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 |
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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.
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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 2 | 5 | | as 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 | 9 | | power over
tangible personal property incident to the | 10 | | ownership of that property,
except that it does not include | 11 | | the sale of such property in any form as
tangible personal | 12 | | property in the regular course of business to the extent
that | 13 | | such property is not first subjected to a use for which it was
| 14 | | purchased, and does not include the use of such property by its | 15 | | owner for
demonstration purposes: Provided that the property | 16 | | purchased is deemed to
be purchased for the purpose of resale, | 17 | | despite first being used, to the
extent to which it is resold | 18 | | as an ingredient of an intentionally produced
product or | 19 | | by-product of manufacturing. "Use" does not mean the | 20 | | demonstration
use or interim use of tangible personal property | 21 | | by a retailer before he sells
that tangible personal property. | 22 | | For watercraft or aircraft, if the period of
demonstration use | 23 | | or interim use by the retailer exceeds 18 months,
the retailer
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| 1 | | shall pay on the retailers' original cost price the tax | 2 | | imposed by this Act,
and no credit for that tax is permitted if | 3 | | the watercraft or aircraft is
subsequently sold by the | 4 | | retailer. "Use" does not mean the physical
incorporation of | 5 | | tangible personal property, to the extent not first subjected
| 6 | | to a use for which it was purchased, as an ingredient or | 7 | | constituent, into
other tangible personal property (a) which | 8 | | is sold in the regular course of
business or (b) which the | 9 | | person incorporating such ingredient or constituent
therein | 10 | | has undertaken at the time of such purchase to cause to be | 11 | | transported
in interstate commerce to destinations outside the | 12 | | State of Illinois: Provided
that the property purchased is | 13 | | deemed to be purchased for the purpose of
resale, despite | 14 | | first being used, to the extent to which it is resold as an
| 15 | | ingredient of an intentionally produced product or by-product | 16 | | of manufacturing.
| 17 | | "Watercraft" means a Class 2, Class 3, or Class 4 | 18 | | watercraft as defined in
Section 3-2 of the Boat Registration | 19 | | and Safety Act, a personal watercraft, or
any boat equipped | 20 | | with an inboard motor.
| 21 | | "Purchase at retail" means the acquisition of the | 22 | | ownership of or title
to tangible personal property through a | 23 | | sale at retail.
| 24 | | "Purchaser" means anyone who, through a sale at retail, | 25 | | acquires the
ownership of tangible personal property for a | 26 | | valuable consideration.
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| 1 | | "Sale at retail" means any transfer of the ownership of or | 2 | | title to
tangible personal property to a purchaser, for the | 3 | | purpose of use, and not
for the purpose of resale in any form | 4 | | as tangible personal property to the
extent not first | 5 | | subjected to a use for which it was purchased, for a
valuable | 6 | | consideration: Provided that the property purchased is deemed | 7 | | to
be purchased for the purpose of resale, despite first being | 8 | | used, to the
extent to which it is resold as an ingredient of | 9 | | an intentionally produced
product or by-product of | 10 | | manufacturing. For this purpose, slag produced as
an incident | 11 | | to manufacturing pig iron or steel and sold is considered to be
| 12 | | an intentionally produced by-product of manufacturing. "Sale | 13 | | at retail"
includes any such transfer made for resale unless | 14 | | made in compliance with
Section 2c of the Retailers' | 15 | | Occupation Tax Act, as incorporated by
reference into Section | 16 | | 12 of this Act. Transactions whereby the possession
of the | 17 | | property is transferred but the seller retains the title as | 18 | | security
for payment of the selling price are sales.
| 19 | | "Sale at retail" shall also 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 | | "Selling price" means the consideration for a sale valued | 17 | | in money
whether received in money or otherwise, including | 18 | | cash, credits, property
other than as hereinafter provided, | 19 | | and services, but , prior to January 1, 2020, not including the
| 20 | | value of or credit given for traded-in tangible personal | 21 | | property where the
item that is traded-in is of like kind and | 22 | | character as that which is being
sold ; beginning January 1, | 23 | | 2020, "selling price" includes the portion of the value of or | 24 | | credit given for traded-in motor vehicles of the First | 25 | | Division as defined in Section 1-146 of the Illinois Vehicle | 26 | | Code of like kind and character as that which is being sold |
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| 1 | | that exceeds $10,000 . "Selling price" shall be determined | 2 | | without any deduction on account of the cost
of the property | 3 | | sold, the cost of materials used, labor or service cost or
any | 4 | | other expense whatsoever, but does not include interest or | 5 | | finance
charges which appear as separate items on the bill of | 6 | | sale or sales
contract nor charges that are added to prices by | 7 | | sellers on account of the
seller's tax liability under the | 8 | | Retailers' Occupation Tax Act, or on
account of the seller's | 9 | | duty to collect, from the purchaser, the tax that
is imposed by | 10 | | this Act, or, except as otherwise provided with respect to any | 11 | | cigarette tax imposed by a home rule unit, on account of the | 12 | | seller's tax liability under any local occupation tax | 13 | | administered by the Department, or, except as otherwise | 14 | | provided with respect to any cigarette tax imposed by a home | 15 | | rule unit on account of the seller's duty to collect, from the | 16 | | purchasers, the tax that is imposed under any local use tax | 17 | | administered by the Department. Effective December 1, 1985, | 18 | | "selling price"
shall include charges that are added to prices | 19 | | by sellers on account of the
seller's tax liability under the | 20 | | Cigarette Tax Act, on account of the seller's
duty to collect, | 21 | | from the purchaser, the tax imposed under the Cigarette Use
| 22 | | Tax Act, and on account of the seller's duty to collect, from | 23 | | the purchaser,
any cigarette tax imposed by a home rule unit.
| 24 | | Notwithstanding any law to the contrary, for any motor | 25 | | vehicle, as defined in Section 1-146 of the Vehicle Code, that | 26 | | is sold on or after January 1, 2015 for the purpose of leasing |
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| 1 | | the vehicle for a defined period that is longer than one year | 2 | | and (1) is a motor vehicle of the second division that: (A) is | 3 | | a self-contained motor vehicle designed or permanently | 4 | | converted to provide living quarters for recreational, | 5 | | camping, or travel use, with direct walk through access to the | 6 | | living quarters from the driver's seat; (B) is of the van | 7 | | configuration designed for the transportation of not less than | 8 | | 7 nor more than 16 passengers; or (C) has a gross vehicle | 9 | | weight rating of 8,000 pounds or less or (2) is a motor vehicle | 10 | | of the first division, "selling price" or "amount of sale" | 11 | | means the consideration received by the lessor pursuant to the | 12 | | lease contract, including amounts due at lease signing and all | 13 | | monthly or other regular payments charged over the term of the | 14 | | lease. Also included in the selling price is any amount | 15 | | received by the lessor from the lessee for the leased vehicle | 16 | | that is not calculated at the time the lease is executed, | 17 | | including, but not limited to, excess mileage charges and | 18 | | charges for excess wear and tear. For sales that occur in | 19 | | Illinois, with respect to any amount received by the lessor | 20 | | from the lessee for the leased vehicle that is not calculated | 21 | | at the time the lease is executed, the lessor who purchased the | 22 | | motor vehicle does not incur the tax imposed by the Use Tax Act | 23 | | on those amounts, and the retailer who makes the retail sale of | 24 | | the motor vehicle to the lessor is not required to collect the | 25 | | tax imposed by this Act or to pay the tax imposed by the | 26 | | Retailers' Occupation Tax Act on those amounts. However, the |
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| 1 | | lessor who purchased the motor vehicle assumes the liability | 2 | | for reporting and paying the tax on those amounts directly to | 3 | | the Department in the same form (Illinois Retailers' | 4 | | Occupation Tax, and local retailers' occupation taxes, if | 5 | | applicable) in which the retailer would have reported and paid | 6 | | such tax if the retailer had accounted for the tax to the | 7 | | Department. For amounts received by the lessor from the lessee | 8 | | that are not calculated at the time the lease is executed, the | 9 | | lessor must file the return and pay the tax to the Department | 10 | | by the due date otherwise required by this Act for returns | 11 | | other than transaction returns. If the retailer is entitled | 12 | | under this Act to a discount for collecting and remitting the | 13 | | tax imposed under this Act to the Department with respect to | 14 | | the sale of the motor vehicle to the lessor, then the right to | 15 | | the discount provided in this Act shall be transferred to the | 16 | | lessor with respect to the tax paid by the lessor for any | 17 | | amount received by the lessor from the lessee for the leased | 18 | | vehicle that is not calculated at the time the lease is | 19 | | executed; provided that the discount is only allowed if the | 20 | | return is timely filed and for amounts timely paid. The | 21 | | "selling price" of a motor vehicle that is sold on or after | 22 | | January 1, 2015 for the purpose of leasing for a defined period | 23 | | of longer than one year shall not be reduced by the value of or | 24 | | credit given for traded-in tangible personal property owned by | 25 | | the lessor, nor shall it be reduced by the value of or credit | 26 | | given for traded-in tangible personal property owned by the |
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| 1 | | lessee, regardless of whether the trade-in value thereof is | 2 | | assigned by the lessee to the lessor. In the case of a motor | 3 | | vehicle that is sold for the purpose of leasing for a defined | 4 | | period of longer than one year, the sale occurs at the time of | 5 | | the delivery of the vehicle, regardless of the due date of any | 6 | | lease payments. A lessor who incurs a Retailers' Occupation | 7 | | Tax liability on the sale of a motor vehicle coming off lease | 8 | | may not take a credit against that liability for the Use Tax | 9 | | the lessor paid upon the purchase of the motor vehicle (or for | 10 | | any tax the lessor paid with respect to any amount received by | 11 | | the lessor from the lessee for the leased vehicle that was not | 12 | | calculated at the time the lease was executed) if the selling | 13 | | price of the motor vehicle at the time of purchase was | 14 | | calculated using the definition of "selling price" as defined | 15 | | in this paragraph. Notwithstanding any other provision of this | 16 | | Act to the contrary, lessors shall file all returns and make | 17 | | all payments required under this paragraph to the Department | 18 | | by electronic means in the manner and form as required by the | 19 | | Department. This paragraph does not apply to leases of motor | 20 | | vehicles for which, at the time the lease is entered into, the | 21 | | term of the lease is not a defined period, including leases | 22 | | with a defined initial period with the option to continue the | 23 | | lease on a month-to-month or other basis beyond the initial | 24 | | defined period. | 25 | | The phrase "like kind and character" shall be liberally | 26 | | construed
(including but not limited to any form of motor |
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| 1 | | vehicle for any form of
motor vehicle, or any kind of farm or | 2 | | agricultural implement for any other
kind of farm or | 3 | | agricultural implement), while not including a kind of item
| 4 | | which, if sold at retail by that retailer, would be exempt from | 5 | | retailers'
occupation tax and use tax as an isolated or | 6 | | occasional sale.
| 7 | | "Department" means the Department of Revenue.
| 8 | | "Person" means any natural individual, firm, partnership, | 9 | | association,
joint stock company, joint adventure, public or | 10 | | private corporation, limited
liability company, or a
receiver, | 11 | | executor, trustee, guardian or other representative appointed
| 12 | | by order of any court.
| 13 | | "Retailer" means and includes every person engaged in the | 14 | | business 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 | 17 | | property at retail is a retailer
hereunder with respect to | 18 | | such sales (and not primarily in a service
occupation) | 19 | | notwithstanding the fact that such person designs and produces
| 20 | | such tangible personal property on special order for the | 21 | | purchaser and in
such a way as to render the property of value | 22 | | only to such purchaser, if
such tangible personal property so | 23 | | produced on special order serves
substantially the same | 24 | | function as stock or standard items of tangible
personal | 25 | | property that are sold at retail.
| 26 | | A person whose activities are organized and conducted |
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| 1 | | primarily as a
not-for-profit service enterprise, and who | 2 | | engages in selling tangible
personal property at retail | 3 | | (whether to the public or merely to members and
their guests) | 4 | | is a retailer with respect to such transactions, excepting
| 5 | | only a person organized and operated exclusively for | 6 | | charitable, religious
or educational purposes either (1), to | 7 | | the extent of sales by such person
to its members, students, | 8 | | patients or inmates of tangible personal property
to be used | 9 | | primarily for the purposes of such person, or (2), to the | 10 | | extent
of sales by such person of tangible personal property | 11 | | which is not sold or
offered for sale by persons organized for | 12 | | profit. The selling of school
books and school supplies by | 13 | | schools at retail to students is not
"primarily for the | 14 | | purposes of" the school which does such selling. This
| 15 | | paragraph does not apply to nor subject to taxation occasional | 16 | | dinners,
social or similar activities of a person organized | 17 | | and operated exclusively
for charitable, religious or | 18 | | educational purposes, whether or not such
activities are open | 19 | | to the public.
| 20 | | A person who is the recipient of a grant or contract under | 21 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | 22 | | serves meals to
participants in the federal Nutrition Program | 23 | | for the Elderly in return for
contributions established in | 24 | | amount by the individual participant pursuant
to a schedule of | 25 | | suggested fees as provided for in the federal Act is not a
| 26 | | retailer under this Act with respect to such transactions.
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| 1 | | Persons who engage in the business of transferring | 2 | | tangible personal
property upon the redemption of trading | 3 | | stamps are retailers hereunder when
engaged in such business.
| 4 | | The isolated or occasional sale of tangible personal | 5 | | property at retail
by a person who does not hold himself out as | 6 | | being engaged (or who does not
habitually engage) in selling | 7 | | such tangible personal property at retail or
a sale through a | 8 | | bulk vending machine does not make such person a retailer
| 9 | | hereunder. However, any person who is engaged in a business | 10 | | which is not
subject to the tax imposed by the Retailers' | 11 | | Occupation Tax Act because
of involving the sale of or a | 12 | | contract to sell real estate or a
construction contract to | 13 | | improve real estate, but who, in the course of
conducting such | 14 | | business, transfers tangible personal property to users or
| 15 | | consumers in the finished form in which it was purchased, and | 16 | | which does
not become real estate, under any provision of a | 17 | | construction contract or
real estate sale or real estate sales | 18 | | agreement entered into with some
other person arising out of | 19 | | or because of such nontaxable business, is a
retailer to the | 20 | | extent of the value of the tangible personal property so
| 21 | | transferred. If, in such transaction, a separate charge is | 22 | | made for the
tangible personal property so transferred, the | 23 | | value of such property, for
the purposes of this Act, is the | 24 | | amount so separately charged, but not less
than the cost of | 25 | | such property to the transferor; if no separate charge is
| 26 | | made, the value of such property, for the purposes of this Act, |
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| 1 | | is the cost
to the transferor of such tangible personal | 2 | | property.
| 3 | | "Retailer maintaining a place of business in this State", | 4 | | or any like
term, means and includes any of the following | 5 | | retailers:
| 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 | 19 | | unsorted confections, nuts, toys, or other items designed
| 20 | | primarily to be used or played with by children
which, when a | 21 | | coin or coins of a denomination not larger than $0.50 are | 22 | | inserted, are dispensed in equal portions, at random and
| 23 | | without selection by the customer.
| 24 | | (Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19; | 25 | | 101-31, eff. 1-1-20; 101-604, eff. 1-1-20.)
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| 1 | | Section 10. The Retailers' Occupation Tax Act is amended | 2 | | by 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 | 5 | | of the
ownership of or title to
tangible personal property to a | 6 | | purchaser, for the purpose of use or
consumption, and not for | 7 | | the purpose of resale in any form as tangible
personal | 8 | | property to the extent not first subjected to a use for which | 9 | | it
was purchased, for a valuable consideration: Provided that | 10 | | the property
purchased is deemed to be purchased for the | 11 | | purpose of resale, despite
first being used, to the extent to | 12 | | which it is resold as an ingredient of
an intentionally | 13 | | produced product or byproduct of manufacturing. For this
| 14 | | purpose, slag produced as an incident to manufacturing pig | 15 | | iron or steel
and sold is considered to be an intentionally | 16 | | produced byproduct of
manufacturing. Transactions whereby the | 17 | | possession of the property is
transferred but the seller | 18 | | retains the title as security for payment of the
selling price | 19 | | shall be deemed to be sales.
| 20 | | "Sale at retail" shall be construed to include any | 21 | | transfer of the
ownership of or title to tangible personal | 22 | | property to a purchaser, for use
or consumption by any other | 23 | | person to whom such purchaser may transfer the
tangible | 24 | | personal property without a valuable consideration, and to | 25 | | include
any transfer, whether made for or without a valuable |
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| 1 | | consideration, for
resale in any form as tangible personal | 2 | | property unless made in compliance
with Section 2c of this | 3 | | Act.
| 4 | | Sales of tangible personal property, which property, to | 5 | | the extent not
first subjected to a use for which it was | 6 | | purchased, as an ingredient or
constituent, goes into and | 7 | | forms a part of tangible personal property
subsequently the | 8 | | subject of a "Sale at retail", are not sales at retail as
| 9 | | defined in this Act: Provided that the property purchased is | 10 | | deemed to be
purchased for the purpose of resale, despite | 11 | | first being used, to the
extent to which it is resold as an | 12 | | ingredient of an intentionally produced
product or byproduct | 13 | | of manufacturing.
| 14 | | "Sale at retail" shall be construed to include any | 15 | | Illinois florist's
sales transaction in which the purchase | 16 | | order is received in Illinois by a
florist and the sale is for | 17 | | use or consumption, but the Illinois florist
has a florist in | 18 | | another state deliver the property to the purchaser or the
| 19 | | purchaser's donee in such other state.
| 20 | | Nonreusable tangible personal property that is used by | 21 | | persons engaged in
the business of operating a restaurant, | 22 | | cafeteria, or drive-in is a sale for
resale when it is | 23 | | transferred to customers in the ordinary course of business
as | 24 | | part of the sale of food or beverages and is used to deliver, | 25 | | package, or
consume food or beverages, regardless of where | 26 | | consumption of the food or
beverages occurs. Examples of those |
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| 1 | | items include, but are not limited to
nonreusable, paper and | 2 | | plastic cups, plates, baskets, boxes, sleeves, buckets
or | 3 | | other containers, utensils, straws, placemats, napkins, doggie | 4 | | bags, and
wrapping or packaging
materials that are transferred | 5 | | to customers as part of the sale of food or
beverages in the | 6 | | ordinary course of business.
| 7 | | The purchase, employment and transfer of such tangible | 8 | | personal property
as newsprint and ink for the primary purpose | 9 | | of conveying news (with or
without other information) is not a | 10 | | purchase, use or sale of tangible
personal property.
| 11 | | A person whose activities are organized and conducted | 12 | | primarily as a
not-for-profit service enterprise, and who | 13 | | engages in selling tangible
personal property at retail | 14 | | (whether to the public or merely to members and
their guests) | 15 | | is engaged in the business of selling tangible personal
| 16 | | property at retail with respect to such transactions, | 17 | | excepting only a
person organized and operated exclusively for | 18 | | charitable, religious or
educational purposes either (1), to | 19 | | the extent of sales by such person to
its members, students, | 20 | | patients or inmates of tangible personal property to
be used | 21 | | primarily for the purposes of such person, or (2), to the | 22 | | extent of
sales by such person of tangible personal property | 23 | | which is not sold or
offered for sale by persons organized for | 24 | | profit. The selling of school
books and school supplies by | 25 | | schools at retail to students is not
"primarily for the | 26 | | purposes of" the school which does such selling. The
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| 1 | | provisions of this paragraph shall not apply to nor subject to | 2 | | taxation
occasional dinners, socials or similar activities of | 3 | | a person organized and
operated exclusively for charitable, | 4 | | religious or educational purposes,
whether or not such | 5 | | activities are open to the public.
| 6 | | A person who is the recipient of a grant or contract under | 7 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | 8 | | serves meals to
participants in the federal Nutrition Program | 9 | | for the Elderly in return for
contributions established in | 10 | | amount by the individual participant pursuant
to a schedule of | 11 | | suggested fees as provided for in the federal Act is not
| 12 | | engaged in the business of selling tangible personal property | 13 | | at retail
with respect to such transactions.
| 14 | | "Purchaser" means anyone who, through a sale at retail, | 15 | | acquires the
ownership of or title to tangible personal | 16 | | property for a valuable
consideration.
| 17 | | "Reseller of motor fuel" means any person engaged in the | 18 | | business of selling
or delivering or transferring title of | 19 | | motor fuel to another person
other than for use or | 20 | | consumption.
No person shall act as a reseller of motor fuel | 21 | | within this State without
first being registered as a reseller | 22 | | pursuant to Section 2c or a retailer
pursuant to Section 2a.
| 23 | | "Selling price" or the "amount of sale" means the | 24 | | consideration for a
sale valued in money whether received in | 25 | | money or otherwise, including
cash, credits, property, other | 26 | | than as hereinafter provided, and services,
but , prior to |
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| 1 | | January 1, 2020, not including the value of or credit given for | 2 | | traded-in tangible
personal property where the item that is | 3 | | traded-in is of like kind and
character as that which is being | 4 | | sold ; beginning January 1, 2020, "selling price" includes the | 5 | | portion of the value of or credit given for traded-in motor | 6 | | vehicles of the First Division as defined in Section 1-146 of | 7 | | the Illinois Vehicle Code of like kind and character as that | 8 | | which is being sold that exceeds $10,000 . "Selling price" | 9 | | shall be determined without any
deduction on account of the | 10 | | cost of the property sold, the cost of
materials used, labor or | 11 | | service cost or any other expense whatsoever, but
does not | 12 | | include charges that are added to prices by sellers on account | 13 | | of
the seller's tax liability under this Act, or on account of | 14 | | the seller's
duty to collect, from the purchaser, the tax that | 15 | | is imposed by the Use Tax
Act, or, except as otherwise provided | 16 | | with respect to any cigarette tax imposed by a home rule unit, | 17 | | on account of the seller's tax liability under any local | 18 | | occupation tax administered by the Department, or, except as | 19 | | otherwise provided with respect to any cigarette tax imposed | 20 | | by a home rule unit on account of the seller's duty to collect, | 21 | | from the purchasers, the tax that is imposed under any local | 22 | | use tax administered by the Department.
Effective December 1, | 23 | | 1985, "selling price" shall include charges that
are added to | 24 | | prices by sellers on account of the seller's
tax liability | 25 | | under the Cigarette Tax Act, on account of the sellers'
duty to | 26 | | collect, from the purchaser, the tax imposed under the |
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| 1 | | Cigarette
Use Tax Act, and on account of the seller's duty to | 2 | | collect, from the
purchaser, any cigarette tax imposed by a | 3 | | home rule unit.
| 4 | | Notwithstanding any law to the contrary, for any motor | 5 | | vehicle, as defined in Section 1-146 of the Vehicle Code, that | 6 | | is sold on or after January 1, 2015 for the purpose of leasing | 7 | | the vehicle for a defined period that is longer than one year | 8 | | and (1) is a motor vehicle of the second division that: (A) is | 9 | | a self-contained motor vehicle designed or permanently | 10 | | converted to provide living quarters for recreational, | 11 | | camping, or travel use, with direct walk through access to the | 12 | | living quarters from the driver's seat; (B) is of the van | 13 | | configuration designed for the transportation of not less than | 14 | | 7 nor more than 16 passengers; or (C) has a gross vehicle | 15 | | weight rating of 8,000 pounds or less or (2) is a motor vehicle | 16 | | of the first division, "selling price" or "amount of sale" | 17 | | means the consideration received by the lessor pursuant to the | 18 | | lease contract, including amounts due at lease signing and all | 19 | | monthly or other regular payments charged over the term of the | 20 | | lease. Also included in the selling price is any amount | 21 | | received by the lessor from the lessee for the leased vehicle | 22 | | that is not calculated at the time the lease is executed, | 23 | | including, but not limited to, excess mileage charges and | 24 | | charges for excess wear and tear. For sales that occur in | 25 | | Illinois, with respect to any amount received by the lessor | 26 | | from the lessee for the leased vehicle that is not calculated |
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| 1 | | at the time the lease is executed, the lessor who purchased the | 2 | | motor vehicle does not incur the tax imposed by the Use Tax Act | 3 | | on those amounts, and the retailer who makes the retail sale of | 4 | | the motor vehicle to the lessor is not required to collect the | 5 | | tax imposed by the Use Tax Act or to pay the tax imposed by | 6 | | this Act on those amounts. However, the lessor who purchased | 7 | | the motor vehicle assumes the liability for reporting and | 8 | | paying the tax on those amounts directly to the Department in | 9 | | the same form (Illinois Retailers' Occupation Tax, and local | 10 | | retailers' occupation taxes, if applicable) in which the | 11 | | retailer would have reported and paid such tax if the retailer | 12 | | had accounted for the tax to the Department. For amounts | 13 | | received by the lessor from the lessee that are not calculated | 14 | | at the time the lease is executed, the lessor must file the | 15 | | return and pay the tax to the Department by the due date | 16 | | otherwise required by this Act for returns other than | 17 | | transaction returns. If the retailer is entitled under this | 18 | | Act to a discount for collecting and remitting the tax imposed | 19 | | under this Act to the Department with respect to the sale of | 20 | | the motor vehicle to the lessor, then the right to the discount | 21 | | provided in this Act shall be transferred to the lessor with | 22 | | respect to the tax paid by the lessor for any amount received | 23 | | by the lessor from the lessee for the leased vehicle that is | 24 | | not calculated at the time the lease is executed; provided | 25 | | that the discount is only allowed if the return is timely filed | 26 | | and for amounts timely paid. The "selling price" of a motor |
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| 1 | | vehicle that is sold on or after January 1, 2015 for the | 2 | | purpose of leasing for a defined period of longer than one year | 3 | | shall not be reduced by the value of or credit given for | 4 | | traded-in tangible personal property owned by the lessor, nor | 5 | | shall it be reduced by the value of or credit given for | 6 | | traded-in tangible personal property owned by the lessee, | 7 | | regardless of whether the trade-in value thereof is assigned | 8 | | by the lessee to the lessor. In the case of a motor vehicle | 9 | | that is sold for the purpose of leasing for a defined period of | 10 | | longer than one year, the sale occurs at the time of the | 11 | | delivery of the vehicle, regardless of the due date of any | 12 | | lease payments. A lessor who incurs a Retailers' Occupation | 13 | | Tax liability on the sale of a motor vehicle coming off lease | 14 | | may not take a credit against that liability for the Use Tax | 15 | | the lessor paid upon the purchase of the motor vehicle (or for | 16 | | any tax the lessor paid with respect to any amount received by | 17 | | the lessor from the lessee for the leased vehicle that was not | 18 | | calculated at the time the lease was executed) if the selling | 19 | | price of the motor vehicle at the time of purchase was | 20 | | calculated using the definition of "selling price" as defined | 21 | | in this paragraph.
Notwithstanding any other provision of this | 22 | | Act to the contrary, lessors shall file all returns and make | 23 | | all payments required under this paragraph to the Department | 24 | | by electronic means in the manner and form as required by the | 25 | | Department. This paragraph does not apply to leases of motor | 26 | | vehicles for which, at the time the lease is entered into, the |
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| 1 | | term of the lease is not a defined period, including leases | 2 | | with a defined initial period with the option to continue the | 3 | | lease on a month-to-month or other basis beyond the initial | 4 | | defined period. | 5 | | The phrase "like kind and character" shall be liberally | 6 | | construed
(including but not limited to any form of motor | 7 | | vehicle for any form of
motor vehicle, or any kind of farm or | 8 | | agricultural implement for any other
kind of farm or | 9 | | agricultural implement), while not including a kind of item
| 10 | | which, if sold at retail by that retailer, would be exempt from | 11 | | retailers'
occupation tax and use tax as an isolated or | 12 | | occasional sale.
| 13 | | "Gross receipts" from the sales of tangible personal | 14 | | property at retail
means the total selling price or the amount | 15 | | of such sales, as hereinbefore
defined. In the case of charge | 16 | | and time sales, the amount thereof shall be
included only as | 17 | | and when payments are received by the seller.
Receipts or | 18 | | other consideration derived by a seller from
the sale, | 19 | | transfer or assignment of accounts receivable to a wholly | 20 | | owned
subsidiary will not be deemed payments prior to the time | 21 | | the purchaser
makes payment on such accounts.
| 22 | | "Department" means the Department of Revenue.
| 23 | | "Person" means any natural individual, firm, partnership, | 24 | | association,
joint stock company, joint adventure, public or | 25 | | private corporation, limited
liability company, or a receiver, | 26 | | executor, trustee, guardian or other
representative appointed |
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| 1 | | by order of any court.
| 2 | | The isolated or occasional sale of tangible personal | 3 | | property at retail
by a person who does not hold himself out as | 4 | | being engaged (or who does not
habitually engage) in selling | 5 | | such tangible personal property at retail, or
a sale through a | 6 | | bulk vending machine, does not constitute engaging in a
| 7 | | business of selling such tangible personal property at retail | 8 | | within the
meaning of this Act; provided that any person who is | 9 | | engaged in a business
which is not subject to the tax imposed | 10 | | by this Act because of involving
the sale of or a contract to | 11 | | sell real estate or a construction contract to
improve real | 12 | | estate or a construction contract to engineer, install, and
| 13 | | maintain an integrated system of products, but who, in the | 14 | | course of
conducting such business,
transfers tangible | 15 | | personal property to users or consumers in the finished
form | 16 | | in which it was purchased, and which does not become real | 17 | | estate or was
not engineered and installed, under any | 18 | | provision of a construction contract or
real estate sale or | 19 | | real estate sales agreement entered into with some other
| 20 | | person arising out of or because of such nontaxable business, | 21 | | is engaged in the
business of selling tangible personal | 22 | | property at retail to the extent of the
value of the tangible | 23 | | personal property so transferred. If, in such a
transaction, a | 24 | | separate charge is made for the tangible personal property so
| 25 | | transferred, the value of such property, for the purpose of | 26 | | this Act, shall be
the amount so separately charged, but not |
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| 1 | | less than the cost of such property
to the transferor; if no | 2 | | separate charge is made, the value of such property,
for the | 3 | | purposes of this Act, is the cost to the transferor of such | 4 | | tangible
personal property. Construction contracts for the | 5 | | improvement of real estate
consisting of engineering, | 6 | | installation, and maintenance of voice, data, video,
security, | 7 | | and all telecommunication systems do not constitute engaging | 8 | | in a
business of selling tangible personal property at retail | 9 | | within the meaning of
this Act if they are sold at one | 10 | | specified contract price.
| 11 | | A person who holds himself or herself out as being engaged | 12 | | (or who habitually
engages) in selling tangible personal | 13 | | property at retail is a person
engaged in the business of | 14 | | selling tangible personal property at retail
hereunder with | 15 | | respect to such sales (and not primarily in a service
| 16 | | occupation) notwithstanding the fact that such person designs | 17 | | and produces
such tangible personal property on special order | 18 | | for the purchaser and in
such a way as to render the property | 19 | | of value only to such purchaser, if
such tangible personal | 20 | | property so produced on special order serves
substantially the | 21 | | same function as stock or standard items of tangible
personal | 22 | | property that are sold at retail.
| 23 | | Persons who engage in the business of transferring | 24 | | tangible personal
property upon the redemption of trading | 25 | | stamps are engaged in the business
of selling such property at | 26 | | retail and shall be liable for and shall pay
the tax imposed by |
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| 1 | | this Act on the basis of the retail value of the
property | 2 | | transferred upon redemption of such stamps.
| 3 | | "Bulk vending machine" means a vending machine,
containing | 4 | | unsorted confections, nuts, toys, or other items designed
| 5 | | primarily to be used or played with by children
which, when a | 6 | | coin or coins of a denomination not larger than $0.50 are
| 7 | | inserted, are dispensed in equal portions, at random and
| 8 | | without selection by the customer.
| 9 | | "Remote retailer" means a retailer that does not maintain | 10 | | within this State, directly or by a subsidiary, an office, | 11 | | distribution house, sales house, warehouse or other place of | 12 | | business, or any agent or other representative operating | 13 | | within this State under the authority of the retailer or its | 14 | | subsidiary, irrespective of whether such place of business or | 15 | | agent is located here permanently or temporarily or whether | 16 | | such retailer or subsidiary is licensed to do business in this | 17 | | State. | 18 | | "Marketplace" means a physical or electronic place, forum, | 19 | | platform, application, or other method by which a marketplace | 20 | | seller sells or offers to sell items. | 21 | | "Marketplace facilitator" means a person who, pursuant to | 22 | | an agreement with an unrelated third-party marketplace seller, | 23 | | directly or indirectly through one or more affiliates | 24 | | facilitates a retail sale by an unrelated third party | 25 | | marketplace seller by: | 26 | | (1) listing or advertising for sale by the marketplace |
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| 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 | 10 | | listing products for sale, is not considered a marketplace | 11 | | facilitator, so long as the advertising service platform or | 12 | | forum does not engage, directly or indirectly through one or | 13 | | more affiliated persons, in the activities described in | 14 | | paragraph (2) of this definition of "marketplace facilitator". | 15 | | "Marketplace seller" means a person that makes sales | 16 | | through a marketplace operated by an unrelated third party | 17 | | marketplace 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 | 20 | | becoming law.
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