94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB4103

 

Introduced 8/25/2005, by Rep. Jack D. Franks

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-10   from Ch. 120, par. 439.3-10
35 ILCS 110/3-10   from Ch. 120, par. 439.33-10
35 ILCS 115/3-10   from Ch. 120, par. 439.103-10
35 ILCS 120/2-10   from Ch. 120, par. 441-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, with respect to motor fuel and gasohol taxed at a rate of 6.25%, the tax imposed under these Acts may not exceed $0.15 per gallon. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning revenue.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Use Tax Act is amended by changing Section
5 3-10 as follows:
 
6     (35 ILCS 105/3-10)  (from Ch. 120, par. 439.3-10)
7     Sec. 3-10. Rate of tax. Unless otherwise provided in this
8 Section, the tax imposed by this Act is at the rate of 6.25% of
9 either the selling price or the fair market value, if any, of
10 the tangible personal property. In all cases where property
11 functionally used or consumed is the same as the property that
12 was purchased at retail, then the tax is imposed on the selling
13 price of the property. In all cases where property functionally
14 used or consumed is a by-product or waste product that has been
15 refined, manufactured, or produced from property purchased at
16 retail, then the tax is imposed on the lower of the fair market
17 value, if any, of the specific property so used in this State
18 or on the selling price of the property purchased at retail.
19 For purposes of this Section "fair market value" means the
20 price at which property would change hands between a willing
21 buyer and a willing seller, neither being under any compulsion
22 to buy or sell and both having reasonable knowledge of the
23 relevant facts. The fair market value shall be established by
24 Illinois sales by the taxpayer of the same property as that
25 functionally used or consumed, or if there are no such sales by
26 the taxpayer, then comparable sales or purchases of property of
27 like kind and character in Illinois.
28     Beginning on July 1, 2000 and through December 31, 2000,
29 with respect to motor fuel, as defined in Section 1.1 of the
30 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
31 the Use Tax Act, the tax is imposed at the rate of 1.25%.
32     Beginning on the effective date of this amendatory Act of

 

 

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1 the 94th General Assembly, with respect to motor fuel and
2 gasohol taxed at a rate of 6.25%, the tax imposed under this
3 Act may not exceed $0.15 per gallon.
4     With respect to gasohol, the tax imposed by this Act
5 applies to (i) 70% of the proceeds of sales made on or after
6 January 1, 1990, and before July 1, 2003, (ii) 80% of the
7 proceeds of sales made on or after July 1, 2003 and on or
8 before December 31, 2013, and (iii) 100% of the proceeds of
9 sales made thereafter. If, at any time, however, the tax under
10 this Act on sales of gasohol is imposed at the rate of 1.25%,
11 then the tax imposed by this Act applies to 100% of the
12 proceeds of sales of gasohol made during that time.
13     With respect to majority blended ethanol fuel, the tax
14 imposed by this Act does not apply to the proceeds of sales
15 made on or after July 1, 2003 and on or before December 31,
16 2013 but applies to 100% of the proceeds of sales made
17 thereafter.
18     With respect to biodiesel blends with no less than 1% and
19 no more than 10% biodiesel, the tax imposed by this Act applies
20 to (i) 80% of the proceeds of sales made on or after July 1,
21 2003 and on or before December 31, 2013 and (ii) 100% of the
22 proceeds of sales made thereafter. If, at any time, however,
23 the tax under this Act on sales of biodiesel blends with no
24 less than 1% and no more than 10% biodiesel is imposed at the
25 rate of 1.25%, then the tax imposed by this Act applies to 100%
26 of the proceeds of sales of biodiesel blends with no less than
27 1% and no more than 10% biodiesel made during that time.
28     With respect to 100% biodiesel and biodiesel blends with
29 more than 10% but no more than 99% biodiesel, the tax imposed
30 by this Act does not apply to the proceeds of sales made on or
31 after July 1, 2003 and on or before December 31, 2013 but
32 applies to 100% of the proceeds of sales made thereafter.
33     With respect to food for human consumption that is to be
34 consumed off the premises where it is sold (other than
35 alcoholic beverages, soft drinks, and food that has been
36 prepared for immediate consumption) and prescription and

 

 

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1 nonprescription medicines, drugs, medical appliances,
2 modifications to a motor vehicle for the purpose of rendering
3 it usable by a disabled person, and insulin, urine testing
4 materials, syringes, and needles used by diabetics, for human
5 use, the tax is imposed at the rate of 1%. For the purposes of
6 this Section, the term "soft drinks" means any complete,
7 finished, ready-to-use, non-alcoholic drink, whether
8 carbonated or not, including but not limited to soda water,
9 cola, fruit juice, vegetable juice, carbonated water, and all
10 other preparations commonly known as soft drinks of whatever
11 kind or description that are contained in any closed or sealed
12 bottle, can, carton, or container, regardless of size. "Soft
13 drinks" does not include coffee, tea, non-carbonated water,
14 infant formula, milk or milk products as defined in the Grade A
15 Pasteurized Milk and Milk Products Act, or drinks containing
16 50% or more natural fruit or vegetable juice.
17     Notwithstanding any other provisions of this Act, "food for
18 human consumption that is to be consumed off the premises where
19 it is sold" includes all food sold through a vending machine,
20 except soft drinks and food products that are dispensed hot
21 from a vending machine, regardless of the location of the
22 vending machine.
23     If the property that is purchased at retail from a retailer
24 is acquired outside Illinois and used outside Illinois before
25 being brought to Illinois for use here and is taxable under
26 this Act, the "selling price" on which the tax is computed
27 shall be reduced by an amount that represents a reasonable
28 allowance for depreciation for the period of prior out-of-state
29 use.
30 (Source: P.A. 93-17, eff. 6-11-03.)
 
31     Section 10. The Service Use Tax Act is amended by changing
32 Section 3-10 as follows:
 
33     (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
34     Sec. 3-10. Rate of tax. Unless otherwise provided in this

 

 

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1 Section, the tax imposed by this Act is at the rate of 6.25% of
2 the selling price of tangible personal property transferred as
3 an incident to the sale of service, but, for the purpose of
4 computing this tax, in no event shall the selling price be less
5 than the cost price of the property to the serviceman.
6     Beginning on July 1, 2000 and through December 31, 2000,
7 with respect to motor fuel, as defined in Section 1.1 of the
8 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
9 the Use Tax Act, the tax is imposed at the rate of 1.25%.
10     Beginning on the effective date of this amendatory Act of
11 the 94th General Assembly, with respect to motor fuel and
12 gasohol taxed at a rate of 6.25%, the tax imposed under this
13 Act may not exceed $0.15 per gallon.
14     With respect to gasohol, as defined in the Use Tax Act, the
15 tax imposed by this Act applies to (i) 70% of the selling price
16 of property transferred as an incident to the sale of service
17 on or after January 1, 1990, and before July 1, 2003, (ii) 80%
18 of the selling price of property transferred as an incident to
19 the sale of service on or after July 1, 2003 and on or before
20 December 31, 2013, and (iii) 100% of the selling price
21 thereafter. If, at any time, however, the tax under this Act on
22 sales of gasohol, as defined in the Use Tax Act, is imposed at
23 the rate of 1.25%, then the tax imposed by this Act applies to
24 100% of the proceeds of sales of gasohol made during that time.
25     With respect to majority blended ethanol fuel, as defined
26 in the Use Tax Act, the tax imposed by this Act does not apply
27 to the selling price of property transferred as an incident to
28 the sale of service on or after July 1, 2003 and on or before
29 December 31, 2013 but applies to 100% of the selling price
30 thereafter.
31     With respect to biodiesel blends, as defined in the Use Tax
32 Act, with no less than 1% and no more than 10% biodiesel, the
33 tax imposed by this Act applies to (i) 80% of the selling price
34 of property transferred as an incident to the sale of service
35 on or after July 1, 2003 and on or before December 31, 2013 and
36 (ii) 100% of the proceeds of the selling price thereafter. If,

 

 

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1 at any time, however, the tax under this Act on sales of
2 biodiesel blends, as defined in the Use Tax Act, with no less
3 than 1% and no more than 10% biodiesel is imposed at the rate
4 of 1.25%, then the tax imposed by this Act applies to 100% of
5 the proceeds of sales of biodiesel blends with no less than 1%
6 and no more than 10% biodiesel made during that time.
7     With respect to 100% biodiesel, as defined in the Use Tax
8 Act, and biodiesel blends, as defined in the Use Tax Act, with
9 more than 10% but no more than 99% biodiesel, the tax imposed
10 by this Act does not apply to the proceeds of the selling price
11 of property transferred as an incident to the sale of service
12 on or after July 1, 2003 and on or before December 31, 2013 but
13 applies to 100% of the selling price thereafter.
14     At the election of any registered serviceman made for each
15 fiscal year, sales of service in which the aggregate annual
16 cost price of tangible personal property transferred as an
17 incident to the sales of service is less than 35%, or 75% in
18 the case of servicemen transferring prescription drugs or
19 servicemen engaged in graphic arts production, of the aggregate
20 annual total gross receipts from all sales of service, the tax
21 imposed by this Act shall be based on the serviceman's cost
22 price of the tangible personal property transferred as an
23 incident to the sale of those services.
24     The tax shall be imposed at the rate of 1% on food prepared
25 for immediate consumption and transferred incident to a sale of
26 service subject to this Act or the Service Occupation Tax Act
27 by an entity licensed under the Hospital Licensing Act, the
28 Nursing Home Care Act, or the Child Care Act of 1969. The tax
29 shall also be imposed at the rate of 1% on food for human
30 consumption that is to be consumed off the premises where it is
31 sold (other than alcoholic beverages, soft drinks, and food
32 that has been prepared for immediate consumption and is not
33 otherwise included in this paragraph) and prescription and
34 nonprescription medicines, drugs, medical appliances,
35 modifications to a motor vehicle for the purpose of rendering
36 it usable by a disabled person, and insulin, urine testing

 

 

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1 materials, syringes, and needles used by diabetics, for human
2 use. For the purposes of this Section, the term "soft drinks"
3 means any complete, finished, ready-to-use, non-alcoholic
4 drink, whether carbonated or not, including but not limited to
5 soda water, cola, fruit juice, vegetable juice, carbonated
6 water, and all other preparations commonly known as soft drinks
7 of whatever kind or description that are contained in any
8 closed or sealed bottle, can, carton, or container, regardless
9 of size. "Soft drinks" does not include coffee, tea,
10 non-carbonated water, infant formula, milk or milk products as
11 defined in the Grade A Pasteurized Milk and Milk Products Act,
12 or drinks containing 50% or more natural fruit or vegetable
13 juice.
14     Notwithstanding any other provisions of this Act, "food for
15 human consumption that is to be consumed off the premises where
16 it is sold" includes all food sold through a vending machine,
17 except soft drinks and food products that are dispensed hot
18 from a vending machine, regardless of the location of the
19 vending machine.
20     If the property that is acquired from a serviceman is
21 acquired outside Illinois and used outside Illinois before
22 being brought to Illinois for use here and is taxable under
23 this Act, the "selling price" on which the tax is computed
24 shall be reduced by an amount that represents a reasonable
25 allowance for depreciation for the period of prior out-of-state
26 use.
27 (Source: P.A. 93-17, eff. 6-11-03.)
 
28     Section 15. The Service Occupation Tax Act is amended by
29 changing Section 3-10 as follows:
 
30     (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
31     Sec. 3-10. Rate of tax. Unless otherwise provided in this
32 Section, the tax imposed by this Act is at the rate of 6.25% of
33 the "selling price", as defined in Section 2 of the Service Use
34 Tax Act, of the tangible personal property. For the purpose of

 

 

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1 computing this tax, in no event shall the "selling price" be
2 less than the cost price to the serviceman of the tangible
3 personal property transferred. The selling price of each item
4 of tangible personal property transferred as an incident of a
5 sale of service may be shown as a distinct and separate item on
6 the serviceman's billing to the service customer. If the
7 selling price is not so shown, the selling price of the
8 tangible personal property is deemed to be 50% of the
9 serviceman's entire billing to the service customer. When,
10 however, a serviceman contracts to design, develop, and produce
11 special order machinery or equipment, the tax imposed by this
12 Act shall be based on the serviceman's cost price of the
13 tangible personal property transferred incident to the
14 completion of the contract.
15     Beginning on July 1, 2000 and through December 31, 2000,
16 with respect to motor fuel, as defined in Section 1.1 of the
17 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
18 the Use Tax Act, the tax is imposed at the rate of 1.25%.
19     Beginning on the effective date of this amendatory Act of
20 the 94th General Assembly, with respect to motor fuel and
21 gasohol taxed at a rate of 6.25%, the tax imposed under this
22 Act may not exceed $0.15 per gallon.
23     With respect to gasohol, as defined in the Use Tax Act, the
24 tax imposed by this Act shall apply to (i) 70% of the cost
25 price of property transferred as an incident to the sale of
26 service on or after January 1, 1990, and before July 1, 2003,
27 (ii) 80% of the selling price of property transferred as an
28 incident to the sale of service on or after July 1, 2003 and on
29 or before December 31, 2013, and (iii) 100% of the cost price
30 thereafter. If, at any time, however, the tax under this Act on
31 sales of gasohol, as defined in the Use Tax Act, is imposed at
32 the rate of 1.25%, then the tax imposed by this Act applies to
33 100% of the proceeds of sales of gasohol made during that time.
34     With respect to majority blended ethanol fuel, as defined
35 in the Use Tax Act, the tax imposed by this Act does not apply
36 to the selling price of property transferred as an incident to

 

 

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1 the sale of service on or after July 1, 2003 and on or before
2 December 31, 2013 but applies to 100% of the selling price
3 thereafter.
4     With respect to biodiesel blends, as defined in the Use Tax
5 Act, with no less than 1% and no more than 10% biodiesel, the
6 tax imposed by this Act applies to (i) 80% of the selling price
7 of property transferred as an incident to the sale of service
8 on or after July 1, 2003 and on or before December 31, 2013 and
9 (ii) 100% of the proceeds of the selling price thereafter. If,
10 at any time, however, the tax under this Act on sales of
11 biodiesel blends, as defined in the Use Tax Act, with no less
12 than 1% and no more than 10% biodiesel is imposed at the rate
13 of 1.25%, then the tax imposed by this Act applies to 100% of
14 the proceeds of sales of biodiesel blends with no less than 1%
15 and no more than 10% biodiesel made during that time.
16     With respect to 100% biodiesel, as defined in the Use Tax
17 Act, and biodiesel blends, as defined in the Use Tax Act, with
18 more than 10% but no more than 99% biodiesel material, the tax
19 imposed by this Act does not apply to the proceeds of the
20 selling price of property transferred as an incident to the
21 sale of service on or after July 1, 2003 and on or before
22 December 31, 2013 but applies to 100% of the selling price
23 thereafter.
24     At the election of any registered serviceman made for each
25 fiscal year, sales of service in which the aggregate annual
26 cost price of tangible personal property transferred as an
27 incident to the sales of service is less than 35%, or 75% in
28 the case of servicemen transferring prescription drugs or
29 servicemen engaged in graphic arts production, of the aggregate
30 annual total gross receipts from all sales of service, the tax
31 imposed by this Act shall be based on the serviceman's cost
32 price of the tangible personal property transferred incident to
33 the sale of those services.
34     The tax shall be imposed at the rate of 1% on food prepared
35 for immediate consumption and transferred incident to a sale of
36 service subject to this Act or the Service Occupation Tax Act

 

 

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1 by an entity licensed under the Hospital Licensing Act, the
2 Nursing Home Care Act, or the Child Care Act of 1969. The tax
3 shall also be imposed at the rate of 1% on food for human
4 consumption that is to be consumed off the premises where it is
5 sold (other than alcoholic beverages, soft drinks, and food
6 that has been prepared for immediate consumption and is not
7 otherwise included in this paragraph) and prescription and
8 nonprescription medicines, drugs, medical appliances,
9 modifications to a motor vehicle for the purpose of rendering
10 it usable by a disabled person, and insulin, urine testing
11 materials, syringes, and needles used by diabetics, for human
12 use. For the purposes of this Section, the term "soft drinks"
13 means any complete, finished, ready-to-use, non-alcoholic
14 drink, whether carbonated or not, including but not limited to
15 soda water, cola, fruit juice, vegetable juice, carbonated
16 water, and all other preparations commonly known as soft drinks
17 of whatever kind or description that are contained in any
18 closed or sealed can, carton, or container, regardless of size.
19 "Soft drinks" does not include coffee, tea, non-carbonated
20 water, infant formula, milk or milk products as defined in the
21 Grade A Pasteurized Milk and Milk Products Act, or drinks
22 containing 50% or more natural fruit or vegetable juice.
23     Notwithstanding any other provisions of this Act, "food for
24 human consumption that is to be consumed off the premises where
25 it is sold" includes all food sold through a vending machine,
26 except soft drinks and food products that are dispensed hot
27 from a vending machine, regardless of the location of the
28 vending machine.
29 (Source: P.A. 93-17, eff. 6-11-03.)
 
30     Section 20. The Retailers' Occupation Tax Act is amended by
31 changing Section 2-10 as follows:
 
32     (35 ILCS 120/2-10)  (from Ch. 120, par. 441-10)
33     Sec. 2-10. Rate of tax. Unless otherwise provided in this
34 Section, the tax imposed by this Act is at the rate of 6.25% of

 

 

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1 gross receipts from sales of tangible personal property made in
2 the course of business.
3     Beginning on July 1, 2000 and through December 31, 2000,
4 with respect to motor fuel, as defined in Section 1.1 of the
5 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
6 the Use Tax Act, the tax is imposed at the rate of 1.25%.
7     Beginning on the effective date of this amendatory Act of
8 the 94th General Assembly, with respect to motor fuel and
9 gasohol taxed at a rate of 6.25%, the tax imposed under this
10 Act may not exceed $0.15 per gallon.
11     Within 14 days after the effective date of this amendatory
12 Act of the 91st General Assembly, each retailer of motor fuel
13 and gasohol shall cause the following notice to be posted in a
14 prominently visible place on each retail dispensing device that
15 is used to dispense motor fuel or gasohol in the State of
16 Illinois: "As of July 1, 2000, the State of Illinois has
17 eliminated the State's share of sales tax on motor fuel and
18 gasohol through December 31, 2000. The price on this pump
19 should reflect the elimination of the tax." The notice shall be
20 printed in bold print on a sign that is no smaller than 4
21 inches by 8 inches. The sign shall be clearly visible to
22 customers. Any retailer who fails to post or maintain a
23 required sign through December 31, 2000 is guilty of a petty
24 offense for which the fine shall be $500 per day per each
25 retail premises where a violation occurs.
26     With respect to gasohol, as defined in the Use Tax Act, the
27 tax imposed by this Act applies to (i) 70% of the proceeds of
28 sales made on or after January 1, 1990, and before July 1,
29 2003, (ii) 80% of the proceeds of sales made on or after July
30 1, 2003 and on or before December 31, 2013, and (iii) 100% of
31 the proceeds of sales made thereafter. If, at any time,
32 however, the tax under this Act on sales of gasohol, as defined
33 in the Use Tax Act, is imposed at the rate of 1.25%, then the
34 tax imposed by this Act applies to 100% of the proceeds of
35 sales of gasohol made during that time.
36     With respect to majority blended ethanol fuel, as defined

 

 

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1 in the Use Tax Act, the tax imposed by this Act does not apply
2 to the proceeds of sales made on or after July 1, 2003 and on or
3 before December 31, 2013 but applies to 100% of the proceeds of
4 sales made thereafter.
5     With respect to biodiesel blends, as defined in the Use Tax
6 Act, with no less than 1% and no more than 10% biodiesel, the
7 tax imposed by this Act applies to (i) 80% of the proceeds of
8 sales made on or after July 1, 2003 and on or before December
9 31, 2013 and (ii) 100% of the proceeds of sales made
10 thereafter. If, at any time, however, the tax under this Act on
11 sales of biodiesel blends, as defined in the Use Tax Act, with
12 no less than 1% and no more than 10% biodiesel is imposed at
13 the rate of 1.25%, then the tax imposed by this Act applies to
14 100% of the proceeds of sales of biodiesel blends with no less
15 than 1% and no more than 10% biodiesel made during that time.
16     With respect to 100% biodiesel, as defined in the Use Tax
17 Act, and biodiesel blends, as defined in the Use Tax Act, with
18 more than 10% but no more than 99% biodiesel, the tax imposed
19 by this Act does not apply to the proceeds of sales made on or
20 after July 1, 2003 and on or before December 31, 2013 but
21 applies to 100% of the proceeds of sales made thereafter.
22     With respect to food for human consumption that is to be
23 consumed off the premises where it is sold (other than
24 alcoholic beverages, soft drinks, and food that has been
25 prepared for immediate consumption) and prescription and
26 nonprescription medicines, drugs, medical appliances,
27 modifications to a motor vehicle for the purpose of rendering
28 it usable by a disabled person, and insulin, urine testing
29 materials, syringes, and needles used by diabetics, for human
30 use, the tax is imposed at the rate of 1%. For the purposes of
31 this Section, the term "soft drinks" means any complete,
32 finished, ready-to-use, non-alcoholic drink, whether
33 carbonated or not, including but not limited to soda water,
34 cola, fruit juice, vegetable juice, carbonated water, and all
35 other preparations commonly known as soft drinks of whatever
36 kind or description that are contained in any closed or sealed

 

 

HB4103 - 12 - LRB094 13273 BDD 48127 b

1 bottle, can, carton, or container, regardless of size. "Soft
2 drinks" does not include coffee, tea, non-carbonated water,
3 infant formula, milk or milk products as defined in the Grade A
4 Pasteurized Milk and Milk Products Act, or drinks containing
5 50% or more natural fruit or vegetable juice.
6     Notwithstanding any other provisions of this Act, "food for
7 human consumption that is to be consumed off the premises where
8 it is sold" includes all food sold through a vending machine,
9 except soft drinks and food products that are dispensed hot
10 from a vending machine, regardless of the location of the
11 vending machine.
12 (Source: P.A. 93-17, eff. 6-11-03.)
 
13     Section 99. Effective date. This Act takes effect upon
14 becoming law.