State of Illinois
91st General Assembly
Legislation

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91_SB0946eng

 
SB946 Engrossed                                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
 
SB946 Engrossed             -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.)

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