Tax Rate Database to determine th e corporation income and replacement tax rates. Replacement tax is collected from corporations, subchapter S corporations, partnerships, and trusts by the State of Illinois and paid to local governments. This tax replaces money lost by local governments when their power to impose personal property taxes was taken away. Replacement Tax , also known as Personal Property Replacement Tax, is a tax on the net income of corporations, subchapter S corporations, partnerships, and trusts. The Illinois Income Tax is based, to a large extent, on the federal income tax code. The tax is calculated by multiplying net income by a flat rate. The Illinois Income Tax is imposed on every taxpayer e arning or receiving income in Illinois.