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Public Act 91-0870
SB1674 Enrolled LRB9113151SMdv
AN ACT concerning prepaid telephone calling arrangements.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Use Tax Act is amended by changing
Section 3 and by adding Section 3-27 as follows:
(35 ILCS 105/3) (from Ch. 120, par. 439.3)
Sec. 3. Tax imposed. A tax is imposed upon the privilege
of using in this State tangible personal property purchased
at retail from a retailer, including computer software, and
including photographs, negatives, and positives that are the
product of photoprocessing, but not including products of
photoprocessing produced for use in motion pictures for
commercial exhibition. Beginning January 1, 2001, prepaid
telephone calling arrangements shall be considered tangible
personal property subject to the tax imposed under this Act
regardless of the form in which those arrangements may be
embodied, transmitted, or fixed by any method now known or
hereafter developed.
(Source: P.A. 91-51, eff. 6-30-99.)
(35 ILCS 105/3-27 new)
Sec. 3-27. Prepaid telephone calling arrangements.
"Prepaid telephone calling arrangements" mean the right to
exclusively purchase telephone or telecommunications services
that must be paid for in advance and enable the origination
of one or more intrastate, interstate, or international
telephone calls or other telecommunications using an access
number, an authorization code, or both, whether manually or
electronically dialed, for which payment to a retailer must
be made in advance, provided that, unless recharged, no
further service is provided once that prepaid amount of
service has been consumed. Prepaid telephone calling
arrangements include the recharge of a prepaid calling
arrangement. For purposes of this Section, "recharge" means
the purchase of additional prepaid telephone or
telecommunications services whether or not the purchaser
acquires a different access number or authorization code.
For purposes of this Section, "telecommunications" means that
term as defined in Section 2 of the Telecommunications Excise
Tax Act. "Prepaid telephone calling arrangement" does not
include an arrangement whereby the service provider reflects
the amount of a purchase as a credit on an account for a
customer under an existing subscription plan.
Section 10. The Service Use Tax Act is amended by
changing Section 3 and by adding 3-27 as follows:
(35 ILCS 110/3) (from Ch. 120, par. 439.33)
Sec. 3. Tax imposed. A tax is imposed upon the
privilege of using in this State real or tangible personal
property acquired as an incident to the purchase of a service
from a serviceman, including computer software, and including
photographs, negatives, and positives that are the product of
photoprocessing, but not including products of
photoprocessing produced for use in motion pictures for
public commercial exhibition. Beginning January 1, 2001,
prepaid telephone calling arrangements shall be considered
tangible personal property subject to the tax imposed under
this Act regardless of the form in which those arrangements
may be embodied, transmitted, or fixed by any method now
known or hereafter developed.
(Source: P.A. 91-51, eff. 6-30-99.)
(35 ILCS 110/3-27 new)
Sec. 3-27. Prepaid telephone calling arrangements.
"Prepaid telephone calling arrangements" mean the right to
exclusively purchase telephone or telecommunications services
that must be paid for in advance and enable the origination
of one or more intrastate, interstate, or international
telephone calls or other telecommunications using an access
number, an authorization code, or both, whether manually or
electronically dialed, for which payment to a retailer must
be made in advance, provided that, unless recharged, no
further service is provided once that prepaid amount of
service has been consumed. Prepaid telephone calling
arrangements include the recharge of a prepaid calling
arrangement. For purposes of this Section, "recharge" means
the purchase of additional prepaid telephone or
telecommunications services whether or not the purchaser
acquires a different access number or authorization code.
For purposes of this Section, "telecommunications" means that
term as defined in Section 2 of the Telecommunications Excise
Tax Act. "Prepaid telephone calling arrangement" does not
include an arrangement whereby the service provider reflects
the amount of the purchase as a credit on an account for a
customer under an existing subscription plan.
Section 15. The Service Occupation Tax Act is amended by
changing Section 3 and by adding Section 3-27 as follows:
(35 ILCS 115/3) (from Ch. 120, par. 439.103)
Sec. 3. Tax imposed. A tax is imposed upon all persons
engaged in the business of making sales of service ( referred
to as "servicemen") on all tangible personal property
transferred as an incident of a sale of service, including
computer software, and including photographs, negatives, and
positives that are the product of photoprocessing, but not
including products of photoprocessing produced for use in
motion pictures for public commercial exhibition. Beginning
January 1, 2001, prepaid telephone calling arrangements shall
be considered tangible personal property subject to the tax
imposed under this Act regardless of the form in which those
arrangements may be embodied, transmitted, or fixed by any
method now known or hereafter developed.
(Source: P.A. 91-51, eff. 6-30-99.)
(35 ILCS 115/3-27 new)
Sec. 3-27. Prepaid telephone calling arrangements.
"Prepaid telephone calling arrangements" mean the right to
exclusively purchase telephone or telecommunications services
that must be paid for in advance and enable the origination
of one or more intrastate, interstate, or international
telephone calls or other telecommunications using an access
number, an authorization code, or both, whether manually or
electronically dialed, for which payment to a retailer must
be made in advance, provided that, unless recharged, no
further service is provided once that prepaid amount of
service has been consumed. Prepaid telephone calling
arrangements include the recharge of a prepaid calling
arrangement. For purposes of this Section, "recharge" means
the purchase of additional prepaid telephone or
telecommunications services whether or not the purchaser
acquires a different access number or authorization code.
For purposes of this Section, "telecommunications" means that
term as defined in Section 2 of the Telecommunications Excise
Tax Act. "Prepaid telephone calling arrangement" does not
include an arrangement whereby the service provider reflects
the amount of the purchase as a credit on an account for a
customer under an existing subscription plan.
Section 20. The Retailers' Occupation Tax Act is amended
by changing Section 2 and by adding Section 2-27 as follows:
(35 ILCS 120/2) (from Ch. 120, par. 441)
Sec. 2. Tax imposed. A tax is imposed upon persons
engaged in the business of selling at retail tangible
personal property, including computer software, and including
photographs, negatives, and positives that are the product of
photoprocessing, but not including products of
photoprocessing produced for use in motion pictures for
public commercial exhibition. Beginning January 1, 2001,
prepaid telephone calling arrangements shall be considered
tangible personal property subject to the tax imposed under
this Act regardless of the form in which those arrangements
may be embodied, transmitted, or fixed by any method now
known or hereafter developed.
(Source: P.A. 91-51, eff. 6-30-99.)
(35 ILCS 120/2-27 new)
Sec. 2-27. Prepaid telephone calling arrangements.
"Prepaid telephone calling arrangements" mean the right to
exclusively purchase telephone or telecommunications services
that must be paid for in advance and enable the origination
of one or more intrastate, interstate, or international
telephone calls or other telecommunications using an access
number, an authorization code, or both, whether manually or
electronically dialed, for which payment to a retailer must
be made in advance, provided that, unless recharged, no
further service is provided once that prepaid amount of
service has been consumed. Prepaid telephone calling
arrangements include the recharge of a prepaid calling
arrangement. For purposes of this Section, "recharge" means
the purchase of additional prepaid telephone or
telecommunications services whether or not the purchaser
acquires a different access number or authorization code.
For purposes of this Section, "telecommunications" means that
term as defined in Section 2 of the Telecommunications Excise
Tax Act. "Prepaid telephone calling arrangement" does not
include an arrangement whereby the service provider reflects
the amount of the purchase as a credit on an account for a
customer under an existing subscription plan.
Section 25. The Telecommunications Excise Tax Act is
amended by changing Sections 2, 3, 4, and 6 as follows:
(35 ILCS 630/2) (from Ch. 120, par. 2002)
Sec. 2. As used in this Article, unless the context
clearly requires otherwise:
(a) "Gross charge" means the amount paid for the act or
privilege of originating or receiving telecommunications in
this State and for all services and equipment provided in
connection therewith by a retailer, valued in money whether
paid in money or otherwise, including cash, credits, services
and property of every kind or nature, and shall be determined
without any deduction on account of the cost of such
telecommunications, the cost of materials used, labor or
service costs or any other expense whatsoever. In case
credit is extended, the amount thereof shall be included only
as and when paid. "Gross charges" for private line service
shall include charges imposed at each channel point within
this State, charges for the channel mileage between each
channel point within this State, and charges for that portion
of the interstate inter-office channel provided within
Illinois. However, "gross charges" shall not include:
(1) any amounts added to a purchaser's bill because
of a charge made pursuant to (i) the tax imposed by this
Article; (ii) charges added to customers' bills pursuant
to the provisions of Sections 9-221 or 9-222 of the
Public Utilities Act, as amended, or any similar charges
added to customers' bills by retailers who are not
subject to rate regulation by the Illinois Commerce
Commission for the purpose of recovering any of the tax
liabilities or other amounts specified in such provisions
of such Act; or (iii) the tax imposed by Section 4251 of
the Internal Revenue Code;
(2) charges for a sent collect telecommunication
received outside of the State;
(3) charges for leased time on equipment or charges
for the storage of data or information for subsequent
retrieval or the processing of data or information
intended to change its form or content. Such equipment
includes, but is not limited to, the use of calculators,
computers, data processing equipment, tabulating
equipment or accounting equipment and also includes the
usage of computers under a time-sharing agreement;
(4) charges for customer equipment, including such
equipment that is leased or rented by the customer from
any source, wherein such charges are disaggregated and
separately identified from other charges;
(5) charges to business enterprises certified under
Section 9-222.1 of the Public Utilities Act, as amended,
to the extent of such exemption and during the period of
time specified by the Department of Commerce and
Community Affairs;
(6) charges for telecommunications and all services
and equipment provided in connection therewith between a
parent corporation and its wholly owned subsidiaries or
between wholly owned subsidiaries when the tax imposed
under this Article has already been paid to a retailer
and only to the extent that the charges between the
parent corporation and wholly owned subsidiaries or
between wholly owned subsidiaries represent expense
allocation between the corporations and not the
generation of profit for the corporation rendering such
service;
(7) bad debts. Bad debt means any portion of a debt
that is related to a sale at retail for which gross
charges are not otherwise deductible or excludable that
has become worthless or uncollectable, as determined
under applicable federal income tax standards. If the
portion of the debt deemed to be bad is subsequently
paid, the retailer shall report and pay the tax on that
portion during the reporting period in which the payment
is made;
(8) charges paid by inserting coins in
coin-operated telecommunication devices;
(9) amounts paid by telecommunications retailers
under the Telecommunications Municipal Infrastructure
Maintenance Fee Act.
(b) "Amount paid" means the amount charged to the
taxpayer's service address in this State regardless of where
such amount is billed or paid.
(c) "Telecommunications", in addition to the meaning
ordinarily and popularly ascribed to it, includes, without
limitation, messages or information transmitted through use
of local, toll and wide area telephone service; private line
services; channel services; telegraph services;
teletypewriter; computer exchange services; cellular mobile
telecommunications service; specialized mobile radio;
stationary two way radio; paging service; or any other form
of mobile and portable one-way or two-way communications; or
any other transmission of messages or information by
electronic or similar means, between or among points by wire,
cable, fiber-optics, laser, microwave, radio, satellite or
similar facilities. As used in this Act, "private line" means
a dedicated non-traffic sensitive service for a single
customer, that entitles the customer to exclusive or priority
use of a communications channel or group of channels, from
one or more specified locations to one or more other
specified locations. The definition of "telecommunications"
shall not include value added services in which computer
processing applications are used to act on the form, content,
code and protocol of the information for purposes other than
transmission. "Telecommunications" shall not include
purchases of telecommunications by a telecommunications
service provider for use as a component part of the service
provided by him to the ultimate retail consumer who
originates or terminates the taxable end-to-end
communications. Carrier access charges, right of access
charges, charges for use of inter-company facilities, and all
telecommunications resold in the subsequent provision of,
used as a component of, or integrated into end-to-end
telecommunications service shall be non-taxable as sales for
resale.
(d) "Interstate telecommunications" means all
telecommunications that either originate or terminate outside
this State.
(e) "Intrastate telecommunications" means all
telecommunications that originate and terminate within this
State.
(f) "Department" means the Department of Revenue of the
State of Illinois.
(g) "Director" means the Director of Revenue for the
Department of Revenue of the State of Illinois.
(h) "Taxpayer" means a person who individually or
through his agents, employees or permittees engages in the
act or privilege of originating or receiving
telecommunications in this State and who incurs a tax
liability under this Article.
(i) "Person" means any natural individual, firm, trust,
estate, partnership, association, joint stock company, joint
venture, corporation, limited liability company, or a
receiver, trustee, guardian or other representative appointed
by order of any court, the Federal and State governments,
including State universities created by statute or any city,
town, county or other political subdivision of this State.
(j) "Purchase at retail" means the acquisition,
consumption or use of telecommunication through a sale at
retail.
(k) "Sale at retail" means the transmitting, supplying
or furnishing of telecommunications and all services and
equipment provided in connection therewith for a
consideration to persons other than the Federal and State
governments, and State universities created by statute and
other than between a parent corporation and its wholly owned
subsidiaries or between wholly owned subsidiaries for their
use or consumption and not for resale.
(l) "Retailer" means and includes every person engaged
in the business of making sales at retail as defined in this
Article. The Department may, in its discretion, upon
application, authorize the collection of the tax hereby
imposed by any retailer not maintaining a place of business
within this State, who, to the satisfaction of the
Department, furnishes adequate security to insure collection
and payment of the tax. Such retailer shall be issued,
without charge, a permit to collect such tax. When so
authorized, it shall be the duty of such retailer to collect
the tax upon all of the gross charges for telecommunications
in this State in the same manner and subject to the same
requirements as a retailer maintaining a place of business
within this State. The permit may be revoked by the
Department at its discretion.
(m) "Retailer maintaining a place of business in this
State", or any like term, means and includes any retailer
having or maintaining within this State, directly or by a
subsidiary, an office, distribution facilities, transmission
facilities, sales office, warehouse or other place of
business, or any agent or other representative operating
within this State under the authority of the retailer or its
subsidiary, irrespective of whether such place of business or
agent or other representative is located here permanently or
temporarily, or whether such retailer or subsidiary is
licensed to do business in this State.
(n) "Service address" means the location of
telecommunications equipment from which the
telecommunications services are originated or at which
telecommunications services are received by a taxpayer. In
the event this may not be a defined location, as in the case
of mobile phones, paging systems, maritime systems,
air-to-ground systems and the like, service address shall
mean the location of a taxpayer's primary use of the
telecommunications equipment as defined by telephone number,
authorization code, or location in Illinois where bills are
sent.
(o) "Prepaid telephone calling arrangements" mean the
right to exclusively purchase telephone or telecommunications
services that must be paid for in advance and enable the
origination of one or more intrastate, interstate, or
international telephone calls or other telecommunications
using an access number, an authorization code, or both,
whether manually or electronically dialed, for which payment
to a retailer must be made in advance, provided that, unless
recharged, no further service is provided once that prepaid
amount of service has been consumed. Prepaid telephone
calling arrangements include the recharge of a prepaid
calling arrangement. For purposes of this subsection,
"recharge" means the purchase of additional prepaid telephone
or telecommunications services whether or not the purchaser
acquires a different access number or authorization code.
"Prepaid telephone calling arrangement" does not include an
arrangement whereby a customer purchases a payment card and
pursuant to which the service provider reflects the amount of
such purchase as a credit on an invoice issued to that
customer under an existing subscription plan.
(Source: P.A. 90-562, eff. 12-16-97.)
(35 ILCS 630/3) (from Ch. 120, par. 2003)
Sec. 3. Until December 31, 1997, a tax is imposed upon
the act or privilege of originating or receiving intrastate
telecommunications by a person in this State at the rate of
5% of the gross charge for such telecommunications purchased
at retail from a retailer by such person. Beginning January
1, 1998, a tax is imposed upon the act or privilege of
originating in this State or receiving in this State
intrastate telecommunications by a person in this State at
the rate of 7% of the gross charge for such
telecommunications purchased at retail from a retailer by
such person. However, such tax is not imposed on the act or
privilege to the extent such act or privilege may not, under
the Constitution and statutes of the United States, be made
the subject of taxation by the State. Beginning January 1,
2001, prepaid telephone calling arrangements shall not be
considered telecommunications subject to the tax imposed
under this Act.
(Source: P.A. 90-548, eff. 12-4-97.)
(35 ILCS 630/4) (from Ch. 120, par. 2004)
Sec. 4. Until December 31, 1997, a tax is imposed upon
the act or privilege of originating in this State or
receiving in this State interstate telecommunications by a
person in this State at the rate of 5% of the gross charge
for such telecommunications purchased at retail from a
retailer by such person. Beginning January 1, 1998, a tax is
imposed upon the act or privilege of originating in this
State or receiving in this State interstate
telecommunications by a person in this State at the rate of
7% of the gross charge for such telecommunications purchased
at retail from a retailer by such person. To prevent actual
multi-state taxation of the act or privilege that is subject
to taxation under this paragraph, any taxpayer, upon proof
that that taxpayer has paid a tax in another state on such
event, shall be allowed a credit against the tax imposed in
this Section 4 to the extent of the amount of such tax
properly due and paid in such other state. However, such tax
is not imposed on the act or privilege to the extent such act
or privilege may not, under the Constitution and statutes of
the United States, be made the subject of taxation by the
State. Beginning on January 1, 2001, prepaid telephone
calling arrangements shall not be considered
telecommunications subject to the tax imposed under this Act.
(Source: P.A. 90-548, eff. 12-4-97.)
(35 ILCS 630/6) (from Ch. 120, par. 2006)
Sec. 6. Except as provided hereinafter in this Section,
on or before the 15th day of each month each retailer
maintaining a place of business in this State shall make a
return to the Department for the preceding calendar month,
stating:
1. His name;
2. The address of his principal place of business,
and the address of the principal place of business (if
that is a different address) from which he engages in the
business of transmitting telecommunications;
3. Total amount of gross charges billed by him
during the preceding calendar month for providing
telecommunications during such calendar month;
4. Total amount received by him during the
preceding calendar month on credit extended;
5. Deductions allowed by law;
6. Gross charges which were billed by him during
the preceding calendar month and upon the basis of which
the tax is imposed;
7. Amount of tax (computed upon Item 6);
8. Such other reasonable information as the
Department may require.
Any taxpayer required to make payments under this Section
may make the payments by electronic funds transfer. The
Department shall adopt rules necessary to effectuate a
program of electronic funds transfer.
If the retailer's average monthly tax billings due to the
Department do not exceed $200, the Department may authorize
his returns to be filed on a quarter annual basis, with the
return for January, February and March of a given year being
due by April 15 of such year; with the return for April, May
and June of a given year being due by July 15 of such year;
with the return for July, August and September of a given
year being due by October 15 of such year; and with the
return of October, November and December of a given year
being due by January 15 of the following year.
If the retailer is otherwise required to file a monthly
or quarterly return and if the retailer's average monthly tax
billings due to the Department do not exceed $50, the
Department may authorize his or her return to be filed on an
annual basis, with the return for a given year being due by
January 15th of the following year.
Notwithstanding any other provision of this Article
containing the time within which a retailer may file his
return, in the case of any retailer who ceases to engage in a
kind of business which makes him responsible for filing
returns under this Article, such retailer shall file a final
return under this Article with the Department not more than
one month after discontinuing such business.
In making such return, the retailer shall determine the
value of any consideration other than money received by him
and he shall include such value in his return. Such
determination shall be subject to review and revision by the
Department in the manner hereinafter provided for the
correction of returns.
Each retailer whose average monthly liability to the
Department under this Article was $10,000 or more during the
preceding calendar year, excluding the month of highest
liability and the month of lowest liability in such calendar
year, and who is not operated by a unit of local government,
shall make estimated payments to the Department on or before
the 7th, 15th, 22nd and last day of the month during which
tax collection liability to the Department is incurred in an
amount not less than the lower of either 22.5% of the
retailer's actual tax collections for the month or 25% of the
retailer's actual tax collections for the same calendar month
of the preceding year. The amount of such quarter monthly
payments shall be credited against the final liability of the
retailer's return for that month. Any outstanding credit,
approved by the Department, arising from the retailer's
overpayment of its final liability for any month may be
applied to reduce the amount of any subsequent quarter
monthly payment or credited against the final liability of
the retailer's return for any subsequent month. If any
quarter monthly payment is not paid at the time or in the
amount required by this Section, the retailer shall be liable
for penalty and interest on the difference between the
minimum amount due as a payment and the amount of such
payment actually and timely paid, except insofar as the
retailer has previously made payments for that month to the
Department in excess of the minimum payments previously due.
If the Director finds that the information required for
the making of an accurate return cannot reasonably be
compiled by a retailer within 15 days after the close of the
calendar month for which a return is to be made, he may grant
an extension of time for the filing of such return for a
period of not to exceed 31 calendar days. The granting of
such an extension may be conditioned upon the deposit by the
retailer with the Department of an amount of money not
exceeding the amount estimated by the Director to be due with
the return so extended. All such deposits, including any
heretofore made with the Department, shall be credited
against the retailer's liabilities under this Article. If
any such deposit exceeds the retailer's present and probable
future liabilities under this Article, the Department shall
issue to the retailer a credit memorandum, which may be
assigned by the retailer to a similar retailer under this
Article, in accordance with reasonable rules and regulations
to be prescribed by the Department.
The retailer making the return herein provided for shall,
at the time of making such return, pay to the Department the
amount of tax herein imposed. On and after the effective date
of this Article of 1985, $1,000,000 of the moneys received by
the Department of Revenue pursuant to this Article shall be
paid each month into the Common School Fund and the remainder
into the General Revenue Fund. On and after February 1, 1998,
however, of the moneys received by the Department of Revenue
pursuant to the additional taxes imposed by this amendatory
Act of 1997 one-half shall be deposited into the School
Infrastructure Fund and one-half shall be deposited into the
Common School Fund. On and after the effective date of this
amendatory Act of the 91st General Assembly, if in any fiscal
year the total of the moneys deposited into the School
Infrastructure Fund under this Act is less than the total of
the moneys deposited into that Fund from the additional taxes
imposed by Public Act 90-548 during fiscal year 1999, then,
as soon as possible after the close of the fiscal year, the
Comptroller shall order transferred and the Treasurer shall
transfer from the General Revenue Fund to the School
Infrastructure Fund an amount equal to the difference between
the fiscal year total deposits and the total amount deposited
into the Fund in fiscal year 1999.
(Source: P.A. 90-16, eff. 6-16-97; 90-548, eff. 12-4-97;
91-541, eff. 8-13-99.)
Section 30. The Telecommunications Municipal
Infrastructure Maintenance Fee Act is amended by changing
Sections 10 and 20 as follows:
(35 ILCS 635/10)
Sec. 10. Definitions.
(a) "Gross charges" means the amount paid to a
telecommunications retailer for the act or privilege of
originating or receiving telecommunications in this State or
the municipality imposing the fee under this Act, as the
context requires, and for all services rendered in connection
therewith, valued in money whether paid in money or
otherwise, including cash, credits, services, and property of
every kind or nature, and shall be determined without any
deduction on account of the cost of such telecommunications,
the cost of the materials used, labor or service costs, or
any other expense whatsoever. In case credit is extended,
the amount thereof shall be included only as and when paid.
"Gross charges" for private line service shall include
charges imposed at each channel point within this State or
the municipality imposing the fee under this Act, charges for
the channel mileage between each channel point within this
State or the municipality imposing the fee under this Act,
and charges for that portion of the interstate inter-office
channel provided within Illinois or the municipality imposing
the fee under this Act. However, "gross charges" shall not
include:
(1) any amounts added to a purchaser's bill because
of a charge made under: (i) the fee imposed by this
Section, (ii) additional charges added to a purchaser's
bill under Section 9-221 or 9-222 of the Public Utilities
Act, (iii) amounts collected under Section 8-11-17 of the
Illinois Municipal Code, (iv) the tax imposed by the
Telecommunications Excise Tax Act, (v) 911 surcharges, or
(vi) the tax imposed by Section 4251 of the Internal
Revenue Code;
(2) charges for a sent collect telecommunication
received outside of this State or the municipality
imposing the fee, as the context requires;
(3) charges for leased time on equipment or charges
for the storage of data or information or subsequent
retrieval or the processing of data or information
intended to change its form or content. Such equipment
includes, but is not limited to, the use of calculators,
computers, data processing equipment, tabulating
equipment, or accounting equipment and also includes the
usage of computers under a time-sharing agreement.
(4) charges for customer equipment, including such
equipment that is leased or rented by the customer from
any source, wherein such charges are disaggregated and
separately identified from other charges;
(5) charges to business enterprises certified under
Section 9-222.1 of the Public Utilities Act to the extent
of such exemption and during the period of time specified
by the Department of Commerce and Community Affairs or by
the municipality imposing the fee under the Act, as the
context requires;
(6) charges for telecommunications and all services
and equipment provided in connection therewith between a
parent corporation and its wholly owned subsidiaries or
between wholly owned subsidiaries, and only to the extent
that the charges between the parent corporation and
wholly owned subsidiaries or between wholly owned
subsidiaries represent expense allocation between the
corporations and not the generation of profit other than
a regulatory required profit for the corporation
rendering such services;
(7) bad debts ("bad debt" means any portion of a
debt that is related to a sale at retail for which gross
charges are not otherwise deductible or excludable that
has become worthless or uncollectible, as determined
under applicable federal income tax standards; if the
portion of the debt deemed to be bad is subsequently
paid, the retailer shall report and pay the tax on that
portion during the reporting period in which the payment
is made);
(8) charges paid by inserting coins in
coin-operated telecommunication devices; or
(9) charges for telecommunications and all services
and equipment provided to a municipality imposing the
infrastructure maintenance fee.
(a-5) "Department" means the Illinois Department of
Revenue.
(b) "Telecommunications" includes, but is not limited
to, messages or information transmitted through use of local,
toll, and wide area telephone service, channel services,
telegraph services, teletypewriter service, computer exchange
services, private line services, specialized mobile radio
services, or any other transmission of messages or
information by electronic or similar means, between or among
points by wire, cable, fiber optics, laser, microwave, radio,
satellite, or similar facilities. Unless the context clearly
requires otherwise, "telecommunications" shall also include
wireless telecommunications as hereinafter defined.
"Telecommunications" shall not include value added services
in which computer processing applications are used to act on
the form, content, code, and protocol of the information for
purposes other than transmission. "Telecommunications" shall
not include purchase of telecommunications by a
telecommunications service provider for use as a component
part of the service provided by him or her to the ultimate
retail consumer who originates or terminates the end-to-end
communications. Retailer access charges, right of access
charges, charges for use of intercompany facilities, and all
telecommunications resold in the subsequent provision and
used as a component of, or integrated into, end-to-end
telecommunications service shall not be included in gross
charges as sales for resale. "Telecommunications" shall not
include the provision of cable services through a cable
system as defined in the Cable Communications Act of 1984 (47
U.S.C. Sections 521 and following) as now or hereafter
amended or through an open video system as defined in the
Rules of the Federal Communications Commission (47 C.D.F.
76.1550 and following) as now or hereafter amended. Beginning
January 1, 2001, prepaid telephone calling arrangements shall
not be considered "telecommunications" subject to the tax
imposed under this Act. For purposes of this Section,
"prepaid telephone calling arrangements" means that term as
defined in Section 2-27 of the Retailers' Occupation Tax Act.
(c) "Wireless telecommunications" includes cellular
mobile telephone services, personal wireless services as
defined in Section 704(C) of the Telecommunications Act of
1996 (Public Law No. 104-104) as now or hereafter amended,
including all commercial mobile radio services, and paging
services.
(d) "Telecommunications retailer" or "retailer" or
"carrier" means and includes every person engaged in the
business of making sales of telecommunications at retail as
defined in this Section. The Illinois Department of Revenue
or the municipality imposing the fee, as the case may be,
may, in its discretion, upon applications, authorize the
collection of the fee hereby imposed by any retailer not
maintaining a place of business within this State, who, to
the satisfaction of the Department or municipality, furnishes
adequate security to insure collection and payment of the
fee. When so authorized, it shall be the duty of such
retailer to pay the fee upon all of the gross charges for
telecommunications in the same manner and subject to the same
requirements as a retailer maintaining a place of business
within the State or municipality imposing the fee.
(e) "Retailer maintaining a place of business in this
State", or any like term, means and includes any retailer
having or maintaining within this State, directly or by a
subsidiary, an office, distribution facilities, transmission
facilities, sales office, warehouse, or other place of
business, or any agent or other representative operating
within this State under the authority of the retailer or its
subsidiary, irrespective of whether such place of business or
agent or other representative is located here permanently or
temporarily, or whether such retailer or subsidiary is
licensed to do business in this State.
(f) "Sale of telecommunications at retail" means the
transmitting, supplying, or furnishing of telecommunications
and all services rendered in connection therewith for a
consideration, other than between a parent corporation and
its wholly owned subsidiaries or between wholly owned
subsidiaries, when the gross charge made by one such
corporation to another such corporation is not greater than
the gross charge paid to the retailer for their use or
consumption and not for sale.
(g) "Service address" means the location of
telecommunications equipment from which telecommunications
services are originated or at which telecommunications
services are received. If this is not a defined location, as
in the case of wireless telecommunications, paging systems,
maritime systems, air-to-ground systems, and the like,
"service address" shall mean the location of the customer's
primary use of the telecommunications equipment as defined by
the location in Illinois where bills are sent.
(Source: P.A. 90-154, eff. 1-1-98; 90-562, eff. 12-16-97.)
(35 ILCS 635/20)
Sec. 20. Municipal telecommunications infrastructure
maintenance fee.
(a) A municipality may impose a municipal infrastructure
maintenance fee upon telecommunications retailers in an
amount specified in subsection (b). On and after the
effective date of this amendatory Act of 1997, a certified
copy of an ordinance or resolution imposing a fee under this
Section shall be filed with the Department within 30 days
after the effective date of this amendatory Act or the
effective date of the ordinance or resolution imposing such
fee, whichever is later. Failure to file a certified copy of
the ordinance or resolution imposing a fee under this Section
shall have no effect on the validity of the ordinance or
resolution. The Department shall create and maintain a list
of all ordinances and resolutions filed pursuant to this
Section and make that list, as well as copies of the
ordinances and resolutions, available to the public for a
reasonable fee.
(b) The amount of the municipal infrastructure
maintenance fee imposed upon a telecommunications retailer
under this Section shall not exceed: (i) in a municipality
with a population of more than 500,000, 2.0% of all gross
charges charged by the telecommunications retailer to service
addresses in the municipality for telecommunications
originating or received in the municipality; and (ii) in a
municipality with a population of 500,000 or less, 1.0% of
all gross charges charged by the telecommunications retailer
to service addresses in the municipality for
telecommunications originating or received in the
municipality. If imposed, the municipal telecommunications
infrastructure fee must be in 1/4% increments. However, the
fee shall not be imposed in any case in which the imposition
of the fee would violate the Constitution or statutes of the
United States.
(c) The municipal telecommunications infrastructure fee
authorized by this Section shall be collected, enforced, and
administered as set forth in subsection (c) of Section 25 of
this Act.
(d) A municipality with a population of more than
500,000 that imposes a municipal infrastructure maintenance
fee under this Section may, by ordinance, exempt from the fee
all charges for the inbound toll-free telecommunications
service commonly known as "800", "877", or "888" or for a
similar service.
(Source: P.A. 90-154, eff. 1-1-98; 90-562, eff. 12-16-97.)
Section 35. The Illinois Municipal Code is amended by
changing Sections 8-11-2 and 8-11-17 as follows:
(65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2)
Sec. 8-11-2. The corporate authorities of any
municipality may tax any or all of the following occupations
or privileges:
1. Persons engaged in the business of transmitting
messages by means of electricity or radio magnetic waves,
or fiber optics, at a rate not to exceed 5% of the gross
receipts from that business originating within the
corporate limits of the municipality. Beginning January
1, 2001, prepaid telephone calling arrangements shall not
be subject to the tax imposed under this Section. For
purposes of this Section, "prepaid telephone calling
arrangements" means that term as defined in Section 2-27
of the Retailers' Occupation Tax Act.
2. Persons engaged in the business of distributing,
supplying, furnishing, or selling gas for use or
consumption within the corporate limits of a municipality
of 500,000 or fewer population, and not for resale, at a
rate not to exceed 5% of the gross receipts therefrom.
2a. Persons engaged in the business of
distributing, supplying, furnishing, or selling gas for
use or consumption within the corporate limits of a
municipality of over 500,000 population, and not for
resale, at a rate not to exceed 8% of the gross receipts
therefrom. If imposed, this tax shall be paid in monthly
payments.
3. The privilege of using or consuming electricity
acquired in a purchase at retail and used or consumed
within the corporate limits of the municipality at rates
not to exceed the following maximum rates, calculated on
a monthly basis for each purchaser:
(i) For the first 2,000 kilowatt-hours used or
consumed in a month; 0.61 cents per kilowatt-hour;
(ii) For the next 48,000 kilowatt-hours used or
consumed in a month; 0.40 cents per kilowatt-hour;
(iii) For the next 50,000 kilowatt-hours used or
consumed in a month; 0.36 cents per kilowatt-hour;
(iv) For the next 400,000 kilowatt-hours used or
consumed in a month; 0.35 cents per kilowatt-hour;
(v) For the next 500,000 kilowatt-hours used or
consumed in a month; 0.34 cents per kilowatt-hour;
(vi) For the next 2,000,000 kilowatt-hours used or
consumed in a month; 0.32 cents per kilowatt-hour;
(vii) For the next 2,000,000 kilowatt-hours used or
consumed in a month; 0.315 cents per kilowatt-hour;
(viii) For the next 5,000,000 kilowatt-hours used
or consumed in a month; 0.31 cents per kilowatt-hour;
(ix) For the next 10,000,000 kilowatt-hours used or
consumed in a month; 0.305 cents per kilowatt-hour; and
(x) For all electricity used or consumed in excess
of 20,000,000 kilowatt-hours in a month, 0.30 cents per
kilowatt-hour.
If a municipality imposes a tax at rates lower than
either the maximum rates specified in this Section or the
alternative maximum rates promulgated by the Illinois
Commerce Commission, as provided below, the tax rates
shall be imposed upon the kilowatt hour categories set
forth above with the same proportional relationship as
that which exists among such maximum rates.
Notwithstanding the foregoing, until December 31, 2008,
no municipality shall establish rates that are in excess
of rates reasonably calculated to produce revenues that
equal the maximum total revenues such municipality could
have received under the tax authorized by this
subparagraph in the last full calendar year prior to the
effective date of Section 65 of this amendatory Act of
1997; provided that this shall not be a limitation on the
amount of tax revenues actually collected by such
municipality.
Upon the request of the corporate authorities of a
municipality, the Illinois Commerce Commission shall,
within 90 days after receipt of such request, promulgate
alternative rates for each of these kilowatt-hour
categories that will reflect, as closely as reasonably
practical for that municipality, the distribution of the
tax among classes of purchasers as if the tax were based
on a uniform percentage of the purchase price of
electricity. A municipality that has adopted an
ordinance imposing a tax pursuant to subparagraph 3 as it
existed prior to the effective date of Section 65 of this
amendatory Act of 1997 may, rather than imposing the tax
permitted by this amendatory Act of 1997, continue to
impose the tax pursuant to that ordinance with respect to
gross receipts received from residential customers
through July 31, 1999, and with respect to gross receipts
from any non-residential customer until the first bill
issued to such customer for delivery services in
accordance with Section 16-104 of the Public Utilities
Act but in no case later than the last bill issued to
such customer before December 31, 2000. No ordinance
imposing the tax permitted by this amendatory Act of 1997
shall be applicable to any non-residential customer until
the first bill issued to such customer for delivery
services in accordance with Section 16-104 of the Public
Utilities Act but in no case later than the last bill
issued to such non-residential customer before December
31, 2000.
4. Persons engaged in the business of distributing,
supplying, furnishing, or selling water for use or
consumption within the corporate limits of the
municipality, and not for resale, at a rate not to exceed
5% of the gross receipts therefrom.
None of the taxes authorized by this Section may be
imposed with respect to any transaction in interstate
commerce or otherwise to the extent to which the business or
privilege may not, under the constitution and statutes of the
United States, be made the subject of taxation by this State
or any political sub-division thereof; nor shall any persons
engaged in the business of distributing, supplying,
furnishing, selling or transmitting gas, water, or
electricity, or engaged in the business of transmitting
messages, or using or consuming electricity acquired in a
purchase at retail, be subject to taxation under the
provisions of this Section for those transactions that are or
may become subject to taxation under the provisions of the
"Municipal Retailers' Occupation Tax Act" authorized by
Section 8-11-1; nor shall any tax authorized by this Section
be imposed upon any person engaged in a business or on any
privilege unless the tax is imposed in like manner and at the
same rate upon all persons engaged in businesses of the same
class in the municipality, whether privately or municipally
owned or operated, or exercising the same privilege within
the municipality.
Any of the taxes enumerated in this Section may be in
addition to the payment of money, or value of products or
services furnished to the municipality by the taxpayer as
compensation for the use of its streets, alleys, or other
public places, or installation and maintenance therein,
thereon or thereunder of poles, wires, pipes or other
equipment used in the operation of the taxpayer's business.
(a) If the corporate authorities of any home rule
municipality have adopted an ordinance that imposed a tax on
public utility customers, between July 1, 1971, and October
1, 1981, on the good faith belief that they were exercising
authority pursuant to Section 6 of Article VII of the 1970
Illinois Constitution, that action of the corporate
authorities shall be declared legal and valid,
notwithstanding a later decision of a judicial tribunal
declaring the ordinance invalid. No municipality shall be
required to rebate, refund, or issue credits for any taxes
described in this paragraph, and those taxes shall be deemed
to have been levied and collected in accordance with the
Constitution and laws of this State.
(b) In any case in which (i) prior to October 19, 1979,
the corporate authorities of any municipality have adopted an
ordinance imposing a tax authorized by this Section (or by
the predecessor provision of the "Revised Cities and Villages
Act") and have explicitly or in practice interpreted gross
receipts to include either charges added to customers' bills
pursuant to the provision of paragraph (a) of Section 36 of
the Public Utilities Act or charges added to customers' bills
by taxpayers who are not subject to rate regulation by the
Illinois Commerce Commission for the purpose of recovering
any of the tax liabilities or other amounts specified in such
paragraph (a) of Section 36 of that Act, and (ii) on or after
October 19, 1979, a judicial tribunal has construed gross
receipts to exclude all or part of those charges, then
neither those municipality nor any taxpayer who paid the tax
shall be required to rebate, refund, or issue credits for any
tax imposed or charge collected from customers pursuant to
the municipality's interpretation prior to October 19, 1979.
This paragraph reflects a legislative finding that it would
be contrary to the public interest to require a municipality
or its taxpayers to refund taxes or charges attributable to
the municipality's more inclusive interpretation of gross
receipts prior to October 19, 1979, and is not intended to
prescribe or limit judicial construction of this Section. The
legislative finding set forth in this subsection does not
apply to taxes imposed after the effective date of this
amendatory Act of 1995.
(c) The tax authorized by subparagraph 3 shall be
collected from the purchaser by the person maintaining a
place of business in this State who delivers the electricity
to the purchaser. This tax shall constitute a debt of the
purchaser to the person who delivers the electricity to the
purchaser and if unpaid, is recoverable in the same manner as
the original charge for delivering the electricity. Any tax
required to be collected pursuant to an ordinance authorized
by subparagraph 3 and any such tax collected by a person
delivering electricity shall constitute a debt owed to the
municipality by such person delivering the electricity,
provided, that the person delivering electricity shall be
allowed credit for such tax related to deliveries of
electricity the charges for which are written off as
uncollectible, and provided further, that if such charges are
thereafter collected, the delivering supplier shall be
obligated to remit such tax. For purposes of this subsection
(c), any partial payment not specifically identified by the
purchaser shall be deemed to be for the delivery of
electricity. Persons delivering electricity shall collect the
tax from the purchaser by adding such tax to the gross charge
for delivering the electricity, in the manner prescribed by
the municipality. Persons delivering electricity shall also
be authorized to add to such gross charge an amount equal to
3% of the tax to reimburse the person delivering electricity
for the expenses incurred in keeping records, billing
customers, preparing and filing returns, remitting the tax
and supplying data to the municipality upon request. If the
person delivering electricity fails to collect the tax from
the purchaser, then the purchaser shall be required to pay
the tax directly to the municipality in the manner prescribed
by the municipality. Persons delivering electricity who file
returns pursuant to this paragraph (c) shall, at the time of
filing such return, pay the municipality the amount of the
tax collected pursuant to subparagraph 3.
(d) For the purpose of the taxes enumerated in this
Section:
"Gross receipts" means the consideration received for the
transmission of messages, the consideration received for
distributing, supplying, furnishing or selling gas for use or
consumption and not for resale, and the consideration
received for distributing, supplying, furnishing or selling
water for use or consumption and not for resale, and for all
services rendered in connection therewith valued in money,
whether received in money or otherwise, including cash,
credit, services and property of every kind and material and
for all services rendered therewith, and shall be determined
without any deduction on account of the cost of transmitting
such messages, without any deduction on account of the cost
of the service, product or commodity supplied, the cost of
materials used, labor or service cost, or any other expenses
whatsoever. "Gross receipts" shall not include that portion
of the consideration received for distributing, supplying,
furnishing, or selling gas or water to, or for the
transmission of messages for, business enterprises described
in paragraph (e) of this Section to the extent and during the
period in which the exemption authorized by paragraph (e) is
in effect or for school districts or units of local
government described in paragraph (f) during the period in
which the exemption authorized in paragraph (f) is in effect.
"Gross receipts" shall not include amounts paid by
telecommunications retailers under the Telecommunications
Municipal Infrastructure Maintenance Fee Act.
For utility bills issued on or after May 1, 1996, but
before May 1, 1997, and for receipts from those utility
bills, "gross receipts" does not include one-third of (i)
amounts added to customers' bills under Section 9-222 of the
Public Utilities Act, or (ii) amounts added to customers'
bills by taxpayers who are not subject to rate regulation by
the Illinois Commerce Commission for the purpose of
recovering any of the tax liabilities described in Section
9-222 of the Public Utilities Act. For utility bills issued
on or after May 1, 1997, but before May 1, 1998, and for
receipts from those utility bills, "gross receipts" does not
include two-thirds of (i) amounts added to customers' bills
under Section 9-222 of the Public Utilities Act, or (ii)
amount added to customers' bills by taxpayers who are not
subject to rate regulation by the Illinois Commerce
Commission for the purpose of recovering any of the tax
liabilities described in Section 9-222 of the Public
Utilities Act. For utility bills issued on or after May 1,
1998, and for receipts from those utility bills, "gross
receipts" does not include (i) amounts added to customers'
bills under Section 9-222 of the Public Utilities Act, or
(ii) amounts added to customers' bills by taxpayers who are
not subject to rate regulation by the Illinois Commerce
Commission for the purpose of recovering any of the tax
liabilities described in Section 9-222 of the Public
Utilities Act.
For purposes of this Section "gross receipts" shall not
include (i) amounts added to customers' bills under Section
9-221 of the Public Utilities Act, or (ii) charges added to
customers' bills to recover the surcharge imposed under the
Emergency Telephone System Act. This paragraph is not
intended to nor does it make any change in the meaning of
"gross receipts" for the purposes of this Section, but is
intended to remove possible ambiguities, thereby confirming
the existing meaning of "gross receipts" prior to the
effective date of this amendatory Act of 1995.
The words "transmitting messages", in addition to the
usual and popular meaning of person to person communication,
shall include the furnishing, for a consideration, of
services or facilities (whether owned or leased), or both, to
persons in connection with the transmission of messages where
those persons do not, in turn, receive any consideration in
connection therewith, but shall not include such furnishing
of services or facilities to persons for the transmission of
messages to the extent that any such services or facilities
for the transmission of messages are furnished for a
consideration, by those persons to other persons, for the
transmission of messages.
"Person" as used in this Section means any natural
individual, firm, trust, estate, partnership, association,
joint stock company, joint adventure, corporation, limited
liability company, municipal corporation, the State or any of
its political subdivisions, any State university created by
statute, or a receiver, trustee, guardian or other
representative appointed by order of any court.
"Person maintaining a place of business in this State"
shall mean any person having or maintaining within this
State, directly or by a subsidiary or other affiliate, an
office, generation facility, distribution facility,
transmission facility, sales office or other place of
business, or any employee, agent, or other representative
operating within this State under the authority of the person
or its subsidiary or other affiliate, irrespective of whether
such place of business or agent or other representative is
located in this State permanently or temporarily, or whether
such person, subsidiary or other affiliate is licensed or
qualified to do business in this State.
"Public utility" shall have the meaning ascribed to it in
Section 3-105 of the Public Utilities Act and shall include
telecommunications carriers as defined in Section 13-202 of
that Act and alternative retail electric suppliers as defined
in Section 16-102 of that Act.
"Purchase at retail" shall mean any acquisition of
electricity by a purchaser for purposes of use or
consumption, and not for resale, but shall not include the
use of electricity by a public utility directly in the
generation, production, transmission, delivery or sale of
electricity.
"Purchaser" shall mean any person who uses or consumes,
within the corporate limits of the municipality, electricity
acquired in a purchase at retail.
In the case of persons engaged in the business of
transmitting messages through the use of mobile equipment,
such as cellular phones and paging systems, the gross
receipts from the business shall be deemed to originate
within the corporate limits of a municipality only if the
address to which the bills for the service are sent is within
those corporate limits. If, however, that address is not
located within a municipality that imposes a tax under this
Section, then (i) if the party responsible for the bill is
not an individual, the gross receipts from the business shall
be deemed to originate within the corporate limits of the
municipality where that party's principal place of business
in Illinois is located, and (ii) if the party responsible for
the bill is an individual, the gross receipts from the
business shall be deemed to originate within the corporate
limits of the municipality where that party's principal
residence in Illinois is located.
(e) Any municipality that imposes taxes upon public
utilities or upon the privilege of using or consuming
electricity pursuant to this Section whose territory includes
any part of an enterprise zone or federally designated
Foreign Trade Zone or Sub-Zone may, by a majority vote of its
corporate authorities, exempt from those taxes for a period
not exceeding 20 years any specified percentage of gross
receipts of public utilities received from, or electricity
used or consumed by, business enterprises that:
(1) either (i) make investments that cause the
creation of a minimum of 200 full-time equivalent jobs in
Illinois, (ii) make investments of at least $175,000,000
that cause the creation of a minimum of 150 full-time
equivalent jobs in Illinois, or (iii) make investments
that cause the retention of a minimum of 1,000 full-time
jobs in Illinois; and
(2) are either (i) located in an Enterprise Zone
established pursuant to the Illinois Enterprise Zone Act
or (ii) Department of Commerce and Community Affairs
designated High Impact Businesses located in a federally
designated Foreign Trade Zone or Sub-Zone; and
(3) are certified by the Department of Commerce and
Community Affairs as complying with the requirements
specified in clauses (1) and (2) of this paragraph (e).
Upon adoption of the ordinance authorizing the exemption,
the municipal clerk shall transmit a copy of that ordinance
to the Department of Commerce and Community Affairs. The
Department of Commerce and Community Affairs shall determine
whether the business enterprises located in the municipality
meet the criteria prescribed in this paragraph. If the
Department of Commerce and Community Affairs determines that
the business enterprises meet the criteria, it shall grant
certification. The Department of Commerce and Community
Affairs shall act upon certification requests within 30 days
after receipt of the ordinance.
Upon certification of the business enterprise by the
Department of Commerce and Community Affairs, the Department
of Commerce and Community Affairs shall notify the Department
of Revenue of the certification. The Department of Revenue
shall notify the public utilities of the exemption status of
the gross receipts received from, and the electricity used or
consumed by, the certified business enterprises. Such
exemption status shall be effective within 3 months after
certification.
(f) A municipality that imposes taxes upon public
utilities or upon the privilege of using or consuming
electricity under this Section and whose territory includes
part of another unit of local government or a school district
may by ordinance exempt the other unit of local government or
school district from those taxes.
(g) The amendment of this Section by Public Act 84-127
shall take precedence over any other amendment of this
Section by any other amendatory Act passed by the 84th
General Assembly before the effective date of Public Act
84-127.
(h) In any case in which, before July 1, 1992, a person
engaged in the business of transmitting messages through the
use of mobile equipment, such as cellular phones and paging
systems, has determined the municipality within which the
gross receipts from the business originated by reference to
the location of its transmitting or switching equipment, then
(i) neither the municipality to which tax was paid on that
basis nor the taxpayer that paid tax on that basis shall be
required to rebate, refund, or issue credits for any such tax
or charge collected from customers to reimburse the taxpayer
for the tax and (ii) no municipality to which tax would have
been paid with respect to those gross receipts if the
provisions of this amendatory Act of 1991 had been in effect
before July 1, 1992, shall have any claim against the
taxpayer for any amount of the tax.
(Source: P.A. 89-325, eff. 1-1-96; 90-16, eff. 6-16-97;
90-561, eff. 8-1-98; 90-562, eff. 12-16-97; 90-655, eff.
7-30-98.)
(65 ILCS 5/8-11-17) (from Ch. 24, par. 8-11-17)
Sec. 8-11-17. Municipal telecommunications tax.
(a) Beginning on the effective date of this amendatory
Act of 1991, the corporate authorities of any municipality in
this State may tax any or all of the following acts or
privileges:
(1) The act or privilege of originating in such
municipality or receiving in such municipality intrastate
telecommunications by a person at a rate not to exceed 5%
of the gross charge for such telecommunications purchased
at retail from a retailer by such person. However, such
tax is not imposed on such act or privilege to the extent
such act or privilege may not, under the Constitution and
statutes of the United States, be made the subject of
taxation by municipalities in this State.
(2) The act or privilege of originating in such
municipality or receiving in such municipality interstate
telecommunications by a person at a rate not to exceed 5%
of the gross charge for such telecommunications purchased
at retail from a retailer by such person. To prevent
actual multi-state taxation of the act or privilege that
is subject to taxation under this paragraph, any
taxpayer, upon proof that the taxpayer has paid a tax in
another state on such event, shall be allowed a credit
against any tax enacted pursuant to an ordinance
authorized by this paragraph to the extent of the amount
of such tax properly due and paid in such other state
which was not previously allowed as a credit against any
other state or local tax in this State. However, such
tax is not imposed on the act or privilege to the extent
such act or privilege may not, under the Constitution and
statutes of the United States, be made the subject of
taxation by municipalities in this State.
(3) The taxes authorized by paragraphs (1) and (2)
of subsection (a) of this Section may only be levied if
such municipality does not then have in effect an
occupation tax imposed on persons engaged in the business
of transmitting messages by means of electricity as
authorized by Section 8-11-2 of the Illinois Municipal
Code.
(b) The tax authorized by this Section shall be
collected from the taxpayer by a retailer maintaining a place
of business in this State and making or effectuating the sale
at retail and shall be remitted by such retailer to the
municipality. Any tax required to be collected pursuant to
an ordinance authorized by this Section and any such tax
collected by such retailer shall constitute a debt owed by
the retailer to such municipality. Retailers shall collect
the tax from the taxpayer by adding the tax to the gross
charge for the act or privilege of originating or receiving
telecommunications when sold for use, in the manner
prescribed by the municipality. The tax authorized by this
Section shall constitute a debt of the purchaser to the
retailer who provides such taxable services until paid and,
if unpaid, is recoverable at law in the same manner as the
original charge for such taxable services. If the retailer
fails to collect the tax from the taxpayer, then the taxpayer
shall be required to pay the tax directly to the municipality
in the manner provided by the municipality. The municipality
imposing the tax shall provide for its administration and
enforcement.
Beginning January 1, 1994, retailers filing tax returns
pursuant to this Section shall, at the time of filing such
return, pay to the municipality the amount of the tax imposed
by this Section, less a commission of 1.75% which is allowed
to reimburse the retailer for the expenses incurred in
keeping records, billing the customer, preparing and filing
returns, remitting the tax and supplying data to the
municipality upon request. No commission may be claimed by a
retailer for tax not timely remitted to the municipality.
Whenever possible, the tax authorized by this Section
shall, when collected, be stated as a distinct item separate
and apart from the gross charge for telecommunications.
(c) For the purpose of the taxes authorized by this
Section:
(1) "Amount paid" means the amount charged to the
taxpayer's service address in such municipality
regardless of where such amount is billed or paid.
(2) "Gross charge" means the amount paid for the
act or privilege of originating or receiving
telecommunications in such municipality and for all
services rendered in connection therewith, valued in
money whether paid in money or otherwise, including cash,
credits, services and property of every kind or nature,
and shall be determined without any deduction on account
of the cost of such telecommunications, the cost of the
materials used, labor or service costs or any other
expense whatsoever. In case credit is extended, the
amount thereof shall be included only as and when paid.
However, "gross charge" shall not include:
(A) any amounts added to a purchaser's bill
because of a charge made pursuant to: (i) the tax
imposed by this Section, (ii) additional charges
added to a purchaser's bill pursuant to Section
9-222 of the Public Utilities Act, (iii) the tax
imposed by the Telecommunications Excise Tax Act, or
(iv) the tax imposed by Section 4251 of the Internal
Revenue Code;
(B) charges for a sent collect
telecommunication received outside of such
municipality;
(C) charges for leased time on equipment or
charges for the storage of data or information or
subsequent retrieval or the processing of data or
information intended to change its form or content.
Such equipment includes, but is not limited to, the
use of calculators, computers, data processing
equipment, tabulating equipment or accounting
equipment and also includes the usage of computers
under a time-sharing agreement;
(D) charges for customer equipment, including
such equipment that is leased or rented by the
customer from any source, wherein such charges are
disaggregated and separately identified from other
charges;
(E) charges to business enterprises certified
under Section 9-222.1 of the Public Utilities Act to
the extent of such exemption and during the period
of time specified by the Department of Commerce and
Community Affairs;
(F) charges for telecommunications and all
services and equipment provided in connection
therewith between a parent corporation and its
wholly owned subsidiaries or between wholly owned
subsidiaries when the tax imposed under this Section
has already been paid to a retailer and only to the
extent that the charges between the parent
corporation and wholly owned subsidiaries or between
wholly owned subsidiaries represent expense
allocation between the corporations and not the
generation of profit for the corporation rendering
such service;
(G) bad debts ("bad debt" means any portion of
a debt that is related to a sale at retail for which
gross charges are not otherwise deductible or
excludable that has become worthless or
uncollectable, as determined under applicable
federal income tax standards; if the portion of the
debt deemed to be bad is subsequently paid, the
retailer shall report and pay the tax on that
portion during the reporting period in which the
payment is made);
(H) charges paid by inserting coins in
coin-operated telecommunication devices; or
(I) amounts paid by telecommunications
retailers under the Telecommunications Municipal
Infrastructure Maintenance Fee Act.
(3) "Interstate telecommunications" means all
telecommunications that either originate or terminate
outside this State.
(4) "Intrastate telecommunications" means all
telecommunications that originate and terminate within
this State.
(5) "Person" means any natural individual, firm,
trust, estate, partnership, association, joint stock
company, joint venture, corporation, limited liability
company, or a receiver, trustee, guardian or other
representative appointed by order of any court, the
Federal and State governments, including State
universities created by statute, or any city, town,
county, or other political subdivision of this State.
(6) "Purchase at retail" means the acquisition,
consumption or use of telecommunications through a sale
at retail.
(7) "Retailer" means and includes every person
engaged in the business of making sales at retail as
defined in this Section. A municipality may, in its
discretion, upon application, authorize the collection of
the tax hereby imposed by any retailer not maintaining a
place of business within this State, who to the
satisfaction of the municipality, furnishes adequate
security to insure collection and payment of the tax.
Such retailer shall be issued, without charge, a permit
to collect such tax. When so authorized, it shall be the
duty of such retailer to collect the tax upon all of the
gross charges for telecommunications in such municipality
in the same manner and subject to the same requirements
as a retailer maintaining a place of business within such
municipality.
(8) "Retailer maintaining a place of business in
this State", or any like term, means and includes any
retailer having or maintaining within this State,
directly or by a subsidiary, an office, distribution
facilities, transmission facilities, sales office,
warehouse or other place of business, or any agent or
other representative operating within this State under
the authority of the retailer or its subsidiary,
irrespective of whether such place of business or agent
or other representative is located here permanently or
temporarily, or whether such retailer or subsidiary is
licensed to do business in this State.
(9) "Sale at retail" means the transmitting,
supplying or furnishing of telecommunications and all
services rendered in connection therewith for a
consideration, to persons other than the Federal and
State governments, and State universities created by
statute and other than between a parent corporation and
its wholly owned subsidiaries or between wholly owned
subsidiaries, when the tax has already been paid to a
retailer and the gross charge made by one such
corporation to another such corporation is not greater
than the gross charge paid to the retailer for their use
or consumption and not for resale.
(10) "Service address" means the location of
telecommunications equipment from which
telecommunications services are originated or at which
telecommunications services are received by a taxpayer.
If this is not a defined location, as in the case of
mobile phones, paging systems, maritime systems,
air-to-ground systems and the like, "service address"
shall mean the location of a taxpayer's primary use of
the telecommunication equipment as defined by telephone
number, authorization code, or location in Illinois where
bills are sent.
(11) "Taxpayer" means a person who individually or
through his agents, employees, or permittees engages in
the act or privilege of originating in such municipality
or receiving in such municipality telecommunications and
who incurs a tax liability under any ordinance authorized
by this Section.
(12) "Telecommunications", in addition to the usual
and popular meaning, includes, but is not limited to,
messages or information transmitted through use of local,
toll and wide area telephone service, channel services,
telegraph services, teletypewriter service, computer
exchange services; cellular mobile telecommunications
service, specialized mobile radio services, paging
service, or any other form of mobile and portable one-way
or two-way communications, or any other transmission of
messages or information by electronic or similar means,
between or among points by wire, cable, fiber optics,
laser, microwave, radio, satellite or similar facilities.
The definition of "telecommunications" shall not include
value added services in which computer processing
applications are used to act on the form, content, code
and protocol of the information for purposes other than
transmission. "Telecommunications" shall not include
purchase of telecommunications by a telecommunications
service provider for use as a component part of the
service provided by him to the ultimate retail consumer
who originates or terminates the taxable end-to-end
communications. Carrier access charges, right of access
charges, charges for use of inter-company facilities, and
all telecommunications resold in the subsequent provision
used as a component of, or integrated into, end-to-end
telecommunications service shall be non-taxable as sales
for resale. Beginning January 1, 2001, prepaid telephone
calling arrangements shall not be considered
"telecommunications" subject to the tax imposed under
this Act. For purposes of this Section, "prepaid
telephone calling arrangements" means that term as
defined in Section 2-27 of the Retailers' Occupation Tax
Act.
(d) If a person, who originates or receives
telecommunications in such municipality claims to be a
reseller of such telecommunications, such person shall apply
to the municipality for a resale number. Such applicant
shall state facts which will show the municipality why such
applicant is not liable for tax under any ordinance
authorized by this Section on any of such purchases and shall
furnish such additional information as the municipality may
reasonably require.
Upon approval of the application, the municipality shall
assign a resale number to the applicant and shall certify
such number to the applicant. The municipality may cancel
any number which is obtained through misrepresentation, or
which is used to send or receive such telecommunication
tax-free when such actions in fact are not for resale, or
which no longer applies because of the person's having
discontinued the making of resales.
Except as provided hereinabove in this Section, the act
or privilege of sending or receiving telecommunications in
this State shall not be made tax-free on the ground of being
a sale for resale unless the person has an active resale
number from the municipality and furnishes that number to the
retailer in connection with certifying to the retailer that
any sale to such person is non-taxable because of being a
sale for resale.
(e) A municipality that imposes taxes upon
telecommunications under this Section and whose territory
includes part of another unit of local government or a school
district may, by ordinance, exempt the other unit of local
government or school district from those taxes.
(f) A municipality that imposes taxes upon
telecommunications under this Section may, by ordinance, (i)
reduce the rate of the tax for persons 65 years of age or
older or (ii) exempt persons 65 years of age or older from
those taxes. Taxes related to such rate reductions or
exemptions shall be rebated from the municipality directly to
persons qualified for the rate reduction or exemption as
determined by the municipality's ordinance.
(g) A municipality with a population of more than
500,000 that imposes a tax under this Section may, by
ordinance, exempt from the tax all charges for the inbound
toll-free telecommunications service commonly known as "800",
"877", or "888" or for a similar service.
(Source: P.A. 90-357, eff. 1-1-98; 90-562, eff. 12-16-97.)
Section 90. The State Mandates Act is amended by adding
Section 8.24 as follows:
(30 ILCS 805/8.24 new)
Sec. 8.24. Exempt mandate. Notwithstanding Sections 6
and 8 of this Act, no reimbursement by the State is required
for the implementation of any mandate created by this
amendatory Act of the 91st General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.
INDEX
Statutes amended in order of appearance
35 ILCS 105/3 from Ch. 120, par. 439.3
35 ILCS 105/3-27 new
35 ILCS 110/3 from Ch. 120, par. 439.33
35 ILCS 110/3-27 new
35 ILCS 115/3 from Ch. 120, par. 439.103
35 ILCS 115/3-27 new
35 ILCS 120/2 from Ch. 120, par. 441
35 ILCS 120/2-27 new
35 ILCS 630/2 from Ch. 120, par. 2002
35 ILCS 630/3 from Ch. 120, par. 2003
35 ILCS 630/6 from Ch. 120, par. 2006
35 ILCS 635/10
35 ILCS 635/20
65 ILCS 5/8-11-2 from Ch. 24, par. 8-11-2
65 ILCS 5/8-11-17 from Ch. 24, par. 8-11-17
30 ILCS 805/8.24 new
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