a) In
General
1)
For taxable years ending
prior to December 31, 2008, business income of a transportation company shall
be apportioned to this State by multiplying that income by a fraction, the
numerator of which is the revenue miles of the person in this State, and the
denominator of which is the revenue miles of the person everywhere.
(IITA Section 304(d)(1))
2)
For taxable years ending on or after December 31, 2008:
A)
Business income derived from
providing transportation services other than airline services shall be
apportioned to this State by using a fraction:
i)
the numerator of which shall
be:
* all receipts from any movement or shipment of
people, goods, mail, oil, gas, or any other substance (other than by airline)
that both originates and terminates in this State, plus
* that portion of the person's gross receipts from
movements or shipments of people, goods, mail, oil, gas, or any other substance
(other than by airline) that originates in one state or jurisdiction and
terminates in another state or jurisdiction, that is determined by the ratio
that the miles traveled in this State bears to total miles everywhere;
and
ii)
the
denominator of which shall be all revenue derived from the movement or shipment
of people, goods, mail, oil, gas, or any other substance (other than by
airline) (IITA Section 304(d)(3)); and
B)
Business income derived from
furnishing airline transportation services shall be apportioned to this State
by multiplying that income by a fraction, the numerator of which is the revenue
miles of the person in this State, and the denominator of which is the revenue
miles of the person everywhere. (IITA Section 304(d)(4))
b) Definitions
1) Miles Transported or Traveled. For
purposes of determining the distance transported or traveled relative to the
movement or shipment of people, goods, oil, gas or any other substance:
A) In the case of transportation by land,
unless the taxpayer maintains specific records of miles or routes actually
traveled by a vehicle in a particular trip, the miles transported or traveled
is the standard distance in miles between the points of pickup and delivery.
Distances may be rounded to the nearest mile.
B) In the case of transportation by water,
unless the taxpayer maintains specific records of miles or routes actually
traveled by a vessel in a particular trip, the miles transported or traveled is
the standard distance in miles between the points of pickup and delivery.
Distances may be rounded to the nearest mile.
C) In the case of transportation by pipeline,
distances may be rounded to the nearest mile.
D) In the case of transportation by air, the
miles transported in a flight is the air distance in miles on the most common
route between the airports. Distances may be rounded to the nearest mile or
tens of miles.
2)
Revenue Mile. A "revenue mile" is:
A)
the transportation of one net ton of freight the distance of one mile
for consideration;
B)
the transportation of one passenger the distance of one mile for
consideration;
C)
the transportation by pipeline of one barrel of oil the distance of one
mile for consideration;
D)
the transportation by pipeline of 1,000 cubic feet of gas the distance
of one mile for consideration; or
E)
the transportation by pipeline of
any specified quantity of a substance other than oil or gas
the distance of one mile for consideration. (IITA Section
304(d)(1) and (4))
3) In
this State. A revenue mile or a mile traveled is "in this State" whenever the
transportation occurs within the geographic boundaries of the State of
Illinois.
A) In the case of interstate
transportation by land, the revenue miles or miles traveled in this State are
the miles determined under subsection (b)(1)(A) between the point or points
where the route used in determining those miles intersect the Illinois border
and the point, if any, in Illinois where the route begins or ends.
B) In the absence of evidence to the
contrary, the number of miles of transportation within this State by a vessel
operating on water that is not wholly within or without this State shall be 50%
of the total number of transportation miles on that water.
C) In the case of interstate transportation
by airline, the revenue miles in this State are the miles determined under
subsection (b)(1)(D) between the point where the route used in determining
those miles intersects the Illinois border and the airport in Illinois where
the flight begins or terminates. Revenue miles in a flight that neither begins
nor terminates in Illinois ("flyover miles") may not be included in the
numerator. (Northwest Airlines, Inc. v. Department of Revenue, 295 Ill. App. 3d
889, 692 N.E.2d 1264 (1998), appeal denied, 179 Ill. 2d 589, 705 N.E. 2d
440.)
4) Gross Receipts
from Furnishing Transportation Services by Airline and by Other Means. For
taxable years ending on or after December 31, 2008, in a transaction in which
the taxpayer transports a passenger or freight both by airline and by any other
mode of transportation, the gross receipts from furnishing airline
transportation services in the transaction shall equal the total gross receipts
from the transaction times a fraction equal to the miles traveled by airline in
the transaction divided by the total miles traveled in the transaction and the
gross receipts from furnishing transportation services (other than by airline)
shall equal the remaining gross receipts from the transaction; provided that:
A) the taxpayer may use any other reasonable
method supported by its books and records for allocating gross receipts from
the transaction between airline transportation and the other modes of
transportation; and
B) if the miles
traveled by airline equal more than 95% of the total miles traveled, the entire
transaction is deemed to be transportation by airline.
5) Freight. "Freight" means any item, other
than an individual passenger, that is transported for consideration.
c) Computation of Apportionment
Factor of a Transportation Company, other than for Furnishing Transportation
Services by Airline, for Taxable Years Ending on or after December 31, 2008.
For each
taxable year ending on or after December 31,
2008, the
business income of a transportation company
shall be apportioned to Illinois by multiplying the company's business income
by an apportionment factor equal to:
1) the
sum of:
A)
the gross receipts from
the provision of transportation services (other than transportation by
airline) when the transportation service both originates and
terminates in Illinois; and
B)
the gross receipts from the
provision of transportation services (other than transportation by
airline) when the transportation service
originates in one
state or jurisdiction and terminates in a different
state or
jurisdiction, multiplied by the quotient of:
i)
the miles traveled in this State
in providing transportation services that originated in one state or
jurisdiction and terminated in a different state or jurisdiction, divided
by
ii) the total miles
traveled in providing transportation services that originated in one
state or jurisdiction and terminated in a different state or
jurisdiction;
2) divided by the taxpayer's
total
gross receipts from the provision of transportation services (other than
transportation by airline). (IITA Section 304(d)(3))
EXAMPLE A: During its taxable year ending December 31, 2008,
Transportation Company made the following trips transporting goods on behalf of
its customers:
|
Miles Traveled
|
|
Trip:
|
Outside Illinois
|
Within Illinois
|
Total
|
Gross Receipts
|
|
Iowa to Minnesota
|
600
|
0
|
600
|
$700
|
|
Iowa to Wisconsin
|
400
|
0
|
400
|
300
|
|
Iowa to Illinois
|
50
|
140
|
190
|
400
|
|
Iowa to Indiana
|
50
|
300
|
350
|
600
|
|
Iowa Intrastate
|
220
|
0
|
220
|
320
|
|
Illinois Intrastate
|
0
|
200
|
200
|
400
|
|
TOTALS
|
1,320
|
640
|
1,960
|
$2,720
|
|
Less IA Intrastate
|
(220)
|
0
|
(220)
|
($320)
|
|
Less IL Intrastate
|
0
|
(200)
|
(200)
|
($400)
|
|
Interstate Totals
|
1,100
|
440
|
1,540
|
$2,000
|
Based on the foregoing, Transportation Company's
apportionment factor is 35.6985 %, computed as follows:
|
ILLINOIS NUMERATOR
|
|
Miles Traveled
|
|
|
Trip:
|
Outside Illinois
|
Within Illinois
|
Total
|
Gross Receipts
|
|
|
|
|
|
|
Totals
|
1,320
|
640
|
1,960
|
$2,720
|
|
Less Iowa Intrastate
|
(220)
|
0
|
(220)
|
(320)
|
|
Less Illinois Intrastate
|
0
|
(200)
|
(200)
|
(400)
|
|
Interstate
|
1,100
|
440
|
1,540
|
$2,000
|
|
|
|
|
|
|
Illinois Intrastate Receipts
|
|
|
|
$400
|
|
Illinois Interstate Miles
|
|
440
|
|
|
|
Everywhere Interstate Miles
|
|
1,540
|
|
|
|
Fraction IL/Everywhere Miles
|
|
28.5714 %
|
|
|
|
Interstate Receipts
|
|
$2,000
|
|
|
|
Illinois Share of Interstate Receipts
|
|
|
|
$571
|
|
Numerator
|
|
|
|
$971
|
|
|
|
|
|
|
DENOMINATOR
|
|
Total Receipts
|
|
|
|
$2,720
|
|
|
|
|
|
|
FACTOR
|
|
Numerator/Denominator
|
|
35.6985%
|
The numerator is:
$400 in gross receipts from the trip that both originated and
terminated in Illinois, plus
$571 Illinois portion of gross receipts from interstate
trips. The $571 Illinois portion of gross receipts from interstate trips is
computed by multiplying the $2,000 in total gross receipts from those trips by
a fraction equal to the 440 miles traveled in Illinois in those trips divided
by the 1,540 in total miles traveled during those trips. The 35.6985% factor is
the $971 numerator divided by the $2,720 in gross receipts for all
trips.
d)
Transportation Companies Providing Transportation Services that use Different
Measures for Apportioning Income. For all taxable years, in cases in which a
transportation company transports both passengers and freight or transports by
pipeline and by other means, and in taxable years ending on or after December
31, 2008, in cases in which a transportation company provides transportation
services by airline and by any other means, the company's apportionment
fraction shall be determined by computing a separate apportionment fraction
under subsection (a)(1), (a)(2)(A) or (a)(2)(B), whichever is applicable, for
its air and surface transportation services, and for its passenger and freight
transportation services within each type, and combining those separate
fractions, weighted by:
1)
in the
case of transportation by railroad, the transportation company's
operating income from transportation of passengers and from
transportation of freight, as reported to the Interstate Commerce
Commission or the Surface Transportation Board; and
2)
in all other cases, by
the
gross receipts derived from the transportation services
related to each separate fraction. (IITA Section 304(d)(1)(A) and (B) and
(2)(A) and (B))
EXAMPLE A: Taxpayer transports freight and passengers by
railroad with total income of $100. Taxpayer derived $60 in operating income
from transporting freight, $30 in operating income from transporting passengers
and $10 in income from nontransportation activities. Taxpayer's apportionment
fraction for its freight transportation business is 15% and its apportionment
fraction for passenger transportation is 45%. Taxpayer's apportionment factor
is 25%, computed as follows: 15% times ($60/$90) plus 45% times
($30/$90).
|
|
Col A
|
Col B
|
Col C
|
Col D
|
Col E
|
|
Example:
|
Income
|
Operating Income
|
Apportionment Fraction
|
Weighting
|
IL Factor C times D
|
|
Transporting freight
|
$60
|
$60
|
15.00 %
|
(60/90)
|
10.00 %
|
|
Transporting passenger
|
$30
|
$30
|
45.00 %
|
(30/90)
|
15.00%
|
|
Nontransportation receipts
|
$10
|
$0
|
0.00%
|
0
|
0.00%
|
|
Subtotals
|
$100
|
$90
|
~~
|
~~
|
25.00 %
|
EXAMPLE B: Taxpayer transports freight by air and ground
service for its taxable year ending June 30, 2009. Taxpayer uses trucks to
provide its ground transportation services. Taxpayer has total gross receipts
of $1,600. Taxpayer derived $600 from transporting freight by truck and $1,000
from transporting freight by air. Using the gross receipts methodology set
forth in subsections (a)(2)(A) and (c), Taxpayer's apportionment factor for its
ground transportation services is 12%. Using the revenue miles methodology in
subsection (a)(2)(B), Taxpayer's apportionment factor for its air
transportation service is 22%. Taxpayer's apportionment factor is 18.25 %,
computed as follows: 12% times ($600/$1600) plus 22% times
($1000/$1600).
|
|
Col A
|
Col B
|
Col C
|
Col D
|
Col E
|
|
Gross Receipts
|
Transportation Receipts
|
Apportionment Fraction
|
Weighting
|
IL Factor C times D
|
|
Example:
|
|
Transporting ground
|
$600
|
$600
|
12.00 %
|
(600/1600)
|
4.50 %
|
|
Transporting air
|
$1000
|
$1000
|
22.00 %
|
(1000/1600)
|
13.75 %
|
|
Nontransportation receipts
|
$100
|
$0
|
0.00%
|
0
|
0.00%
|
|
Subtotals
|
$1700
|
$1600
|
~~
|
~~
|
18.25%
|
