Bill Text: IL SB1739 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Amends the Illinois Income Tax Act. Provides that, for the purpose of allocating gains and losses from sales or exchanges of shares in a Subchapter S corporation or from interests in certain partnerships, those gains and losses shall be allocated in proportion to the average of the pass-through entity's Illinois apportionment factor in the year of the sale or exchange and the 2 tax years immediately preceding the year of the sale or exchange. Provides that, if the pass-through entity was not in existence during both of the preceding 2 years, then only the years in which the pass-through entity was in existence shall be considered when computing the average.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2025-02-18 - Assigned to Revenue [SB1739 Detail]

Download: Illinois-2025-SB1739-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB1739 Introduced 2/5/2025, by Sen. Robert F. Martwick SYNOPSIS AS INTRODUCED:
35 ILCS 5/303 from Ch. 120, par. 3-303
35 ILCS 5/304 from Ch. 120, par. 3-304
Amends the Illinois Income Tax Act. Provides that, for the purpose of allocating gains and losses from sales or exchanges of shares in a Subchapter S corporation or from interests in certain partnerships, those gains and losses shall be allocated in proportion to the average of the pass-through entity's Illinois apportionment factor in the year of the sale or exchange and the 2 tax years immediately preceding the year of the sale or exchange. Provides that, if the pass-through entity was not in existence during both of the preceding 2 years, then only the years in which the pass-through entity was in existence shall be considered when computing the average.
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A BILL FOR
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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 Sections 303 and 304 as follows:
(35 ILCS 5/303) (from Ch. 120, par. 3-303)
Sec. 303. (a) In general. Any item of capital gain or loss,
and any item of income from rents or royalties from real or
tangible personal property, interest, dividends, and patent or
copyright royalties, and prizes awarded under the Illinois
Lottery Law, and, for taxable years ending on or after
December 31, 2019, wagering and gambling winnings from
Illinois sources as set forth in subsection (e-1) of this
Section, and, for taxable years ending on or after December
31, 2021, sports wagering and winnings from Illinois sources
as set forth in subsection (e-2) of this Section, to the extent
such item constitutes nonbusiness income, together with any
item of deduction directly allocable thereto, shall be
allocated by any person other than a resident as provided in
this Section.
(b) Capital gains and losses.
(1) Real property. Capital gains and losses from sales
or exchanges of real property are allocable to this State

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if the property is located in this State.
(2) Tangible personal property. Capital gains and
losses from sales or exchanges of tangible personal
property are allocable to this State if, at the time of
such sale or exchange:
(A) The property had its situs in this State; or
(B) The taxpayer had its commercial domicile in
this State and was not taxable in the state in which
the property had its situs.
(3) Intangibles. Capital gains and losses from sales
or exchanges of intangible personal property are allocable
to this State if the taxpayer had its commercial domicile
in this State at the time of such sale or exchange.
(4) Pass-through entities. Gains and losses from sales
or exchanges of shares in a Subchapter S corporation or
from an interest in a partnership, other than an
investment partnership as defined in paragraph (11.5) of
subsection (a) of Section 1501, are allocable to this
State if the pass-through entity is taxable in this State,
and those gains and losses shall be allocated in
proportion to the average of the pass-through entity's
Illinois apportionment factor computed under Section 304
in the year of the sale or exchange and the 2 tax years
immediately preceding the year of the sale or exchange. If
the pass-through entity was not in existence during both
of the preceding 2 years, then only the years in which the

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pass-through entity was in existence shall be considered
when computing the average.
(c) Rents and royalties.
(1) Real property. Rents and royalties from real
property are allocable to this State if the property is
located in this State.
(2) Tangible personal property. Rents and royalties
from tangible personal property are allocable to this
State:
(A) If and to the extent that the property is
utilized in this State; or
(B) In their entirety if, at the time such rents or
royalties were paid or accrued, the taxpayer had its
commercial domicile in this State and was not
organized under the laws of or taxable with respect to
such rents or royalties in the state in which the
property was utilized. The extent of utilization of
tangible personal property in a state is determined by
multiplying the rents or royalties derived from such
property by a fraction, the numerator of which is the
number of days of physical location of the property in
the state during the rental or royalty period in the
taxable year and the denominator of which is the
number of days of physical location of the property
everywhere during all rental or royalty periods in the
taxable year. If the physical location of the property

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during the rental or royalty period is unknown or
unascertainable by the taxpayer, tangible personal
property is utilized in the state in which the
property was located at the time the rental or royalty
payer obtained possession.
(d) Patent and copyright royalties.
(1) Allocation. Patent and copyright royalties are
allocable to this State:
(A) If and to the extent that the patent or
copyright is utilized by the payer in this State; or
(B) If and to the extent that the patent or
copyright is utilized by the payer in a state in which
the taxpayer is not taxable with respect to such
royalties and, at the time such royalties were paid or
accrued, the taxpayer had its commercial domicile in
this State.
(2) Utilization.
(A) A patent is utilized in a state to the extent
that it is employed in production, fabrication,
manufacturing or other processing in the state or to
the extent that a patented product is produced in the
state. If the basis of receipts from patent royalties
does not permit allocation to states or if the
accounting procedures do not reflect states of
utilization, the patent is utilized in this State if
the taxpayer has its commercial domicile in this

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State.
(B) A copyright is utilized in a state to the
extent that printing or other publication originates
in the state. If the basis of receipts from copyright
royalties does not permit allocation to states or if
the accounting procedures do not reflect states of
utilization, the copyright is utilized in this State
if the taxpayer has its commercial domicile in this
State.
(e) Illinois lottery prizes. Prizes awarded under the
Illinois Lottery Law are allocable to this State. Payments
received in taxable years ending on or after December 31,
2013, from the assignment of a prize under Section 13.1 of the
Illinois Lottery Law are allocable to this State.
(e-1) Wagering and gambling winnings. Payments received in
taxable years ending on or after December 31, 2019 of winnings
from pari-mutuel wagering conducted at a wagering facility
licensed under the Illinois Horse Racing Act of 1975 and from
gambling games conducted on a riverboat or in a casino or
organization gaming facility licensed under the Illinois
Gambling Act are allocable to this State.
(e-2) Sports wagering and winnings. Payments received in
taxable years ending on or after December 31, 2021 of winnings
from sports wagering conducted in accordance with the Sports
Wagering Act are allocable to this State.
(e-5) Unemployment benefits. Unemployment benefits paid by

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the Illinois Department of Employment Security are allocable
to this State.
(f) Taxability in other state. For purposes of allocation
of income pursuant to this Section, a taxpayer is taxable in
another state if:
(1) In that state he is subject to a net income tax, a
franchise tax measured by net income, a franchise tax for
the privilege of doing business, or a corporate stock tax;
or
(2) That state has jurisdiction to subject the
taxpayer to a net income tax regardless of whether, in
fact, the state does or does not.
(g) Cross references.
(1) For allocation of interest and dividends by
persons other than residents, see Section 301(c)(2).
(2) For allocation of nonbusiness income by residents,
see Section 301(a).
(Source: P.A. 101-31, eff. 6-28-19; 102-40, eff. 6-25-21.)
(35 ILCS 5/304) (from Ch. 120, par. 3-304)
Sec. 304. Business income of persons other than residents.
(a) In general. The business income of a person other than
a resident shall be allocated to this State if such person's
business income is derived solely from this State. If a person
other than a resident derives business income from this State
and one or more other states, then, for tax years ending on or

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before December 30, 1998, and except as otherwise provided by
this Section, such person's business income shall be
apportioned to this State by multiplying the income by a
fraction, the numerator of which is the sum of the property
factor (if any), the payroll factor (if any) and 200% of the
sales factor (if any), and the denominator of which is 4
reduced by the number of factors other than the sales factor
which have a denominator of zero and by an additional 2 if the
sales factor has a denominator of zero. For tax years ending on
or after December 31, 1998, and except as otherwise provided
by this Section, persons other than residents who derive
business income from this State and one or more other states
shall compute their apportionment factor by weighting their
property, payroll, and sales factors as provided in subsection
(h) of this Section.
(1) Property factor.
(A) The property factor is a fraction, the numerator
of which is the average value of the person's real and
tangible personal property owned or rented and used in the
trade or business in this State during the taxable year
and the denominator of which is the average value of all
the person's real and tangible personal property owned or
rented and used in the trade or business during the
taxable year.
(B) Property owned by the person is valued at its
original cost. Property rented by the person is valued at

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8 times the net annual rental rate. Net annual rental rate
is the annual rental rate paid by the person less any
annual rental rate received by the person from
sub-rentals.
(C) The average value of property shall be determined
by averaging the values at the beginning and ending of the
taxable year, but the Director may require the averaging
of monthly values during the taxable year if reasonably
required to reflect properly the average value of the
person's property.
(2) Payroll factor.
(A) The payroll factor is a fraction, the numerator of
which is the total amount paid in this State during the
taxable year by the person for compensation, and the
denominator of which is the total compensation paid
everywhere during the taxable year.
(B) Compensation is paid in this State if:
(i) The individual's service is performed entirely
within this State;
(ii) The individual's service is performed both
within and without this State, but the service
performed without this State is incidental to the
individual's service performed within this State; or
(iii) For tax years ending prior to December 31,
2020, some of the service is performed within this
State and either the base of operations, or if there is

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no base of operations, the place from which the
service is directed or controlled is within this
State, or the base of operations or the place from
which the service is directed or controlled is not in
any state in which some part of the service is
performed, but the individual's residence is in this
State. For tax years ending on or after December 31,
2020, compensation is paid in this State if some of the
individual's service is performed within this State,
the individual's service performed within this State
is nonincidental to the individual's service performed
without this State, and the individual's service is
performed within this State for more than 30 working
days during the tax year. The amount of compensation
paid in this State shall include the portion of the
individual's total compensation for services performed
on behalf of his or her employer during the tax year
which the number of working days spent within this
State during the tax year bears to the total number of
working days spent both within and without this State
during the tax year. For purposes of this paragraph:
(a) The term "working day" means all days
during the tax year in which the individual
performs duties on behalf of his or her employer.
All days in which the individual performs no
duties on behalf of his or her employer (e.g.,

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weekends, vacation days, sick days, and holidays)
are not working days.
(b) A working day is spent within this State
if:
(1) the individual performs service on
behalf of the employer and a greater amount of
time on that day is spent by the individual
performing duties on behalf of the employer
within this State, without regard to time
spent traveling, than is spent performing
duties on behalf of the employer without this
State; or
(2) the only service the individual
performs on behalf of the employer on that day
is traveling to a destination within this
State, and the individual arrives on that day.
(c) Working days spent within this State do
not include any day in which the employee is
performing services in this State during a
disaster period solely in response to a request
made to his or her employer by the government of
this State, by any political subdivision of this
State, or by a person conducting business in this
State to perform disaster or emergency-related
services in this State. For purposes of this item
(c):

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"Declared State disaster or emergency"
means a disaster or emergency event (i) for
which a Governor's proclamation of a state of
emergency has been issued or (ii) for which a
Presidential declaration of a federal major
disaster or emergency has been issued.
"Disaster period" means a period that
begins 10 days prior to the date of the
Governor's proclamation or the President's
declaration (whichever is earlier) and extends
for a period of 60 calendar days after the end
of the declared disaster or emergency period.
"Disaster or emergency-related services"
means repairing, renovating, installing,
building, or rendering services or conducting
other business activities that relate to
infrastructure that has been damaged,
impaired, or destroyed by the declared State
disaster or emergency.
"Infrastructure" means property and
equipment owned or used by a public utility,
communications network, broadband and Internet
internet service provider, cable and video
service provider, electric or gas distribution
system, or water pipeline that provides
service to more than one customer or person,

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including related support facilities.
"Infrastructure" includes, but is not limited
to, real and personal property such as
buildings, offices, power lines, cable lines,
poles, communications lines, pipes,
structures, and equipment.
(iv) Compensation paid to nonresident professional
athletes.
(a) General. The Illinois source income of a
nonresident individual who is a member of a
professional athletic team includes the portion of the
individual's total compensation for services performed
as a member of a professional athletic team during the
taxable year which the number of duty days spent
within this State performing services for the team in
any manner during the taxable year bears to the total
number of duty days spent both within and without this
State during the taxable year.
(b) Travel days. Travel days that do not involve
either a game, practice, team meeting, or other
similar team event are not considered duty days spent
in this State. However, such travel days are
considered in the total duty days spent both within
and without this State.
(c) Definitions. For purposes of this subpart
(iv):

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(1) The term "professional athletic team"
includes, but is not limited to, any professional
baseball, basketball, football, soccer, or hockey
team.
(2) The term "member of a professional
athletic team" includes those employees who are
active players, players on the disabled list, and
any other persons required to travel and who
travel with and perform services on behalf of a
professional athletic team on a regular basis.
This includes, but is not limited to, coaches,
managers, and trainers.
(3) Except as provided in items (C) and (D) of
this subpart (3), the term "duty days" means all
days during the taxable year from the beginning of
the professional athletic team's official
pre-season training period through the last game
in which the team competes or is scheduled to
compete. Duty days shall be counted for the year
in which they occur, including where a team's
official pre-season training period through the
last game in which the team competes or is
scheduled to compete, occurs during more than one
tax year.
(A) Duty days shall also include days on
which a member of a professional athletic team

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performs service for a team on a date that
does not fall within the foregoing period
(e.g., participation in instructional leagues,
the "All Star Game", or promotional
"caravans"). Performing a service for a
professional athletic team includes conducting
training and rehabilitation activities, when
such activities are conducted at team
facilities.
(B) Also included in duty days are game
days, practice days, days spent at team
meetings, promotional caravans, preseason
training camps, and days served with the team
through all post-season games in which the
team competes or is scheduled to compete.
(C) Duty days for any person who joins a
team during the period from the beginning of
the professional athletic team's official
pre-season training period through the last
game in which the team competes, or is
scheduled to compete, shall begin on the day
that person joins the team. Conversely, duty
days for any person who leaves a team during
this period shall end on the day that person
leaves the team. Where a person switches teams
during a taxable year, a separate duty-day

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calculation shall be made for the period the
person was with each team.
(D) Days for which a member of a
professional athletic team is not compensated
and is not performing services for the team in
any manner, including days when such member of
a professional athletic team has been
suspended without pay and prohibited from
performing any services for the team, shall
not be treated as duty days.
(E) Days for which a member of a
professional athletic team is on the disabled
list and does not conduct rehabilitation
activities at facilities of the team, and is
not otherwise performing services for the team
in Illinois, shall not be considered duty days
spent in this State. All days on the disabled
list, however, are considered to be included
in total duty days spent both within and
without this State.
(4) The term "total compensation for services
performed as a member of a professional athletic
team" means the total compensation received during
the taxable year for services performed:
(A) from the beginning of the official
pre-season training period through the last

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game in which the team competes or is
scheduled to compete during that taxable year;
and
(B) during the taxable year on a date
which does not fall within the foregoing
period (e.g., participation in instructional
leagues, the "All Star Game", or promotional
caravans).
This compensation shall include, but is not
limited to, salaries, wages, bonuses as described
in this subpart, and any other type of
compensation paid during the taxable year to a
member of a professional athletic team for
services performed in that year. This compensation
does not include strike benefits, severance pay,
termination pay, contract or option year buy-out
payments, expansion or relocation payments, or any
other payments not related to services performed
for the team.
For purposes of this subparagraph, "bonuses"
included in "total compensation for services
performed as a member of a professional athletic
team" subject to the allocation described in
Section 302(c)(1) are: bonuses earned as a result
of play (i.e., performance bonuses) during the
season, including bonuses paid for championship,

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playoff or "bowl" games played by a team, or for
selection to all-star league or other honorary
positions; and bonuses paid for signing a
contract, unless the payment of the signing bonus
is not conditional upon the signee playing any
games for the team or performing any subsequent
services for the team or even making the team, the
signing bonus is payable separately from the
salary and any other compensation, and the signing
bonus is nonrefundable.
(3) Sales factor.
(A) The sales factor is a fraction, the numerator of
which is the total sales of the person in this State during
the taxable year, and the denominator of which is the
total sales of the person everywhere during the taxable
year.
(B) Sales of tangible personal property are in this
State if:
(i) The property is delivered or shipped to a
purchaser, other than the United States government,
within this State regardless of the f. o. b. point or
other conditions of the sale; or
(ii) The property is shipped from an office,
store, warehouse, factory or other place of storage in
this State and either the purchaser is the United
States government or the person is not taxable in the

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state of the purchaser; provided, however, that
premises owned or leased by a person who has
independently contracted with the seller for the
printing of newspapers, periodicals or books shall not
be deemed to be an office, store, warehouse, factory
or other place of storage for purposes of this
Section. Sales of tangible personal property are not
in this State if the seller and purchaser would be
members of the same unitary business group but for the
fact that either the seller or purchaser is a person
with 80% or more of total business activity outside of
the United States and the property is purchased for
resale.
(B-1) Patents, copyrights, trademarks, and similar
items of intangible personal property.
(i) Gross receipts from the licensing, sale, or
other disposition of a patent, copyright, trademark,
or similar item of intangible personal property, other
than gross receipts governed by paragraph (B-7) of
this item (3), are in this State to the extent the item
is utilized in this State during the year the gross
receipts are included in gross income.
(ii) Place of utilization.
(I) A patent is utilized in a state to the
extent that it is employed in production,
fabrication, manufacturing, or other processing in

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the state or to the extent that a patented product
is produced in the state. If a patent is utilized
in more than one state, the extent to which it is
utilized in any one state shall be a fraction
equal to the gross receipts of the licensee or
purchaser from sales or leases of items produced,
fabricated, manufactured, or processed within that
state using the patent and of patented items
produced within that state, divided by the total
of such gross receipts for all states in which the
patent is utilized.
(II) A copyright is utilized in a state to the
extent that printing or other publication
originates in the state. If a copyright is
utilized in more than one state, the extent to
which it is utilized in any one state shall be a
fraction equal to the gross receipts from sales or
licenses of materials printed or published in that
state divided by the total of such gross receipts
for all states in which the copyright is utilized.
(III) Trademarks and other items of intangible
personal property governed by this paragraph (B-1)
are utilized in the state in which the commercial
domicile of the licensee or purchaser is located.
(iii) If the state of utilization of an item of
property governed by this paragraph (B-1) cannot be

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determined from the taxpayer's books and records or
from the books and records of any person related to the
taxpayer within the meaning of Section 267(b) of the
Internal Revenue Code, 26 U.S.C. 267, the gross
receipts attributable to that item shall be excluded
from both the numerator and the denominator of the
sales factor.
(B-2) Gross receipts from the license, sale, or other
disposition of patents, copyrights, trademarks, and
similar items of intangible personal property, other than
gross receipts governed by paragraph (B-7) of this item
(3), may be included in the numerator or denominator of
the sales factor only if gross receipts from licenses,
sales, or other disposition of such items comprise more
than 50% of the taxpayer's total gross receipts included
in gross income during the tax year and during each of the
2 immediately preceding tax years; provided that, when a
taxpayer is a member of a unitary business group, such
determination shall be made on the basis of the gross
receipts of the entire unitary business group.
(B-5) For taxable years ending on or after December
31, 2008, except as provided in subsections (ii) through
(vii), receipts from the sale of telecommunications
service or mobile telecommunications service are in this
State if the customer's service address is in this State.
(i) For purposes of this subparagraph (B-5), the

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following terms have the following meanings:
"Ancillary services" means services that are
associated with or incidental to the provision of
"telecommunications services", including, but not
limited to, "detailed telecommunications billing",
"directory assistance", "vertical service", and "voice
mail services".
"Air-to-Ground Radiotelephone service" means a
radio service, as that term is defined in 47 CFR 22.99,
in which common carriers are authorized to offer and
provide radio telecommunications service for hire to
subscribers in aircraft.
"Call-by-call Basis" means any method of charging
for telecommunications services where the price is
measured by individual calls.
"Communications Channel" means a physical or
virtual path of communications over which signals are
transmitted between or among customer channel
termination points.
"Conference bridging service" means an "ancillary
service" that links two or more participants of an
audio or video conference call and may include the
provision of a telephone number. "Conference bridging
service" does not include the "telecommunications
services" used to reach the conference bridge.
"Customer Channel Termination Point" means the

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location where the customer either inputs or receives
the communications.
"Detailed telecommunications billing service"
means an "ancillary service" of separately stating
information pertaining to individual calls on a
customer's billing statement.
"Directory assistance" means an "ancillary
service" of providing telephone number information,
and/or address information.
"Home service provider" means the facilities based
carrier or reseller with which the customer contracts
for the provision of mobile telecommunications
services.
"Mobile telecommunications service" means
commercial mobile radio service, as defined in Section
20.3 of Title 47 of the Code of Federal Regulations as
in effect on June 1, 1999.
"Place of primary use" means the street address
representative of where the customer's use of the
telecommunications service primarily occurs, which
must be the residential street address or the primary
business street address of the customer. In the case
of mobile telecommunications services, "place of
primary use" must be within the licensed service area
of the home service provider.
"Post-paid telecommunication service" means the

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telecommunications service obtained by making a
payment on a call-by-call basis either through the use
of a credit card or payment mechanism such as a bank
card, travel card, credit card, or debit card, or by
charge made to a telephone number which is not
associated with the origination or termination of the
telecommunications service. A post-paid calling
service includes telecommunications service, except a
prepaid wireless calling service, that would be a
prepaid calling service except it is not exclusively a
telecommunication service.
"Prepaid telecommunication service" means the
right to access exclusively telecommunications
services, which must be paid for in advance and which
enables the origination of calls using an access
number or authorization code, whether manually or
electronically dialed, and that is sold in
predetermined units or dollars of which the number
declines with use in a known amount.
"Prepaid Mobile telecommunication service" means a
telecommunications service that provides the right to
utilize mobile wireless service as well as other
non-telecommunication services, including, but not
limited to, ancillary services, which must be paid for
in advance that is sold in predetermined units or
dollars of which the number declines with use in a

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known amount.
"Private communication service" means a
telecommunication service that entitles the customer
to exclusive or priority use of a communications
channel or group of channels between or among
termination points, regardless of the manner in which
such channel or channels are connected, and includes
switching capacity, extension lines, stations, and any
other associated services that are provided in
connection with the use of such channel or channels.
"Service address" means:
(a) The location of the telecommunications
equipment to which a customer's call is charged
and from which the call originates or terminates,
regardless of where the call is billed or paid;
(b) If the location in line (a) is not known,
service address means the origination point of the
signal of the telecommunications services first
identified by either the seller's
telecommunications system or in information
received by the seller from its service provider
where the system used to transport such signals is
not that of the seller; and
(c) If the locations in line (a) and line (b)
are not known, the service address means the
location of the customer's place of primary use.

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"Telecommunications service" means the electronic
transmission, conveyance, or routing of voice, data,
audio, video, or any other information or signals to a
point, or between or among points. The term
"telecommunications service" includes such
transmission, conveyance, or routing in which computer
processing applications are used to act on the form,
code or protocol of the content for purposes of
transmission, conveyance or routing without regard to
whether such service is referred to as voice over
Internet protocol services or is classified by the
Federal Communications Commission as enhanced or value
added. "Telecommunications service" does not include:
(a) Data processing and information services
that allow data to be generated, acquired, stored,
processed, or retrieved and delivered by an
electronic transmission to a purchaser when such
purchaser's primary purpose for the underlying
transaction is the processed data or information;
(b) Installation or maintenance of wiring or
equipment on a customer's premises;
(c) Tangible personal property;
(d) Advertising, including, but not limited
to, directory advertising;
(e) Billing and collection services provided
to third parties;

SB1739 - 26 - LRB104 03450 HLH 13473 b
(f) Internet access service;
(g) Radio and television audio and video
programming services, regardless of the medium,
including the furnishing of transmission,
conveyance and routing of such services by the
programming service provider. Radio and television
audio and video programming services shall
include, but not be limited to, cable service as
defined in 47 USC 522(6) and audio and video
programming services delivered by commercial
mobile radio service providers, as defined in 47
CFR 20.3;
(h) "Ancillary services"; or
(i) Digital products "delivered
electronically", including, but not limited to,
software, music, video, reading materials or
ringtones ring tones.
"Vertical service" means an "ancillary service"
that is offered in connection with one or more
"telecommunications services", which offers advanced
calling features that allow customers to identify
callers and to manage multiple calls and call
connections, including "conference bridging services".
"Voice mail service" means an "ancillary service"
that enables the customer to store, send or receive
recorded messages. "Voice mail service" does not

SB1739 - 27 - LRB104 03450 HLH 13473 b
include any "vertical services" that the customer may
be required to have in order to utilize the "voice mail
service".
(ii) Receipts from the sale of telecommunications
service sold on an individual call-by-call basis are
in this State if either of the following applies:
(a) The call both originates and terminates in
this State.
(b) The call either originates or terminates
in this State and the service address is located
in this State.
(iii) Receipts from the sale of postpaid
telecommunications service at retail are in this State
if the origination point of the telecommunication
signal, as first identified by the service provider's
telecommunication system or as identified by
information received by the seller from its service
provider if the system used to transport
telecommunication signals is not the seller's, is
located in this State.
(iv) Receipts from the sale of prepaid
telecommunications service or prepaid mobile
telecommunications service at retail are in this State
if the purchaser obtains the prepaid card or similar
means of conveyance at a location in this State.
Receipts from recharging a prepaid telecommunications

SB1739 - 28 - LRB104 03450 HLH 13473 b
service or mobile telecommunications service is in
this State if the purchaser's billing information
indicates a location in this State.
(v) Receipts from the sale of private
communication services are in this State as follows:
(a) 100% of receipts from charges imposed at
each channel termination point in this State.
(b) 100% of receipts from charges for the
total channel mileage between each channel
termination point in this State.
(c) 50% of the total receipts from charges for
service segments when those segments are between 2
customer channel termination points, 1 of which is
located in this State and the other is located
outside of this State, which segments are
separately charged.
(d) The receipts from charges for service
segments with a channel termination point located
in this State and in two or more other states, and
which segments are not separately billed, are in
this State based on a percentage determined by
dividing the number of customer channel
termination points in this State by the total
number of customer channel termination points.
(vi) Receipts from charges for ancillary services
for telecommunications service sold to customers at

SB1739 - 29 - LRB104 03450 HLH 13473 b
retail are in this State if the customer's primary
place of use of telecommunications services associated
with those ancillary services is in this State. If the
seller of those ancillary services cannot determine
where the associated telecommunications are located,
then the ancillary services shall be based on the
location of the purchaser.
(vii) Receipts to access a carrier's network or
from the sale of telecommunication services or
ancillary services for resale are in this State as
follows:
(a) 100% of the receipts from access fees
attributable to intrastate telecommunications
service that both originates and terminates in
this State.
(b) 50% of the receipts from access fees
attributable to interstate telecommunications
service if the interstate call either originates
or terminates in this State.
(c) 100% of the receipts from interstate end
user access line charges, if the customer's
service address is in this State. As used in this
subdivision, "interstate end user access line
charges" includes, but is not limited to, the
surcharge approved by the federal communications
commission and levied pursuant to 47 CFR 69.

SB1739 - 30 - LRB104 03450 HLH 13473 b
(d) Gross receipts from sales of
telecommunication services or from ancillary
services for telecommunications services sold to
other telecommunication service providers for
resale shall be sourced to this State using the
apportionment concepts used for non-resale
receipts of telecommunications services if the
information is readily available to make that
determination. If the information is not readily
available, then the taxpayer may use any other
reasonable and consistent method.
(B-7) For taxable years ending on or after December
31, 2008, receipts from the sale of broadcasting services
are in this State if the broadcasting services are
received in this State. For purposes of this paragraph
(B-7), the following terms have the following meanings:
"Advertising revenue" means consideration received
by the taxpayer in exchange for broadcasting services
or allowing the broadcasting of commercials or
announcements in connection with the broadcasting of
film or radio programming, from sponsorships of the
programming, or from product placements in the
programming.
"Audience factor" means the ratio that the
audience or subscribers located in this State of a
station, a network, or a cable system bears to the

SB1739 - 31 - LRB104 03450 HLH 13473 b
total audience or total subscribers for that station,
network, or cable system. The audience factor for film
or radio programming shall be determined by reference
to the books and records of the taxpayer or by
reference to published rating statistics provided the
method used by the taxpayer is consistently used from
year to year for this purpose and fairly represents
the taxpayer's activity in this State.
"Broadcast" or "broadcasting" or "broadcasting
services" means the transmission or provision of film
or radio programming, whether through the public
airwaves, by cable, by direct or indirect satellite
transmission, or by any other means of communication,
either through a station, a network, or a cable
system.
"Film" or "film programming" means the broadcast
on television of any and all performances, events, or
productions, including, but not limited to, news,
sporting events, plays, stories, or other literary,
commercial, educational, or artistic works, either
live or through the use of video tape, disc, or any
other type of format or medium. Each episode of a
series of films produced for television shall
constitute a separate "film" notwithstanding that the
series relates to the same principal subject and is
produced during one or more tax periods.

SB1739 - 32 - LRB104 03450 HLH 13473 b
"Radio" or "radio programming" means the broadcast
on radio of any and all performances, events, or
productions, including, but not limited to, news,
sporting events, plays, stories, or other literary,
commercial, educational, or artistic works, either
live or through the use of an audio tape, disc, or any
other format or medium. Each episode in a series of
radio programming produced for radio broadcast shall
constitute a separate "radio programming"
notwithstanding that the series relates to the same
principal subject and is produced during one or more
tax periods.
(i) In the case of advertising revenue from
broadcasting, the customer is the advertiser and
the service is received in this State if the
commercial domicile of the advertiser is in this
State.
(ii) In the case where film or radio
programming is broadcast by a station, a network,
or a cable system for a fee or other remuneration
received from the recipient of the broadcast, the
portion of the service that is received in this
State is measured by the portion of the recipients
of the broadcast located in this State.
Accordingly, the fee or other remuneration for
such service that is included in the Illinois

SB1739 - 33 - LRB104 03450 HLH 13473 b
numerator of the sales factor is the total of
those fees or other remuneration received from
recipients in Illinois. For purposes of this
paragraph, a taxpayer may determine the location
of the recipients of its broadcast using the
address of the recipient shown in its contracts
with the recipient or using the billing address of
the recipient in the taxpayer's records.
(iii) In the case where film or radio
programming is broadcast by a station, a network,
or a cable system for a fee or other remuneration
from the person providing the programming, the
portion of the broadcast service that is received
by such station, network, or cable system in this
State is measured by the portion of recipients of
the broadcast located in this State. Accordingly,
the amount of revenue related to such an
arrangement that is included in the Illinois
numerator of the sales factor is the total fee or
other total remuneration from the person providing
the programming related to that broadcast
multiplied by the Illinois audience factor for
that broadcast.
(iv) In the case where film or radio
programming is provided by a taxpayer that is a
network or station to a customer for broadcast in

SB1739 - 34 - LRB104 03450 HLH 13473 b
exchange for a fee or other remuneration from that
customer the broadcasting service is received at
the location of the office of the customer from
which the services were ordered in the regular
course of the customer's trade or business.
Accordingly, in such a case the revenue derived by
the taxpayer that is included in the taxpayer's
Illinois numerator of the sales factor is the
revenue from such customers who receive the
broadcasting service in Illinois.
(v) In the case where film or radio
programming is provided by a taxpayer that is not
a network or station to another person for
broadcasting in exchange for a fee or other
remuneration from that person, the broadcasting
service is received at the location of the office
of the customer from which the services were
ordered in the regular course of the customer's
trade or business. Accordingly, in such a case the
revenue derived by the taxpayer that is included
in the taxpayer's Illinois numerator of the sales
factor is the revenue from such customers who
receive the broadcasting service in Illinois.
(B-8) Gross receipts from winnings under the Illinois
Lottery Law from the assignment of a prize under Section
13.1 of the Illinois Lottery Law are received in this

SB1739 - 35 - LRB104 03450 HLH 13473 b
State. This paragraph (B-8) applies only to taxable years
ending on or after December 31, 2013.
(B-9) For taxable years ending on or after December
31, 2019, gross receipts from winnings from pari-mutuel
wagering conducted at a wagering facility licensed under
the Illinois Horse Racing Act of 1975 or from winnings
from gambling games conducted on a riverboat or in a
casino or organization gaming facility licensed under the
Illinois Gambling Act are in this State.
(B-10) For taxable years ending on or after December
31, 2021, gross receipts from winnings from sports
wagering conducted in accordance with the Sports Wagering
Act are in this State.
(C) For taxable years ending before December 31, 2008,
sales, other than sales governed by paragraphs (B), (B-1),
(B-2), and (B-8) are in this State if:
(i) The income-producing activity is performed in
this State; or
(ii) The income-producing activity is performed
both within and without this State and a greater
proportion of the income-producing activity is
performed within this State than without this State,
based on performance costs.
(C-5) For taxable years ending on or after December
31, 2008, sales, other than sales governed by paragraphs
(B), (B-1), (B-2), (B-5), and (B-7), are in this State if

SB1739 - 36 - LRB104 03450 HLH 13473 b
any of the following criteria are met:
(i) Sales from the sale or lease of real property
are in this State if the property is located in this
State.
(ii) Sales from the lease or rental of tangible
personal property are in this State if the property is
located in this State during the rental period. Sales
from the lease or rental of tangible personal property
that is characteristically moving property, including,
but not limited to, motor vehicles, rolling stock,
aircraft, vessels, or mobile equipment are in this
State to the extent that the property is used in this
State.
(iii) In the case of interest, net gains (but not
less than zero) and other items of income from
intangible personal property, the sale is in this
State if:
(a) in the case of a taxpayer who is a dealer
in the item of intangible personal property within
the meaning of Section 475 of the Internal Revenue
Code, the income or gain is received from a
customer in this State. For purposes of this
subparagraph, a customer is in this State if the
customer is an individual, trust or estate who is
a resident of this State and, for all other
customers, if the customer's commercial domicile

SB1739 - 37 - LRB104 03450 HLH 13473 b
is in this State. Unless the dealer has actual
knowledge of the residence or commercial domicile
of a customer during a taxable year, the customer
shall be deemed to be a customer in this State if
the billing address of the customer, as shown in
the records of the dealer, is in this State; or
(a-5) in the case of the sale or exchange of
shares in a Subchapter S corporation or an
interest in a partnership, other than an
investment partnership as defined in paragraph
(11.5) of subsection (a) of Section 1501, the
Subchapter S corporation or partnership was
taxable in this State; for purposes of this
subparagraph, the amount attributable to this
State shall be determined in proportion to the
average of the pass-through entity's Illinois
apportionment factor computed under this Section
in the year of the sale or exchange and the 2 tax
years immediately preceding the year of the sale
or exchange; if the pass-through entity was not in
existence during both of the preceding 2 years,
then only the years in which the pass-through
entity was in existence shall be considered when
computing the average; or
(b) in all other cases, if the
income-producing activity of the taxpayer is

SB1739 - 38 - LRB104 03450 HLH 13473 b
performed in this State or, if the
income-producing activity of the taxpayer is
performed both within and without this State, if a
greater proportion of the income-producing
activity of the taxpayer is performed within this
State than in any other state, based on
performance costs.
(iv) Sales of services are in this State if the
services are received in this State. For the purposes
of this section, gross receipts from the performance
of services provided to a corporation, partnership, or
trust may only be attributed to a state where that
corporation, partnership, or trust has a fixed place
of business. If the state where the services are
received is not readily determinable or is a state
where the corporation, partnership, or trust receiving
the service does not have a fixed place of business,
the services shall be deemed to be received at the
location of the office of the customer from which the
services were ordered in the regular course of the
customer's trade or business. If the ordering office
cannot be determined, the services shall be deemed to
be received at the office of the customer to which the
services are billed. If the taxpayer is not taxable in
the state in which the services are received, the sale
must be excluded from both the numerator and the

SB1739 - 39 - LRB104 03450 HLH 13473 b
denominator of the sales factor. The Department shall
adopt rules prescribing where specific types of
service are received, including, but not limited to,
publishing, and utility service.
(D) For taxable years ending on or after December 31,
1995, the following items of income shall not be included
in the numerator or denominator of the sales factor:
dividends; amounts included under Section 78 of the
Internal Revenue Code; and Subpart F income as defined in
Section 952 of the Internal Revenue Code. No inference
shall be drawn from the enactment of this paragraph (D) in
construing this Section for taxable years ending before
December 31, 1995.
(E) Paragraphs (B-1) and (B-2) shall apply to tax
years ending on or after December 31, 1999, provided that
a taxpayer may elect to apply the provisions of these
paragraphs to prior tax years. Such election shall be made
in the form and manner prescribed by the Department, shall
be irrevocable, and shall apply to all tax years; provided
that, if a taxpayer's Illinois income tax liability for
any tax year, as assessed under Section 903 prior to
January 1, 1999, was computed in a manner contrary to the
provisions of paragraphs (B-1) or (B-2), no refund shall
be payable to the taxpayer for that tax year to the extent
such refund is the result of applying the provisions of
paragraph (B-1) or (B-2) retroactively. In the case of a

SB1739 - 40 - LRB104 03450 HLH 13473 b
unitary business group, such election shall apply to all
members of such group for every tax year such group is in
existence, but shall not apply to any taxpayer for any
period during which that taxpayer is not a member of such
group.
(b) Insurance companies.
(1) In general. Except as otherwise provided by
paragraph (2), business income of an insurance company for
a taxable year shall be apportioned to this State by
multiplying such income by a fraction, the numerator of
which is the direct premiums written for insurance upon
property or risk in this State, and the denominator of
which is the direct premiums written for insurance upon
property or risk everywhere. For purposes of this
subsection, the term "direct premiums written" means the
total amount of direct premiums written, assessments and
annuity considerations as reported for the taxable year on
the annual statement filed by the company with the
Illinois Director of Insurance in the form approved by the
National Convention of Insurance Commissioners or such
other form as may be prescribed in lieu thereof.
(2) Reinsurance. If the principal source of premiums
written by an insurance company consists of premiums for
reinsurance accepted by it, the business income of such
company shall be apportioned to this State by multiplying
such income by a fraction, the numerator of which is the

SB1739 - 41 - LRB104 03450 HLH 13473 b
sum of (i) direct premiums written for insurance upon
property or risk in this State, plus (ii) premiums written
for reinsurance accepted in respect of property or risk in
this State, and the denominator of which is the sum of
(iii) direct premiums written for insurance upon property
or risk everywhere, plus (iv) premiums written for
reinsurance accepted in respect of property or risk
everywhere. For purposes of this paragraph, premiums
written for reinsurance accepted in respect of property or
risk in this State, whether or not otherwise determinable,
may, at the election of the company, be determined on the
basis of the proportion which premiums written for
reinsurance accepted from companies commercially domiciled
in Illinois bears to premiums written for reinsurance
accepted from all sources, or, alternatively, in the
proportion which the sum of the direct premiums written
for insurance upon property or risk in this State by each
ceding company from which reinsurance is accepted bears to
the sum of the total direct premiums written by each such
ceding company for the taxable year. The election made by
a company under this paragraph for its first taxable year
ending on or after December 31, 2011, shall be binding for
that company for that taxable year and for all subsequent
taxable years, and may be altered only with the written
permission of the Department, which shall not be
unreasonably withheld.

SB1739 - 42 - LRB104 03450 HLH 13473 b
(c) Financial organizations.
(1) In general. For taxable years ending before
December 31, 2008, business income of a financial
organization shall be apportioned to this State by
multiplying such income by a fraction, the numerator of
which is its business income from sources within this
State, and the denominator of which is its business income
from all sources. For the purposes of this subsection, the
business income of a financial organization from sources
within this State is the sum of the amounts referred to in
subparagraphs (A) through (E) following, but excluding the
adjusted income of an international banking facility as
determined in paragraph (2):
(A) Fees, commissions or other compensation for
financial services rendered within this State;
(B) Gross profits from trading in stocks, bonds or
other securities managed within this State;
(C) Dividends, and interest from Illinois
customers, which are received within this State;
(D) Interest charged to customers at places of
business maintained within this State for carrying
debit balances of margin accounts, without deduction
of any costs incurred in carrying such accounts; and
(E) Any other gross income resulting from the
operation as a financial organization within this
State.

SB1739 - 43 - LRB104 03450 HLH 13473 b
In computing the amounts referred to in paragraphs (A)
through (E) of this subsection, any amount received by a
member of an affiliated group (determined under Section
1504(a) of the Internal Revenue Code but without reference
to whether any such corporation is an "includible
corporation" under Section 1504(b) of the Internal Revenue
Code) from another member of such group shall be included
only to the extent such amount exceeds expenses of the
recipient directly related thereto.
(2) International Banking Facility. For taxable years
ending before December 31, 2008:
(A) Adjusted Income. The adjusted income of an
international banking facility is its income reduced
by the amount of the floor amount.
(B) Floor Amount. The floor amount shall be the
amount, if any, determined by multiplying the income
of the international banking facility by a fraction,
not greater than one, which is determined as follows:
(i) The numerator shall be:
The average aggregate, determined on a
quarterly basis, of the financial organization's
loans to banks in foreign countries, to foreign
domiciled borrowers (except where secured
primarily by real estate) and to foreign
governments and other foreign official
institutions, as reported for its branches,

SB1739 - 44 - LRB104 03450 HLH 13473 b
agencies and offices within the state on its
"Consolidated Report of Condition", Schedule A,
Lines 2.c., 5.b., and 7.a., which was filed with
the Federal Deposit Insurance Corporation and
other regulatory authorities, for the year 1980,
minus
The average aggregate, determined on a
quarterly basis, of such loans (other than loans
of an international banking facility), as reported
by the financial institution for its branches,
agencies and offices within the state, on the
corresponding Schedule and lines of the
Consolidated Report of Condition for the current
taxable year, provided, however, that in no case
shall the amount determined in this clause (the
subtrahend) exceed the amount determined in the
preceding clause (the minuend); and
(ii) the denominator shall be the average
aggregate, determined on a quarterly basis, of the
international banking facility's loans to banks in
foreign countries, to foreign domiciled borrowers
(except where secured primarily by real estate)
and to foreign governments and other foreign
official institutions, which were recorded in its
financial accounts for the current taxable year.
(C) Change to Consolidated Report of Condition and

SB1739 - 45 - LRB104 03450 HLH 13473 b
in Qualification. In the event the Consolidated Report
of Condition which is filed with the Federal Deposit
Insurance Corporation and other regulatory authorities
is altered so that the information required for
determining the floor amount is not found on Schedule
A, lines 2.c., 5.b. and 7.a., the financial
institution shall notify the Department and the
Department may, by regulations or otherwise, prescribe
or authorize the use of an alternative source for such
information. The financial institution shall also
notify the Department should its international banking
facility fail to qualify as such, in whole or in part,
or should there be any amendment or change to the
Consolidated Report of Condition, as originally filed,
to the extent such amendment or change alters the
information used in determining the floor amount.
(3) For taxable years ending on or after December 31,
2008, the business income of a financial organization
shall be apportioned to this State by multiplying such
income by a fraction, the numerator of which is its gross
receipts from sources in this State or otherwise
attributable to this State's marketplace and the
denominator of which is its gross receipts everywhere
during the taxable year. "Gross receipts" for purposes of
this subparagraph (3) means gross income, including net
taxable gain on disposition of assets, including

SB1739 - 46 - LRB104 03450 HLH 13473 b
securities and money market instruments, when derived from
transactions and activities in the regular course of the
financial organization's trade or business. The following
examples are illustrative:
(i) Receipts from the lease or rental of real or
tangible personal property are in this State if the
property is located in this State during the rental
period. Receipts from the lease or rental of tangible
personal property that is characteristically moving
property, including, but not limited to, motor
vehicles, rolling stock, aircraft, vessels, or mobile
equipment are from sources in this State to the extent
that the property is used in this State.
(ii) Interest income, commissions, fees, gains on
disposition, and other receipts from assets in the
nature of loans that are secured primarily by real
estate or tangible personal property are from sources
in this State if the security is located in this State.
(iii) Interest income, commissions, fees, gains on
disposition, and other receipts from consumer loans
that are not secured by real or tangible personal
property are from sources in this State if the debtor
is a resident of this State.
(iv) Interest income, commissions, fees, gains on
disposition, and other receipts from commercial loans
and installment obligations that are not secured by

SB1739 - 47 - LRB104 03450 HLH 13473 b
real or tangible personal property are from sources in
this State if the proceeds of the loan are to be
applied in this State. If it cannot be determined
where the funds are to be applied, the income and
receipts are from sources in this State if the office
of the borrower from which the loan was negotiated in
the regular course of business is located in this
State. If the location of this office cannot be
determined, the income and receipts shall be excluded
from the numerator and denominator of the sales
factor.
(v) Interest income, fees, gains on disposition,
service charges, merchant discount income, and other
receipts from credit card receivables are from sources
in this State if the card charges are regularly billed
to a customer in this State.
(vi) Receipts from the performance of services,
including, but not limited to, fiduciary, advisory,
and brokerage services, are in this State if the
services are received in this State within the meaning
of subparagraph (a)(3)(C-5)(iv) of this Section.
(vii) Receipts from the issuance of travelers
checks and money orders are from sources in this State
if the checks and money orders are issued from a
location within this State.
(viii) For tax years ending before December 31,

SB1739 - 48 - LRB104 03450 HLH 13473 b
2024, receipts from investment assets and activities
and trading assets and activities are included in the
receipts factor as follows:
(1) Interest, dividends, net gains (but not
less than zero) and other income from investment
assets and activities from trading assets and
activities shall be included in the receipts
factor. Investment assets and activities and
trading assets and activities include, but are not
limited to: investment securities; trading account
assets; federal funds; securities purchased and
sold under agreements to resell or repurchase;
options; futures contracts; forward contracts;
notional principal contracts such as swaps;
equities; and foreign currency transactions. With
respect to the investment and trading assets and
activities described in subparagraphs (A) and (B)
of this paragraph, the receipts factor shall
include the amounts described in such
subparagraphs.
(A) The receipts factor shall include the
amount by which interest from federal funds
sold and securities purchased under resale
agreements exceeds interest expense on federal
funds purchased and securities sold under
repurchase agreements.

SB1739 - 49 - LRB104 03450 HLH 13473 b
(B) The receipts factor shall include the
amount by which interest, dividends, gains and
other income from trading assets and
activities, including, but not limited to,
assets and activities in the matched book, in
the arbitrage book, and foreign currency
transactions, exceed amounts paid in lieu of
interest, amounts paid in lieu of dividends,
and losses from such assets and activities.
(2) The numerator of the receipts factor
includes interest, dividends, net gains (but not
less than zero), and other income from investment
assets and activities and from trading assets and
activities described in paragraph (1) of this
subsection that are attributable to this State.
(A) The amount of interest, dividends, net
gains (but not less than zero), and other
income from investment assets and activities
in the investment account to be attributed to
this State and included in the numerator is
determined by multiplying all such income from
such assets and activities by a fraction, the
numerator of which is the gross income from
such assets and activities which are properly
assigned to a fixed place of business of the
taxpayer within this State and the denominator

SB1739 - 50 - LRB104 03450 HLH 13473 b
of which is the gross income from all such
assets and activities.
(B) The amount of interest from federal
funds sold and purchased and from securities
purchased under resale agreements and
securities sold under repurchase agreements
attributable to this State and included in the
numerator is determined by multiplying the
amount described in subparagraph (A) of
paragraph (1) of this subsection from such
funds and such securities by a fraction, the
numerator of which is the gross income from
such funds and such securities which are
properly assigned to a fixed place of business
of the taxpayer within this State and the
denominator of which is the gross income from
all such funds and such securities.
(C) The amount of interest, dividends,
gains, and other income from trading assets
and activities, including, but not limited to,
assets and activities in the matched book, in
the arbitrage book and foreign currency
transactions (but excluding amounts described
in subparagraphs (A) or (B) of this
paragraph), attributable to this State and
included in the numerator is determined by

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multiplying the amount described in
subparagraph (B) of paragraph (1) of this
subsection by a fraction, the numerator of
which is the gross income from such trading
assets and activities which are properly
assigned to a fixed place of business of the
taxpayer within this State and the denominator
of which is the gross income from all such
assets and activities.
(D) Properly assigned, for purposes of
this paragraph (2) of this subsection, means
the investment or trading asset or activity is
assigned to the fixed place of business with
which it has a preponderance of substantive
contacts. An investment or trading asset or
activity assigned by the taxpayer to a fixed
place of business without the State shall be
presumed to have been properly assigned if:
(i) the taxpayer has assigned, in the
regular course of its business, such asset
or activity on its records to a fixed
place of business consistent with federal
or state regulatory requirements;
(ii) such assignment on its records is
based upon substantive contacts of the
asset or activity to such fixed place of

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business; and
(iii) the taxpayer uses such records
reflecting assignment of such assets or
activities for the filing of all state and
local tax returns for which an assignment
of such assets or activities to a fixed
place of business is required.
(E) The presumption of proper assignment
of an investment or trading asset or activity
provided in subparagraph (D) of paragraph (2)
of this subsection may be rebutted upon a
showing by the Department, supported by a
preponderance of the evidence, that the
preponderance of substantive contacts
regarding such asset or activity did not occur
at the fixed place of business to which it was
assigned on the taxpayer's records. If the
fixed place of business that has a
preponderance of substantive contacts cannot
be determined for an investment or trading
asset or activity to which the presumption in
subparagraph (D) of paragraph (2) of this
subsection does not apply or with respect to
which that presumption has been rebutted, that
asset or activity is properly assigned to the
state in which the taxpayer's commercial

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domicile is located. For purposes of this
subparagraph (E), it shall be presumed,
subject to rebuttal, that taxpayer's
commercial domicile is in the state of the
United States or the District of Columbia to
which the greatest number of employees are
regularly connected with the management of the
investment or trading income or out of which
they are working, irrespective of where the
services of such employees are performed, as
of the last day of the taxable year.
(ix) For tax years ending on or after December 31,
2024, receipts from investment assets and activities
and trading assets and activities are included in the
receipts factor as follows:
(1) Interest, dividends, net gains (but not
less than zero), and other income from investment
assets and activities from trading assets and
activities shall be included in the receipts
factor. Investment assets and activities and
trading assets and activities include, but are not
limited to the following: investment securities;
trading account assets; federal funds; securities
purchased and sold under agreements to resell or
repurchase; options; futures contracts; forward
contracts; notional principal contracts, such as

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swaps; equities; and foreign currency
transactions. With respect to the investment and
trading assets and activities described in
subparagraphs (A) and (B) of this paragraph, the
receipts factor shall include the amounts
described in those subparagraphs.
(A) The receipts factor shall include the
amount by which interest from federal funds
sold and securities purchased under resale
agreements exceeds interest expense on federal
funds purchased and securities sold under
repurchase agreements.
(B) The receipts factor shall include the
amount by which interest, dividends, gains and
other income from trading assets and
activities, including, but not limited to,
assets and activities in the matched book, in
the arbitrage book, and foreign currency
transactions, exceed amounts paid in lieu of
interest, amounts paid in lieu of dividends,
and losses from such assets and activities.
(2) The numerator of the receipts factor
includes interest, dividends, net gains (but not
less than zero), and other income from investment
assets and activities and from trading assets and
activities described in paragraph (1) of this

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subsection that are attributable to this State.
(A) The amount of interest, dividends, net
gains (but not less than zero), and other
income from investment assets and activities
in the investment account to be attributed to
this State and included in the numerator is
determined by multiplying all of the income
from those assets and activities by a
fraction, the numerator of which is the total
receipts included in the numerator pursuant to
items (i) through (vii) of this subparagraph
(3) and the denominator of which is all total
receipts included in the denominator, other
than interest, dividends, net gains (but not
less than zero), and other income from
investment assets and activities and trading
assets and activities.
(B) The amount of interest from federal
funds sold and purchased and from securities
purchased under resale agreements and
securities sold under repurchase agreements
attributable to this State and included in the
numerator is determined by multiplying the
amount described in subparagraph (A) of
paragraph (1) of this subsection from such
funds and such securities by a fraction, the

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numerator of which is the total receipts
included in the numerator pursuant to items
(i) through (vii) of this subparagraph (3) and
the denominator of which is all total receipts
included in the denominator, other than
interest, dividends, net gains (but not less
than zero), and other income from investment
assets and activities and trading assets and
activities.
(C) The amount of interest, dividends,
gains, and other income from trading assets
and activities, including, but not limited to,
assets and activities in the matched book, in
the arbitrage book and foreign currency
transactions (but excluding amounts described
in subparagraphs (A) or (B) of this
paragraph), attributable to this State and
included in the numerator is determined by
multiplying the amount described in
subparagraph (B) of paragraph (1) of this
subsection by a fraction, the numerator of
which is the total receipts included in the
numerator pursuant to items (i) through (vii)
of this subparagraph (3) and the denominator
of which is all total receipts included in the
denominator, other than interest, dividends,

SB1739 - 57 - LRB104 03450 HLH 13473 b
net gains (but not less than zero), and other
income from investment assets and activities
and trading assets and activities.
(4) (Blank).
(5) (Blank).
(c-1) Federally regulated exchanges. For taxable years
ending on or after December 31, 2012, business income of a
federally regulated exchange shall, at the option of the
federally regulated exchange, be apportioned to this State by
multiplying such income by a fraction, the numerator of which
is its business income from sources within this State, and the
denominator of which is its business income from all sources.
For purposes of this subsection, the business income within
this State of a federally regulated exchange is the sum of the
following:
(1) Receipts attributable to transactions executed on
a physical trading floor if that physical trading floor is
located in this State.
(2) Receipts attributable to all other matching,
execution, or clearing transactions, including without
limitation receipts from the provision of matching,
execution, or clearing services to another entity,
multiplied by (i) for taxable years ending on or after
December 31, 2012 but before December 31, 2013, 63.77%;
and (ii) for taxable years ending on or after December 31,
2013, 27.54%.

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(3) All other receipts not governed by subparagraphs
(1) or (2) of this subsection (c-1), to the extent the
receipts would be characterized as "sales in this State"
under item (3) of subsection (a) of this Section.
"Federally regulated exchange" means (i) a "registered
entity" within the meaning of 7 U.S.C. Section 1a(40)(A), (B),
or (C), (ii) an "exchange" or "clearing agency" within the
meaning of 15 U.S.C. Section 78c (a)(1) or (23), (iii) any such
entities regulated under any successor regulatory structure to
the foregoing, and (iv) all taxpayers who are members of the
same unitary business group as a federally regulated exchange,
determined without regard to the prohibition in Section
1501(a)(27) of this Act against including in a unitary
business group taxpayers who are ordinarily required to
apportion business income under different subsections of this
Section; provided that this subparagraph (iv) shall apply only
if 50% or more of the business receipts of the unitary business
group determined by application of this subparagraph (iv) for
the taxable year are attributable to the matching, execution,
or clearing of transactions conducted by an entity described
in subparagraph (i), (ii), or (iii) of this paragraph.
In no event shall the Illinois apportionment percentage
computed in accordance with this subsection (c-1) for any
taxpayer for any tax year be less than the Illinois
apportionment percentage computed under this subsection (c-1)
for that taxpayer for the first full tax year ending on or

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after December 31, 2013 for which this subsection (c-1)
applied to the taxpayer.
(d) Transportation services. For taxable years ending
before December 31, 2008, business income derived from
furnishing transportation services shall be apportioned to
this State in accordance with paragraphs (1) and (2):
(1) Such business income (other than that derived from
transportation by pipeline) shall be apportioned to this
State by multiplying such income by a fraction, the
numerator of which is the revenue miles of the person in
this State, and the denominator of which is the revenue
miles of the person everywhere. For purposes of this
paragraph, a revenue mile is the transportation of 1
passenger or 1 net ton of freight the distance of 1 mile
for a consideration. Where a person is engaged in the
transportation of both passengers and freight, the
fraction above referred to shall be determined by means of
an average of the passenger revenue mile fraction and the
freight revenue mile fraction, weighted to reflect the
person's
(A) relative railway operating income from total
passenger and total freight service, as reported to
the Interstate Commerce Commission, in the case of
transportation by railroad, and
(B) relative gross receipts from passenger and
freight transportation, in case of transportation

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other than by railroad.
(2) Such business income derived from transportation
by pipeline shall be apportioned to this State by
multiplying such income by a fraction, the numerator of
which is the revenue miles of the person in this State, and
the denominator of which is the revenue miles of the
person everywhere. For the purposes of this paragraph, a
revenue mile is the transportation by pipeline of 1 barrel
of oil, 1,000 cubic feet of gas, or of any specified
quantity of any other substance, the distance of 1 mile
for a consideration.
(3) For taxable years ending on or after December 31,
2008, business income derived from providing
transportation services other than airline services shall
be apportioned to this State by using a fraction, (a) the
numerator of which shall be (i) all receipts from any
movement or shipment of people, goods, mail, oil, gas, or
any other substance (other than by airline) that both
originates and terminates in this State, plus (ii) that
portion of the person's gross receipts from movements or
shipments of people, goods, mail, oil, gas, or any other
substance (other than by airline) that originates in one
state or jurisdiction and terminates in another state or
jurisdiction, that is determined by the ratio that the
miles traveled in this State bears to total miles
everywhere and (b) the denominator of which shall be all

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revenue derived from the movement or shipment of people,
goods, mail, oil, gas, or any other substance (other than
by airline). Where a taxpayer is engaged in the
transportation of both passengers and freight, the
fraction above referred to shall first be determined
separately for passenger miles and freight miles. Then an
average of the passenger miles fraction and the freight
miles fraction shall be weighted to reflect the
taxpayer's:
(A) relative railway operating income from total
passenger and total freight service, as reported to
the Surface Transportation Board, in the case of
transportation by railroad; and
(B) relative gross receipts from passenger and
freight transportation, in case of transportation
other than by railroad.
(4) For taxable years ending on or after December 31,
2008, business income derived from furnishing airline
transportation services shall be apportioned to this State
by multiplying such income by a fraction, the numerator of
which is the revenue miles of the person in this State, and
the denominator of which is the revenue miles of the
person everywhere. For purposes of this paragraph, a
revenue mile is the transportation of one passenger or one
net ton of freight the distance of one mile for a
consideration. If a person is engaged in the

SB1739 - 62 - LRB104 03450 HLH 13473 b
transportation of both passengers and freight, the
fraction above referred to shall be determined by means of
an average of the passenger revenue mile fraction and the
freight revenue mile fraction, weighted to reflect the
person's relative gross receipts from passenger and
freight airline transportation.
(e) Combined apportionment. Where 2 or more persons are
engaged in a unitary business as described in subsection
(a)(27) of Section 1501, a part of which is conducted in this
State by one or more members of the group, the business income
attributable to this State by any such member or members shall
be apportioned by means of the combined apportionment method.
(f) Alternative allocation. If the allocation and
apportionment provisions of subsections (a) through (e) and of
subsection (h) do not, for taxable years ending before
December 31, 2008, fairly represent the extent of a person's
business activity in this State, or, for taxable years ending
on or after December 31, 2008, fairly represent the market for
the person's goods, services, or other sources of business
income, the person may petition for, or the Director may,
without a petition, permit or require, in respect of all or any
part of the person's business activity, if reasonable:
(1) Separate accounting;
(2) The exclusion of any one or more factors;
(3) The inclusion of one or more additional factors
which will fairly represent the person's business

SB1739 - 63 - LRB104 03450 HLH 13473 b
activities or market in this State; or
(4) The employment of any other method to effectuate
an equitable allocation and apportionment of the person's
business income.
(g) Cross-reference Cross reference. For allocation of
business income by residents, see Section 301(a).
(h) For tax years ending on or after December 31, 1998, the
apportionment factor of persons who apportion their business
income to this State under subsection (a) shall be equal to:
(1) for tax years ending on or after December 31, 1998
and before December 31, 1999, 16 2/3% of the property
factor plus 16 2/3% of the payroll factor plus 66 2/3% of
the sales factor;
(2) for tax years ending on or after December 31, 1999
and before December 31, 2000, 8 1/3% of the property
factor plus 8 1/3% of the payroll factor plus 83 1/3% of
the sales factor;
(3) for tax years ending on or after December 31,
2000, the sales factor.
If, in any tax year ending on or after December 31, 1998 and
before December 31, 2000, the denominator of the payroll,
property, or sales factor is zero, the apportionment factor
computed in paragraph (1) or (2) of this subsection for that
year shall be divided by an amount equal to 100% minus the
percentage weight given to each factor whose denominator is
equal to zero.

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(Source: P.A. 102-40, eff. 6-25-21; 102-558, eff. 8-20-21;
103-592, eff. 6-7-24; revised 10-16-24.)