Public Act 099-0213

HB3086 Enrolled LRB099 10675 HLH 30934 b

AN ACT concerning revenue.

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

represented in the General Assembly:

Section 5. The Illinois Income Tax Act is amended by

changing Section 1501 as follows:

(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.

(1.5) Captive real estate investment trust:

(A) The term "captive real estate investment

trust" means a corporation, trust, or association:

(i) that is considered a real estate

investment trust for the taxable year under

Section 856 of the Internal Revenue Code;

(ii) the certificates of beneficial interest

or shares of which are not regularly traded on an

established securities market; and

(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.

(B) The term "captive real estate investment

trust" does not include:

(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:

(a) a real estate investment trust, other

than a captive real estate investment trust;

(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;

(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;

(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

(e) an entity that is organized outside of

the laws of the United States and that

satisfies all of the following criteria:

(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;

(2) the entity is not subject to tax on

amounts that are distributed to its

beneficial owners or is exempt from

entity-level taxation;

(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;

(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

(5) the entity is organized in a

country that has entered into a tax treaty

with the United States; or

(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.

(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.

(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.

(2) Commercial domicile. The term "commercial

domicile" means the principal place from which the trade or

business of the taxpayer is directed or managed.

(3) Compensation. The term "compensation" means wages,

salaries, commissions and any other form of remuneration

paid to employees for personal services.

(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.

(5) Department. The term "Department" means the

Department of Revenue of this State.

(6) Director. The term "Director" means the Director of

Revenue of this State.

(7) Fiduciary. The term "fiduciary" means a guardian,

trustee, executor, administrator, receiver, or any person

acting in any fiduciary capacity for any person.

(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.

(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.

(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):

(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:

(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;

(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

(c) the outstanding balance of a contract

or agreement described in provisions (a) or (b)

of this item (i).

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.

(ii) A corporation meeting each of the

following criteria:

(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;

(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;

(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

(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.

This amendatory Act of the 91st General Assembly is

declaratory of existing law.

(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.

(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.

(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.

(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.

(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.

(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.

(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.

(11.5) Investment partnership.

(A) The term "investment partnership" means any

entity that is treated as a partnership for federal

income tax purposes that meets the following

requirements:

(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;

(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

(iii) the partnership is not a dealer in

qualifying investment securities.

(B) For purposes of this paragraph (11.5), the term

"qualifying investment securities" includes all of the

following:

(i) common stock, including preferred or debt

securities convertible into common stock, and

preferred stock;

(ii) bonds, debentures, and other debt

securities;

(iii) foreign and domestic currency deposits

secured by federal, state, or local governmental

agencies;

(iv) mortgage or asset-backed securities

secured by federal, state, or local governmental

agencies;

(v) repurchase agreements and loan

participations;

(vi) foreign currency exchange contracts and

forward and futures contracts on foreign

currencies;

(vii) stock and bond index securities and

futures contracts and other similar financial

securities and futures contracts on those

securities;

(viii) options for the purchase or sale of any

of the securities, currencies, contracts, or

financial instruments described in items (i) to

(vii), inclusive;

(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;

(xi) derivatives; and

(xii) a partnership interest in another

partnership that is an investment partnership.

(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:

(A) arithmetic errors or incorrect computations on

the return or supporting schedules;

(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

(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.

(13) Nonbusiness income. The term "nonbusiness income"

means all income other than business income or

compensation.

(14) Nonresident. The term "nonresident" means a

person who is not a resident.

(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.

(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.

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.

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.

(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.

(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.

(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.

(19) Regulations. The term "regulations" includes

rules promulgated and forms prescribed by the Department.

(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;

(B) The estate of a decedent who at his or her

death was domiciled in this State;

(C) A trust created by a will of a decedent who at

his death was domiciled in this State; and

(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.

(21) Sales. The term "sales" means all gross receipts

of the taxpayer not allocated under Sections 301, 302 and

303.

(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.

(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.

(24) Taxpayer. The term "taxpayer" means any person

subject to the tax imposed by this Act.

(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.

(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.

(B) A person is not an income tax return preparer

if all he or she does is

(i) furnish typing, reproducing, or other

mechanical assistance;

(ii) prepare returns or claims for refunds for

the employer by whom he or she is regularly and

continuously employed;

(iii) prepare as a fiduciary returns or claims

for refunds for any person; or

(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.

(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).

(B) In no event, 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, 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.

(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.

(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.

(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).

(iv) The provisions of this subparagraph (C)

are intended to clarify existing law.

(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.

(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.

(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.

(30) Foreign person. The term "foreign person" means

any person who is a nonresident alien individual 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.

(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:

(A) Words importing the singular include and apply

to several persons, parties or things;

(B) Words importing the plural include the

singular; and

(C) Words importing the masculine gender include

the feminine as well.

(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.

(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.

(Source: P.A. 96-641, eff. 8-24-09; 97-507, eff. 8-23-11;

97-636, eff. 6-1-12.)

Section 99. Effective date. This Act takes effect upon

becoming law.