Illinois Administrative Code
Title 86 - REVENUE
Part 100 - INCOME TAX
Subpart M - BUSINESS INCOME OF PERSONS OTHER THAN RESIDENTS
Section 100.3450 - Apportionment of Business Income of Transportation Companies (IITA Section 304(d))

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:

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:

2) Revenue Mile. A "revenue mile" is:

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.

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:

5) Freight. "Freight" means any item, other than an individual passenger, that is transported for consideration.

1) the sum of:

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:

Based on the foregoing, Transportation Company's apportionment factor is 35.6985 %, computed as follows:

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.

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).

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).