101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB2492

 

Introduced 1/22/2020, by Sen. Paul Schimpf

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/2  from Ch. 120, par. 439.2
35 ILCS 110/2  from Ch. 120, par. 439.32
35 ILCS 120/1  from Ch. 120, par. 440

    Amends the Use Tax Act, the Service Use Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning on July 1, 2020, with respect to motor fuel, the term "selling price" does not include any tax or fee imposed by the federal government, the State, or any unit of local government. Effective immediately.


LRB101 14733 HLH 63682 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2492LRB101 14733 HLH 63682 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 Use Tax Act is amended by changing Section 2
5as follows:
 
6    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
7    Sec. 2. Definitions.
8    "Use" means the exercise by any person of any right or
9power over tangible personal property incident to the ownership
10of that property, except that it does not include the sale of
11such property in any form as tangible personal property in the
12regular course of business to the extent that such property is
13not first subjected to a use for which it was purchased, and
14does not include the use of such property by its owner for
15demonstration purposes: Provided that the property purchased
16is deemed to be purchased for the purpose of resale, despite
17first being used, to the extent to which it is resold as an
18ingredient of an intentionally produced product or by-product
19of manufacturing. "Use" does not mean the demonstration use or
20interim use of tangible personal property by a retailer before
21he sells that tangible personal property. For watercraft or
22aircraft, if the period of demonstration use or interim use by
23the retailer exceeds 18 months, the retailer shall pay on the

 

 

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1retailers' original cost price the tax imposed by this Act, and
2no credit for that tax is permitted if the watercraft or
3aircraft is subsequently sold by the retailer. "Use" does not
4mean the physical incorporation of tangible personal property,
5to the extent not first subjected to a use for which it was
6purchased, as an ingredient or constituent, into other tangible
7personal property (a) which is sold in the regular course of
8business or (b) which the person incorporating such ingredient
9or constituent therein has undertaken at the time of such
10purchase to cause to be transported in interstate commerce to
11destinations outside the State of Illinois: Provided that the
12property purchased is deemed to be purchased for the purpose of
13resale, despite first being used, to the extent to which it is
14resold as an ingredient of an intentionally produced product or
15by-product of manufacturing.
16    "Watercraft" means a Class 2, Class 3, or Class 4
17watercraft as defined in Section 3-2 of the Boat Registration
18and Safety Act, a personal watercraft, or any boat equipped
19with an inboard motor.
20    "Purchase at retail" means the acquisition of the ownership
21of or title to tangible personal property through a sale at
22retail.
23    "Purchaser" means anyone who, through a sale at retail,
24acquires the ownership of tangible personal property for a
25valuable consideration.
26    "Sale at retail" means any transfer of the ownership of or

 

 

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1title to tangible personal property to a purchaser, for the
2purpose of use, and not for the purpose of resale in any form
3as tangible personal property to the extent not first subjected
4to a use for which it was purchased, for a valuable
5consideration: Provided that the property purchased is deemed
6to be purchased for the purpose of resale, despite first being
7used, to the extent to which it is resold as an ingredient of
8an intentionally produced product or by-product of
9manufacturing. For this purpose, slag produced as an incident
10to manufacturing pig iron or steel and sold is considered to be
11an intentionally produced by-product of manufacturing. "Sale
12at retail" includes any such transfer made for resale unless
13made in compliance with Section 2c of the Retailers' Occupation
14Tax Act, as incorporated by reference into Section 12 of this
15Act. Transactions whereby the possession of the property is
16transferred but the seller retains the title as security for
17payment of the selling price are sales.
18    "Sale at retail" shall also be construed to include any
19Illinois florist's sales transaction in which the purchase
20order is received in Illinois by a florist and the sale is for
21use or consumption, but the Illinois florist has a florist in
22another state deliver the property to the purchaser or the
23purchaser's donee in such other state.
24    Nonreusable tangible personal property that is used by
25persons engaged in the business of operating a restaurant,
26cafeteria, or drive-in is a sale for resale when it is

 

 

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1transferred to customers in the ordinary course of business as
2part of the sale of food or beverages and is used to deliver,
3package, or consume food or beverages, regardless of where
4consumption of the food or beverages occurs. Examples of those
5items include, but are not limited to nonreusable, paper and
6plastic cups, plates, baskets, boxes, sleeves, buckets or other
7containers, utensils, straws, placemats, napkins, doggie bags,
8and wrapping or packaging materials that are transferred to
9customers as part of the sale of food or beverages in the
10ordinary course of business.
11    The purchase, employment and transfer of such tangible
12personal property as newsprint and ink for the primary purpose
13of conveying news (with or without other information) is not a
14purchase, use or sale of tangible personal property.
15    "Selling price" means the consideration for a sale valued
16in money whether received in money or otherwise, including
17cash, credits, property other than as hereinafter provided, and
18services, but, prior to January 1, 2020, not including the
19value of or credit given for traded-in tangible personal
20property where the item that is traded-in is of like kind and
21character as that which is being sold; beginning January 1,
222020, "selling price" includes the portion of the value of or
23credit given for traded-in motor vehicles of the First Division
24as defined in Section 1-146 of the Illinois Vehicle Code of
25like kind and character as that which is being sold that
26exceeds $10,000. "Selling price" shall be determined without

 

 

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1any deduction on account of the cost of the property sold, the
2cost of materials used, labor or service cost or any other
3expense whatsoever, but does not include interest or finance
4charges which appear as separate items on the bill of sale or
5sales contract nor charges that are added to prices by sellers
6on account of the seller's tax liability under the "Retailers'
7Occupation Tax Act", or on account of the seller's duty to
8collect, from the purchaser, the tax that is imposed by this
9Act, or, except as otherwise provided with respect to any
10cigarette tax imposed by a home rule unit, on account of the
11seller's tax liability under any local occupation tax
12administered by the Department, or, except as otherwise
13provided with respect to any cigarette tax imposed by a home
14rule unit on account of the seller's duty to collect, from the
15purchasers, the tax that is imposed under any local use tax
16administered by the Department. Effective December 1, 1985,
17"selling price" shall include charges that are added to prices
18by sellers on account of the seller's tax liability under the
19Cigarette Tax Act, on account of the seller's duty to collect,
20from the purchaser, the tax imposed under the Cigarette Use Tax
21Act, and on account of the seller's duty to collect, from the
22purchaser, any cigarette tax imposed by a home rule unit.
23Beginning July 1, 2020, with respect to motor fuel, "selling
24price" does not include any tax or fee imposed by the federal
25government, the State, or any unit of local government.
26    Notwithstanding any law to the contrary, for any motor

 

 

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1vehicle, as defined in Section 1-146 of the Vehicle Code, that
2is sold on or after January 1, 2015 for the purpose of leasing
3the vehicle for a defined period that is longer than one year
4and (1) is a motor vehicle of the second division that: (A) is
5a self-contained motor vehicle designed or permanently
6converted to provide living quarters for recreational,
7camping, or travel use, with direct walk through access to the
8living quarters from the driver's seat; (B) is of the van
9configuration designed for the transportation of not less than
107 nor more than 16 passengers; or (C) has a gross vehicle
11weight rating of 8,000 pounds or less or (2) is a motor vehicle
12of the first division, "selling price" or "amount of sale"
13means the consideration received by the lessor pursuant to the
14lease contract, including amounts due at lease signing and all
15monthly or other regular payments charged over the term of the
16lease. Also included in the selling price is any amount
17received by the lessor from the lessee for the leased vehicle
18that is not calculated at the time the lease is executed,
19including, but not limited to, excess mileage charges and
20charges for excess wear and tear. For sales that occur in
21Illinois, with respect to any amount received by the lessor
22from the lessee for the leased vehicle that is not calculated
23at the time the lease is executed, the lessor who purchased the
24motor vehicle does not incur the tax imposed by the Use Tax Act
25on those amounts, and the retailer who makes the retail sale of
26the motor vehicle to the lessor is not required to collect the

 

 

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1tax imposed by this Act or to pay the tax imposed by the
2Retailers' Occupation Tax Act on those amounts. However, the
3lessor who purchased the motor vehicle assumes the liability
4for reporting and paying the tax on those amounts directly to
5the Department in the same form (Illinois Retailers' Occupation
6Tax, and local retailers' occupation taxes, if applicable) in
7which the retailer would have reported and paid such tax if the
8retailer had accounted for the tax to the Department. For
9amounts received by the lessor from the lessee that are not
10calculated at the time the lease is executed, the lessor must
11file the return and pay the tax to the Department by the due
12date otherwise required by this Act for returns other than
13transaction returns. If the retailer is entitled under this Act
14to a discount for collecting and remitting the tax imposed
15under this Act to the Department with respect to the sale of
16the motor vehicle to the lessor, then the right to the discount
17provided in this Act shall be transferred to the lessor with
18respect to the tax paid by the lessor for any amount received
19by the lessor from the lessee for the leased vehicle that is
20not calculated at the time the lease is executed; provided that
21the discount is only allowed if the return is timely filed and
22for amounts timely paid. The "selling price" of a motor vehicle
23that is sold on or after January 1, 2015 for the purpose of
24leasing for a defined period of longer than one year shall not
25be reduced by the value of or credit given for traded-in
26tangible personal property owned by the lessor, nor shall it be

 

 

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1reduced by the value of or credit given for traded-in tangible
2personal property owned by the lessee, regardless of whether
3the trade-in value thereof is assigned by the lessee to the
4lessor. In the case of a motor vehicle that is sold for the
5purpose of leasing for a defined period of longer than one
6year, the sale occurs at the time of the delivery of the
7vehicle, regardless of the due date of any lease payments. A
8lessor who incurs a Retailers' Occupation Tax liability on the
9sale of a motor vehicle coming off lease may not take a credit
10against that liability for the Use Tax the lessor paid upon the
11purchase of the motor vehicle (or for any tax the lessor paid
12with respect to any amount received by the lessor from the
13lessee for the leased vehicle that was not calculated at the
14time the lease was executed) if the selling price of the motor
15vehicle at the time of purchase was calculated using the
16definition of "selling price" as defined in this paragraph.
17Notwithstanding any other provision of this Act to the
18contrary, lessors shall file all returns and make all payments
19required under this paragraph to the Department by electronic
20means in the manner and form as required by the Department.
21This paragraph does not apply to leases of motor vehicles for
22which, at the time the lease is entered into, the term of the
23lease is not a defined period, including leases with a defined
24initial period with the option to continue the lease on a
25month-to-month or other basis beyond the initial defined
26period.

 

 

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1    The phrase "like kind and character" shall be liberally
2construed (including but not limited to any form of motor
3vehicle for any form of motor vehicle, or any kind of farm or
4agricultural implement for any other kind of farm or
5agricultural implement), while not including a kind of item
6which, if sold at retail by that retailer, would be exempt from
7retailers' occupation tax and use tax as an isolated or
8occasional sale.
9    "Department" means the Department of Revenue.
10    "Person" means any natural individual, firm, partnership,
11association, joint stock company, joint adventure, public or
12private corporation, limited liability company, or a receiver,
13executor, trustee, guardian or other representative appointed
14by order of any court.
15    "Retailer" means and includes every person engaged in the
16business of making sales at retail as defined in this Section.
17    A person who holds himself or herself out as being engaged
18(or who habitually engages) in selling tangible personal
19property at retail is a retailer hereunder with respect to such
20sales (and not primarily in a service occupation)
21notwithstanding the fact that such person designs and produces
22such tangible personal property on special order for the
23purchaser and in such a way as to render the property of value
24only to such purchaser, if such tangible personal property so
25produced on special order serves substantially the same
26function as stock or standard items of tangible personal

 

 

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1property that are sold at retail.
2    A person whose activities are organized and conducted
3primarily as a not-for-profit service enterprise, and who
4engages in selling tangible personal property at retail
5(whether to the public or merely to members and their guests)
6is a retailer with respect to such transactions, excepting only
7a person organized and operated exclusively for charitable,
8religious or educational purposes either (1), to the extent of
9sales by such person to its members, students, patients or
10inmates of tangible personal property to be used primarily for
11the purposes of such person, or (2), to the extent of sales by
12such person of tangible personal property which is not sold or
13offered for sale by persons organized for profit. The selling
14of school books and school supplies by schools at retail to
15students is not "primarily for the purposes of" the school
16which does such selling. This paragraph does not apply to nor
17subject to taxation occasional dinners, social or similar
18activities of a person organized and operated exclusively for
19charitable, religious or educational purposes, whether or not
20such activities are open to the public.
21    A person who is the recipient of a grant or contract under
22Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
23serves meals to participants in the federal Nutrition Program
24for the Elderly in return for contributions established in
25amount by the individual participant pursuant to a schedule of
26suggested fees as provided for in the federal Act is not a

 

 

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1retailer under this Act with respect to such transactions.
2    Persons who engage in the business of transferring tangible
3personal property upon the redemption of trading stamps are
4retailers hereunder when engaged in such business.
5    The isolated or occasional sale of tangible personal
6property at retail by a person who does not hold himself out as
7being engaged (or who does not habitually engage) in selling
8such tangible personal property at retail or a sale through a
9bulk vending machine does not make such person a retailer
10hereunder. However, any person who is engaged in a business
11which is not subject to the tax imposed by the "Retailers'
12Occupation Tax Act" because of involving the sale of or a
13contract to sell real estate or a construction contract to
14improve real estate, but who, in the course of conducting such
15business, transfers tangible personal property to users or
16consumers in the finished form in which it was purchased, and
17which does not become real estate, under any provision of a
18construction contract or real estate sale or real estate sales
19agreement entered into with some other person arising out of or
20because of such nontaxable business, is a retailer to the
21extent of the value of the tangible personal property so
22transferred. If, in such transaction, a separate charge is made
23for the tangible personal property so transferred, the value of
24such property, for the purposes of this Act, is the amount so
25separately charged, but not less than the cost of such property
26to the transferor; if no separate charge is made, the value of

 

 

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1such property, for the purposes of this Act, is the cost to the
2transferor of such tangible personal property.
3    "Retailer maintaining a place of business in this State",
4or any like term, means and includes any of the following
5retailers:
6        (1) A retailer having or maintaining within this State,
7    directly or by a subsidiary, an office, distribution house,
8    sales house, warehouse or other place of business, or any
9    agent or other representative operating within this State
10    under the authority of the retailer or its subsidiary,
11    irrespective of whether such place of business or agent or
12    other representative is located here permanently or
13    temporarily, or whether such retailer or subsidiary is
14    licensed to do business in this State. However, the
15    ownership of property that is located at the premises of a
16    printer with which the retailer has contracted for printing
17    and that consists of the final printed product, property
18    that becomes a part of the final printed product, or copy
19    from which the printed product is produced shall not result
20    in the retailer being deemed to have or maintain an office,
21    distribution house, sales house, warehouse, or other place
22    of business within this State.
23        (1.1) (Blank).
24        (1.2) (Blank).
25        (2) (Blank).
26        (3) (Blank).

 

 

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1        (4) (Blank).
2        (5) (Blank).
3        (6) (Blank).
4        (7) (Blank).
5        (8) (Blank).
6        (9) Beginning October 1, 2018 through June 30, 2020, a
7    retailer making sales of tangible personal property to
8    purchasers in Illinois from outside of Illinois if:
9            (A) the cumulative gross receipts from sales of
10        tangible personal property to purchasers in Illinois
11        are $100,000 or more; or
12            (B) the retailer enters into 200 or more separate
13        transactions for the sale of tangible personal
14        property to purchasers in Illinois.
15        The retailer shall determine on a quarterly basis,
16    ending on the last day of March, June, September, and
17    December, whether he or she meets the criteria of either
18    subparagraph (A) or (B) of this paragraph (9) for the
19    preceding 12-month period. If the retailer meets the
20    criteria of either subparagraph (A) or (B) for a 12-month
21    period, he or she is considered a retailer maintaining a
22    place of business in this State and is required to collect
23    and remit the tax imposed under this Act and file returns
24    for one year. At the end of that one-year period, the
25    retailer shall determine whether the retailer met the
26    criteria of either subparagraph (A) or (B) during the

 

 

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1    preceding 12-month period. If the retailer met the criteria
2    in either subparagraph (A) or (B) for the preceding
3    12-month period, he or she is considered a retailer
4    maintaining a place of business in this State and is
5    required to collect and remit the tax imposed under this
6    Act and file returns for the subsequent year. If at the end
7    of a one-year period a retailer that was required to
8    collect and remit the tax imposed under this Act determines
9    that he or she did not meet the criteria in either
10    subparagraph (A) or (B) during the preceding 12-month
11    period, the retailer shall subsequently determine on a
12    quarterly basis, ending on the last day of March, June,
13    September, and December, whether he or she meets the
14    criteria of either subparagraph (A) or (B) for the
15    preceding 12-month period.
16        Beginning January 1, 2020, neither the gross receipts
17    from nor the number of separate transactions for sales of
18    tangible personal property to purchasers in Illinois that a
19    retailer makes through a marketplace facilitator and for
20    which the retailer has received a certification from the
21    marketplace facilitator pursuant to Section 2d of this Act
22    shall be included for purposes of determining whether he or
23    she has met the thresholds of this paragraph (9).
24        (10) Beginning January 1, 2020, a marketplace
25    facilitator, as defined in Section 2d of this Act.
26    "Bulk vending machine" means a vending machine, containing

 

 

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1unsorted confections, nuts, toys, or other items designed
2primarily to be used or played with by children which, when a
3coin or coins of a denomination not larger than $0.50 are
4inserted, are dispensed in equal portions, at random and
5without selection by the customer.
6(Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19; 101-31,
7eff. 1-1-20; revised 7-11-19.)
 
8    Section 10. The Service Use Tax Act is amended by changing
9Section 2 as follows:
 
10    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
11    Sec. 2. Definitions. In this Act:
12    "Use" means the exercise by any person of any right or
13power over tangible personal property incident to the ownership
14of that property, but does not include the sale or use for
15demonstration by him of that property in any form as tangible
16personal property in the regular course of business. "Use" does
17not mean the interim use of tangible personal property nor the
18physical incorporation of tangible personal property, as an
19ingredient or constituent, into other tangible personal
20property, (a) which is sold in the regular course of business
21or (b) which the person incorporating such ingredient or
22constituent therein has undertaken at the time of such purchase
23to cause to be transported in interstate commerce to
24destinations outside the State of Illinois.

 

 

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1    "Purchased from a serviceman" means the acquisition of the
2ownership of, or title to, tangible personal property through a
3sale of service.
4    "Purchaser" means any person who, through a sale of
5service, acquires the ownership of, or title to, any tangible
6personal property.
7    "Cost price" means the consideration paid by the serviceman
8for a purchase valued in money, whether paid in money or
9otherwise, including cash, credits and services, and shall be
10determined without any deduction on account of the supplier's
11cost of the property sold or on account of any other expense
12incurred by the supplier. When a serviceman contracts out part
13or all of the services required in his sale of service, it
14shall be presumed that the cost price to the serviceman of the
15property transferred to him or her by his or her subcontractor
16is equal to 50% of the subcontractor's charges to the
17serviceman in the absence of proof of the consideration paid by
18the subcontractor for the purchase of such property.
19    "Selling price" means the consideration for a sale valued
20in money whether received in money or otherwise, including
21cash, credits and service, and shall be determined without any
22deduction on account of the serviceman's cost of the property
23sold, the cost of materials used, labor or service cost or any
24other expense whatsoever, but does not include interest or
25finance charges which appear as separate items on the bill of
26sale or sales contract nor charges that are added to prices by

 

 

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1sellers on account of the seller's duty to collect, from the
2purchaser, the tax that is imposed by this Act. Beginning July
31, 2020, with respect to motor fuel, "selling price" does not
4include any tax or fee imposed by the federal government, the
5State, or any unit of local government.
6    "Department" means the Department of Revenue.
7    "Person" means any natural individual, firm, partnership,
8association, joint stock company, joint venture, public or
9private corporation, limited liability company, and any
10receiver, executor, trustee, guardian or other representative
11appointed by order of any court.
12    "Sale of service" means any transaction except:
13        (1) a retail sale of tangible personal property taxable
14    under the Retailers' Occupation Tax Act or under the Use
15    Tax Act.
16        (2) a sale of tangible personal property for the
17    purpose of resale made in compliance with Section 2c of the
18    Retailers' Occupation Tax Act.
19        (3) except as hereinafter provided, a sale or transfer
20    of tangible personal property as an incident to the
21    rendering of service for or by any governmental body, or
22    for or by any corporation, society, association,
23    foundation or institution organized and operated
24    exclusively for charitable, religious or educational
25    purposes or any not-for-profit corporation, society,
26    association, foundation, institution or organization which

 

 

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1    has no compensated officers or employees and which is
2    organized and operated primarily for the recreation of
3    persons 55 years of age or older. A limited liability
4    company may qualify for the exemption under this paragraph
5    only if the limited liability company is organized and
6    operated exclusively for educational purposes.
7        (4) (blank).
8        (4a) a sale or transfer of tangible personal property
9    as an incident to the rendering of service for owners,
10    lessors, or shippers of tangible personal property which is
11    utilized by interstate carriers for hire for use as rolling
12    stock moving in interstate commerce so long as so used by
13    interstate carriers for hire, and equipment operated by a
14    telecommunications provider, licensed as a common carrier
15    by the Federal Communications Commission, which is
16    permanently installed in or affixed to aircraft moving in
17    interstate commerce.
18        (4a-5) on and after July 1, 2003 and through June 30,
19    2004, a sale or transfer of a motor vehicle of the second
20    division with a gross vehicle weight in excess of 8,000
21    pounds as an incident to the rendering of service if that
22    motor vehicle is subject to the commercial distribution fee
23    imposed under Section 3-815.1 of the Illinois Vehicle Code.
24    Beginning on July 1, 2004 and through June 30, 2005, the
25    use in this State of motor vehicles of the second division:
26    (i) with a gross vehicle weight rating in excess of 8,000

 

 

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1    pounds; (ii) that are subject to the commercial
2    distribution fee imposed under Section 3-815.1 of the
3    Illinois Vehicle Code; and (iii) that are primarily used
4    for commercial purposes. Through June 30, 2005, this
5    exemption applies to repair and replacement parts added
6    after the initial purchase of such a motor vehicle if that
7    motor vehicle is used in a manner that would qualify for
8    the rolling stock exemption otherwise provided for in this
9    Act. For purposes of this paragraph, "used for commercial
10    purposes" means the transportation of persons or property
11    in furtherance of any commercial or industrial enterprise
12    whether for-hire or not.
13        (5) a sale or transfer of machinery and equipment used
14    primarily in the process of the manufacturing or
15    assembling, either in an existing, an expanded or a new
16    manufacturing facility, of tangible personal property for
17    wholesale or retail sale or lease, whether such sale or
18    lease is made directly by the manufacturer or by some other
19    person, whether the materials used in the process are owned
20    by the manufacturer or some other person, or whether such
21    sale or lease is made apart from or as an incident to the
22    seller's engaging in a service occupation and the
23    applicable tax is a Service Use Tax or Service Occupation
24    Tax, rather than Use Tax or Retailers' Occupation Tax. The
25    exemption provided by this paragraph (5) includes
26    production related tangible personal property, as defined

 

 

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1    in Section 3-50 of the Use Tax Act, purchased on or after
2    July 1, 2019. The exemption provided by this paragraph (5)
3    does not include machinery and equipment used in (i) the
4    generation of electricity for wholesale or retail sale;
5    (ii) the generation or treatment of natural or artificial
6    gas for wholesale or retail sale that is delivered to
7    customers through pipes, pipelines, or mains; or (iii) the
8    treatment of water for wholesale or retail sale that is
9    delivered to customers through pipes, pipelines, or mains.
10    The provisions of Public Act 98-583 are declaratory of
11    existing law as to the meaning and scope of this exemption.
12    The exemption under this paragraph (5) is exempt from the
13    provisions of Section 3-75.
14        (5a) the repairing, reconditioning or remodeling, for
15    a common carrier by rail, of tangible personal property
16    which belongs to such carrier for hire, and as to which
17    such carrier receives the physical possession of the
18    repaired, reconditioned or remodeled item of tangible
19    personal property in Illinois, and which such carrier
20    transports, or shares with another common carrier in the
21    transportation of such property, out of Illinois on a
22    standard uniform bill of lading showing the person who
23    repaired, reconditioned or remodeled the property to a
24    destination outside Illinois, for use outside Illinois.
25        (5b) a sale or transfer of tangible personal property
26    which is produced by the seller thereof on special order in

 

 

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1    such a way as to have made the applicable tax the Service
2    Occupation Tax or the Service Use Tax, rather than the
3    Retailers' Occupation Tax or the Use Tax, for an interstate
4    carrier by rail which receives the physical possession of
5    such property in Illinois, and which transports such
6    property, or shares with another common carrier in the
7    transportation of such property, out of Illinois on a
8    standard uniform bill of lading showing the seller of the
9    property as the shipper or consignor of such property to a
10    destination outside Illinois, for use outside Illinois.
11        (6) until July 1, 2003, a sale or transfer of
12    distillation machinery and equipment, sold as a unit or kit
13    and assembled or installed by the retailer, which machinery
14    and equipment is certified by the user to be used only for
15    the production of ethyl alcohol that will be used for
16    consumption as motor fuel or as a component of motor fuel
17    for the personal use of such user and not subject to sale
18    or resale.
19        (7) at the election of any serviceman not required to
20    be otherwise registered as a retailer under Section 2a of
21    the Retailers' Occupation Tax Act, made for each fiscal
22    year sales of service in which the aggregate annual cost
23    price of tangible personal property transferred as an
24    incident to the sales of service is less than 35%, or 75%
25    in the case of servicemen transferring prescription drugs
26    or servicemen engaged in graphic arts production, of the

 

 

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1    aggregate annual total gross receipts from all sales of
2    service. The purchase of such tangible personal property by
3    the serviceman shall be subject to tax under the Retailers'
4    Occupation Tax Act and the Use Tax Act. However, if a
5    primary serviceman who has made the election described in
6    this paragraph subcontracts service work to a secondary
7    serviceman who has also made the election described in this
8    paragraph, the primary serviceman does not incur a Use Tax
9    liability if the secondary serviceman (i) has paid or will
10    pay Use Tax on his or her cost price of any tangible
11    personal property transferred to the primary serviceman
12    and (ii) certifies that fact in writing to the primary
13    serviceman.
14    Tangible personal property transferred incident to the
15completion of a maintenance agreement is exempt from the tax
16imposed pursuant to this Act.
17    Exemption (5) also includes machinery and equipment used in
18the general maintenance or repair of such exempt machinery and
19equipment or for in-house manufacture of exempt machinery and
20equipment. On and after July 1, 2017, exemption (5) also
21includes graphic arts machinery and equipment, as defined in
22paragraph (5) of Section 3-5. The machinery and equipment
23exemption does not include machinery and equipment used in (i)
24the generation of electricity for wholesale or retail sale;
25(ii) the generation or treatment of natural or artificial gas
26for wholesale or retail sale that is delivered to customers

 

 

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1through pipes, pipelines, or mains; or (iii) the treatment of
2water for wholesale or retail sale that is delivered to
3customers through pipes, pipelines, or mains. The provisions of
4Public Act 98-583 are declaratory of existing law as to the
5meaning and scope of this exemption. For the purposes of
6exemption (5), each of these terms shall have the following
7meanings: (1) "manufacturing process" shall mean the
8production of any article of tangible personal property,
9whether such article is a finished product or an article for
10use in the process of manufacturing or assembling a different
11article of tangible personal property, by procedures commonly
12regarded as manufacturing, processing, fabricating, or
13refining which changes some existing material or materials into
14a material with a different form, use or name. In relation to a
15recognized integrated business composed of a series of
16operations which collectively constitute manufacturing, or
17individually constitute manufacturing operations, the
18manufacturing process shall be deemed to commence with the
19first operation or stage of production in the series, and shall
20not be deemed to end until the completion of the final product
21in the last operation or stage of production in the series; and
22further, for purposes of exemption (5), photoprocessing is
23deemed to be a manufacturing process of tangible personal
24property for wholesale or retail sale; (2) "assembling process"
25shall mean the production of any article of tangible personal
26property, whether such article is a finished product or an

 

 

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1article for use in the process of manufacturing or assembling a
2different article of tangible personal property, by the
3combination of existing materials in a manner commonly regarded
4as assembling which results in a material of a different form,
5use or name; (3) "machinery" shall mean major mechanical
6machines or major components of such machines contributing to a
7manufacturing or assembling process; and (4) "equipment" shall
8include any independent device or tool separate from any
9machinery but essential to an integrated manufacturing or
10assembly process; including computers used primarily in a
11manufacturer's computer assisted design, computer assisted
12manufacturing (CAD/CAM) system; or any subunit or assembly
13comprising a component of any machinery or auxiliary, adjunct
14or attachment parts of machinery, such as tools, dies, jigs,
15fixtures, patterns and molds; or any parts which require
16periodic replacement in the course of normal operation; but
17shall not include hand tools. Equipment includes chemicals or
18chemicals acting as catalysts but only if the chemicals or
19chemicals acting as catalysts effect a direct and immediate
20change upon a product being manufactured or assembled for
21wholesale or retail sale or lease. The purchaser of such
22machinery and equipment who has an active resale registration
23number shall furnish such number to the seller at the time of
24purchase. The user of such machinery and equipment and tools
25without an active resale registration number shall prepare a
26certificate of exemption for each transaction stating facts

 

 

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1establishing the exemption for that transaction, which
2certificate shall be available to the Department for inspection
3or audit. The Department shall prescribe the form of the
4certificate.
5    Any informal rulings, opinions or letters issued by the
6Department in response to an inquiry or request for any opinion
7from any person regarding the coverage and applicability of
8exemption (5) to specific devices shall be published,
9maintained as a public record, and made available for public
10inspection and copying. If the informal ruling, opinion or
11letter contains trade secrets or other confidential
12information, where possible the Department shall delete such
13information prior to publication. Whenever such informal
14rulings, opinions, or letters contain any policy of general
15applicability, the Department shall formulate and adopt such
16policy as a rule in accordance with the provisions of the
17Illinois Administrative Procedure Act.
18    On and after July 1, 1987, no entity otherwise eligible
19under exemption (3) of this Section shall make tax-free
20purchases unless it has an active exemption identification
21number issued by the Department.
22    The purchase, employment and transfer of such tangible
23personal property as newsprint and ink for the primary purpose
24of conveying news (with or without other information) is not a
25purchase, use or sale of service or of tangible personal
26property within the meaning of this Act.

 

 

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1    "Serviceman" means any person who is engaged in the
2occupation of making sales of service.
3    "Sale at retail" means "sale at retail" as defined in the
4Retailers' Occupation Tax Act.
5    "Supplier" means any person who makes sales of tangible
6personal property to servicemen for the purpose of resale as an
7incident to a sale of service.
8    "Serviceman maintaining a place of business in this State",
9or any like term, means and includes any serviceman:
10        (1) having or maintaining within this State, directly
11    or by a subsidiary, an office, distribution house, sales
12    house, warehouse or other place of business, or any agent
13    or other representative operating within this State under
14    the authority of the serviceman or its subsidiary,
15    irrespective of whether such place of business or agent or
16    other representative is located here permanently or
17    temporarily, or whether such serviceman or subsidiary is
18    licensed to do business in this State;
19        (1.1) having a contract with a person located in this
20    State under which the person, for a commission or other
21    consideration based on the sale of service by the
22    serviceman, directly or indirectly refers potential
23    customers to the serviceman by providing to the potential
24    customers a promotional code or other mechanism that allows
25    the serviceman to track purchases referred by such persons.
26    Examples of mechanisms that allow the serviceman to track

 

 

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1    purchases referred by such persons include but are not
2    limited to the use of a link on the person's Internet
3    website, promotional codes distributed through the
4    person's hand-delivered or mailed material, and
5    promotional codes distributed by the person through radio
6    or other broadcast media. The provisions of this paragraph
7    (1.1) shall apply only if the cumulative gross receipts
8    from sales of service by the serviceman to customers who
9    are referred to the serviceman by all persons in this State
10    under such contracts exceed $10,000 during the preceding 4
11    quarterly periods ending on the last day of March, June,
12    September, and December; a serviceman meeting the
13    requirements of this paragraph (1.1) shall be presumed to
14    be maintaining a place of business in this State but may
15    rebut this presumption by submitting proof that the
16    referrals or other activities pursued within this State by
17    such persons were not sufficient to meet the nexus
18    standards of the United States Constitution during the
19    preceding 4 quarterly periods;
20        (1.2) beginning July 1, 2011, having a contract with a
21    person located in this State under which:
22            (A) the serviceman sells the same or substantially
23        similar line of services as the person located in this
24        State and does so using an identical or substantially
25        similar name, trade name, or trademark as the person
26        located in this State; and

 

 

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1            (B) the serviceman provides a commission or other
2        consideration to the person located in this State based
3        upon the sale of services by the serviceman.
4    The provisions of this paragraph (1.2) shall apply only if
5    the cumulative gross receipts from sales of service by the
6    serviceman to customers in this State under all such
7    contracts exceed $10,000 during the preceding 4 quarterly
8    periods ending on the last day of March, June, September,
9    and December;
10        (2) soliciting orders for tangible personal property
11    by means of a telecommunication or television shopping
12    system (which utilizes toll free numbers) which is intended
13    by the retailer to be broadcast by cable television or
14    other means of broadcasting, to consumers located in this
15    State;
16        (3) pursuant to a contract with a broadcaster or
17    publisher located in this State, soliciting orders for
18    tangible personal property by means of advertising which is
19    disseminated primarily to consumers located in this State
20    and only secondarily to bordering jurisdictions;
21        (4) soliciting orders for tangible personal property
22    by mail if the solicitations are substantial and recurring
23    and if the retailer benefits from any banking, financing,
24    debt collection, telecommunication, or marketing
25    activities occurring in this State or benefits from the
26    location in this State of authorized installation,

 

 

SB2492- 29 -LRB101 14733 HLH 63682 b

1    servicing, or repair facilities;
2        (5) being owned or controlled by the same interests
3    which own or control any retailer engaging in business in
4    the same or similar line of business in this State;
5        (6) having a franchisee or licensee operating under its
6    trade name if the franchisee or licensee is required to
7    collect the tax under this Section;
8        (7) pursuant to a contract with a cable television
9    operator located in this State, soliciting orders for
10    tangible personal property by means of advertising which is
11    transmitted or distributed over a cable television system
12    in this State;
13        (8) engaging in activities in Illinois, which
14    activities in the state in which the supply business
15    engaging in such activities is located would constitute
16    maintaining a place of business in that state; or
17        (9) beginning October 1, 2018, making sales of service
18    to purchasers in Illinois from outside of Illinois if:
19            (A) the cumulative gross receipts from sales of
20        service to purchasers in Illinois are $100,000 or more;
21        or
22            (B) the serviceman enters into 200 or more separate
23        transactions for sales of service to purchasers in
24        Illinois.
25        The serviceman shall determine on a quarterly basis,
26    ending on the last day of March, June, September, and

 

 

SB2492- 30 -LRB101 14733 HLH 63682 b

1    December, whether he or she meets the criteria of either
2    subparagraph (A) or (B) of this paragraph (9) for the
3    preceding 12-month period. If the serviceman meets the
4    criteria of either subparagraph (A) or (B) for a 12-month
5    period, he or she is considered a serviceman maintaining a
6    place of business in this State and is required to collect
7    and remit the tax imposed under this Act and file returns
8    for one year. At the end of that one-year period, the
9    serviceman shall determine whether the serviceman met the
10    criteria of either subparagraph (A) or (B) during the
11    preceding 12-month period. If the serviceman met the
12    criteria in either subparagraph (A) or (B) for the
13    preceding 12-month period, he or she is considered a
14    serviceman maintaining a place of business in this State
15    and is required to collect and remit the tax imposed under
16    this Act and file returns for the subsequent year. If at
17    the end of a one-year period a serviceman that was required
18    to collect and remit the tax imposed under this Act
19    determines that he or she did not meet the criteria in
20    either subparagraph (A) or (B) during the preceding
21    12-month period, the serviceman subsequently shall
22    determine on a quarterly basis, ending on the last day of
23    March, June, September, and December, whether he or she
24    meets the criteria of either subparagraph (A) or (B) for
25    the preceding 12-month period.
26        Beginning January 1, 2020, neither the gross receipts

 

 

SB2492- 31 -LRB101 14733 HLH 63682 b

1    from nor the number of separate transactions for sales of
2    service to purchasers in Illinois that a serviceman makes
3    through a marketplace facilitator and for which the
4    serviceman has received a certification from the
5    marketplace facilitator pursuant to Section 2d of this Act
6    shall be included for purposes of determining whether he or
7    she has met the thresholds of this paragraph (9).
8        (10) Beginning January 1, 2020, a marketplace
9    facilitator, as defined in Section 2d of this Act.
10(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
11100-587, eff. 6-4-18; 100-863, eff. 8-14-18; 101-9, Article 10,
12Section 10-15, eff. 6-5-19; 101-9, Article 25, Section 25-10,
13eff. 6-5-19; revised 7-10-19.)
 
14    Section 15. The Retailers' Occupation Tax Act is amended by
15changing Section 1 as follows:
 
16    (35 ILCS 120/1)  (from Ch. 120, par. 440)
17    Sec. 1. Definitions. "Sale at retail" means any transfer of
18the ownership of or title to tangible personal property to a
19purchaser, for the purpose of use or consumption, and not for
20the purpose of resale in any form as tangible personal property
21to the extent not first subjected to a use for which it was
22purchased, for a valuable consideration: Provided that the
23property purchased is deemed to be purchased for the purpose of
24resale, despite first being used, to the extent to which it is

 

 

SB2492- 32 -LRB101 14733 HLH 63682 b

1resold as an ingredient of an intentionally produced product or
2byproduct of manufacturing. For this purpose, slag produced as
3an incident to manufacturing pig iron or steel and sold is
4considered to be an intentionally produced byproduct of
5manufacturing. Transactions whereby the possession of the
6property is transferred but the seller retains the title as
7security for payment of the selling price shall be deemed to be
8sales.
9    "Sale at retail" shall be construed to include any transfer
10of the ownership of or title to tangible personal property to a
11purchaser, for use or consumption by any other person to whom
12such purchaser may transfer the tangible personal property
13without a valuable consideration, and to include any transfer,
14whether made for or without a valuable consideration, for
15resale in any form as tangible personal property unless made in
16compliance with Section 2c of this Act.
17    Sales of tangible personal property, which property, to the
18extent not first subjected to a use for which it was purchased,
19as an ingredient or constituent, goes into and forms a part of
20tangible personal property subsequently the subject of a "Sale
21at retail", are not sales at retail as defined in this Act:
22Provided that the property purchased is deemed to be purchased
23for the purpose of resale, despite first being used, to the
24extent to which it is resold as an ingredient of an
25intentionally produced product or byproduct of manufacturing.
26    "Sale at retail" shall be construed to include any Illinois

 

 

SB2492- 33 -LRB101 14733 HLH 63682 b

1florist's sales transaction in which the purchase order is
2received in Illinois by a florist and the sale is for use or
3consumption, but the Illinois florist has a florist in another
4state deliver the property to the purchaser or the purchaser's
5donee in such other state.
6    Nonreusable tangible personal property that is used by
7persons engaged in the business of operating a restaurant,
8cafeteria, or drive-in is a sale for resale when it is
9transferred to customers in the ordinary course of business as
10part of the sale of food or beverages and is used to deliver,
11package, or consume food or beverages, regardless of where
12consumption of the food or beverages occurs. Examples of those
13items include, but are not limited to nonreusable, paper and
14plastic cups, plates, baskets, boxes, sleeves, buckets or other
15containers, utensils, straws, placemats, napkins, doggie bags,
16and wrapping or packaging materials that are transferred to
17customers as part of the sale of food or beverages in the
18ordinary course of business.
19    The purchase, employment and transfer of such tangible
20personal property as newsprint and ink for the primary purpose
21of conveying news (with or without other information) is not a
22purchase, use or sale of tangible personal property.
23    A person whose activities are organized and conducted
24primarily as a not-for-profit service enterprise, and who
25engages in selling tangible personal property at retail
26(whether to the public or merely to members and their guests)

 

 

SB2492- 34 -LRB101 14733 HLH 63682 b

1is engaged in the business of selling tangible personal
2property at retail with respect to such transactions, excepting
3only a person organized and operated exclusively for
4charitable, religious or educational purposes either (1), to
5the extent of sales by such person to its members, students,
6patients or inmates of tangible personal property to be used
7primarily for the purposes of such person, or (2), to the
8extent of sales by such person of tangible personal property
9which is not sold or offered for sale by persons organized for
10profit. The selling of school books and school supplies by
11schools at retail to students is not "primarily for the
12purposes of" the school which does such selling. The provisions
13of this paragraph shall not apply to nor subject to taxation
14occasional dinners, socials or similar activities of a person
15organized and operated exclusively for charitable, religious
16or educational purposes, whether or not such activities are
17open to the public.
18    A person who is the recipient of a grant or contract under
19Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
20serves meals to participants in the federal Nutrition Program
21for the Elderly in return for contributions established in
22amount by the individual participant pursuant to a schedule of
23suggested fees as provided for in the federal Act is not
24engaged in the business of selling tangible personal property
25at retail with respect to such transactions.
26    "Purchaser" means anyone who, through a sale at retail,

 

 

SB2492- 35 -LRB101 14733 HLH 63682 b

1acquires the ownership of or title to tangible personal
2property for a valuable consideration.
3    "Reseller of motor fuel" means any person engaged in the
4business of selling or delivering or transferring title of
5motor fuel to another person other than for use or consumption.
6No person shall act as a reseller of motor fuel within this
7State without first being registered as a reseller pursuant to
8Section 2c or a retailer pursuant to Section 2a.
9    "Selling price" or the "amount of sale" means the
10consideration for a sale valued in money whether received in
11money or otherwise, including cash, credits, property, other
12than as hereinafter provided, and services, but, prior to
13January 1, 2020, not including the value of or credit given for
14traded-in tangible personal property where the item that is
15traded-in is of like kind and character as that which is being
16sold; beginning January 1, 2020, "selling price" includes the
17portion of the value of or credit given for traded-in motor
18vehicles of the First Division as defined in Section 1-146 of
19the Illinois Vehicle Code of like kind and character as that
20which is being sold that exceeds $10,000. "Selling price" shall
21be determined without any deduction on account of the cost of
22the property sold, the cost of materials used, labor or service
23cost or any other expense whatsoever, but does not include
24charges that are added to prices by sellers on account of the
25seller's tax liability under this Act, or on account of the
26seller's duty to collect, from the purchaser, the tax that is

 

 

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1imposed by the Use Tax Act, or, except as otherwise provided
2with respect to any cigarette tax imposed by a home rule unit,
3on account of the seller's tax liability under any local
4occupation tax administered by the Department, or, except as
5otherwise provided with respect to any cigarette tax imposed by
6a home rule unit on account of the seller's duty to collect,
7from the purchasers, the tax that is imposed under any local
8use tax administered by the Department. Effective December 1,
91985, "selling price" shall include charges that are added to
10prices by sellers on account of the seller's tax liability
11under the Cigarette Tax Act, on account of the sellers' duty to
12collect, from the purchaser, the tax imposed under the
13Cigarette Use Tax Act, and on account of the seller's duty to
14collect, from the purchaser, any cigarette tax imposed by a
15home rule unit. Beginning July 1, 2020, with respect to motor
16fuel, "selling price" does not include any tax or fee imposed
17by the federal government, the State, or any unit of local
18government.
19    Notwithstanding any law to the contrary, for any motor
20vehicle, as defined in Section 1-146 of the Vehicle Code, that
21is sold on or after January 1, 2015 for the purpose of leasing
22the vehicle for a defined period that is longer than one year
23and (1) is a motor vehicle of the second division that: (A) is
24a self-contained motor vehicle designed or permanently
25converted to provide living quarters for recreational,
26camping, or travel use, with direct walk through access to the

 

 

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1living quarters from the driver's seat; (B) is of the van
2configuration designed for the transportation of not less than
37 nor more than 16 passengers; or (C) has a gross vehicle
4weight rating of 8,000 pounds or less or (2) is a motor vehicle
5of the first division, "selling price" or "amount of sale"
6means the consideration received by the lessor pursuant to the
7lease contract, including amounts due at lease signing and all
8monthly or other regular payments charged over the term of the
9lease. Also included in the selling price is any amount
10received by the lessor from the lessee for the leased vehicle
11that is not calculated at the time the lease is executed,
12including, but not limited to, excess mileage charges and
13charges for excess wear and tear. For sales that occur in
14Illinois, with respect to any amount received by the lessor
15from the lessee for the leased vehicle that is not calculated
16at the time the lease is executed, the lessor who purchased the
17motor vehicle does not incur the tax imposed by the Use Tax Act
18on those amounts, and the retailer who makes the retail sale of
19the motor vehicle to the lessor is not required to collect the
20tax imposed by the Use Tax Act or to pay the tax imposed by this
21Act on those amounts. However, the lessor who purchased the
22motor vehicle assumes the liability for reporting and paying
23the tax on those amounts directly to the Department in the same
24form (Illinois Retailers' Occupation Tax, and local retailers'
25occupation taxes, if applicable) in which the retailer would
26have reported and paid such tax if the retailer had accounted

 

 

SB2492- 38 -LRB101 14733 HLH 63682 b

1for the tax to the Department. For amounts received by the
2lessor from the lessee that are not calculated at the time the
3lease is executed, the lessor must file the return and pay the
4tax to the Department by the due date otherwise required by
5this Act for returns other than transaction returns. If the
6retailer is entitled under this Act to a discount for
7collecting and remitting the tax imposed under this Act to the
8Department with respect to the sale of the motor vehicle to the
9lessor, then the right to the discount provided in this Act
10shall be transferred to the lessor with respect to the tax paid
11by the lessor for any amount received by the lessor from the
12lessee for the leased vehicle that is not calculated at the
13time the lease is executed; provided that the discount is only
14allowed if the return is timely filed and for amounts timely
15paid. The "selling price" of a motor vehicle that is sold on or
16after January 1, 2015 for the purpose of leasing for a defined
17period of longer than one year shall not be reduced by the
18value of or credit given for traded-in tangible personal
19property owned by the lessor, nor shall it be reduced by the
20value of or credit given for traded-in tangible personal
21property owned by the lessee, regardless of whether the
22trade-in value thereof is assigned by the lessee to the lessor.
23In the case of a motor vehicle that is sold for the purpose of
24leasing for a defined period of longer than one year, the sale
25occurs at the time of the delivery of the vehicle, regardless
26of the due date of any lease payments. A lessor who incurs a

 

 

SB2492- 39 -LRB101 14733 HLH 63682 b

1Retailers' Occupation Tax liability on the sale of a motor
2vehicle coming off lease may not take a credit against that
3liability for the Use Tax the lessor paid upon the purchase of
4the motor vehicle (or for any tax the lessor paid with respect
5to any amount received by the lessor from the lessee for the
6leased vehicle that was not calculated at the time the lease
7was executed) if the selling price of the motor vehicle at the
8time of purchase was calculated using the definition of
9"selling price" as defined in this paragraph. Notwithstanding
10any other provision of this Act to the contrary, lessors shall
11file all returns and make all payments required under this
12paragraph to the Department by electronic means in the manner
13and form as required by the Department. This paragraph does not
14apply to leases of motor vehicles for which, at the time the
15lease is entered into, the term of the lease is not a defined
16period, including leases with a defined initial period with the
17option to continue the lease on a month-to-month or other basis
18beyond the initial defined period.
19    The phrase "like kind and character" shall be liberally
20construed (including but not limited to any form of motor
21vehicle for any form of motor vehicle, or any kind of farm or
22agricultural implement for any other kind of farm or
23agricultural implement), while not including a kind of item
24which, if sold at retail by that retailer, would be exempt from
25retailers' occupation tax and use tax as an isolated or
26occasional sale.

 

 

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1    "Gross receipts" from the sales of tangible personal
2property at retail means the total selling price or the amount
3of such sales, as hereinbefore defined. In the case of charge
4and time sales, the amount thereof shall be included only as
5and when payments are received by the seller. Receipts or other
6consideration derived by a seller from the sale, transfer or
7assignment of accounts receivable to a wholly owned subsidiary
8will not be deemed payments prior to the time the purchaser
9makes payment on such accounts.
10    "Department" means the Department of Revenue.
11    "Person" means any natural individual, firm, partnership,
12association, joint stock company, joint adventure, public or
13private corporation, limited liability company, or a receiver,
14executor, trustee, guardian or other representative appointed
15by order of any court.
16    The isolated or occasional sale of tangible personal
17property at retail by a person who does not hold himself out as
18being engaged (or who does not habitually engage) in selling
19such tangible personal property at retail, or a sale through a
20bulk vending machine, does not constitute engaging in a
21business of selling such tangible personal property at retail
22within the meaning of this Act; provided that any person who is
23engaged in a business which is not subject to the tax imposed
24by this Act because of involving the sale of or a contract to
25sell real estate or a construction contract to improve real
26estate or a construction contract to engineer, install, and

 

 

SB2492- 41 -LRB101 14733 HLH 63682 b

1maintain an integrated system of products, but who, in the
2course of conducting such business, transfers tangible
3personal property to users or consumers in the finished form in
4which it was purchased, and which does not become real estate
5or was not engineered and installed, under any provision of a
6construction contract or real estate sale or real estate sales
7agreement entered into with some other person arising out of or
8because of such nontaxable business, is engaged in the business
9of selling tangible personal property at retail to the extent
10of the value of the tangible personal property so transferred.
11If, in such a transaction, a separate charge is made for the
12tangible personal property so transferred, the value of such
13property, for the purpose of this Act, shall be the amount so
14separately charged, but not less than the cost of such property
15to the transferor; if no separate charge is made, the value of
16such property, for the purposes of this Act, is the cost to the
17transferor of such tangible personal property. Construction
18contracts for the improvement of real estate consisting of
19engineering, installation, and maintenance of voice, data,
20video, security, and all telecommunication systems do not
21constitute engaging in a business of selling tangible personal
22property at retail within the meaning of this Act if they are
23sold at one specified contract price.
24    A person who holds himself or herself out as being engaged
25(or who habitually engages) in selling tangible personal
26property at retail is a person engaged in the business of

 

 

SB2492- 42 -LRB101 14733 HLH 63682 b

1selling tangible personal property at retail hereunder with
2respect to such sales (and not primarily in a service
3occupation) notwithstanding the fact that such person designs
4and produces such tangible personal property on special order
5for the purchaser and in such a way as to render the property
6of value only to such purchaser, if such tangible personal
7property so produced on special order serves substantially the
8same function as stock or standard items of tangible personal
9property that are sold at retail.
10    Persons who engage in the business of transferring tangible
11personal property upon the redemption of trading stamps are
12engaged in the business of selling such property at retail and
13shall be liable for and shall pay the tax imposed by this Act
14on the basis of the retail value of the property transferred
15upon redemption of such stamps.
16    "Bulk vending machine" means a vending machine, containing
17unsorted confections, nuts, toys, or other items designed
18primarily to be used or played with by children which, when a
19coin or coins of a denomination not larger than $0.50 are
20inserted, are dispensed in equal portions, at random and
21without selection by the customer.
22    "Remote retailer" means a retailer located outside of this
23State that does not maintain within this State, directly or by
24a subsidiary, an office, distribution house, sales house,
25warehouse or other place of business, or any agent or other
26representative operating within this State under the authority

 

 

SB2492- 43 -LRB101 14733 HLH 63682 b

1of the retailer or its subsidiary, irrespective of whether such
2place of business or agent is located here permanently or
3temporarily or whether such retailer or subsidiary is licensed
4to do business in this State.
5(Source: P.A. 101-31, eff. 6-28-19.)
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.