Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart M - BUSINESS INCOME OF PERSONS OTHER THAN RESIDENTS › Section 100.3405 - Apportionment of Business Income of Financial Organizations for Taxable Years Ending on or after December 31, 2008 (IITA Section 304(c))

Current through Register Vol. 48, No. 28, July 12, 2024
a) In General. 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. (IITA Section
				304(c)(3)) Any gross receipt that is excluded from base income or subtracted in
				the computation of base income of the financial organization must be excluded
				from the numerator and denominator of this formula. See Continental Illinois
				National Bank and Trust Company of Chicago v. Lenckos, 102 Ill.2d 210 (1984).
				For example, dividends deducted from federal taxable income under
				26 USC
				243 or subtracted in the computation of base
				income under IITA Section 203(b)(2)(O) are excluded from the apportionment
				formula.
b) Definitions. For
				purposes of this Section, the following definitions shall apply:
1) Fixed Place of Business. The term "fixed
				place of business" has the same meaning as that term is given in Section 864 of
				the Internal Revenue Code and the related Treasury regulations. (IITA Section
				1501(a)(9.5 ))
A) As a general rule, a "fixed
				place of business" is a fixed facility, that is, a place, site, structure or
				other similar facility, through which the taxpayer engages in a trade or
				business. (See 26 CFR 1.864 - 7(b)(1).)
B) A taxpayer is not considered to have a
				fixed place of business merely because the taxpayer uses another person's fixed
				place of business, whether or not the other person and the taxpayer are related
				persons, through which to transact a trade or business, if the trade or
				business activities of the taxpayer in that fixed place of business are
				relatively sporadic or infrequent, taking into account the overall needs and
				conduct of that trade or business. (See 26 CFR 1.864 - 7(b)(2).)
C) A fixed place of business of an agent of
				the taxpayer who is not an independent agent is not a fixed place of business
				of the taxpayer unless the agent has the authority to negotiate and conclude
				contracts in the name of the taxpayer, and regularly exercises that authority.
				(See 26 CFR 1.864 - 7(d)(1)(i).)
D)
				A fixed place of business of an independent agent of the taxpayer shall not be
				treated as the office or other fixed place of business of the taxpayer,
				irrespective of whether the agent has authority to negotiate and conclude
				contracts in the name of the principal and regularly exercises that authority.
				(See 26 CFR 1.864 - 7(d)(2).)
E)
				For purposes of this subsection (b)(1), "independent agent" means a general
				commission agent, broker or other agent of an independent status acting in the
				ordinary course of his or her business in that capacity. (See 26 CFR 1.864 -
				7(d)(3).)