Full Text of HB3891 101st General Assembly
HB3891 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 HB3891 Introduced 10/17/2019, by Rep. Ryan Spain - Grant Wehrli, Andrew S. Chesney and Tony McCombie 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 ownership | 10 | | of that property,
except that it does not include the sale of | 11 | | such property in any form as
tangible personal property in the | 12 | | regular course of business to the extent
that such property is | 13 | | not first subjected to a use for which it was
purchased, and | 14 | | does not include the use of such property by its owner for
| 15 | | demonstration purposes: Provided that the property purchased | 16 | | is deemed to
be purchased for the purpose of resale, despite | 17 | | first being used, to the
extent to which it is resold as an | 18 | | ingredient of an intentionally produced
product or by-product | 19 | | of manufacturing. "Use" does not mean the demonstration
use or | 20 | | interim use of tangible personal property by a retailer before | 21 | | he sells
that tangible personal property. For watercraft or | 22 | | aircraft, if the period of
demonstration use or interim use by | 23 | | the retailer exceeds 18 months,
the retailer
shall pay on the |
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| 1 | | retailers' original cost price the tax imposed by this Act,
and | 2 | | no credit for that tax is permitted if the watercraft or | 3 | | aircraft is
subsequently sold by the retailer. "Use" does not | 4 | | mean the physical
incorporation of tangible personal property, | 5 | | to the extent not first subjected
to a use for which it was | 6 | | purchased, as an ingredient or constituent, into
other tangible | 7 | | personal property (a) which is sold in the regular course of
| 8 | | business or (b) which the person incorporating such ingredient | 9 | | or constituent
therein has undertaken at the time of such | 10 | | purchase to cause to be transported
in interstate commerce to | 11 | | destinations outside the State of Illinois: Provided
that the | 12 | | property purchased is deemed to be purchased for the purpose of
| 13 | | resale, despite first being used, to the extent to which it is | 14 | | resold as an
ingredient of an intentionally produced product or | 15 | | by-product of manufacturing.
| 16 | | "Watercraft" means a Class 2, Class 3, or Class 4 | 17 | | watercraft as defined in
Section 3-2 of the Boat Registration | 18 | | and Safety Act, a personal watercraft, or
any boat equipped | 19 | | with an inboard motor.
| 20 | | "Purchase at retail" means the acquisition of the ownership | 21 | | of or title
to tangible personal property through a sale at | 22 | | retail.
| 23 | | "Purchaser" means anyone who, through a sale at retail, | 24 | | acquires the
ownership of tangible personal property for a | 25 | | valuable consideration.
| 26 | | "Sale at retail" means any transfer of the ownership of or |
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| 1 | | title to
tangible personal property to a purchaser, for the | 2 | | purpose of use, and not
for the purpose of resale in any form | 3 | | as tangible personal property to the
extent not first subjected | 4 | | to a use for which it was purchased, for a
valuable | 5 | | consideration: Provided that the property purchased is deemed | 6 | | to
be purchased for the purpose of resale, despite first being | 7 | | used, to the
extent to which it is resold as an ingredient of | 8 | | an intentionally produced
product or by-product of | 9 | | manufacturing. For this purpose, slag produced as
an incident | 10 | | to manufacturing pig iron or steel and sold is considered to be
| 11 | | an intentionally produced by-product of manufacturing. "Sale | 12 | | at retail"
includes any such transfer made for resale unless | 13 | | made in compliance with
Section 2c of the Retailers' Occupation | 14 | | Tax Act, as incorporated by
reference into Section 12 of this | 15 | | Act. Transactions whereby the possession
of the property is | 16 | | transferred but the seller retains the title as security
for | 17 | | payment of the selling price are sales.
| 18 | | "Sale at retail" shall also be construed to include any | 19 | | Illinois
florist's sales transaction in which the purchase | 20 | | order is received in
Illinois by a florist and the sale is for | 21 | | use or consumption, but the
Illinois florist has a florist in | 22 | | another state deliver the property to the
purchaser or the | 23 | | purchaser's donee in such other state.
| 24 | | Nonreusable tangible personal property that is used by | 25 | | persons engaged in
the business of operating a restaurant, | 26 | | cafeteria, or drive-in is a sale for
resale when it is |
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| 1 | | transferred to customers in the ordinary course of business
as | 2 | | part of the sale of food or beverages and is used to deliver, | 3 | | package, or
consume food or beverages, regardless of where | 4 | | consumption of the food or
beverages occurs. Examples of those | 5 | | items include, but are not limited to
nonreusable, paper and | 6 | | plastic cups, plates, baskets, boxes, sleeves, buckets
or other | 7 | | containers, utensils, straws, placemats, napkins, doggie bags, | 8 | | and
wrapping or packaging
materials that are transferred to | 9 | | customers as part of the sale of food or
beverages in the | 10 | | ordinary course of business.
| 11 | | The purchase, employment and transfer of such tangible | 12 | | personal property
as newsprint and ink for the primary purpose | 13 | | of conveying news (with or
without other information) is not a | 14 | | purchase, use or sale of tangible
personal property.
| 15 | | "Selling price" means the consideration for a sale valued | 16 | | in money
whether received in money or otherwise, including | 17 | | cash, credits, property
other than as hereinafter provided, and | 18 | | services, but , prior to January 1, 2020, not including the
| 19 | | value of or credit given for traded-in tangible personal | 20 | | property where the
item that is traded-in is of like kind and | 21 | | character as that which is being
sold ; beginning January 1, | 22 | | 2020, "selling price" includes the portion of the value of or | 23 | | credit given for traded-in motor vehicles of the First Division | 24 | | as defined in Section 1-146 of the Illinois Vehicle Code of | 25 | | like kind and character as that which is being sold that | 26 | | exceeds $10,000 . "Selling price" shall be determined without |
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| 1 | | any deduction on account of the cost
of the property sold, the | 2 | | cost of materials used, labor or service cost or
any other | 3 | | expense whatsoever, but does not include interest or finance
| 4 | | charges which appear as separate items on the bill of sale or | 5 | | sales
contract nor charges that are added to prices by sellers | 6 | | on account of the
seller's tax liability under the " Retailers' | 7 | | Occupation Tax Act " , or on
account of the seller's duty to | 8 | | collect, from the purchaser, the tax that
is imposed by this | 9 | | Act, or, except as otherwise provided with respect to any | 10 | | cigarette tax imposed by a home rule unit, on account of the | 11 | | seller's tax liability under any local occupation tax | 12 | | administered by the Department, or, except as otherwise | 13 | | provided with respect to any cigarette tax imposed by a home | 14 | | rule unit on account of the seller's duty to collect, from the | 15 | | purchasers, the tax that is imposed under any local use tax | 16 | | administered by the Department. Effective December 1, 1985, | 17 | | "selling price"
shall include charges that are added to prices | 18 | | by sellers on account of the
seller's tax liability under the | 19 | | Cigarette Tax Act, on account of the seller's
duty to collect, | 20 | | from the purchaser, the tax imposed under the Cigarette Use
Tax | 21 | | Act, and on account of the seller's duty to collect, from the | 22 | | purchaser,
any cigarette tax imposed by a home rule unit.
| 23 | | Notwithstanding any law to the contrary, for any motor | 24 | | vehicle, as defined in Section 1-146 of the Vehicle Code, that | 25 | | is sold on or after January 1, 2015 for the purpose of leasing | 26 | | the vehicle for a defined period that is longer than one year |
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| 1 | | and (1) is a motor vehicle of the second division that: (A) is | 2 | | a self-contained motor vehicle designed or permanently | 3 | | converted to provide living quarters for recreational, | 4 | | camping, or travel use, with direct walk through access to the | 5 | | living quarters from the driver's seat; (B) is of the van | 6 | | configuration designed for the transportation of not less than | 7 | | 7 nor more than 16 passengers; or (C) has a gross vehicle | 8 | | weight rating of 8,000 pounds or less or (2) is a motor vehicle | 9 | | of the first division, "selling price" or "amount of sale" | 10 | | means the consideration received by the lessor pursuant to the | 11 | | lease contract, including amounts due at lease signing and all | 12 | | monthly or other regular payments charged over the term of the | 13 | | lease. Also included in the selling price is any amount | 14 | | received by the lessor from the lessee for the leased vehicle | 15 | | that is not calculated at the time the lease is executed, | 16 | | including, but not limited to, excess mileage charges and | 17 | | charges for excess wear and tear. For sales that occur in | 18 | | Illinois, with respect to any amount received by the lessor | 19 | | from the lessee for the leased vehicle that is not calculated | 20 | | at the time the lease is executed, the lessor who purchased the | 21 | | motor vehicle does not incur the tax imposed by the Use Tax Act | 22 | | on those amounts, and the retailer who makes the retail sale of | 23 | | the motor vehicle to the lessor is not required to collect the | 24 | | tax imposed by this Act or to pay the tax imposed by the | 25 | | Retailers' Occupation Tax Act on those amounts. However, the | 26 | | lessor who purchased the motor vehicle assumes the liability |
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| 1 | | for reporting and paying the tax on those amounts directly to | 2 | | the Department in the same form (Illinois Retailers' Occupation | 3 | | Tax, and local retailers' occupation taxes, if applicable) in | 4 | | which the retailer would have reported and paid such tax if the | 5 | | retailer had accounted for the tax to the Department. For | 6 | | amounts received by the lessor from the lessee that are not | 7 | | calculated at the time the lease is executed, the lessor must | 8 | | file the return and pay the tax to the Department by the due | 9 | | date otherwise required by this Act for returns other than | 10 | | transaction returns. If the retailer is entitled under this Act | 11 | | to a discount for collecting and remitting the tax imposed | 12 | | under this Act to the Department with respect to the sale of | 13 | | the motor vehicle to the lessor, then the right to the discount | 14 | | provided in this Act shall be transferred to the lessor with | 15 | | respect to the tax paid by the lessor for any amount received | 16 | | by the lessor from the lessee for the leased vehicle that is | 17 | | not calculated at the time the lease is executed; provided that | 18 | | the discount is only allowed if the return is timely filed and | 19 | | for amounts timely paid. The "selling price" of a motor vehicle | 20 | | that is sold on or after January 1, 2015 for the purpose of | 21 | | leasing for a defined period of longer than one year shall not | 22 | | be reduced by the value of or credit given for traded-in | 23 | | tangible personal property owned by the lessor, nor shall it be | 24 | | reduced by the value of or credit given for traded-in tangible | 25 | | personal property owned by the lessee, regardless of whether | 26 | | the trade-in value thereof is assigned by the lessee to the |
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| 1 | | lessor. In the case of a motor vehicle that is sold for the | 2 | | purpose of leasing for a defined period of longer than one | 3 | | year, the sale occurs at the time of the delivery of the | 4 | | vehicle, regardless of the due date of any lease payments. A | 5 | | lessor who incurs a Retailers' Occupation Tax liability on the | 6 | | sale of a motor vehicle coming off lease may not take a credit | 7 | | against that liability for the Use Tax the lessor paid upon the | 8 | | purchase of the motor vehicle (or for any tax the lessor paid | 9 | | with respect to any amount received by the lessor from the | 10 | | lessee for the leased vehicle that was not calculated at the | 11 | | time the lease was executed) if the selling price of the motor | 12 | | vehicle at the time of purchase was calculated using the | 13 | | definition of "selling price" as defined in this paragraph. | 14 | | Notwithstanding any other provision of this Act to the | 15 | | contrary, lessors shall file all returns and make all payments | 16 | | required under this paragraph to the Department by electronic | 17 | | means in the manner and form as required by the Department. | 18 | | This paragraph does not apply to leases of motor vehicles for | 19 | | which, at the time the lease is entered into, the term of the | 20 | | lease is not a defined period, including leases with a defined | 21 | | initial period with the option to continue the lease on a | 22 | | month-to-month or other basis beyond the initial defined | 23 | | period. | 24 | | The phrase "like kind and character" shall be liberally | 25 | | construed
(including but not limited to any form of motor | 26 | | vehicle for any form of
motor vehicle, or any kind of farm or |
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| 1 | | agricultural implement for any other
kind of farm or | 2 | | agricultural implement), while not including a kind of item
| 3 | | which, if sold at retail by that retailer, would be exempt from | 4 | | retailers'
occupation tax and use tax as an isolated or | 5 | | occasional sale.
| 6 | | "Department" means the Department of Revenue.
| 7 | | "Person" means any natural individual, firm, partnership, | 8 | | association,
joint stock company, joint adventure, public or | 9 | | private corporation, limited
liability company, or a
receiver, | 10 | | executor, trustee, guardian or other representative appointed
| 11 | | by order of any court.
| 12 | | "Retailer" means and includes every person engaged in the | 13 | | business of
making sales at retail as defined in this Section.
| 14 | | A person who holds himself or herself out as being engaged | 15 | | (or who habitually
engages) in selling tangible personal | 16 | | property at retail is a retailer
hereunder with respect to such | 17 | | sales (and not primarily in a service
occupation) | 18 | | notwithstanding the fact that such person designs and produces
| 19 | | such tangible personal property on special order for the | 20 | | purchaser and in
such a way as to render the property of value | 21 | | only to such purchaser, if
such tangible personal property so | 22 | | produced on special order serves
substantially the same | 23 | | function as stock or standard items of tangible
personal | 24 | | property that are sold at retail.
| 25 | | A person whose activities are organized and conducted | 26 | | primarily as a
not-for-profit service enterprise, and who |
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| 1 | | engages in selling tangible
personal property at retail | 2 | | (whether to the public or merely to members and
their guests) | 3 | | is a retailer with respect to such transactions, excepting
only | 4 | | a person organized and operated exclusively for charitable, | 5 | | religious
or educational purposes either (1), to the extent of | 6 | | sales by such person
to its members, students, patients or | 7 | | inmates of tangible personal property
to be used primarily for | 8 | | the purposes of such person, or (2), to the extent
of sales by | 9 | | such person of tangible personal property which is not sold or
| 10 | | offered for sale by persons organized for profit. The selling | 11 | | of school
books and school supplies by schools at retail to | 12 | | students is not
"primarily for the purposes of" the school | 13 | | which does such selling. This
paragraph does not apply to nor | 14 | | subject to taxation occasional dinners,
social or similar | 15 | | activities of a person organized and operated exclusively
for | 16 | | charitable, religious or educational purposes, whether or not | 17 | | such
activities are open to the public.
| 18 | | A person who is the recipient of a grant or contract under | 19 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | 20 | | serves meals to
participants in the federal Nutrition Program | 21 | | for the Elderly in return for
contributions established in | 22 | | amount by the individual participant pursuant
to a schedule of | 23 | | suggested fees as provided for in the federal Act is not a
| 24 | | retailer under this Act with respect to such transactions.
| 25 | | Persons who engage in the business of transferring tangible | 26 | | personal
property upon the redemption of trading stamps are |
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| 1 | | retailers hereunder when
engaged in such business.
| 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 make such person a retailer
| 7 | | hereunder. However, any person who is engaged in a business | 8 | | which is not
subject to the tax imposed by the " Retailers' | 9 | | Occupation Tax Act " because
of involving the sale of or a | 10 | | contract to sell real estate or a
construction contract to | 11 | | improve real estate, but who, in the course of
conducting such | 12 | | business, transfers tangible personal property to users or
| 13 | | consumers in the finished form in which it was purchased, and | 14 | | which does
not become real estate, under any provision of a | 15 | | construction contract or
real estate sale or real estate sales | 16 | | agreement entered into with some
other person arising out of or | 17 | | because of such nontaxable business, is a
retailer to the | 18 | | extent of the value of the tangible personal property so
| 19 | | transferred. If, in such transaction, a separate charge is made | 20 | | for the
tangible personal property so transferred, the value of | 21 | | such property, for
the purposes of this Act, is the amount so | 22 | | separately charged, but not less
than the cost of such property | 23 | | to the transferor; if no separate charge is
made, the value of | 24 | | such property, for the purposes of this Act, is the cost
to the | 25 | | transferor of such tangible personal property.
| 26 | | "Retailer maintaining a place of business in this State", |
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| 1 | | or any like
term, means and includes any of the following | 2 | | retailers:
| 3 | | (1) A retailer having or maintaining within this State, | 4 | | directly or by
a subsidiary, an office, distribution house, | 5 | | sales house, warehouse or other
place of business, or any | 6 | | agent or other representative operating within this
State | 7 | | under the authority of the retailer or its subsidiary, | 8 | | irrespective of
whether such place of business or agent or | 9 | | other representative is located here
permanently or | 10 | | temporarily, or whether such retailer or subsidiary is | 11 | | licensed
to do business in this State. However, the | 12 | | ownership of property that is
located at the premises of a | 13 | | printer with which the retailer has contracted for
printing | 14 | | and that consists of the final printed product, property | 15 | | that becomes
a part of the final printed product, or copy | 16 | | from which the printed product is
produced shall not result | 17 | | in the retailer being deemed to have or maintain an
office, | 18 | | distribution house, sales house, warehouse, or other place | 19 | | of business
within this State. | 20 | | (1.1) (Blank). | 21 | | (1.2) (Blank).
| 22 | | (2) (Blank).
| 23 | | (3) (Blank).
| 24 | | (4) (Blank).
| 25 | | (5) (Blank).
| 26 | | (6) (Blank).
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| 1 | | (7) (Blank).
| 2 | | (8) (Blank).
| 3 | | (9) Beginning October 1, 2018 through June 30, 2020, a | 4 | | retailer making sales of tangible personal property to | 5 | | purchasers in Illinois from outside of Illinois if: | 6 | | (A) the cumulative gross receipts from sales of | 7 | | tangible personal property to purchasers in Illinois | 8 | | are $100,000 or more; or | 9 | | (B) the retailer enters into 200 or more separate | 10 | | transactions for the sale of tangible personal | 11 | | property to purchasers in Illinois. | 12 | | The retailer shall determine on a quarterly basis, | 13 | | ending on the last day of March, June, September, and | 14 | | December, whether he or she meets the criteria of either | 15 | | subparagraph (A) or (B) of this paragraph (9) for the | 16 | | preceding 12-month period. If the retailer meets the | 17 | | criteria of either subparagraph (A) or (B) for a 12-month | 18 | | period, he or she is considered a retailer maintaining a | 19 | | place of business in this State and is required to collect | 20 | | and remit the tax imposed under this Act and file returns | 21 | | for one year. At the end of that one-year period, the | 22 | | retailer shall determine whether the retailer met the | 23 | | criteria of either subparagraph (A) or (B) during the | 24 | | preceding 12-month period. If the retailer met the criteria | 25 | | in either subparagraph (A) or (B) for the preceding | 26 | | 12-month period, he or she is considered a retailer |
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| 1 | | maintaining a place of business in this State and is | 2 | | required to collect and remit the tax imposed under this | 3 | | Act and file returns for the subsequent year. If at the end | 4 | | of a one-year period a retailer that was required to | 5 | | collect and remit the tax imposed under this Act determines | 6 | | that he or she did not meet the criteria in either | 7 | | subparagraph (A) or (B) during the preceding 12-month | 8 | | period, the retailer shall subsequently determine on a | 9 | | quarterly basis, ending on the last day of March, June, | 10 | | September, and December, whether he or she meets the | 11 | | criteria of either subparagraph (A) or (B) for the | 12 | | preceding 12-month period. | 13 | | Beginning January 1, 2020, neither the gross receipts | 14 | | from nor the number of separate transactions for sales of | 15 | | tangible personal property to purchasers in Illinois that a | 16 | | retailer makes through a marketplace facilitator and for | 17 | | which the retailer has received a certification from the | 18 | | marketplace facilitator pursuant to Section 2d of this Act | 19 | | shall be included for purposes of determining whether he or | 20 | | she has met the thresholds of this paragraph (9). | 21 | | (10) Beginning January 1, 2020, a marketplace | 22 | | facilitator, as defined in Section 2d of this Act. | 23 | | "Bulk vending machine" means a vending machine,
containing | 24 | | unsorted confections, nuts, toys, or other items designed
| 25 | | primarily to be used or played with by children
which, when a | 26 | | coin or coins of a denomination not larger than $0.50 are |
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| 1 | | inserted, are dispensed in equal portions, at random and
| 2 | | without selection by the customer.
| 3 | | (Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19; 101-31, | 4 | | eff. 1-1-20; revised 7-11-19.)
| 5 | | Section 10. The Retailers' Occupation Tax Act is amended by | 6 | | changing Section 1 as follows:
| 7 | | (35 ILCS 120/1) (from Ch. 120, par. 440)
| 8 | | Sec. 1. Definitions. "Sale at retail" means any transfer of | 9 | | the
ownership of or title to
tangible personal property to a | 10 | | purchaser, for the purpose of use or
consumption, and not for | 11 | | the purpose of resale in any form as tangible
personal property | 12 | | to the extent not first subjected to a use for which it
was | 13 | | purchased, for a valuable consideration: Provided that the | 14 | | property
purchased is deemed to be purchased for the purpose of | 15 | | resale, despite
first being used, to the extent to which it is | 16 | | resold as an ingredient of
an intentionally produced product or | 17 | | byproduct of manufacturing. For this
purpose, slag produced as | 18 | | an incident to manufacturing pig iron or steel
and sold is | 19 | | considered to be an intentionally produced byproduct of
| 20 | | manufacturing. Transactions whereby the possession of the | 21 | | property is
transferred but the seller retains the title as | 22 | | security for payment of the
selling price shall be deemed to be | 23 | | sales.
| 24 | | "Sale at retail" shall be construed to include any transfer |
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| 1 | | of the
ownership of or title to tangible personal property to a | 2 | | purchaser, for use
or consumption by any other person to whom | 3 | | such purchaser may transfer the
tangible personal property | 4 | | without a valuable consideration, and to include
any transfer, | 5 | | whether made for or without a valuable consideration, for
| 6 | | resale in any form as tangible personal property unless made in | 7 | | compliance
with Section 2c of this Act.
| 8 | | Sales of tangible personal property, which property, to the | 9 | | extent not
first subjected to a use for which it was purchased, | 10 | | as an ingredient or
constituent, goes into and forms a part of | 11 | | tangible personal property
subsequently the subject of a "Sale | 12 | | at retail", are not sales at retail as
defined in this Act: | 13 | | Provided that the property purchased is deemed to be
purchased | 14 | | for the purpose of resale, despite first being used, to the
| 15 | | extent to which it is resold as an ingredient of an | 16 | | intentionally produced
product or byproduct of manufacturing.
| 17 | | "Sale at retail" shall be construed to include any Illinois | 18 | | florist's
sales transaction in which the purchase order is | 19 | | received in Illinois by a
florist and the sale is for use or | 20 | | consumption, but the Illinois florist
has a florist in another | 21 | | state deliver the property to the purchaser or the
purchaser's | 22 | | donee in such other state.
| 23 | | Nonreusable tangible personal property that is used by | 24 | | persons engaged in
the business of operating a restaurant, | 25 | | cafeteria, or drive-in is a sale for
resale when it is | 26 | | transferred to customers in the ordinary course of business
as |
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| 1 | | part of the sale of food or beverages and is used to deliver, | 2 | | package, or
consume food or beverages, regardless of where | 3 | | consumption of the food or
beverages occurs. Examples of those | 4 | | items include, but are not limited to
nonreusable, paper and | 5 | | plastic cups, plates, baskets, boxes, sleeves, buckets
or other | 6 | | containers, utensils, straws, placemats, napkins, doggie bags, | 7 | | and
wrapping or packaging
materials that are transferred to | 8 | | customers as part of the sale of food or
beverages in the | 9 | | ordinary course of business.
| 10 | | The purchase, employment and transfer of such tangible | 11 | | personal property
as newsprint and ink for the primary purpose | 12 | | of conveying news (with or
without other information) is not a | 13 | | purchase, use or sale of tangible
personal property.
| 14 | | A person whose activities are organized and conducted | 15 | | primarily as a
not-for-profit service enterprise, and who | 16 | | engages in selling tangible
personal property at retail | 17 | | (whether to the public or merely to members and
their guests) | 18 | | is engaged in the business of selling tangible personal
| 19 | | property at retail with respect to such transactions, excepting | 20 | | only a
person organized and operated exclusively for | 21 | | charitable, religious or
educational purposes either (1), to | 22 | | the extent of sales by such person to
its members, students, | 23 | | patients or inmates of tangible personal property to
be used | 24 | | primarily for the purposes of such person, or (2), to the | 25 | | extent of
sales by such person of tangible personal property | 26 | | which is not sold or
offered for sale by persons organized for |
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| 1 | | profit. The selling of school
books and school supplies by | 2 | | schools at retail to students is not
"primarily for the | 3 | | purposes of" the school which does such selling. The
provisions | 4 | | of this paragraph shall not apply to nor subject to taxation
| 5 | | occasional dinners, socials or similar activities of a person | 6 | | organized and
operated exclusively for charitable, religious | 7 | | or educational purposes,
whether or not such activities are | 8 | | open to the public.
| 9 | | A person who is the recipient of a grant or contract under | 10 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | 11 | | serves meals to
participants in the federal Nutrition Program | 12 | | for the Elderly in return for
contributions established in | 13 | | amount by the individual participant pursuant
to a schedule of | 14 | | suggested fees as provided for in the federal Act is not
| 15 | | engaged in the business of selling tangible personal property | 16 | | at retail
with respect to such transactions.
| 17 | | "Purchaser" means anyone who, through a sale at retail, | 18 | | acquires the
ownership of or title to tangible personal | 19 | | property for a valuable
consideration.
| 20 | | "Reseller of motor fuel" means any person engaged in the | 21 | | business of selling
or delivering or transferring title of | 22 | | motor fuel to another person
other than for use or consumption.
| 23 | | No person shall act as a reseller of motor fuel within this | 24 | | State without
first being registered as a reseller pursuant to | 25 | | Section 2c or a retailer
pursuant to Section 2a.
| 26 | | "Selling price" or the "amount of sale" means the |
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| 1 | | consideration for a
sale valued in money whether received in | 2 | | money or otherwise, including
cash, credits, property, other | 3 | | than as hereinafter provided, and services,
but , prior to | 4 | | January 1, 2020, not including the value of or credit given for | 5 | | traded-in tangible
personal property where the item that is | 6 | | traded-in is of like kind and
character as that which is being | 7 | | sold ; beginning January 1, 2020, "selling price" includes the | 8 | | portion of the value of or credit given for traded-in motor | 9 | | vehicles of the First Division as defined in Section 1-146 of | 10 | | the Illinois Vehicle Code of like kind and character as that | 11 | | which is being sold that exceeds $10,000 . "Selling price" shall | 12 | | be determined without any
deduction on account of the cost of | 13 | | the property sold, the cost of
materials used, labor or service | 14 | | cost or any other expense whatsoever, but
does not include | 15 | | charges that are added to prices by sellers on account of
the | 16 | | seller's tax liability under this Act, or on account of the | 17 | | seller's
duty to collect, from the purchaser, the tax that is | 18 | | imposed by the Use Tax
Act, or, except as otherwise provided | 19 | | with respect to any cigarette tax imposed by a home rule unit, | 20 | | on account of the seller's tax liability under any local | 21 | | occupation tax administered by the Department, or, except as | 22 | | otherwise provided with respect to any cigarette tax imposed by | 23 | | a home rule unit on account of the seller's duty to collect, | 24 | | from the purchasers, the tax that is imposed under any local | 25 | | use tax administered by the Department.
Effective December 1, | 26 | | 1985, "selling price" shall include charges that
are added to |
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| 1 | | prices by sellers on account of the seller's
tax liability | 2 | | under the Cigarette Tax Act, on account of the sellers'
duty to | 3 | | collect, from the purchaser, the tax imposed under the | 4 | | Cigarette
Use Tax Act, and on account of the seller's duty to | 5 | | collect, from the
purchaser, any cigarette tax imposed by a | 6 | | home rule unit.
| 7 | | Notwithstanding any law to the contrary, for any motor | 8 | | vehicle, as defined in Section 1-146 of the Vehicle Code, that | 9 | | is sold on or after January 1, 2015 for the purpose of leasing | 10 | | the vehicle for a defined period that is longer than one year | 11 | | and (1) is a motor vehicle of the second division that: (A) is | 12 | | a self-contained motor vehicle designed or permanently | 13 | | converted to provide living quarters for recreational, | 14 | | camping, or travel use, with direct walk through access to the | 15 | | living quarters from the driver's seat; (B) is of the van | 16 | | configuration designed for the transportation of not less than | 17 | | 7 nor more than 16 passengers; or (C) has a gross vehicle | 18 | | weight rating of 8,000 pounds or less or (2) is a motor vehicle | 19 | | of the first division, "selling price" or "amount of sale" | 20 | | means the consideration received by the lessor pursuant to the | 21 | | lease contract, including amounts due at lease signing and all | 22 | | monthly or other regular payments charged over the term of the | 23 | | lease. Also included in the selling price is any amount | 24 | | received by the lessor from the lessee for the leased vehicle | 25 | | that is not calculated at the time the lease is executed, | 26 | | including, but not limited to, excess mileage charges and |
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| 1 | | charges for excess wear and tear. For sales that occur in | 2 | | Illinois, with respect to any amount received by the lessor | 3 | | from the lessee for the leased vehicle that is not calculated | 4 | | at the time the lease is executed, the lessor who purchased the | 5 | | motor vehicle does not incur the tax imposed by the Use Tax Act | 6 | | on those amounts, and the retailer who makes the retail sale of | 7 | | the motor vehicle to the lessor is not required to collect the | 8 | | tax imposed by the Use Tax Act or to pay the tax imposed by this | 9 | | Act on those amounts. However, the lessor who purchased the | 10 | | motor vehicle assumes the liability for reporting and paying | 11 | | the tax on those amounts directly to the Department in the same | 12 | | form (Illinois Retailers' Occupation Tax, and local retailers' | 13 | | occupation taxes, if applicable) in which the retailer would | 14 | | have reported and paid such tax if the retailer had accounted | 15 | | for the tax to the Department. For amounts received by the | 16 | | lessor from the lessee that are not calculated at the time the | 17 | | lease is executed, the lessor must file the return and pay the | 18 | | tax to the Department by the due date otherwise required by | 19 | | this Act for returns other than transaction returns. If the | 20 | | retailer is entitled under this Act to a discount for | 21 | | collecting and remitting the tax imposed under this Act to the | 22 | | Department with respect to the sale of the motor vehicle to the | 23 | | lessor, then the right to the discount provided in this Act | 24 | | shall be transferred to the lessor with respect to the tax paid | 25 | | by the lessor for any amount received by the lessor from the | 26 | | lessee for the leased vehicle that is not calculated at the |
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| 1 | | time the lease is executed; provided that the discount is only | 2 | | allowed if the return is timely filed and for amounts timely | 3 | | paid. The "selling price" of a motor vehicle that is sold on or | 4 | | after January 1, 2015 for the purpose of leasing for a defined | 5 | | period of longer than one year shall not be reduced by the | 6 | | value of or credit given for traded-in tangible personal | 7 | | property owned by the lessor, nor shall it be reduced by the | 8 | | value of or credit given for traded-in tangible personal | 9 | | property owned by the lessee, regardless of whether the | 10 | | trade-in value thereof is assigned by the lessee to the lessor. | 11 | | In the case of a motor vehicle that is sold for the purpose of | 12 | | leasing for a defined period of longer than one year, the sale | 13 | | occurs at the time of the delivery of the vehicle, regardless | 14 | | of the due date of any lease payments. A lessor who incurs a | 15 | | Retailers' Occupation Tax liability on the sale of a motor | 16 | | vehicle coming off lease may not take a credit against that | 17 | | liability for the Use Tax the lessor paid upon the purchase of | 18 | | the motor vehicle (or for any tax the lessor paid with respect | 19 | | to any amount received by the lessor from the lessee for the | 20 | | leased vehicle that was not calculated at the time the lease | 21 | | was executed) if the selling price of the motor vehicle at the | 22 | | time of purchase was calculated using the definition of | 23 | | "selling price" as defined in this paragraph.
Notwithstanding | 24 | | any other provision of this Act to the contrary, lessors shall | 25 | | file all returns and make all payments required under this | 26 | | paragraph to the Department by electronic means in the manner |
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| 1 | | and form as required by the Department. This paragraph does not | 2 | | apply to leases of motor vehicles for which, at the time the | 3 | | lease is entered into, the term of the lease is not a defined | 4 | | period, including leases with a defined initial period with the | 5 | | option to continue the lease on a month-to-month or other basis | 6 | | beyond the initial defined period. | 7 | | The phrase "like kind and character" shall be liberally | 8 | | construed
(including but not limited to any form of motor | 9 | | vehicle for any form of
motor vehicle, or any kind of farm or | 10 | | agricultural implement for any other
kind of farm or | 11 | | agricultural implement), while not including a kind of item
| 12 | | which, if sold at retail by that retailer, would be exempt from | 13 | | retailers'
occupation tax and use tax as an isolated or | 14 | | occasional sale.
| 15 | | "Gross receipts" from the sales of tangible personal | 16 | | property at retail
means the total selling price or the amount | 17 | | of such sales, as hereinbefore
defined. In the case of charge | 18 | | and time sales, the amount thereof shall be
included only as | 19 | | and when payments are received by the seller.
Receipts or other | 20 | | consideration derived by a seller from
the sale, transfer or | 21 | | assignment of accounts receivable to a wholly owned
subsidiary | 22 | | will not be deemed payments prior to the time the purchaser
| 23 | | makes payment on such accounts.
| 24 | | "Department" means the Department of Revenue.
| 25 | | "Person" means any natural individual, firm, partnership, | 26 | | association,
joint stock company, joint adventure, public or |
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| 1 | | private corporation, limited
liability company, or a receiver, | 2 | | executor, trustee, guardian or other
representative appointed | 3 | | by order of any court.
| 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 constitute engaging in a
| 9 | | business of selling such tangible personal property at retail | 10 | | within the
meaning of this Act; provided that any person who is | 11 | | engaged in a business
which is not subject to the tax imposed | 12 | | by this Act because of involving
the sale of or a contract to | 13 | | sell real estate or a construction contract to
improve real | 14 | | estate or a construction contract to engineer, install, and
| 15 | | maintain an integrated system of products, but who, in the | 16 | | course of
conducting such business,
transfers tangible | 17 | | personal property to users or consumers in the finished
form in | 18 | | which it was purchased, and which does not become real estate | 19 | | or was
not engineered and installed, under any provision of a | 20 | | construction contract or
real estate sale or real estate sales | 21 | | agreement entered into with some other
person arising out of or | 22 | | because of such nontaxable business, is engaged in the
business | 23 | | of selling tangible personal property at retail to the extent | 24 | | of the
value of the tangible personal property so transferred. | 25 | | If, in such a
transaction, a separate charge is made for the | 26 | | tangible personal property so
transferred, the value of such |
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| 1 | | property, for the purpose of this Act, shall be
the amount so | 2 | | separately charged, but not less than the cost of such property
| 3 | | to the transferor; if no separate charge is made, the value of | 4 | | such property,
for the purposes of this Act, is the cost to the | 5 | | transferor of such tangible
personal property. Construction | 6 | | contracts for the improvement of real estate
consisting of | 7 | | engineering, installation, and maintenance of voice, data, | 8 | | video,
security, and all telecommunication systems do not | 9 | | constitute engaging in a
business of selling tangible personal | 10 | | property at retail within the meaning of
this Act if they are | 11 | | sold at one specified contract price.
| 12 | | A person who holds himself or herself out as being engaged | 13 | | (or who habitually
engages) in selling tangible personal | 14 | | property at retail is a person
engaged in the business of | 15 | | selling tangible personal property at retail
hereunder with | 16 | | respect to such sales (and not primarily in a service
| 17 | | occupation) notwithstanding the fact that such person designs | 18 | | and produces
such tangible personal property on special order | 19 | | for the purchaser and in
such a way as to render the property | 20 | | of value only to such purchaser, if
such tangible personal | 21 | | property so produced on special order serves
substantially the | 22 | | same function as stock or standard items of tangible
personal | 23 | | property that are sold at retail.
| 24 | | Persons who engage in the business of transferring tangible | 25 | | personal
property upon the redemption of trading stamps are | 26 | | engaged in the business
of selling such property at retail and |
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| 1 | | shall be liable for and shall pay
the tax imposed by this Act | 2 | | on the basis of the retail value of the
property transferred | 3 | | upon redemption of such stamps.
| 4 | | "Bulk vending machine" means a vending machine,
containing | 5 | | unsorted confections, nuts, toys, or other items designed
| 6 | | primarily to be used or played with by children
which, when a | 7 | | coin or coins of a denomination not larger than $0.50 are
| 8 | | inserted, are dispensed in equal portions, at random and
| 9 | | without selection by the customer.
| 10 | | "Remote retailer" means a retailer located outside of this | 11 | | State that does not maintain within this State, directly or by | 12 | | a subsidiary, an office, distribution house, sales house, | 13 | | warehouse or other place of business, or any agent or other | 14 | | representative operating within this State under the authority | 15 | | of the retailer or its subsidiary, irrespective of whether such | 16 | | place of business or agent is located here permanently or | 17 | | temporarily or whether such retailer or subsidiary is licensed | 18 | | to do business in this State. | 19 | | (Source: P.A. 101-31, eff. 6-28-19.)
| 20 | | Section 99. Effective date. This Act takes effect upon | 21 | | becoming law.
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