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Illinois

NATIONAL ACCOUNTING & FINANCE COUNCIL
STATE OF ILLINOIS MOTOR CARRIER TAX GUIDE

  1. CORPORATE ORGANIZATION AND QUALIFICATION FEES
    1. DOMESTIC CORPORATIONS
      1. The initial license fee or tax is imposed at the rates included in (805 Ill. Comp. Stat. Ann. § 5/15.20).
      2. Domestic tax rate is imposed at (805 Ill. Comp. Stat. Ann. § 5/15.30). 
    2. FOREIGN CORPORATIONS
      1. The same fees and taxes applicable to domestic corporations are imposed on foreign corporations. The Illinois law does provides that a formula be used to determine the basis of the license fee, in order that only the amount of stated capital and paid-in surplus represented in Illinois is taxed (805 Ill.Comp.Stat.Ann. §5/15.50).
  2. FRANCHISE TAX
    1. The initial franchise tax rate is imposed according to (805 Ill. Comp. Stat. Ann. § 5/15.45, 805 Ill. Comp. Stat. Ann. § 5/15.75).
    2. Annual reports due dates are referenced in (805 Ill. Comp. Stat. Ann. § 5/15.40(c), Ill. Comp. Stat. Ann. § 5/15.70).
    3. There is additional franchise tax on an increase in paid in capital (805 Ill. Compl Stat. Ann. § 5/15.35(b)(2)).
  3. INCOME TAX
    1. Illinois imposes an income tax on every corporation for the privilege of earning or receiving income in or as a resident of the State (35 Ill. Comp. Stat. Ann. § 5/201(a)).
    2. The tax is imposed according to (35 Ill. Comp. Stat. Ann. § 5/201(b)).
    3. There is an additional personal property replacement tax in addition to tax on net income (35 Ill. Comp. Stat. Ann. § 5/201(c)).
    4. Refer to (35 Ill. Comp. Stat. Ann. 5/304(d)(1) and (3)) for special apportionment formula for motor carriers.
    5. Corporation taxpayers (other than S-corporations) that are members of the same unitary business group are treated as one taxpayer for reporting and must file a combined return. (35 Ill. Comp. Stat. Ann. § 5/502(e)).
    6. The Illinois Corporation Income Tax Return must be filed with the Illinois Department of Revenue (35 Ill. Comp. Stat. Ann. § 5/505(a)(1)).
    7. Appeal procedures for contesting assessments, filing refund claims, etc. (35 Ill. Comp. Stat. Ann. § 5/908-5/911).
  4. SALES AND USE TAX 

    See sales tax guide
  5. PROPERTY TAXES
    1. Real property taxes are levied by local governments (i.e., county, city, town, village, etc.) which assess and collect these taxes pursuant to Illinois law (Ill. Const. Art. IX § 4).
    2. All real property within Illinois is subject to property tax unless a specific exemption can be found (35 Ill. Comp. Stat. Ann. § 200/15-5 through 15-185).
    3. Real property has been defined to include land and "...buildings, structures and improvements, and other permanent fixtures, of whatever kind, thereon...and all rights and privileges belonging or in any way pertaining thereto..." (35 Ill. Comp. Stat. Ann. § 200/1-130).
    4. Appeal procedures for contesting assessments (86 Ill. Admin. Code Reg. § 1910.10 - 1910.80).
  6. OPERATING TAXES
    1. Registration and Other Fees
      1. Illinois is a member of the International Registration Plan (www.irponline.org).
      2. The registration year is from April through March (IRP Registration Table).
      3. An initial application fee, known as the registration fee, is imposed.
      4. In lieu of annual registration, a registration trip permit is available (IRP Trip Permit Table).
      5. Illinois offers an alternative mileage tax payable by an Illinois intrastate-only registrant. Most states will not recognize the mileage tax plate for operation beyond Illinois borders. Under this alternative, a minimum guaranteed mileage tax is paid for each vehicle and the election to use this method is binding only on an annual basis. Renewal of this election must be filed with the Secretary of State on or before July 1 of each registration period. Semiannual reports are required to show daily miles traveled in the state by each vehicle, Records of fuel consumption also must be maintained and available for audit for three years. A $500 bond is required under this option (625 Ill. Comp. Stat. Ann. § 5/3-818).
      6. The State of Illinois is a participant in the Unified Carrier Registration program (UCR) effective January 1, 2007. The UCR replaces the Single State Registration System which expired on January 1, 2007 (www.ucr.in.gov).
  7. THIRD STRUCTURE TAXES

    Not applicable 
  8. FUEL TAXES
    1. Illinois is a member of the International Fuel Tax Agreement (www.iftach.org).
    2. Advantages of IFTA
      1. The base jurisdiction issues a single fuel tax license authorizing travel in all IFTA jurisdictions.
      2. One consolidated quarterly IFTA tax return containing detailed operations in each of the member jurisdictions is submitted to the base jurisdiction.
      3. Consolidated fuel tax audits are performed by the base state jurisdiction rather than multiple fuel audits.
      4. Due to the consolidation of the IFTA fuel tax reporting into one base state, the paperwork and compliance burdens for the motor carrier are significantly reduced.
    1. Overview of Fuel Tax Exemptions
      1. Fuel consumed during the use of PTO equipment (35 Ill. Comp. Stat. Ann. 505/13(7)).
      2. A credit or refund is available for fuel consumed in a separate fuel tank used to operate auxiliary equipment such as a reefer unit and non-licensed off-road equipment (35 Ill. Comp. Stat. Ann. 505/13(6)).
      3. A refund is available for the use of fuel for any purpose other than the operation of a motor vehicle upon public highways (35 Ill. Comp. Stat. Ann. 505/13).
      4. A two year statute for fuel tax refunds (35 Ill. Comp. Stat. Ann. 505/13).
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