97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3128

 

Introduced 2/23/2011, by Rep. Karen A. Yarbrough

 

SYNOPSIS AS INTRODUCED:
 
55 ILCS 5/5-1006.3 new
65 ILCS 5/8-11-6b

    Amends the Counties Code. Creates the Home Rule County Soft Drink Retailers' Occupation Tax. Provides that home rule counties may impose a tax upon all persons engaged in the business of selling soft drinks, including those who sell fountain soft drinks. Sets forth requirements for the tax and provides that it shall not take effect prior to the first day of the third month following the passage of the ordinance imposing the tax and receipt of a certified copy of the ordinance by the Department of Revenue. Requires that a certificate of registration must be issued by the Illinois Department of Revenue to a retailer in order to permit the registrant to engage in a business that sells soft drinks. Provides that a certified copy of any ordinance imposing or discontinuing any soft drink tax or effecting a change in the rate of that tax shall be filed with the Department of Revenue. Amends the Illinois Municipal Code. Provides that a home rule municipality may impose a tax upon all persons engaged in the business of selling soft drinks, including those who sell fountain soft drinks. Effective January 1, 2012.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3128LRB097 08168 KMW 48292 b

1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Counties Code is amended by adding Section
55-1006.3 as follows:
 
6    (55 ILCS 5/5-1006.3 new)
7    Sec. 5-1006.3. Home rule soft drink taxes.
8    (a) The county board of a home rule county may impose a
9tax, which shall not take effect prior to the first day of the
10third month following the passage of the ordinance imposing the
11tax and receipt of a certified copy of the ordinance by the
12Department of Revenue, upon all persons engaged in the business
13of selling soft drinks (other than fountain soft drinks) at
14retail in the county based on the gross receipts from those
15sales made in the course of such business. If imposed, the tax
16shall only be in 1/4% increments and shall not exceed 3%. For
17purposes of this subsection, the term "soft drink" has the
18meaning set forth in Section 2-10 of the Retailers' Occupation
19Tax Act, as may be amended from time to time, except that the
20term shall not be limited to drinks contained in a closed or
21sealed bottle, can, carton or container; the term "fountain
22soft drinks" means soft drinks which are prepared by the retail
23seller of the soft drinks by mixing syrup or concentrate with

 

 

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1water, by hand or through a soft drink dispensing machine, at
2or near the point and time of sale to the retail purchaser; and
3the term "soft drink dispensing machine" means a device which
4mixes soft drink syrup or concentrate with water and dispenses
5the mixture into an open container as a ready to drink soft
6drink.
7    The tax imposed under this subsection and all civil
8penalties that may be assessed as an incident to that tax shall
9be collected and enforced by the Illinois Department of
10Revenue. The Department shall have full power to administer and
11enforce this subsection, to collect all taxes and penalties so
12collected in the manner provided in this subsection, and to
13determine all rights to credit memoranda arising on account of
14the erroneous payment of tax or penalty under this subsection.
15In the administration of and compliance with this subsection,
16the Department and persons who are subject to this subsection
17shall have the same rights, remedies, privileges, immunities,
18powers and duties, shall be subject to the same conditions,
19restrictions, limitations, penalties, exclusions, exemptions,
20and definitions of terms, and shall employ the same modes of
21procedure applicable to the Retailers' Occupation Tax as are
22prescribed in Sections 1, 2 through 2-65 (in respect to all
23provisions of those Sections other than the State rate of
24taxes), 2c, 2h, 2i, 3 (except as to the disposition of taxes
25and penalties collected), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i,
265j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 12, 13 and, on and after

 

 

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1January 1, 1994, all applicable provisions of the Uniform
2Penalty and Interest Act that are not inconsistent with this
3subsection, as fully as if provisions contained in those
4Sections of the Retailers' Occupation Tax Act were set forth in
5this subsection.
6    Persons subject to any tax imposed under the authority
7granted by this subsection may reimburse themselves for their
8seller's tax liability under this subsection by separately
9stating that tax as an additional charge, which charge may be
10stated in combination, in a single amount, with State taxes
11that sellers are required to collect under the Use Tax Act
12pursuant to bracket schedules as the Department may prescribe.
13The retailer filing the return shall, at the time of filing the
14return, pay to the Department the amount of tax imposed under
15this subsection, less the discount of 1.75%, which is allowed
16to reimburse the retailer for the expenses incurred in keeping
17records, preparing the filing returns, remitting the tax, and
18supplying data to the Department on request.
19    Whenever the Department determines that a refund should be
20made under this subsection to a claimant instead of issuing a
21credit memoranda, the Department shall notify the State
22Comptroller, who shall cause a warrant to be drawn for the
23amount specified and to the person named in the notification
24from the Department. The refund shall be paid by the State
25Treasurer out of the Home Rule County Soft Drink Retailers'
26Occupation Tax Fund.

 

 

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1    The Department shall forthwith pay over to the State
2Treasurer, ex officio, as trustee, all taxes and penalties
3collected hereunder. On or before the 25th day of each calendar
4month, the Department shall prepare and certify to the
5Comptroller the amount to be paid to named counties, the
6counties to be those from which retailers have paid taxes or
7penalties hereunder to the Department during the second
8preceding calendar month. The amount to be paid to each county
9shall be the amount collected hereunder during the second
10preceding calendar month by the Department, less any amounts
11determined by the Department to be necessary for the payment of
12refunds, and less 4% for the first year the tax is in effect
13and 2% thereafter of such balance, which sum shall be deposited
14by the State Treasurer into the Tax Compliance and
15Administration Fund in the State treasury from which it shall
16be appropriated to the Department to cover the costs of the
17Department in administering and enforcing the provisions of
18this subsection. Within 10 days after receipt by the
19Comptroller of the certification, the Comptroller shall cause
20the orders to be drawn for the respective amount in accordance
21with the directions contained in such certification.
22    Nothing in this Section shall be construed to authorize a
23county to impose a tax upon the privilege of engaging in any
24business which under the Constitution of the United States may
25not be made the subject of taxation by the State.
26    A certificate of registration issued by the Illinois

 

 

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1Department of Revenue to a retailer under the Retailers'
2Occupation Tax Act shall permit the registrant to engage in a
3business that is taxed under the tax imposed under this
4subsection and no additional registration shall be required
5under the ordinance imposing a tax or under this subsection.
6    A certified copy of any ordinance imposing or discontinuing
7any tax under this subsection or effecting a change in the rate
8of that tax shall be filed with the Department, whereupon the
9Department shall proceed to administer and enforce this
10subsection on behalf of such county as of the first day of the
11third month following the date of filing. This tax shall be
12known and cited as the Home Rule County Soft Drink Retailers'
13Occupation Tax.
14    (b) The county board of a home rule county may impose a
15tax, which shall not take effect prior to the first day of the
16third month following the passage of the ordinance imposing the
17tax and receipt of a certified copy of the ordinance by the
18Department of Revenue, on persons engaged in the business of
19selling fountain soft drinks at retail at a rate not to exceed
209% of the cost price of the fountain soft drinks at retail in
21such municipality. For purposes of this subsection, the term
22"soft drink" has the meaning set forth in Section 2-10 of the
23Retailers' Occupation Tax Act, as may be amended from time to
24time, except that the term shall not be limited to drinks
25contained in a closed or sealed bottle, can, carton, or
26container; the term "fountain soft drinks" means soft drinks

 

 

HB3128- 6 -LRB097 08168 KMW 48292 b

1which are prepared by the retail seller of the soft drinks by
2mixing soft drink syrup or concentrate with water, by hand or
3through a soft drink dispensing machine at or near the point
4and time of sale to the retail purchaser; the term "soft drink
5dispensing machine" means a device which mixes soft drink syrup
6or concentrate with water and dispenses such mixture into an
7open container as a ready to drink soft drink; the term "sold
8at retail" shall mean any transfer of the ownership or title to
9tangible personal property to a purchaser, for the purpose of
10use or consumption, and not for the purpose of resale, for
11valuable consideration; the term "cost price of the fountain
12soft drinks" means the consideration paid by the retail seller
13of the fountain soft drink, valued in money, whether paid in
14money or otherwise, including cash, credits and services, and
15shall be determined without any deduction on account of the
16supplier's cost of the property sold or on account or any other
17expenses incurred by the supplier, for the purchase of soft
18drink syrup or concentrate which is designed to be further
19mixed with water before it is consumed as a soft drink; and the
20term "supplier" means any person who makes sales of soft drink
21syrup or concentrate to a retail seller of fountain soft drinks
22for purposes of resale as fountain soft drinks. The tax
23authorized by this subsection shall be collected, enforced, and
24administered by the county imposing the tax. Persons subject to
25the tax may reimburse themselves for their tax liability
26hereunder by separately stating an amount equal to the tax as

 

 

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1an additional charge to their retail purchasers or may include
2such amount as part of the selling price of the soft drink. The
3county imposing the tax shall provide for its collection from
4the person subject to the tax by requiring that the supplier to
5the person subject to the tax collect and remit the tax to the
6county. If the supplier fails to collect the tax or if the
7person subject to the tax fails to pay the tax to its supplier,
8the person subject to the tax shall make the tax payment
9directly to the county. Payment of the tax by the retailer to
10the supplier shall relieve the retailer of any further
11liability for the tax.
12    (c) If either tax imposed or authorized by this Section
135-1006.3 is repealed by the General Assembly or has its maximum
14rate reduced by the General Assembly, or is declared unlawful
15or unconstitutional on its face by any court of competent
16jurisdiction after all appeals have been exhausted or the time
17to appeal has expired, then this Section 5-1006.3 is
18automatically repealed and no longer effective without further
19action by the General Assembly.
 
20    Section 10. The Illinois Municipal Code is amended by
21changing Section 8-11-6b as follows:
 
22    (65 ILCS 5/8-11-6b)
23    Sec. 8-11-6b. Home rule soft drink taxes.
24    (a) Except as provided in Sections 8-11-1, 8-11-5 and

 

 

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18-11-6, or as provided in this Section, no home rule
2municipality has the authority to impose, pursuant to its home
3rule authority, a tax on the sale, purchase, or use of soft
4drinks regardless of whether the measure of the tax is selling
5price, purchase price, gross receipts, unit of volumetric
6measure, or any other measure. For purposes of this subsection,
7the term "soft drink" has the meaning set forth in Section 2-10
8of the Retailers' Occupation Tax Act, as may be amended from
9time to time, except that the term shall not be limited to
10drinks contained in a closed or sealed bottle, can, carton, or
11container. This Section is a denial and limitation, under
12subsection (g) of Section 6 of Article VII of the Illinois
13Constitution, on the power of home rule units to tax.
14    (b) The corporate authorities of a home rule municipality
15with a population in excess of 1,000,000 may impose a tax,
16which shall not take effect prior to the first day of the third
17month following the passage of the ordinance imposing the tax
18and receipt of a certified copy of the ordinance by the
19Department of Revenue April 1, 1994, upon all persons engaged
20in the business of selling soft drinks (other than fountain
21soft drinks) at retail in the municipality based on the gross
22receipts from those sales made in the course of such business.
23If imposed, the tax shall only be in 1/4% increments and shall
24not exceed 3%. For purposes of this subsection, the term "soft
25drink" has the meaning set forth in Section 2-10 of the
26Retailers' Occupation Tax Act, as may be amended from time to

 

 

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1time, except that the term shall not be limited to drinks
2contained in a closed or sealed bottle, can, carton or
3container; the term "fountain soft drinks" means soft drinks
4which are prepared by the retail seller of the soft drinks by
5mixing syrup or concentrate with water, by hand or through a
6soft drink dispensing machine, at or near the point and time of
7sale to the retail purchaser; and the term "soft drink
8dispensing machine" means a device which mixes soft drink syrup
9or concentrate with water and dispenses the mixture into an
10open container as a ready to drink soft drink.
11    The tax imposed under this subsection and all civil
12penalties that may be assessed as an incident to that tax shall
13be collected and enforced by the Illinois Department of
14Revenue. The Department shall have full power to administer and
15enforce this subsection, to collect all taxes and penalties so
16collected in the manner provided in this subsection, and to
17determine all rights to credit memoranda arising on account of
18the erroneous payment of tax or penalty under this subsection.
19In the administration of and compliance with this subsection,
20the Department and persons who are subject to this subsection
21shall have the same rights, remedies, privileges, immunities,
22powers and duties, shall be subject to the same conditions,
23restrictions, limitations, penalties, exclusions, exemptions,
24and definitions of terms, and shall employ the same modes of
25procedure applicable to the Retailers' Occupation Tax as are
26prescribed in Sections 1, 2 through 2-65 (in respect to all

 

 

HB3128- 10 -LRB097 08168 KMW 48292 b

1provisions of those Sections other than the State rate of
2taxes), 2c, 2h, 2i, 3 (except as to the disposition of taxes
3and penalties collected), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i,
45j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 12, 13 and, until January 1,
51994, 13.5 of the Retailers' Occupation Tax Act, and on and
6after January 1, 1994, all applicable provisions of the Uniform
7Penalty and Interest Act that are not inconsistent with this
8subsection, as fully as if provisions contained in those
9Sections of the Retailers' Occupation Tax Act were set forth in
10this subsection.
11    Persons subject to any tax imposed under the authority
12granted by this subsection may reimburse themselves for their
13seller's tax liability under this subsection by separately
14stating that tax as an additional charge, which charge may be
15stated in combination, in a single amount, with State taxes
16that sellers are required to collect under the Use Tax Act
17pursuant to bracket schedules as the Department may prescribe.
18The retailer filing the return shall, at the time of filing the
19return, pay to the Department the amount of tax imposed under
20this subsection, less the discount of 1.75%, which is allowed
21to reimburse the retailer for the expenses incurred in keeping
22records, preparing the filing returns, remitting the tax, and
23supplying data to the Department on request.
24    Whenever the Department determines that a refund should be
25made under this subsection to a claimant instead of issuing a
26credit memoranda, the Department shall notify the State

 

 

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1Comptroller, who shall cause a warrant to be drawn for the
2amount specified and to the person named in the notification
3from the Department. The refund shall be paid by the State
4Treasurer out of the Home Rule Municipal Soft Drink Retailers'
5Occupation Tax Fund.
6    The Department shall forthwith pay over to the State
7Treasurer, ex officio, as trustee, all taxes and penalties
8collected hereunder. On or before the 25th day of each calendar
9month, the Department shall prepare and certify to the
10Comptroller the amount to be paid to named municipalities, the
11municipalities to be those from which retailers have paid taxes
12or penalties hereunder to the Department during the second
13preceding calendar month. The amount to be paid to each
14municipality shall be the amount collected hereunder during the
15second preceding calendar month by the Department, less any
16amounts determined by the Department to be necessary for the
17payment of refunds, and less 4% for the first year the tax is
18in effect and 2% thereafter of such balance, which sum shall be
19deposited by the State Treasurer into the Tax Compliance and
20Administration Fund in the State treasury from which it shall
21be appropriated to the Department to cover the costs of the
22Department in administering and enforcing the provisions of
23this subsection. Within 10 days after receipt by the
24Comptroller of the certification, the Comptroller shall cause
25the orders to be drawn for the respective amount in accordance
26with the directions contained in such certification.

 

 

HB3128- 12 -LRB097 08168 KMW 48292 b

1    Nothing in this Section shall be construed to authorize a
2municipality to impose a tax upon the privilege of engaging in
3any business which under the Constitution of the United States
4may not be made the subject of taxation by the State.
5    A certificate of registration issued by the Illinois
6Department of Revenue to a retailer under the Retailers'
7Occupation Tax Act shall permit the registrant to engage in a
8business that is taxed under the tax imposed under this
9subsection and no additional registration shall be required
10under the ordinance imposing a tax or under this subsection.
11    A certified copy of any ordinance imposing or discontinuing
12any tax under this subsection or effecting a change in the rate
13of that tax shall be filed with the Department, whereupon the
14Department shall proceed to administer and enforce this
15subsection on behalf of such municipality as of the first day
16of February following the date of filing. This tax shall be
17known and cited as the Home Rule Municipal Soft Drink
18Retailers' Occupation Tax.
19    (c) The corporate authorities of a home rule municipality
20with a population in excess of 1,000,000 may impose a tax,
21which shall not take effect prior to the first day of the third
22month following the passage of the ordinance imposing the tax
23and receipt of a certified copy of the ordinance by the
24Department of Revenue April 1, 1994, on persons engaged in the
25business of selling fountain soft drinks at retail at a rate
26not to exceed 9% of the cost price of the fountain soft drinks

 

 

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1at retail in such municipality. For purposes of this
2subsection, the term "soft drink" has the meaning set forth in
3Section 2-10 of the Retailers' Occupation Tax Act, as may be
4amended from time to time, except that the term shall not be
5limited to drinks contained in a closed or sealed bottle, can,
6carton, or container; the term "fountain soft drinks" means
7soft drinks which are prepared by the retail seller of the soft
8drinks by mixing soft drink syrup or concentrate with water, by
9hand or through a soft drink dispensing machine at or near the
10point and time of sale to the retail purchaser; the term "soft
11drink dispensing machine" means a device which mixes soft drink
12syrup or concentrate with water and dispenses such mixture into
13an open container as a ready to drink soft drink; the term
14"sold at retail" shall mean any transfer of the ownership or
15title to tangible personal property to a purchaser, for the
16purpose of use or consumption, and not for the purpose of
17resale, for valuable consideration; the term "cost price of the
18fountain soft drinks" means the consideration paid by the
19retail seller of the fountain soft drink, valued in money,
20whether paid in money or otherwise, including cash, credits and
21services, and shall be determined without any deduction on
22account of the supplier's cost of the property sold or on
23account or any other expenses incurred by the supplier, for the
24purchase of soft drink syrup or concentrate which is designed
25to be further mixed with water before it is consumed as a soft
26drink; and the term "supplier" means any person who makes sales

 

 

HB3128- 14 -LRB097 08168 KMW 48292 b

1of soft drink syrup or concentrate to a retail seller of
2fountain soft drinks for purposes of resale as fountain soft
3drinks. The tax authorized by this subsection shall be
4collected, enforced, and administered by the municipality
5imposing the tax. Persons subject to the tax may reimburse
6themselves for their tax liability hereunder by separately
7stating an amount equal to the tax as an additional charge to
8their retail purchasers or may include such amount as part of
9the selling price of the soft drink. The municipality imposing
10the tax shall provide for its collection from the person
11subject to the tax by requiring that the supplier to the person
12subject to the tax collect and remit the tax to the
13municipality. If the supplier fails to collect the tax or if
14the person subject to the tax fails to pay the tax to its
15supplier, the person subject to the tax shall make the tax
16payment directly to the municipality. Payment of the tax by the
17retailer to the supplier shall relieve the retailer of any
18further liability for the tax.
19    (d) If either tax imposed or authorized by this Section
208-11-6b is repealed by the General Assembly or has its maximum
21rate reduced by the General Assembly, or is declared unlawful
22or unconstitutional on its face by any court of competent
23jurisdiction after all appeals have been exhausted or the time
24to appeal has expired, then this Section 8-11-6b is
25automatically repealed and no longer effective without further
26action by the General Assembly.

 

 

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1    (e) Notwithstanding the preemption of taxes on the sale,
2purchase or use of soft drinks, taxes on the sale, purchase, or
3use of soft drinks which had been imposed by a municipality
4prior to the effective date of this amendatory Act of 1993 are
5specifically authorized under this Section for sales made on or
6after the effective date of this amendatory Act of 1993 through
7March 31, 1994.
8(Source: P.A. 88-507.)
 
9    Section 99. Effective date. This Act takes effect January
101, 2012.