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91_SB0946
LRB9106128REpk
1 AN ACT concerning taxes.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5 changing Section 308 as follows:
6 (35 ILCS 5/308) (from Ch. 120, par. 3-308)
7 Sec. 308. Allocation of Subchapter S Corporation Income
8 by Subchapter S Corporations and Shareholders Other Than
9 Residents. (a) Allocation of Subchapter S corporation
10 business income by shareholders other than residents. The
11 respective shares of shareholders other than residents in so
12 much of the business income of the Subchapter S corporation
13 as is allocated or apportioned to this State in the hands of
14 the Subchapter S corporation shall be taken into account by
15 the such shareholder pro rata in accordance with the
16 requirements of Section 1366 of the Internal Revenue Code for
17 the Subchapter S corporation's taxable year and allocated to
18 this State.
19 (b) Allocation of Subchapter S corporation nonbusiness
20 income by shareholders other than residents. The respective
21 share of shareholders other than residents in the items of
22 Subchapter S corporation income and deduction not taken into
23 account in computing the business income of the Subchapter S
24 corporation shall be taken into account by such shareholders
25 pro rata in accordance with the requirements of Section 1366
26 of the Internal Revenue Code for the corporation's taxable
27 year, and allocated as if such items had been paid, incurred
28 or accrued directly to such shareholders in their separate
29 capacities.
30 (c) Allocation or apportionment of base income by the
31 Subchapter S corporation. Base income of a Subchapter S
-2- LRB9106128REpk
1 corporation shall be allocated or apportioned to this State
2 pursuant to this Article 3 in the same manner as it is
3 allocated or apportioned for any other nonresident.
4 (d) This Section shall not apply to any corporation for
5 which there is in effect a federal election to opt out of the
6 provisions of the Subchapter S Revision Act of 1982 and have
7 applied instead the prior federal Subchapter S rules as in
8 effect on July 1, 1982.
9 (Source: P.A. 83-1352.)