Illinois General Assembly - Full Text of HB1922
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Full Text of HB1922  102nd General Assembly

HB1922 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB1922

 

Introduced 2/17/2021, by Rep. Ryan Spain

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/2  from Ch. 120, par. 439.2
35 ILCS 120/1  from Ch. 120, par. 440

    Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that the term "selling price" does not include the value of or credit given for traded-in tangible personal property (currently, beginning on January 1, 2020, with respect to motor vehicles, "selling price" does include the trade-in value). Effective immediately.


LRB102 10696 HLH 16025 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1922LRB102 10696 HLH 16025 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section 2
5as follows:
 
6    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
7    Sec. 2. Definitions.
8    "Use" means the exercise by any person of any right or
9power over tangible personal property incident to the
10ownership of that property, except that it does not include
11the sale of such property in any form as tangible personal
12property in the regular course of business to the extent that
13such property is not first subjected to a use for which it was
14purchased, and does not include the use of such property by its
15owner for demonstration purposes: Provided that the property
16purchased is deemed to be purchased for the purpose of resale,
17despite first being used, to the extent to which it is resold
18as an ingredient of an intentionally produced product or
19by-product of manufacturing. "Use" does not mean the
20demonstration use or interim use of tangible personal property
21by a retailer before he sells that tangible personal property.
22For watercraft or aircraft, if the period of demonstration use
23or interim use by the retailer exceeds 18 months, the retailer

 

 

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1shall pay on the retailers' original cost price the tax
2imposed by this Act, and no credit for that tax is permitted if
3the watercraft or aircraft is subsequently sold by the
4retailer. "Use" does not mean the physical incorporation of
5tangible personal property, to the extent not first subjected
6to a use for which it was purchased, as an ingredient or
7constituent, into other tangible personal property (a) which
8is sold in the regular course of business or (b) which the
9person incorporating such ingredient or constituent therein
10has undertaken at the time of such purchase to cause to be
11transported in interstate commerce to destinations outside the
12State of Illinois: Provided that the property purchased is
13deemed to be purchased for the purpose of resale, despite
14first being used, to the extent to which it is resold as an
15ingredient of an intentionally produced product or by-product
16of manufacturing.
17    "Watercraft" means a Class 2, Class 3, or Class 4
18watercraft as defined in Section 3-2 of the Boat Registration
19and Safety Act, a personal watercraft, or any boat equipped
20with an inboard motor.
21    "Purchase at retail" means the acquisition of the
22ownership of or title to tangible personal property through a
23sale at retail.
24    "Purchaser" means anyone who, through a sale at retail,
25acquires the ownership of tangible personal property for a
26valuable consideration.

 

 

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1    "Sale at retail" means any transfer of the ownership of or
2title to tangible personal property to a purchaser, for the
3purpose of use, and not for the purpose of resale in any form
4as tangible personal property to the extent not first
5subjected to a use for which it was purchased, for a valuable
6consideration: Provided that the property purchased is deemed
7to be purchased for the purpose of resale, despite first being
8used, to the extent to which it is resold as an ingredient of
9an intentionally produced product or by-product of
10manufacturing. For this purpose, slag produced as an incident
11to manufacturing pig iron or steel and sold is considered to be
12an intentionally produced by-product of manufacturing. "Sale
13at retail" includes any such transfer made for resale unless
14made in compliance with Section 2c of the Retailers'
15Occupation Tax Act, as incorporated by reference into Section
1612 of this Act. Transactions whereby the possession of the
17property is transferred but the seller retains the title as
18security for payment of the selling price are sales.
19    "Sale at retail" shall also be construed to include any
20Illinois florist's sales transaction in which the purchase
21order is received in Illinois by a florist and the sale is for
22use or consumption, but the Illinois florist has a florist in
23another state deliver the property to the purchaser or the
24purchaser's donee in such other state.
25    Nonreusable tangible personal property that is used by
26persons engaged in the business of operating a restaurant,

 

 

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1cafeteria, or drive-in is a sale for resale when it is
2transferred to customers in the ordinary course of business as
3part of the sale of food or beverages and is used to deliver,
4package, or consume food or beverages, regardless of where
5consumption of the food or beverages occurs. Examples of those
6items include, but are not limited to nonreusable, paper and
7plastic cups, plates, baskets, boxes, sleeves, buckets or
8other containers, utensils, straws, placemats, napkins, doggie
9bags, and wrapping or packaging materials that are transferred
10to customers as part of the sale of food or beverages in the
11ordinary course of business.
12    The purchase, employment and transfer of such tangible
13personal property as newsprint and ink for the primary purpose
14of conveying news (with or without other information) is not a
15purchase, use or sale of tangible personal property.
16    "Selling price" means the consideration for a sale valued
17in money whether received in money or otherwise, including
18cash, credits, property other than as hereinafter provided,
19and services, but, prior to January 1, 2020, not including the
20value of or credit given for traded-in tangible personal
21property where the item that is traded-in is of like kind and
22character as that which is being sold; beginning January 1,
232020, "selling price" includes the portion of the value of or
24credit given for traded-in motor vehicles of the First
25Division as defined in Section 1-146 of the Illinois Vehicle
26Code of like kind and character as that which is being sold

 

 

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1that exceeds $10,000. "Selling price" shall be determined
2without any deduction on account of the cost of the property
3sold, the cost of materials used, labor or service cost or any
4other expense whatsoever, but does not include interest or
5finance charges which appear as separate items on the bill of
6sale or sales contract nor charges that are added to prices by
7sellers on account of the seller's tax liability under the
8Retailers' Occupation Tax Act, or on account of the seller's
9duty to collect, from the purchaser, the tax that is imposed by
10this Act, or, except as otherwise provided with respect to any
11cigarette tax imposed by a home rule unit, on account of the
12seller's tax liability under any local occupation tax
13administered by the Department, or, except as otherwise
14provided with respect to any cigarette tax imposed by a home
15rule unit on account of the seller's duty to collect, from the
16purchasers, the tax that is imposed under any local use tax
17administered by the Department. Effective December 1, 1985,
18"selling price" shall include charges that are added to prices
19by sellers on account of the seller's tax liability under the
20Cigarette Tax Act, on account of the seller's duty to collect,
21from the purchaser, the tax imposed under the Cigarette Use
22Tax Act, and on account of the seller's duty to collect, from
23the purchaser, any cigarette tax imposed by a home rule unit.
24    Notwithstanding any law to the contrary, for any motor
25vehicle, as defined in Section 1-146 of the Vehicle Code, that
26is sold on or after January 1, 2015 for the purpose of leasing

 

 

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1the vehicle for a defined period that is longer than one year
2and (1) is a motor vehicle of the second division that: (A) is
3a self-contained motor vehicle designed or permanently
4converted to provide living quarters for recreational,
5camping, or travel use, with direct walk through access to the
6living quarters from the driver's seat; (B) is of the van
7configuration designed for the transportation of not less than
87 nor more than 16 passengers; or (C) has a gross vehicle
9weight rating of 8,000 pounds or less or (2) is a motor vehicle
10of the first division, "selling price" or "amount of sale"
11means the consideration received by the lessor pursuant to the
12lease contract, including amounts due at lease signing and all
13monthly or other regular payments charged over the term of the
14lease. Also included in the selling price is any amount
15received by the lessor from the lessee for the leased vehicle
16that is not calculated at the time the lease is executed,
17including, but not limited to, excess mileage charges and
18charges for excess wear and tear. For sales that occur in
19Illinois, with respect to any amount received by the lessor
20from the lessee for the leased vehicle that is not calculated
21at the time the lease is executed, the lessor who purchased the
22motor vehicle does not incur the tax imposed by the Use Tax Act
23on those amounts, and the retailer who makes the retail sale of
24the motor vehicle to the lessor is not required to collect the
25tax imposed by this Act or to pay the tax imposed by the
26Retailers' Occupation Tax Act on those amounts. However, the

 

 

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1lessor who purchased the motor vehicle assumes the liability
2for reporting and paying the tax on those amounts directly to
3the Department in the same form (Illinois Retailers'
4Occupation Tax, and local retailers' occupation taxes, if
5applicable) in which the retailer would have reported and paid
6such tax if the retailer had accounted for the tax to the
7Department. For amounts received by the lessor from the lessee
8that are not calculated at the time the lease is executed, the
9lessor must file the return and pay the tax to the Department
10by the due date otherwise required by this Act for returns
11other than transaction returns. If the retailer is entitled
12under this Act to a discount for collecting and remitting the
13tax imposed under this Act to the Department with respect to
14the sale of the motor vehicle to the lessor, then the right to
15the discount provided in this Act shall be transferred to the
16lessor with respect to the tax paid by the lessor for any
17amount received by the lessor from the lessee for the leased
18vehicle that is not calculated at the time the lease is
19executed; provided that the discount is only allowed if the
20return is timely filed and for amounts timely paid. The
21"selling price" of a motor vehicle that is sold on or after
22January 1, 2015 for the purpose of leasing for a defined period
23of longer than one year shall not be reduced by the value of or
24credit given for traded-in tangible personal property owned by
25the lessor, nor shall it be reduced by the value of or credit
26given for traded-in tangible personal property owned by the

 

 

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1lessee, regardless of whether the trade-in value thereof is
2assigned by the lessee to the lessor. In the case of a motor
3vehicle that is sold for the purpose of leasing for a defined
4period of longer than one year, the sale occurs at the time of
5the delivery of the vehicle, regardless of the due date of any
6lease payments. A lessor who incurs a Retailers' Occupation
7Tax liability on the sale of a motor vehicle coming off lease
8may not take a credit against that liability for the Use Tax
9the lessor paid upon the purchase of the motor vehicle (or for
10any tax the lessor paid with respect to any amount received by
11the lessor from the lessee for the leased vehicle that was not
12calculated at the time the lease was executed) if the selling
13price of the motor vehicle at the time of purchase was
14calculated using the definition of "selling price" as defined
15in this paragraph. Notwithstanding any other provision of this
16Act to the contrary, lessors shall file all returns and make
17all payments required under this paragraph to the Department
18by electronic means in the manner and form as required by the
19Department. This paragraph does not apply to leases of motor
20vehicles for which, at the time the lease is entered into, the
21term of the lease is not a defined period, including leases
22with a defined initial period with the option to continue the
23lease on a month-to-month or other basis beyond the initial
24defined period.
25    The phrase "like kind and character" shall be liberally
26construed (including but not limited to any form of motor

 

 

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1vehicle for any form of motor vehicle, or any kind of farm or
2agricultural implement for any other kind of farm or
3agricultural implement), while not including a kind of item
4which, if sold at retail by that retailer, would be exempt from
5retailers' occupation tax and use tax as an isolated or
6occasional sale.
7    "Department" means the Department of Revenue.
8    "Person" means any natural individual, firm, partnership,
9association, joint stock company, joint adventure, public or
10private corporation, limited liability company, or a receiver,
11executor, trustee, guardian or other representative appointed
12by order of any court.
13    "Retailer" means and includes every person engaged in the
14business of making sales at retail as defined in this Section.
15    A person who holds himself or herself out as being engaged
16(or who habitually engages) in selling tangible personal
17property at retail is a retailer hereunder with respect to
18such sales (and not primarily in a service occupation)
19notwithstanding the fact that such person designs and produces
20such tangible personal property on special order for the
21purchaser and in such a way as to render the property of value
22only to such purchaser, if such tangible personal property so
23produced on special order serves substantially the same
24function as stock or standard items of tangible personal
25property that are sold at retail.
26    A person whose activities are organized and conducted

 

 

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1primarily as a not-for-profit service enterprise, and who
2engages in selling tangible personal property at retail
3(whether to the public or merely to members and their guests)
4is a retailer with respect to such transactions, excepting
5only a person organized and operated exclusively for
6charitable, religious or educational purposes either (1), to
7the extent of sales by such person to its members, students,
8patients or inmates of tangible personal property to be used
9primarily for the purposes of such person, or (2), to the
10extent of sales by such person of tangible personal property
11which is not sold or offered for sale by persons organized for
12profit. The selling of school books and school supplies by
13schools at retail to students is not "primarily for the
14purposes of" the school which does such selling. This
15paragraph does not apply to nor subject to taxation occasional
16dinners, social or similar activities of a person organized
17and operated exclusively for charitable, religious or
18educational purposes, whether or not such activities are open
19to the public.
20    A person who is the recipient of a grant or contract under
21Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
22serves meals to participants in the federal Nutrition Program
23for the Elderly in return for contributions established in
24amount by the individual participant pursuant to a schedule of
25suggested fees as provided for in the federal Act is not a
26retailer under this Act with respect to such transactions.

 

 

HB1922- 11 -LRB102 10696 HLH 16025 b

1    Persons who engage in the business of transferring
2tangible personal property upon the redemption of trading
3stamps are retailers hereunder when engaged in such business.
4    The isolated or occasional sale of tangible personal
5property at retail by a person who does not hold himself out as
6being engaged (or who does not habitually engage) in selling
7such tangible personal property at retail or a sale through a
8bulk vending machine does not make such person a retailer
9hereunder. However, any person who is engaged in a business
10which is not subject to the tax imposed by the Retailers'
11Occupation Tax Act because of involving the sale of or a
12contract to sell real estate or a construction contract to
13improve real estate, but who, in the course of conducting such
14business, transfers tangible personal property to users or
15consumers in the finished form in which it was purchased, and
16which does not become real estate, under any provision of a
17construction contract or real estate sale or real estate sales
18agreement entered into with some other person arising out of
19or because of such nontaxable business, is a retailer to the
20extent of the value of the tangible personal property so
21transferred. If, in such transaction, a separate charge is
22made for the tangible personal property so transferred, the
23value of such property, for the purposes of this Act, is the
24amount so separately charged, but not less than the cost of
25such property to the transferor; if no separate charge is
26made, the value of such property, for the purposes of this Act,

 

 

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1is the cost to the transferor of such tangible personal
2property.
3    "Retailer maintaining a place of business in this State",
4or any like term, means and includes any of the following
5retailers:
6        (1) A retailer having or maintaining within this
7    State, directly or by a subsidiary, an office,
8    distribution house, sales house, warehouse or other place
9    of business, or any agent or other representative
10    operating within this State under the authority of the
11    retailer or its subsidiary, irrespective of whether such
12    place of business or agent or other representative is
13    located here permanently or temporarily, or whether such
14    retailer or subsidiary is licensed to do business in this
15    State. However, the ownership of property that is located
16    at the premises of a printer with which the retailer has
17    contracted for printing and that consists of the final
18    printed product, property that becomes a part of the final
19    printed product, or copy from which the printed product is
20    produced shall not result in the retailer being deemed to
21    have or maintain an office, distribution house, sales
22    house, warehouse, or other place of business within this
23    State.
24        (1.1) A retailer having a contract with a person
25    located in this State under which the person, for a
26    commission or other consideration based upon the sale of

 

 

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1    tangible personal property by the retailer, directly or
2    indirectly refers potential customers to the retailer by
3    providing to the potential customers a promotional code or
4    other mechanism that allows the retailer to track
5    purchases referred by such persons. Examples of mechanisms
6    that allow the retailer to track purchases referred by
7    such persons include but are not limited to the use of a
8    link on the person's Internet website, promotional codes
9    distributed through the person's hand-delivered or mailed
10    material, and promotional codes distributed by the person
11    through radio or other broadcast media. The provisions of
12    this paragraph (1.1) shall apply only if the cumulative
13    gross receipts from sales of tangible personal property by
14    the retailer to customers who are referred to the retailer
15    by all persons in this State under such contracts exceed
16    $10,000 during the preceding 4 quarterly periods ending on
17    the last day of March, June, September, and December. A
18    retailer meeting the requirements of this paragraph (1.1)
19    shall be presumed to be maintaining a place of business in
20    this State but may rebut this presumption by submitting
21    proof that the referrals or other activities pursued
22    within this State by such persons were not sufficient to
23    meet the nexus standards of the United States Constitution
24    during the preceding 4 quarterly periods.
25        (1.2) Beginning July 1, 2011, a retailer having a
26    contract with a person located in this State under which:

 

 

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1            (A) the retailer sells the same or substantially
2        similar line of products as the person located in this
3        State and does so using an identical or substantially
4        similar name, trade name, or trademark as the person
5        located in this State; and
6            (B) the retailer provides a commission or other
7        consideration to the person located in this State
8        based upon the sale of tangible personal property by
9        the retailer.
10        The provisions of this paragraph (1.2) shall apply
11    only if the cumulative gross receipts from sales of
12    tangible personal property by the retailer to customers in
13    this State under all such contracts exceed $10,000 during
14    the preceding 4 quarterly periods ending on the last day
15    of March, June, September, and December.
16        (2) (Blank).
17        (3) (Blank).
18        (4) (Blank).
19        (5) (Blank).
20        (6) (Blank).
21        (7) (Blank).
22        (8) (Blank).
23        (9) Beginning October 1, 2018, a retailer making sales
24    of tangible personal property to purchasers in Illinois
25    from outside of Illinois if:
26            (A) the cumulative gross receipts from sales of

 

 

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1        tangible personal property to purchasers in Illinois
2        are $100,000 or more; or
3            (B) the retailer enters into 200 or more separate
4        transactions for the sale of tangible personal
5        property to purchasers in Illinois.
6        The retailer shall determine on a quarterly basis,
7    ending on the last day of March, June, September, and
8    December, whether he or she meets the criteria of either
9    subparagraph (A) or (B) of this paragraph (9) for the
10    preceding 12-month period. If the retailer meets the
11    threshold of either subparagraph (A) or (B) for a 12-month
12    period, he or she is considered a retailer maintaining a
13    place of business in this State and is required to collect
14    and remit the tax imposed under this Act and file returns
15    for one year. At the end of that one-year period, the
16    retailer shall determine whether he or she met the
17    threshold of either subparagraph (A) or (B) during the
18    preceding 12-month period. If the retailer met the
19    criteria in either subparagraph (A) or (B) for the
20    preceding 12-month period, he or she is considered a
21    retailer maintaining a place of business in this State and
22    is required to collect and remit the tax imposed under
23    this Act and file returns for the subsequent year. If at
24    the end of a one-year period a retailer that was required
25    to collect and remit the tax imposed under this Act
26    determines that he or she did not meet the threshold in

 

 

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1    either subparagraph (A) or (B) during the preceding
2    12-month period, the retailer shall subsequently determine
3    on a quarterly basis, ending on the last day of March,
4    June, September, and December, whether he or she meets the
5    threshold of either subparagraph (A) or (B) for the
6    preceding 12-month period.
7        Beginning January 1, 2020, neither the gross receipts
8    from nor the number of separate transactions for sales of
9    tangible personal property to purchasers in Illinois that
10    a retailer makes through a marketplace facilitator and for
11    which the retailer has received a certification from the
12    marketplace facilitator pursuant to Section 2d of this Act
13    shall be included for purposes of determining whether he
14    or she has met the thresholds of this paragraph (9).
15        (10) Beginning January 1, 2020, a marketplace
16    facilitator that meets a threshold set forth in subsection
17    (b) of Section 2d of this Act.
18    "Bulk vending machine" means a vending machine, containing
19unsorted confections, nuts, toys, or other items designed
20primarily to be used or played with by children which, when a
21coin or coins of a denomination not larger than $0.50 are
22inserted, are dispensed in equal portions, at random and
23without selection by the customer.
24(Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19;
25101-31, eff. 1-1-20; 101-604, eff. 1-1-20.)
 

 

 

HB1922- 17 -LRB102 10696 HLH 16025 b

1    Section 10. The Retailers' Occupation Tax Act is amended
2by changing Section 1 as follows:
 
3    (35 ILCS 120/1)  (from Ch. 120, par. 440)
4    Sec. 1. Definitions. "Sale at retail" means any transfer
5of the ownership of or title to tangible personal property to a
6purchaser, for the purpose of use or consumption, and not for
7the purpose of resale in any form as tangible personal
8property to the extent not first subjected to a use for which
9it was purchased, for a valuable consideration: Provided that
10the property purchased is deemed to be purchased for the
11purpose of resale, despite first being used, to the extent to
12which it is resold as an ingredient of an intentionally
13produced product or byproduct of manufacturing. For this
14purpose, slag produced as an incident to manufacturing pig
15iron or steel and sold is considered to be an intentionally
16produced byproduct of manufacturing. Transactions whereby the
17possession of the property is transferred but the seller
18retains the title as security for payment of the selling price
19shall be deemed to be sales.
20    "Sale at retail" shall be construed to include any
21transfer of the ownership of or title to tangible personal
22property to a purchaser, for use or consumption by any other
23person to whom such purchaser may transfer the tangible
24personal property without a valuable consideration, and to
25include any transfer, whether made for or without a valuable

 

 

HB1922- 18 -LRB102 10696 HLH 16025 b

1consideration, for resale in any form as tangible personal
2property unless made in compliance with Section 2c of this
3Act.
4    Sales of tangible personal property, which property, to
5the extent not first subjected to a use for which it was
6purchased, as an ingredient or constituent, goes into and
7forms a part of tangible personal property subsequently the
8subject of a "Sale at retail", are not sales at retail as
9defined in this Act: Provided that the property purchased is
10deemed to be purchased for the purpose of resale, despite
11first being used, to the extent to which it is resold as an
12ingredient of an intentionally produced product or byproduct
13of manufacturing.
14    "Sale at retail" shall be construed to include any
15Illinois florist's sales transaction in which the purchase
16order is received in Illinois by a florist and the sale is for
17use or consumption, but the Illinois florist has a florist in
18another state deliver the property to the purchaser or the
19purchaser's donee in such other state.
20    Nonreusable tangible personal property that is used by
21persons engaged in the business of operating a restaurant,
22cafeteria, or drive-in is a sale for resale when it is
23transferred to customers in the ordinary course of business as
24part of the sale of food or beverages and is used to deliver,
25package, or consume food or beverages, regardless of where
26consumption of the food or beverages occurs. Examples of those

 

 

HB1922- 19 -LRB102 10696 HLH 16025 b

1items include, but are not limited to nonreusable, paper and
2plastic cups, plates, baskets, boxes, sleeves, buckets or
3other containers, utensils, straws, placemats, napkins, doggie
4bags, and wrapping or packaging materials that are transferred
5to customers as part of the sale of food or beverages in the
6ordinary course of business.
7    The purchase, employment and transfer of such tangible
8personal property as newsprint and ink for the primary purpose
9of conveying news (with or without other information) is not a
10purchase, use or sale of tangible personal property.
11    A person whose activities are organized and conducted
12primarily as a not-for-profit service enterprise, and who
13engages in selling tangible personal property at retail
14(whether to the public or merely to members and their guests)
15is engaged in the business of selling tangible personal
16property at retail with respect to such transactions,
17excepting only a person organized and operated exclusively for
18charitable, religious or educational purposes either (1), to
19the extent of sales by such person to its members, students,
20patients or inmates of tangible personal property to be used
21primarily for the purposes of such person, or (2), to the
22extent of sales by such person of tangible personal property
23which is not sold or offered for sale by persons organized for
24profit. The selling of school books and school supplies by
25schools at retail to students is not "primarily for the
26purposes of" the school which does such selling. The

 

 

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1provisions of this paragraph shall not apply to nor subject to
2taxation occasional dinners, socials or similar activities of
3a person organized and operated exclusively for charitable,
4religious or educational purposes, whether or not such
5activities are open to the public.
6    A person who is the recipient of a grant or contract under
7Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
8serves meals to participants in the federal Nutrition Program
9for the Elderly in return for contributions established in
10amount by the individual participant pursuant to a schedule of
11suggested fees as provided for in the federal Act is not
12engaged in the business of selling tangible personal property
13at retail with respect to such transactions.
14    "Purchaser" means anyone who, through a sale at retail,
15acquires the ownership of or title to tangible personal
16property for a valuable consideration.
17    "Reseller of motor fuel" means any person engaged in the
18business of selling or delivering or transferring title of
19motor fuel to another person other than for use or
20consumption. No person shall act as a reseller of motor fuel
21within this State without first being registered as a reseller
22pursuant to Section 2c or a retailer pursuant to Section 2a.
23    "Selling price" or the "amount of sale" means the
24consideration for a sale valued in money whether received in
25money or otherwise, including cash, credits, property, other
26than as hereinafter provided, and services, but, prior to

 

 

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1January 1, 2020, not including the value of or credit given for
2traded-in tangible personal property where the item that is
3traded-in is of like kind and character as that which is being
4sold; beginning January 1, 2020, "selling price" includes the
5portion of the value of or credit given for traded-in motor
6vehicles of the First Division as defined in Section 1-146 of
7the Illinois Vehicle Code of like kind and character as that
8which is being sold that exceeds $10,000. "Selling price"
9shall be determined without any deduction on account of the
10cost of the property sold, the cost of materials used, labor or
11service cost or any other expense whatsoever, but does not
12include charges that are added to prices by sellers on account
13of the seller's tax liability under this Act, or on account of
14the seller's duty to collect, from the purchaser, the tax that
15is imposed by the Use Tax Act, or, except as otherwise provided
16with respect to any cigarette tax imposed by a home rule unit,
17on account of the seller's tax liability under any local
18occupation tax administered by the Department, or, except as
19otherwise provided with respect to any cigarette tax imposed
20by a home rule unit on account of the seller's duty to collect,
21from the purchasers, the tax that is imposed under any local
22use tax administered by the Department. Effective December 1,
231985, "selling price" shall include charges that are added to
24prices by sellers on account of the seller's tax liability
25under the Cigarette Tax Act, on account of the sellers' duty to
26collect, from the purchaser, the tax imposed under the

 

 

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1Cigarette Use Tax Act, and on account of the seller's duty to
2collect, from the purchaser, any cigarette tax imposed by a
3home rule unit.
4    Notwithstanding any law to the contrary, for any motor
5vehicle, as defined in Section 1-146 of the Vehicle Code, that
6is sold on or after January 1, 2015 for the purpose of leasing
7the vehicle for a defined period that is longer than one year
8and (1) is a motor vehicle of the second division that: (A) is
9a self-contained motor vehicle designed or permanently
10converted to provide living quarters for recreational,
11camping, or travel use, with direct walk through access to the
12living quarters from the driver's seat; (B) is of the van
13configuration designed for the transportation of not less than
147 nor more than 16 passengers; or (C) has a gross vehicle
15weight rating of 8,000 pounds or less or (2) is a motor vehicle
16of the first division, "selling price" or "amount of sale"
17means the consideration received by the lessor pursuant to the
18lease contract, including amounts due at lease signing and all
19monthly or other regular payments charged over the term of the
20lease. Also included in the selling price is any amount
21received by the lessor from the lessee for the leased vehicle
22that is not calculated at the time the lease is executed,
23including, but not limited to, excess mileage charges and
24charges for excess wear and tear. For sales that occur in
25Illinois, with respect to any amount received by the lessor
26from the lessee for the leased vehicle that is not calculated

 

 

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1at the time the lease is executed, the lessor who purchased the
2motor vehicle does not incur the tax imposed by the Use Tax Act
3on those amounts, and the retailer who makes the retail sale of
4the motor vehicle to the lessor is not required to collect the
5tax imposed by the Use Tax Act or to pay the tax imposed by
6this Act on those amounts. However, the lessor who purchased
7the motor vehicle assumes the liability for reporting and
8paying the tax on those amounts directly to the Department in
9the same form (Illinois Retailers' Occupation Tax, and local
10retailers' occupation taxes, if applicable) in which the
11retailer would have reported and paid such tax if the retailer
12had accounted for the tax to the Department. For amounts
13received by the lessor from the lessee that are not calculated
14at the time the lease is executed, the lessor must file the
15return and pay the tax to the Department by the due date
16otherwise required by this Act for returns other than
17transaction returns. If the retailer is entitled under this
18Act to a discount for collecting and remitting the tax imposed
19under this Act to the Department with respect to the sale of
20the motor vehicle to the lessor, then the right to the discount
21provided in this Act shall be transferred to the lessor with
22respect to the tax paid by the lessor for any amount received
23by the lessor from the lessee for the leased vehicle that is
24not calculated at the time the lease is executed; provided
25that the discount is only allowed if the return is timely filed
26and for amounts timely paid. The "selling price" of a motor

 

 

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1vehicle that is sold on or after January 1, 2015 for the
2purpose of leasing for a defined period of longer than one year
3shall not be reduced by the value of or credit given for
4traded-in tangible personal property owned by the lessor, nor
5shall it be reduced by the value of or credit given for
6traded-in tangible personal property owned by the lessee,
7regardless of whether the trade-in value thereof is assigned
8by the lessee to the lessor. In the case of a motor vehicle
9that is sold for the purpose of leasing for a defined period of
10longer than one year, the sale occurs at the time of the
11delivery of the vehicle, regardless of the due date of any
12lease payments. A lessor who incurs a Retailers' Occupation
13Tax liability on the sale of a motor vehicle coming off lease
14may not take a credit against that liability for the Use Tax
15the lessor paid upon the purchase of the motor vehicle (or for
16any tax the lessor paid with respect to any amount received by
17the lessor from the lessee for the leased vehicle that was not
18calculated at the time the lease was executed) if the selling
19price of the motor vehicle at the time of purchase was
20calculated using the definition of "selling price" as defined
21in this paragraph. Notwithstanding any other provision of this
22Act to the contrary, lessors shall file all returns and make
23all payments required under this paragraph to the Department
24by electronic means in the manner and form as required by the
25Department. This paragraph does not apply to leases of motor
26vehicles for which, at the time the lease is entered into, the

 

 

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1term of the lease is not a defined period, including leases
2with a defined initial period with the option to continue the
3lease on a month-to-month or other basis beyond the initial
4defined period.
5    The phrase "like kind and character" shall be liberally
6construed (including but not limited to any form of motor
7vehicle for any form of motor vehicle, or any kind of farm or
8agricultural implement for any other kind of farm or
9agricultural implement), while not including a kind of item
10which, if sold at retail by that retailer, would be exempt from
11retailers' occupation tax and use tax as an isolated or
12occasional sale.
13    "Gross receipts" from the sales of tangible personal
14property at retail means the total selling price or the amount
15of such sales, as hereinbefore defined. In the case of charge
16and time sales, the amount thereof shall be included only as
17and when payments are received by the seller. Receipts or
18other consideration derived by a seller from the sale,
19transfer or assignment of accounts receivable to a wholly
20owned subsidiary will not be deemed payments prior to the time
21the purchaser makes payment on such accounts.
22    "Department" means the Department of Revenue.
23    "Person" means any natural individual, firm, partnership,
24association, joint stock company, joint adventure, public or
25private corporation, limited liability company, or a receiver,
26executor, trustee, guardian or other representative appointed

 

 

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1by order of any court.
2    The isolated or occasional sale of tangible personal
3property at retail by a person who does not hold himself out as
4being engaged (or who does not habitually engage) in selling
5such tangible personal property at retail, or a sale through a
6bulk vending machine, does not constitute engaging in a
7business of selling such tangible personal property at retail
8within the meaning of this Act; provided that any person who is
9engaged in a business which is not subject to the tax imposed
10by this Act because of involving the sale of or a contract to
11sell real estate or a construction contract to improve real
12estate or a construction contract to engineer, install, and
13maintain an integrated system of products, but who, in the
14course of conducting such business, transfers tangible
15personal property to users or consumers in the finished form
16in which it was purchased, and which does not become real
17estate or was not engineered and installed, under any
18provision of a construction contract or real estate sale or
19real estate sales agreement entered into with some other
20person arising out of or because of such nontaxable business,
21is engaged in the business of selling tangible personal
22property at retail to the extent of the value of the tangible
23personal property so transferred. If, in such a transaction, a
24separate charge is made for the tangible personal property so
25transferred, the value of such property, for the purpose of
26this Act, shall be the amount so separately charged, but not

 

 

HB1922- 27 -LRB102 10696 HLH 16025 b

1less than the cost of such property to the transferor; if no
2separate charge is made, the value of such property, for the
3purposes of this Act, is the cost to the transferor of such
4tangible personal property. Construction contracts for the
5improvement of real estate consisting of engineering,
6installation, and maintenance of voice, data, video, security,
7and all telecommunication systems do not constitute engaging
8in a business of selling tangible personal property at retail
9within the meaning of this Act if they are sold at one
10specified contract price.
11    A person who holds himself or herself out as being engaged
12(or who habitually engages) in selling tangible personal
13property at retail is a person engaged in the business of
14selling tangible personal property at retail hereunder with
15respect to such sales (and not primarily in a service
16occupation) notwithstanding the fact that such person designs
17and produces such tangible personal property on special order
18for the purchaser and in such a way as to render the property
19of value only to such purchaser, if such tangible personal
20property so produced on special order serves substantially the
21same function as stock or standard items of tangible personal
22property that are sold at retail.
23    Persons who engage in the business of transferring
24tangible personal property upon the redemption of trading
25stamps are engaged in the business of selling such property at
26retail and shall be liable for and shall pay the tax imposed by

 

 

HB1922- 28 -LRB102 10696 HLH 16025 b

1this Act on the basis of the retail value of the property
2transferred upon redemption of such stamps.
3    "Bulk vending machine" means a vending machine, containing
4unsorted confections, nuts, toys, or other items designed
5primarily to be used or played with by children which, when a
6coin or coins of a denomination not larger than $0.50 are
7inserted, are dispensed in equal portions, at random and
8without selection by the customer.
9    "Remote retailer" means a retailer that does not maintain
10within this State, directly or by a subsidiary, an office,
11distribution house, sales house, warehouse or other place of
12business, or any agent or other representative operating
13within this State under the authority of the retailer or its
14subsidiary, irrespective of whether such place of business or
15agent is located here permanently or temporarily or whether
16such retailer or subsidiary is licensed to do business in this
17State.
18    "Marketplace" means a physical or electronic place, forum,
19platform, application, or other method by which a marketplace
20seller sells or offers to sell items.
21    "Marketplace facilitator" means a person who, pursuant to
22an agreement with an unrelated third-party marketplace seller,
23directly or indirectly through one or more affiliates
24facilitates a retail sale by an unrelated third party
25marketplace seller by:
26        (1) listing or advertising for sale by the marketplace

 

 

HB1922- 29 -LRB102 10696 HLH 16025 b

1    seller in a marketplace, tangible personal property that
2    is subject to tax under this Act; and
3        (2) either directly or indirectly, through agreements
4    or arrangements with third parties, collecting payment
5    from the customer and transmitting that payment to the
6    marketplace seller regardless of whether the marketplace
7    facilitator receives compensation or other consideration
8    in exchange for its services.
9    A person who provides advertising services, including
10listing products for sale, is not considered a marketplace
11facilitator, so long as the advertising service platform or
12forum does not engage, directly or indirectly through one or
13more affiliated persons, in the activities described in
14paragraph (2) of this definition of "marketplace facilitator".
15    "Marketplace seller" means a person that makes sales
16through a marketplace operated by an unrelated third party
17marketplace facilitator.
18(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.