Full Text of HB1480 101st General Assembly
HB1480 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 HB1480 Introduced , by Rep. Tony McCombie SYNOPSIS AS INTRODUCED: |
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35 ILCS 105/3-55 | from Ch. 120, par. 439.3-55 |
35 ILCS 110/3-45 | from Ch. 120, par. 439.33-45 |
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Amends the Use Tax Act and the Service Use Tax Act. Provides that the multistate exemption includes the return of property of an out-of-State lessor or purchaser to this State for storage, repair, or refurbishment, so long as the property is not used by a lessee or purchaser in this State. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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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 Use Tax Act is amended by changing Section | 5 | | 3-55 as follows:
| 6 | | (35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
| 7 | | Sec. 3-55. Multistate exemption. To prevent actual or | 8 | | likely multistate taxation, the tax imposed by this
Act
does | 9 | | not apply to the use of
tangible personal property in this | 10 | | State under the following circumstances:
| 11 | | (a) The use, in this State, of tangible personal property | 12 | | acquired
outside this State by a nonresident individual and | 13 | | brought into this
State by the individual for his or her own | 14 | | use while temporarily within
this State or while passing | 15 | | through this State.
| 16 | | (b) (Blank).
| 17 | | (c) The use, in this State, by owners, lessors,
or
shippers
| 18 | | of tangible personal property that is utilized by interstate | 19 | | carriers
for hire for use as rolling stock moving in interstate | 20 | | commerce as
long as so used by the interstate carriers for | 21 | | hire, and equipment
operated by a telecommunications provider, | 22 | | licensed as a common carrier by the
Federal Communications | 23 | | Commission, which is permanently installed in or affixed
to |
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| 1 | | aircraft moving in interstate commerce.
| 2 | | (d) The use, in this State, of tangible personal property | 3 | | that is
acquired outside this State and caused to be brought | 4 | | into this State by
a person who has already paid a tax in | 5 | | another State in respect to the
sale, purchase, or use of that | 6 | | property, to the extent of the amount of
the tax properly due | 7 | | and paid in the other State.
| 8 | | (e) The temporary storage, in this State, of tangible | 9 | | personal
property that is acquired outside this State and that, | 10 | | after
being brought into this State and stored here | 11 | | temporarily, is used
solely outside this State or is physically | 12 | | attached to or incorporated
into other tangible personal | 13 | | property that is used solely outside this
State, or is altered | 14 | | by converting, fabricating, manufacturing, printing,
| 15 | | processing, or shaping, and, as altered, is used solely outside | 16 | | this State.
| 17 | | (e-5) The return of property of an out-of-State lessor or | 18 | | purchaser to this State for storage, repair, or refurbishment, | 19 | | so long as the property is not used by a lessee or purchaser in | 20 | | this State. As used in this subsection (e-5), refurbishment | 21 | | includes the replacement of component parts as well as | 22 | | upgrades. | 23 | | (f) The temporary storage in this State of building | 24 | | materials and
fixtures that are acquired either in this State | 25 | | or outside this State
by an Illinois registered combination | 26 | | retailer and construction contractor, and
that the purchaser |
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| 1 | | thereafter uses outside this State by incorporating that
| 2 | | property into real estate located outside this State.
| 3 | | (g) The use or purchase of tangible personal property by a | 4 | | common carrier
by rail or motor that receives the physical | 5 | | possession of the property in
Illinois, and
that transports the | 6 | | property, or shares with another common carrier in the
| 7 | | transportation of the property, out of Illinois on a standard | 8 | | uniform bill of
lading showing the seller of the property as | 9 | | the shipper or consignor of the
property to a destination | 10 | | outside Illinois, for use outside Illinois.
| 11 | | (h) Except as provided in subsection (h-1), the use, in | 12 | | this State, of a motor vehicle that was sold in
this State to a | 13 | | nonresident, even though the motor vehicle is
delivered to the | 14 | | nonresident in this State, if the motor vehicle
is not to be | 15 | | titled in this State, and if a
drive-away permit is issued to | 16 | | the motor vehicle as
provided in Section 3-603 of the Illinois | 17 | | Vehicle Code or if the
nonresident purchaser has vehicle | 18 | | registration plates to transfer
to the motor vehicle upon | 19 | | returning to his or her home state.
The issuance of the | 20 | | drive-away permit or having the
out-of-state
registration | 21 | | plates to be transferred shall be prima facie evidence
that the | 22 | | motor vehicle will not be titled in this State.
| 23 | | (h-1) The exemption under subsection (h) does not apply if | 24 | | the state in which the motor vehicle will be titled does not | 25 | | allow a reciprocal exemption for the use in that state of a | 26 | | motor vehicle sold and delivered in that state to an Illinois |
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| 1 | | resident but titled in Illinois. The tax collected under this | 2 | | Act on the sale of a motor vehicle in this State to a resident | 3 | | of another state that does not allow a reciprocal exemption | 4 | | shall be imposed at a rate equal to the state's rate of tax on | 5 | | taxable property in the state in which the purchaser is a | 6 | | resident, except that the tax shall not exceed the tax that | 7 | | would otherwise be imposed under this Act. At the time of the | 8 | | sale, the purchaser shall execute a statement, signed under | 9 | | penalty of perjury, of his or her intent to title the vehicle | 10 | | in the state in which the purchaser is a resident within 30 | 11 | | days after the sale and of the fact of the payment to the State | 12 | | of Illinois of tax in an amount equivalent to the state's rate | 13 | | of tax on taxable property in his or her state of residence and | 14 | | shall submit the statement to the appropriate tax collection | 15 | | agency in his or her state of residence. In addition, the | 16 | | retailer must retain a signed copy of the statement in his or | 17 | | her records. Nothing in this subsection shall be construed to | 18 | | require the removal of the vehicle from this state following | 19 | | the filing of an intent to title the vehicle in the purchaser's | 20 | | state of residence if the purchaser titles the vehicle in his | 21 | | or her state of residence within 30 days after the date of | 22 | | sale. The tax collected under this Act in accordance with this | 23 | | subsection (h-1) shall be proportionately distributed as if the | 24 | | tax were collected at the 6.25% general rate imposed under this | 25 | | Act.
| 26 | | (h-2) The following exemptions apply with respect to |
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| 1 | | certain aircraft: | 2 | | (1) Beginning on July 1, 2007, no tax is imposed under | 3 | | this Act on the purchase of an aircraft, as defined in | 4 | | Section 3 of the Illinois Aeronautics Act, if all of the | 5 | | following conditions are met: | 6 | | (A) the aircraft leaves this State within 15 days | 7 | | after the later of either the issuance of the final | 8 | | billing for the purchase of the aircraft or the | 9 | | authorized approval for return to service, completion | 10 | | of the maintenance record entry, and completion of the | 11 | | test flight and ground test for inspection, as required | 12 | | by 14 C.F.R. 91.407; | 13 | | (B) the aircraft is not based or registered in this | 14 | | State after the purchase of the aircraft; and | 15 | | (C) the purchaser provides the Department with a | 16 | | signed and dated certification, on a form prescribed by | 17 | | the Department, certifying that the requirements of | 18 | | this item (1) are met. The certificate must also | 19 | | include the name and address of the purchaser, the | 20 | | address of the location where the aircraft is to be | 21 | | titled or registered, the address of the primary | 22 | | physical location of the aircraft, and other | 23 | | information that the Department may reasonably | 24 | | require. | 25 | | (2) Beginning on July 1, 2007, no tax is imposed under | 26 | | this Act on the use of an aircraft, as defined in Section 3 |
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| 1 | | of the Illinois Aeronautics Act, that is temporarily | 2 | | located in this State for the purpose of a prepurchase | 3 | | evaluation if all of the following conditions are met: | 4 | | (A) the aircraft is not based or registered in this | 5 | | State after the prepurchase evaluation; and | 6 | | (B) the purchaser provides the Department with a | 7 | | signed and dated certification, on a form prescribed by | 8 | | the Department, certifying that the requirements of | 9 | | this item (2) are met. The certificate must also | 10 | | include the name and address of the purchaser, the | 11 | | address of the location where the aircraft is to be | 12 | | titled or registered, the address of the primary | 13 | | physical location of the aircraft, and other | 14 | | information that the Department may reasonably | 15 | | require. | 16 | | (3) Beginning on July 1, 2007, no tax is imposed under | 17 | | this Act on the use of an aircraft, as defined in Section 3 | 18 | | of the Illinois Aeronautics Act, that is temporarily | 19 | | located in this State for the purpose of a post-sale | 20 | | customization if all of the following conditions are met: | 21 | | (A) the aircraft leaves this State within 15 days | 22 | | after the authorized approval for return to service, | 23 | | completion of the maintenance record entry, and | 24 | | completion of the test flight and ground test for | 25 | | inspection, as required by 14 C.F.R. 91.407; | 26 | | (B) the aircraft is not based or registered in this |
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| 1 | | State either before or after the post-sale | 2 | | customization; and | 3 | | (C) the purchaser provides the Department with a | 4 | | signed and dated certification, on a form prescribed by | 5 | | the Department, certifying that the requirements of | 6 | | this item (3) are met. The certificate must also | 7 | | include the name and address of the purchaser, the | 8 | | address of the location where the aircraft is to be | 9 | | titled or registered, the address of the primary | 10 | | physical location of the aircraft, and other | 11 | | information that the Department may reasonably | 12 | | require. | 13 | | If tax becomes due under this subsection (h-2) because of | 14 | | the purchaser's use of the aircraft in this State, the | 15 | | purchaser shall file a return with the Department and pay the | 16 | | tax on the fair market value of the aircraft. This return and | 17 | | payment of the tax must be made no later than 30 days after the | 18 | | aircraft is used in a taxable manner in this State. The tax is | 19 | | based on the fair market value of the aircraft on the date that | 20 | | it is first used in a taxable manner in this State. | 21 | | For purposes of this subsection (h-2): | 22 | | "Based in this State" means hangared, stored, or otherwise | 23 | | used, excluding post-sale customizations as defined in this | 24 | | Section, for 10 or more days in each 12-month period | 25 | | immediately following the date of the sale of the aircraft. | 26 | | "Post-sale customization" means any improvement, |
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| 1 | | maintenance, or repair that is performed on an aircraft | 2 | | following a transfer of ownership of the aircraft. | 3 | | "Prepurchase evaluation" means an examination of an | 4 | | aircraft to provide a potential purchaser with information | 5 | | relevant to the potential purchase. | 6 | | "Registered in this State" means an aircraft registered | 7 | | with the Department of Transportation, Aeronautics Division, | 8 | | or titled or registered with the Federal Aviation | 9 | | Administration to an address located in this State.
| 10 | | This subsection (h-2) is exempt from the provisions of | 11 | | Section 3-90.
| 12 | | (i) Beginning July 1, 1999, the use, in this State, of fuel | 13 | | acquired
outside this State and brought into this State in the | 14 | | fuel supply
tanks of locomotives engaged in freight hauling and | 15 | | passenger service for
interstate commerce. This subsection is | 16 | | exempt from the provisions of Section
3-90.
| 17 | | (j) Beginning on January 1, 2002 and through June 30, 2016, | 18 | | the use of tangible personal property
purchased from an | 19 | | Illinois retailer by a taxpayer engaged in centralized
| 20 | | purchasing activities in Illinois who will, upon receipt of the | 21 | | property in
Illinois, temporarily store the property in | 22 | | Illinois (i) for the purpose of
subsequently transporting it | 23 | | outside this State for use or consumption
thereafter solely | 24 | | outside this State or (ii) for the purpose of being
processed, | 25 | | fabricated, or manufactured into, attached to, or incorporated | 26 | | into
other tangible personal property to be transported outside |
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| 1 | | this State and
thereafter used or consumed solely outside this | 2 | | State. The Director of Revenue
shall, pursuant to rules adopted | 3 | | in accordance with the Illinois Administrative
Procedure Act, | 4 | | issue a permit to any taxpayer in good standing with the
| 5 | | Department who is eligible for the exemption under this | 6 | | subsection (j). The
permit issued under this subsection (j) | 7 | | shall authorize the holder, to the
extent and in the manner | 8 | | specified in the rules adopted under this Act, to
purchase | 9 | | tangible personal property from a retailer exempt from the | 10 | | taxes
imposed by this Act. Taxpayers shall maintain all | 11 | | necessary books and records
to substantiate the use and | 12 | | consumption of all such tangible personal property
outside of | 13 | | the State of Illinois.
| 14 | | (Source: P.A. 100-321, eff. 8-24-17.)
| 15 | | Section 10. The Service Use Tax Act is amended by changing | 16 | | Section 3-45 as follows:
| 17 | | (35 ILCS 110/3-45) (from Ch. 120, par. 439.33-45)
| 18 | | Sec. 3-45. Multistate exemption. To prevent actual or | 19 | | likely multistate
taxation, the tax imposed by this Act does | 20 | | not apply
to the use of tangible personal property in this | 21 | | State under the following
circumstances:
| 22 | | (a) The use, in this State, of property acquired outside | 23 | | this State
by a nonresident individual and brought into this | 24 | | State by the
individual for his or her own use while |
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| 1 | | temporarily within this State or
while passing through this | 2 | | State.
| 3 | | (b) The use, in this State, of property that is
acquired | 4 | | outside
this State and that is moved into this State for use as | 5 | | rolling stock
moving in interstate commerce.
| 6 | | (c) The use, in this State, of property that is acquired | 7 | | outside
this State and caused to be brought into this State by | 8 | | a person who has
already paid a tax in another state in respect | 9 | | to the sale, purchase, or
use of that property, to the extent | 10 | | of the amount of the tax properly
due and paid in the other | 11 | | state.
| 12 | | (d) The temporary storage, in this State, of property that | 13 | | is
acquired outside this State and that after being brought | 14 | | into
this State and stored here temporarily, is used solely | 15 | | outside this
State or is physically attached to or incorporated | 16 | | into other property
that is used solely outside this State, or | 17 | | is altered by converting,
fabricating, manufacturing, | 18 | | printing, processing, or shaping, and, as
altered, is used | 19 | | solely outside this State.
| 20 | | (d-5) The return of property of an out-of-State lessor or | 21 | | purchaser to this State for storage, repair, or refurbishment, | 22 | | so long as the property is not used by a lessee or purchaser in | 23 | | this State. As used in this subsection (d-5), refurbishment | 24 | | includes the replacement of component parts as well as | 25 | | upgrades. | 26 | | (e) Beginning July 1, 1999, the use, in this State, of fuel |
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| 1 | | acquired
outside this State and brought into this State in the | 2 | | fuel supply
tanks of locomotives engaged in freight hauling and | 3 | | passenger service for
interstate commerce. This subsection is | 4 | | exempt from the provisions of Section
3-75.
| 5 | | (f) Beginning on January 1, 2002 and through June 30, 2016, | 6 | | the use of tangible personal property
purchased from an | 7 | | Illinois retailer by a taxpayer engaged in centralized
| 8 | | purchasing activities in Illinois who will, upon receipt of the | 9 | | property in
Illinois, temporarily store the property in | 10 | | Illinois (i) for the purpose of
subsequently transporting it | 11 | | outside this State for use or consumption
thereafter solely | 12 | | outside this State or (ii) for the purpose of being
processed, | 13 | | fabricated, or manufactured into, attached to, or incorporated | 14 | | into
other tangible personal property to be transported outside | 15 | | this State and
thereafter used or consumed solely outside this | 16 | | State. The Director of Revenue
shall, pursuant to rules adopted | 17 | | in accordance with the Illinois Administrative
Procedure Act, | 18 | | issue a permit to any taxpayer in good standing with the
| 19 | | Department who is eligible for the exemption under this | 20 | | subsection (f). The
permit issued under this subsection (f) | 21 | | shall authorize the holder, to the
extent and in the manner | 22 | | specified in the rules adopted under this Act, to
purchase | 23 | | tangible personal property from a retailer exempt from the | 24 | | taxes
imposed by this Act. Taxpayers shall maintain all | 25 | | necessary books and records
to substantiate the use and | 26 | | consumption of all such tangible personal property
outside of |
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| 1 | | the State of Illinois.
| 2 | | (Source: P.A. 97-73, eff. 6-30-11.)
| 3 | | Section 99. Effective date. This Act takes effect upon | 4 | | becoming law.
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