First of all, for those reading this answer who may not know the difference, let's talk about the difference between it's and its.
It's and its are two of the most commonly confused words in the English language. However, understanding the difference between these
two words is crucial for successful communication.
It's is a contraction for it is or it has. For example:
- I think it's going to snow on Monday. It's been a long time since I last saw Ben.
- It's a small world after all.
Its is a possessive pronoun. Its modifies a noun and is used to show ownership. For example:
- The bear carried its cub in its mouth.
- Nothing can take its place.
- The cat licked with its tongue.
To determine if you should use it's or its in your sentence, simply
try replacing the word with it is or it has. If the sentence
makes sense, it's is appropriate. If not, use its. For
- "Nothing can take it is place" makes no sense. Therefore, the correct word to use is its.
- "It is raining outside" is a perfectly acceptable sentence. Therefore, you may use it's if you wish.
Now for the answer to your question there are a few reasons why you would use it is instead of it's.
Contractions can be used in any position in a sentence; however,
homophone contractions such as "it's" and "they're" sound better
when followed by another word or phrase. Therefore, contractions
should not be used at the end of a sentence.
The reason is that the sounds of "its" and "it's" and "they're" and
"they are" are so similar that they can be confusing unless they are
used with the context of an additional word. For example:
- Incorrect: "It is what it's."
- Correct: "It is what it is looking like."
- Correct: "It is what it is."
- Incorrect: "You said they didn't want to go, well, they're."
- Correct: ""You said they didn't want to go, well, they're going."
- Correct: "You said they didn't want to go, well, they are."
[M]any experts also caution against the use of contractions in formal
communication. Since contractions tend to add a light and informal
tone to your writing, they are often inappropriate for academic
research papers, business presentations, and other types of official
correspondence. However, this rule does have some flexibility.
In general, it's best to use your own judgment when deciding if
contractions are appropriate for a particular piece.
Another reason is indicated in the comments. If you need to emphasise the word is then you need to use it is. However, in written text you would add emphasis to the is by using italics.
(Source for quotes: http://grammar.yourdictionary.com/style-and-usage/using-contractions.html)