Section 693.101  Nature of the Non-Home Rule Municipal Retailers' Occupation Tax

a)         Authority to Impose Tax

1)         Pursuant to the Non-Home Rule Municipal Retailers' Occupation Tax Act [65 ILCS 5/8-11-1.3], the corporate authorities of a non-home rule municipality may impose, by ordinance or resolution adopted in the manner described in Section 8-11-1.1, a tax upon all persons engaged in the business of selling tangible personal property, other than on an item of tangible personal property which is titled and registered by an agency of this State's government, at retail in the municipality. If imposed, the tax shall be imposed on the gross receipts from such sales made in the course of such business.  The proceeds of the tax may be used for public infrastructure or for property tax relief or both, as defined in Section 8-11-1.2.

2)         The tax imposed may not be more than 1% and may be imposed only in ¼% increments.

3)         If the tax is approved by referendum on or after July 14, 2010, and before August 5, 2024, the corporate authorities of the non-home rule municipality may, until January 1, 2031, use the proceeds of the tax for expenditure or municipal operations, in addition to or in lieu of any expenditure on public infrastructure or for property tax relief.  If the tax is approved by ordinance or resolution adopted on or after August 5, 2024, the corporate authorities of the non-home rule municipality, may until January 1, 2031, use the proceeds of the tax for expenditure on municipal operations, in addition to or in lieu of any expenditure on public infrastructure or for property tax relief.  [65 ILCS 5/8-11-1.3]

4)         The tax may not be imposed on tangible personal property taxed at the 1% rate under the Retailers' Occupation Tax Act [35 ILCS 120]. [65 ILCS 5/8-11-1.3] For guidance on the types of tangible personal property taxed at the 1% rate, see 86 Ill. Adm. Code 130.310 and 130.311.

5)         Beginning December 1, 2019, this tax is not 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 is excluded from the 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 5/8-11-1.3] "Aviation fuel" means jet fuel and aviation gasoline.  [35 ILCS 120/3] "Airport-related purposes" has the meaning ascribed in Section 6z-20.2 of the State Finance Act [30 ILCS 105].  This exclusion for aviation fuel only applies U.S.C. 47133 are binding on the municipality. 

6)         The tax imposed by a municipality pursuant to this Section and all civil penalties that may be assessed as an incident thereof shall be collected and enforced by the Department of Revenue.  [65 ILCS 5/8-11-1.3]

b)         Passing on the Tax

The legal incidence of the Non-Home Rule Municipal Retailers' Occupation Tax is on the seller.  Nevertheless, the General Assembly has authorized persons subject to this tax to reimburse themselves for their seller'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 sellers are required to collect under the Use Tax Act [35 ILCS 105], pursuant to such bracket schedules as the Department has prescribed.  [65 ILCS 5/8-11-1.3] (See 86 Ill. Adm. Code 150.Table A).

c)         Exclusion from "Gross Receipts"

Any amount added to the selling price of tangible personal property by the seller because of a Non-Home Rule Municipal Retailers' Occupation Tax, the Retailers' Occupation Tax, the Use Tax Act, or any other local occupation tax administered by the Department, and collected from the purchaser, shall not be regarded as a part of the seller's gross receipts that are subject to such Non-Home Rule Municipal Retailers' Occupation Tax.

(Source:  Amended at 49 Ill. Reg. 3304, effective February 26, 2025)