Full Text of SB2066 102nd General Assembly
SB2066 102ND GENERAL ASSEMBLY |
| | 102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022 SB2066 Introduced 2/26/2021, by Sen. Cristina Castro SYNOPSIS AS INTRODUCED: |
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35 ILCS 120/1 | from Ch. 120, par. 440 |
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Amends the Retailers' Occupation Tax Act. Provides that a "marketplace facilitator" does not include a person licensed under the Auction License Act, except for an Internet auction listing service, as defined in the Auction License Act.
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| | A BILL FOR |
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| 1 | | AN ACT concerning local government.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Retailers' Occupation Tax Act is amended by | 5 | | changing Section 1 as follows:
| 6 | | (35 ILCS 120/1) (from Ch. 120, par. 440)
| 7 | | Sec. 1. Definitions. "Sale at retail" means any transfer | 8 | | of the
ownership of or title to
tangible personal property to a | 9 | | purchaser, for the purpose of use or
consumption, and not for | 10 | | the purpose of resale in any form as tangible
personal | 11 | | property to the extent not first subjected to a use for which | 12 | | it
was purchased, for a valuable consideration: Provided that | 13 | | the property
purchased is deemed to be purchased for the | 14 | | purpose of resale, despite
first being used, to the extent to | 15 | | which it is resold as an ingredient of
an intentionally | 16 | | produced product or byproduct of manufacturing. For this
| 17 | | purpose, slag produced as an incident to manufacturing pig | 18 | | iron or steel
and sold is considered to be an intentionally | 19 | | produced byproduct of
manufacturing. Transactions whereby the | 20 | | possession of the property is
transferred but the seller | 21 | | retains the title as security for payment of the
selling price | 22 | | shall be deemed to be sales.
| 23 | | "Sale at retail" shall be construed to include any |
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| 1 | | transfer of the
ownership of or title to tangible personal | 2 | | property to a purchaser, for use
or consumption by any other | 3 | | person to whom such purchaser may transfer the
tangible | 4 | | personal property without a valuable consideration, and to | 5 | | include
any transfer, whether made for or without a valuable | 6 | | consideration, for
resale in any form as tangible personal | 7 | | property unless made in compliance
with Section 2c of this | 8 | | Act.
| 9 | | Sales of tangible personal property, which property, to | 10 | | the extent not
first subjected to a use for which it was | 11 | | purchased, as an ingredient or
constituent, goes into and | 12 | | forms a part of tangible personal property
subsequently the | 13 | | subject of a "Sale at retail", are not sales at retail as
| 14 | | defined in this Act: Provided that the property purchased is | 15 | | deemed to be
purchased for the purpose of resale, despite | 16 | | first being used, to the
extent to which it is resold as an | 17 | | ingredient of an intentionally produced
product or byproduct | 18 | | of manufacturing.
| 19 | | "Sale at retail" shall be construed to include any | 20 | | Illinois florist's
sales transaction in which the purchase | 21 | | order is received in Illinois by a
florist and the sale is for | 22 | | use or consumption, but the Illinois florist
has a florist in | 23 | | another state deliver the property to the purchaser or the
| 24 | | purchaser's donee in such other state.
| 25 | | Nonreusable tangible personal property that is used by | 26 | | persons engaged in
the business of operating a restaurant, |
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| 1 | | cafeteria, or drive-in is a sale for
resale when it is | 2 | | transferred to customers in the ordinary course of business
as | 3 | | part of the sale of food or beverages and is used to deliver, | 4 | | package, or
consume food or beverages, regardless of where | 5 | | consumption of the food or
beverages occurs. Examples of those | 6 | | items include, but are not limited to
nonreusable, paper and | 7 | | plastic cups, plates, baskets, boxes, sleeves, buckets
or | 8 | | other containers, utensils, straws, placemats, napkins, doggie | 9 | | bags, and
wrapping or packaging
materials that are transferred | 10 | | to customers as part of the sale of food or
beverages in the | 11 | | ordinary course of business.
| 12 | | The purchase, employment and transfer of such tangible | 13 | | personal property
as newsprint and ink for the primary purpose | 14 | | of conveying news (with or
without other information) is not a | 15 | | purchase, use or sale of tangible
personal property.
| 16 | | A person whose activities are organized and conducted | 17 | | primarily as a
not-for-profit service enterprise, and who | 18 | | engages in selling tangible
personal property at retail | 19 | | (whether to the public or merely to members and
their guests) | 20 | | is engaged in the business of selling tangible personal
| 21 | | property at retail with respect to such transactions, | 22 | | excepting only a
person organized and operated exclusively for | 23 | | charitable, religious or
educational purposes either (1), to | 24 | | the extent of sales by such person to
its members, students, | 25 | | patients or inmates of tangible personal property to
be used | 26 | | primarily for the purposes of such person, or (2), to the |
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| 1 | | extent of
sales by such person of tangible personal property | 2 | | which is not sold or
offered for sale by persons organized for | 3 | | profit. The selling of school
books and school supplies by | 4 | | schools at retail to students is not
"primarily for the | 5 | | purposes of" the school which does such selling. The
| 6 | | provisions of this paragraph shall not apply to nor subject to | 7 | | taxation
occasional dinners, socials or similar activities of | 8 | | a person organized and
operated exclusively for charitable, | 9 | | religious or educational purposes,
whether or not such | 10 | | activities are open to the public.
| 11 | | A person who is the recipient of a grant or contract under | 12 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | 13 | | serves meals to
participants in the federal Nutrition Program | 14 | | for the Elderly in return for
contributions established in | 15 | | amount by the individual participant pursuant
to a schedule of | 16 | | suggested fees as provided for in the federal Act is not
| 17 | | engaged in the business of selling tangible personal property | 18 | | at retail
with respect to such transactions.
| 19 | | "Purchaser" means anyone who, through a sale at retail, | 20 | | acquires the
ownership of or title to tangible personal | 21 | | property for a valuable
consideration.
| 22 | | "Reseller of motor fuel" means any person engaged in the | 23 | | business of selling
or delivering or transferring title of | 24 | | motor fuel to another person
other than for use or | 25 | | consumption.
No person shall act as a reseller of motor fuel | 26 | | within this State without
first being registered as a reseller |
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| 1 | | pursuant to Section 2c or a retailer
pursuant to Section 2a.
| 2 | | "Selling price" or the "amount of sale" means the | 3 | | consideration for a
sale valued in money whether received in | 4 | | money or otherwise, including
cash, credits, property, other | 5 | | than as hereinafter provided, and services,
but, prior to | 6 | | January 1, 2020, not including the value of or credit given for | 7 | | traded-in tangible
personal property where the item that is | 8 | | traded-in is of like kind and
character as that which is being | 9 | | sold; beginning January 1, 2020, "selling price" includes the | 10 | | portion of the value of or credit given for traded-in motor | 11 | | vehicles of the First Division as defined in Section 1-146 of | 12 | | the Illinois Vehicle Code of like kind and character as that | 13 | | which is being sold that exceeds $10,000. "Selling price" | 14 | | shall be determined without any
deduction on account of the | 15 | | cost of the property sold, the cost of
materials used, labor or | 16 | | service cost or any other expense whatsoever, but
does not | 17 | | include charges that are added to prices by sellers on account | 18 | | of
the seller's tax liability under this Act, or on account of | 19 | | the seller's
duty to collect, from the purchaser, the tax that | 20 | | is imposed by the Use Tax
Act, or, except as otherwise provided | 21 | | with respect to any cigarette tax imposed by a home rule unit, | 22 | | on account of the seller's tax liability under any local | 23 | | occupation tax administered by the Department, or, except as | 24 | | otherwise provided with respect to any cigarette tax imposed | 25 | | by a home rule unit on account of the seller's duty to collect, | 26 | | from the purchasers, the tax that is imposed under any local |
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| 1 | | use tax administered by the Department.
Effective December 1, | 2 | | 1985, "selling price" shall include charges that
are added to | 3 | | prices by sellers on account of the seller's
tax liability | 4 | | under the Cigarette Tax Act, on account of the sellers'
duty to | 5 | | collect, from the purchaser, the tax imposed under the | 6 | | Cigarette
Use Tax Act, and on account of the seller's duty to | 7 | | collect, from the
purchaser, any cigarette tax imposed by a | 8 | | home rule unit.
| 9 | | Notwithstanding any law to the contrary, for any motor | 10 | | vehicle, as defined in Section 1-146 of the Vehicle Code, that | 11 | | is sold on or after January 1, 2015 for the purpose of leasing | 12 | | the vehicle for a defined period that is longer than one year | 13 | | and (1) is a motor vehicle of the second division that: (A) is | 14 | | a self-contained motor vehicle designed or permanently | 15 | | converted to provide living quarters for recreational, | 16 | | camping, or travel use, with direct walk through access to the | 17 | | living quarters from the driver's seat; (B) is of the van | 18 | | configuration designed for the transportation of not less than | 19 | | 7 nor more than 16 passengers; or (C) has a gross vehicle | 20 | | weight rating of 8,000 pounds or less or (2) is a motor vehicle | 21 | | of the first division, "selling price" or "amount of sale" | 22 | | means the consideration received by the lessor pursuant to the | 23 | | lease contract, including amounts due at lease signing and all | 24 | | monthly or other regular payments charged over the term of the | 25 | | lease. Also included in the selling price is any amount | 26 | | received by the lessor from the lessee for the leased vehicle |
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| 1 | | that is not calculated at the time the lease is executed, | 2 | | including, but not limited to, excess mileage charges and | 3 | | charges for excess wear and tear. For sales that occur in | 4 | | Illinois, with respect to any amount received by the lessor | 5 | | from the lessee for the leased vehicle that is not calculated | 6 | | at the time the lease is executed, the lessor who purchased the | 7 | | motor vehicle does not incur the tax imposed by the Use Tax Act | 8 | | on those amounts, and the retailer who makes the retail sale of | 9 | | the motor vehicle to the lessor is not required to collect the | 10 | | tax imposed by the Use Tax Act or to pay the tax imposed by | 11 | | this Act on those amounts. However, the lessor who purchased | 12 | | the motor vehicle assumes the liability for reporting and | 13 | | paying the tax on those amounts directly to the Department in | 14 | | the same form (Illinois Retailers' Occupation Tax, and local | 15 | | retailers' occupation taxes, if applicable) in which the | 16 | | retailer would have reported and paid such tax if the retailer | 17 | | had accounted for the tax to the Department. For amounts | 18 | | received by the lessor from the lessee that are not calculated | 19 | | at the time the lease is executed, the lessor must file the | 20 | | return and pay the tax to the Department by the due date | 21 | | otherwise required by this Act for returns other than | 22 | | transaction returns. If the retailer is entitled under this | 23 | | Act to a discount for collecting and remitting the tax imposed | 24 | | under this Act to the Department with respect to the sale of | 25 | | the motor vehicle to the lessor, then the right to the discount | 26 | | provided in this Act shall be transferred to the lessor with |
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| 1 | | respect to the tax paid by the lessor for any amount received | 2 | | by the lessor from the lessee for the leased vehicle that is | 3 | | not calculated at the time the lease is executed; provided | 4 | | that the discount is only allowed if the return is timely filed | 5 | | and for amounts timely paid. The "selling price" of a motor | 6 | | vehicle that is sold on or after January 1, 2015 for the | 7 | | purpose of leasing for a defined period of longer than one year | 8 | | shall not be reduced by the value of or credit given for | 9 | | traded-in tangible personal property owned by the lessor, nor | 10 | | shall it be reduced by the value of or credit given for | 11 | | traded-in tangible personal property owned by the lessee, | 12 | | regardless of whether the trade-in value thereof is assigned | 13 | | by the lessee to the lessor. In the case of a motor vehicle | 14 | | that is sold for the purpose of leasing for a defined period of | 15 | | longer than one year, the sale occurs at the time of the | 16 | | delivery of the vehicle, regardless of the due date of any | 17 | | lease payments. A lessor who incurs a Retailers' Occupation | 18 | | Tax liability on the sale of a motor vehicle coming off lease | 19 | | may not take a credit against that liability for the Use Tax | 20 | | the lessor paid upon the purchase of the motor vehicle (or for | 21 | | any tax the lessor paid with respect to any amount received by | 22 | | the lessor from the lessee for the leased vehicle that was not | 23 | | calculated at the time the lease was executed) if the selling | 24 | | price of the motor vehicle at the time of purchase was | 25 | | calculated using the definition of "selling price" as defined | 26 | | in this paragraph.
Notwithstanding any other provision of this |
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| 1 | | Act to the contrary, lessors shall file all returns and make | 2 | | all payments required under this paragraph to the Department | 3 | | by electronic means in the manner and form as required by the | 4 | | Department. This paragraph does not apply to leases of motor | 5 | | vehicles for which, at the time the lease is entered into, the | 6 | | term of the lease is not a defined period, including leases | 7 | | with a defined initial period with the option to continue the | 8 | | lease on a month-to-month or other basis beyond the initial | 9 | | defined period. | 10 | | The phrase "like kind and character" shall be liberally | 11 | | construed
(including but not limited to any form of motor | 12 | | vehicle for any form of
motor vehicle, or any kind of farm or | 13 | | agricultural implement for any other
kind of farm or | 14 | | agricultural implement), while not including a kind of item
| 15 | | which, if sold at retail by that retailer, would be exempt from | 16 | | retailers'
occupation tax and use tax as an isolated or | 17 | | occasional sale.
| 18 | | "Gross receipts" from the sales of tangible personal | 19 | | property at retail
means the total selling price or the amount | 20 | | of such sales, as hereinbefore
defined. In the case of charge | 21 | | and time sales, the amount thereof shall be
included only as | 22 | | and when payments are received by the seller.
Receipts or | 23 | | other consideration derived by a seller from
the sale, | 24 | | transfer or assignment of accounts receivable to a wholly | 25 | | owned
subsidiary will not be deemed payments prior to the time | 26 | | the purchaser
makes payment on such accounts.
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| 1 | | "Department" means the Department of Revenue.
| 2 | | "Person" means any natural individual, firm, partnership, | 3 | | association,
joint stock company, joint adventure, public or | 4 | | private corporation, limited
liability company, or a receiver, | 5 | | executor, trustee, guardian or other
representative appointed | 6 | | by order of any court.
| 7 | | The isolated or occasional sale of tangible personal | 8 | | property at retail
by a person who does not hold himself out as | 9 | | being engaged (or who does not
habitually engage) in selling | 10 | | such tangible personal property at retail, or
a sale through a | 11 | | bulk vending machine, does not constitute engaging in a
| 12 | | business of selling such tangible personal property at retail | 13 | | within the
meaning of this Act; provided that any person who is | 14 | | engaged in a business
which is not subject to the tax imposed | 15 | | by this Act because of involving
the sale of or a contract to | 16 | | sell real estate or a construction contract to
improve real | 17 | | estate or a construction contract to engineer, install, and
| 18 | | maintain an integrated system of products, but who, in the | 19 | | course of
conducting such business,
transfers tangible | 20 | | personal property to users or consumers in the finished
form | 21 | | in which it was purchased, and which does not become real | 22 | | estate or was
not engineered and installed, under any | 23 | | provision of a construction contract or
real estate sale or | 24 | | real estate sales agreement entered into with some other
| 25 | | person arising out of or because of such nontaxable business, | 26 | | is engaged in the
business of selling tangible personal |
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| 1 | | property at retail to the extent of the
value of the tangible | 2 | | personal property so transferred. If, in such a
transaction, a | 3 | | separate charge is made for the tangible personal property so
| 4 | | transferred, the value of such property, for the purpose of | 5 | | this Act, shall be
the amount so separately charged, but not | 6 | | less than the cost of such property
to the transferor; if no | 7 | | separate charge is made, the value of such property,
for the | 8 | | purposes of this Act, is the cost to the transferor of such | 9 | | tangible
personal property. Construction contracts for the | 10 | | improvement of real estate
consisting of engineering, | 11 | | installation, and maintenance of voice, data, video,
security, | 12 | | and all telecommunication systems do not constitute engaging | 13 | | in a
business of selling tangible personal property at retail | 14 | | within the meaning of
this Act if they are sold at one | 15 | | specified contract price.
| 16 | | A person who holds himself or herself out as being engaged | 17 | | (or who habitually
engages) in selling tangible personal | 18 | | property at retail is a person
engaged in the business of | 19 | | selling tangible personal property at retail
hereunder with | 20 | | respect to such sales (and not primarily in a service
| 21 | | occupation) notwithstanding the fact that such person designs | 22 | | and produces
such tangible personal property on special order | 23 | | for the purchaser and in
such a way as to render the property | 24 | | of value only to such purchaser, if
such tangible personal | 25 | | property so produced on special order serves
substantially the | 26 | | same function as stock or standard items of tangible
personal |
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| 1 | | property that are sold at retail.
| 2 | | Persons who engage in the business of transferring | 3 | | tangible personal
property upon the redemption of trading | 4 | | stamps are engaged in the business
of selling such property at | 5 | | retail and shall be liable for and shall pay
the tax imposed by | 6 | | this Act on the basis of the retail value of the
property | 7 | | transferred upon redemption of such stamps.
| 8 | | "Bulk vending machine" means a vending machine,
containing | 9 | | unsorted confections, nuts, toys, or other items designed
| 10 | | primarily to be used or played with by children
which, when a | 11 | | coin or coins of a denomination not larger than $0.50 are
| 12 | | inserted, are dispensed in equal portions, at random and
| 13 | | without selection by the customer.
| 14 | | "Remote retailer" means a retailer that does not maintain | 15 | | within this State, directly or by a subsidiary, an office, | 16 | | distribution house, sales house, warehouse or other place of | 17 | | business, or any agent or other representative operating | 18 | | within this State under the authority of the retailer or its | 19 | | subsidiary, irrespective of whether such place of business or | 20 | | agent is located here permanently or temporarily or whether | 21 | | such retailer or subsidiary is licensed to do business in this | 22 | | State. | 23 | | "Marketplace" means a physical or electronic place, forum, | 24 | | platform, application, or other method by which a marketplace | 25 | | seller sells or offers to sell items. | 26 | | "Marketplace facilitator" means a person who, pursuant to |
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| 1 | | an agreement with an unrelated third-party marketplace seller, | 2 | | directly or indirectly through one or more affiliates | 3 | | facilitates a retail sale by an unrelated third party | 4 | | marketplace seller by: | 5 | | (1) listing or advertising for sale by the marketplace | 6 | | seller in a marketplace, tangible personal property that | 7 | | is subject to tax under this Act; and | 8 | | (2) either directly or indirectly, through agreements | 9 | | or arrangements with third parties, collecting payment | 10 | | from the customer and transmitting that payment to the | 11 | | marketplace seller regardless of whether the marketplace | 12 | | facilitator receives compensation or other consideration | 13 | | in exchange for its services. | 14 | | A person who provides advertising services, including | 15 | | listing products for sale, is not considered a marketplace | 16 | | facilitator, so long as the advertising service platform or | 17 | | forum does not engage, directly or indirectly through one or | 18 | | more affiliated persons, in the activities described in | 19 | | paragraph (2) of this definition of "marketplace facilitator". | 20 | | "Marketplace facilitator" does not include a person | 21 | | licensed under the Auction License Act. This exception does | 22 | | not include an Internet auction listing service, as defined in | 23 | | Section 5-10 of the Auction License Act. | 24 | | "Marketplace seller" means a person that makes sales | 25 | | through a marketplace operated by an unrelated third party | 26 | | marketplace facilitator. |
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| 1 | | (Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
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