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Illinois Responds to Federal Tax Reform Bill by Proposing Legislation to Decouple from the FDII Deduction

The 2017 federal tax reform bill, known as the Tax Cuts and Jobs Act (Act), made a number of significant changes to the law, particularly to the international tax provisions of the Internal Revenue Code (IRC). Last month, Illinois joined the growing number of states responding to the Act by proposing legislation purporting to add-back the new federal deduction for foreign-derived intangible income (FDII). The FDII deduction, enacted in sub-part (a)(1)(A) of new IRC section 250, allows US corporate taxpayers a deduction in the amount of 37.5 percent of income earned from the sale of property to a person outside of the US for use outside of the US or the provision of services to a person outside of the US or with respect to property not located in the US. (For tax years beginning 2026, the deduction is reduced to 21.875 percent.) Senate Bill (SB) 3152 (linked here) proposes an amendment to Section 203(b)(2) of the Illinois Income Tax Act (IITA) that would add...

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Finishing SALT: Inside SALT’s Monthly Recap

Wrapping Up November – and Looking Forward to December You can view all of the topics we discussed over the last month here. Our lawyers appear at the following State and Local Tax events in December: December 4–5, 2017: Peter Faber, Arthur Rosen and Diann Smith spoke at the 36th Annual NYU Institute on State and Local Taxation. December 14, 2017: Catherine Battin, Mary Kay Martire and Jane May are presenting about the SALT aspects of Tax Reform at the Tax in the City® - Year in Review, which will focus on tax reform.

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