Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart M - BUSINESS INCOME OF PERSONS OTHER THAN RESIDENTS › Section 100.3373 - Sales Factor for Publishing

Current through Register Vol. 48, No. 28, July 12, 2024
a) For
				taxable years ending on or after December 31, 2008, sales of services (other
				than sales covered by IITA Section 304(a)(3)(B-1), (B-2) and (B-5)) are in this
				State if the services are received in this State. The Department may adopt
				rules prescribing where specific types of service are received, including, but
				not limited to, broadcast, cable, advertising, publishing, and utility service.
				(IITA Section 304(a)(3)(C-5)(iv)) This Section provides guidance for
				determining where publishing services are received and applies only to the
				gross receipts from publishing services of a taxpayer required to source gross
				receipts under IITA Section 304(a)(3)(C-5) in computing its sales
				factor.
b) Definitions. For
				purposes of this Section, the following terms have the following meanings:
1) "Circulation factor" means, for each
				individual publication by the taxpayer of published material containing
				advertising, the ratio that the taxpayer's in-state circulation to purchasers
				and subscribers of the published material bears to its total circulation of the
				published material to purchasers and subscribers everywhere. If the geographic
				location of purchasers and subscribers of a publication is determined by the
				taxpayer for a business purpose (for example, in determining advertising
				rates), the circulation factor shall be determined for that publication using
				the geographic information used by the taxpayer for that purpose. Otherwise,
				the circulation factor shall be determined from the taxpayer's books and
				records or, if the books and records of the taxpayer are inadequate to allow
				the determination of the circulation factor of a publication or if the taxpayer
				so elects, the circulation factor for a publication shall be determined by
				reference to the rating statistics as reflected in such sources as Audit Bureau
				of Circulations, Internet World Stats, or other comparable sources, provided
				that the source selected is consistently used from year to year for that
				purpose.
EXAMPLE 1: Company A publishes advertising on the Internet
				  for its customers. In order to calculate its circulation factor, Company A
				  elects to utilize Internet World Stats. Company A determines its circulation
				  factor by multiplying Illinois' population by the Internet penetration
				  percentage of the United States, as reported on Internet World Stats, divided
				  by the combined populations of the jurisdictions in which Company A does
				  business multiplied by their respective Internet penetration percentages as
				  reported on Internet World Stats. Company A must use this method consistently
				  from year to year to compute its circulation factor.
2) "Publication" or "published material"
				includes, without limitation, the physical embodiment or printed version of any
				thought or expression, including, without limitation, a play, story, article,
				column or other literary, commercial, educational, artistic or other written or
				printed work. The determination of whether an item is or consists of published
				material shall be made without regard to its content. Published material may
				take the form of a book, newspaper, magazine, periodical, trade journal or any
				other form of printed matter and may be contained on any property or medium
				(including any electronic medium, such as, for example, the internet, but not
				including any broadcasting medium governed by IITA Section
				304(a)(3)(B-7)).
3) "Publishing" or
				"publishing services" means deriving business income from publishing, selling,
				licensing (other than licensing to another person for purposes of printing or
				other publication of the licensed material by that person within the meaning of
				IITA Section 304(a)(3)(B-1)) or distributing newspapers, magazines,
				periodicals, trade journals or other published material. "Publishing" or
				"publishing services" does not include delivery of materials published by a
				third party, and does not include delivery of materials published by the
				taxpayer when a separate charge is made for delivery. Fees for delivery
				services performed by a taxpayer who is not itself the publisher of the
				materials (such as a newspaper carrier) or that are charged separately by the
				publisher are sourced under Section
				100.3370(c)(5),
				not under this Section.
4)
				"Purchaser" and "subscriber" mean the individual, residence, business or other
				outlet that is the ultimate or final recipient of the published material.
				Neither term shall mean or include a wholesaler, retailer or other distributor
				of published material.