State Tax Ruling

Plain-English summary

A taxpayer's representative asked the Illinois Department of Revenue for a Private Letter Ruling declaring that a woman who had moved to Illinois in 2000, lived there for years, and was then reassigned overseas by her employer starting in early "20XX" was no longer an Illinois resident for state income tax purposes. Because of how the facts were presented, the Department could not issue a binding PLR and instead responded with this General Information Letter (GIL) — general guidance only, not a statement of Department policy, and not binding on the Department (2 Ill. Adm. Code 1200.120(b) and (c)).

The Department explained that Illinois defines a "resident" as someone who is domiciled in Illinois but absent only for a "temporary or transitory purpose" during the tax year (35 ILCS 5/1501(a)(20)(A)). Its own regulation, 86 Ill. Adm. Code 100.3020, asks whether the time away is for a "short and definite" period (temporary — you stay a resident) or a "long and indefinite" period (you may become a nonresident), and there is a regulatory presumption of nonresidence once someone has been absent for a year or more (86 Ill. Adm. Code 100.3020(f)).

To illustrate how fact-dependent this is, the Department walked through Grede v. Illinois Dept. of Revenue, 2013 IL App (2d) 120731-U — a case with striking similarities to the taxpayer's own facts (an Illinois-domiciled executive sent to work in Hong Kong under a multi-year contract, family connections left behind in Illinois). The appellate court found that Mr. Grede had not abandoned his Illinois domicile, yet still qualified as a nonresident for the years he was away, because his absence was for a long and indefinite period — driven largely by stock options that would not fully vest for years and by the routine renewal of executives' contracts, meaning his stay abroad could reasonably be expected to last far longer than the initial contract term.

The Department's bottom-line statement in the ruling is that "residency determinations are very dependent on the facts and circumstances of each case, but individuals domiciled in Illinois who are on short-term assignments overseas generally remain liable for Illinois income tax." Notably, the letter does not tell the requesting taxpayer whether she specifically is or is not an Illinois resident — it declined to issue that declaratory ruling and instead laid out the legal framework and the closest available precedent for her to apply to her own situation.

What this means for you

Individuals working or moving abroad while domiciled in Illinois

If you are domiciled in Illinois (you consider it your permanent home) and take a job overseas, you generally remain an Illinois resident — and owe Illinois income tax — for as long as your absence looks "temporary or transitory," meaning a short, defined stint rather than an open-ended or genuinely long-term relocation. Facts that matter under Grede and 86 Ill. Adm. Code 100.3020 include the length and renewability of your work contract, whether you or your family kept property or ties in Illinois, whether there's a realistic, foreseeable end date to the assignment, and whether you've taken steps to establish a new domicile elsewhere. Simply owning property (like a condo) in Illinois does not by itself make you a resident, but it is one fact among many that the Department and courts will weigh.

Expatriates and cross-border assignees

There is a regulatory presumption that you are not an Illinois resident once you've been absent from the state for one year or more (86 Ill. Adm. Code 100.3020(f)), but that presumption can be overcome or reinforced by the specific facts. This GIL does not give a green light to assume nonresidence just because an assignment has lasted a year — the Department's own framing (short-term assignments "generally remain liable") suggests the presumption is not automatic in practice and depends heavily on whether the absence looks indefinite, as in Grede.

Accountants and tax professionals advising expatriate clients

This letter is useful for the legal framework it recites — IITA 35 ILCS 5/1501(a)(20)(A), 86 Ill. Adm. Code 100.3020(d)(2) (loss of domicile) and (f) (one-year presumption), and the Grede appellate decision — but it is not a ruling on the specific taxpayer's facts and cannot be cited as Department policy. Note also that Grede itself was decided under Illinois Supreme Court Rule 23, which limits its precedential weight, a point the taxpayer's own submission flagged. When advising clients with open-ended or renewable overseas contracts, look closely at contract length, renewal patterns, deferred compensation/vesting schedules, and whether family or property ties to Illinois remain — the same facts that turned the Grede case.

Common questions

Q: Does moving overseas automatically make me a nonresident for Illinois income tax?
A: No. The Department's own framing in this letter is that Illinois domiciliaries on short-term overseas assignments "generally remain liable for Illinois income tax." Only if your absence is for a long and indefinite period, not a short and definite one, do you have a real case for nonresident status.

Q: Did the Department rule on whether the specific taxpayer in this letter was an Illinois resident?
A: No. The taxpayer asked for a binding Private Letter Ruling, but the Department determined the request required a General Information Letter instead — general guidance, not a decision on her facts, and not binding on the Department.

Q: Does owning a home or condo in Illinois automatically make me a resident?
A: Not by itself. In Grede, the appellate court found the taxpayer had not abandoned his Illinois domicile (he kept accounts and property connections there) but was still a nonresident for the years he worked abroad, because the absence itself was long and indefinite. Property ownership is one fact considered, not a decisive one.

Q: Is the Grede case binding precedent I can rely on?
A: The Department cited it as the closest available precedent, but the taxpayer's own submission noted that the decision was issued under Illinois Supreme Court Rule 23, which limits its precedential value. Treat it as persuasive guidance on how the "temporary or transitory" test is applied, not as a guaranteed outcome.

Citations and references

• 35 ILCS 5/1501(a)(20)(A) — Illinois Income Tax Act definition of "resident"
• 86 Ill. Adm. Code 100.3020(d)(2) — loss of Illinois domicile
• 86 Ill. Adm. Code 100.3020(f) — presumption of nonresidence after one year's absence
• 2 Ill. Adm. Code 1200.120(b), (c) — General Information Letters are non-binding, non-policy guidance
• Grede v. Illinois Dept. of Revenue, 2013 IL App (2d) 120731-U (April 22, 2013)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/income-tax/2019.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/income-tax/2019/it19-0005-gil.pdf

Original ruling text

IT 19-0005-GIL 04/15/2019 RESIDENCY/NON-RESIDENCY
Individuals domiciled in Illinois who are on short-term assignments overseas generally remain
liable for Illinois income tax

April 15, 2019

Dear Xxxx:
This is in response to your letter dated January 2nd, 2019, in which you request a Private Letter
Ruling on behalf of NAME. The nature of your request and the information you have provided require
that we respond with a General Information Letter, which is designed to provide general information, is
not a statement of Department policy and is not binding on the Department. See 86 Ill. Adm. Code
1200.120(b) and (c), which may be found on the Department's web site at www.tax.illinois.gov.
Your letter states as follows:
RE:

Personal Income Tax Ruling Request for NAME

I am submitting this ruling request pursuant to Illinois Department of Revenue Regulations
Section 1200.110 on behalf of NAME. I am attaching Form 2848 (Power of Attorney).
Issue Presented
NAME would like a declaratory ruling that she is not a resident of Illinois for purposes of state
personal income tax for 2018 and subsequent tax years.
Statement of Facts
NAME has worked for BUSINESS for several decades. BUSINESS coordinates the worldwide
COMPANY network which supports COUNTRY companies around the world. NAME moved to Illinois
in 2000. She worked for BUSINESS as its representative for the U.S. Midwest until 2015. During that
time, NAME and her husband purchased a condominium in CITY. NAME and her husband filed joint
income tax returns in Illinois during those years. In February 20XX, NAME was reassigned by
BUSINESS to COMPANY. At the time, NAME signed a three year contract which required her to live
and work in COUNTRY. The contract was automatically renewed for three years in 20XX. The contract
renews automatically every year. NAME does not know how long her employer will require her to
remain in COUNTRY. However, she will not be able to return to Illinois with BUSINESS because her
former position has been filled. NAME believes that if she is reassigned by BUSINESS after her current
contract, she will be moved to STATE.
NAME husband had originally planned to move to COUNTRY. But a job opportunity in
COUNTRY fell through and he remained in CITY. He lives in the condominium jointly owned with
NAME. Other than a few trips to visit her husband, NAME has not spent any significant time in Illinois

IT 19-0005-GIL
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since departing in February 20XX. She has no other family living in the state. She owns no other
property in the state. And she has no plans to return to Illinois to live.
Contracts
I am in possession of the employment contract between BUSINESS and NAME. The contract
is, unfortunately, in COUNTRY. We can have the contract translated if the Department finds it
necessary to make a ruling.
Tax Period.
NAME requests a ruling for the tax year 2018 and subsequent years assuming her status does
not change. NAME is not under audit by and is not involved in any litigation with the Illinois Department
of Revenue.
No Previous Rulings.
The Illinois Department of Revenue has never ruled on this issue (or any issue) with respect to
NAME. Neither NAME nor any representative of hers has ever submitted the same or similar request
to the Illinois Department of Revenue.
Statement of Authorities (in Support).
The Illinois Income Tax Act (IITA), 35 ILCS 5/101 et seq., imposes a tax measured by net income
on the privilege of earning or receiving income in or as a "resident" of Illinois. According to Section
1501(20) of the IITA, a “resident” is defined as:
(A) an individual (i) who is in this State for other than a temporary or transitory purpose during the
taxable year; or (ii) who is domiciled in this State but is absent from the State for a temporary or
transitory purpose during the taxable year.
According to the Department regulations, there is a presumption that an individual is not a
resident if he or she is absent from Illinois for one year or more. Section 100.3020(f) of the Illinois
Administrative Code (“IAC”).
Moreover, the Department regulations state that an individual domiciled in Illinois loses Illinois
domicile:
by locating elsewhere with the intention of establishing the new location as his or her
domicile; and
by abandoning any intention of returning to Illinois. Section 100.3020(d)(2)2) (IAC).
NAME has been living in COUNTRY since February 20XX. She has no intention of returning to
Illinois on a permanent basis.
Moreover, an appellate court decision seem particularly on point. Grede v. Illinois Dept. of
Revenue, Ill. App. Ct., 2nd Dist., Dkt. No. 2-12-0731, 04/22/2013 presented a similar situation. In that
case, Grede lived in Illinois but took a job in Hong Kong. He owned a house in Illinois and filed a joint
Illinois return with his wife. The court held that domicile is not dispositive of residency and that an

IT 19-0005-GIL
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individual who is absent from the state for other than a temporary purpose qualifies as a nonresident.
NAME is in a similar situation. She is in COUNTRY and will be there indefinitely.
While the Grede case is right on point, the opinion was issued pursuant to Illinois Supreme Court
Rule 21, which limits its precedential value.
Still, the statutory and regulatory authorities seem to indicate that a person who is not living in
Illinois and has no intention of doing so in the future is not a resident for Illinois income tax purposes.
Statement of Authorities (in Opposition).
I have not found any case law that would indicate that NAME is a resident of Illinois. However,
there have been several administrative rulings that sided with the Department of Revenue on similar
issues. These rulings are distinguishable from the NAME case.
In IT 14-03, Illinois Decisions in Department of Revenue Hearings, the administrative law judge
found that a taxpayer who worked overseas in 2008 remained a resident for Illinois tax purposes. The
taxpayer in that case worked overseas under a part year contract. The judge determined that the
taxpayer intended to and did return to Illinois when the contract ended.
Similarly, in IT 09-0024-GIL, the taxpayer lived and worked in Illinois. The taxpayer accepted a
position with the United States State Department. But the taxpayer noted in his request that "Illinois will
remain my home state." There is not much detail in this general information letter. The taxpayer did
say that he had an Illinois driver's license and continued to vote in the state. Interestingly, in a letter
ruling addressing a Foreign Service officer, the department noted that an individual who is absent for
one year or more is presumed to be a non-resident of Illinois. (Illinois Private Letter Ruling No. IT 910034-PLR).
Trade Secrets.
This ruling request contains no trade secret information that will require deletion. However,
NAME requests that should a ruling be issued anything identifying her or her employer be redacted.
Conclusion
NAME requests a ruling that she is not a resident of Illinois for purposes of the state personal
income tax. She has not lived in Illinois since 20XX. And she has no plans to return. We request the
ruling because there remains some uncertainty about the application of the law. There is a presumption
that NAME is not a resident. But she owns a condominium with her husband in Chicago. NAME does
not believe that the ownership of a condominium in the state alone is enough to establish residency.
But that is why she requests clarification.
Thank you for your time and consideration of this request. Please inform me if you have any
questions about this request or if NAME can provide you with any more information in support thereof.

IT 19-0005-GIL
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RULING
Residency determinations are very dependent on the facts and circumstances of each case, but
individuals domiciled in Illinois who are on short-term assignments overseas generally remain liable for
Illinois income tax.
IITA section 1501(a)(20)(A) defines the term “resident” as “[a]n individual (i) who is in this State for
other than a temporary or transitory purpose during the taxable year; or (ii) who is domiciled in this
State but is absent from the State for a temporary or transitory purpose during the taxable year; . . . .”
In discussing “temporary or transitory purposes,” Regulation section 100.3020 focuses on whether the
absence will be for a short and definite or long and indefinite period of time. In Grede v. Illinois
Department of Revenue, 2013 IL App (2d) 120731-U (April 22, 2013), the Illinois Appellate Court
addressed this question.
Mr. Grede, an executive vice president at the Chicago Board of Trade, had resided in Illinois for a
number of years with his wife and two children. In 1999, he was recruited to launch a stock exchange
in Hong Kong and serve as its deputy chief operating officer. He signed a three-year contract and began
working April 1, 2000. His family remained in Illinois.
He opened a bank account in Hong Kong, as required to deposit his paychecks. He maintained
brokerage and bank accounts in Illinois and regularly transferred funds to support his family. He
extended the six-month lease on an apartment in Hong Kong several times, eventually signing a twoyear lease. In 2003, Mr. Grede learned his employment contract would not be renewed, and he returned
to Illinois.
On his 2001 Illinois income tax return, Mr. Grede reported his status as married filing separately and
claimed to be a non-resident. The Department determined that Mr. Grede remained a resident and
issued a notice of deficiency. The Gredes argued that the decision not to move their children and enroll
them in school in Hong Kong should not be considered a failure by Mr. Grede to abandon his Illinois
domicile. In response, the Department argued that the steps taken toward abandoning their Illinois
domicile were limited. The appellate court held that the Department’s determination that the Gredes
had not abandoned their Illinois domicile was not clearly erroneous.
However, the appellate court found that Mr. Grede nevertheless was absent for more than a temporary
or transitory purpose and did not meet the statutory definition of resident. In so finding, the appellate
court relied on testimony that renewing employment contracts with senior officers was common
practice, and Mr. Grede’s main incentive for accepting the job in Hong Kong was the receipt of stock
options lasting up to 10 years that did not fully vest until he completed 5 years. Given that Mr. Grede
reasonably expected his employment would potentially last as long as 10 years as specified in the
options contract, the Department’s decision that he remained a resident was clearly erroneous.
As stated above, this is a general information letter which does not constitute a statement of policy that
applies, interprets or prescribes the tax laws, and it is not binding on the Department. If you have any
further questions regarding this letter, you may contact me at (312) 814-3185.

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Sincerely,

Evan Schanerberger
Legal Counsel – Department of Revenue