HB3882ham001 98TH GENERAL ASSEMBLY

Rep. Lawrence M. Walsh, Jr.

Filed: 3/26/2014

09800HB3882ham001 LRB098 15452 HLH 57711 a

AMENDMENT TO HOUSE BILL 3882

AMENDMENT NO. ______. Amend House Bill 3882 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the Illinois Certainty and Fairness in Local Tax Sourcing Act.

Section 5. Sourcing local taxes. In allocating or sourcing any municipal, county, special district, or other local retailers' occupation tax or the local share of the State's retailers' occupation tax, for sales occurring in this State, the sales location for such allocation or sourcing purposes shall be the office location where the order for the purchase of the tangible personal property is accepted by the retailer or its authorized representative, except as provided elsewhere in this Act. In determining the acceptance location for a sale, the office where the order is first received by the retailer or its authorized representative shall be presumptively deemed the acceptance location, unless the retailer or the Department of Revenue clearly proves that the final event or activity giving rise to the retailer's acceptance of the order, or the binding contract for such sale, occurred at a different office location. This final event or activity giving rise to the retailer's acceptance of the order, or the binding contract for the sale, refers to the single identifiable event or action by the retailer or its authorized representative that, when it occurs, it creates a binding sale without any further acceptance or approval action by the retailer or its authorized representative.

Section 10. Electronic receipt. For purposes of this Act, if the order is received by electronic means, including, but not limited to, e-mail or facsimile transmission, and the first electronic receipt of the order is not addressed to or otherwise identified with a specific office location of the retailer or its authorized representative, then the order shall be deemed first received at the office location of the retailer or its authorized representative to whom the addressee of the electronic order is primarily assigned or stationed, but in the event such addressee has no identifiable office location then the order shall be deemed first received at the office location that first records the receipt of such electronic order.

Section 15. Definitions. For purposes of this Act:

"Office location" means a temporary or permanent structure, or part thereof, held out to the public as being an office of the retailer or its authorized representative, where at least one individual performs authorized services for the retailer or its authorized representative with respect to the purchase of tangible personal property from the retailer.

"Order" means the request (in writing, orally, or electronically) by the purchaser to buy tangible personal property.

Section 20. Multiple office locations. If a retailer has more than one office location in Illinois at which order receipt or acceptance services are performed for the retailer, then an office location is not a sales location unless the office location also has one or more individuals who are employees or authorized representatives of the retailer who, on a regular basis, perform authorized services at that location exclusively on behalf of the retailer or any of the retailer's affiliates that relate in some fashion, other than simply order receipt and acceptance, to order processing or the overall sales process for that sale, including, but not limited to, order input, order review, credit review, credit approval, price verification, shipment period verification, price approval, providing price quotes, customer interaction, billing, payment receipt, inventory verification, inventory procurement, accepting returns, or customer service. If an office location does not meet these requirements, then the retailer's primary office location in this State shall be deemed to be the sales location for the sale. The term "primary office location" means the office location of the retailer in this State where the majority of the retailer's employees, officers, and representatives in this State who are involved in the retailer's order processing or the sales approval process are located, and the term "affiliate" means an entity in which the retailer owns, either directly or indirectly, 50% or more of that entity's outstanding voting stock or equitable controlling interest.

Section 25. Physical delivery location. Except as otherwise provided in this Act, neither the delivery location nor the location of the acceptance of the tangible personal property by the purchaser (either before or after inspection or installation) shall determine the sales location for allocation or sourcing purposes under this Act.

Section 30. Special rule. Notwithstanding provision of law to the contrary, for purposes of this Act, the sales location for the allocation or sourcing of any municipal, county, special district, or other local retailers' occupation tax, or the local share of the State's retailers' occupation tax, shall be as follows:

(1) if the acceptance of the order by the retailer occurs outside of the State (whether or not the receipt of the order occurs within the State), then the sales location shall be deemed outside of the State, and no local sourcing of retailers' occupation tax applies, except when the tangible personal property that is being sold has been specifically identified in the sales contract and is in the inventory of the retailer at a location within the State at the time of sale (or is subsequently produced by the retailer at a location in this State); in that event, the inventory location shall be deemed the sales location;

(2) if the retailer sends to the purchaser a complete and unconditional offer to sell, then the sales location shall be the office location where the retailer or its authorized representative first receives the purchaser's acceptance of that offer;

(3) for keep full or similar requirements contracts where the retailer agrees to supply tangible personal property to a purchaser on a continuous basis until notified to stop by the purchaser, the sales location shall be the office location where the retailer or its authorized representative receives the initial order to start the deliveries under the contract, provided that, if the contract is a written contract not requiring a separate initial order to start the continuous supply process, then the sales location shall be the office location where the retailer or its authorized representative signed the contract;

(4) for sales accepted in Illinois under a long-term blanket or master contract that (though definite as to price and quantity) must be implemented by the purchaser's placing of specific orders when goods are wanted, the office location of the retailer or its authorized representative at which such subsequent specific orders are received (rather than the place where the seller signed the master contract) shall be the sales location;

(5) if the order for the purchase of tangible personal property is received by the retailer or its authorized representative, and, prior to final acceptance of the order by the retailer or its authorized representative, the ordered tangible personal property is delivered or shipped from the inventory of the retailer at a location in this State, then the sales location shall be the retailer's or its authorized representative's office location in this State where the purchase order for such tangible personal property is first received or if such order is first received at an office location outside the State then the sales location shall be the inventory location from which the tangible personal property was shipped or delivered; and

(6) in those situations where the order for the purchase of tangible personal property is placed in person by the purchaser at a retailer's retail sales location and the delivery or shipment of the property occurs from that location, then that retail sales location shall be deemed the sales location for that sale even if the acceptance of the order by the retailer occurs at a different office location.

Section 35. Mobile or temporary sales locations. Notwithstanding any provision of law to the contrary, for purposes of this Act:

(1) where the initial receipt of a purchase order from a purchaser is made by a retailer or its authorized representative during an in person meeting with the purchaser and (A) a vehicle, vessel, aircraft or other mobile form of transportation is used to facilitate that meeting, and delivery of the property is immediately made from uncommitted inventory located in or on that mobile form of transportation, then the sales location shall be deemed to be the location of the mobile transportation at the time of the sale, or (B) the meeting occurs at a temporary sales location, such as a tent, outdoor fair, or other location that is not contained within a structure, and delivery of the property is made immediately from uncommitted inventory located at that sales location, then the sales location shall be deemed to be the temporary sale location; and

(2) where a purchase order is received from the purchaser by a salesman or other authorized individual acting on behalf of a retailer, and that purchase order (A) is accepted by by those individuals on behalf of the retailer while traveling on business or for other reasons, (B) involves the future delivery of the property being sold, and (C) is not accepted at an office location or a temporary sales office of the retailer when the acceptance occurs, then the sales location shall be deemed to be the office location where the individual who receives the purchase order is primarily assigned or stationed, unless item (1) of Section 30 applies.

Section 40. No office or mobile or temporary sales location in State. If the final event or activity giving rise to the retailer's acceptance of the order, or the binding contract for a sale, occurs in this State and a retailer does not have a office location or a mobile or temporary sales location in this State, then the sales location shall be deemed the location where such acceptance or binding contract occurs.

Section 45. Minerals. Except as otherwise specifically provided by law, for the purpose of determining allocation of tax to a the local government unit, a retail sale by a producer of coal or other mineral mined in Illinois is a sale at retail at the place where the coal or other mineral mined in Illinois is extracted from the earth. With respect to minerals (i) the term "extracted from the earth" means the location at which the coal or other mineral is extracted from the mouth of the mine, and (ii) a "mineral" includes not only coal, but also oil, sand, stone taken from a quarry, gravel and any other thing commonly regarded as a mineral and extracted from the earth. This Section does not apply to coal or another mineral when it is delivered or shipped by the seller to the purchaser at a point outside Illinois so that the sale is exempt under the United States Constitution as a sale in interstate or foreign commerce.

Section 50. Out-of-State delivery. When property is sold for delivery or shipment by the seller or its authorized representative to the purchaser at a point outside this state, which results in no retailer's occupation tax due on the sale, then no local sourcing or allocation of state or local retailers' occupation tax applies.

Section 55. Applicability. This Act applies to sales made on or after its effective date and to sales made during past periods not yet closed by any applicable limitations period. The retailer may apply the changes made by this Act in the allocation of its past sales only to the extent it does not change the retailer's previous filing location for that sale.

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