99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB2423

 

Introduced 2/9/2016, by Sen. Sue Rezin

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 110/3-51

    Amends the Service Use Tax Act. Makes a technical change in a Section concerning rolling stock.


LRB099 18682 HLH 43065 b

 

 

A BILL FOR

 

SB2423LRB099 18682 HLH 43065 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Service Use Tax Act is amended by changing
5Section 3-51 as follows:
 
6    (35 ILCS 110/3-51)
7    Sec. 3-51. Motor vehicles; trailers; use as rolling stock
8definition.
9    (a) Through June 30, 2003, "use as as rolling stock moving
10in interstate commerce" in subsection (b) of Section 3-45 means
11for motor vehicles, as defined in Section 1-46 of the Illinois
12Vehicle Code, and trailers, as defined in Section 1-209 of the
13Illinois Vehicle Code, when on 15 or more occasions in a
1412-month period the motor vehicle and trailer has carried
15persons or property for hire in interstate commerce, even just
16between points in Illinois, if the motor vehicle and trailer
17transports persons whose journeys or property whose shipments
18originate or terminate outside Illinois. This definition
19applies to all property purchased for the purpose of being
20attached to those motor vehicles or trailers as a part thereof.
21    (b) On and after July 1, 2003 and through June 30, 2004,
22"use as rolling stock moving in interstate commerce" in
23paragraphs (4) and (4a) of the definition of "sale of service"

 

 

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1in Section 2 and subsection (b) of Section 3-45 occurs for
2motor vehicles, as defined in Section 1-146 of the Illinois
3Vehicle Code, when during a 12-month period the rolling stock
4has carried persons or property for hire in interstate commerce
5for 51% of its total trips and transports persons whose
6journeys or property whose shipments originate or terminate
7outside Illinois. Trips that are only between points in
8Illinois shall not be counted as interstate trips when
9calculating whether the tangible personal property qualifies
10for the exemption but such trips shall be included in total
11trips taken.
12    (c) Beginning July 1, 2004, "use as rolling stock moving in
13interstate commerce" in paragraphs (4) and (4a) of the
14definition of "sale of service" in Section 2 and subsection (b)
15of Section 3-45 occurs for motor vehicles, as defined in
16Section 1-146 of the Illinois Vehicle Code, when during a
1712-month period the rolling stock has carried persons or
18property for hire in interstate commerce for greater than 50%
19of its total trips for that period or for greater than 50% of
20its total miles for that period. The person claiming the
21exemption shall make an election at the time of purchase to use
22either the trips or mileage method. Persons who purchased motor
23vehicles prior to July 1, 2004 shall make an election to use
24either the trips or mileage method and document that election
25in their books and records. If no election is made under this
26subsection to use the trips or mileage method, the person shall

 

 

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1be deemed to have chosen the mileage method.
2    For purposes of determining qualifying trips or miles,
3motor vehicles that carry persons or property for hire, even
4just between points in Illinois, will be considered used for
5hire in interstate commerce if the motor vehicle transports
6persons whose journeys or property whose shipments originate or
7terminate outside Illinois. The exemption for motor vehicles
8used as rolling stock moving in interstate commerce may be
9claimed only for the following vehicles: (i) motor vehicles
10whose gross vehicle weight rating exceeds 16,000 pounds; and
11(ii) limousines, as defined in Section 1-139.1 of the Illinois
12Vehicle Code. This definition applies to all property purchased
13for the purpose of being attached to those motor vehicles as a
14part thereof.
15    (d) Beginning July 1, 2004, "use as rolling stock moving in
16interstate commerce" in paragraphs (4) and (4a) of the
17definition of "sale of service" in Section 2 and subsection (b)
18of Section 3-45 occurs for trailers, as defined in Section
191-209 of the Illinois Vehicle Code, semitrailers as defined in
20Section 1-187 of the Illinois Vehicle Code, and pole trailers
21as defined in Section 1-161 of the Illinois Vehicle Code, when
22during a 12-month period the rolling stock has carried persons
23or property for hire in interstate commerce for greater than
2450% of its total trips for that period or for greater than 50%
25of its total miles for that period. The person claiming the
26exemption for a trailer or trailers that will not be dedicated

 

 

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1to a motor vehicle or group of motor vehicles shall make an
2election at the time of purchase to use either the trips or
3mileage method. Persons who purchased trailers prior to July 1,
42004 that are not dedicated to a motor vehicle or group of
5motor vehicles shall make an election to use either the trips
6or mileage method and document that election in their books and
7records. If no election is made under this subsection to use
8the trips or mileage method, the person shall be deemed to have
9chosen the mileage method.
10    For purposes of determining qualifying trips or miles,
11trailers, semitrailers, or pole trailers that carry property
12for hire, even just between points in Illinois, will be
13considered used for hire in interstate commerce if the
14trailers, semitrailers, or pole trailers transport property
15whose shipments originate or terminate outside Illinois. This
16definition applies to all property purchased for the purpose of
17being attached to those trailers, semitrailers, or pole
18trailers as a part thereof. In lieu of a person providing
19documentation regarding the qualifying use of each individual
20trailer, semitrailer, or pole trailer, that person may document
21such qualifying use by providing documentation of the
22following:
23        (1) If a trailer, semitrailer, or pole trailer is
24    dedicated to a motor vehicle that qualifies as rolling
25    stock moving in interstate commerce under subsection (c) of
26    this Section, then that trailer, semitrailer, or pole

 

 

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1    trailer qualifies as rolling stock moving in interstate
2    commerce under this subsection.
3        (2) If a trailer, semitrailer, or pole trailer is
4    dedicated to a group of motor vehicles that all qualify as
5    rolling stock moving in interstate commerce under
6    subsection (c) of this Section, then that trailer,
7    semitrailer, or pole trailer qualifies as rolling stock
8    moving in interstate commerce under this subsection.
9        (3) If one or more trailers, semitrailers, or pole
10    trailers are dedicated to a group of motor vehicles and not
11    all of those motor vehicles in that group qualify as
12    rolling stock moving in interstate commerce under
13    subsection (c) of this Section, then the percentage of
14    those trailers, semitrailers, or pole trailers that
15    qualifies as rolling stock moving in interstate commerce
16    under this subsection is equal to the percentage of those
17    motor vehicles in that group that qualify as rolling stock
18    moving in interstate commerce under subsection (c) of this
19    Section to which those trailers, semitrailers, or pole
20    trailers are dedicated. However, to determine the
21    qualification for the exemption provided under this item
22    (3), the mathematical application of the qualifying
23    percentage to one or more trailers, semitrailers, or pole
24    trailers under this subpart shall not be allowed as to any
25    fraction of a trailer, semitrailer, or pole trailer.
26    (e) For aircraft and watercraft purchased on or after

 

 

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1January 1, 2014, "use as rolling stock moving in interstate
2commerce" in (i) paragraphs (4) and (4a) of the definition of
3"sale of service" in Section 2 and (ii) subsection (b) of
4Section 3-45 occurs when, during a 12-month period, the rolling
5stock has carried persons or property for hire in interstate
6commerce for greater than 50% of its total trips for that
7period or for greater than 50% of its total miles for that
8period. The person claiming the exemption shall make an
9election at the time of purchase to use either the trips or
10mileage method and document that election in their books and
11records. If no election is made under this subsection to use
12the trips or mileage method, the person shall be deemed to have
13chosen the mileage method. For aircraft, flight hours may be
14used in lieu of recording miles in determining whether the
15aircraft meets the mileage test in this subsection. For
16watercraft, nautical miles or trip hours may be used in lieu of
17recording miles in determining whether the watercraft meets the
18mileage test in this subsection.
19    Notwithstanding any other provision of law to the contrary,
20property purchased on or after January 1, 2014 for the purpose
21of being attached to aircraft or watercraft as a part thereof
22qualifies as rolling stock moving in interstate commerce only
23if the aircraft or watercraft to which it will be attached
24qualifies as rolling stock moving in interstate commerce under
25the test set forth in this subsection (e), regardless of when
26the aircraft or watercraft was purchased. Persons who purchased

 

 

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1aircraft or watercraft prior to January 1, 2014 shall make an
2election to use either the trips or mileage method and document
3that election in their books and records for the purpose of
4determining whether property purchased on or after January 1,
52014 for the purpose of being attached to aircraft or
6watercraft as a part thereof qualifies as rolling stock moving
7in interstate commerce under this subsection (e).
8    (f) The election to use either the trips or mileage method
9made under the provisions of subsections (c), (d), or (e) of
10this Section will remain in effect for the duration of the
11purchaser's ownership of that item.
12(Source: P.A. 98-584, eff. 8-27-13.)