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Today’s Top Headlines




Illinois Senate Passes Corporate Tax Transparency Bill

by Leroy Baker, Tax-News.com, New York

03 December 2012

The Democrat-led Illinois Senate has managed to pass, by a narrow margin, a bill - the Illinois Corporate Tax Disclosure and Responsibility Act - to make all publicly-traded companies doing business in the state openly disclose how much they pay in Illinois income taxes.

Within the proposed bill, the boundaries of "doing business” in Illinois are wide, applying, for example, to all companies owning or renting property located in the state; having employees, agents or representatives acting on its behalf in the state; making sales to purchasers that take possession of the goods in the state; performing services in, or for customers located in, the state; or engaging in the regular solicitation of sales in Illinois.

For each taxable year ending on or after December 31, 2012, each such company must file an annual statement containing, amongst other information, its taxable income declared in Illinois; its total business income and the apportionment factor it has used; and its total state income tax liability before tax credits, together with the amount of each Illinois tax credit claimed.

In addition, the tax information given by companies under the Act will be public records, available on an on-going basis in the form of a searchable database freely accessible through the internet.

While it proponents, and in particular Democratic Senate President John Cullerton, have called for the legislation to ensure that corporate income declarations are transparent and that companies are paying their fair share in taxes, they have also indicated that the information could be used to direct the state’s future corporate tax policy, particularly in determining which tax credits are effective.

Opponents, however, are depicting such tax transparency as being anti-business. Not only do they say that confidential tax returns should not be made public as they contain information that could be useful to competitors, but that the information provided could be misleading and lead to unfounded accusations of specific companies not paying their ‘fair share’ of income taxes in the state.

The bill now passes for consideration to the Illinois House of Representatives, which also has a Democrat majority.

TAGS: compliance | tax | business | tax compliance | law | corporation tax | tax credits | legislation | United States

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