The Illinois Senate has advanced legislation that requires publicly traded companies to make certain tax information subject to public disclosure. The legislation now awaits action by the Illinois House of Representatives, which may occur as early as next week during the Illinois General Assembly’s veto session. If enacted, the new law would require public disclosure of tax information that heretofore has been confidential under federal and state law. The legislation would exempt from public disclosure only information that is required to be kept confidential by federal law.
On November 28, 2012, the Illinois Senate passed Senate Bill 282, which requires publicly traded companies that are treated as corporations for tax purposes and that do business in the State of Illinois, as well as their majority-owned subsidiaries that do business in Illinois, to file tax disclosure statements on an annual basis with the Illinois Secretary of State. Once filed, the tax disclosure statements will be compiled by the Secretary of State in a publicly available, searchable, Internet-based database.
The tax disclosure statements would require disclosure of the following information, based on the company’s Illinois state income tax return:
In addition, the information that will be disclosed in the tax disclosure statement must be updated within 60 days of filing an amended federal or Illinois state income tax return.
If a company is required to file a tax disclosure statement, but is not required to file an Illinois state income tax return, the company must still file the tax disclosure statement with certain identifying information, an explanation of why the company is not required to file an Illinois state income tax return, and information with respect to the company’s annual gross receipts.
The legislation exempts from disclosure information that “is confidential and may not be disclosed” under the federal tax code or any other federal statute.
The tax disclosure statements will be subject to audit by the Illinois Department of Revenue. Failure to provide an accurate and timely tax disclosure statement may result in civil penalties against both the company and the company’s chief operating officer.
With adoption of the legislation by the Illinois Senate, the Illinois House of Representatives may take action as early as next week during the General Assembly’s veto session.
Learn more about Senate Bill 282.
For inquiries related to this Legal Update, please contact John A. Janicik.