The Illinois House of Representatives recently held a contentious hearing on legislation introduced earlier this year that would require publicly traded corporations, and those that are at least 50% owned by a publicly traded company, “doing business” in Illinois to disclose certain tax information in an annual statement filed with the Secretary of State. Under House Bill (HB) 3627’s broad definition of “doing business,” corporations making sales of tangible personal property to Illinois customers, earning income from intangible personal property with a situs in Illinois, or performing services for customers located in Illinois would be subject to the disclosure requirements even if not subject to the corporate income tax. The annual statements would be public records and would include items such as a corporation’s base income, Illinois apportionment factor, business income apportioned to the state, nonbusiness income allocated to the state, net operating loss deduction or credits claimed, and Illinois tax liability before and after credits.
In lieu of the statement described above, a corporation doing business in Illinois but not required to file an Illinois corporate income tax return could elect to file a statement explaining why the corporation is not required to file a corporate income tax return and designating the corporation’s total gross receipts from sales to purchasers in Illinois. The annual statements would be available to the public two years after the initial disclosure on a searchable Internet database created by the Illinois Secretary of State. Corporations that failed to file an annual statement or those that provided inaccurate information could be subject to a civil penalty of up to $100 per statement per day. A similar measure, SB 282, was approved by the Illinois Senate in November 2012 but died in the House Revenue and Finance Committee. The current bill sits in the House Rules Committee, and no vote on the bill is currently scheduled. HB 3627, “Illinois Corporate Responsibility and Tax Disclosure Act,” as introduced in the Illinois House of Representatives on May 2, 2013.