The Illinois Department of Revenue has adopted a regulation that provides comprehensive guidance and examples on the apportionment of business income by taxpayers that provide transportation services in Illinois. Business income derived from providing transportation services, other than airline services, must be apportioned to Illinois by using a fraction, the numerator of which must include the sum of (1) all receipts from any movement or shipment of people, goods, mail, oil, gas, or any other substance that both originates and terminates in the state, plus (2) that portion of the gross receipts from movements or shipments of people, goods, mail, oil, gas, or any other substance 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 Illinois bears to total miles everywhere. The denominator of the apportionment fraction must include all revenue derived from the movement or shipment of people, goods, mail, oil, gas, or any other substance. Business income derived from furnishing airline transportation services must be apportioned to Illinois by multiplying that income by a fraction, the numerator of which is the revenue miles in the state, and the denominator of which is the revenue miles everywhere. The regulation explains the method for determining the miles transported or traveled in the case of transportation by land or water and provides a definition of the term “revenue mile”. Finally, the regulation discusses the computation of the apportionment fraction for companies that furnish transportation services by airline and by other means or companies, such as railroads, that transport both passengers and freight.
86 Ill. Adm. Code Sec. 100.3450, Illinois Department of Revenue, effective November 18, 2015