Illinois General Assembly - Full Text of HB2317
Illinois General Assembly

Previous General Assemblies

Full Text of HB2317  98th General Assembly

HB2317sam001 98TH GENERAL ASSEMBLY

Sen. Don Harmon

Filed: 5/16/2013

 

 


 

 


 
09800HB2317sam001LRB098 09941 HLH 46045 a

1
AMENDMENT TO HOUSE BILL 2317

2    AMENDMENT NO. ______. Amend House Bill 2317 immediately
3below the enacting clause, by inserting the following:
 
4    "Section 3. The Use Tax Act is amended by changing Section
52 as follows:
 
6    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
7    Sec. 2. "Use" means the exercise by any person of any right
8or power over tangible personal property incident to the
9ownership of that property, except that it does not include the
10sale of such property in any form as tangible personal property
11in the regular course of business to the extent that such
12property is not first subjected to a use for which it was
13purchased, and does not include the use of such property by its
14owner for demonstration purposes: Provided that the property
15purchased is deemed to be purchased for the purpose of resale,
16despite first being used, to the extent to which it is resold

 

 

09800HB2317sam001- 2 -LRB098 09941 HLH 46045 a

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

 

 

09800HB2317sam001- 3 -LRB098 09941 HLH 46045 a

1    "Purchase at retail" means the acquisition of the ownership
2of or title to tangible personal property through a sale at
3retail.
4    "Purchaser" means anyone who, through a sale at retail,
5acquires the ownership of tangible personal property for a
6valuable consideration.
7    "Sale at retail" means any transfer of the ownership of or
8title to tangible personal property to a purchaser, for the
9purpose of use, and not for the purpose of resale in any form
10as tangible personal property to the extent not first subjected
11to a use for which it was purchased, for a valuable
12consideration: Provided that the property purchased is deemed
13to be purchased for the purpose of resale, despite first being
14used, to the extent to which it is resold as an ingredient of
15an intentionally produced product or by-product of
16manufacturing. For this purpose, slag produced as an incident
17to manufacturing pig iron or steel and sold is considered to be
18an intentionally produced by-product of manufacturing. "Sale
19at retail" includes any such transfer made for resale unless
20made in compliance with Section 2c of the Retailers' Occupation
21Tax Act, as incorporated by reference into Section 12 of this
22Act. Transactions whereby the possession of the property is
23transferred but the seller retains the title as security for
24payment of the selling price are sales.
25    "Sale at retail" shall also be construed to include any
26Illinois florist's sales transaction in which the purchase

 

 

09800HB2317sam001- 4 -LRB098 09941 HLH 46045 a

1order is received in Illinois by a florist and the sale is for
2use or consumption, but the Illinois florist has a florist in
3another state deliver the property to the purchaser or the
4purchaser's donee in such other state.
5    Nonreusable tangible personal property that is used by
6persons engaged in the business of operating a restaurant,
7cafeteria, or drive-in is a sale for resale when it is
8transferred to customers in the ordinary course of business as
9part of the sale of food or beverages and is used to deliver,
10package, or consume food or beverages, regardless of where
11consumption of the food or beverages occurs. Examples of those
12items include, but are not limited to nonreusable, paper and
13plastic cups, plates, baskets, boxes, sleeves, buckets or other
14containers, utensils, straws, placemats, napkins, doggie bags,
15and wrapping or packaging materials that are transferred to
16customers as part of the sale of food or beverages in the
17ordinary course of business.
18    The purchase, employment and transfer of such tangible
19personal property as newsprint and ink for the primary purpose
20of conveying news (with or without other information) is not a
21purchase, use or sale of tangible personal property.
22    "Selling price" means the consideration for a sale valued
23in money whether received in money or otherwise, including
24cash, credits, property other than as hereinafter provided, and
25services, but not including the value of or credit given for
26traded-in tangible personal property where the item that is

 

 

09800HB2317sam001- 5 -LRB098 09941 HLH 46045 a

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

 

 

09800HB2317sam001- 6 -LRB098 09941 HLH 46045 a

1is sold on or after July 1, 2014 for the purpose of leasing the
2vehicle for a defined period that is longer than one year and
3(1) is a motor vehicle of the second division that: (A) is a
4self-contained motor vehicle designed or permanently converted
5to provide living quarters for recreational, camping, or travel
6use, with direct walk through access to the living quarters
7from the driver's seat; (B) is of the van configuration
8designed for the transportation of not less than 7 nor more
9than 16 passengers; or (C) has a gross vehicle weight rating of
108,000 pounds or less or (2) is a motor vehicle of the first
11division, "selling price" or "amount of sale" means the
12consideration received by the lessor pursuant to the lease
13contract, including amounts due at lease signing and all
14monthly or other regular payments charged over the term of the
15lease. Also included in the selling price is any amount
16received by the lessor from the lessee for the leased vehicle
17that is not calculated at the time the lease is executed,
18including, but not limited to, excess mileage charges and
19charges for excess wear and tear. For sales that occur in
20Illinois, with respect to any amount received by the lessor
21from the lessee for the leased vehicle that is not calculated
22at the time the lease is executed, the lessor who purchased the
23motor vehicle does not incur the tax imposed by the Use Tax Act
24on those amounts, and the retailer who makes the retail sale of
25the motor vehicle to the lessor is not required to collect the
26tax imposed by the this Act or to pay the tax imposed by the

 

 

09800HB2317sam001- 7 -LRB098 09941 HLH 46045 a

1Retailers' Occupation Tax Act on those amounts. However, the
2lessor who purchased the motor vehicle assumes the liability
3for reporting and paying the tax on those amounts directly to
4the Department in the same form (Illinois Retailers' Occupation
5Tax, and local retailers' occupation taxes, if applicable) in
6which the retailer would have reported and paid such tax if the
7retailer had accounted for the tax to the Department. For
8amounts received by the lessor from the lessee that are not
9calculated at the time the lease is executed, the lessor must
10file the return and pay the tax to the Department by the due
11date otherwise required by this Act for returns other than
12transaction returns. If the retailer is entitled under this Act
13to a discount for collecting and remitting the tax imposed
14under this Act to the Department with respect to the sale of
15the motor vehicle to the lessor, then the right to the discount
16provided in this Act shall be transferred to the lessor with
17respect to the tax paid by the lessor for any amount received
18by the lessor from the lessee for the leased vehicle that is
19not calculated at the time the lease is executed; provided that
20the discount is only allowed if the return is timely filed and
21for amounts timely paid. The "selling price" of a motor vehicle
22that is sold on or after July 1, 2014 for the purpose of
23leasing for a defined period of longer than one year shall not
24be reduced by the value of or credit given for traded-in
25tangible personal property owned by the lessor, nor shall it be
26reduced by the value of or credit given for traded-in tangible

 

 

09800HB2317sam001- 8 -LRB098 09941 HLH 46045 a

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

 

 

09800HB2317sam001- 9 -LRB098 09941 HLH 46045 a

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

 

 

09800HB2317sam001- 10 -LRB098 09941 HLH 46045 a

1    A person whose activities are organized and conducted
2primarily as a not-for-profit service enterprise, and who
3engages in selling tangible personal property at retail
4(whether to the public or merely to members and their guests)
5is a retailer with respect to such transactions, excepting only
6a person organized and operated exclusively for charitable,
7religious or educational purposes either (1), to the extent of
8sales by such person to its members, students, patients or
9inmates of tangible personal property to be used primarily for
10the purposes of such person, or (2), to the extent of sales by
11such person of tangible personal property which is not sold or
12offered for sale by persons organized for profit. The selling
13of school books and school supplies by schools at retail to
14students is not "primarily for the purposes of" the school
15which does such selling. This paragraph does not apply to nor
16subject to taxation occasional dinners, social or similar
17activities of a person organized and operated exclusively for
18charitable, religious or educational purposes, whether or not
19such activities are open to 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.

 

 

09800HB2317sam001- 11 -LRB098 09941 HLH 46045 a

1    Persons who engage in the business of transferring tangible
2personal property upon the redemption of trading stamps are
3retailers 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 or
19because 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 made
22for the tangible personal property so transferred, the value of
23such property, for the purposes of this Act, is the amount so
24separately charged, but not less than the cost of such property
25to the transferor; if no separate charge is made, the value of
26such property, for the purposes of this Act, is the cost to the

 

 

09800HB2317sam001- 12 -LRB098 09941 HLH 46045 a

1transferor of such tangible personal property.
2    "Retailer maintaining a place of business in this State",
3or any like term, means and includes any of the following
4retailers:
5        1. A retailer having or maintaining within this State,
6    directly or by a subsidiary, an office, distribution house,
7    sales house, warehouse or other place of business, or any
8    agent or other representative operating within this State
9    under the authority of the retailer or its subsidiary,
10    irrespective of whether such place of business or agent or
11    other representative is located here permanently or
12    temporarily, or whether such retailer or subsidiary is
13    licensed to do business in this State. However, the
14    ownership of property that is located at the premises of a
15    printer with which the retailer has contracted for printing
16    and that consists of the final printed product, property
17    that becomes a part of the final printed product, or copy
18    from which the printed product is produced shall not result
19    in the retailer being deemed to have or maintain an office,
20    distribution house, sales house, warehouse, or other place
21    of business within this State.
22        1.1. Beginning July 1, 2011, a retailer having a
23    contract with a person located in this State under which
24    the person, for a commission or other consideration based
25    upon the sale of tangible personal property by the
26    retailer, directly or indirectly refers potential

 

 

09800HB2317sam001- 13 -LRB098 09941 HLH 46045 a

1    customers to the retailer by a link on the person's
2    Internet website. The provisions of this paragraph 1.1
3    shall apply only if the cumulative gross receipts from
4    sales of tangible personal property by the retailer to
5    customers who are referred to the retailer by all persons
6    in this State under such contracts exceed $10,000 during
7    the preceding 4 quarterly periods ending on the last day of
8    March, June, September, and December.
9        1.2. Beginning July 1, 2011, a retailer having a
10    contract with a person located in this State under which:
11            A. the retailer sells the same or substantially
12        similar line of products as the person located in this
13        State and does so using an identical or substantially
14        similar name, trade name, or trademark as the person
15        located in this State; and
16            B. the retailer provides a commission or other
17        consideration to the person located in this State based
18        upon the sale of tangible personal property by the
19        retailer.
20    The provisions of this paragraph 1.2 shall apply only if
21    the cumulative gross receipts from sales of tangible
22    personal property by the retailer to customers in this
23    State under all such contracts exceed $10,000 during the
24    preceding 4 quarterly periods ending on the last day of
25    March, June, September, and December.
26        2. A retailer soliciting orders for tangible personal

 

 

09800HB2317sam001- 14 -LRB098 09941 HLH 46045 a

1    property by means of a telecommunication or television
2    shopping system (which utilizes toll free numbers) which is
3    intended by the retailer to be broadcast by cable
4    television or other means of broadcasting, to consumers
5    located in this State.
6        3. A retailer, pursuant to a contract with a
7    broadcaster or publisher located in this State, soliciting
8    orders for tangible personal property by means of
9    advertising which is disseminated primarily to consumers
10    located in this State and only secondarily to bordering
11    jurisdictions.
12        4. A retailer soliciting orders for tangible personal
13    property by mail if the solicitations are substantial and
14    recurring and if the retailer benefits from any banking,
15    financing, debt collection, telecommunication, or
16    marketing activities occurring in this State or benefits
17    from the location in this State of authorized installation,
18    servicing, or repair facilities.
19        5. A retailer that is owned or controlled by the same
20    interests that own or control any retailer engaging in
21    business in the same or similar line of business in this
22    State.
23        6. A retailer having a franchisee or licensee operating
24    under its trade name if the franchisee or licensee is
25    required to collect the tax under this Section.
26        7. A retailer, pursuant to a contract with a cable

 

 

09800HB2317sam001- 15 -LRB098 09941 HLH 46045 a

1    television operator located in this State, soliciting
2    orders for tangible personal property by means of
3    advertising which is transmitted or distributed over a
4    cable television system in this State.
5        8. A retailer engaging in activities in Illinois, which
6    activities in the state in which the retail business
7    engaging in such activities is located would constitute
8    maintaining a place of business in that state.
9    "Bulk vending machine" means a vending machine, containing
10unsorted confections, nuts, toys, or other items designed
11primarily to be used or played with by children which, when a
12coin or coins of a denomination not larger than $0.50 are
13inserted, are dispensed in equal portions, at random and
14without selection by the customer.
15(Source: P.A. 95-723, eff. 6-23-08; 96-1544, eff. 3-10-11.)
 
16    Section 4. The Retailers' Occupation Tax Act is amended by
17changing Section 1 as follows:
 
18    (35 ILCS 120/1)  (from Ch. 120, par. 440)
19    Sec. 1. Definitions. "Sale at retail" means any transfer of
20the ownership of or title to tangible personal property to a
21purchaser, for the purpose of use or consumption, and not for
22the purpose of resale in any form as tangible personal property
23to the extent not first subjected to a use for which it was
24purchased, for a valuable consideration: Provided that the

 

 

09800HB2317sam001- 16 -LRB098 09941 HLH 46045 a

1property purchased is deemed to be purchased for the purpose of
2resale, despite first being used, to the extent to which it is
3resold as an ingredient of an intentionally produced product or
4byproduct of manufacturing. For this purpose, slag produced as
5an incident to manufacturing pig iron or steel and sold is
6considered to be an intentionally produced byproduct of
7manufacturing. Transactions whereby the possession of the
8property is transferred but the seller retains the title as
9security for payment of the selling price shall be deemed to be
10sales.
11    "Sale at retail" shall be construed to include any transfer
12of the ownership of or title to tangible personal property to a
13purchaser, for use or consumption by any other person to whom
14such purchaser may transfer the tangible personal property
15without a valuable consideration, and to include any transfer,
16whether made for or without a valuable consideration, for
17resale in any form as tangible personal property unless made in
18compliance with Section 2c of this Act.
19    Sales of tangible personal property, which property, to the
20extent not first subjected to a use for which it was purchased,
21as an ingredient or constituent, goes into and forms a part of
22tangible personal property subsequently the subject of a "Sale
23at retail", are not sales at retail as defined in this Act:
24Provided that the property purchased is deemed to be purchased
25for the purpose of resale, despite first being used, to the
26extent to which it is resold as an ingredient of an

 

 

09800HB2317sam001- 17 -LRB098 09941 HLH 46045 a

1intentionally produced product or byproduct of manufacturing.
2    "Sale at retail" shall be construed to include any Illinois
3florist's sales transaction in which the purchase order is
4received in Illinois by a florist and the sale is for use or
5consumption, but the Illinois florist has a florist in another
6state deliver the property to the purchaser or the purchaser's
7donee in such other state.
8    Nonreusable tangible personal property that is used by
9persons engaged in the business of operating a restaurant,
10cafeteria, or drive-in is a sale for resale when it is
11transferred to customers in the ordinary course of business as
12part of the sale of food or beverages and is used to deliver,
13package, or consume food or beverages, regardless of where
14consumption of the food or beverages occurs. Examples of those
15items include, but are not limited to nonreusable, paper and
16plastic cups, plates, baskets, boxes, sleeves, buckets or other
17containers, utensils, straws, placemats, napkins, doggie bags,
18and wrapping or packaging materials that are transferred to
19customers as part of the sale of food or beverages in the
20ordinary course of business.
21    The purchase, employment and transfer of such tangible
22personal property as newsprint and ink for the primary purpose
23of conveying news (with or without other information) is not a
24purchase, use or sale of tangible personal property.
25    A person whose activities are organized and conducted
26primarily as a not-for-profit service enterprise, and who

 

 

09800HB2317sam001- 18 -LRB098 09941 HLH 46045 a

1engages in selling tangible personal property at retail
2(whether to the public or merely to members and their guests)
3is engaged in the business of selling tangible personal
4property at retail 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. The provisions
15of this paragraph shall not apply to nor subject to taxation
16occasional dinners, socials or similar activities of a person
17organized and operated exclusively for charitable, religious
18or educational purposes, whether or not such activities are
19open to 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
26engaged in the business of selling tangible personal property

 

 

09800HB2317sam001- 19 -LRB098 09941 HLH 46045 a

1at retail with respect to such transactions.
2    "Purchaser" means anyone who, through a sale at retail,
3acquires the ownership of or title to tangible personal
4property for a valuable consideration.
5    "Reseller of motor fuel" means any person engaged in the
6business of selling or delivering or transferring title of
7motor fuel to another person other than for use or consumption.
8No person shall act as a reseller of motor fuel within this
9State without first being registered as a reseller pursuant to
10Section 2c or a retailer pursuant to Section 2a.
11    "Selling price" or the "amount of sale" means the
12consideration for a sale valued in money whether received in
13money or otherwise, including cash, credits, property, other
14than as hereinafter provided, and services, but not including
15the value of or credit given for traded-in tangible personal
16property where the item that is traded-in is of like kind and
17character as that which is being sold, and shall be determined
18without any deduction on account of the cost of the property
19sold, the cost of materials used, labor or service cost or any
20other expense whatsoever, but does not include charges that are
21added to prices by sellers on account of the seller's tax
22liability under this Act, or on account of the seller's duty to
23collect, from the purchaser, the tax that is imposed by the Use
24Tax Act, or, except as otherwise provided with respect to any
25cigarette tax imposed by a home rule unit, on account of the
26seller's tax liability under any local occupation tax

 

 

09800HB2317sam001- 20 -LRB098 09941 HLH 46045 a

1administered by the Department, or, except as otherwise
2provided with respect to any cigarette tax imposed by a home
3rule unit on account of the seller's duty to collect, from the
4purchasers, the tax that is imposed under any local use tax
5administered by the Department. Effective December 1, 1985,
6"selling price" shall include charges that are added to prices
7by sellers on account of the seller's tax liability under the
8Cigarette Tax Act, on account of the sellers' duty to collect,
9from the purchaser, the tax imposed under the Cigarette Use Tax
10Act, and on account of the seller's duty to collect, from the
11purchaser, any cigarette tax imposed by a home rule unit.
12    Notwithstanding any law to the contrary, for any motor
13vehicle, as defined in Section 1-146 of the Vehicle Code, that
14is sold on or after July 1, 2014 for the purpose of leasing the
15vehicle for a defined period that is longer than one year and
16(1) is a motor vehicle of the second division that: (A) is a
17self-contained motor vehicle designed or permanently converted
18to provide living quarters for recreational, camping, or travel
19use, with direct walk through access to the living quarters
20from the driver's seat; (B) is of the van configuration
21designed for the transportation of not less than 7 nor more
22than 16 passengers; or (C) has a gross vehicle weight rating of
238,000 pounds or less or (2) is a motor vehicle of the first
24division, "selling price" or "amount of sale" means the
25consideration received by the lessor pursuant to the lease
26contract, including amounts due at lease signing and all

 

 

09800HB2317sam001- 21 -LRB098 09941 HLH 46045 a

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

 

 

09800HB2317sam001- 22 -LRB098 09941 HLH 46045 a

1Department with respect to the sale of the motor vehicle to the
2lessor, then the right to the discount provided in this Act
3shall be transferred to the lessor with respect to the tax paid
4by the lessor for any amount received by the lessor from the
5lessee for the leased vehicle that is not calculated at the
6time the lease is executed; provided that the discount is only
7allowed if the return is timely filed and for amounts timely
8paid. The "selling price" of a motor vehicle that is sold on or
9after July 1, 2014 for the purpose of leasing for a defined
10period of longer than one year shall not be reduced by the
11value of or credit given for traded-in tangible personal
12property owned by the lessor, nor shall it be reduced by the
13value of or credit given for traded-in tangible personal
14property owned by the lessee, regardless of whether the
15trade-in value thereof is assigned by the lessee to the lessor.
16In the case of a motor vehicle that is sold for the purpose of
17leasing for a defined period of longer than one year, the sale
18occurs at the time of the delivery of the vehicle, regardless
19of the due date of any lease payments. A lessor who incurs a
20Retailers' Occupation Tax liability on the sale of a motor
21vehicle coming off lease may not take a credit against that
22liability for the Use Tax the lessor paid upon the purchase of
23the motor vehicle (or for any tax the lessor paid with respect
24to any amount received by the lessor from the lessee for the
25leased vehicle that was not calculated at the time the lease
26was executed) if the selling price of the motor vehicle at the

 

 

09800HB2317sam001- 23 -LRB098 09941 HLH 46045 a

1time of purchase was calculated using the definition of
2"selling price" as defined in this paragraph. Notwithstanding
3any other provision of this Act to the contrary, lessors shall
4file all returns and make all payments required under this
5paragraph to the Department by electronic means in the manner
6and form as required by the Department. This paragraph does not
7apply to leases of motor vehicles for which, at the time the
8lease is entered into, the term of the lease is not a defined
9period, including leases with a defined initial period with the
10option to continue the lease on a month-to-month or other basis
11beyond the initial defined period.
12    The phrase "like kind and character" shall be liberally
13construed (including but not limited to any form of motor
14vehicle for any form of motor vehicle, or any kind of farm or
15agricultural implement for any other kind of farm or
16agricultural implement), while not including a kind of item
17which, if sold at retail by that retailer, would be exempt from
18retailers' occupation tax and use tax as an isolated or
19occasional sale.
20    "Gross receipts" from the sales of tangible personal
21property at retail means the total selling price or the amount
22of such sales, as hereinbefore defined. In the case of charge
23and time sales, the amount thereof shall be included only as
24and when payments are received by the seller. Receipts or other
25consideration derived by a seller from the sale, transfer or
26assignment of accounts receivable to a wholly owned subsidiary

 

 

09800HB2317sam001- 24 -LRB098 09941 HLH 46045 a

1will not be deemed payments prior to the time the purchaser
2makes payment on such accounts.
3    "Department" means the Department of Revenue.
4    "Person" means any natural individual, firm, partnership,
5association, joint stock company, joint adventure, public or
6private corporation, limited liability company, or a receiver,
7executor, trustee, guardian or other representative appointed
8by order of any court.
9    The isolated or occasional sale of tangible personal
10property at retail by a person who does not hold himself out as
11being engaged (or who does not habitually engage) in selling
12such tangible personal property at retail, or a sale through a
13bulk vending machine, does not constitute engaging in a
14business of selling such tangible personal property at retail
15within the meaning of this Act; provided that any person who is
16engaged in a business which is not subject to the tax imposed
17by this Act because of involving the sale of or a contract to
18sell real estate or a construction contract to improve real
19estate or a construction contract to engineer, install, and
20maintain an integrated system of products, but who, in the
21course of conducting such business, transfers tangible
22personal property to users or consumers in the finished form in
23which it was purchased, and which does not become real estate
24or was not engineered and installed, under any provision of a
25construction contract or real estate sale or real estate sales
26agreement entered into with some other person arising out of or

 

 

09800HB2317sam001- 25 -LRB098 09941 HLH 46045 a

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

 

 

09800HB2317sam001- 26 -LRB098 09941 HLH 46045 a

1same function as stock or standard items of tangible personal
2property that are sold at retail.
3    Persons who engage in the business of transferring tangible
4personal property upon the redemption of trading stamps are
5engaged in the business of selling such property at retail and
6shall be liable for and shall pay the tax imposed by this Act
7on the basis of the retail value of the property transferred
8upon redemption of such stamps.
9    "Bulk vending machine" means a vending machine, containing
10unsorted confections, nuts, toys, or other items designed
11primarily to be used or played with by children which, when a
12coin or coins of a denomination not larger than $0.50 are
13inserted, are dispensed in equal portions, at random and
14without selection by the customer.
15(Source: P.A. 95-723, eff. 6-23-08.)".