Illinois Administrative Code › Title 86 - REVENUE › Part 100 - INCOME TAX › Subpart EE - DEFINITIONS › Section 100.9715 - Transportation Companies (IITA Section 304(d))

Current through Register Vol. 48, No. 28, July 12, 2024
a) Transportation company. The term
				"transportation company" means any person deriving 80 percent or more of its
				gross income, averaged over a period of three years, which includes the current
				tax year and the immediately preceding two tax years, from furnishing
				transportation services and ancillary services.
1) For purposes of this subsection (a), gross
				income shall include only amounts that are received in the ordinary course of
				the person's regular business activities and that are included in net income
				under the IITA. For purposes of determining whether a person is predominantly
				engaged in the business activities of a transportation company when a person is
				formed in a current tax year or in its immediately preceding tax year, only the
				years for which the person is in existence will be used in determining whether
				the person meets the 80 percent test.
2) The treatment of items of income that are
				not included in apportionable business income is not affected by the
				classification of the person as a transportation company, and those items are
				therefore disregarded for purposes of the gross income test. For example,
				interest received on United States Treasury obligations is excluded from
				Illinois base income and, accordingly, is disregarded for purposes of
				determining whether the business income of a person should be apportioned using
				the transportation company formula. Similarly, dividends received by a
				corporation shall be disregarded to the extent the dividends are deducted from
				federal taxable income under
				26 USC
				243 or are subtracted in the computation of
				Illinois base income under IITA Section 203(b)(2)(O).
3) In the case of a sale or disposition of
				any asset (whether tangible or intangible, and whether the asset is part of the
				person's stock in trade) that occurs in the ordinary course of a person's
				regular business activities, only the net gain shall be taken into account for
				purposes of the gross income test. Thus, for example, gross income from the
				sale of inventory is equal to its gross receipts minus the cost of goods sold,
				while gross income from the sale of stock is equal to the sales price minus any
				brokerage commission and minus the person's basis in the stock. If gross income
				from a transaction is negative, the loss shall not be considered for purposes
				of the gross income test.
4) Income
				that results from transactions outside the ordinary course of a person's
				regular business activities is not taken into account for the purposes of the
				gross income test. For example, amounts received from the sale of a person's
				headquarters shall be disregarded, whether or not the gain is characterized as
				business income.
5) In applying the
				gross income test, a person's transactions with a person to which it is related
				(including transactions with a member of the person's unitary business group
				that are eliminated in combination under Section
				100.3320(d)
				of this Part) shall be treated in the same manner as transactions between the
				person and an unrelated person, subject in all cases to the authority of the
				Department under IITA Section 404 to make such adjustments as are necessary to
				properly reflect each party's Illinois business activities.