer, director, or agent of a limited liability company

8 who in such capacity commits an offense specified in 
9 Section 1301 and 1302.


10  (18A) Records. The term "records" includes all data 
11 maintained by the
taxpayer, whether on paper, microfilm, 
12 microfiche, or any type of
machine-sensible data 
13 compilation.


14  (19) Regulations. The term "regulations" includes 
15 rules promulgated and
forms prescribed by the Department.


16  (20) Resident. The term "resident" means:


17   (A) an individual (i) who is
in this State for 
18 other than a temporary or transitory purpose during the

19 taxable year; or (ii) who is domiciled in this State 
20 but is absent from
the State for a temporary or 
21 transitory purpose during the taxable year;


22   (B) The estate of a decedent who at his or her 
23 death was domiciled in
this
State;


24   (C) A trust created by a will of a decedent who at 
25 his death was
domiciled
in this State; and


26   (D) An irrevocable trust, the grantor of which was 
 
 
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1 domiciled in this
State
at the time such trust became 
2 irrevocable. For purpose of this subparagraph,
a trust 
3 shall be considered irrevocable to the extent that the 
4 grantor is
not treated as the owner thereof under 
5 Sections 671 through 678 of the Internal
Revenue Code.


6  (21) Sales. The term "sales" means all gross receipts 
7 of the taxpayer
not allocated under Sections 301, 302 and 
8 303.


9  (22) State. The term "state" when applied to a 
10 jurisdiction other than
this State means any state of the 
11 United States, the District of Columbia,
the Commonwealth 
12 of Puerto Rico, any Territory or Possession of the United

13 States, and any foreign country, or any political 
14 subdivision of any of the
foregoing. For purposes of the 
15 foreign tax credit under Section 601, the
term "state" 
16 means any state of the United States, the District of 
17 Columbia,
the Commonwealth of Puerto Rico, and any 
18 territory or possession of the
United States, or any 
19 political subdivision of any of the foregoing,
effective 
20 for tax years ending on or after December 31, 1989.


21  (23) Taxable year. The term "taxable year" means the 
22 calendar year, or
the fiscal year ending during such 
23 calendar year, upon the basis of which
the base income is 
24 computed under this Act. "Taxable year" means, in the
case 
25 of a return made for a fractional part of a year under the 
26 provisions
of this Act, the period for which such return is 
 
 
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1 made.


2  (24) Taxpayer. The term "taxpayer" means any person 
3 subject to the tax
imposed by this Act.


4  (25) International banking facility. The term 
5 international banking
facility shall have the same meaning 
6 as is set forth in the Illinois Banking
Act or as is set 
7 forth in the laws of the United States or regulations of

8 the Board of Governors of the Federal Reserve System.


9  (26) Income Tax Return Preparer.


10   (A) The term "income tax return preparer"
means any 
11 person who prepares for compensation, or who employs 
12 one or more
persons to prepare for compensation, any 
13 return of tax imposed by this Act
or any claim for 
14 refund of tax imposed by this Act. The preparation of a

15 substantial portion of a return or claim for refund 
16 shall be treated as
the preparation of that return or 
17 claim for refund.


18   (B) A person is not an income tax return preparer 
19 if all he or she does
is


20    (i) furnish typing, reproducing, or other 
21 mechanical assistance;


22    (ii) prepare returns or claims for refunds for 
23 the employer by whom he
or she is regularly and 
24 continuously employed;


25    (iii) prepare as a fiduciary returns or claims 
26 for refunds for any
person; or


 
 
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1    (iv) prepare claims for refunds for a taxpayer 
2 in response to any
notice
of deficiency issued to 
3 that taxpayer or in response to any waiver of

4 restriction after the commencement of an audit of 
5 that taxpayer or of another
taxpayer if a 
6 determination in the audit of the other taxpayer 
7 directly or
indirectly affects the tax liability 
8 of the taxpayer whose claims he or she is

9 preparing.


10  (27) Unitary business group. 
11   (A) The term "unitary business group" means
a group 
12 of persons related through common ownership whose 
13 business activities
are integrated with, dependent 
14 upon and contribute to each other. The group
will not 
15 include those members whose business activity outside 
16 the United
States is 80% or more of any such member's 
17 total business activity; for
purposes of this 
18 paragraph and clause (a)(3)(B)(ii) of Section 304,

19 business
activity within the United States shall be 
20 measured by means of the factors
ordinarily applicable 
21 under subsections (a), (b), (c), (d), or (h)
of Section

22 304 except that, in the case of members ordinarily 
23 required to apportion
business income by means of the 3 
24 factor formula of property, payroll and sales

25 specified in subsection (a) of Section 304, including 
26 the
formula as weighted in subsection (h) of Section 
 
 
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1 304, such members shall
not use the sales factor in the 
2 computation and the results of the property
and payroll 
3 factor computations of subsection (a) of Section 304 
4 shall be
divided by 2 (by one if either
the property or 
5 payroll factor has a denominator of zero). The 
6 computation
required by the preceding sentence shall, 
7 in each case, involve the division of
the member's 
8 property, payroll, or revenue miles in the United 
9 States,
insurance premiums on property or risk in the 
10 United States, or financial
organization business 
11 income from sources within the United States, as the

12 case may be, by the respective worldwide figures for 
13 such items. Common
ownership in the case of 
14 corporations is the direct or indirect control or

15 ownership of more than 50% of the outstanding voting 
16 stock of the persons
carrying on unitary business 
17 activity. Unitary business activity can
ordinarily be 
18 illustrated where the activities of the members are: 
19 (1) in the
same general line (such as manufacturing, 
20 wholesaling, retailing of tangible
personal property, 
21 insurance, transportation or finance); or (2) are 
22 steps in a
vertically structured enterprise or process 
23 (such as the steps involved in the
production of 
24 natural resources, which might include exploration, 
25 mining,
refining, and marketing); and, in either 
26 instance, the members are functionally
integrated 
 
 
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1 through the exercise of strong centralized management 
2 (where, for
example, authority over such matters as 
3 purchasing, financing, tax compliance,
product line, 
4 personnel, marketing and capital investment is not 
5 left to each
member).

6   (B) In no event, shall any
unitary business group 
7 include members
which are ordinarily required to 
8 apportion business income under different
subsections 
9 of Section 304 except that for tax years ending on or 
10 after
December 31, 1987 this prohibition shall not 
11 apply to a holding company that would otherwise be a 
12 member of a unitary business group with taxpayers that 
13 apportion business income under any of subsections 
14 (b), (c), (c-1), or (d) of Section 304. If a unitary 
15 business
group would, but for the preceding sentence, 
16 include members that are
ordinarily required to 
17 apportion business income under different subsections 
18 of
Section 304, then for each subsection of Section 304 
19 for which there are two or
more members, there shall be 
20 a separate unitary business group composed of such

21 members. For purposes of the preceding two sentences, a 
22 member is "ordinarily
required to apportion business 
23 income" under a particular subsection of Section
304 if 
24 it would be required to use the apportionment method 
25 prescribed by such
subsection except for the fact that 
26 it derives business income solely from
Illinois. As 
 
 
HB0199- 23 -LRB099 04147 HLH 24167 b


1 used in this paragraph, for taxable years ending before 
2 December 31, 2015, the phrase "United States" means 
3 only the 50 states and the District of Columbia, but 
4 does not include any territory or possession of the 
5 United States or any area over which the United States 
6 has asserted jurisdiction or claimed exclusive rights 
7 with respect to the exploration for or exploitation of 
8 natural resources.
For taxable years ending on or after 
9 December 31, 2015, the phrase "United States", as used 
10 in this paragraph, means only the 50 states, the 
11 District of Columbia, and any area over which the 
12 United States has asserted jurisdiction or claimed 
13 exclusive rights with respect to the exploration for or 
14 exploitation of natural resources, but does not 
15 include any territory or possession of the United 
16 States. 
17   (C) Holding companies.
18    (i) For purposes of this subparagraph, a 
19 "holding company" is a corporation (other than a 
20 corporation that is a financial organization under 
21 paragraph (8) of this subsection (a) of Section 
22 1501 because it is a bank holding company under the 
23 provisions of the Bank Holding Company Act of 1956 
24 (12 U.S.C. 1841, et seq.) or because it is owned by 
25 a bank or a bank holding company) that owns a 
26 controlling interest in one or more other 
 
 
HB0199- 24 -LRB099 04147 HLH 24167 b


1 taxpayers ("controlled taxpayers"); that, during 
2 the period that includes the taxable year and the 2 
3 immediately preceding taxable years or, if the 
4 corporation was formed during the current or 
5 immediately preceding taxable year, the taxable 
6 years in which the corporation has been in 
7 existence, derived substantially all its gross 
8 income from dividends, interest, rents, royalties, 
9 fees or other charges received from controlled 
10 taxpayers for the provision of services, and gains 
11 on the sale or other disposition of interests in 
12 controlled taxpayers or in property leased or 
13 licensed to controlled taxpayers or used by the 
14 taxpayer in providing services to controlled 
15 taxpayers; and that incurs no substantial expenses 
16 other than expenses (including interest and other 
17 costs of borrowing) incurred in connection with 
18 the acquisition and holding of interests in 
19 controlled taxpayers and in the provision of 
20 services to controlled taxpayers or in the leasing 
21 or licensing of property to controlled taxpayers.
22    (ii) The income of a holding company which is a 
23 member of more than one unitary business group 
24 shall be included in each unitary business group of 
25 which it is a member on a pro rata basis, by 
26 including in each unitary business group that 
 
 
HB0199- 25 -LRB099 04147 HLH 24167 b


1 portion of the base income of the holding company 
2 that bears the same proportion to the total base 
3 income of the holding company as the gross receipts 
4 of the unitary business group bears to the combined 
5 gross receipts of all unitary business groups (in 
6 both cases without regard to the holding company) 
7 or on any other reasonable basis, consistently 
8 applied.
9    (iii) A holding company shall apportion its 
10 business income under the subsection of Section 
11 304 used by the other members of its unitary 
12 business group. The apportionment factors of a 
13 holding company which would be a member of more 
14 than one unitary business group shall be included 
15 with the apportionment factors of each unitary 
16 business group of which it is a member on a pro 
17 rata basis using the same method used in clause 
18 (ii).
19    (iv) The provisions of this subparagraph (C) 
20 are intended to clarify existing law.
21   (D) If including the base income and factors of a 
22 holding company in more than one unitary business group 
23 under subparagraph (C) does not fairly reflect the 
24 degree of integration between the holding company and 
25 one or more of the unitary business groups, the 
26 dependence of the holding company and one or more of 
 
 
HB0199- 26 -LRB099 04147 HLH 24167 b


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

23 accounting period of the member that is expected to 
24 have, on a recurring basis,
the greatest Illinois 
25 income tax liability must be used to determine whether 
26 to
use the apportionment method provided in subsection 
 
 
HB0199- 27 -LRB099 04147 HLH 24167 b


1 (a) or subsection (h) of
Section 304. The
prohibition 
2 against membership in a unitary business group for 
3 taxpayers
ordinarily required to apportion income 
4 under different subsections of Section
304 does not 
5 apply to taxpayers required to apportion income under 
6 subsection
(a) and subsection (h) of Section
304. The 
7 provisions of this amendatory Act of 1998 apply to tax

8 years ending on or after December 31, 1998.


9  (28) Subchapter S corporation. The term "Subchapter S 
10 corporation"
means a corporation for which there is in 
11 effect an election under Section
1362 of the Internal 
12 Revenue Code, or for which there is a federal election
to 
13 opt out of the provisions of the Subchapter S Revision Act 
14 of 1982 and
have applied instead the prior federal 
15 Subchapter S rules as in effect on July
1, 1982.

16  (30) Foreign person. The term "foreign person" means 
17 any person who is a nonresident alien individual and any 
18 nonindividual entity, regardless of where created or 
19 organized, whose business activity outside the United 
20 States is 80% or more of the entity's total business 
21 activity.



22 (b) Other definitions.


23  (1) Words denoting number, gender, and so forth,
when 
24 used in this Act, where not otherwise distinctly expressed 
25 or manifestly
incompatible with the intent thereof:


 
 
HB0199- 28 -LRB099 04147 HLH 24167 b


1   (A) Words importing the singular include and apply 
2 to several persons,
parties or things;


3   (B) Words importing the plural include the 
4 singular; and


5   (C) Words importing the masculine gender include 
6 the feminine as well.


7  (2) "Company" or "association" as including successors 
8 and assigns. The
word "company" or "association", when used 
9 in reference to a corporation,
shall be deemed to embrace 
10 the words "successors and assigns of such company
or 
11 association", and in like manner as if these last-named 
12 words, or words
of similar import, were expressed.


13  (3) Other terms. Any term used in any Section of this 
14 Act with respect
to the application of, or in connection 
15 with, the provisions of any other
Section of this Act shall 
16 have the same meaning as in such other Section.

17(Source: P.A. 96-641, eff. 8-24-09; 97-507, eff. 8-23-11; 
1897-636, eff. 6-1-12.)



19 Section 10. The Limited Liability Company Act is amended by 
20changing Section 50-10 as follows:




21 (805 ILCS 180/50-10)



22 Sec. 50-10. Fees. 

23 (a) The Secretary of State shall charge and collect in

24accordance with the provisions of this Act and rules

 
 
HB0199- 29 -LRB099 04147 HLH 24167 b


1promulgated under its authority all of the following:


2  (1) Fees for filing documents.


3  (2) Miscellaneous charges.


4  (3) Fees for the sale of lists of filings and for 
5 copies
of any documents.

6 (b) The Secretary of State shall charge and collect for
all 
7of the following:


8  (1) Filing articles of organization (domestic), 
9 application for
admission (foreign), and restated articles 
10 of
organization (domestic), $75 $500. Notwithstanding the 
11 foregoing, the fee for filing articles of organization 
12 (domestic), application for admission (foreign), and 
13 restated articles of organization (domestic) in connection 
14 with a limited liability company with ability to establish 
15 series pursuant to Section 37-40 of this Act is $125 $750.



16  (2) Filing articles of amendment or an amended 
17 application for admission, $150.


18  (3) Filing articles of dissolution or
application
for 
19 withdrawal, $100.


20  (4) Filing an application to reserve a name, $300.


21  (5) Filing a notice of cancellation of a reserved name, 
22 $100.


23  (6) Filing a notice of a transfer of a reserved
name, 
24 $100.


25  (7) Registration of a name, $300.


26  (8) Renewal of registration of a name, $100.


 
 
HB0199- 30 -LRB099 04147 HLH 24167 b


1  (9) Filing an application for use of an assumed
name 
2 under Section 1-20 of this Act, $150 for each
year or part 
3 thereof ending in 0 or 5, $120 for each year or
part 
4 thereof ending in 1 or 6, $90 for each year or part thereof 
5 ending in 2 or
7, $60 for each year or part thereof ending 
6 in 3 or 8, $30 for each year or
part thereof ending in 4 or 
7 9, and a renewal for each assumed name, $150.


8  (10) Filing an application for change or cancellation 
9 of an assumed
name, $100.


10  (11) Filing an annual report of a limited liability

11 company or foreign limited liability company, $250, if

12 filed as required by this Act, plus a penalty if

13 delinquent. Notwithstanding the foregoing, the fee for 
14 filing an annual report of a limited liability company or 
15 foreign limited liability company with ability to 
16 establish series is $250 plus $50 for each series for which 
17 a certificate of designation has been filed pursuant to 
18 Section 37-40 of this Act and active on the last day of the 
19 third month preceding the company's anniversary month, 
20 plus a penalty if delinquent.



21  (12) Filing an application for reinstatement of a

22 limited liability company or foreign limited liability

23 company
$500.


24  (13) Filing Articles of Merger, $100 plus $50 for each 
25 party to the
merger in excess of the first 2 parties.


26  (14) Filing an Agreement of Conversion or Statement of 
 
 
HB0199- 31 -LRB099 04147 HLH 24167 b


1 Conversion, $100.


2  (15) Filing a statement of change of address of 
3 registered office or change of registered agent, or both, 
4 or filing a statement of correction, $25.


5  (16) Filing a petition for refund, $15.


6  (17) Filing any other document, $100.

7  (18) Filing a certificate of designation of a limited 
8 liability company with the ability to establish series 
9 pursuant to Section 37-40 of this Act, $50.

10 (c) The Secretary of State shall charge and collect all
of 
11the following:


12  (1) For furnishing a copy or certified copy of any

13 document, instrument, or paper relating to a limited

14 liability company or foreign limited liability company,
or 
15 for a certificate, $25.


16  (2) For the transfer of information by computer
process 
17 media to any purchaser, fees established by
rule.

18(Source: P.A. 97-839, eff. 7-20-12.)