IL IT 22-0003-GIL Illinois Income Tax 2022-02-25

What is Illinois General Information Letter IT 22-0003-GIL, and what does it say about corporate income tax nexus?

Short answer: It isn't a ruling on anyone's tax situation -- it's the Illinois Department of Revenue's completed answers to a private publisher's annual '2022 Survey of State Tax Departments,' covering how Illinois applies corporate income tax nexus, Pub. L. 86-272, apportionment/sourcing, combined reporting, and pass-through entity rules.

Apply this to your situation

This page answers the general question as of 2022. Ezel answers yours, under current Illinois tax law, with citations.

Disclaimer: This is an official Illinois Department of Revenue General Information Letter (GIL), issued under 2 Ill. Adm. Code 1200.120. A GIL merely directs a taxpayer to the relevant Department regulations or other sources of information; it is NOT a statement of Department policy and is NOT binding on the Department. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Illinois tax professional about your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.

View original ruling (PDF)

Subject

Corporate Income Tax Nexus Survey Response

Plain-English summary

This is not a ruling on any taxpayer's situation. IT 22-0003-GIL is the Illinois Department of Revenue's response to an email from a private publisher asking Illinois to fill out its "2022 Survey of State Tax Departments" -- an annual questionnaire, sent to every state's tax department, about corporate income tax nexus policy. The publisher wanted Illinois to update the spreadsheet's 2021 answers with 2022 responses so it could publish a state-by-state comparison for tax practitioners.

The Department's entire "response" is the completed survey spreadsheet reproduced in the letter. In it, Illinois describes (in its own words, as of January 1, 2022) how it treats corporate income tax nexus and apportionment, including: nexus standards under 86 Ill. Adm. Code 100.9720; that Illinois requires any corporation qualified to do business in the state and required to file a federal return to also file in Illinois regardless of tax liability (35 ILCS 5/502(a)(2)); that Illinois generally follows a "Joyce" approach (not "Finnigan") for sourcing sales of no-nexus combined-group members; its single-sales-factor apportionment formula with industry-specific formulas for insurance companies, financial organizations, exchanges, and transportation companies; its market-based sourcing of service and intangible receipts; its rolling conformity to the Internal Revenue Code with several TCJA/CARES Act-related addition and subtraction modifications (including decoupling from 100% federal bonus depreciation for tax years ending on or after December 31, 2021, per Public Act 102-0016); and its newly enacted elective Pass-Through Entity Tax under 35 ILCS 5/201(p) (Public Act 102-0658).

Because this is a GIL, not a Private Letter Ruling, none of it is binding on the Department, and it doesn't resolve any specific taxpayer's facts -- it is simply Illinois's self-description of its own general corporate tax nexus regime for a third-party publication.

What this means for you

Multistate businesses assessing Illinois nexus

If your company is trying to figure out whether it has Illinois corporate income tax nexus, this letter is a useful index of Illinois's own stated positions as of early 2022 -- for example, that having even one employee physically present and performing services in Illinois (including a telecommuting employee) creates nexus, that Illinois has no specific "de minimis" activity exception, and that a corporation qualified to do business in Illinois must file a return regardless of tax liability. But treat it as a snapshot summary, not authority you can rely on for your own facts -- it is not a PLR and doesn't address any particular company.

Accountants and multistate tax professionals

The letter is a convenient one-stop reference to several of Illinois's rules as the Department itself framed them for a national nexus survey: single-sales-factor apportionment with industry-specific formulas (35 ILCS 5/304), market-based sourcing for services and intangibles, the "Joyce" (not "Finnigan") treatment of no-nexus combined groups, IRC conformity details including the 2021 bonus-depreciation decoupling and GILTI/IRC section 965 modifications under 35 ILCS 5/203, and the newly enacted elective PTE tax under 35 ILCS 5/201(p). Because these are survey answers rather than adjudicated positions, always verify current-year rules directly against the statutes and regulations cited, since state answers like this are only accurate as of the stated survey date (January 1, 2022).

Anyone expecting a substantive taxpayer ruling

If you came looking for a ruling that resolves a specific tax dispute or question, this isn't it. The Department explicitly says the nature of the inquiry (a request to complete a third-party survey) required a GIL response, and the "ruling" is nothing more than Illinois filling in someone else's spreadsheet. There is no taxpayer-specific fact pattern, no issue, and no conclusion beyond the survey answers themselves.

Common questions

Q: Is this letter binding on the Illinois Department of Revenue?
A: No. It is a General Information Letter issued under 2 Ill. Adm. Code 1200.120, which by definition does not state Department policy and does not bind the Department. It is even further removed from a binding ruling than a typical GIL, since it responds to a survey request rather than a taxpayer's own question.

Q: Who asked for this letter, and why?
A: A private publisher of a multistate tax survey ("NAME" in the redacted text) emailed the Department asking it to complete the "2022 Survey of State Tax Departments," an annual spreadsheet questionnaire about corporate income tax nexus policy that gets published for tax professionals to compare states side by side.

Q: What topics does the survey response actually cover?
A: Corporate income tax nexus standards and nexus-creating activities, Pub. L. 86-272 conformity, apportionment formulas and alternative apportionment, sourcing rules for tangible property, services, and intangibles (including cloud computing/SaaS), combined reporting composition and apportionment, pass-through entity taxation (including the new elective PTE tax), conformity to federal tax law changes from the TCJA and CARES Act, reporting of federal audit adjustments, and voluntary disclosure agreements.

Q: Does this letter answer a specific company's nexus question?
A: No. There is no taxpayer, no fact pattern, and no specific issue presented -- the entire substance is Illinois's general, self-reported answers to a standardized industry survey, current only as of January 1, 2022.

Q: Can I cite this letter for how Illinois currently treats a particular nexus or apportionment issue?
A: Use caution. It's a helpful pointer to relevant statutes and regulations (which you should verify are still current), but as a non-binding GIL answering a 2022 survey, it carries no authority and may be outdated by later statutory or regulatory changes.

Source

Original ruling text

IT 22-0003 02/25/2022 MISCELLANEOUS
This letter responds to an annual survey. (This is a GIL.)
February 25, 2022
Dear XXXX:
This letter is in response to your email dated December 13, 2021, in which you
requested information. Department of Revenue (“Department”) regulations require that
the Department issue only two types of letter rulings, Private Letter Rulings (“PLRs”)
and General Information Letters (“GILs”). PLRs are issued by the Department in
response to specific taxpayer inquiries concerning the application of a tax statute or rule
to a particular fact situation. A PLR is binding against the Department, but only as to the
taxpayer issued the ruling and only to the extent the facts recited in the PLR are correct
and complete. The purpose of GILs is to direct taxpayers to Department regulations or
other sources of information regarding the topic about which they have inquired. GILs
do not constitute statements of Department policy that apply, interpret, or prescribe the
tax laws, and are not binding on the Department. See 2 Ill. Admin. Code 1200 for more
information. You may access our website at www.tax.illinois.gov to review regulations,
letter rulings, and other types of information relevant to your inquiry. The nature of your
inquiry and the information you have provided require that we respond with a GIL.
In your letter you have stated and made inquiry as follows:
I am writing to ask you to complete the questionnaire for the 2022 NAME Survey
of State Tax Departments on behalf of your state. The survey covers many of the
gray areas of state tax law. Your responses will provide useful guidance for
taxpayers in complying with your state’s laws.
Attached is an Excel spreadsheet containing the questions for 2022. Like last
year’s questionnaire, this year two columns of the spreadsheet have all of your
state’s responses and comments for 2021. Adjacent columns are there for you
to record your responses and comments for 2022. To avoid any errors, please fill
out the 2022 column even if the answer has not changed from 2021.
If you are adding or revising question specific comments, please use the 2022
comment box that relates to that question directly. If you are adding or revising a
comment that applies to multiple questions or all questions in a category, please
use the 2022 comment box at the end of the category. You can either scroll down
for this comment or click the hyperlinked text in the chart, when available. If you
would like to add or change information you have previously recorded in the
comments section, please make those modifications in red font.
Additionally, we ask that you note where you have intentionally left questions
blank. We are required to follow-up regarding any unanswered questions and

IT 22-0002-GIL
Page 2
making note of intentionally unanswered questions allows us to process and
analyze the data faster. This can be accomplished by typing “blank” or “no
response” in the answer column or simply noting in your e-mail that questions
were left blank intentionally.
The questionnaire should be completed based on state law as of January 1,
2022.
Some new questions have been added to this year’s questionnaire. The new
questions and subsections are denoted in blue font.
We have also included a new column where you may include feedback or notes
on the questions in this year’s questionnaire. Information included in this column
will not be published as part of our survey report. Any feedback you choose to
provide is greatly appreciated and will be incredibly helpful in drafting future
versions of our questionnaire.
Please return your questionnaire to us by Feb. 25, 2022. Your completed Excel
spreadsheet should be e-mailed to me at E-MAIL.
Your responses, along with the responses we receive from other states, will be
published by NAME, a leading publisher of international, federal, and state tax
analysis. More information about NAME can be found at WEBSITE.
If you have any questions about this or if there is any way I can help you to
complete this year’s questionnaire, please contact me at E-MAIL or PHONE #.
I look forward to working with you. Thank you.
DEPARTMENT’S RESPONSE:
Please see the 2022 responses and comments on the attached Excel spreadsheet.
NAME
2022 SURVEY OF STATE TAX DEPARTMENTS
Section I. Corporate Income Tax Nexus Policies
A. State Statutes,
2021
2022
Regulations, Administrative
Response
Response
Pronouncements, or Judicial
Decisions Specifically
Addressing Income Tax
Nexus

Identify any statute(s)
None
None
addressing corporate income
tax nexus.

IT 22-0002-GIL
Page 3

Identify any regulation(s)
addressing income tax nexus.

86 Ill. Adm Code 100.9720. 86 Ill. Admin. Code
100.9720.

Identify any administrative
pronouncement(s) addressing
income tax nexus.
Identify judicial decision(s)
addressing income tax nexus.

None

Linn v. Department of
Revenue, 2 N.E.3d 1203
(Ill. App. Ct. 2013).

Linn v. Department of
Revenue, 2 N.E. 3d
1203 (Ill. App. Ct.
2013).

B. Application of Nexus
Standards

2021
2021
Response Comment

Your state’s income tax
No
nexus policy is only based
on physical presence.
Your state’s income tax
No
nexus policy is only based
on economic presence. (If
"yes," please state the
threshold for economic
nexus in the comment to
this question. If you do not
have a set threshold, please
explain in the comment to
this question.)
Your state's income tax
Yes
nexus policy is based on
both physical presence and
economic presence. (If
"yes," please state the
threshold for economic
nexus in the comment to
this question. If you do not
have a set threshold, please
explain in the comment to
this question.)

2022
2022
Response Comment
No

IL: One of
No
many factors.

One of many
factors

IL: Standards Yes
for
determining
sufficient tax
nexus are
found in
federal
statutes
regulating
interstate
commerce,
US
Constitution
jurisprudence
and Illinois
tax statutes.

Standards for
determining
sufficient tax
nexus are
found in
federal
statutes
regulating
interstate
commerce,
US
Constitution
jurisprudence,
and Illinois
tax statutes.

IT 22-0002-GIL
Page 4

Does your state use a
No
No
factor presence threshold
measured by an annual
dollar threshold or activity
threshold when determining
whether your economic
nexus standard has been
met?
Comment applicable to all questions in Section I.B.
2021 Comment:
2022 Comment:
Blank for 2021.
C. Adherence to MTC's
Factor Presence Nexus
Threshold

2021
2021
Response Comment

2022
Response

2022
Comment

The Multistate Tax Commission’s (MTC) model statute, Factor Presence Nexus
Standard for Business Activity Taxes, uses both economic and physical presence to
determine nexus. However, the model statute sets forth minimum thresholds for each.
It states that substantial nexus is established if any of the following limits are
exceeded during the tax period:
• $50,000 of property,
• $50,000 of payroll,
• $500,000 of sales, or
• 25 percent of total property, total payroll, or total sales.
Answer "yes" or "no" to the questions in this section. If your response to question 4 in
Part C of Section I is "no," answer "not applicable."

Your state's factor
presence nexus standard
generally conforms to the
MTC’s model statute,
Factor Presence Nexus
Standard for Business
Activity Taxes. (If "yes," cite
to the applicable statute
and/or regulation in the
comment to this question.)
Your state's factor
presence nexus standard
partially conforms to the
MTC’s model statute,
Factor Presence Nexus
Standard for Business
Activity Taxes.

Not
Applicable

IT 22-0002-GIL
Page 5
(If your response to
question 1 is "yes," answer
"not applicable.")

If you answered "yes" to Not
Not
questions one or two, has
Applicable
Applicable
your state's reliance on the
MTC's model statute been
tested in court? (If "yes,"
provide citations in the
comment to this question.)
Your state's factor
Not
Not
presence nexus standard
Applicable
Applicable
does not conform to any
aspects of the MTC’s model
statute, Factor Presence
Nexus Standard for
Business Activity Taxes.
Your state's factor
Not
Not
presence nexus standard
Applicable
Applicable
has adopted an annual
dollar threshold or activity
threshold applicable only to
specific industry groups,
which is not based on the
MTC's model statute,
Factor Presence Nexus
Standard for Business
Activity Taxes. (If "yes," set
forth the standard(s) and
applicable industry group(s)
in the comment to this
question.)
Comment applicable to all questions in Section I.C.
2021 Comment:
2022 Comment:
Blank for 2021.

IT 22-0002-GIL
Page 6
D. Adoption of
2021
2021
2022
2022
Multistate Tax
Response Comment
Response Comment
Commission
Statements on Federal
Pub. L. No. 86-272
The Multistate Tax Commission (MTC) has issued three separate statements and one
amendment to guidance issued in 1986 aimed at helping states comply with federal
Pub. L. No. 86-272. The Phase I Statement incorporates the U.S. Supreme Court's
ruling in Wisconsin Dept. of Rev. v. William Wrigley, Jr., Co., 505 U.S. 214 (1992).
The Phase II Statement added and removed several activities from the nonexhaustive lists of protected and unprotected activities, clarified that the throwback
rule is applied on an entity-by-entity basis when a combined or consolidated report is
filed and permits signatory states to apply Pub. L. No. 86-272 protections to
transactions occurring in non-U.S. commerce. The original signatories to the Phase II
statement were AL, AZ, AR, CA, CO, HI, ID, LA, MT, NM, ND, OR, RI and UT. The
2001 Amendment to its guidelines removed delivery of inventory via company-owned
vehicles in a state from the list of unprotected activities.

Your state is a
No
No
signatory to the Phase I
Statement without any
additions or exceptions.
Your state is a
No
No
signatory to the Phase I
Statement and created
your own additions or
exceptions to the
statement.
Your state is not a
No
No
signatory to the Phase I
Statement, but has laws
that adhere to the
statement's list of
immune and nonimmune activities.
Your state is a
No
No
signatory to the Phase II
Statement without any
additions or exceptions.
Your state is a
No
No
signatory to the Phase II
Statement and created
your own additions or
exceptions to the
statement.

IT 22-0002-GIL
Page 7

Your state is not a
No
No
signatory to the Phase II
Statement, but has laws
that adhere to the
statement's list of
immune and nonimmune activities.
Your state conformed
No
No
its laws to the MTC's
2001 amendment to its
guidelines on Pub. L. No.
86-272.
Your state does not
No
No
conform to the Phase I
Statement, Phase II
Statement or 2001
Amendment.
Comment applicable to all questions in Section I.D.
2021 Comment:
2022 Comment:
Blank for 2021.
E. Nexus Enforcement
Policies

2021
2021
Response Comment

2022
2022
Response Comment

Answer "yes" or "no" to the questions in this section.

Your state sends a
nexus questionnaire to
corporations that it
believes might be doing
business within its
borders.
Your state imposes tax
on a corporation that
triggers nexus for the
entire year (i.e., including
amounts in the sales
factor that occurred before
nexus was established).
Your state requires a
tax return to be filed even
if the corporation’s
activities are protected by
Pub. L. No. 86-272.

Yes

IL: IITA
Section
502(a)(2)
requires
corporations
qualified to do
business in

Yes

Illinois Income
Tax Act
("IITA")
Section
502(a)(2)
requires
corporations

IT 22-0002-GIL
Page 8
Illinois and
required to file
a federal
income tax
return to file in
Illinois
regardless of
tax liability.

Your state requires a
tax return to be filed by a
corporation that has
registered in the state, but
has not yet commenced
doing business.

Yes

IL: Id.

Yes

Your state would find
taxable nexus for the
entire taxable year (but no
more), for a corporation
that stops an activity
during the tax year that
once created nexus (i.e.,
trailing nexus).
Your state would find
taxable nexus for the
entire taxable year, plus
an additional year (and no
more), for a corporation
that stops an activity
during the tax year that
once created nexus (i.e.,
trailing nexus).

Yes

qualified to do
business in
Illinois and
required to file
a federal
income tax
return to file in
Illinois
regardless of
tax liability.
IITA Section
502(a)(2)
requires
corporations
qualified to do
business in
Illinois and
required to file
a federal
income tax
return to file in
Illinois
regardless of
tax liability.

IT 22-0002-GIL
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Your state would find
No
No
taxable nexus for the
taxable year, plus more
than an additional year, for
a corporation that stops an
activity during the tax year
that once created nexus
(i.e., trailing nexus). (If
"yes," indicate how long
your state would continue
to find taxable nexus after
the discontinuation of the
nexus-creating activities in
the comment to this
question.)
For questions 5-7 on
No
No
"trailing nexus," does your
answer depend on the
magnitude of the nexuscreating activity (e.g.,
three salesperson visits
resulting in the sale of a
used car, versus three
CEO visits resulting in the
sale of a petroleum super
tanker)? (If "yes," explain
in the comment to this
question.)
Comment applicable to all questions in Section I.E.
2021 Comment:
2022 Comment:
Blank for 2021.

IT 22-0002-GIL
Page 10
Section II. Nexus—Creating Activities
State "yes" or "no" to show whether each of the following activities or relationships
would, by itself, create sufficient nexus to subject an out-of-state corporation to an
income-based tax. When determining whether the listed activity/relationship would
create nexus in your state for a corporation, assume that each item is the only
activity/relationship the corporation has in your state (other than activities protected by
Pub. L. No. 86-272).
A. General Activities
2021
2021
2022
2022
Response Comment
Response Comment

The out-of-state
Yes
Yes
corporation is doing
business in your state.
The out-of-state
No
No
corporation makes sales
to customers in your
state by means of a 1800 telephone order
number advertised in
your state.
The out-of-state
Yes
Yes
corporation uses local
phone numbers in your
state, calls to which are
forwarded to the out-ofstate corporation's
headquarters located in
another state.
The out-of-state
No
No
corporation maintains a
bank account at a bank
located in your state.
The out-of-state
Yes
Yes
corporation provides one
to six days of consulting
services in your state
during the year.
The out-of-state
Yes
IL: If work is
Yes
If work is
corporation, through a
performed by
performed by
third party, provides
an agent of
an agent of
warranty services on
the taxpayer.
the taxpayer.
goods sold in your state.
The out-of-state
No
No
corporation sends
catalogs to residents in
your state.

IT 22-0002-GIL
Page 11

The out-of-state
corporation has at least
one client in the state.
Does your state have
a de minimis standard?
(If "yes," explain and
include whether the
standard is based on the
number of activities
performed or the number
of days an activity is
performed in your state
in the comment to this
question.)
Does your state
apply the definition of
"transacting business" or
"doing business" used to
determine whether an
out-of-state corporation
must register with the
Secretary of State, or
other similar agency,
when determining
whether the out-of-state
corporation has nexus
with your state?

Yes
Yes

Yes
IL: Illinois has
no specific
definition of
"de minimis".

Yes

Illinois has no
specific
definition of
"de minimis".

Yes

Comment applicable to all questions in Section II.A.
2021 Comment:
2022 Comment:
Blank for 2021.
B. Registration with State
Agencies/Departments

2021
2021
Response Comment

2022
2022
Response Comment

The out-of-state
corporation is registered,
authorized, certified or
qualified by the Secretary of
State, or other similar
agency, to transact business
in your state as a foreign
corporation.

IT 22-0002-GIL
Page 12

The out-of-state
corporation holds a general
business license issued by
your state.
The out-of-state
corporation holds a specialty
license issued by your state,
such as a specialty
insurance license.
The out-of-state
corporation is registered with
the state tax department for
payroll tax purposes.
The out-of-state
corporation is registered with
the state agency or
department that regulates or
administers workers'
compensation.
The out-of-state
corporation is registered with
the state as a government
vendor or contractor.
The out-of-state
corporation is registered with
the state for sales tax
purposes.

IL:
No
Insufficient
Response
information
is provided
to answer
the question.
Comment applicable to all questions in Section II.B.
2021 Comment:
2022 Comment:
Blank for 2021.

Insufficient
information
is provided
to answer
the question.

C. Ownership/Leasing of
In-State Property

The out-of-state
corporation owns
unimproved land in your
state.
The out-of-state
corporation stores inventory
or other goods in a public
warehouse in your state for
fewer than 30 days per
year.

2021
Response
Yes

2022
Comment

No
Response

Yes

2021
Comment

2022
Response
Yes

Yes

IT 22-0002-GIL
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The out-of-state
corporation stores inventory
or other goods in a bonded
warehouse in your state for
fewer than 30 days per
year.
The out-of-state
corporation ships in-process
inventory to an unrelated
party in your state solely for
processing.
The out-of-state
corporation consigns goods
to vendors, independent
contractors, or other parties
in your state.
The out-of-state
corporation owns display
racks in your state.
The out-of-state
corporation owns tooling,
molds, dies, etc., located at
a manufacturing facility in
your state.
The out-of-state
corporation leases (as
lessor) real estate in your
state to an unrelated third
party.
The out-of-state
corporation leases (as
lessor) rented mobile
property such as rail cars,
planes, and trailers, which
the lessee may use in your
state five or fewer times per
year.
The out-of-state
corporation owns or leases
automobiles provided to
salespersons in your state.
The out-of-state
corporation owns or leases
trucks or automobiles used
by non-salespersons in your
state.

Yes

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The out-of-state
Yes
Yes
corporation owns or leases
other machinery or
equipment in your state.
The out-of-state
Yes
Yes
corporation holds title to
property located in your
state until the contract price
has been paid.
The out-of-state
Yes
Yes
corporation files a security
interest in your state on
inventory sold until the
contract price has been
paid.
The out-of-state
Yes
Yes
corporation owns or leases
a place in your state for
company employees,
directors, and officers.
Comment applicable to all questions in Section II.C.
2021 Comment:
2022 Comment:
IL: See Department Regulations Section See 86 Ill. Admin. Code 100.9720(c)(5)(D)
100.9720(c)(5)(D) and (E).
and (E).
D. Ownership
Interest of In-State
Pass-Through
Entities
The out-of-state
corporation owns an
interest in an
investment
partnership or LLC
that has operations in
your state.

2021
Response

2021
Comment

2022
Response

No
Response

IL: IITA
No
Section
Response
205(b)
exempts an
"investment
partnership"
from
replacement
income tax.
Under IITA
Section 305(c5) the
distributive
share income
of a
nonresident

2022
Comment
IITA Section
205(b) exempts
an "investment
partnership"
from
replacement
income tax.
Under IITA
Section 305(c5) the
distributive
share income of
a nonresident
partner of an
investment
partnership is

IT 22-0002-GIL
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The out-of-state
corporation owns a
general interest in a
partnership that is
doing business in your
state.
The out-of-state
corporation owns a
limited interest in a
partnership that is
doing business in your
state.
The out-of-state
corporation owns an
interest in an LLC that
is doing business in
your state and is
involved in managing
the LLC.
The out-of-state
corporation owns an
interest in an LLC that
is doing business in
your state, but is not
the managing member
or otherwise involved
in managing the LLC.

Yes

partner of an
investment
partnership is
generally
deemed
nonbusiness
income and
allocated to
the partner's
state of
residence or
commercial
domicile.

generally
deemed
nonbusiness
income and
allocated to the
partner's state
of residence or
commercial
domicile.

Yes

IT 22-0002-GIL
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The out-of-state
corporation owns an
interest in an entity
located in your state
that is disregarded for
federal income tax
purposes.
The out-of-state
corporation owns a
managing interest in
an entity that limits its
activities in your state
to managing intangible
investment assets that
generate passive
income.
The out-of-state
corporation owns a
limited interest in an
entity that limits its
activities in your state
to managing intangible
investment assets that
generate passive
income.
The out-of-state
corporation owns a
managing interest in
an entity that limits its
activities in your state
to managing real
property located instate that generate
passive income.

Yes

The out-of-state
corporation owns a
limited interest in an
entity that limits its
activities in your state
to managing real
property located instate that generate
passive income.

Yes

IT 22-0002-GIL
Page 17
Comment applicable to all questions in Section II.D.
2021 Comment:
2022 Comment:
Blank for 2021.
E. Licensing
Intangibles

2021
Response

2021
Comment

2022
Response

The out-of-state
corporation licenses
trademarks or trade
names to related entities
with locations in your
state.
The out-of-state
corporation licenses
trademarks or trade
names to unrelated
entities with locations in
your state.
The out-of-state
corporation sells/licenses
franchises (such as fastfood franchises) to
residents of your state.
The out-of-state
corporation licenses
canned software to
consumers in your state.
The out-of-state
corporation receives a
management fee from a
related entity with a
location in your state.
The out-of-state
corporation receives a
management fee from an
unrelated entity with a
location in your state.
The out-of-state
corporation licenses to
an in-state consumer
permission to use its
website for a webinar.

Yes

2022
Comment

IT 22-0002-GIL
Page 18

The out-of-state
Yes
Yes
corporation sells/licenses
the right to use a patent
or copyright to related
entities with locations in
your state.
The out-of-state
Yes
Yes
corporation sells/licenses
the right to use a patent
or copyright to unrelated
entities with locations in
your state.
The out-of-state
Yes
Yes
corporation sells/rents
customer lists to
unrelated entities in your
state.
Comment applicable to all questions in Section II.E.
2021 Comment:
2022 Comment:
Blank for 2021.

F. Employee Activities
— Sales Related

2021
Response

2021
Comment

2022
Response

Employees of an outof-state corporation,
while in your state
accept and approve
customer orders.
Employees of an outof-state corporation,
while in your state
negotiate prices, subject
to approval outside your
state.
Employees of an outof-state corporation,
while in your state
investigate creditworthiness of customers.

Yes

2022
Comment

IT 22-0002-GIL
Page 19

Employees of an outof-state corporation,
while in your state
secure or accept
deposits on sales.
Employees of an outof-state corporation,
while in your state
handle credit disputes.
Employees of an outof-state corporation,
while in your state attend
trade shows or maintain
sample/display rooms for
one to 14 days per year.
Employees of an outof-state corporation,
while in your state
maintain a two-month
supply of free samples.
Employees of an outof-state corporation,
while in your state check
customers' inventories
for reorder.
Employees of an outof-state corporation,
while in your state make
a single sale on his or
her own initiative and
without the company's
prior knowledge (assume
that the sale was de
minimis).
Employees of an outof-state corporation,
while in your state make
a single sale on his or
her own initiative and
without the company's
prior knowledge (assume
that the sale was not de
minimis).

Yes

No
Response

IL: Insufficient
information is
provided to
answer the
question.

Yes

No
Response

Insufficient
information is
provided to
answer the
question.

Yes

IL: Id.

No
Response

Yes

Insufficient
information is
provided to
answer the
question.

IT 22-0002-GIL
Page 20

Employees of an out- Yes
Yes
of-state corporation,
while in your state solicit
sales of services in your
state one to six days per
year.
Employees of an out- No
No
of-state corporation,
while in your state
perform a sales-related
function and are
reimbursed for the costs
of maintaining an inhome office.
Employees of an out- Yes
Yes
of-state corporation,
while in your state
operate mobile stores.
Comment applicable to all questions in Section II.F.
2021 Comment:
2022 Comment:
Blank for 2021.
G. Employee
Activities — NonSales Related

2021
Response

2021
Comment

2022
Response

Employees of an outof-state corporation,
while in your state
collect delinquent
accounts.
Employees of an outof-state corporation,
while in your state
repossess property.
Employees of an outof-state corporation,
while in your state
regularly perform
installation, repair,
maintenance, or
warranty services.

Yes

2022
Comment

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Page 21

Employees of an outof-state corporation,
while in your state
perform installation,
repair, or warranty
services one to four
times per year.

Yes

Employees of an outof-state corporation,
while in your state set
up promotional display
of products (e.g., end
caps, etc.) and inspect
inventory.

Yes

Employees of an outof-state corporation,
while in your state
supervise or inspect
installation.
Employees of an outof-state corporation,
while in your state
conduct training
courses, seminars, or
lectures two times per
year.
Employees of an outof-state corporation,
while in your state
provide engineering or
design functions related
to customized products.

Yes

Employees of an outof-state corporation,
while in your state
handle customer
complaints.

Yes

Employees of an
Yes
out-of-state corporation,
while in your state pick
up defective
merchandise.

Yes

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Employees of an
Yes
out-of-state corporation,
while in your state pick
up or replace damaged
or returned property.

Yes

Employees of an
Yes
out-of-state corporation,
while in your state
provide shipping
information and
coordinate deliveries.

Yes

Employees of an
Yes
out-of-state corporation,
while in your state
telecommute from their
homes located in your
state. Assume that
there are one to six
such employees in your
state and all of these
employees perform
non-solicitation
activities. (Explain
whether you would
reach a different
answer if the out-ofstate corporation made
no sales in your state,
or if the employees
telecommute for only
part of their total work
time in the comment for
this question.)

IL: Having an
Yes
employee
performing
services
constitutes
physical
presence. If the
out-of-state
corporation
made no sales
in IL, then its
apportionment
factor would be
zero.

a. At least one
employee of an out-ofstate corporation
telecommutes from a
home located in your
state and performs
back-office
administrative business
functions, such as
payroll, as opposed to
direct customer service

Yes

Having an
employee
performing
services
constitutes
physical
presence. If
the out-ofstate
corporation
made no sales
in IL, then its
apportionment
factor would
be zero.

IT 22-0002-GIL
Page 23
or other activities
directly related to the
employer's commercial
business activities.

b. At least one
employee of an out-ofstate corporation
telecommutes from a
home located in your
state and performs
product development
functions such as
computer coding.

Yes

Employees of an
Yes
out-of-state corporation,
assist the out-of-state
corporation in
defending a lawsuit
(e.g., legal staff and
witnesses) while in your
state for one to 30
days.

Yes

Employees of an
Yes
out-of-state corporation,
purchase raw materials
and inventory while in
your state for 20 or
fewer days.

Yes

Employees of an
out-of-state corporation
attend seminars in your
state.

Yes

Employees of an
out-of-state corporation
attend an annual
training seminar,
convention, trade show,
retreat, or board of
directors meeting in
your state for one to 14
consecutive days each
year (assume that,
during their stay,

IT 22-0002-GIL
Page 24
employees maintain
contact with the out-ofstate office, and
conduct business over
the telephone or fax
machines in your state).

Employees of an
out-of-state corporation
fly into your state on a
commercial airline for
business purposes one
to four times per year.

Yes

Employees of an
out-of-state corporation
fly into your state on a
commercial airline for
business purposes five
or more times per year.
Employees of an
out-of-state corporation
fly into your state on a
company plane for
business purposes one
to four times per year.
Employees of an
out-of-state corporation
fly into your state on a
company plane for
business purposes five
or more times per year.

Yes

Employees of an
out-of-state corporation
fly into your state on a
company plane to
attend a seminar.
Employees of an
out-of-state corporation
state fly into your state
on a company plane to
attend sports events at
least four times, but
fewer than 10 times per
year.

No
Response

IL: Insufficient
information is
provided to
answer the
question.

No
Response

Insufficient
information is
provided to
answer the
question.

IT 22-0002-GIL
Page 25

Employees of an
No
No
out-of-state corporation
attend seminars or
social functions while
staying on a company
yacht docked in waters
in your state for one to
14 days.
Employees of an
Yes
Yes
out-of-state corporation
hold job fairs, hiring
events, or other
recruiting activities in
your state.
Employees of an
Yes
Yes
out-of-state corporation
hire, supervise, or train
other employees in your
state.
Comment applicable to all questions in Section II.G.
2021 Comment:
2022 Comment:
Blank for 2021.
H. Activities of
Unrelated Parties

2021
Response

2021
Comment

2022
Response

Unrelated third parties
located in your state
provide fulfillment
services (i.e., fill product
orders from corporateowned inventory).
Unrelated third parties
located in your state
collect regular or
delinquent accounts.
Unrelated third parties
located in your state
investigate creditworthiness of new
customers.
Unrelated third parties
located in your state
repossess property one
to six times a year.

Yes

2022
Comment

IT 22-0002-GIL
Page 26

Unrelated third parties No
IL: Insufficient
No
located in your state
Response information is
Response
repair or provide
provided to
maintenance, including
answer
warranty services, one
question.
to six times per year.
Unrelated third parties No
IL: Id.
No
located in your state
Response
Response
assist with the set-up or
installation of the
company's products.
Unrelated third parties No
IL: Id.
No
located in your state
Response
Response
perform repairs under
standard or extended
warranty.
Unrelated third parties No
IL: Id.
No
located in your state
Response
Response
close mortgage loans for
an out-of-state financial
organization.
Unrelated third parties No
IL: Id.
No
located in your state
Response
Response
service mortgage and/or
consumer loans for an
out-of-state financial
organization.
Comment applicable to all questions in Section II.H.
2021 Comment:
2022 Comment:
Blank for 2021.
I. Distribution and Delivery

2021
2021
Response Comment

The out-of-state corporation No
ships products into your state
in returnable containers.
The out-of-state corporation No
delivers goods into your state
(from a point outside your
state) to customers in the outof-state corporation's owned or
leased vehicles.

2022
Response
No
No

Insufficient
information is
provided to
answer
question.
Insufficient
information is
provided to
answer
question.
Insufficient
information is
provided to
answer
question.
Insufficient
information is
provided to
answer
question.
Insufficient
information is
provided to
answer
question.

2022
Comment

IT 22-0002-GIL
Page 27

The out-of-state corporation
picks up defective products or
scrap materials in your state in
the out-of-state corporation's
owned or leased vehicles.
The out-of-state corporation
picks up raw materials in your
state in the out-of-state
corporation's vehicles.
The out-of-state corporation
travels to or through your state
one to six times per year in the
out-of-state corporation's
owned or leased vehicles, but
does not pick up or deliver
goods in your state.
The out-of-state corporation
travels to or through your state
more than six times, but no
more than 12 times, per year
in the out-of-state
corporation's owned or leased
vehicles, but does not pick up
or deliver goods in your state.
The out-of-state corporation
travels to or through your state
more than 12 times per year in
the out-of-state corporation's
owned or leased vehicles, but
does not pick up or deliver
goods in your state.
The out-of-state corporation
"backhauls" (i.e., picks up
shipments at the destination or
nearby location for delivery to
another point) in corporateowned trucks.
The out-of-state corporation
holds title to electricity flowing
through a transmission wire
within your state (the
transmission neither originates
nor terminates in your state).

Yes

No
Response

IL:
No Response
Insufficient
information
is provided
to answer
question.

No
Response

IL: Id.

No Response Insufficient
information
is provided
to answer
question.

No
Response

IL: Id.

No Response Insufficient
information
is provided
to answer
question.

Yes

Insufficient
information
is provided
to answer
question.

IT 22-0002-GIL
Page 28

The out-of-state
Yes
Yes
corporation holds title to
natural gas flowing through a
pipeline within your state (the
natural gas neither originates
nor terminates in your state).
Comment applicable to all questions in Section II.I.
2021 Comment:
2022 Comment:
Blank for 2021.
J. Financial
Activities/Transactions
The out-of-state
corporation negotiates and
obtains bank loans from a
bank located in your state
(assume officers of the outof-state corporation visit the
bank at least twice a year to
discuss business).
The out-of-state
corporation makes loans
secured by real estate
located in your state.
The out-of-state
corporation makes personal
loans secured by tangible
property located in your
state.
The out-of-state
corporation issues credit
cards to residents of your
state.
The out-of-state
corporation purchases, via
the secondary market, loans
secured by real estate
located in your state.
The out-of-state
corporation purchases, via
the secondary market, credit
account balances of
residents of your state.

2021
Response
No
Response

2021
Comment
IL:
Insufficient
information
is provided
to answer
question.

2022
Response
No
Response

Yes

No
Response

IL: Id.

No
Response

2022
Comment
Insufficient
information
is provided
to answer
question.

Insufficient
information
is provided
to answer
question.

IT 22-0002-GIL
Page 29

The out-of-state
No
IL: Id.
No
corporation makes personal
Response
Response
loans to 20 or more residents
of your state who traveled
across the state border to
obtain the loans.
The out-of-state
No
No
corporation makes personal
loans to 20 or more out-ofstate residents who, over a
number of years,
subsequently move to your
state.
The out-of-state
No
IL: Id.
No
corporation makes
Response
Response
automobile loans to 20 or
more out-of-state residents
who, over a number of years,
subsequently move to your
state.
The out-of-state
No
IL: Id.
No
corporation is in the business Response
Response
of packaging and selling
credit card and mortgage
loans to passive investors
throughout the United States
(assume a few of the debtors
and some of the property
securing the loans are
located in your state).
The out-of-state
Yes
Yes
corporation forecloses on
one parcel of real estate
located in your state.
The out-of-state
Yes
Yes
corporation forecloses on
several parcels of real estate
located in your state.
Comment applicable to all questions in Section II.J.
2021 Comment:
2022 Comment:
Blank for 2021.

Insufficient
information
is provided
to answer
question.

Insufficient
information
is provided
to answer
question.
Insufficient
information
is provided
to answer
question.

IT 22-0002-GIL
Page 30
K. Transactions With
In-State Printers

The out-of-state
corporation leases
tangible personal
property located at a
printer in your state for
use in connection with a
printing contract (assume
that, once the work is
complete, the printer
ships the printed material
out of your state for
addressing and mailing).

2021
Response
No

2021
Comment

2022
Response
No

2022
Comment

The out-of-state
No
No
corporation owns raw
materials at an in-state
printer.
The out-of-state
No
No
corporation visits in-state
printers for quality control
purposes one to six times
per year.
Comment applicable to all questions in Section II.K.
2021 Comment:
2022 Comment:
Blank for 2021.
L. Cloud Computing or
2021
2021
2022
2022
Software as a Service
Response Comment
Response Comment
(SaaS) Transactions
Assume an out-of-state corporation provides access to software to customers in your
state via a third party's cloud infrastructure. Customers pay a fee in return for a
license to use the software. State whether nexus would result under the following
scenarios.
The out-of-state
Yes
Yes
corporation provides
access to its software to instate customers and pays
independent contractors to
perform configuration/setup services in the state.

IT 22-0002-GIL
Page 31

The out-of-state
Yes
Yes
corporation provides
access to its software to instate customers and lacks
a physical presence in the
state, but has a substantial
number of customers with
billing addresses in the
state.
The out-of-state
Yes
Yes
corporation provides
access to its software to instate customers and lacks
a physical presence in the
state, but earns a
substantial amount of
revenue from customers in
the state.
The out-of-state
Yes
Yes
corporation rents space on
a third-party server located
in the state and otherwise
lacks a physical presence
in the state.
Comment applicable to all questions in Section II.L.
2021 Comment:
2022 Comment:
Blank for 2021.
M. Internet-Based
Activities

2021
Response

2021
Comment

2022
Response

2022
Comment

If your answer to any of the following questions depends on whether the out-of-state
corporation made sales into your state, explain in the comment to the question(s).

The out-of-state
corporation owns an
internet server located
in your state.

Yes

IT 22-0002-GIL
Page 32

The out-of-state
corporation owns an
internet server located
in your state and hires
third-party technicians
located in your state to
keep the server
functioning.
The out-of-state
corporation leases a
third-party's internet
server located in your
state. Assume that the
server is used
exclusively by the outof-state corporation.
The out-of-state
corporation leases
space on a third-party's
internet server located
in your state. Assume
that space on the thirdparty's server is also
leased to several other
unrelated corporations.
The out-of-state
corporation leases
space on a third-party's
network of internet
servers, some of which
are located in your
state. Assume that the
out-of-state
corporation's data is on
the third-party's internet
server in your state for
less than six months
during the year.

Yes

No
Response

IL: Insufficient
information is
provided to
answer
question.

No
Response

Insufficient
information is
provided to
answer
question.

No
Response

IL: Id.

No
Response

Insufficient
information is
provided to
answer
question.

IT 22-0002-GIL
Page 33

The out-of-state
No
IL: Id.
No
corporation leases
Response
Response
space on a third-party's
network of internet
servers, some of which
are located in your
state. Assume that the
out-of-state
corporation's data is on
the third-party's internet
server in your state for
more than six months
during the year.
The out-of-state
No
No
corporation does not
own or lease property in
your state, but pays a
web-hosting provider
with a server located in
your state to provide the
out-of-state corporation
web services to sell
products over the
internet.
Comment applicable to all questions in Section II.M.
2021 Comment:
2022 Comment:
Blank for 2021.

Insufficient
information is
provided to
answer
question.

IT 22-0002-GIL
Page 34
Section III. State Tax Add-Backs
Editors' Note: In previous years, the questions in this section were framed to ask
whether a deduction was allowed, with the majority of states responding "allowed" or
"disallowed." These results were then translated into "yes" or "no" responses to the
question of whether an add back was required for purposes of the Survey of State
Tax Departments special report. This year, we are reframing the questions in this
questionnaire to reflect the answers published in the special report. As a result, all
previous "allowed" answers will now appear as "no" and all "disallowed" answers will
now appear as "yes."
A. General Taxes
2021
2021
2022
2022
Response Comment
Response Comment

Does your state require
the add-back (i.e.,
disallows the deduction) of
amounts representing the
payment of state incomebased taxes imposed by
your state in arriving at
your state's corporatebased income tax in
arriving at your state's
corporate-based income
tax?
Does your state require
the add-back (i.e.,
disallows the deduction) of
amounts representing the
payment of state incomebased taxes imposed by
other states in arriving at
your state's corporatebased income tax?
Does your state require
the add-back (i.e.,
disallows the deduction) of
amounts representing the
payment of local incomebased taxes imposed by
in-state local governments
in arriving at your state's
corporate-based income
tax?

Yes

IT 22-0002-GIL
Page 35

Does your state require
the add-back (i.e.,
disallows the deduction) of
amounts representing the
payment of local incomebased taxes imposed by
out-of-state local
governments in arriving at
your state's corporatebased income tax?
Does your state require
the add-back (i.e.,
disallows the deduction) of
amounts representing the
payment of foreign income
taxes (other countries) in
arriving at your state's
corporate-based income
tax?
Does your state require
the add-back (i.e.,
disallows the deduction) of
amounts representing the
payment of dual capacity
foreign taxes (other
countries) in arriving at
your state's corporatebased income tax?
Does your state require
the add-back (i.e.,
disallows the deduction) of
amounts representing the
payment of state franchise
taxes based on capital
stock or net worth in
arriving at your state's
corporate-based income
tax?
Does your state require
the add-back (i.e.,
disallows the deduction) of
amounts representing the
payment of gross receipts
taxes in arriving at your
state's corporate-based
income tax?

IT 22-0002-GIL
Page 36
Comment applicable to all questions in Section III.A.
2021 Comment:
2022 Comment:
Blank for 2021.
B. State-Specific Taxes

2021
Response
No

Does your state require
the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the District
of Columbia
Unincorporated Business
Tax in arriving at your
state's corporate-based
income tax?
Does your state require No
the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the
Kentucky License Tax in
arriving at your state's
corporate-based income
tax?
Does your state require No
the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the New
Hampshire Business
Profits Tax in arriving at
your state's corporatebased income tax?
Does your state require No
the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the
Washington Business and
Occupation Tax in arriving
at your state's corporatebased income tax?

2021
Comment

2022
Response
No

2022
Comment

IT 22-0002-GIL
Page 37

Does your state require
the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the West
Virginia Business and
Occupation Tax in arriving
at your state's corporatebased income tax?
Does your state require
the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the New
York City Unincorporated
Business Tax in arriving
at your state's corporatebased income tax?
Does your state require
the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the Ohio
CAT in arriving at your
state's corporate-based
income tax?
Does your state require
the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the
revised Texas Franchise
Tax in arriving at your
state's corporate-based
income tax?
Does your state require
the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the
Oregon Corporate Activity
Tax in arriving at your
state's corporate-based
income tax?

IT 22-0002-GIL
Page 38

Does your state
No
No
require the add-back (i.e.,
disallows the deduction)
of amounts representing
the payment of the
Nevada Commerce Tax in
arriving at your state's
corporate-based income
tax?
Comment applicable to all questions in Section III.B.
2021 Comment:
2022 Comment:
Blank for 2021.
Section IV. Response to Recent Federal Tax Code Changes
A. Response
to Federal
Tax Cuts and
Jobs Act
(TCJA), Pub.
L. 115-97
Your state
conforms to
I.R.C. § 163(j)
as amended
by the TCJA,
which limits
the interest
expense
deduction.

2021
Response

2021
Comment

Yes

Your state
No
conforms to
Response
I.R.C. § 168(k)
as amended
by the TCJA,
which allows
the bonus
depreciation
provisions.

2022
Response

2022
Comment

Yes

IL: Illinois
follows 100%
bonus
depreciation.

Public Act 102-0016
amended IITA Section
203 to decouple Illinois
from federal 100
percent bonus
depreciation for tax
years ending on or after
December 31, 2021.
See IITA Sections
203(a)(2)(Z)(3)(iii)-(iv),
203(b)(2)(T)(3)(iii)-(iv),
203(c)(2)(R)(3)(iii)-(iv),
203(d)(2)(O)(3)(iii)-(iv).

IT 22-0002-GIL
Page 39

Your state
conforms to
I.R.C. § 172
as amended
by the TCJA,
which amends
the net
operating loss
deduction.

No
Response

IL: In the case
of individuals.

No
Response

Your state
conforms to
I.R.C. § 179
as amended
by the TCJA,
which
increases the
asset
expensing
limitation
amounts.
Your state
conforms to
I.R.C. § 199A
as added by
the TCJA,
which allows a
qualified
business
income
deduction.
Your state
conforms to
I.R.C. § 951A
as added by
the TCJA,
which requires
global
intangible lowtaxed income
(GILTI) to be
included in the
gross income
of U.S.
shareholders.

Yes

In the case of
individuals.

IT 22-0002-GIL
Page 40

If "yes" to
Yes
question 7,
does your
state require a
subtraction
modification
for § 965
income?
Your state
Yes
conforms to
I.R.C. § 250
as added by
the TCJA,
which allows a
deduction for
global
intangible lowtaxed income
(GILTI) and
foreignderived
intangible
income (FDII).
Your state
Yes
conforms to
I.R.C. § 965
as amended
by the TCJA,
which requires
the
repatriation of
certain
deferred
foreign income
(If “yes,”
please identify
the
percentage of
income that
must be
repatriated in
the comment
to this
question.)

IL: Partial
subtraction
under 35 ILCS
5/203(b)(2)(O).

IL: Id.

Yes

Partial subtraction
under 35 ILCS
5/203(b)(2)(O).

Public Act 102-0016
amended IITA Section
203 to require an
addition modification.
See IITA Section
203(b)(2)(E-19).

Yes

Partial subtraction
under 35 ILCS
5/203(b)(2)(O).

IT 22-0002-GIL
Page 41

Your state Yes
conforms to
I.R.C. § 245A
as amended
by the TCJA,
which allows a
deduction for
the foreignsource portion
of dividends
received by
domestic
corporations
from specific
10% owned
foreign
corporations.
Your state Yes
conforms to
I.R.C. § 118
as repealed by
the TCJA,
which
eliminates the
exclusion from
federal gross
income of
contributions
made by any
governmental
entity or civic
group to the
capital of a
corporation.
Your state Yes
conforms to
other Internal
Revenue
Code
sections, not
already listed
above, as
amended,
added, or
repealed by
the TCJA.

Public Act 102-0016
amended IITA Section
203 to require an
addition modification.
See IITA Section
203(b)(2)(E-20).

Yes

IL: Illinois is a
rolling
conformity
state subject to
addition and
subtraction
modifications
under 35 ILCS
5/203.

Yes

Illinois is a rolling
conformity state subject
to addition and
subtraction
modifications under 35
ILCS 5/203.

IT 22-0002-GIL
Page 42
(If "yes,"
identify the
code sections
in the
comment to
this question.)
Comment applicable to all questions in Section IV.A.
2021 Comment:
2022 Comment:
Blank for 2021.
B. Response to
Federal Coronavirus
Aid, Relief, and
Economic Security
(CARES) Act, Pub. L.
116-136

Your state conforms
to I.R.C. § 163(j) as
amended by the
CARES Act, which
temporarily modifies
the limitations on the
interest expense
deduction.
Your state conforms
to I.R.C. § 168 as
amended by the
CARES Act, which
retroactively classifies
qualified improvement
property as 15-year
property.
Your state conforms
to I.R.C. § 170 as
amended by the
CARES Act, which
increases the
contribution limit of
taxable income that
may be deducted
under the charitable
deduction.

2021
Response

2021
Comment

2022
Response

Yes

2022
Comment

IT 22-0002-GIL
Page 43

Your state conforms
to I.R.C. § 172 as
amended by the
CARES Act, which
modifies the net
operating loss
deduction.
Your state conforms
to I.R.C. § 179 as
amended by the
CARES, which
suspends the asset
expensing limitation
amounts.
Your state conforms
to other Internal
Revenue Code
sections, not already
listed above, as
amended, added, or
repealed by the
CARES Act. (If "yes,"
identify the code
sections in the
comment to this
question.)
Your state conforms
to section 1106(i) of
the CARES, which
provides that any
forgiveness or
cancellation of
Paycheck Protection
Program loans will not
be treated as taxable
income.
Has your state
released guidance
regarding its response
to the CARES Act? (If
"yes," provide a
citation to the
guidance in the
comment to this
question.)

No
Response

IL: For
individuals.

Yes

No
Response

For individuals

Yes

IL: Illinois is a
rolling
conformity state
subject to
addition and
subtraction
modifications
under 35 ILCS
5/203.

No
Response

Yes

Illinois is a
rolling
conformity state
subject to
addition and
subtraction
modifications
under 35 ILCS
5/203.

IT 22-0002-GIL
Page 44
Comment applicable to all questions in Section IV.B.
2021 Comment:
2022 Comment:
Blank for 2021.
Section V. Apportionment & Sourcing Policies
A. Apportionment 2021
2021
2022
2022
Formula
Response
Comment
Response Comment

Does your state
use a three factor
apportionment
formula based on
property, payroll,
and sales when
apportioning an
out-of-state
corporation’s
business income
to your state?
Does your state
use a weighted
three-factor
apportionment
formula based on
property, payroll,
and sales when
apportioning an
out-of-state
corporation’s
business income
to your state?
Does your state
use a single-factor
apportionment
formula based on
sales only when
apportioning an
out-of-state
corporation’s
business income
to your state?

Yes

IT 22-0002-GIL
Page 45

Does your state
use a different
apportionment
formula than those
described above
when apportioning
an out-of-state
corporation’s
business income
to your state? (If
"yes," explain.)

Yes

IL: Special
Yes
receipts based
formulas are
provided for
insurance
companies,
financial
organizations,
federally
regulated
exchanges, and
transportation
companies.
Comment applicable to all questions in Section V.A.
2021 Comment:
2022 Comment:
Blank for 2021.
B. Alternative
Apportionment

If your state's
alternative apportionment
regime has been invoked,
does the state have
written regulations or
guidelines on when the
state or the taxpayer can
use it?
Does your state place
the burden of proof on the
party seeking to apply an
alternative apportionment
method?
Does your state place
the burden of proof on the
taxpayer, without
consideration as to which
party is seeking to apply
an alternative
apportionment method?
To invoke your state's
alternative apportionment
method, the taxpayer's
burden of proof is clear
and convincing evidence.

2021
Response
Yes

2021
Comment
IL: See IITA
Section
304(f); 86 Ill.
Adm. Code
100.3390.

2022
Response
Yes

Yes

Special receipts
based formulas
are provided for
insurance
companies,
financial
organizations,
federally
regulated
exchanges, and
transportation
companies.

2022
Comment
See IITA
Section
304(f); 86 Ill.
Admin. Code
100.3390.

IT 22-0002-GIL
Page 46

To invoke your state's
No
No
alternative apportionment
method, the taxpayer's
burden of proof is
preponderance of the
evidence.
The state's burden of
Yes
Yes
proof for requiring a
taxpayer to use an
alternative apportionment
method is clear and
convincing evidence.
The state's burden of
No
No
proof for requiring a
taxpayer to use an
alternative apportionment
method is preponderance
of the evidence.
Are taxpayers required Yes
IL: See 86 Ill. Yes
to request alternative
Admin. Code
apportionment prior to
§ 100.3390.
filing on such a basis? (If
"yes," explain how and
when such a request must
be made in the comment
to this question.)
Comment applicable to all questions in Section V.B.
2021 Comment:
2022 Comment:
Blank for 2021.
C. General Sourcing
Method

2021
Response

2021
Comment

2022
Response

See 86 Ill.
Admin. Code
100.3390.

2022
Comment

State which of the methods listed below best describes your state's general approach
to sourcing receipts from sales, other than sales of tangible personal property.

An out-of-state
No
corporation must source
receipts from sales, other
than sales of tangible
personal property, to
your state based on
costs of performance.

IT 22-0002-GIL
Page 47

An out-of-state
Yes
Yes
corporation must source
receipts from sales, other
than sales of tangible
personal property, to
your state based on the
location of the market.
An out-of-state
No
No
corporation must source
receipts from sales, other
than sales of tangible
personal property, to
your state using a
method other than the
methods described
above. (If "yes," explain
in the comment to this
question).
Does your state apply Yes
Yes
different sourcing
methods to different
categories of receipts
(e.g., services,
intangibles, etc.) when
sourcing an out-of-state
corporation's receipts
from sales, other than
sales of tangible
personal property?
Comment applicable to all questions in Section V.C.
2021 Comment:
2022 Comment:
Blank for 2021.

IT 22-0002-GIL
Page 48
Section VI. Sourcing Receipts
2021
2021
2022
Response Comment
Response

A. Receipts from Sales
2022
of Tangible Personal
Comment
Property
State which of the methods listed below best describes your state's approach to
sourcing receipts from sales of tangible personal property by an out-of-state
corporation.

Receipts from sales
Yes
Yes
of tangible personal
property are added to
the numerator of the
corporation's sales
factor if the property is
delivered or shipped to a
purchaser within your
state (destination-based
sourcing).
Receipts from sales
Yes
IL: If the
Yes
If the taxpayer
of tangible personal
taxpayer is not
is not subject
property are added to
subject to tax
to tax in the
the numerator of the
in the
destination
corporation's sales
destination
state.
factor if the property is
state.
shipped from an office,
store, warehouse,
factory or other place of
storage in your state
(origin-based sourcing).
Receipts from sales
No
No
of tangible personal
property are added to
the numerator of the
corporation's sales
factor using a method
other than destinationbased sourcing or
origin-based sourcing.
(If "yes," explain in the
comment to this
question.)
Comment applicable to all questions in Section VI.A.
2021 Comment:
2022 Comment:
Blank for 2021.

IT 22-0002-GIL
Page 49
B. Sales of Tangible
2021
2021
2022
Personal Property to
Response Comment
Response
the U.S. Government

Does your state
Yes
Yes
provide special rules for
sourcing sales of
tangible personal
property to the U.S.
government?
a. Are sales of
No
No
tangible personal
property to the U.S.
government sourced to
your state based on
destination?
b. Are sales of
Yes
Yes
tangible personal
property to the U.S.
government sourced to
your state based on
origin?
c. Are sales of tangible No
No
personal property to the
U.S. government
sourced to your state
based on a method other
than those described
above? (If "yes," explain
in the comment to this
question.)
Comment applicable to all questions in Section VI.B.
2021 Comment:
2022 Comment:
Blank for 2021.

2022
Comment

IT 22-0002-GIL
Page 50
C. Receipts from Leases,
Licenses, or Rentals of
Tangible Personal Property

2021
Response

2021
Comment

2022
Response

2022
Comment

State which of the methods listed below best describes your state's approach to
sourcing receipts from the lease, license, or rental of tangible personal property by an
out-of-state corporation.

An out-of-state corporation No
No
must source receipts from the
lease, license or rental of
tangible personal property to
your state based on costs of
performance.
An out-of-state corporation Yes
Yes
must source receipts from the
lease, license or rental of
tangible personal property to
your state based on the
location of the market.
An out-of-state corporation No
No
must source receipts from the
lease, license or rental of
tangible personal property to
your state based on a method
other than those described
above. (If "yes," explain in the
comment to the this
question.)
Comment applicable to all questions in Section VI.C.
2021 Comment:
2022 Comment:
Blank for 2021.
D. Receipts from Real Property
For purposes of sourcing an
out-of-state corporation's receipts
from real property, does your state
source receipts from real property
based on the location of the
property? (If "no," state the
method your state uses for
sourcing an out-of-state
corporation's receipts from real
property in the comment to this
question.)

2021
2021
2022
2022
Response Comment Response Comment
Yes
Yes

IT 22-0002-GIL
Page 51
Comment applicable to all questions in Section VI.D.
2021 Comment:
2022 Comment:
Blank for 2021.
E. Receipts from
Services

2021
Response

2021
Comment

2022
Response

2022
Comment

State which of the methods listed below best describes your state's approach to
sourcing receipts from sales of services by an out-of-state corporation.

All of the service
No
receipts are added to the
numerator of the service
company's sales factor if
more income-producing
activity based on cost of
performance is
performed in your state
than any other state
(plurality method).
A proportionate share
No
of the service company's
income is apportioned to
the state on a pro rata
basis, in which the
company's sales are
divided among the states
in which it does business,
depending on the
performance level in
each state as measured
by costs of performance
(proportionate method).
A market-based
Yes
sourcing approach is
used in which sales
receipts are sourced
based upon the location
of the market (marketbased sourcing).

Yes

IT 22-0002-GIL
Page 52

Receipts from the
No
No
provision of services are
added to the numerator
of the company's sales
factor using a method
other than costs of
performance or marketbased sourcing. (If "yes,"
explain in the comment
to this question.)
Comment applicable to all questions in Section VI.E.
2021 Comment:
2022 Comment:
Blank for 2021.
F. Receipts from
Intangibles

2021
Response

2021
Comment

2022
Response

2022
Comment

State which of the methods listed below best describes your state's approach to
sourcing the receipts from intangible personal property by an out-of-state corporation.

An out-of-state
corporation must source
receipts from sales of
intangible personal
property to your state
based on costs of
performance.
An out-of-state
corporation must source
receipts from sales of
intangible personal
property to your state
based on the location of
the market.
An out-of-state
corporation must source
receipts from sales of
intangible personal
property to your state
based on a method other
than costs of
performance or marketbased sourcing. (If "yes,"
explain in the comment
to this question.)

Yes

IL: Yes for all
taxpayers who
are not
dealers with
respect to the
property.

Yes

Yes for all
taxpayers who
are not
dealers with
respect to the
property.

Yes

IL: Yes for
dealers.

Yes

Yes for
dealers.

IT 22-0002-GIL
Page 53
Comment applicable to all questions in Section VI.F.
2021 Comment:
2022 Comment:
Blank for 2021.
G. Cloud Computing or
Software as a Service
(SaaS) Transactions

2021
Response

2021
Comment

2022
Response

2022
Comment

State which of the methods listed below best describes your state's approach to
sourcing receipts from in-state customers that access an out-of-state corporation's
software via a third party's cloud infrastructure.

Receipts from cloud
No
No
computing or SaaS
transactions are
generally sourced to your
state based on costs of
performance.
Receipts from cloud
Yes
Yes
computing or SaaS
transactions are
generally sourced to your
state based on the
location of the market.
Receipts from cloud
No
No
computing or SaaS
transactions are
generally sourced to your
state based on a method
other than those
described above. (If
"yes," explain in the
comment to this
question).
Are receipts from
No
No
cloud computing or SaaS
transactions
characterized as receipts
from the sale of tangible
personal property?
Are receipts from
No
No
cloud computing or SaaS
transactions
characterized as receipts
from the lease, license or
rental of tangible
personal property?

IT 22-0002-GIL
Page 54

Are receipts from
No
No
cloud computing or SaaS
transactions
characterized as receipts
from the sale, lease,
license or rental of
intangible personal
property?
Are receipts from
Yes
Yes
cloud computing or SaaS
transactions
characterized as receipts
from the sale of
services?
Does your state
No
No
consider whether the
software accessed is
prewritten or custom
computer software when
characterizing its
receipts?
Comment applicable to all questions in Section VI.G.
2021 Comment:
2022 Comment:
Blank for 2021.
H. Industry
Specific
Sourcing Rules

2021
Response

2021
Comment

2022
Response

2022
Comment

Does your
state provide
special rules for
sourcing the
receipts of an
airline? (If "yes,"
explain in the
comment to this
question.)
Does your
state provide
special rules for
sourcing the
receipts of a bank
or financial
services
company?

Yes

IL: See 35 ILCS
5/304(d).

Yes

See 35 ILCS
5/304(d).

Yes

IL: See IITA
Section 5/304(c).

Yes

See 35 ILCS
5/304(c).

IT 22-0002-GIL
Page 55
(If "yes," explain
in the comment to
this question.)

Does your
state provide
special rules for
sourcing the
receipts of a film,
television, or
radio
broadcasting
company? (If
"yes," explain in
the comment to
this question.)
Does your
state provide
special rules for
sourcing the
receipts of a longterm construction
contractor? (If
"yes," explain in
the comment to
this question.)
Does your
state provide
special rules for
sourcing the
receipts of a
pipeline
company? (If
"yes," explain in
the comment to
this question.)
Does your
state provide
special rules for
sourcing the
receipts of a
telecommunicatio
ns and ancillary
service provider?

Yes

IL: See 35 ILCS
5/304(a)(3)(B-7).

Yes

See 35 ILCS
5/304(a)(3)(B-7).

Yes

IL: See 35 ILCS
5/304(d).

Yes

See 35 ILCS
5/304(d).

Yes

IL: See 35 ILCS
5/304(a)(3)(B-5).

Yes

See 35 ILCS
5/304(a)(3)(B-5).

IT 22-0002-GIL
Page 56
(If "yes," explain
in the comment to
this question.)

Does your
Yes
IL: See 35 ILCS
Yes
state provide
5/304(d).
special rules for
sourcing the
receipts of a
trucking
company? (If
"yes," explain in
the comment to
this question.)
Comment applicable to all questions in Section VI.H.
2021 Comment:
2022 Comment:
Blank for 2021.

See 35 ILCS
5/304(d).

Section VII. Treatment of Pass-Through Entities
A. Classification of
Income

2021
Response

2021
Comment

2022
Response

Your state requires a
partnership or multimember LLC to classify
its income as business or
nonbusiness income at
the entity level.
Your state requires a
partnership or multimember LLC to classify
its income as business or
nonbusiness income at
the owner level.
Your state classifies
guaranteed payments to
nonresident partners or
members for services,
other than personal and
professional services,
performed in another
state as business
income.

Yes

2022
Comment

IT 22-0002-GIL
Page 57

Your state classifies
Yes
Yes
guaranteed payments to
nonresident partners or
members for personal
and professional services
performed in another
state as business
income.
Your state classifies
Yes
Yes
guaranteed payments to
nonresident partners or
members for the use of
their partnership capital in
the states where the
partnership does
business as business
income.
Your state uses a
No
No
classification rule for
purposes of
distinguishing between
business and
nonbusiness income that
differentiates between
guaranteed payments for
capital versus guaranteed
payments for services.
Comment applicable to all questions in Section VII.A.
2021 Comment:
2022 Comment:
Blank for 2021.
B. Apportionment

2021
Response

2021
Comment

2022
Response

Your state requires a
partnership to apportion
income at the entity level.
Your state requires a
partnership to apportion
income at the owner level.
Your state requires
transactions between the
owners and the
partnership to be
eliminated before income
is apportioned.

Yes

2022
Comment

IT 22-0002-GIL
Page 58

Your state requires
sales receipts from a
partnership owned by
individuals to be sourced
in the same manner as
receipts from a
partnership owned by a
corporation.
Your state requires
apportionment of
guaranteed payments to
nonresident partners for
services, other than
personal and professional
services, performed in
another state.
Your state requires
apportionment of
guaranteed payments to
nonresident partners for
personal and professional
services performed in
another state.
Your state requires
apportionment of
guaranteed payments to
nonresident partners for
the use of their
partnership capital in the
states where the
partnership does
business.
Your state requires
partnerships to apportion
their income using the
same apportionment rules
used by corporations.
Your state requires
partnerships to apportion
their income using
apportionment rules for
pass through entities
instead of the
apportionment rules used
by corporations.

Yes

IT 22-0002-GIL
Page 59
Comment applicable to all questions in Section VII.B.
2021 Comment:
2022 Comment:
IL: Department Regulations 100.3380
86 Ill. Admin. Code 100.3380 requires
requires special rules where the partner special rules where the partner and
and partnership are engaged in a
partnership are engaged in a unitary
unitary business.
business.
C. Disposition of PassThrough Entity Interest

2021
Response

2021
Comment

2022
Response

Your state imposes
income tax on the gain
recognized by the
disposition of an out-ofstate corporation's
managing ownership
interest of a pass-through
entity doing business in
your state.
Your state imposes
income tax on the gain
recognized by the
disposition of a nonresident
individual's managing
ownership interest of a
pass-through entity doing
business in your state.
Your state imposes
income tax on the gain
recognized by the
disposition of an out-ofstate corporation's limited
ownership interest of a
pass-through entity doing
business in your state.
Your state imposes
income tax on the gain
recognized by the
disposition of a nonresident
individual's limited
ownership interest of a
pass-through entity doing
business in your state.

Yes

2022
Comment

No
Response

IL: Not
No
enough
Response
information.

Insufficient
information is
provided to
answer the
question.

No
Response

IL: Id.

Insufficient
information is
provided to
answer the
question.

No
Response

IT 22-0002-GIL
Page 60

Your state imposes
income tax on the gain
recognized by the
disposition of an out-ofstate corporation's
managing ownership
interest of a pass-through
entity doing business in
your state when the passthrough entity and
corporation comprise a
unitary business.
Your state imposes
income tax on the gain
recognized by the
disposition of an out-ofstate corporation's
managing ownership
interest of a pass-through
entity doing business in
your state when the passthrough entity and
corporation are nonunitary.
Your state imposes
income tax on the gain
recognized by the
disposition of an out-ofstate corporation's limited
ownership interest of a
pass-through entity doing
business in your state
when the pass-through
entity and corporation
comprise a unitary
business.
Your state imposes
income tax on the gain
recognized by the
disposition of an out-ofstate corporation's limited
ownership interest of a
pass-through entity doing
business in your state
when the pass-through
entity and corporation are
nonunitary.

Yes

No
Response

Yes

IL: Id.

Yes

No
Response

Insufficient
information is
provided to
answer the
question.

Yes

IL: Id.

No
Response

Insufficient
information is
provided to
answer the
question.

IT 22-0002-GIL
Page 61
Comment applicable to all questions in Section VII.C.
2021 Comment:
2022 Comment:
Blank for 2021.
D. Composite Returns and
Withholding

Your state requires passthrough entities doing
business in your state to file
composite returns for
nonresident individuals who
are owners/members/partners.
Your state requires passthrough entities doing
business in your state to file
composite returns for out-ofstate corporations who are
owners/members/partners.
Your state requires passthrough entities doing
business in your state to
withhold estimated tax on
distributive share payments
made to nonresident
individuals who are
owners/members/partners.
Your state requires passthrough entities doing
business in your state to
withhold estimated tax on
distributive share payments
made to out-of-state
corporations that are
owners/members/partners.
Your state requires
nonresident
owners/members/partners
subject to withholding or
composite return requirements
to file a return to receive a
refund of any amounts overwithheld.

2021
2021
Response Comment
No

2022
2022
Response Comment
No

Yes

IT 22-0002-GIL
Page 62
Comment applicable to all questions in Section VII.D.
2021 Comment:
2022 Comment:
IL: See 35 ILCS 5/709.5.
See 35 ILCS 5/709.5.
E. Pass-Through
Entity Level Nexus

2021
Response

2021
Comment

2022
Response

2022
Comment

Will a partnership
Yes
Yes
doing business in your
state create nexus for
the partnership itself?
Will an LLC doing
Yes
Yes
business in your state
create nexus for the
LLC itself?
Will an S corporation Yes
Yes
doing business in your
state create nexus for
the S corporation itself?
Will a QSub doing
Yes
Yes
business in your state
create nexus for the
Qsub itself?
Will a QSub doing
Yes
Yes
business in your state
create nexus for the
QSub's S corporation
parent?
Comment applicable to all questions in Section VII.E.
2021 Comment:
2022 Comment:
Blank for 2021.
F. Partnership Audit
Rules
Your state has
adopted the federal
partnership audit rules
in whole.
Your state has
adopted the federal
partnership audit rules
in part.

2021
Response
No

2021
Comment

2022
Response
No

2022
Comment

IT 22-0002-GIL
Page 63

Your state makes
Yes
Yes
adjustments,
determines imputed
tax, and assesses and
collects tax at the
partnership entity level.
Your state makes
Yes
Yes
adjustments,
determines imputed
tax, and assesses and
collects tax at the
individual partner level.
Your state requires a Yes
Yes
partnership that
receives an entity level
adjustment at the
federal level to file a
report with the state
department of revenue.
Your state allows
Not
IL: All
Not
partnerships to make a Applicable adjustments
Applicable
different election from
are made in the
the federal election to
reviewed year.
pass through the audit
adjustment to persons
that were partners in
the reviewed year.
Comment applicable to all questions in Section VII.F.
2021 Comment:
2022 Comment:
Blank for 2021.

All adjustments
are made in the
reviewed year.

IT 22-0002-GIL
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G. Pass-Through
Entity Level
Taxes

Your state has
enacted an entitylevel tax on passthrough entities.

2021
Response

2021
Comment

2022
Response

2022
Comment

IL: While income
tax flows through
to partners,
shareholders and
owners, IL
imposes a
personal property
replacement tax
at the passthrough entity
level.

Yes

See 35 ILCS
5/201(p) enacted
by Public Act
102-0658. The
Pass-through
Entity (PTE) tax
is an entity-level
income tax that
partnerships
(other than
publicly traded
partnerships
under IRC 7704)
and subchapter
S corporations
may elect to pay
effective for tax
years ending on
or after
December 31,
2021.

If "yes" to
Not
No
question 1, is your Applicable
state's passthrough entity tax
required? (If your
answer to question
1 is "no" respond
with "Not
Applicable.")
If "yes" to
Not
Yes
question 1, is your Applicable
state's passthrough entity tax
optional? (If your
answer to question
1 is "no" respond
with "Not
Applicable.")
Comment applicable to all questions in Section VII.G.
2021 Comment:
2022 Comment:
Blank for 2021.

IT 22-0002-GIL
Page 65
Section VIII. Combined Reporting
A. Composition of the
2021
2021
2022
Combined Reporting
Response Comment
Response
Group

Your state uses a
"unitary business"
definition to determine
which entities must be
included within a
combined group.

Yes

Your state looks to an
"ownership threshold" to
determine which entities
must be included within a
combined group.

Your state uses some
other standard in addition
to, or instead of, the
"unitary business"
definition or "ownership
threshold." (If "yes," set
forth the standard(s) in
the comment to this
question.)

Your state uses
water's-edge reporting
(nexus only, all unitary
members) as the default
method for determining
the composition of a
combined group.

Your state uses
worldwide reporting (all
unitary members) as the
default method for
determining composition
of a combined group.

2022
Comment

Yes

IL: To meet
definition of
unitary
business,
ownership
must exceed
50%.

To meet
definition of
unitary
business,
ownership
must exceed
50%.

IT 22-0002-GIL
Page 66

Your state requires the Yes
exclusion from the unitary
business group members
whose business activity
outside the United States
is 80 percent or more of
the member's total
business activity.

Yes

Your state requires the
inclusion in the unitary
business group members
whose business activity
outside the United States
is 80 percent or more of
the member's total
business activity.

Your state requires an
entity doing business in a
tax haven, as defined by
your state, to be included
within a water's-edge
group.

Your state requires an
entity that is foreign, but
derives income from
intangibles, to be
included within a water'sedge group.

Your state prohibits
including within the
combined group related
entities that use an
industry-specific
apportionment formula.

Your state requires
including within the
combined group related
entities that use an
industry-specific
apportionment formula.

Yes

IT 22-0002-GIL
Page 67

Your state offers
No
No
elective provisions to a
combined group such as
allowing the group to
determine whether to be
comprised on a water'sedge or worldwide basis.
(If "yes," set forth the
standard(s) in the
comment to this
question.)
Comment applicable to all questions in Section VIII.A.
2021 Comment:
2022 Comment:
Blank for 2021.
B. Tax Base

2021
Response
Yes

Your state computes
the income tax liability of
the group on an
aggregate basis and
allows members to share
tax credits between one
another.
Your state computes
Yes
the income tax liability of
the group on an
aggregate basis and
allows members to offset
losses between one
another.
Your state conforms to Yes
the "matching rule" under
U.S. Treas. Regs.
§1.1502-13 (i.e.,
intercompany
transactions shall be
taken into account as if
the seller and buyer were
divisions of a single
corporation).

2021
Comment

2022
Response
Yes

Yes

2022
Comment

IT 22-0002-GIL
Page 68

Your state conforms to Yes
Yes
the "acceleration rule"
under U.S. Treas. Regs.
§1.1502-13 (i.e.,
intercompany items shall
be taken into account
when the effect of
treating the seller and
buyer as divisions of a
single corporation cannot
be achieved, such as
when either the seller or
buyer leaves the
combined reporting
group).
Comment applicable to all questions in Section VIII.B
2021 Comment:
2022 Comment:
Blank for 2021.
C. Apportionment

2021
Response

Your state includes in
No
the numerator of the
combined group's sales
factor the in-state sales of
a no nexus combined
group member,
notwithstanding Pub. L.
No. 86-272 (i.e., Finnigan
approach).
Your state does not
Yes
include in the sales factor
numerator sales by a no
nexus combined group
member for purposes of
determining taxable
income in your state for
the other group members
(i.e., Joyce approach).
Your state eliminates
Yes
intercompany transactions
(receipts, rents, etc.) from
the apportionment factors.

2021
Comment

2022
Response
No

Yes

2022
Comment

IT 22-0002-GIL
Page 69
Comment applicable to all questions in Section VIII.C.
2021 Comment:
2022 Comment:
Blank for 2021.
Section IX. Tax Treatment of Non-U.S. Entities
A. Tax Treatment of Non-U.S. 2021
2021
2022
Entities
Response Comment
Response

Does your state apply the
Yes
Yes
same nexus standard to nonU.S. entities as it does to
domestic entities?
Does your state extend the
protections under Pub. L. No.
86-272 to business entities that
are not organized under the
law of a state or local taxing
jurisdiction in the U.S.
(i.e., a foreign corporation not
eligible for Pub. L. No. 86-272
protections)?

Yes

Does your state generally
honor all tax treaties the United
States has entered into with
other countries?

Does your state honor some, No
but not all, tax treaties the
United States has entered into
with other countries? (If "yes,"
state which treaties your state
honors in the comment to this
question.)

Does your state, when
No
determining the state taxable
Response
income of a non-U.S. entity,
permit federal income tax treaty
exemptions or other limits to
control liability for state income
taxation (i.e., the non-U.S.
entity will only have state
taxable income if it has a

No
Response

2022
Comment

IT 22-0002-GIL
Page 70
"permanent establishment" in
the U.S. and reports income on
Federal Form 1120-F)? (If "no,"
describe your state's method
for computing tax in the
comment to this question.)

Does your state require a
No
non-U.S. entity that is not
Response
subject to federal income tax,
but subject to your state's
income-based tax, to compute
your state's tax by first
completing a "pro forma"
federal tax return or
computation of federal income?

No
Response

Does your state require a
No
non-U.S. entity that is not
Response
subject to federal income tax,
but subject to your state's
income-based tax, to use a
starting point in determining
state taxable income other than
federal taxable income (i.e.,
$0)?

No
Response

Does your state impose tax
on a non-U.S. entity's
apportioned worldwide taxable
income?

No
Response

Does your state determine
the source of income for
purposes of determining
taxability of nonbusiness
income by using the federal
source rules under I.R.C. § 861
et seq.? (If "no," state your
state’s rule.)
Does your state use federal
source rules to determine the
non-U.S. income of an 80-20
corporation for water’s edge or
other purposes?

No
Response

IT 22-0002-GIL
Page 71

Does your state impose tax
only on the income of the U.S.
branch of a non-U.S. entity?

No
Response

Does your state impose
No
income tax on a non-U.S. entity Response
that is not subject to federal
income taxation and only files
federal Form 1120F?

No
Response

If a foreign business does
No
not file a federal return within a Response
specified period of time after its
due date (usually 18 months
after the original due date),
federal deductions are denied.
Does your state follow a similar
rule? (State if the higher federal
income starting point serves as
the equivalent of the state’s
penalty in the comment to this
question.)

No
Response

Does your state impose
franchise tax or other nonincome based tax on a nonU.S. entity that is not subject to
federal income taxation and
only files federal Form 1120F?

No
Response

Does your state conform to
the federal treatment of
effectively connected income
under I.R.C. §§ 881 and 882?

Yes

IL:
No
Questions
Response
regarding
franchise
tax should
be
addressed
to the
Illinois
Secretary of
State.
Yes

Questions
regarding
franchise
tax should
be
addressed
to the
Illinois
Secretary
of State.

IT 22-0002-GIL
Page 72
Comment applicable to all questions in Section IX.A.
2021 Comment:
2022 Comment:
IL: The starting point in the computation of
The starting point in the computation of
Illinois base income of a corporation is
Illinois base income of a corporation is
federal taxable income. Therefore, in
federal taxable income. Therefore, in
general, items of income and deduction that general, items of income and
are included in the computation of federal
deduction that are included in the
taxable income are included in the
computation of federal taxable income
computation of Illinois base income, while
are included in the computation of
items of income that are excluded in
Illinois base income, while items of
computing federal taxable income, or
income that are excluded in computing
deductions that are denied in computing
federal taxable income, or deductions
federal taxable income, are likewise
that are denied in computing federal
excluded or denied in the computation of
taxable income, are likewise excluded
Illinois base income.
or denied in the computation of Illinois
base income.
Section X. Reporting Federal Changes
A. IRS Audit Reportable 2021
2021
2022
Adjustments After Your Response Comment
Response
State's Normal Statute
of Limitations Expires

Does signing IRS
Yes
Yes
Form 870 (Waiver of
Restrictions on
Assessment & Collection
of Deficiency in Tax and
Acceptance of Over
Assessment) for only one
audit when other audit
issues are still under
review by the IRS
constitutes a reportable
adjustment after your
state's normal statute of
limitations has expired?
Does any partial
Yes
Yes
settlement of federal tax
issues as they are
reported/paid to the IRS
constitutes a reportable
adjustment after your
state's normal statute of
limitations has expired?

2022
Comment

IT 22-0002-GIL
Page 73

Does filing Form 4549- Yes
A, Income Tax
Discrepancy Report,
constitutes a reportable
adjustment after your
state's normal statute of
limitations has expired?
Does filing Form 886Yes
A, Explanation of
Adjustments, constitutes
a reportable adjustment
after your state's normal
statute of limitations has
expired?

Yes

Does filing Final
Yes
Yes
federal tax changes (i.e.,
all appeals exhausted)
constitutes a reportable
adjustment after your
state's normal statute of
limitations has expired?
Would your answer to No
No
any of these questions
change in cases
involving a refund of
federal taxable income?
(If "yes," state which
question or questions
would change in the
comment to this
question.)
Does your state have
No
No
written guidance on what
constitutes a final federal
tax change? (If "yes," cite
to the guidance in the
comment to this
question.)
Comment applicable to all questions in Section X.A.
2021 Comment:
2022 Comment:
Blank for 2021.

IT 22-0002-GIL
Page 74
B. Other Reportable
2021
2021
2022
Adjustments After Your Response Comment
Response
State's Normal Statute
of Limitations Expires

Do other state tax
No
No
changes constitutes a
reportable adjustment
after your state's normal
statute of limitations has
expired?
Do other local tax
No
No
changes constitutes a
reportable adjustment
after your state's normal
statute of limitations has
expired?
Do changes to
No
No
financial statements
(e.g., net worth),
constitutes a reportable
adjustment after your
state's normal statute of
limitations has expired?
Do changes by foreign No
No
governments constitutes
a reportable adjustment
after your state's normal
statute of limitations has
expired?
Does a federal change No
No
(e.g., certain federal tax
credits) that has no
impact on an entity's tax
liability in your state
constitutes a reportable
adjustment after your
state's normal statute of
limitations has expired?
Comment applicable to all questions in Section X.B.
2021 Comment:
2022 Comment:
Blank for 2021.

2022
Comment

IT 22-0002-GIL
Page 75
C. Adequate Notice of
2021
2021
2022
Reportable Adjustment
Response Comment Response

For purposes of starting the
Yes
Yes
state’s statute of limitations for
issuing an assessment,
adequate notice of a reportable
adjustment is only made when
a taxpayer actually files an
amended return.
For purposes of starting the
No
No
state’s statute of limitations for
issuing an assessment,
adequate notice of a reportable
adjustment may be made when
a taxpayer files some type of
notice in writing to your agency
(e.g., a document submitted to
an auditor without filing an
amended tax return).
For purposes of starting the
No
No
state’s statute of limitations for
issuing an assessment,
adequate notice of a reportable
adjustment is imputed to the
tax agency from the date the
IRS or another jurisdiction
provides information to the
agency.
Comment applicable to all questions in Section X.C.
2021 Comment:
2022 Comment:
Blank for 2021.
Section XI. Voluntary Disclosure Agreements
A. Voluntary
2021
2021
2022
Disclosure Agreements Response Comment
Response
Does your state
NEW
NEW
Yes
currently offer a
voluntary disclosure
program?
If your state does not
NEW
NEW
No
currently offer a
Response
voluntary disclosure
program, has it done so
in the past?

2022
Comment

IT 22-0002-GIL
Page 76

Would issues missed
NEW
NEW
No
on an audit qualify for
inclusion in your state’s
voluntary disclosure
program?
Does your state allow NEW
NEW
No
taxpayers to obtain
longer retrospective
periods than the
standard period provided
by the voluntary
disclosure program? (If
yes, please explain how
a taxpayer can request a
longer period in the
comment box for this
question.)
Would the following
NEW
NEW
No
prior contact from your
state’s revenue or tax
department (or similar)
disqualify a taxpayer
from participating in your
state’s voluntary
disclosure program:
obtaining a nexus survey
from your department?
Would the following
NEW
NEW
No
prior contact from your
state’s revenue or tax
department (or similar)
disqualify a taxpayer
from participating in your
state’s voluntary
disclosure program:
receiving a question from
an outsourced contractor
regarding potential
liability for a specific tax
or for unclaimed
property?
Comment applicable to all questions in Section XI.A
2021 Comment:
2022 Comment:
NEW

IT 22-0002-GIL
Page 77
I hope this information is helpful. If you require additional information, please visit our
website at www.tax.illinois.gov or contact the Department’s Taxpayer Assistance
Division at (800) 732-8866 or (217) 782-3336.
Sincerely,
Jennifer Uhles
Associate Counsel (Income Tax)

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