ALL THAT’S NEW IN ILLINOIS
12th Annual Taxpayers’ Federation of Illinois
State and Local Tax Conference
September 20, 2011
Fred O. Marcus
Horwood Marcus & Berk, Chtd.
(312) 606-3210
fmarcus@hmblaw.com
Michael A. Lovett
PricewaterhouseCoopers LLP
(312) 298-5612
michael.a.lovett@us.pwc.com
Agenda
• Legislation
• Enacted
• Proposed
• Judicial
• Income / Franchise
• Other
• Regulations
• Adopted
• Projects on the Agenda
• Current Developments
2
Enacted Legislation (96th General Assembly)
S.B. 3655 Research and Development Credit
(P.A. 96-0937)(Signed 6/23/2010)
• Provides that the research and development credit applies
for taxable years ending on or after December 31, 2004
and ending prior to January 1, 2011
• Credit was to sunset on December 31, 2009 under Act’s
automatic sunset provisions
• Research and development credit may not be carried
forward to any taxable year ending on or after January 1,
2011
3
Enacted Legislation (96th General Assembly)
S.B. 1578 Small Business Jobs Creation Tax Credit
(P.A. 96-0888)(Signed 4/13/2010)
• Provides tax credit to small business by Department of
Commerce and Economic Opportunity (DCEO)
• Applies to taxpayers with fewer than 50 employees that
have hired a new employee during the State’s fiscal year
2011
• Credit not to exceed $2,500 ($50,000,000 total)
• Dept. Press Release “Illinois Small Business Jobs Creation
Tax Credit/Certificates from DCEO” (June 29, 2011)
• Reminder that the credit is only available to businesses and nonprofits that registered with the DCEO on or before June 20, 2011
• Clarifies when and how the credit is to be claimed
4
Enacted Legislation (96th General Assembly)
S.B. 3089 EDGE Tax Credits Expansion
(P.A. 96-0905)(Signed 6/4/2010)
• Expands the provision allowing certain motor vehicle
manufacturer to elect to claim the EDGE credit against
their withholding tax obligations to apply to heavy duty
truck manufacturer that meet certain criteria
• Intended to allow certain taxpayer to take advantage of the
provisions of P.A. 96-834, which passed during veto
session
5
Enacted Legislation (96th General Assembly)
S.B. 2505 (P.A. 96-1496)(Signed 1/13/2011)
• Corporate income tax rate increased from 4.8% to 7% beginning on
January 1, 2011
• On January 1, 2015, the rate decreases to 5.25%
• Reduced again to 4.8% on January 1, 2025
• Note that Illinois also imposes a 2.5% replacement tax on
corporations
• Special rules apply to fiscal-year taxpayers
• Taxpayers with tax years that overlap date on which a rate change
occurs can use a weighted average of the two rates or can elect to
specifically account for income and expenses earned during each
part of the tax year
6
Enacted Legislation (96th General Assembly)
S.B. 2505 (P.A. 96-1496)(Signed 1/13/2011)
• For all corporations (excluding S corporations), NOL
carryovers are suspended for tax years ending after
December 31, 2010 and prior to December 31, 2014
• No taxable year for which a deduction is suspended
will be counted
• Fiscal year taxpayers have a four-year suspension
• The rule suspending carryovers does not contain an
exception for corporations whose final taxable year
falls within the period of suspension. IT 11-0013-GIL
(July 8, 2011)
7
Enacted Legislation (97th General Assembly)
Income Tax
• SB 4 – Amends EDGE Act (P.A. 97-0002)(Signed
5/6/2011)
• Provides election to claim EDGE Credit against
withholding tax obligations for certain narrowly
defined industries
• Contains recapture provisions for not meeting
investment or job creation and retention requirements
• Provides that taxpayers may not take credits awarded
pursuant to Film Production Services Tax Credit Act
for tax years beginning on or after 5 years after
effective date of SB 4
8
Enacted Legislation (97th General Assembly)
Income Tax
• SB 398 (P.A. 97-0003)(Signed 5/6/2011) – Film
Production Services Tax Credit Act
• Amends Film Production Services Tax Credit Act of
2008
• Provides that taxpayers not entitled to take credit for
tax years beginning on or after 10 years (instead of 5
years) after the effective date of SB 4
• Provides that General Assembly may extend sunset
date by 5 year intervals
9
Enacted Legislation (97th General Assembly)
Income Tax
• SB 2168 (P.A. 97-0203)(Signed 7/28/2011)
• River Edge Historic Rehabilitation Tax Credit
• Creates credit equal to 25% of qualified expenditures incurred
by eligible taxpayer for restoration and preservation of
qualified historic structure located in River Edge
Redevelopment Zone
• The qualifying expenditure must equal at least $5,000 or more
and must exceed 50% of the purchase price of the property
• Applicable to tax years beginning on or after January 1, 2012
and ending prior to January 1, 2017
10
Enacted Legislation (97th General Assembly)
Income Tax
• HB 2955 (P.A. 97-0507)(Signed 8/23/2011)
• Technical Corrections Bill
• Broad technical correction bill that amends the Income Tax Act
to achieve consistency with the IRS Code and clarifies the State’s
approach to taxation linked to insurance premiums, net losses,
life insurance income, and income from a real estate mortgage
investment conduit
• Various administrative and technical changes
• Provides that deduction for partnership personal service income
and income distributable to entities subject to Replacement Tax
are not subject to sunset provisions
• Many of the provisions have different effective dates
11
Enacted Legislation (97th General Assembly)
Income Tax
HB 2955 (P.A. 97-0507)(Signed 8/23/2011)
• Technical Corrections Bill
• Broadly permits full and partial combination of holding companies by
amending IITA Section 1501(a)(27)’s exception to allow combination of
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), or (d) of Section 304”
• Defines what a holding company is and how the income and
apportionment factors should be allocated to the unitary groups
• The holding company provisions are intended to clarify existing law
12
Enacted Legislation (97th General Assembly)
Sales/Use Tax
• HB 3659 (P.A. 96-1544)(Signed 3/10/2011)
• Amends Illinois use tax and service use tax laws, beginning
7/1/2011, by adopting click-through nexus provisions applicable
to certain retailers
• $10,000 threshold of total sales from in-state relationships
during the preceding 4 quarterly periods
• Unlike in other states adopting similar “click-through” nexus
provisions, there is no “presumption” that nexus exists that
can be rebutted by the out-of-state retailers
• Also adopts expanded affiliate nexus provisions for certain
retailers that use the same marks/trade names as in-state
businesses
13
Enacted Legislation (97th General Assembly)
Sales/ Use Tax
• SB 0145 (P.A. 97-0038)(Signed 6/28/2011)
• Nursing Home Care Act; Exemptions for certain food and medicine
• Provides that the exemption applicable to goods purchased for use
by a person receiving medical assistance under Art. 5 of the Public
Aid Code also applies to a person who resides in a licensed facility
as defined in the Specialized Mental Health Rehabilitation Act
(SMHRA)
• Provides a reduced 1% service occupation tax and service use tax
rate applies to food prepared for immediate consumption and
transferred incident to a sale of service by an entity licensed under
the SMHRA
14
Enacted Legislation (97th General Assembly)
Sales/ Use Tax
• SB 401 (P.A. 97-0073)(Signed 6/30/2011)
• Use Tax-Centralized Purchasing (Temporary Storage Exemption)
• Extends exemption to June 30, 2016 for use of tangible personal
property purchased from an Illinois retailer by a taxpayer engaged
in centralized purchasing activities in Illinois who will, upon
receipt of the property in the state, temporarily store the property
in Illinois (i) for the purpose of subsequently transporting it
outside the state for use or consumption solely outside Illinois or
(ii) for purpose of being processed, fabricated, or manufactured
into, attached to, or incorporated into other tangible personal
property to be transported outside Illinois and used or consumed
solely outside Illinois
15
Enacted Legislation (97th General Assembly)
Property Tax
• HB 212 (P.A. 97-0577)(Signed 8/26/2011)
• Business Corridor Abatement
• HB 1218(P.A. 97-0577)(Signed 8/25/2011)
• Tax Purchaser/Sale Transparency
• HB 1926 (P.A. 97-0451)(Signed 8/19/2011)
• Housing Authority Exemption
• HB 234(P.A. 97-0296)(Signed 8/11/2011)
• Open Space Valuation Changes
• SB 1804 (P.A. 97-0533)(Signed 8/23/2011)
• Special Service Area Property Tax Covenants
16
Enacted Legislation (97th General Assembly)
Property Tax
• SB 1386 (P.A. 97-0521)(Signed 8/23/2011)
• Property Tax Overpayments
• HB 1518(P.A. 97-0481(Signed 8/22/2011)
• Senior Citizen Real Estate Tax Deferral/High Speed Rail Property
Valuation
17
Enacted Legislation (97th General Assembly)
Unclaimed Property
• HB 1560 (P.A. 97-0270)(Signed 8/8/2011)
• Unclaimed Wages - Limitation
• Amends 765 ILCS 1025/2 and 2a
• Provides that unclaimed wages, payroll and salary held or
owing by a banking or financial institution will be presumed
abandoned if outstanding for more than one year from the
date of issuance
• Additionally, business associations shall report unclaimed
wages, payroll and salary, in any form, after remaining
unclaimed for more than one year
• Effective August 8, 2011
18
Enacted Legislation (97th General Assembly)
Miscellaneous Taxes
• SB 43 (P.A. 97-0353)(Signed 8/12/2011)
• Taxation Disclosure Act
• Provides that the Department of Revenue shall make tax rate
information available on its website, including:
Municipal rate information for use and occupation tax;
Corporate income tax rates; and
State and local excise tax rates
• Provides that the information required to be provided must be
made available in a viewable and downloadable format, and
must be updated regularly
• Effective July 1, 2012
19
Enacted Legislation (97th General Assembly)
Miscellaneous Taxes
• SB 2063 (P.A. 97-0463)(Signed 8/19/2011)
• Prepaid Wireless Surcharge
• Creates a prepaid wireless 911 surcharge of 1.5% on retail
transactions of “prepaid wireless telecommunications services”
• “Prepaid wireless telecommunications service” means a wireless
telecommunications service that allows a caller to dial 9-1-1 to
access the 911 system, when the service is paid for in advance and is
sold in predetermined units which decline with use in a known
amount
• Home rule municipalities having a population in excess of 500,000
may impose a prepaid wireless 911 surcharge not to exceed 7% per
retail transaction sourced to that jurisdiction.
• Effective January 1, 2012
20
Proposed 2011 Business Tax Law Changes
Income Tax
• SB 1741 Income Tax-Estimated Taxes (referred to
Assignments 7/23/2011)
• Provides if taxpayer is entitled to refund after payment
of fourth installment, may apply amount of refund to
first installment due in next taxable year
• SB 1900 Brownfield Credit (Re-referred to Rules
Committee 5/31/2011)
• Provides credit against income tax for eligible projects
related to remodeling, rehabilitation, modernization, or
remediation of contaminated property in Illinois
21
Proposed 2011 Business Tax Law Changes
Income Tax
• HB 1084 Business Mandate Note (Referred to
Assignments 7/23/2011)
• Provides that every bill that directly increases cost of
doing business in State shall have brief explanatory
statement or note with reliable estimate of anticipated
impact before second reading
22
Proposed 2011 Business Tax Law Changes
Income Tax
• SB 163 and SB 1842– Extends R&D Credit to 1/1/2016
and increases amount from 6.5% to 8% (Referred to
Assignments 3/18/2011)
• SB 1215 –Extends R&D Credit until 12/31/2016 (Referred
to Assignments 3/18/2011
• HB 2948—Extends R&D Credit until 12/31/2011 plus 5year Carryforward (Referred to House Rules 3/17/2011)
23
Proposed 2011 Business Tax Law Changes
Sales Tax
• SB 2194 Sales Tax Sourcing (Re-referred to Rules Committee 5/31/
2011)
• Attempts to codify history of regulations and letter rulings issued
by the Department concerning location of where order acceptance
occurs for Illinois Retailers’ Occupation Tax
• Amended to provide that if order is first received by the retailer or
placed by purchaser at a retailer’s retail sales location and
immediate payment and delivery or shipment of property occurs
at that location, retail sales location deemed the sales location for
the sale
• SB 397 w/HA#1—RTA/IDOR Local Sales Tax Sourcing Proposal
(Re-referred to Rules Committee 5/31/2011)
24
Proposed 2011 Business Tax Law Changes
Property Tax
• HB 363 (Re-referred to Rules Committee 7/23/ 2011)
• PTELL Referendum Transparency
• HB 503 (Senate Assignments 4/22/2011)
• Municipal Lease of Exempt Property
• HB 1883 (Senate Assignments 7/23/2011)
• Stipulated Assessments
• SB 19 (Re-referred to Rules Committee 5/31/2011)
• Annual Reapplication for Senior Citizens Homestead Exemption
in Cook County
• SB 1648 (Re-referred to Rules Committee 5/31/2011)
• Homestead Assessment Freeze Expansion of Disabled
25
Judicial Developments
Income Tax
AT&T Teleholdings Inc. v. Department of Revenue, 09COEL-008 (Cir. Ct. Cook County 1/20/2011)
In a Memorandum Opinion and Judgment Order, the
Circuit Court affirmed the decision of an Administrative
Law Judge that held a capital loss should be allocated
among members reporting a capital loss on Schedule D in
proportion to the sum of all separate capital losses so as
not to result in a windfall by carrying back the loss using a
combined apportionment method.
26
Judicial Developments
Non-Income Tax
Cwik v. Giannoulias, Ill., No. 108313, 5/20/2010
Issue: Whether the state’s retention of interest accrued on unclaimed
property pursuant to § 15 of the Act is an unconstitutional taking of
private property without compensation.
Holding: The Illinois Supreme Court held that the state’s unclaimed
property statute divests the owner of abandoned property of certain
incidents of ownership while that state provides safekeeping of the
property along with reclamation services. This limited lapse or
divestment is not an illegal taking for which compensation is due.
27
Judicial Developments
Non-Income Tax
Hartney Fuel Oil Co. v. Department of Revenue, Tenth
Circuit Court of Illinois, No. 08-MR-11, 08-MR-13, 08MR15, 1/26/2011
Issue: Whether fuel company provided sufficient evidence to support
its position that its fuel sales transactions were sitused at its sales office
in the Village of Mark.
Holding: Illinois Circuit Court held that the evidence was sufficient
and therefore the local sales tax imposed in Forest View should not
have been collected by the Illinois Department of Revenue.
28
Judicial Developments
Non-Income Tax
Empress Casino Joliet Corp. v. Blagojevich, No. 09-3975,
638 F. 3d 519 (3/2/2011)
Issue: Whether casino surcharge imposed by the Illinois legislature
and used by the state to assist the horse racing industry is a “tax” to
which the federal Tax Injunction Act applies.
Holding: The U.S. Court of Appeals for the Seventh Circuit held the
casino surcharge was not a “tax,” but rather more like a regulatory
penalty or fee.
29
Judicial Developments
Non-Income Tax
Performance Marketing Association v. Brian Hamer,
Director, Illinois Department of Revenue, Cir. Ct. Cook
County, 7/27/2011
Complaint originally field in Federal Court, dropped and refiled in Cir.
Ct. Cook County challenging the constitutionality of HB 3659 (P.A.
96-1544)(click-through nexus provisions)
• Count 1 alleges improper and unduly burdensome regulation of
interstate commerce in violation of the Commerce Clause of the
US Constitution
• Count 2 alleges improper regulation of commerce occurring
outside of Illinois’ borders in violation of the Commerce Clause
• Count 3 alleges violation of the Federal Internet Tax Freedom Act
30
Judicial Developments
Non-Income Tax
Interstate Trucks, LLC v. State of Illinois, Ill. App. Ct., 4th
Dist. No. 4-10-0603 (6/14/2011)
Motor Fuel Tax Law
Issue: Whether out-of-state dealership that purchased trucks in Illinois and
then attempted to transport the trucks to the dealership in Tennessee was
subject to the motor fuel use tax when fuel for the trucks was purchased in
Illinois.
Holding: Court held that motor fuel use tax license was not required because,
at the time the Department stopped the trucks, they had been operated
exclusively within Illinois, and fuel sufficient to get the trucks out of the state
had been purchased in Illinois. The court further found that requiring the
taxpayer to purchase single-trip permits would not further the purpose behind
the motor fuel use tax.
31
Judicial Developments
Non-Income Tax
Wirtz v. Quinn, Ill. S. Ct., 2011 IL 111903 (7/11/2011),
reversing Wirtz v. Quinn, Ill. App. Ct., No 1-09-3163 and 1-10-0344
(1/26/2011)
Issue: Whether four laws enacted in 2009 that created a $31 billion capital
program were enacted in violation of the single subject rule of the Illinois state
constitution.
Holding: On appeal, the Illinois Supreme Court reversed the Court of
Appeals, finding that the substantive provisions of the Act were clearly
connected to the single subject of the Act (capital projects) because they
established increased revenue sources to be deposited into the Capital Projects
fund. Even the provisions that did not directly raise revenue were still related
in that they helped implement the other provisions. The Court rejected all
other constitutional challenges to the enactment of the Act.
32
Judicial Developments
Non-Income Tax
Kansas City Southern Railway Co. et al. v. Koeller et al.,
7th Cir., No. 10-2333 (7/27/2011)
Federal Railroad Revitalization and Regulatory Reform Act (“4-R
Act”)
Issue: Whether Sny Island Levee Drainage District assessments were
discriminatory under the federal 4-R Act.
Holding: 7th Circuit decision found that the assessment did violate the 4-R
Act’s prohibition against imposition of discriminatory taxes when it changed
its method for calculating assessments due under the Illinois Drainage Code.
While the basis for calculating the assessments (a “benefit basis”) might have
been fair in theory, as applied to the railroad companies, it was discriminatory
in practice. Case remanded to district court with instructions to enjoin the
assessments.
33
Judicial Developments
Non-Income Tax
Demos v. Pappas et al., Ill. App. Ct., 1st Dist. No. 1-100829 (8/15/2011)
Issue: Whether County Treasurer, as judgment debtor under the Property
Tax Code Indemnity Fund, is a “governmental entity” for purposes of
calculating postjudgment rates.
Holding: The Property Tax Code Indemnity Fund is maintained to satisfy
judgments against the County Treasurer, as trustee of the fund. The interest
rate applicable to such judgments depends on whether the “judgment debtor”
is a “governmental entity.” As trustee of the Fund, the Cook County Treasurer
is the relevant “judgment debtor,” and the Court of Appeals determined that
the county treasurer is a “governmental entity,” because the treasurer is a
constitutional officer carrying out her public duties for the benefit of the public.
Therefore, the proper postjudgment rate on indemnity fund judgments is 6%.
34
Judicial Developments
Non-Income Tax
Regional Transportation Authority v. City of Kankakee et.
al., Cir. Ct. Cook County (8/23/2011)
Complaint filed August 23, 2011 alleging that Kankakee and
Channahon have been distributing local sales tax revenue to companies
sourcing sales to “sham” offices purportedly located in those
municipalities. The RTA claims that these “sham” offices are set up to
avoid paying locally imposed taxes, including the share of the
Retailers’ Occupation Tax that is allocated 0.25% to the RTA in Cook
County. As a result, the RTA “loses sales tax monies that should have
been rightfully paid to it.” The complaint alleges a violation of 65
ILCS 5/8-11-21, and seeks damages to compensate for the tax revenue
it was denied as a result of the municipalities unlawful conduct.
35
Judicial Developments
Non-Income Tax
City of Chicago v. City of Kankakee et. al., Cir. Ct. Cook
County (8/23/2011)
Similar to the RTA action, but limited to periods since 1/1/2004
forward. In addition to damages, City of Chicago is seeking injunctive
relief.
36
Income Tax
Adopted Regulations
Income Tax
• Estimated Income Tax Payment
• 86 Ill. Adm. Code 100.8000 and 100.8010, added 8/19/10
• Taxability in Other State
• 86 Ill. Adm. Code 100.3200, amended 8/19/10
• Filing Extension Pass-through Entities
• 86 Ill. Adm. Code 100.5020, amended 8/19/10
• Income Tax Treatment of Separate Entities
• 86 Ill. Adm. Code 100.9750, amended 8/19/10
37
Income Tax
Adopted Regulations
Income Tax (con’t)
• Electronic Filing Returns and Other Documents
• 86 Ill. Adm. Code 760.100, amended 12/21/10 (see slide re:
proposed regs for Notice of further amendments)
• Refund Claims for Overpayment
• 86 Ill. Adm. Code 100.9400 and 100.9410, amended 2/25/11.
• Angel Investor Tax Credit
• 14 Ill Adm. Code 531.10-.90, adopted 6/1/11
38
Sales/Other Tax
Adopted Regulations
Sales Tax
• Retailers’ Occupation Tax/Graphic Arts Machinery
• 86 Ill. Adm. Code 130.325, amended 1/24/11
• Retailers’ Occupation Tax Candy, Soft Drinks, Drugs, Medicines,
Medical Appliances and Grooming and Hygiene Products as the result
of P.A. 96-0034 and 96-0038
• 86 Ill. Adm. Code 130.310, amended 8/19/10, and 130.311, added
8/19/10
All Taxes Administered by the DOR
• Tax Amnesty
• 86 Ill. Adm. Code 520.101 and 105
39
Department of Revenue
Proposed Income Tax Regulations
• Electronic Filing of Returns and Other Documents;
Proposal to amend 86 Ill. Adm. Code 760.100
• Would mandate filing of Illinois corporate income tax
return electronically for those corporations required to
file their federal income tax returns, beginning with
returns for taxable years ending December 31, 2011
• Formal JCAR meeting 9 /13/2011; 2d Notice ends
10/5/2011
40
Department of Revenue
Proposed Income Tax Regulations
• Income Tax; Notice of Proposal to amend 86 Ill. Adm. Code 100.7325
(5/27/2011)
• Would amend regulation to require semi-weekly withholding payments to
be made by electronic funds transfer beginning calendar year 2011
• Income Tax; Notice of Proposal to amend 86 Ill. Adm. Code 100.2101
(6/3/2011)
• Would update regulation to reflect changes to the definition of “retailing”
and “tangible personal property” under PA 96-115, and extend the
replacement tax investment credit through 2013
• Income Tax; Notice of Proposal to add 86 Ill. Adm. Code 100.2193,
.2435, and .2510 (6/10/2011)
• Proposes new rules regarding: subtraction modification for contributions
to an Il qualified tuition plan; income tax credit for contributing
employers; and addition modification for employers claiming the credit
41
Department of Revenue
2011 Regulatory Agenda/ Projects
Income Tax (no hearings scheduled as of 8/29/2011)
• 86 Ill Adm. Code 100 (multiple sections)
• Add new rules concerning: tax credit for Tech Prep Youth Vocational
Programs; reallocation of items under Section 404; pass-through of
investment credits from partnerships and Sub S corps; filing of refund
claims, statutes of limitations and interest computations
• Add and amend rules concerning: computation of base income under Art 2
and the allocation and apportionment of base income under Art 3;
definition of unitary business group and computation of combined tax
liability of unitary group; addition and subtraction modifications for
residential property tax credit; definitions in Section 1501(a);
implementation of legislation introduced beginning in 2004; and guidance
on nexus and Illinois tax consequences of Federal tax law changes
42
Department of Revenue
2011 Regulatory Agenda/ Projects
Sales/Use Taxes (no hearings scheduled as of 8/29/2011)
•
ROT, 86 Ill. Adm. Code 130: Project relates to multiple sections, including:
•
•
•
•
•
•
•
130.415 transportation and delivery charges
130.2050 sales and gifts by employers to employees
130.450 installation, alteration, and special service charges re: real estate
130.340 rolling stock exemption
SOT, 86 Ill. Adm. Code 140: Project relates to general updates designed to
clarify application of the SOT and to reflect recent decisional law, statutory
changes and Dept. policies
Use Tax, 86 Ill. Adm. Code 150: Project relates to updates designed to reflect
new statutory developments, decisional law, and Dept. policies regarding, for
example, the types of activities and relationships that establish nexus for Use
Tax purposes
Service Use Tax, 86 Ill. Adm. Code 160: Project designed to reflect new
statutory developments, decisional law and Dept. policies
43
Illinois Department of Revenue Developments
New Tax Computer System
• Department in process of completing project to consolidate
more than 200 tax and fee programs into one integrated
computer system (four year project begun in 2007)
• Department will have ability to view taxpayer accounts on
consolidated basis
• Enhancements to notices and bills (include Account ID for
each tax type; Taxpayer Statement to replace Statement of
Account)
• Illinois Business Tax (IBT) numbers to be replaced by
Account IDs
44
Illinois Department of Revenue Developments
Denial of Property Tax Exemption
• On August 16, 2011, based on the 2010 Illinois Supreme
Court decision in Provena Covenant, the Department
denied the exempt status of three more Illinois hospitals.
The reported charity care at the hospitals ranged from
1.85% of patient revenue to .96%, all in excess of the .07%
determined by the court in Provena to be “de minimis.”
The hospitals can seek review of the Department’s
decision by filing a petition with the Office of
Administrative Hearing within 60 days of the
Department’s decision.
45
Other Income Tax Developments
Electronic Filing
• Effective January 1, 2011, paid preparers who file more than 100
Illinois Individual Income Tax returns must file electronically
Electronic Payments
• Effective October 1, 2010, the mandated threshold for electronic
payments reduced from $200,000 to $20,000 except for Individual
Income Tax, Telecom Tax, Environmental Impact Fee, and Motor Fuel
Tax
• Effective January 1, 2011, the mandated threshold for making
electronic payments for Withholding Income Tax reduced to $12,000
Bonus Depreciation
• Department issued revised Form IL-4562
• Provides clarification that Illinois conforms with 100 percent bonus
depreciation allowed under Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010
46
Franchise Tax—Illinois Secretary of State
Recent Activity
• BCA 1.35 Allocation Factor Interrogatories—Proposed Apportionment
Factor changes
• Business Services Section amended instructions to Interrogatories
related to the sourcing of “investment property” and service
income
• Significant impact on Illinois Headquarters Companies
• Secretary of State withdrew revised Form BCA 1.35 and reinstated old
Form (revised as of Jan. 2003)
47
Q&A
•
•
•
This document is for general information purposes only, and should not be used as
a substitute for consultation with professional advisors .
This document was not intended or written to be used, and it cannot be used, for the
purpose of avoiding U.S. federal, state or local tax penalties.
© 2011 PwC. All rights reserved. In this document, "PwC" refers to
PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a
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