Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart M - BUSINESS INCOME OF PERSONS OTHER THAN RESIDENTS › Section 100.3370 - Sales Factor (IITA Section 304)

Current through Register Vol. 48, No. 28, July 12, 2024
a)
				In General
1) IITA Section 1501(a)(21)
				defines the term "sales" to mean all gross receipts of the person not allocated
				under IITA Sections 301, 302 and 303. Thus, for the purposes of the sales
				factor of the apportionment formula for each trade or business of the person,
				the term "sales" means all gross receipts derived by the person from
				transactions and activity in the regular course of his or her trade or
				business. The following are rules for determining "sales" in various
				situations, except in instances in which an alternative method of determining
				the sales factor is prescribed in Section
				100.3380. If the determination
				prescribed by this Section does not clearly reflect the taxpayer's business
				activities in Illinois (for taxable years ending before December 31, 2008) or
				the market for the taxpayer's goods, services or other sources of income in
				Illinois (for taxable years ending on or after December 31, 2008), the taxpayer
				may request the use of an alternative method of apportionment under Section
				100.3390.
A) In the case of a person engaged in
				manufacturing and selling or purchasing and reselling goods or products,
				"sales" includes all gross receipts from the sales of those goods or products
				(or other property of a kind that would properly be included in the inventory
				of the person if on hand at the close of the tax period) held by the person
				primarily for sale to customers in the ordinary course of its trade or
				business. Gross receipts for this purpose means gross sales less returns and
				allowances, and includes all interest income, service charges, carrying
				charges, or time-price differential charges attendant to those sales. Federal
				and State excise taxes (including sales taxes) shall be included as part of the
				receipts if the taxes are passed on to the buyer or included as part of the
				selling price of the product.
B) In
				the case of cost plus fixed fee contracts, such as the operation of a
				government-owned plant for a fee, "sales" includes the entire reimbursed cost,
				plus the fee.
C) In the case of a
				person engaged in providing services, such as the operation of an advertising
				agency, or the performance of equipment service contracts, or research and
				development contracts, "sales" includes the gross receipts from the performance
				of those services, including fees, commissions and similar items.
D) In the case of a person engaged in renting
				real or tangible property, "sales" includes the gross receipts from the rental,
				lease or licensing of the use of the property.
E) In the case of a person engaged in the
				sale, assignment or licensing of intangible personal property such as patents
				and copyrights, "sales" includes the gross receipts therefrom.
F) If a person derives receipts from the sale
				of equipment used in its business, those receipts constitute "sales". For
				example, a truck express company owns a fleet of trucks and sells its trucks
				under a regular replacement program. The gross receipts from the sales of the
				trucks shall be included in the sales factor.