Full Text of SB3282 103rd General Assembly
SB3282eng 103RD GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 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 2-10.5 as follows:
| 6 | | (35 ILCS 120/2-10.5)
| 7 | | Sec. 2-10.5.
Direct payment program; purchaser's providing | 8 | | of permit to
retailer; retailer relieved of collecting use tax | 9 | | and local retailers'
occupation tax reimbursements from | 10 | | purchaser; direct payment of retailers'
occupation tax and | 11 | | local retailers' occupation tax by purchaser.
| 12 | | (a) Beginning on July 1, 2001 there is established in this | 13 | | State a Direct
Payment Program to be administered by the | 14 | | Department. The Department shall
issue a Direct Pay Permit to | 15 | | applicants who have been approved to participate
in the Direct | 16 | | Payment Program. Each person applying to participate in the
| 17 | | Direct Payment Program must demonstrate (1) the applicant's | 18 | | ability to comply
with the retailers' occupation tax laws and | 19 | | the use tax laws in effect in this
State and that the | 20 | | applicant's accounting system will reflect the proper amount
| 21 | | of tax due, (2) that the applicant has a valid business purpose | 22 | | for
participating in the Direct Payment Program, and (3) how | 23 | | the applicant's
participation in the Direct Payment Program |
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| 1 | | will benefit tax compliance.
Application shall be made on | 2 | | forms provided by the Department and shall contain
information | 3 | | as the Department may reasonably require. The Department shall
| 4 | | approve or deny an applicant within 90 days after the | 5 | | Department's receipt of
the application, unless the Department | 6 | | makes a written request for additional
information from the | 7 | | applicant.
| 8 | | (b) A person who has been approved for the Direct Payment | 9 | | Program and who
has been issued a Direct Pay Permit by the | 10 | | Department is relieved of paying tax
to a retailer when | 11 | | purchasing tangible personal property for use or
consumption, | 12 | | except as provided in subsection (d), by providing that | 13 | | retailer a
copy of that Direct Pay Permit. A retailer who | 14 | | accepts a copy of a customer's
Direct Pay Permit is relieved of | 15 | | the obligation to remit the tax imposed by
this Act on the | 16 | | transaction. References in this Section to "the tax imposed by
| 17 | | this Act" include any local occupation taxes administered by | 18 | | the Department
that would be incurred on the retail sale.
| 19 | | (c) Once the holder of a Direct Pay Permit uses that Permit | 20 | | to relieve the
Permit holder from paying tax to a particular | 21 | | retailer, the holder must use its
Permit for all purchases, | 22 | | except as provided in subsection (d), from that
retailer for | 23 | | so long as the Permit is valid.
| 24 | | (d) Direct Pay Permits are not valid and shall not be used | 25 | | for sales or
purchases of:
| 26 | | (1) food or beverage;
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| 1 | | (2) tangible personal property required to be titled | 2 | | or registered with an
agency of government; or
| 3 | | (3) any transactions subject to the Service Occupation | 4 | | Tax Act or Service
Use Tax Act.
| 5 | | (e) Direct Pay Permits are not assignable and are not | 6 | | transferable. As an
illustration, a construction contractor | 7 | | shall not make purchases using a
customer's Direct Pay Permit.
| 8 | | (f) A Direct Pay Permit is valid until it is revoked by the | 9 | | Department or
until the holder notifies the Department in | 10 | | writing that the holder is
withdrawing from the Direct Payment | 11 | | Program. A Direct Pay Permit can be
revoked by the Department, | 12 | | after notice and hearing, if the holder violates any
provision | 13 | | of this Act, any provision of the Illinois Use Tax Act, or any
| 14 | | provision of any Act imposing a local retailers' occupation | 15 | | tax administered by
the Department.
| 16 | | (g) The holder of a Direct Pay Permit who has been relieved | 17 | | of paying tax to
a retailer on a purchase for use or | 18 | | consumption by representing to that
retailer that it would pay | 19 | | all applicable taxes directly to the Department
shall pay | 20 | | those taxes to the Department not later than the 20th day of | 21 | | the
month following the month in which the purchase was made. | 22 | | Permit holders
making such purchases are subject to all | 23 | | provisions of this Act, and the tax
must be reported and paid | 24 | | as retailers' occupation tax in the same manner that
the | 25 | | retailer from whom the purchases were made would have reported | 26 | | and paid it,
including any local retailers' occupation taxes |
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| 1 | | applicable to that retail sale.
Notwithstanding any other | 2 | | provision of this Act, Permit holders shall make all
payments | 3 | | to the Department through the use of electronic funds | 4 | | transfer.
| 5 | | (h) Beginning on January 1, 2025, each holder of a Direct | 6 | | Pay Permit must review its purchase activity by January 31 and | 7 | | July 31 of each year to verify that the purchases made in the | 8 | | preceding 6-month period ending on the last day of the | 9 | | calendar month immediately preceding the month in which the | 10 | | report is due were sourced correctly and the correct tax rate | 11 | | was applied. If any errors are discovered, then the holder of | 12 | | the Direct Pay Permit shall correct the errors on returns | 13 | | filed on or after the date on which the error is discovered and | 14 | | shall file amended returns to correct past errors. Any holder | 15 | | of a Direct Pay Permit who fails to properly verify purchase | 16 | | activity and correct sourcing and tax rate errors based on the | 17 | | permit holder's purchase activity, as required by this Section | 18 | | and the rules adopted by the Department, is liable to pay to | 19 | | the Department, for deposit into the Tax Compliance and | 20 | | Administration Fund, a penalty of $6,000 for each 6-month | 21 | | review period after which the permit holder does not correct | 22 | | sourcing and tax rate errors based on its purchase activity | 23 | | until the permit holder comes into compliance and corrects any | 24 | | sourcing or tax rate errors. The penalties imposed under this | 25 | | Section shall not apply if the permit holder shows that he or | 26 | | she acted with ordinary business care and prudence. The |
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| 1 | | Department may adopt rules to administer the penalties under | 2 | | this Section. | 3 | | (Source: P.A. 92-484, eff. 8-23-01.)
| 4 | | Section 99. Effective date. This Act takes effect upon | 5 | | becoming law.
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