Illinois market based sourcing regulations

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August 2017

Overview

The Illinois Department of Revenue amended three corporate income tax regulations. The provisions have various applicability dates, as expressed in the Insight.

The amendments provide guidance regarding: (1) sourcing patent, copyright, and trademark receipts; (2) sourcing receipts from interest and similar items of intangible personal property; (3) sourcing service receipts; (4) providing examples of incidental and occasional sales excluded from the sales factor; and (5) repealing double throwback retroactive to tax years ending on or after December 31, 2008.

Taxpayers should review their approach to market sourcing in Illinois to determine whether they have been applying market sourcing rules consistent with the newly amended regulations.

Taxpayers should also take note of the retroactive repeal of double throwback and consider refunds to the extent double throwback resulted in an increase in Illinois taxable income in tax years open under statute.

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Peter Michalowski

Peter Michalowski

State and Local Tax Leader, PwC US

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