Madison Park Bank v. Zagel

The substantive issue in this case is whether a corporation with losses for Federal income tax purposes, but positive income from sources subject to the State but not the Federal tax, may offset those losses on its Illinois income tax return against the positive State income. For the reason explained below, we do not decide that issue.

Section 201(a) of the Illinois Income Tax Act (Ill. Rev. Stat. 1973, ch. 120, par. 2-201(a)) imposes a tax on “net income.” “Net income” is defined in section 202(a) (Ill. Rev. Stat. 1973, ch. 120, par. 2-202(a)) as “that portion of [taxpayer’s] base income for…