Section 280.101  Nature of the Home Rule Municipal Service Occupation Tax

 

a)         Authority to Impose Tax

 

1)         Pursuant to Section 8-11-5 of the Illinois Municipal Code [65 ILCS 5], the corporate authorities of a home rule municipality may impose a tax upon all persons engaged, in such municipality, in the business of making sales of service at the same rate of tax imposed pursuant to Section 8-11-1 of the Illinois Municipal Code [65 ILCS 5/8-11-1], of the selling price of all tangible personal property transferred by such servicemen either in the form of tangible personal property or in the form of real estate.  If imposed, such tax shall only be imposed in ¼% increments. 

 

2)         This additional tax may not be imposed on tangible personal property taxed at the 1% rate under the Service Occupation Tax Act [35 ILCS 115].  [65 ILCS 5/8-11-5]  For guidance on the types of tangible personal property taxed at the 1% rate, see 86 Ill. Adm. Code 130.310 and 130.311.

 

3)         Beginning December 1, 2019, this tax may not be imposed on sales of aviation fuel unless the tax revenue is expended for airport-related purposes.  If a municipality does not have an airport-related purpose to which it dedicates aviation fuel tax revenue, then aviation fuel shall be excluded from tax.  Each municipality must comply with the certification requirements for airport-related purposes under Section 2-22 of the Retailers' Occupation Tax Act [35 ILCS 120].  [65 ILCS 5/8-11-5]  "Aviation fuel" means jet fuel and aviation gasoline.  [35 ILCS 115/9]  "Airport-related purposes" has the meaning ascribed in Section 6z-20.2 of the State Finance Act [30 ILCS 105].  This exception for aviation fuel only applies for so long as the revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the State. 

 

4)         The tax imposed by a home rule municipality pursuant to this Section and all civil penalties that may be assessed as an incident thereof shall be collected and enforce by the Department of Revenue.  [65 ILCS 5/8-11-5]

 

b)         Passing on the Tax

The legal incidence of the Home Rule Municipal Service Occupation Tax is on the serviceman.  Nevertheless, the General Assembly has authorized persons subject to this tax to reimburse themselves for their serviceman's tax liability by separately stating such tax as an additional charge, which charge may be stated in combination, in a single amount, with State tax which servicemen are authorized to collect under the Service Use Tax Act [35 ILCS 115], pursuant to such bracket schedules as the Department has prescribed.  [65 ILCS 5/8-11-5]  (See 86 Ill. Adm. Code 150.Table A).

 

c)         Exclusion from "Selling Price "

Any amount added by a serviceman to the selling price of tangible personal property as an incident to service because of a Home Rule Municipal Service Occupation Tax, the Service Occupation Tax, the Service Use Tax, or any other local occupation tax administered by the Department, shall not be regarded as a part of the selling price that is subject to such Home Rule Municipal Service Occupation Tax.

 

(Source:  Amended at 49 Ill. Reg. 3219, effective February 26, 2025)

 

Section 280.105  Registration and Returns

 

a)         A serviceman's registration under the Service Occupation Tax Act [35 ILCS 115] or the Retailers' Occupation Tax Act [35 ILCS 120] is sufficient for the purposes of the Home Rule Municipal Service Occupation Tax Act.  No special registration for a Home Rule Municipal Service Occupation Tax is required.

 

b)         The information required for the Home Rule Municipal Service Occupation Tax shall be furnished on the taxpayer's Service Occupation Tax return form.

 

c)         If applicable, aviation fuel tax returns shall be filed in accordance with Section 9 of the Service Occupation Tax Act and 86 Ill. Adm. Code 130.541 except that the retailer's discount is not allowed for taxes paid on aviation fuel that are subject to the revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133.  [65 ILCS 5/8-11-5]  (See also 86 Ill. Adm. Code 280.101(a)(3)). 

 

(Source:  Amended at 49 Ill. Reg. 3219, effective February 26, 2025)

 

Section 280.110  Claims to Recover Erroneously Paid Tax

 

a)         Incorporation by Reference

            In general, the provisions of Subpart N of the Service Occupation Tax Regulations (86 Ill. Adm. Code 140) shall apply.

 

b)         Claims for Multiple Taxes

            If a claimant files a claim for refund on a transaction which was subject to State and local taxes administered by the Department, the claim need not be filed separately for each type of tax.  A single claim for the total of all applicable taxes will suffice.  The claim will be audited, heard, or otherwise processed as a single claim whenever possible.  A single credit memorandum will be issued which may be used by the claimant or his authorized assignee to pay State or local tax liability.

 

(Source:  Amended at 15 Ill. Reg. 6290, effective April 11, 1991)

 

Section 280.115  Jurisdictional Questions

 

If the Illinois Service Occupation Tax on a transaction is being remitted to the Department by the serviceman, the serviceman shall also pay Home Rule Municipal Service Occupation Tax to the Department on the same transaction if such serviceman's place of business is located in a Home Rule municipality which has adopted the Home Rule Municipal Service Occupation Tax. If a purchase order is accepted outside this State but the tangible personal property which is sold incident to the sale of service is in the inventory of a serviceman located within a home rule municipality at the time of its sale (or is subsequently produced in the home rule municipality) then delivered in Illinois to the service customer, the place where the property is located at the time of the sale (or subsequent production in the municipality) will determine where the seller is engaged in business for Home Rule Municipal Service Occupation Tax purposes with respect to such sale.

 

(Source:  Amended at 15 Ill. Reg. 6290 effective April 11, 1991)

 

Section 280.120  Incorporation of Service Occupation Tax Regulations by Reference

 

To avoid needless repetition, the substance and provisions of all Service Occupation Tax Regulations (86 Ill. Adm. Code 140), except Subpart A as it pertains to rate, are incorporated herein by reference and made a part hereof.

 

(Source:  Amended at 15 Ill. Reg. 6290, effective April 11, 1991)

 

Section 280.125  Penalties, Interest and Procedures

 

All penalties (both civil and criminal), provisions concerning interest and procedure (such as the making of assessments, the venue and mode of conducting hearings, subpoenas, matters pertaining to judicial review and other procedural subjects), together with statutes of limitation, are the same under the Home Rule Municipal Service Occupation Tax Act as under the Service Occupation Tax Act.

 

(Source:  Amended at 15 Ill. Reg. 6290, effective April 11, 1991)

 

Section 280.130  Effective Date

 

An ordinance or resolution imposing or effecting a change in the rate of a Home Rule Municipal Service Occupation Tax shall either: be adopted and a certified copy filed with the Department on or before the first day of April, whereupon the Department shall proceed to administer and enforce the ordinance or resolution as of the first day of July next following such adoption and filing; or be adopted and a certified copy filed with the Department on or before the first day of October, whereupon the Department shall proceed to administer and enforce the ordinance or resolution as of the first day of January next following such adoption and filing. For this purpose, the date of the sale of service is deemed to be the date of the delivery, to the user, of the tangible personal property which the serviceman retransfers as an incident to service.

 

(Source:  Amended at 24 Ill. Reg. 8114, effective May 26, 2001)