Current Developments
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Notable Items Mentioned in the January 2008 Department of Revenue Regulatory Agenda |
| 1/18/2008 |
ADDENDUM A
Potential Changes to Income Tax rules
· A new rule regarding reallocation of items under Illinois Income Tax Act (“IITA”) Section 404, which allows the Director of Revenue to adjust a person’s base income if the Director deems it to be improperly or inaccurately reflected.
· A new rule regarding pass-through of investment credits for partnerships and Subchapter S corporations to their partners and shareholders.
· Add and change rules governing the computation of base income under IITA Article 2 and the allocation and apportionment of base income under IITA Article 3.
· Update to provisions defining unitary business groups and computing the combined tax liability of unitary business groups.
· Guidance on the addition and subtraction modifications allowed in IITA Section 203, the section that defines base income
· Guidance on the five percent credit for residential real property taxes paid.
· Guidance on the rounding of returns to the nearest dollar.
Potential Changes to the Retailers’ Occupation Tax regulations
· Clarify (1) the requirement of a separate agreement between sellers and purchasers, particularly in the case of Internet, mail order, telephone, and television orders and (2) what tax rate applies to taxable handling charges for an order that contains both high tax rate and low tax rate items.
· Explain the tax liability of hotels for room rental charges made in connection with events during which food is provided by the hotels, such as conferences.
· Clarify the manner in which the tax rate on food is determined and the exemption for drugs and medical appliances is administered under rule Section 130.310.
· Amend Section 130.2005 regarding nonprofit service enterprises to clarify how tax-exempt organizations handle fundraising events other than occasional dinners and bake sales and similar events.
· Amend rule Section 130.2013 regarding the lessors credit to describe the requirements necessary for claiming the credit on sales to customers who are purchasing items that they had previously leased from those lessors.
· Clarify how automobile rebates and dealer incentives are taxed.
Potential Changes to the Service Occupation Tax regulations
· Add a regulatory section explaining the taxation of seminar materials.
Potential Update to the Use Tax regulations
· Regulations setting forth the Department’s policies regarding the types of activities and relationships that establish a nexus for use tax collection.
Potential Telecommunications Excise Tax regulations
· Regulations that explain the manner in which DSL services are taxed.
· Regulations that explain the taxation of telecommunications that are provided by cable and satellite television companies as part of internet access services and the taxation of Voice Over Internet Protocol (“VOIP”).
· Regulations that explain the telecommunications tax liabilities involved when multiple parties are joined together in different conference calling arrangements.
Potential New Part Governing Electronic Filing of Corporate Income Tax Returns
· Regulations providing the procedures for corporations, partnerships, and tax exempt organizations to electronically file their Illinois income tax returns.
Potential New Part Governing Internet Filing of Sales and Use Tax Returns
· Regulations providing the procedures and requirements for persons using an Internet-based system to file sales and use tax returns.
Potential New Part Governing County School Facility Taxes
· Regulations providing the procedures and requirements for the county school facility taxes authorized by SB 835 (PA 95-675).
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