Certain companies that do business with the City of Chicago would be required to disclose taxes paid by the company under a newly proposed ordinance. Introduced by Alderman Ed Burke, Chairman of the City Council’s Finance Committee in December 2012, the ordinance is intended to promote the full and accurate disclosure of the tax payments of “corporations” seeking “City action.” A “corporation” is any entity (a) subject to the tax imposed on corporations pursuant to Section 201 of the Illinois Income Tax Act or Section 11 of the Internal Revenue Code; and, (b) is publicly traded on any U.S. or foreign stock exchange. The ordinance also applies to entities where 50% or more of the voting stock of the company is directly or indirectly owned by a publicly traded corporation. “City action” means any action requiring an ordinance, or ordinance amendment, city council approval, or other city agency or department approval, with respect to the sale or purchase of real estate, real property tax reclassifications, leases, and contracts.
If the ordinance becomes law, corporations seeking City action will have broad disclosure obligations. The ordinance requires a company to disclose, among other tax information, taxable and net income, base income, operating loss deductions, tax credits and net corporate income tax. A company must also disclose the amount of real property taxes more recently paid for properties owned or leased within the City of Chicago. As of the date of this alert, the ordinance has not yet been scheduled for a hearing before the Finance Committee.