093_SB1102eng

 
SB1102 Engrossed                     LRB093 07188 SJM 07343 b

 1        AN ACT in relation to taxes.

 2        Be it  enacted  by  the  People  of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.   The  Telecommunications  Excise  Tax Act is
 5    amended by changing Section 2 as follows:

 6        (35 ILCS 630/2) (from Ch. 120, par. 2002)
 7        (Text of Section before amendment by P.A. 92-878)
 8        Sec. 2.  As used in  this  Article,  unless  the  context
 9    clearly requires otherwise:
10        (a)  "Gross  charge" means the amount paid for the act or
11    privilege of originating or receiving  telecommunications  in
12    this  State  and  for  all services and equipment provided in
13    connection therewith by a retailer, valued in  money  whether
14    paid in money or otherwise, including cash, credits, services
15    and property of every kind or nature, and shall be determined
16    without  any  deduction  on  account  of  the  cost  of  such
17    telecommunications,  the  cost  of  materials  used, labor or
18    service costs or  any  other  expense  whatsoever.   In  case
19    credit is extended, the amount thereof shall be included only
20    as  and  when  paid. "Gross charges" for private line service
21    shall include charges imposed at each  channel  point  within
22    this  State,  charges  for  the  channel mileage between each
23    channel point within this State, and charges for that portion
24    of  the  interstate  inter-office  channel  provided   within
25    Illinois. However, "gross charges" shall not include:
26             (1)  any amounts added to a purchaser's bill because
27        of  a charge made pursuant to (i) the tax imposed by this
28        Article; (ii) charges added to customers' bills  pursuant
29        to  the  provisions  of  Sections  9-221  or 9-222 of the
30        Public Utilities Act, as amended, or any similar  charges
31        added  to  customers'  bills  by  retailers  who  are not
 
SB1102 Engrossed            -2-      LRB093 07188 SJM 07343 b
 1        subject to  rate  regulation  by  the  Illinois  Commerce
 2        Commission  for  the purpose of recovering any of the tax
 3        liabilities or other amounts specified in such provisions
 4        of such Act; (iii) the tax imposed by Section 4251 of the
 5        Internal Revenue Code; (iv) 911 surcharges;  or  (v)  the
 6        tax     imposed     by     the    Simplified    Municipal
 7        Telecommunications Tax Act;
 8             (2)  charges for a  sent  collect  telecommunication
 9        received outside of the State;
10             (3)  charges for leased time on equipment or charges
11        for  the  storage  of  data or information for subsequent
12        retrieval  or  the  processing  of  data  or  information
13        intended to change its form or content.   Such  equipment
14        includes,  but is not limited to, the use of calculators,
15        computers,   data   processing   equipment,    tabulating
16        equipment  or  accounting equipment and also includes the
17        usage of computers under a time-sharing agreement;
18             (4)  charges for customer equipment, including  such
19        equipment  that  is leased or rented by the customer from
20        any source, wherein such charges  are  disaggregated  and
21        separately identified from other charges;
22             (5)  charges to business enterprises certified under
23        Section  9-222.1 of the Public Utilities Act, as amended,
24        to the extent of such exemption and during the period  of
25        time   specified   by  the  Department  of  Commerce  and
26        Community Affairs;
27             (6)  charges for telecommunications and all services
28        and equipment provided in connection therewith between  a
29        parent  corporation  and its wholly owned subsidiaries or
30        between wholly owned subsidiaries when  the  tax  imposed
31        under  this  Article  has already been paid to a retailer
32        and only to the  extent  that  the  charges  between  the
33        parent  corporation  and  wholly  owned  subsidiaries  or
34        between   wholly  owned  subsidiaries  represent  expense
 
SB1102 Engrossed            -3-      LRB093 07188 SJM 07343 b
 1        allocation  between  the   corporations   and   not   the
 2        generation  of  profit for the corporation rendering such
 3        service;
 4             (7)  bad debts. Bad debt means any portion of a debt
 5        that is related to a  sale  at  retail  for  which  gross
 6        charges  are  not otherwise deductible or excludable that
 7        has become  worthless  or  uncollectable,  as  determined
 8        under  applicable  federal  income tax standards.  If the
 9        portion of the debt deemed  to  be  bad  is  subsequently
10        paid,  the  retailer shall report and pay the tax on that
11        portion during the reporting period in which the  payment
12        is made;
13             (8)  charges    paid    by    inserting   coins   in
14        coin-operated telecommunication devices;
15             (9)  amounts paid  by  telecommunications  retailers
16        under  the  Telecommunications  Municipal  Infrastructure
17        Maintenance Fee Act.
18        (b)  "Amount  paid"  means  the  amount  charged  to  the
19    taxpayer's  service address in this State regardless of where
20    such amount is billed or paid.
21        (c)  "Telecommunications", in  addition  to  the  meaning
22    ordinarily  and  popularly  ascribed to it, includes, without
23    limitation, messages or information transmitted  through  use
24    of  local, toll and wide area telephone service; private line
25    services;    channel    services;     telegraph     services;
26    teletypewriter;  computer  exchange services; cellular mobile
27    telecommunications   service;   specialized   mobile   radio;
28    stationary two way radio; paging service; or any  other  form
29    of  mobile and portable one-way or two-way communications; or
30    any  other  transmission  of  messages  or   information   by
31    electronic or similar means, between or among points by wire,
32    cable,  fiber-optics,  laser,  microwave, radio, satellite or
33    similar facilities.  As used  in  this  Act,  "private  line"
34    means  a dedicated non-traffic sensitive service for a single
 
SB1102 Engrossed            -4-      LRB093 07188 SJM 07343 b
 1    customer, that entitles the customer to exclusive or priority
 2    use of a communications channel or group  of  channels,  from
 3    one  or  more  specified  locations  to  one  or  more  other
 4    specified  locations.  The definition of "telecommunications"
 5    shall not include value  added  services  in  which  computer
 6    processing applications are used to act on the form, content,
 7    code  and protocol of the information for purposes other than
 8    transmission.    "Telecommunications"   shall   not   include
 9    purchases  of  telecommunications  by  a   telecommunications
10    service  provider  for use as a component part of the service
11    provided  by  him  to  the  ultimate  retail   consumer   who
12    originates    or    terminates    the    taxable   end-to-end
13    communications.  Carrier  access  charges,  right  of  access
14    charges, charges for use of inter-company facilities, and all
15    telecommunications  resold  in  the  subsequent provision of,
16    used  as  a  component  of,  or  integrated  into  end-to-end
17    telecommunications service shall be non-taxable as sales  for
18    resale.
19        (d)  "Interstate     telecommunications"     means    all
20    telecommunications that either originate or terminate outside
21    this State.
22        (e)  "Intrastate    telecommunications"     means     all
23    telecommunications  that  originate and terminate within this
24    State.
25        (f)  "Department" means the Department of Revenue of  the
26    State of Illinois.
27        (g)  "Director"  means  the  Director  of Revenue for the
28    Department of Revenue of the State of Illinois.
29        (h)  "Taxpayer"  means  a  person  who  individually   or
30    through  his  agents,  employees or permittees engages in the
31    act   or    privilege    of    originating    or    receiving
32    telecommunications  in  this  State  and  who  incurs  a  tax
33    liability under this Article.
34        (i)  "Person"  means any natural individual, firm, trust,
 
SB1102 Engrossed            -5-      LRB093 07188 SJM 07343 b
 1    estate, partnership, association, joint stock company,  joint
 2    venture,   corporation,   limited  liability  company,  or  a
 3    receiver, trustee, guardian or other representative appointed
 4    by order of any court, the  Federal  and  State  governments,
 5    including  State universities created by statute or any city,
 6    town, county or other political subdivision of this State.
 7        (j)  "Purchase  at   retail"   means   the   acquisition,
 8    consumption  or  use  of  telecommunication through a sale at
 9    retail.
10        (k)  "Sale at retail" means the  transmitting,  supplying
11    or  furnishing  of  telecommunications  and  all services and
12    equipment   provided   in   connection   therewith   for    a
13    consideration  to  persons  other  than the Federal and State
14    governments, and State universities created  by  statute  and
15    other  than between a parent corporation and its wholly owned
16    subsidiaries or between wholly owned subsidiaries  for  their
17    use or consumption and not for resale.
18        (l)  "Retailer"  means  and includes every person engaged
19    in the business of making sales at retail as defined in  this
20    Article.    The  Department  may,  in  its  discretion,  upon
21    application, authorize  the  collection  of  the  tax  hereby
22    imposed  by  any retailer not maintaining a place of business
23    within  this  State,  who,  to  the   satisfaction   of   the
24    Department,  furnishes adequate security to insure collection
25    and payment of the  tax.   Such  retailer  shall  be  issued,
26    without  charge,  a  permit  to  collect  such  tax.  When so
27    authorized, it shall be the duty of such retailer to  collect
28    the  tax upon all of the gross charges for telecommunications
29    in this State in the same manner  and  subject  to  the  same
30    requirements  as  a  retailer maintaining a place of business
31    within  this  State.   The  permit  may  be  revoked  by  the
32    Department at its discretion.
33        (m)  "Retailer maintaining a place of  business  in  this
34    State",  or  any  like  term, means and includes any retailer
 
SB1102 Engrossed            -6-      LRB093 07188 SJM 07343 b
 1    having or maintaining within this State,  directly  or  by  a
 2    subsidiary,  an office, distribution facilities, transmission
 3    facilities,  sales  office,  warehouse  or  other  place   of
 4    business,  or  any  agent  or  other representative operating
 5    within this State under the authority of the retailer or  its
 6    subsidiary, irrespective of whether such place of business or
 7    agent  or other representative is located here permanently or
 8    temporarily,  or  whether  such  retailer  or  subsidiary  is
 9    licensed to do business in this State.
10        (n)  "Service   address"   means    the    location    of
11    telecommunications       equipment     from     which     the
12    telecommunications  services  are  originated  or  at   which
13    telecommunications  services  are received by a taxpayer.  In
14    the event this may not be a defined location, as in the  case
15    of  mobile  phones, paging systems, maritime systems, service
16    address means the customer's place of primary use as  defined
17    in  the  Mobile  Telecommunications  Sourcing Conformity Act.
18    For air-to-ground systems and the like, service address shall
19    mean  the  location  of  a  taxpayer's  primary  use  of  the
20    telecommunications equipment as defined by telephone  number,
21    authorization  code,  or location in Illinois where bills are
22    sent.
23        (o)  "Prepaid telephone calling  arrangements"  mean  the
24    right to exclusively purchase telephone or telecommunications
25    services  that  must  be  paid  for in advance and enable the
26    origination  of  one  or  more  intrastate,  interstate,   or
27    international  telephone  calls  or  other telecommunications
28    using an access  number,  an  authorization  code,  or  both,
29    whether  manually or electronically dialed, for which payment
30    to a retailer must be made in advance, provided that,  unless
31    recharged,  no  further service is provided once that prepaid
32    amount of  service  has  been  consumed.   Prepaid  telephone
33    calling  arrangements  include  the  recharge  of  a  prepaid
34    calling   arrangement.   For  purposes  of  this  subsection,
 
SB1102 Engrossed            -7-      LRB093 07188 SJM 07343 b
 1    "recharge" means the purchase of additional prepaid telephone
 2    or telecommunications services whether or not  the  purchaser
 3    acquires  a  different  access  number or authorization code.
 4    "Prepaid telephone calling arrangement" does not  include  an
 5    arrangement  whereby  a customer purchases a payment card and
 6    pursuant to which the service provider reflects the amount of
 7    such purchase as a  credit  on  an  invoice  issued  to  that
 8    customer under an existing subscription plan.
 9    (Source:  P.A.  91-870,  eff.  6-22-00;  92-474, eff. 8-1-02;
10    92-526, eff. 1-1-03.)

11        (Text of Section after amendment by P.A. 92-878)
12        Sec. 2.  As used in  this  Article,  unless  the  context
13    clearly requires otherwise:
14        (a)  "Gross  charge" means the amount paid for the act or
15    privilege of originating or receiving  telecommunications  in
16    this  State  and  for  all services and equipment provided in
17    connection therewith by a retailer, valued in  money  whether
18    paid in money or otherwise, including cash, credits, services
19    and property of every kind or nature, and shall be determined
20    without  any  deduction  on  account  of  the  cost  of  such
21    telecommunications,  the  cost  of  materials  used, labor or
22    service costs or  any  other  expense  whatsoever.   In  case
23    credit is extended, the amount thereof shall be included only
24    as  and  when  paid. "Gross charges" for private line service
25    shall include charges imposed at each  channel  point  within
26    this  State,  charges  for  the  channel mileage between each
27    channel point within this State, and charges for that portion
28    of  the  interstate  inter-office  channel  provided   within
29    Illinois.   Charges   for  that  portion  of  the  interstate
30    inter-office channel provided in Illinois shall be determined
31    by the retailer as follows:  (i) for interstate  inter-office
32    channels  having  2  channel  termination points, only one of
33    which is in Illinois, 50% of the total charge  imposed;  (ii)
34    for  interstate  inter-office  channels  having  more  than 2
 
SB1102 Engrossed            -8-      LRB093 07188 SJM 07343 b
 1    channel termination points, one  or  more  of  which  are  in
 2    Illinois, an amount equal to the total charge multiplied by a
 3    fraction,  the  numerator  of  which is the number of channel
 4    termination points within Illinois  and  the  denominator  of
 5    which  is  the total number of channel termination points; or
 6    (iii) any other method that reasonably apportions  the  total
 7    charges for interstate inter-office channels among the states
 8    in  which  channel  termination  points are located. Prior to
 9    January 1,  2004  June  1,  2003,  any  apportionment  method
10    consistent  with  this  paragraph  shall  be  accepted  as  a
11    reasonable  method  to determine the charges for that portion
12    of  the  interstate  inter-office  channel  provided   within
13    Illinois for that period.  However, "gross charges" shall not
14    include any of the following:
15             (1)  Any amounts added to a purchaser's bill because
16        of  a charge made pursuant to (i) the tax imposed by this
17        Article; (ii) charges added to customers' bills  pursuant
18        to  the  provisions  of  Sections  9-221  or 9-222 of the
19        Public Utilities Act, as amended, or any similar  charges
20        added  to  customers'  bills  by  retailers  who  are not
21        subject to  rate  regulation  by  the  Illinois  Commerce
22        Commission  for  the purpose of recovering any of the tax
23        liabilities or other amounts specified in such provisions
24        of such Act; (iii) the tax imposed by Section 4251 of the
25        Internal Revenue Code; (iv) 911 surcharges;  or  (v)  the
26        tax     imposed     by     the    Simplified    Municipal
27        Telecommunications Tax Act.
28             (2)  Charges for a  sent  collect  telecommunication
29        received outside of the State.
30             (3)  Charges for leased time on equipment or charges
31        for  the  storage  of  data or information for subsequent
32        retrieval  or  the  processing  of  data  or  information
33        intended to change its form or content.   Such  equipment
34        includes,  but is not limited to, the use of calculators,
 
SB1102 Engrossed            -9-      LRB093 07188 SJM 07343 b
 1        computers,   data   processing   equipment,    tabulating
 2        equipment  or  accounting equipment and also includes the
 3        usage of computers under a time-sharing agreement.
 4             (4)  Charges for customer equipment, including  such
 5        equipment  that  is leased or rented by the customer from
 6        any source, wherein such charges  are  disaggregated  and
 7        separately identified from other charges.
 8             (5)  Charges to business enterprises certified under
 9        Section  9-222.1 of the Public Utilities Act, as amended,
10        to the extent of such exemption and during the period  of
11        time   specified   by  the  Department  of  Commerce  and
12        Community Affairs.
13             (6)  Charges for telecommunications and all services
14        and equipment provided in connection therewith between  a
15        parent  corporation  and its wholly owned subsidiaries or
16        between wholly owned subsidiaries when  the  tax  imposed
17        under  this  Article  has already been paid to a retailer
18        and only to the  extent  that  the  charges  between  the
19        parent  corporation  and  wholly  owned  subsidiaries  or
20        between   wholly  owned  subsidiaries  represent  expense
21        allocation  between  the   corporations   and   not   the
22        generation  of  profit for the corporation rendering such
23        service.
24             (7)  Bad debts. Bad debt means any portion of a debt
25        that is related to a  sale  at  retail  for  which  gross
26        charges  are  not otherwise deductible or excludable that
27        has become  worthless  or  uncollectable,  as  determined
28        under  applicable  federal  income tax standards.  If the
29        portion of the debt deemed  to  be  bad  is  subsequently
30        paid,  the  retailer shall report and pay the tax on that
31        portion during the reporting period in which the  payment
32        is made.
33             (8)  Charges    paid    by    inserting   coins   in
34        coin-operated telecommunication devices.
 
SB1102 Engrossed            -10-     LRB093 07188 SJM 07343 b
 1             (9)  Amounts paid  by  telecommunications  retailers
 2        under  the  Telecommunications  Municipal  Infrastructure
 3        Maintenance Fee Act.
 4             (10)  Charges    for    nontaxable    services    or
 5        telecommunications  if  (i)  those charges are aggregated
 6        with  other  charges  for  telecommunications  that   are
 7        taxable,  (ii) those charges are not separately stated on
 8        the customer bill or invoice, and (iii) the retailer  can
 9        reasonably   identify   the  nontaxable  charges  on  the
10        retailer's books and records kept in the  regular  course
11        of  business. If the nontaxable charges cannot reasonably
12        be identified, the gross charge from  the  sale  of  both
13        taxable  and  nontaxable  services  or telecommunications
14        billed on a combined basis shall  be  attributed  to  the
15        taxable  services  or  telecommunications.  The burden of
16        proving nontaxable charges shall be on  the  retailer  of
17        the telecommunications.
18        (b)  "Amount  paid"  means  the  amount  charged  to  the
19    taxpayer's  service address in this State regardless of where
20    such amount is billed or paid.
21        (c)  "Telecommunications", in  addition  to  the  meaning
22    ordinarily  and  popularly  ascribed to it, includes, without
23    limitation, messages or information transmitted  through  use
24    of  local, toll and wide area telephone service; private line
25    services;    channel    services;     telegraph     services;
26    teletypewriter;  computer  exchange services; cellular mobile
27    telecommunications   service;   specialized   mobile   radio;
28    stationary two way radio; paging service; or any  other  form
29    of  mobile and portable one-way or two-way communications; or
30    any  other  transmission  of  messages  or   information   by
31    electronic or similar means, between or among points by wire,
32    cable,  fiber-optics,  laser,  microwave, radio, satellite or
33    similar facilities.  As used  in  this  Act,  "private  line"
34    means  a dedicated non-traffic sensitive service for a single
 
SB1102 Engrossed            -11-     LRB093 07188 SJM 07343 b
 1    customer, that entitles the customer to exclusive or priority
 2    use of a communications channel or group  of  channels,  from
 3    one  or  more  specified  locations  to  one  or  more  other
 4    specified  locations.  The definition of "telecommunications"
 5    shall not include value  added  services  in  which  computer
 6    processing applications are used to act on the form, content,
 7    code  and protocol of the information for purposes other than
 8    transmission.    "Telecommunications"   shall   not   include
 9    purchases  of  telecommunications  by  a   telecommunications
10    service  provider  for use as a component part of the service
11    provided  by  him  to  the  ultimate  retail   consumer   who
12    originates    or    terminates    the    taxable   end-to-end
13    communications.  Carrier  access  charges,  right  of  access
14    charges, charges for use of inter-company facilities, and all
15    telecommunications  resold  in  the  subsequent provision of,
16    used  as  a  component  of,  or  integrated  into  end-to-end
17    telecommunications service shall be non-taxable as sales  for
18    resale.
19        (d)  "Interstate     telecommunications"     means    all
20    telecommunications that either originate or terminate outside
21    this State.
22        (e)  "Intrastate    telecommunications"     means     all
23    telecommunications  that  originate and terminate within this
24    State.
25        (f)  "Department" means the Department of Revenue of  the
26    State of Illinois.
27        (g)  "Director"  means  the  Director  of Revenue for the
28    Department of Revenue of the State of Illinois.
29        (h)  "Taxpayer"  means  a  person  who  individually   or
30    through  his  agents,  employees or permittees engages in the
31    act   or    privilege    of    originating    or    receiving
32    telecommunications  in  this  State  and  who  incurs  a  tax
33    liability under this Article.
34        (i)  "Person"  means any natural individual, firm, trust,
 
SB1102 Engrossed            -12-     LRB093 07188 SJM 07343 b
 1    estate, partnership, association, joint stock company,  joint
 2    venture,   corporation,   limited  liability  company,  or  a
 3    receiver, trustee, guardian or other representative appointed
 4    by order of any court, the  Federal  and  State  governments,
 5    including  State universities created by statute or any city,
 6    town, county or other political subdivision of this State.
 7        (j)  "Purchase  at   retail"   means   the   acquisition,
 8    consumption  or  use  of  telecommunication through a sale at
 9    retail.
10        (k)  "Sale at retail" means the  transmitting,  supplying
11    or  furnishing  of  telecommunications  and  all services and
12    equipment   provided   in   connection   therewith   for    a
13    consideration  to  persons  other  than the Federal and State
14    governments, and State universities created  by  statute  and
15    other  than between a parent corporation and its wholly owned
16    subsidiaries or between wholly owned subsidiaries  for  their
17    use or consumption and not for resale.
18        (l)  "Retailer"  means  and includes every person engaged
19    in the business of making sales at retail as defined in  this
20    Article.    The  Department  may,  in  its  discretion,  upon
21    application, authorize  the  collection  of  the  tax  hereby
22    imposed  by  any retailer not maintaining a place of business
23    within  this  State,  who,  to  the   satisfaction   of   the
24    Department,  furnishes adequate security to insure collection
25    and payment of the  tax.   Such  retailer  shall  be  issued,
26    without  charge,  a  permit  to  collect  such  tax.  When so
27    authorized, it shall be the duty of such retailer to  collect
28    the  tax upon all of the gross charges for telecommunications
29    in this State in the same manner  and  subject  to  the  same
30    requirements  as  a  retailer maintaining a place of business
31    within  this  State.   The  permit  may  be  revoked  by  the
32    Department at its discretion.
33        (m)  "Retailer maintaining a place of  business  in  this
34    State",  or  any  like  term, means and includes any retailer
 
SB1102 Engrossed            -13-     LRB093 07188 SJM 07343 b
 1    having or maintaining within this State,  directly  or  by  a
 2    subsidiary,  an office, distribution facilities, transmission
 3    facilities,  sales  office,  warehouse  or  other  place   of
 4    business,  or  any  agent  or  other representative operating
 5    within this State under the authority of the retailer or  its
 6    subsidiary, irrespective of whether such place of business or
 7    agent  or other representative is located here permanently or
 8    temporarily,  or  whether  such  retailer  or  subsidiary  is
 9    licensed to do business in this State.
10        (n)  "Service   address"   means    the    location    of
11    telecommunications       equipment     from     which     the
12    telecommunications  services  are  originated  or  at   which
13    telecommunications  services  are received by a taxpayer.  In
14    the event this may not be a defined location, as in the  case
15    of  mobile  phones, paging systems, maritime systems, service
16    address means the customer's place of primary use as  defined
17    in  the  Mobile  Telecommunications  Sourcing Conformity Act.
18    For air-to-ground systems and the like, service address shall
19    mean  the  location  of  a  taxpayer's  primary  use  of  the
20    telecommunications equipment as defined by telephone  number,
21    authorization  code,  or location in Illinois where bills are
22    sent.
23        (o)  "Prepaid telephone calling  arrangements"  mean  the
24    right to exclusively purchase telephone or telecommunications
25    services  that  must  be  paid  for in advance and enable the
26    origination  of  one  or  more  intrastate,  interstate,   or
27    international  telephone  calls  or  other telecommunications
28    using an access  number,  an  authorization  code,  or  both,
29    whether  manually or electronically dialed, for which payment
30    to a retailer must be made in advance, provided that,  unless
31    recharged,  no  further service is provided once that prepaid
32    amount of  service  has  been  consumed.   Prepaid  telephone
33    calling  arrangements  include  the  recharge  of  a  prepaid
34    calling   arrangement.   For  purposes  of  this  subsection,
 
SB1102 Engrossed            -14-     LRB093 07188 SJM 07343 b
 1    "recharge" means the purchase of additional prepaid telephone
 2    or telecommunications services whether or not  the  purchaser
 3    acquires  a  different  access  number or authorization code.
 4    "Prepaid telephone calling arrangement" does not  include  an
 5    arrangement  whereby  a customer purchases a payment card and
 6    pursuant to which the service provider reflects the amount of
 7    such purchase as a  credit  on  an  invoice  issued  to  that
 8    customer under an existing subscription plan.
 9    (Source:  P.A.  91-870,  eff.  6-22-00;  92-474, eff. 8-1-02;
10    92-526, eff. 1-1-03; 92-878, eff. 1-1-04.)

11        Section  10.    The   Telecommunications   Infrastructure
12    Maintenance  Fee  Act  is  amended  by changing Section 10 as
13    follows:

14        (35 ILCS 635/10)
15        (Text of Section before amendment by P.A. 92-878)
16        Sec. 10.  Definitions.
17        (a)  "Gross  charges"  means  the  amount   paid   to   a
18    telecommunications  retailer  for  the  act  or  privilege of
19    originating or receiving telecommunications in this State and
20    for all services rendered in connection therewith, valued  in
21    money  whether  paid  in  money or otherwise, including cash,
22    credits, services, and property of every kind or nature,  and
23    shall  be  determined without any deduction on account of the
24    cost of such telecommunications, the cost  of  the  materials
25    used,   labor   or   service  costs,  or  any  other  expense
26    whatsoever.  In case credit is extended, the  amount  thereof
27    shall  be included only as and when paid. "Gross charges" for
28    private line service shall include charges  imposed  at  each
29    channel  point  within  this  State,  charges for the channel
30    mileage between each channel point  within  this  State,  and
31    charges  for  that  portion  of  the  interstate inter-office
32    channel provided within Illinois.  However,  "gross  charges"
 
SB1102 Engrossed            -15-     LRB093 07188 SJM 07343 b
 1    shall not include:
 2             (1)  any amounts added to a purchaser's bill because
 3        of  a  charge  made  under:  (i)  the fee imposed by this
 4        Section, (ii) additional charges added to  a  purchaser's
 5        bill under Section 9-221 or 9-222 of the Public Utilities
 6        Act,  (iii)  the  tax  imposed  by the Telecommunications
 7        Excise Tax Act, (iv) 911 surcharges, (v) the tax  imposed
 8        by Section 4251 of the Internal Revenue Code, or (vi) the
 9        tax     imposed     by     the    Simplified    Municipal
10        Telecommunications Tax Act;
11             (2)  charges for a  sent  collect  telecommunication
12        received outside of this State;
13             (3)  charges for leased time on equipment or charges
14        for  the  storage  of  data  or information or subsequent
15        retrieval  or  the  processing  of  data  or  information
16        intended to change its form or content.   Such  equipment
17        includes,  but is not limited to, the use of calculators,
18        computers,   data   processing   equipment,    tabulating
19        equipment,  or accounting equipment and also includes the
20        usage of computers under a time-sharing agreement;
21             (4)  charges for customer equipment, including  such
22        equipment  that  is leased or rented by the customer from
23        any source, wherein such charges  are  disaggregated  and
24        separately identified from other charges;
25             (5)  charges to business enterprises certified under
26        Section 9-222.1 of the Public Utilities Act to the extent
27        of such exemption and during the period of time specified
28        by the Department of Commerce and Community Affairs;
29             (6)  charges for telecommunications and all services
30        and  equipment provided in connection therewith between a
31        parent corporation and its wholly owned  subsidiaries  or
32        between wholly owned subsidiaries, and only to the extent
33        that  the  charges  between  the  parent  corporation and
34        wholly  owned  subsidiaries  or  between   wholly   owned
 
SB1102 Engrossed            -16-     LRB093 07188 SJM 07343 b
 1        subsidiaries  represent  expense  allocation  between the
 2        corporations and not the generation of profit other  than
 3        a   regulatory   required   profit  for  the  corporation
 4        rendering such services;
 5             (7)  bad debts ("bad debt" means any  portion  of  a
 6        debt  that is related to a sale at retail for which gross
 7        charges are not otherwise deductible or  excludable  that
 8        has  become  worthless  or  uncollectible,  as determined
 9        under applicable federal income  tax  standards;  if  the
10        portion  of  the  debt  deemed  to be bad is subsequently
11        paid, the retailer shall report and pay the tax  on  that
12        portion  during the reporting period in which the payment
13        is made); or
14             (8)  charges   paid   by    inserting    coins    in
15        coin-operated telecommunication devices.
16        (a-5)  "Department"  means  the  Illinois  Department  of
17    Revenue.
18        (b)  "Telecommunications"  includes,  but  is not limited
19    to, messages or information transmitted through use of local,
20    toll, and wide  area  telephone  service,  channel  services,
21    telegraph services, teletypewriter service, computer exchange
22    services,  private  line  services,  specialized mobile radio
23    services,  or  any  other   transmission   of   messages   or
24    information  by electronic or similar means, between or among
25    points by wire, cable, fiber optics, laser, microwave, radio,
26    satellite, or similar facilities.  Unless the context clearly
27    requires otherwise, "telecommunications" shall  also  include
28    wireless    telecommunications    as   hereinafter   defined.
29    "Telecommunications" shall not include value  added  services
30    in  which computer processing applications are used to act on
31    the form, content, code, and protocol of the information  for
32    purposes other than transmission.  "Telecommunications" shall
33    not    include    purchase   of   telecommunications   by   a
34    telecommunications service provider for use  as  a  component
 
SB1102 Engrossed            -17-     LRB093 07188 SJM 07343 b
 1    part  of  the  service provided by him or her to the ultimate
 2    retail consumer who originates or terminates  the  end-to-end
 3    communications.   Retailer  access  charges,  right of access
 4    charges, charges for use of intercompany facilities, and  all
 5    telecommunications  resold  in  the  subsequent provision and
 6    used as  a  component  of,  or  integrated  into,  end-to-end
 7    telecommunications  service  shall  not  be included in gross
 8    charges as sales for resale.  "Telecommunications" shall  not
 9    include  the  provision  of  cable  services  through a cable
10    system as defined in the Cable Communications Act of 1984 (47
11    U.S.C. Sections  521  and  following)  as  now  or  hereafter
12    amended  or  through  an  open video system as defined in the
13    Rules of the Federal  Communications  Commission  (47  C.D.F.
14    76.1550   and   following)   as  now  or  hereafter  amended.
15    Beginning  January  1,  2001,   prepaid   telephone   calling
16    arrangements  shall  not  be  considered "telecommunications"
17    subject to the tax imposed under this Act.  For  purposes  of
18    this  Section, "prepaid telephone calling arrangements" means
19    that term as  defined  in  Section  2-27  of  the  Retailers'
20    Occupation Tax Act.
21        (c)  "Wireless   telecommunications"   includes  cellular
22    mobile telephone  services,  personal  wireless  services  as
23    defined  in  Section  704(C) of the Telecommunications Act of
24    1996 (Public Law No. 104-104) as now  or  hereafter  amended,
25    including  all  commercial  mobile radio services, and paging
26    services.
27        (d)  "Telecommunications  retailer"  or   "retailer"   or
28    "carrier"  means  and  includes  every  person engaged in the
29    business of making sales of telecommunications at  retail  as
30    defined   in  this  Section.   The  Department  may,  in  its
31    discretion, upon applications, authorize  the  collection  of
32    the  fee  hereby  imposed  by  any retailer not maintaining a
33    place of business within this State, who, to the satisfaction
34    of the Department,  furnishes  adequate  security  to  insure
 
SB1102 Engrossed            -18-     LRB093 07188 SJM 07343 b
 1    collection  and  payment  of the fee.  When so authorized, it
 2    shall be the duty of such retailer to pay the fee upon all of
 3    the gross charges for telecommunications in the  same  manner
 4    and   subject   to   the  same  requirements  as  a  retailer
 5    maintaining a place of business within this State.
 6        (e)  "Retailer maintaining a place of  business  in  this
 7    State",  or  any  like  term, means and includes any retailer
 8    having or maintaining within this State,  directly  or  by  a
 9    subsidiary,  an office, distribution facilities, transmission
10    facilities,  sales  office,  warehouse,  or  other  place  of
11    business, or any  agent  or  other  representative  operating
12    within  this State under the authority of the retailer or its
13    subsidiary, irrespective of whether such place of business or
14    agent or other representative is located here permanently  or
15    temporarily,  or  whether  such  retailer  or  subsidiary  is
16    licensed to do business in this State.
17        (f)  "Sale  of  telecommunications  at  retail" means the
18    transmitting, supplying, or furnishing of  telecommunications
19    and  all  services  rendered  in  connection  therewith for a
20    consideration, other than between a  parent  corporation  and
21    its   wholly  owned  subsidiaries  or  between  wholly  owned
22    subsidiaries,  when  the  gross  charge  made  by  one   such
23    corporation  to  another such corporation is not greater than
24    the gross charge paid  to  the  retailer  for  their  use  or
25    consumption and not for sale.
26        (g)  "Service    address"    means    the   location   of
27    telecommunications equipment  from  which  telecommunications
28    services   are  originated  or  at  which  telecommunications
29    services are received.  If this is not a defined location, as
30    in the case of wireless telecommunications,  paging  systems,
31    maritime  systems, service address means the customer's place
32    of primary use as defined in  the  Mobile  Telecommunications
33    Sourcing  Conformity Act.  For air-to-ground systems, and the
34    like, "service  address"  shall  mean  the  location  of  the
 
SB1102 Engrossed            -19-     LRB093 07188 SJM 07343 b
 1    customer's primary use of the telecommunications equipment as
 2    defined by the location in Illinois where bills are sent.
 3    (Source:  P.A.  91-870,  eff.  6-22-00;  92-474, eff. 8-1-02;
 4    92-526, eff. 1-1-03.)

 5        (Text of Section after amendment by P.A. 92-878)
 6        Sec. 10.  Definitions.
 7        (a)  "Gross  charges"  means  the  amount   paid   to   a
 8    telecommunications  retailer  for  the  act  or  privilege of
 9    originating or receiving telecommunications in this State and
10    for all services rendered in connection therewith, valued  in
11    money  whether  paid  in  money or otherwise, including cash,
12    credits, services, and property of every kind or nature,  and
13    shall  be  determined without any deduction on account of the
14    cost of such telecommunications, the cost  of  the  materials
15    used,   labor   or   service  costs,  or  any  other  expense
16    whatsoever.  In case credit is extended, the  amount  thereof
17    shall  be included only as and when paid. "Gross charges" for
18    private line service shall include charges  imposed  at  each
19    channel  point  within  this  State,  charges for the channel
20    mileage between each channel point  within  this  State,  and
21    charges  for  that  portion  of  the  interstate inter-office
22    channel provided within Illinois. Charges for that portion of
23    the interstate  inter-office  channel  provided  in  Illinois
24    shall  be  determined  by  the  retailer as follows:  (i) for
25    interstate inter-office channels having 2 channel termination
26    points, only one of which is in Illinois, 50%  of  the  total
27    charge  imposed;  (ii)  for  interstate inter-office channels
28    having more than 2 channel termination points, one or more of
29    which are in Illinois, an amount equal to  the  total  charge
30    multiplied  by  a  fraction,  the  numerator  of which is the
31    number of channel termination points within Illinois and  the
32    denominator   of   which  is  the  total  number  of  channel
33    termination points; or (iii) any other method that reasonably
34    apportions the  total  charges  for  interstate  inter-office
 
SB1102 Engrossed            -20-     LRB093 07188 SJM 07343 b
 1    channels among the states in which channel termination points
 2    are  located.  Prior  to  January  1,  2004 June 1, 2003, any
 3    apportionment method consistent with this paragraph shall  be
 4    accepted  as a reasonable method to determine the charges for
 5    that portion of the interstate inter-office channel  provided
 6    within  Illinois  for  that  period. However, "gross charges"
 7    shall not include any of the following:
 8             (1)  Any amounts added to a purchaser's bill because
 9        of a charge made under:  (i)  the  fee  imposed  by  this
10        Section,  (ii)  additional charges added to a purchaser's
11        bill under Section 9-221 or 9-222 of the Public Utilities
12        Act, (iii) the  tax  imposed  by  the  Telecommunications
13        Excise  Tax Act, (iv) 911 surcharges, (v) the tax imposed
14        by Section 4251 of the Internal Revenue Code, or (vi) the
15        tax    imposed    by     the     Simplified     Municipal
16        Telecommunications Tax Act.
17             (2)  Charges  for  a  sent collect telecommunication
18        received outside of this State.
19             (3)  Charges for leased time on equipment or charges
20        for the storage of  data  or  information  or  subsequent
21        retrieval  or  the  processing  of  data  or  information
22        intended  to  change its form or content.  Such equipment
23        includes, but is not limited to, the use of  calculators,
24        computers,    data   processing   equipment,   tabulating
25        equipment, or accounting equipment and also includes  the
26        usage of computers under a time-sharing agreement.
27             (4)  Charges  for customer equipment, including such
28        equipment that is leased or rented by the  customer  from
29        any  source,  wherein  such charges are disaggregated and
30        separately identified from other charges.
31             (5)  Charges to business enterprises certified under
32        Section 9-222.1 of the Public Utilities Act to the extent
33        of such exemption and during the period of time specified
34        by the Department of Commerce and Community Affairs.
 
SB1102 Engrossed            -21-     LRB093 07188 SJM 07343 b
 1             (6)  Charges for telecommunications and all services
 2        and equipment provided in connection therewith between  a
 3        parent  corporation  and its wholly owned subsidiaries or
 4        between wholly owned subsidiaries, and only to the extent
 5        that the  charges  between  the  parent  corporation  and
 6        wholly   owned   subsidiaries  or  between  wholly  owned
 7        subsidiaries represent  expense  allocation  between  the
 8        corporations  and not the generation of profit other than
 9        a  regulatory  required  profit   for   the   corporation
10        rendering such services.
11             (7)  Bad  debts  ("bad  debt" means any portion of a
12        debt that is related to a sale at retail for which  gross
13        charges  are  not otherwise deductible or excludable that
14        has become  worthless  or  uncollectible,  as  determined
15        under  applicable  federal  income  tax standards; if the
16        portion of the debt deemed  to  be  bad  is  subsequently
17        paid,  the  retailer shall report and pay the tax on that
18        portion during the reporting period in which the  payment
19        is made).
20             (8)  Charges    paid    by    inserting   coins   in
21        coin-operated telecommunication devices.
22             (9)  Charges    for    nontaxable    services     or
23        telecommunications  if  (i)  those charges are aggregated
24        with  other  charges  for  telecommunications  that   are
25        taxable,  (ii) those charges are not separately stated on
26        the customer bill or invoice, and (iii) the retailer  can
27        reasonably   identify   the  nontaxable  charges  on  the
28        retailer's books and records kept in the  regular  course
29        of business.  If the nontaxable charges cannot reasonably
30        be  identified,  the  gross  charge from the sale of both
31        taxable and  nontaxable  services  or  telecommunications
32        billed  on  a  combined  basis shall be attributed to the
33        taxable services or  telecommunications.  The  burden  of
34        proving  nontaxable  charges  shall be on the retailer of
 
SB1102 Engrossed            -22-     LRB093 07188 SJM 07343 b
 1        the telecommunications.
 2        (a-5)  "Department"  means  the  Illinois  Department  of
 3    Revenue.
 4        (b)  "Telecommunications" includes, but  is  not  limited
 5    to, messages or information transmitted through use of local,
 6    toll,  and  wide  area  telephone  service, channel services,
 7    telegraph services, teletypewriter service, computer exchange
 8    services, private line  services,  specialized  mobile  radio
 9    services,   or   any   other   transmission  of  messages  or
10    information by electronic or similar means, between or  among
11    points by wire, cable, fiber optics, laser, microwave, radio,
12    satellite, or similar facilities.  Unless the context clearly
13    requires  otherwise,  "telecommunications" shall also include
14    wireless   telecommunications   as    hereinafter    defined.
15    "Telecommunications"  shall  not include value added services
16    in which computer processing applications are used to act  on
17    the  form, content, code, and protocol of the information for
18    purposes other than transmission.  "Telecommunications" shall
19    not   include   purchase   of   telecommunications    by    a
20    telecommunications  service  provider  for use as a component
21    part of the service provided by him or her  to  the  ultimate
22    retail  consumer  who originates or terminates the end-to-end
23    communications.  Retailer access  charges,  right  of  access
24    charges,  charges for use of intercompany facilities, and all
25    telecommunications resold in  the  subsequent  provision  and
26    used  as  a  component  of,  or  integrated  into, end-to-end
27    telecommunications service shall not  be  included  in  gross
28    charges  as sales for resale.  "Telecommunications" shall not
29    include the provision  of  cable  services  through  a  cable
30    system as defined in the Cable Communications Act of 1984 (47
31    U.S.C.  Sections  521  and  following)  as  now  or hereafter
32    amended or through an open video system  as  defined  in  the
33    Rules  of  the  Federal  Communications Commission (47 C.D.F.
34    76.1550  and  following)  as  now   or   hereafter   amended.
 
SB1102 Engrossed            -23-     LRB093 07188 SJM 07343 b
 1    Beginning   January   1,   2001,  prepaid  telephone  calling
 2    arrangements shall  not  be  considered  "telecommunications"
 3    subject  to  the tax imposed under this Act.  For purposes of
 4    this Section, "prepaid telephone calling arrangements"  means
 5    that  term  as  defined  in  Section  2-27  of the Retailers'
 6    Occupation Tax Act.
 7        (c)  "Wireless  telecommunications"   includes   cellular
 8    mobile  telephone  services,  personal  wireless  services as
 9    defined in Section 704(C) of the  Telecommunications  Act  of
10    1996  (Public  Law  No. 104-104) as now or hereafter amended,
11    including all commercial mobile radio  services,  and  paging
12    services.
13        (d)  "Telecommunications   retailer"   or  "retailer"  or
14    "carrier" means and includes  every  person  engaged  in  the
15    business  of  making sales of telecommunications at retail as
16    defined  in  this  Section.   The  Department  may,  in   its
17    discretion,  upon  applications,  authorize the collection of
18    the fee hereby imposed by  any  retailer  not  maintaining  a
19    place of business within this State, who, to the satisfaction
20    of  the  Department,  furnishes  adequate  security to insure
21    collection and payment of the fee.  When  so  authorized,  it
22    shall be the duty of such retailer to pay the fee upon all of
23    the  gross  charges for telecommunications in the same manner
24    and  subject  to  the  same  requirements   as   a   retailer
25    maintaining a place of business within this State.
26        (e)  "Retailer  maintaining  a  place of business in this
27    State", or any like term, means  and  includes  any  retailer
28    having  or  maintaining  within  this State, directly or by a
29    subsidiary, an office, distribution facilities,  transmission
30    facilities,  sales  office,  warehouse,  or  other  place  of
31    business,  or  any  agent  or  other representative operating
32    within this State under the authority of the retailer or  its
33    subsidiary, irrespective of whether such place of business or
34    agent  or other representative is located here permanently or
 
SB1102 Engrossed            -24-     LRB093 07188 SJM 07343 b
 1    temporarily,  or  whether  such  retailer  or  subsidiary  is
 2    licensed to do business in this State.
 3        (f)  "Sale of telecommunications  at  retail"  means  the
 4    transmitting,  supplying, or furnishing of telecommunications
 5    and all services  rendered  in  connection  therewith  for  a
 6    consideration,  other  than  between a parent corporation and
 7    its  wholly  owned  subsidiaries  or  between  wholly   owned
 8    subsidiaries,   when  the  gross  charge  made  by  one  such
 9    corporation to another such corporation is not  greater  than
10    the  gross  charge  paid  to  the  retailer  for their use or
11    consumption and not for sale.
12        (g)  "Service   address"   means    the    location    of
13    telecommunications  equipment  from  which telecommunications
14    services  are  originated  or  at  which   telecommunications
15    services are received.  If this is not a defined location, as
16    in  the  case of wireless telecommunications, paging systems,
17    maritime systems, service address means the customer's  place
18    of  primary  use  as defined in the Mobile Telecommunications
19    Sourcing Conformity Act.  For air-to-ground systems, and  the
20    like,  "service  address"  shall  mean  the  location  of the
21    customer's primary use of the telecommunications equipment as
22    defined by the location in Illinois where bills are sent.
23    (Source: P.A. 91-870,  eff.  6-22-00;  92-474,  eff.  8-1-02;
24    92-526, eff. 1-1-03; 92-878, eff. 1-1-04.)

25        Section  15.  The Simplified Municipal Telecommunications
26    Tax Act is amended by  changing  Sections  5-7  and  5-20  as
27    follows:

28        (35 ILCS 636/5-7)
29        (Text of Section before amendment by P.A. 92-878)
30        Sec.  5-7.   Definitions.   For  purposes  of  the  taxes
31    authorized by this Act:
32        "Amount  paid" means the amount charged to the taxpayer's
 
SB1102 Engrossed            -25-     LRB093 07188 SJM 07343 b
 1    service address in such municipality regardless of where such
 2    amount is billed or paid.
 3        "Department" means the Illinois Department of Revenue.
 4        "Gross charge" means the  amount  paid  for  the  act  or
 5    privilege  of  originating or receiving telecommunications in
 6    such municipality and for all services and equipment provided
 7    in connection  therewith  by  a  retailer,  valued  in  money
 8    whether  paid in money or otherwise, including cash, credits,
 9    services and property of every kind or nature, and  shall  be
10    determined  without  any  deduction on account of the cost of
11    such telecommunications, the  cost  of  the  materials  used,
12    labor  or  service costs or any other expense whatsoever.  In
13    case credit is extended, the amount thereof shall be included
14    only as and when  paid.  "Gross  charges"  for  private  line
15    service  shall  include charges imposed at each channel point
16    within this State, charges for the  channel  mileage  between
17    each  channel  point  within this State, and charges for that
18    portion  of  the  interstate  inter-office  channel  provided
19    within Illinois. However, "gross charge" shall not include:
20             (1)  any amounts added to a purchaser's bill because
21        of a charge made pursuant to: (i) the tax imposed by this
22        Act, (ii)  the  tax  imposed  by  the  Telecommunications
23        Excise  Tax Act, (iii) the tax imposed by Section 4251 of
24        the Internal Revenue Code, (iv) 911  surcharges,  or  (v)
25        charges   added  to  customers'  bills  pursuant  to  the
26        provisions of  Section  9-221  or  9-222  of  the  Public
27        Utilities  Act,  as amended, or any similar charges added
28        to customers' bills by retailers who are not  subject  to
29        rate  regulation  by the Illinois Commerce Commission for
30        the purpose of recovering any of the tax  liabilities  or
31        other amounts specified in those provisions of the Public
32        Utilities Act;
33             (2)  charges  for  a  sent collect telecommunication
34        received outside of such municipality;
 
SB1102 Engrossed            -26-     LRB093 07188 SJM 07343 b
 1             (3)  charges for leased time on equipment or charges
 2        for the storage of data  or  information  for  subsequent
 3        retrieval  or  the  processing  of  data  or  information
 4        intended  to  change its form or content.  Such equipment
 5        includes, but is not limited to, the use of  calculators,
 6        computers,    data   processing   equipment,   tabulating
 7        equipment or accounting equipment and also  includes  the
 8        usage of computers under a time-sharing agreement;
 9             (4)  charges  for customer equipment, including such
10        equipment that is leased or rented by the  customer  from
11        any  source,  wherein  such charges are disaggregated and
12        separately identified from other charges;
13             (5)  charges to business  enterprises  certified  as
14        exempt  under Section 9-222.1 of the Public Utilities Act
15        to the extent of such exemption and during the period  of
16        time   specified   by  the  Department  of  Commerce  and
17        Community Affairs;
18             (6)  charges for telecommunications and all services
19        and equipment provided in connection therewith between  a
20        parent  corporation  and its wholly owned subsidiaries or
21        between wholly owned subsidiaries when  the  tax  imposed
22        under  this  Act  has already been paid to a retailer and
23        only to the extent that the charges  between  the  parent
24        corporation  and  wholly  owned  subsidiaries  or between
25        wholly owned subsidiaries  represent  expense  allocation
26        between the corporations and not the generation of profit
27        for the corporation rendering such service;
28             (7)  bad  debts  ("bad  debt" means any portion of a
29        debt that is related to a sale at retail for which  gross
30        charges  are  not otherwise deductible or excludable that
31        has become  worthless  or  uncollectible,  as  determined
32        under  applicable  federal  income  tax standards; if the
33        portion of the debt deemed  to  be  bad  is  subsequently
34        paid,  the  retailer shall report and pay the tax on that
 
SB1102 Engrossed            -27-     LRB093 07188 SJM 07343 b
 1        portion during the reporting period in which the  payment
 2        is made);
 3             (8)  charges    paid    by    inserting   coins   in
 4        coin-operated telecommunication devices; or
 5             (9)  amounts paid  by  telecommunications  retailers
 6        under  the  Telecommunications Infrastructure Maintenance
 7        Fee Act.
 8        "Interstate      telecommunications"      means       all
 9    telecommunications that either originate or terminate outside
10    this State.
11        "Intrastate       telecommunications"      means      all
12    telecommunications that originate and terminate  within  this
13    State.
14        "Person"  means  any  natural  individual,  firm,  trust,
15    estate,  partnership, association, joint stock company, joint
16    venture,  corporation,  limited  liability  company,   or   a
17    receiver,   trustee,   guardian,   or   other  representative
18    appointed by order  of  any  court,  the  Federal  and  State
19    governments, including State universities created by statute,
20    or  any city, town, county, or other political subdivision of
21    this State.
22        "Purchase at retail" means the  acquisition,  consumption
23    or use of telecommunications through a sale at retail.
24        "Retailer" means and includes every person engaged in the
25    business  of  making  sales  at  retail  as  defined  in this
26    Section.  The  Department  may,  in  its   discretion,   upon
27    application,  authorize  the  collection  of  the  tax hereby
28    imposed by any retailer not maintaining a place  of  business
29    within   this   State,   who,  to  the  satisfaction  of  the
30    Department, furnishes adequate security to insure  collection
31    and  payment  of  the  tax.   Such  retailer shall be issued,
32    without charge, a  permit  to  collect  such  tax.   When  so
33    authorized,  it shall be the duty of such retailer to collect
34    the tax upon all of the gross charges for  telecommunications
 
SB1102 Engrossed            -28-     LRB093 07188 SJM 07343 b
 1    in  this  State  in  the  same manner and subject to the same
 2    requirements as a retailer maintaining a  place  of  business
 3    within  this  State.   The  permit  may  be  revoked  by  the
 4    Department at its discretion.
 5        "Retailer maintaining a place of business in this State",
 6    or  any  like term, means and includes any retailer having or
 7    maintaining within this State, directly or by  a  subsidiary,
 8    an  office, distribution facilities, transmission facilities,
 9    sales office, warehouse or other place of  business,  or  any
10    agent  or  other  representative  operating within this State
11    under the  authority  of  the  retailer  or  its  subsidiary,
12    irrespective  of  whether  such place of business or agent or
13    other  representative  is   located   here   permanently   or
14    temporarily,  or  whether  such  retailer  or  subsidiary  is
15    licensed to do business in this State.
16        "Sale  at  retail"  means  the transmitting, supplying or
17    furnishing  of  telecommunications  and  all   services   and
18    equipment    provided   in   connection   therewith   for   a
19    consideration, to persons other than the  Federal  and  State
20    governments,  and  State  universities created by statute and
21    other than between a parent corporation and its wholly  owned
22    subsidiaries  or  between wholly owned subsidiaries for their
23    use or consumption and not for resale.
24        "Service    address"    means     the     location     of
25    telecommunications  equipment  from  which telecommunications
26    services  are  originated  or  at  which   telecommunications
27    services  are  received by a taxpayer.  In the event this may
28    not be a defined location, as in the case of  mobile  phones,
29    paging  systems,  and maritime systems, service address means
30    the customer's place of primary use as defined in the  Mobile
31    Telecommunications     Sourcing    Conformity    Act.     For
32    air-to-ground systems and the like, "service  address"  shall
33    mean  the  location  of  a  taxpayer's  primary  use  of  the
34    telecommunications  equipment as defined by telephone number,
 
SB1102 Engrossed            -29-     LRB093 07188 SJM 07343 b
 1    authorization code, or location in Illinois where  bills  are
 2    sent.
 3        "Taxpayer" means a person who individually or through his
 4    or her agents, employees, or permittees engages in the act or
 5    privilege of originating or receiving telecommunications in a
 6    municipality  and who incurs a tax liability as authorized by
 7    this Act.
 8        "Telecommunications",  in   addition   to   the   meaning
 9    ordinarily  and  popularly  ascribed to it, includes, without
10    limitation, messages or information transmitted  through  use
11    of local, toll, and wide area telephone service, private line
12    services,     channel     services,    telegraph    services,
13    teletypewriter, computer exchange services,  cellular  mobile
14    telecommunications   service,   specialized   mobile   radio,
15    stationary  two-way  radio, paging service, or any other form
16    of mobile and portable one-way or two-way communications,  or
17    any   other   transmission  of  messages  or  information  by
18    electronic or similar means, between or among points by wire,
19    cable, fiber optics, laser, microwave, radio,  satellite,  or
20    similar  facilities.   As  used  in  this Act, "private line"
21    means a dedicated non-traffic sensitive service for a  single
22    customer, that entitles the customer to exclusive or priority
23    use  of  a  communications channel or group of channels, from
24    one  or  more  specified  locations  to  one  or  more  other
25    specified locations.  The definition of  "telecommunications"
26    shall  not  include  value  added  services in which computer
27    processing applications are used to act on the form, content,
28    code, and protocol of the information for purposes other than
29    transmission.    "Telecommunications"   shall   not   include
30    purchases  of  telecommunications  by  a   telecommunications
31    service  provider  for use as a component part of the service
32    provided by such provider to the ultimate retail consumer who
33    originates   or    terminates    the    taxable    end-to-end
34    communications.   Carrier  access  charges,  right  of access
 
SB1102 Engrossed            -30-     LRB093 07188 SJM 07343 b
 1    charges, charges for use of inter-company facilities, and all
 2    telecommunications resold in  the  subsequent  provision  of,
 3    used  as  a  component  of,  or  integrated  into, end-to-end
 4    telecommunications service shall be non-taxable as sales  for
 5    resale.   Prepaid telephone calling arrangements shall not be
 6    considered "telecommunications" subject to  the  tax  imposed
 7    under  this  Act.   For  purposes  of  this Section, "prepaid
 8    telephone calling arrangements" means that term as defined in
 9    Section 2-27 of the Retailers' Occupations Tax Act.
10    (Source: P.A. 92-526, eff. 7-1-02.)

11        (Text of Section after amendment by P.A. 92-878)
12        Sec.  5-7.   Definitions.   For  purposes  of  the  taxes
13    authorized by this Act:
14        "Amount paid" means the amount charged to the  taxpayer's
15    service address in such municipality regardless of where such
16    amount is billed or paid.
17        "Department" means the Illinois Department of Revenue.
18        "Gross  charge"  means  the  amount  paid  for the act or
19    privilege of originating or receiving  telecommunications  in
20    such municipality and for all services and equipment provided
21    in  connection  therewith  by  a  retailer,  valued  in money
22    whether paid in money or otherwise, including cash,  credits,
23    services  and  property of every kind or nature, and shall be
24    determined without any deduction on account of  the  cost  of
25    such  telecommunications,  the  cost  of  the materials used,
26    labor or service costs or any other expense  whatsoever.   In
27    case credit is extended, the amount thereof shall be included
28    only  as  and  when  paid.  "Gross  charges" for private line
29    service shall include charges imposed at each  channel  point
30    within  this  State,  charges for the channel mileage between
31    each channel point within this State, and  charges  for  that
32    portion  of  the  interstate  inter-office  channel  provided
33    within  Illinois.  Charges for that portion of the interstate
34    inter-office channel provided in Illinois shall be determined
 
SB1102 Engrossed            -31-     LRB093 07188 SJM 07343 b
 1    by the retailer as follows:  (i) for interstate  inter-office
 2    channels  having  2  channel  termination points, only one of
 3    which is in Illinois, 50% of the total charge  imposed;  (ii)
 4    for  interstate  inter-office  channels  having  more  than 2
 5    channel termination points, one  or  more  of  which  are  in
 6    Illinois, an amount equal to the total charge multiplied by a
 7    fraction,  the  numerator  of  which is the number of channel
 8    termination points within Illinois  and  the  denominator  of
 9    which  is  the total number of channel termination points; or
10    (iii) any other method that reasonably apportions  the  total
11    charges for interstate inter-office channels among the states
12    in  which  channel  termination  points are located. Prior to
13    January 1,  2004  June  1,  2003,  any  apportionment  method
14    consistent  with  this  paragraph  shall  be  accepted  as  a
15    reasonable  method  to determine the charges for that portion
16    of  the  interstate  inter-office  channel  provided   within
17    Illinois  for  that period. However, "gross charge" shall not
18    include any of the following:
19             (1)  Any amounts added to a purchaser's bill because
20        of a charge made pursuant to: (i) the tax imposed by this
21        Act, (ii)  the  tax  imposed  by  the  Telecommunications
22        Excise  Tax Act, (iii) the tax imposed by Section 4251 of
23        the Internal Revenue Code, (iv) 911  surcharges,  or  (v)
24        charges   added  to  customers'  bills  pursuant  to  the
25        provisions of  Section  9-221  or  9-222  of  the  Public
26        Utilities  Act,  as amended, or any similar charges added
27        to customers' bills by retailers who are not  subject  to
28        rate  regulation  by the Illinois Commerce Commission for
29        the purpose of recovering any of the tax  liabilities  or
30        other amounts specified in those provisions of the Public
31        Utilities Act.
32             (2)  Charges  for  a  sent collect telecommunication
33        received outside of such municipality.
34             (3)  Charges for leased time on equipment or charges
 
SB1102 Engrossed            -32-     LRB093 07188 SJM 07343 b
 1        for the storage of data  or  information  for  subsequent
 2        retrieval  or  the  processing  of  data  or  information
 3        intended  to  change its form or content.  Such equipment
 4        includes, but is not limited to, the use of  calculators,
 5        computers,    data   processing   equipment,   tabulating
 6        equipment or accounting equipment and also  includes  the
 7        usage of computers under a time-sharing agreement.
 8             (4)  Charges  for customer equipment, including such
 9        equipment that is leased or rented by the  customer  from
10        any  source,  wherein  such charges are disaggregated and
11        separately identified from other charges.
12             (5)  Charges to business  enterprises  certified  as
13        exempt  under Section 9-222.1 of the Public Utilities Act
14        to the extent of such exemption and during the period  of
15        time   specified   by  the  Department  of  Commerce  and
16        Community Affairs.
17             (6)  Charges for telecommunications and all services
18        and equipment provided in connection therewith between  a
19        parent  corporation  and its wholly owned subsidiaries or
20        between wholly owned subsidiaries when  the  tax  imposed
21        under  this  Act  has already been paid to a retailer and
22        only to the extent that the charges  between  the  parent
23        corporation  and  wholly  owned  subsidiaries  or between
24        wholly owned subsidiaries  represent  expense  allocation
25        between the corporations and not the generation of profit
26        for the corporation rendering such service.
27             (7)  Bad  debts  ("bad  debt" means any portion of a
28        debt that is related to a sale at retail for which  gross
29        charges  are  not otherwise deductible or excludable that
30        has become  worthless  or  uncollectible,  as  determined
31        under  applicable  federal  income  tax standards; if the
32        portion of the debt deemed  to  be  bad  is  subsequently
33        paid,  the  retailer shall report and pay the tax on that
34        portion during the reporting period in which the  payment
 
SB1102 Engrossed            -33-     LRB093 07188 SJM 07343 b
 1        is made).
 2             (8)  Charges    paid    by    inserting   coins   in
 3        coin-operated telecommunication devices.
 4             (9)  Amounts paid  by  telecommunications  retailers
 5        under  the  Telecommunications Infrastructure Maintenance
 6        Fee Act.
 7             (10)  Charges    for    nontaxable    services    or
 8        telecommunications if (i) those  charges  are  aggregated
 9        with   other  charges  for  telecommunications  that  are
10        taxable, (ii) those charges are not separately stated  on
11        the  customer bill or invoice, and (iii) the retailer can
12        reasonably  identify  the  nontaxable  charges   on   the
13        retailer's  books  and records kept in the regular course
14        of business. If the nontaxable charges cannot  reasonably
15        be  identified,  the  gross  charge from the sale of both
16        taxable and  nontaxable  services  or  telecommunications
17        billed  on  a  combined  basis shall be attributed to the
18        taxable services or  telecommunications.  The  burden  of
19        proving  nontaxable  charges  shall be on the retailer of
20        the telecommunications.
21        "Interstate      telecommunications"      means       all
22    telecommunications that either originate or terminate outside
23    this State.
24        "Intrastate       telecommunications"      means      all
25    telecommunications that originate and terminate  within  this
26    State.
27        "Person"  means  any  natural  individual,  firm,  trust,
28    estate,  partnership, association, joint stock company, joint
29    venture,  corporation,  limited  liability  company,   or   a
30    receiver,   trustee,   guardian,   or   other  representative
31    appointed by order  of  any  court,  the  Federal  and  State
32    governments, including State universities created by statute,
33    or  any city, town, county, or other political subdivision of
34    this State.
 
SB1102 Engrossed            -34-     LRB093 07188 SJM 07343 b
 1        "Purchase at retail" means the  acquisition,  consumption
 2    or use of telecommunications through a sale at retail.
 3        "Retailer" means and includes every person engaged in the
 4    business  of  making  sales  at  retail  as  defined  in this
 5    Section.  The  Department  may,  in  its   discretion,   upon
 6    application,  authorize  the  collection  of  the  tax hereby
 7    imposed by any retailer not maintaining a place  of  business
 8    within   this   State,   who,  to  the  satisfaction  of  the
 9    Department, furnishes adequate security to insure  collection
10    and  payment  of  the  tax.   Such  retailer shall be issued,
11    without charge, a  permit  to  collect  such  tax.   When  so
12    authorized,  it shall be the duty of such retailer to collect
13    the tax upon all of the gross charges for  telecommunications
14    in  this  State  in  the  same manner and subject to the same
15    requirements as a retailer maintaining a  place  of  business
16    within  this  State.   The  permit  may  be  revoked  by  the
17    Department at its discretion.
18        "Retailer maintaining a place of business in this State",
19    or  any  like term, means and includes any retailer having or
20    maintaining within this State, directly or by  a  subsidiary,
21    an  office, distribution facilities, transmission facilities,
22    sales office, warehouse or other place of  business,  or  any
23    agent  or  other  representative  operating within this State
24    under the  authority  of  the  retailer  or  its  subsidiary,
25    irrespective  of  whether  such place of business or agent or
26    other  representative  is   located   here   permanently   or
27    temporarily,  or  whether  such  retailer  or  subsidiary  is
28    licensed to do business in this State.
29        "Sale  at  retail"  means  the transmitting, supplying or
30    furnishing  of  telecommunications  and  all   services   and
31    equipment    provided   in   connection   therewith   for   a
32    consideration, to persons other than the  Federal  and  State
33    governments,  and  State  universities created by statute and
34    other than between a parent corporation and its wholly  owned
 
SB1102 Engrossed            -35-     LRB093 07188 SJM 07343 b
 1    subsidiaries  or  between wholly owned subsidiaries for their
 2    use or consumption and not for resale.
 3        "Service    address"    means     the     location     of
 4    telecommunications  equipment  from  which telecommunications
 5    services  are  originated  or  at  which   telecommunications
 6    services  are  received by a taxpayer.  In the event this may
 7    not be a defined location, as in the case of  mobile  phones,
 8    paging  systems,  and maritime systems, service address means
 9    the customer's place of primary use as defined in the  Mobile
10    Telecommunications     Sourcing    Conformity    Act.     For
11    air-to-ground systems and the like, "service  address"  shall
12    mean  the  location  of  a  taxpayer's  primary  use  of  the
13    telecommunications  equipment as defined by telephone number,
14    authorization code, or location in Illinois where  bills  are
15    sent.
16        "Taxpayer" means a person who individually or through his
17    or her agents, employees, or permittees engages in the act or
18    privilege of originating or receiving telecommunications in a
19    municipality  and who incurs a tax liability as authorized by
20    this Act.
21        "Telecommunications",  in   addition   to   the   meaning
22    ordinarily  and  popularly  ascribed to it, includes, without
23    limitation, messages or information transmitted  through  use
24    of local, toll, and wide area telephone service, private line
25    services,     channel     services,    telegraph    services,
26    teletypewriter, computer exchange services,  cellular  mobile
27    telecommunications   service,   specialized   mobile   radio,
28    stationary  two-way  radio, paging service, or any other form
29    of mobile and portable one-way or two-way communications,  or
30    any   other   transmission  of  messages  or  information  by
31    electronic or similar means, between or among points by wire,
32    cable, fiber optics, laser, microwave, radio,  satellite,  or
33    similar  facilities.   As  used  in  this Act, "private line"
34    means a dedicated non-traffic sensitive service for a  single
 
SB1102 Engrossed            -36-     LRB093 07188 SJM 07343 b
 1    customer, that entitles the customer to exclusive or priority
 2    use  of  a  communications channel or group of channels, from
 3    one  or  more  specified  locations  to  one  or  more  other
 4    specified locations.  The definition of  "telecommunications"
 5    shall  not  include  value  added  services in which computer
 6    processing applications are used to act on the form, content,
 7    code, and protocol of the information for purposes other than
 8    transmission.    "Telecommunications"   shall   not   include
 9    purchases  of  telecommunications  by  a   telecommunications
10    service  provider  for use as a component part of the service
11    provided by such provider to the ultimate retail consumer who
12    originates   or    terminates    the    taxable    end-to-end
13    communications.   Carrier  access  charges,  right  of access
14    charges, charges for use of inter-company facilities, and all
15    telecommunications resold in  the  subsequent  provision  of,
16    used  as  a  component  of,  or  integrated  into, end-to-end
17    telecommunications service shall be non-taxable as sales  for
18    resale.   Prepaid telephone calling arrangements shall not be
19    considered "telecommunications" subject to  the  tax  imposed
20    under  this  Act.   For  purposes  of  this Section, "prepaid
21    telephone calling arrangements" means that term as defined in
22    Section 2-27 of the Retailers' Occupation Tax Act.
23    (Source: P.A. 92-526, eff. 7-1-02; 92-878, eff. 1-1-04.)

24        (35 ILCS 636/5-20)
25        Sec. 5-20. Imposition.
26        (a)  On and after January  1,  2003,  for  municipalities
27    with  populations of less than 500,000, the tax authorized by
28    this Act shall be imposed (except  as  provided  in  Sections
29    5-25  and  5-30  of  this  Act),  amended,  or repealed by an
30    ordinance adopted by the municipality. Upon adoption  of  the
31    ordinance  authorizing  the imposition, amendment, or repeal,
32    the municipal clerk shall transmit a certified copy  of  that
33    ordinance  to  the Department. The Department shall determine
 
SB1102 Engrossed            -37-     LRB093 07188 SJM 07343 b
 1    within 10 days after receipt of  the  ordinance  whether  the
 2    ordinance meets the criteria under this Act. If the ordinance
 3    meets the criteria, the Department shall grant certification.
 4    Upon   certification,   the   Department   shall  notify  the
 5    telecommunications  retailers  of  the  certified  ordinance,
 6    which ordinance shall be filed by the municipality  with  the
 7    Department pursuant to the rules of the Department.
 8             (1)  Any  ordinance adopted by a municipality with a
 9        population of less than 500,000 which attempts to impose,
10        amend or repeal the tax authorized by this Act  shall  be
11        of  no  force  and  effect  until at least 3 months after
12        certification by properly filed with an appropriate  form
13        with  the Department and notice to the telecommunications
14        retailers.
15             (2)  Any certified copy of an ordinance certified by
16        filed   with   the   Department   and   notice   to   the
17        telecommunications provider  prior  to  October  1,  2002
18        shall  be  effective with respect to gross charges billed
19        by telecommunications retailers on or  after  January  1,
20        2003 and thereafter any ordinance certified by copy of an
21        ordinance  filed  with  the  Department and notice to the
22        telecommunications retailer  prior  to  any  April  1  or
23        October  1  shall  be  effective  with  respect  to gross
24        charges billed  by  telecommunications  retailers  on  or
25        after the following July 1 or January 1, respectively.
26        (b)  On  and  after  January  1, 2003, for municipalities
27    with populations of 500,000 or more, the  tax  authorized  by
28    this  Act  shall  be  imposed,  amended, or repealed, and any
29    authorized  exemptions  granted,  by  the  adoption   of   an
30    ordinance   and   notification   to   the  telecommunications
31    retailers.
32    (Source: P.A. 92-526, eff. 7-1-02.)

33        Section 95.  No acceleration or delay.   Where  this  Act
 
SB1102 Engrossed            -38-     LRB093 07188 SJM 07343 b
 1    makes changes in a statute that is represented in this Act by
 2    text  that  is not yet or no longer in effect (for example, a
 3    Section represented by multiple versions), the  use  of  that
 4    text  does  not  accelerate or delay the taking effect of (i)
 5    the changes made by this Act or (ii) provisions derived  from
 6    any other Public Act.

 7        Section  99.  Effective date.  This Act takes effect upon
 8    becoming law.