102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB1519

 

Introduced 2/17/2021, by Rep. Emanuel Chris Welch

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 120/6  from Ch. 120, par. 445

    Amends the Retailers' Occupation Tax Act. Makes a technical change in a Section concerning credit memorandums and refunds.


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A BILL FOR

 

HB1519LRB102 03535 HLH 13548 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 Retailers' Occupation Tax Act is amended by
5changing Section 6 as follows:
 
6    (35 ILCS 120/6)  (from Ch. 120, par. 445)
7    Sec. 6. Credit memorandum or refund. If it appears, after
8claim therefor filed with the the Department, that an amount
9of tax or penalty or interest has been paid which was not due
10under this Act, whether as the result of a mistake of fact or
11an error of law, except as hereinafter provided, then the
12Department shall issue a credit memorandum or refund to the
13person who made the erroneous payment or, if that person died
14or became a person under legal disability, to his or her legal
15representative, as such. For purposes of this Section, the tax
16is deemed to be erroneously paid by a retailer when the
17manufacturer of a motor vehicle sold by the retailer accepts
18the return of that automobile and refunds to the purchaser the
19selling price of that vehicle as provided in the New Vehicle
20Buyer Protection Act. When a motor vehicle is returned for a
21refund of the purchase price under the New Vehicle Buyer
22Protection Act, the Department shall issue a credit memorandum
23or a refund for the amount of tax paid by the retailer under

 

 

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1this Act attributable to the initial sale of that vehicle.
2Claims submitted by the retailer are subject to the same
3restrictions and procedures provided for in this Act. If it is
4determined that the Department should issue a credit
5memorandum or refund, the Department may first apply the
6amount thereof against any tax or penalty or interest due or to
7become due under this Act or under the Use Tax Act, the Service
8Occupation Tax Act, the Service Use Tax Act, any local
9occupation or use tax administered by the Department, Section
104 of the Water Commission Act of 1985, subsections (b), (c) and
11(d) of Section 5.01 of the Local Mass Transit District Act, or
12subsections (e), (f) and (g) of Section 4.03 of the Regional
13Transportation Authority Act, from the person who made the
14erroneous payment. If no tax or penalty or interest is due and
15no proceeding is pending to determine whether such person is
16indebted to the Department for tax or penalty or interest, the
17credit memorandum or refund shall be issued to the claimant;
18or (in the case of a credit memorandum) the credit memorandum
19may be assigned and set over by the lawful holder thereof,
20subject to reasonable rules of the Department, to any other
21person who is subject to this Act, the Use Tax Act, the Service
22Occupation Tax Act, the Service Use Tax Act, any local
23occupation or use tax administered by the Department, Section
244 of the Water Commission Act of 1985, subsections (b), (c) and
25(d) of Section 5.01 of the Local Mass Transit District Act, or
26subsections (e), (f) and (g) of Section 4.03 of the Regional

 

 

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1Transportation Authority Act, and the amount thereof applied
2by the Department against any tax or penalty or interest due or
3to become due under this Act or under the Use Tax Act, the
4Service Occupation Tax Act, the Service Use Tax Act, any local
5occupation or use tax administered by the Department, Section
64 of the Water Commission Act of 1985, subsections (b), (c) and
7(d) of Section 5.01 of the Local Mass Transit District Act, or
8subsections (e), (f) and (g) of Section 4.03 of the Regional
9Transportation Authority Act, from such assignee. However, as
10to any claim for credit or refund filed with the Department on
11and after each January 1 and July 1 no amount of tax or penalty
12or interest erroneously paid (either in total or partial
13liquidation of a tax or penalty or amount of interest under
14this Act) more than 3 years prior to such January 1 and July 1,
15respectively, shall be credited or refunded, except that if
16both the Department and the taxpayer have agreed to an
17extension of time to issue a notice of tax liability as
18provided in Section 4 of this Act, such claim may be filed at
19any time prior to the expiration of the period agreed upon.
20    No claim may be allowed for any amount paid to the
21Department, whether paid voluntarily or involuntarily, if paid
22in total or partial liquidation of an assessment which had
23become final before the claim for credit or refund to recover
24the amount so paid is filed with the Department, or if paid in
25total or partial liquidation of a judgment or order of court.
26No credit may be allowed or refund made for any amount paid by

 

 

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1or collected from any claimant unless it appears (a) that the
2claimant bore the burden of such amount and has not been
3relieved thereof nor reimbursed therefor and has not shifted
4such burden directly or indirectly through inclusion of such
5amount in the price of the tangible personal property sold by
6him or her or in any manner whatsoever; and that no
7understanding or agreement, written or oral, exists whereby he
8or she or his or her legal representative may be relieved of
9the burden of such amount, be reimbursed therefor or may shift
10the burden thereof; or (b) that he or she or his or her legal
11representative has repaid unconditionally such amount to his
12or her vendee (1) who bore the burden thereof and has not
13shifted such burden directly or indirectly, in any manner
14whatsoever; (2) who, if he or she has shifted such burden, has
15repaid unconditionally such amount to his own vendee; and (3)
16who is not entitled to receive any reimbursement therefor from
17any other source than from his or her vendor, nor to be
18relieved of such burden in any manner whatsoever. No credit
19may be allowed or refund made for any amount paid by or
20collected from any claimant unless it appears that the
21claimant has unconditionally repaid, to the purchaser, any
22amount collected from the purchaser and retained by the
23claimant with respect to the same transaction under the Use
24Tax Act.
25    Any credit or refund that is allowed under this Section
26shall bear interest at the rate and in the manner specified in

 

 

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1the Uniform Penalty and Interest Act.
2    In case the Department determines that the claimant is
3entitled to a refund, such refund shall be made only from the
4Aviation Fuel Sales Tax Refund Fund or from such appropriation
5as may be available for that purpose, as appropriate. If it
6appears unlikely that the amount available would permit
7everyone having a claim allowed during the period covered by
8such appropriation or from the Aviation Fuel Sales Tax Refund
9Fund, as appropriate, to elect to receive a cash refund, the
10Department, by rule or regulation, shall provide for the
11payment of refunds in hardship cases and shall define what
12types of cases qualify as hardship cases.
13    If a retailer who has failed to pay retailers' occupation
14tax on gross receipts from retail sales is required by the
15Department to pay such tax, such retailer, without filing any
16formal claim with the Department, shall be allowed to take
17credit against such retailers' occupation tax liability to the
18extent, if any, to which such retailer has paid an amount
19equivalent to retailers' occupation tax or has paid use tax in
20error to his or her vendor or vendors of the same tangible
21personal property which such retailer bought for resale and
22did not first use before selling it, and no penalty or interest
23shall be charged to such retailer on the amount of such credit.
24However, when such credit is allowed to the retailer by the
25Department, the vendor is precluded from refunding any of that
26tax to the retailer and filing a claim for credit or refund

 

 

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1with respect thereto with the Department. The provisions of
2this amendatory Act shall be applied retroactively, regardless
3of the date of the transaction.
4(Source: P.A. 101-10, eff. 6-5-19.)