HB5595 98TH GENERAL ASSEMBLY

LRB098 18639 HLH 53782 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5595

Introduced , by Rep. Brandon W. Phelps

SYNOPSIS AS INTRODUCED:

New Act

Creates the Facilitating Business Rapid Response to State Declared Disasters Act of 2014. Provides that an out-of-State business that conducts operations within the State solely for the purpose of performing work or services related to a declared State disaster or emergency during a specified disaster period shall not be required to register, file, or remit State or local taxes with respect to that disaster-related work, and is not subject to any State licensing or registration requirements; provided that, in the case of an out-of-State employee who is required to have a professional license to perform the disaster relief or recovery work, that employee is required to maintain a current license in his or her home state or another state during the disaster period. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Facilitating Business Rapid Response to State Declared Disasters Act of 2014.

Section 5. Findings. With respect to emergency aid coming from out of State, the General Assembly finds that:

(1) During times of storm, tornado, flood, fire, earthquake, or other disaster or emergency, many businesses bring in resources and personnel from other States on a temporary basis to expedite the often enormous and overwhelming tasks of cleaning up, restoring and repairing damaged buildings, equipment, and property, and deploying or building new replacement facilities in the State.

(2) This work may involve the need for out-of-State businesses, including out-of-State affiliates of businesses based in the State, to bring in resources, property, and personnel that previously had no connection to the State to perform disaster relief and recovery activities in the State for extended periods of time.

(3) During such time of operating in the State on a temporary basis solely for the purpose of helping the State recover from the disaster or emergency, these businesses and individual employees should not be burdened by any State or local taxes.

(4) The State's nexus and residency thresholds are intended to apply to businesses and individuals that conduct regular business operations or intend to reside in the State and should not be directed at businesses and individuals coming into the State on a temporary basis to provide help and assistance in response to a declared disaster or emergency.

(5) To ensure that businesses may focus on quick response to the needs of the State and its citizens during a declared disaster or emergency, it is appropriate for the General Assembly to deem that such activity for a reasonable period of time before, during and after the disaster or emergency for repairing and restoration of the often devastating damage to property and infrastructure in the State shall not establish presence, residency, nor doing business in the State nor any other criteria for purposes of State and local taxes, licensing and regulatory requirements.

Section 10. Definitions. In this Act:

"Registered business in the State" (or "registered business") means a business entity that is currently registered to do business in the State prior to a declared State disaster or emergency.

"Out-of-State business" means a business entity that (i) has no presence in the State and conducts no business in the State, whose services are requested by a registered business or by a State or local government for purposes of performing disaster or emergency related work in the State and (ii) has no registrations or tax filings or nexus in the State prior to a declared State disaster or emergency. This shall also include a business entity that is affiliated with the registered business in the State solely through common ownership.

"Out-of-State employee" means an employee who does not work in the State, except for disaster or emergency related work during the disaster period.

"Infrastructure" means property and equipment owned or used by communications networks, cable, video broadband, data and Voice Over Internet Protocol networks, electric generation, transmission and distribution systems, gas distribution systems, water pipelines, and public roads and bridges and related support facilities that service multiple customers, including, but not limited to, real and personal property such as buildings, offices, lines, poles, pipes, structures, and equipment.

"Declared State disaster or emergency" means a disaster or emergency event (1) for which a Governor's proclamation of a State of emergency has been issued or (2) for which a Presidential declaration of a federal major disaster or emergency has been issued.

"Disaster period" means a period that begins within 10 days of the first day of the Governor's proclamation or the President's declaration and that extends for a period of 60 calendar days after the end of the declared disaster or emergency period.

"Disaster or emergency related work" means repairing, renovating, installing, building, rendering services or other business activities that relate to infrastructure that has been damaged impaired or destroyed by the declared State disaster or emergency.

Section 15. Obligations during and after disaster period.

(a) An out-of-State business that conducts operations within the State solely for the purpose of performing work or services related to a declared State disaster or emergency during the disaster period shall not be considered to have established a level of presence that would require that business to register, file, or remit State or local taxes, or that would require that business or its out-of-State employees to be subject to any State licensing or registration requirements; provided that, in the case of an employee who is required to have a professional license to perform the disaster relief or recovery work, that employee is required to maintain a current license in his or her home state or another state during the disaster period. Out-of-State businesses and employees are exempt from the following: State unemployment insurance requirements, State or local occupational licensing fees, use or occupation taxes imposed on the sale or use of tangible personal property used for the purpose of disaster or emergency related work during the disaster period, and Illinois Commerce Commission or Secretary of State licensing and regulatory requirements. Income derived solely from disaster or emergency related work performed by out-of-State businesses or employees during the disaster period shall not be allocated or apportioned to this State for the purposes of the taxes imposed under the Illinois Income Tax Act, including the employer's obligation to pay over withholding taxes.

(b) Out-of-State businesses and employees are required to pay taxes and fees, including use and occupation taxes, motor fuel taxes, hotel taxes, and automobile rental taxes, to the extent that the use or purchase is for personal use and not solely for the purpose of disaster or emergency related work during the disaster period.

(c) Any out-of-State business or out-of-State employee that remains in the State after the disaster period will become subject to the State's normal standards for establishing presence, residency or doing business in the State and will therefore become responsible for any business or employee tax requirements that ensue.

Section 20. Administration, notification, and reporting.

(a) An out-of-State business that enters the State shall, upon request, provide to the Office of the Governor, the Department of Revenue, and the Department of Employment Security a statement that it is in the State solely for the purpose of responding to the disaster or emergency, which statement shall include the business name, state of domicile, principal business address, federal tax identification number, date of entry, and contact information.

(b) A registered business in the State shall, upon request, provide the information required in paragraph (a) of this Section for any affiliate that enters the State that is an out-of-State business. The notification shall also include contact information for the registered business in the State.

(c) An out-of-State business or an out-of-State employee that remains in the State after the disaster period shall complete State and local registration, licensing and filing requirements that ensue as a result of establishing the requisite business presence or residency in the State applicable under the existing law.

(d) The Department of Revenue shall promulgate necessary regulations, develop and issue forms or online processes, and maintain and make available an annual record of any designations pursuant to this Act to carry out these administrative procedures.

Section 99. Effective date. This Act takes effect upon becoming law.