Illinois adopts change to 'Retaliatory Tax' law

Multistate tax alert | February 6, 2015

This Tax Alert summarizes the Retaliatory Tax, the decision in 'United States Liability Insurance Company v. Department of Insurance', and the effects of P.A. 98-1169.

Senate Bill 3366

Illinois Governor Bruce Rauner recently signed into law Senate Bill 3366 (Public Act 98-1169, “P.A. 98-1169”).1 The new law, effective January 9, 2015, was adopted in response to the Appellate Court of Illinois’ 2014 decision in United States Liability Insurance Company v. Department of Insurance.2 The case involved a dispute over how insurance companies incorporated or organized outside Illinois (“foreign insurance companies”) but doing business in Illinois should treat their Illinois income tax for purposes of the Illinois “Retaliatory Tax.”

1 P.A. 98-1169; Senate Bill 3366, 99th Gen. Assem.; signed by Governor Rauner on Jan. 9, 2015.

2 United States Liability Insurance Company v. Department of Insurance, 2014 Ill. App. 4th 121125 (May 9, 2014).


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