2001 Income Tax Letter Rulings

General Information Letters

Ruling	Date	Subject	Synopsis
IT 01-0090-GIL	12/17/2001	Credits - Training Expense	General Information Letter: IITA Section 201(j) allows a credit for expenses incurred in training Illinois employees.
IT 01-0089-GIL	12/07/2001	Subtraction Modifications - Other	General Information Letter: There is no limit in the IITA to the deduction allowed for contributions to the College Savings Pool or "Bright Start" program.
IT 01-0088-GIL	12/05/2001	Allocation	General Information Letter: Deferred compensation is "paid in this State" to the extent paid for services for which the ordinary compensation was "paid in this State."
IT 01-0087-GIL	11/20/2001	Credits - Foreign Tax	General Information Letter: Base income subject to tax in both Missouri and Illinois is only the portion of income from Missouri sources.
IT 01-0086-GIL	11/20/2001	Credits - Foreign Tax	General Information Letter: Addition modification for Indiana property tax deducted in the computation of federal adjusted gross income made in computing Indiana taxable income is taken into account in computing base income subject to tax in both Indiana and Illinois.
IT 01-0085-GIL	11/08/2001	Base Income	General Information Letter: "Catch-up" contributions to pension plans, to the extent excluded or deducted in computing federal adjusted gross income, are excluded from base income.
IT 01-0084-GIL	11/06/2001	Public Law 86-272/Nexus	General Information Letter: Nexus issues are generally not an appropriate subject for letter rulings.
IT 01-0083-GIL	10/19/2001	Base Income	General Information Letter: Items of income or deduction included in taxable income as the result of an IRC Section 338 election are included in base income in the same manner and amounts as included in the taxable income of the taxpayer.
IT 01-0082-GIL	10/09/2001	Public Law 86-272/ Nexus	General Information Letter: Nexus decision are not appropriately made in letter rulings.
IT 01-0081-GIL	10/09/2001	Public Law 86-272/ Nexus	General Information Letter: Nexus decision are not appropriately made in letter rulings.
IT 01-0080-GIL	10/05/2001	Credits - Foreign Tax	General Information Letter: In computing limit on foreign tax credit, base income subject to tax in Illinois and the other state is net of a subtraction modification allowed in computing both base income and the tax base in the other state.
IT 01-0079-GIL	10/04/2001	Subtraction Modifications	General Information Letter: The Employee Retirement Income Security Act does not prohibit state income taxation of Voluntary Employee Benefit Associations. Letter Ruling IT 90-0073 rescinded.
IT 01-0078-GIL	10/04/2001	Subtraction Modifications	General Information Letter: The Employee Retirement Income Security Act does not prohibit state income taxation of Voluntary Employee Benefit Associations. Letter Ruling IT 93-0017 rescinded.
IT 01-0077-GIL	10/04/2001	Subtraction Modifications	General Information Letter: The Employee Retirement Income Security Act does not prohibit state income taxation of Voluntary Employee Benefit Associations. Letter Ruling IT 93-0187 rescinded.
IT 01-0076-GIL	10/03/2001	Subtraction Modifications	General Information Letter: Gambling losses taken as itemized deductions for federal income tax purposes may not be subtracted from adjusted gross income in computing base income.
IT 01-0075-GIL	09/28/2001	Withholding	General Information Letter: Illinois law generally requires withholding only when withholding is required for federal income tax purposes.
IT 01-0074-GIL	09/28/2001	Subtraction Modification - Other Rulings	General Information Letter: ERISA does not prohibit the taxation of a voluntary employee benefits association. Letter rulings IT 90-0073, IT 93-0017 and IT 93-0017 are revoked.
IT 01-0073-GIL	09/25/2001	Pensions	General Information Letter: Federal law prohibits a state from taxing most forms of retirement income of nonresident individuals.
IT 01-0072-GIL	09/19/2001	Net Income (Loss) and Net Loss Deduction	General Information Letter: Response to questionnaire regarding general income tax issues.
IT 01-0071-GIL	09/17/2001	Public Law 86 - 272/Nexus	General Information Letter: Nexus is not generally an appropriate issue for determination by letter ruling.
IT 01-0070-GIL	08/30/2001	Apportionment - Insurance Company	General Information Letter: In determining the numerator of a life insurance company's apportionment factor, "risk" in Illinois refers to insured persons in Illinois.
IT 01-0069-GIL	08/29/2001	Base Income	General Information Letter: Illinois tax treatment of fringe benefits and contributions to employee benefit funds generally follows the federal income tax treatment of such benefits and contributions.
IT 01-0068-GIL	08/28/2001	Composite Returns	General Information Letter: Composite returns cannot be filed on behalf of corporations or partnerships that are partners in a partnership.
IT 01-0067-GIL	08/24/2001	Penalties - Other Rulings	General Information Letter: Failure of current officers and shareholders of a corporation to pay payroll taxes of the corporation arising prior to their taking control may subject such persons to penalty.
IT 01-0066-GIL	08/24/2001	Collection	General Information Letter: The Illinois Department of Revenue cannot compromise tax debts other than through Board of Appeals review, and is not bound by a restrictive endorsement on a check.
IT 01-0065-GIL	08/20/2001	Credits - Foreign Tax	General Information Letter: Foreign tax credit is not allowed for use taxes or other taxes not imposed on or measured by income.
IT 01-0064-GIL	08/20/2001	Base Income	General Information Letter: In general, Illinois treatment of deferred compensation follows federal income tax treatment, except that qualified retirement plan payments are not subject to Illinois income tax.
IT 01-0063-GIL	08/14/2001	Public Law 86-272/Nexus	General Information Letter: Nexus guidance is provided by 86 Ill. Admin. Code Section 100.9720.
IT 01-0062-GIL	08/14/2001	Apportionment - Sales Factor	General Information Letter: Partnership with no assets or employees in Illinois, and whose only Illinois activities are carried out by independent contractors will have no Illinois sales factor numerator.
IT 01-0061-GIL	08/07/2001	Withholding - Other Rulings	General Information Letter: The Department of Revenue accepts electronic funds transfer payment of withholding taxes, but currently does not accept electronic filing of withholding returns.
IT 01-0060-GIL	08/02/2001	Subtraction Modifications - Pensions	General Information Letter: Military retirement pay is not subject to Illinois income taxation.
IT 01-0059-GIL	08/01/2001	Residency/Nonresidency	General Information Letter: Determination of residency is not a proper subject of a letter ruling.
IT 01-0058-GIL	07/27/2001	Returns - Requirement to File	General Information Letter: A corporation qualified to do business in Illinois is required to file a return for any year for which a federal income tax return is required to be filed.
IT 01-0057-GIL	07/24/2001	Pensions	General Information Letter: Government employee retirement and disability plan income is excluded from Illinois base income.
IT 01-0056-GIL	07/20/2001	Base Income	General Information Letter: Base income of an individual is federal adjusted gross income, with statutory modifications. No modification requires the add-back of amounts excluded from gross income under cafeteria plans or 401(k) plans, and so such amounts are automatically excluded from base income.
IT 01-0055-GIL	07/13/2001	Withholding - Other Rulings	General Information Letter: It is possible that both Illinois law and the law of another state will require withholding from the same compensation.
IT 01-0054-GIL	07/11/2001	Partnerships	General Information Letter: Guaranteed payments under IRC Section 707(c) are distributions of partnership income, and must be allocated under IITA Section 305.
IT 01-0053-GIL	07/06/2001	Base Income	General Information Letter: Base income of a corporation is its federal taxable income, with statutory modifications. No modifications to federal depreciation deductions are required, and so federal depreciation deductions are automatically allowed.
IT 01-0052-GIL	07/06/2001	Base Income	General Information Letter: Subchapter S corporation shareholder whose adjusted gross income was increased by agreement with the IRS to include the audit increases in income of the corporation allocable to all shareholders must include such increase in his base income.
IT 01-0051-GIL	06/19/2001	Composite Returns	General Information Letter: Permission is granted to request to allow nonresident partners to claim a credit for taxes paid on their behalf on a composite return.
IT 01-0050-GIL	06/18/2001	Alternative Apportionment	General Information Letter: Petition for alternative apportionment cannot be granted absent a showing that the statutory apportionment method does not fairly represent the extent of the taxpayer's business activities in Illinois.
IT 01-0049-GIL	06/07/2001	Liens	General Information Letter: Liens for unpaid income taxes arise by operation of law at the time the tax is due.
IT 01-0048-GIL	06/07/2001	Subtraction Modifications - Other Rulings	General Information Letter: No subtraction modification is allowed for gambling losses not deductible in computing adjusted gross income.
IT 01-0047-GIL	06/07/2001	Returns - Requirements to File	General Information Letter: Illinois Income Tax Act does not mandate electronic filing of income tax returns.
IT 01-0046-GIL	05/15/2001	Public Law 86-272/Nexus	General Information Letter: Nexus determinations are generally not proper subjects of a letter ruling.
IT 01-0045-GIL	05/10/2001	Base Income	General Information Letter: Tax treatment of repayment of incentive compensation received in an earlier year is governed by the Internal Revenue Code.
IT 01-0044-GIL	05/09/2001	Partnerships	General Information Letter: General discussion of tax treatment of a limited liability company that has elected to be treated as a partnership for federal income tax purposes.
IT 01-0043-GIL	05/02/2001	Base ncome	General Information Letter: Illinois follows IRC Section 338(h)(10) treatment without a separate election.
IT 01-0042-GIL	04/27/2001	Taxability in Other States	General Information Letter: A taxpayer subject to Michigan Single Business Tax is taxable in Michigan for purposes of allocation and apportionment of income.
IT 01-0041-GIL	04/24/2001	Apportionment - Sales Factor	General Information Letter: No throwback rule applies to business income from investments in intangible assets which may not be taxed in another state.
IT 01-0040-GIL	04/20/2001	Alternative Apportionment	General Information Letter: Taxpayers seeking to use an alternative apportionment method must file a petition in accordance with regulations.
IT 01-0039-GIL	04/18/2001	Base Income	General Information Letter: Income from IRC Section 529 plans excluded from federal gross income is excluded from base income.
IT 01-0038-GIL	04/16/2001	Exempt Organizations	General Information Letter: Organizations exempt from federal income taxation under IRC Section 501(a) are subject to Illinois income tax only on their unrelated business taxable income.
IT 01-0037-GIL	04/13/2001	Public Law 86-272/Nexus	General Information Letter: Nexus determinations generally cannot be made in the ruling process.
IT 01-0036-GIL	04/04/2001	Sales Outside the Ordinary Course of Business (Bulk Sales)	General Information Letter: Bulk sales notification requirements do not apply to transfers under federal bankruptcy court proceedings.
IT 01-0035-GIL	03/29/2001	Exempt Organizations	General Information Letter: Exempt organizations are subject to Illinois income tax on unrelated business taxable income.
IT 01-0034-GIL	03/23/2001	Short Period Returns	General Information Letter: Corporation whose tax year and filing status is otherwise unchanged by acquisition may file a single return covering both short taxable years resulting from the acquisition.
IT 01-0033-GIL	03/21/2001	Alternative Apportionment	General Information Letter: Separate accounting under IITA Section 304(f) cannot be granted on the mere assertion that separate accounting is accurate without any factual evidence regarding distortion by the statutory apportionment formula.
IT 01-0032-GIL	03/21/2001	Alternative Apportionment	General Information Letter: Separate accounting under IITA Section 304(f) cannot be granted on the mere assertion that separate accounting is accurate without any factual evidence regarding distortion by the statutory apportionment formula.
IT 01-0031-GIL	03/21/2001	Withholding - Exemptions	General Information Letter: Employer who has received notice from the Internal Revenue Service to disregard W-4 of employee claiming exemption from tax must compute Illinois income tax withholding without regard to that W-4.
IT 01-0030-GIL	03/21/2001	Federal Returns	General Information Letter: Reporting of federal changes, payment of resulting liabilities and claims for resulting refunds discussed.
IT 01-0029-GIL	03/20/2001	Allocation	General Information Letter: Gain realized by a nonresident on the sale of Illinois realty will generate Illinois income.
IT 01-0028-GIL	03/14/2001	Base Income	General Information Letter: Except for the special exemptions allowed for Illinois Prepaid Tuition Program and College Savings Pool distributions, Illinois income tax treatment of IRC Section 529 college savings plans follows federal income tax treatment.
IT 01-0027-GIL	03/13/2001	Alternative Apportionment	General Information Letter: Separate accounting under IITA Section 304(f) cannot be granted on the mere assertion that separate accounting is accurate without any factual evidence regarding distortion by the statutory apportionment formula.
IT 01-0026-GIL	03/13/2001	Alternative Apportionment	General Information Letter: Separate accounting under IITA Section 304(f) cannot be granted on the mere assertion that separate accounting is accurate without any factual evidence regarding distortion by the statutory apportionment formula.
IT 01-0025-GIL	03/13/2001	Alternative Apportionment	General Information Letter: Separate accounting under IITA Section 304(f) cannot be granted on the mere assertion that separate accounting is accurate without any factual evidence regarding distortion by the statutory apportionment formula.
IT 01-0024-GIL	03/09/2001	Alternative Apportionment	General Information Letter: Alternative apportionment under IITA Section 304(f) cannot be granted on the mere assertion of distortion without any underlying facts.
IT 01-0023-GIL	03/05/2001	Exempt Organizations	General Information Letter: Exempt organizations are subject to Illinois income tax on unrelated business taxable income.
IT 01-0022-GIL	03/05/2001	Public Law 86-272/Nexus	General Information Letter: Quality control activities in Illinois, if not de minimus, are not protected under Public Law 86-272.
IT 01-0021-GIL	02/28/2001	Public Law 86-272/Nexus	General Information Letter: The determination of whether or not a taxpayer has nexus depends on the specific facts and circumstances of each case, and is generally not an appropriate subject for letter rulings.
IT 01-0020-GIL	02/28/2001	Public Law 86-272/Nexus	General Information Letter: Picking up and delivering goods in the taxpayer's own trucks is not an activity protected under Public Law 82-272.
IT 01-0019-GIL	02/28/2001	Alternative Apportionment	General Information Letter: Petition to use alternative apportionment method cannot be granted without some showing that statutory apportionment formula fails to properly reflect the extent of the taxpayer's business activity in Illinois.
IT 01-0018-GIL	02/22/2001	Alternative Apportionment	General Information Letter: Petition to use alternative apportionment method cannot be granted without some showing that statutory apportionment formula fails to properly reflect the extent of the taxpayer's business activity in Illinois.
IT 01-0017-GIL	02/21/2001	Collection	General Information Letter: Notice of Intent to Levy Assets was sent to taxpayer in compliance with the requirements of the Illinois Income Tax Act.
IT 01-0016-GIL	02/16/2001	Public Law 86-272/Nexus	General Information Letter: The determination of whether or not a taxpayer has nexus depends on the specific facts and circumstances of each case, and is generally not an appropriate subject for letter rulings.
IT 01-0015-GIL	02/16/2001	Public Law 86-272/Nexus	General Information Letter: The determination of whether or not a taxpayer has nexus depends on the specific facts and circumstances of each case, and is generally not an appropriate subject for letter rulings.
IT 01-0014-GIL	02/16/2001	Business Income	General Information Letter: Illinois income tax law generally follows the provisions of the Uniform Division of Income for Tax Purposes Act provisions for apportionment of business income.
IT 01-0013-GIL	02/15/2001	Credits - Foreign Tax	General Information Letter: In the case of an Illinois resident individual, only income from California sources is actually taxed by California. The limitation on the foreign tax credit allowed cannot be computed using income from all sources used by California to determine the rate of tax imposed.
IT 01-0012-GIL	02/13/2001	Base Income	General Information Letter: Unless a specific addition or subtraction modification requires otherwise, amounts excluded from federal taxable income of a corporate taxpayer as the result of an IRC Section 338 election are similarly excluded from base income, and amounts included in federal taxable income as the result of the election are included in base income.
IT 01-0011-GIL	02/08/2001	Subtraction Modifications - Other Rulings	General Information Letter: No depreciation deduction is allowed except to the extent taken into account in computing the federal taxable income of the taxpayer corporation.
IT 01-0010-GIL	01/23/2001	Public Law 86-272/Nexus	General Information Letter: Nexus determinations are beyond the scope of letter rulings.
IT 01-0009-GIL	01/23/2001	Public Law 86-272/Nexus	General Information Letter: Activities related to the sale and delivery of farm products in Illinois by nonresident go beyond activities protected by Public Law 86-272.
IT 01-0008-GIL	01/18/2001	Collection	General Information Letter: Statutory authorization for issuance of levies by the Department discussed.
IT 01-0007-GIL	01/16/2001	Information Reports - Other Rulings	General Information Letter: The Schedule K-1-P is provided for the convenience of the partnership or Subchapter S corporation and its owners, and its use is not mandatory.
IT 01-0006-GIL	01/12/2001	Subtraction Modifications - Other Rulings	General Information Letter: Individuals may carry over losses only as allowed in computing federal adjusted gross income.
IT 01-0005-GIL	01/10/2001	Refunds - Other Rulings	General Information Letter: Claims for refund of replacement taxes paid by a Subchapter S corporation resulting from retroactive allowance of a subtraction modification for income distributable to shareholders subject to replacement tax should be filed using Form IL-843.
IT 01-0004-GIL	01/09/2001	Innocent Spouse	General Information Letter: Innocent spouse relief may be available to spouse who was unaware that no payment was made of liabilities shown on joint returns.
IT 01-0003-GIL	01/08/2001	Apportionment - Other Rulings	General Information Letter: Nonresident with income apportioned to other states using statutory apportionment formula has income derived from other states, entitling it to apportion business income.
IT 01-0002-GIL	01/05/2001	Interest Income	General Information Letter: Response to survey regarding taxation of municipal bond interest.
IT 01-0001-GIL	01/05/2001	Public Law 86-272/Nexus	General Information Letter: Nexus determinations are beyond the scope of letter rulings.

Private Letter Rulings

Ruling	Date	Subject	Synopsis
IT 01-0010-PLR	10/30/2001	Subtraction Modifications - Other Rulings	Private Letter Ruling: Corporation designated a high impact business by the Department of Commerce and Community Affairs and which has some amount of payroll or property factor allocated to an enterprise zone qualifies to have its dividends subtracted in the computation of base income under IITA Section 203(a)(2)(J), (b)(2)(K), (c)(2)(O) or (d)(2)(M).
IT 01-0009-PLR	09/15/2001	Apportionment - Sales Factor	Private Letter Ruling: Under facts represented in the request, regulation Section 100.3380(c)(2) would require elimination of gain from sales factor and lack of incomeproducing activities in Illinois would prevent interest income from being included in the Illinois numerator of the sales factor.
IT 01-0008-PLR	08/02/2001	Subtraction Modifications - Other Rulings	Private Letter Ruling: Corporation designated a high impact business by the Department of Commerce and Community Affairs and which has some amount of payroll or property factor allocated to an enterprise zone qualifies to have its dividends subtracted in the computation of base income under IITA Section 203(a)(2)(J), (b)(2)(K), (c)(2)(O) or (d)(2)(M).
IT 01-0007-PLR	07/13/2001	Apportionment - Financial Organizations	Private Letter Ruling: Letter Ruling IT 89-0212, stating that taxpayer has no Illinois apportionment factors, is revoked. Taxpayer was entitled to rely on that letter ruling prior to revocation, and so is not subject to tax or penalties prior to revocation.
IT 01-0006-PLR	04/20/2001	Apportionment - Financial Organizations	Private Letter Ruling: Taxpayer factoring company and single-member LLC that has elected to be disregarded for federal income tax purposes are a single financial organization entitled to apportion business income under IITA Section 304(c).
IT 01-0005-PLR	02/28/2001	Composite Returns	Private Letter Ruling: Nonresident partners with no Illinois sourced income other than from partnerships may join in composite returns filed by those partnerships without the need for filing a petition as long as all Illinois sourced income is reported and taxed on the composite returns.
IT 01-0004-PLR	02/13/2001	Apportionment - Financial Organizations	Private Letter Ruling: Taxpayer factoring company and single-member LLC that has elected to be disregarded for federal income tax purposes are a single financial organization entitled to apportion business income under IITA Section 304(c).
IT 01-0003-PLR	02/09/2001	Apportionment - Financial Organizations	Private Letter Ruling: Taxpayer factoring company is a financial organization entitled to apportion business income under IITA Section 304(c), and may not be included in a unitary business group with taxpayers who may not apportion their business income under that subsection.
IT 01-0002-PLR	01/05/2001	Apportionment - Financial Organizations	Private Letter Ruling: Taxpayer factoring company and single-member LLC that has elected to be disregarded for federal income tax purposes are a single financial organization entitled to apportion business income under IITA Section 304(c).
IT 01-0001-PLR	01/03/2001	Composite Returns	Private Letter Ruling: Partnership may file composite returns on behalf of nonresident individual partners who have no other sources of Illinois income.