Full Text of HB4054 103rd General Assembly
HB4054 103RD GENERAL ASSEMBLY |
| | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB4054 Introduced 4/27/2023, by Rep. Kelly M. Burke SYNOPSIS AS INTRODUCED: |
| 35 ILCS 105/2d | | 35 ILCS 110/2d | | 35 ILCS 120/1 | from Ch. 120, par. 440 |
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Amends the Use Tax Act, the Service Use Tax Act, and the Retailers' Occupation Tax Act. Provides that a delivery network company that delivers tangible personal property on behalf of a marketplace seller or a marketplace serviceman is not considered a marketplace facilitator. Provides that a delivery network company is a business that facilitates, through the use of an Internet website or mobile application, the delivery of local products. Provides that a local product is any item, including food, other than freight, mail, or a package to which
postage has been affixed. Effective immediately.
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| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Use Tax Act is amended by changing Section | 5 | | 2d as follows: | 6 | | (35 ILCS 105/2d) | 7 | | Sec. 2d. Marketplace facilitators and marketplace sellers. | 8 | | (a) As used in this Section: | 9 | | "Affiliate" means a person that, with respect to another | 10 | | person: (i) has a direct or indirect ownership interest of | 11 | | more than 5 percent in the other person; or (ii) is related to | 12 | | the other person because a third person, or a group of third | 13 | | persons who are affiliated with each other as defined in this | 14 | | subsection, holds a direct or indirect ownership interest of | 15 | | more than 5% in the related person. | 16 | | "Delivery network company" means a business that | 17 | | facilitates, through the use of an Internet website or mobile | 18 | | application, the delivery of local products. | 19 | | "Local product" means any item, including food, other than | 20 | | freight, mail, or a package to which
postage has been affixed. | 21 | | "Marketplace" means a physical or electronic place, forum, | 22 | | platform, application, or other method by which a marketplace | 23 | | seller sells or offers to sell items. |
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| 1 | | "Marketplace facilitator" means a person who, pursuant to | 2 | | an agreement with an unrelated third-party marketplace seller, | 3 | | directly or indirectly through one or more affiliates | 4 | | facilitates a retail sale by an unrelated third party | 5 | | marketplace seller by: | 6 | | (1) listing or advertising for sale by the marketplace | 7 | | seller in a marketplace, tangible personal property that | 8 | | is subject to tax under this Act; and | 9 | | (2) either directly or indirectly, through agreements | 10 | | or arrangements with third parties, collecting payment | 11 | | from the customer and transmitting that payment to the | 12 | | marketplace seller regardless of whether the marketplace | 13 | | facilitator receives compensation or other consideration | 14 | | in exchange for its services. | 15 | | "Marketplace facilitator" does not include a delivery | 16 | | network company that delivers tangible personal property on | 17 | | behalf of a marketplace seller that is engaged in business as a | 18 | | retail vendor. | 19 | | "Marketplace seller" means a person that sells or offers | 20 | | to sell tangible personal property through a marketplace | 21 | | operated by an unrelated third-party marketplace facilitator. | 22 | | (b) Beginning on January 1, 2020, a marketplace | 23 | | facilitator who meets either of the following thresholds is | 24 | | considered the retailer for each sale of tangible personal | 25 | | property made through its marketplace: | 26 | | (1) the cumulative gross receipts from sales of |
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| 1 | | tangible personal property to purchasers in Illinois by | 2 | | the marketplace facilitator and by marketplace sellers | 3 | | selling through the marketplace are $100,000 or more; or | 4 | | (2) the marketplace facilitator and marketplace | 5 | | sellers selling through the marketplace cumulatively enter | 6 | | into 200 or more separate transactions for the sale of | 7 | | tangible personal property to purchasers in Illinois. | 8 | | A marketplace facilitator shall determine on a quarterly | 9 | | basis, ending on the last day of March, June, September, and | 10 | | December, whether he or she meets the threshold of either | 11 | | paragraph (1) or (2) of this subsection (b) for the preceding | 12 | | 12-month period. If the marketplace facilitator meets the | 13 | | threshold of either paragraph (1) or (2) for a 12-month | 14 | | period, he or she is considered a retailer maintaining a place | 15 | | of business in this State and is required to collect and remit | 16 | | the tax imposed under this Act and file returns for one year. | 17 | | At the end of that one-year period, the marketplace | 18 | | facilitator shall determine whether the marketplace | 19 | | facilitator met the threshold of either paragraph (1) or (2) | 20 | | during the preceding 12-month period. If the marketplace | 21 | | facilitator met the threshold in either paragraph (1) or (2) | 22 | | for the preceding 12-month period, he or she is considered a | 23 | | retailer maintaining a place of business in this State and is | 24 | | required to collect and remit the tax imposed under this Act | 25 | | and file returns for the subsequent year. If at the end of a | 26 | | one-year period a marketplace facilitator that was required to |
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| 1 | | collect and remit the tax imposed under this Act determines | 2 | | that he or she did not meet the threshold in either paragraph | 3 | | (1) or (2) during the preceding 12-month period, the | 4 | | marketplace facilitator shall subsequently determine on a | 5 | | quarterly basis, ending on the last day of March, June, | 6 | | September, and December, whether he or she meets the threshold | 7 | | of either paragraph (1) or (2) for the preceding 12-month | 8 | | period. | 9 | | (c) Beginning on January 1, 2020 a marketplace facilitator | 10 | | considered to be the retailer pursuant to subsection (b) of | 11 | | this Section is considered the retailer with respect to each | 12 | | sale made through its marketplace and is liable for collecting | 13 | | and remitting the tax under this Act on all such sales. The | 14 | | marketplace facilitator who is considered to be the retailer | 15 | | under subsection (b) for sales made through its marketplace | 16 | | has all the rights and duties, and is required to comply with | 17 | | the same requirements and procedures, as all other retailers | 18 | | maintaining a place of business in this State who are | 19 | | registered or who are required to be registered to collect and | 20 | | remit the tax imposed by this Act with respect to such sales. | 21 | | (d) A marketplace facilitator shall: | 22 | | (1) certify to each marketplace seller that the | 23 | | marketplace facilitator assumes the rights and duties of a | 24 | | retailer under this Act with respect to sales made by the | 25 | | marketplace seller through the marketplace; and | 26 | | (2) collect taxes imposed by this Act as required by |
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| 1 | | Section 3-45 of this Act for sales made through the | 2 | | marketplace. | 3 | | (e) A marketplace seller shall retain books and records | 4 | | for all sales made through a marketplace in accordance with | 5 | | the requirements of Section 11. | 6 | | (f) A marketplace seller shall furnish to the marketplace | 7 | | facilitator information that is necessary for the marketplace | 8 | | facilitator to correctly collect and remit taxes for a retail | 9 | | sale. The information may include a certification that an item | 10 | | being sold is taxable, not taxable, exempt from taxation, or | 11 | | taxable at a specified rate. A marketplace seller shall be | 12 | | held harmless for liability for the tax imposed under this Act | 13 | | when a marketplace facilitator fails to correctly collect and | 14 | | remit tax after having been provided with information by a | 15 | | marketplace seller to correctly collect and remit taxes | 16 | | imposed under this Act. | 17 | | (g) If the marketplace facilitator demonstrates to the | 18 | | satisfaction of the Department that its failure to correctly | 19 | | collect and remit tax on a retail sale resulted from the | 20 | | marketplace facilitator's good faith reliance on incorrect or | 21 | | insufficient information provided by a marketplace seller, it | 22 | | shall be relieved of liability for the tax on that retail sale. | 23 | | In this case, a marketplace seller is liable for any resulting | 24 | | tax due. | 25 | | (h) (Blank). | 26 | | (i) This Section does not affect the tax liability of a |
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| 1 | | purchaser under this Act. | 2 | | (j) (Blank).
| 3 | | (k) A marketplace facilitator required to collect taxes | 4 | | imposed under this Section and this Act on retail sales made | 5 | | through its marketplace shall be liable to the Department for | 6 | | such taxes, except when the marketplace facilitator is | 7 | | relieved of the duty to remit such taxes by virtue of having | 8 | | paid to the Department taxes imposed by the Retailers' | 9 | | Occupation Tax Act upon his or her gross receipts from the same | 10 | | transactions. | 11 | | (l) If, for any reason, the Department is prohibited from | 12 | | enforcing the marketplace facilitator's duty under this Act to | 13 | | collect and remit taxes pursuant to this Section, the duty to | 14 | | collect and remit such taxes reverts to the marketplace seller | 15 | | that is a retailer maintaining a place of business in this | 16 | | State pursuant to Section 2. | 17 | | (Source: P.A. 101-9, eff. 6-5-19; 101-604, eff. 1-1-20.) | 18 | | Section 10. The Service Use Tax Act is amended by changing | 19 | | Section 2d as follows: | 20 | | (35 ILCS 110/2d) | 21 | | Sec. 2d. Marketplace facilitators and marketplace | 22 | | servicemen. | 23 | | (a) Definitions. For purposes of this Section: | 24 | | "Affiliate" means a person that, with respect to another |
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| 1 | | person: (i) has a direct or indirect ownership interest of | 2 | | more than 5% in the other person; or (ii) is related to the | 3 | | other person because a third person, or group of third persons | 4 | | who are affiliated with each other as defined in this | 5 | | subsection, holds a direct or indirect ownership interest of | 6 | | more than 5% in the related person. | 7 | | "Delivery network company" means a business that | 8 | | facilitates, through the use of an Internet website or mobile | 9 | | application, the delivery of local products. | 10 | | "Local product" means any item, including food, other than | 11 | | freight, mail, or a package to which
postage has been affixed. | 12 | | "Marketplace" means a physical or electronic place, forum, | 13 | | platform, application or other method by which a marketplace | 14 | | serviceman makes or offers to make sales of service. | 15 | | "Marketplace facilitator" means a person who, pursuant to | 16 | | an agreement with a marketplace serviceman, facilitates sales | 17 | | of service by that marketplace serviceman. A person | 18 | | facilitates a sale of service by, directly or indirectly | 19 | | through one or more affiliates, doing both of the following: | 20 | | (i) listing or otherwise making available a sale of service of | 21 | | the marketplace serviceman through a marketplace owned or | 22 | | operated by the marketplace facilitator; and (ii) processing | 23 | | sales of service for, or payments for sales of service by, | 24 | | marketplace servicemen. | 25 | | "Marketplace facilitator" does not include a delivery | 26 | | network company that delivers tangible personal property on |
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| 1 | | behalf of a marketplace serviceman that is engaged in business | 2 | | as a retail vendor. | 3 | | "Marketplace serviceman" means a person that makes or | 4 | | offers to make a sale of service through a marketplace. | 5 | | (b) Beginning January 1, 2020, a marketplace facilitator | 6 | | who meets either of the following criteria is considered the | 7 | | serviceman for each sale of service made on the marketplace: | 8 | | (1) the cumulative gross receipts from sales of | 9 | | service to purchasers in Illinois by the marketplace | 10 | | facilitator and by marketplace servicemen are $100,000 or | 11 | | more; or | 12 | | (2) the marketplace facilitator and marketplace | 13 | | servicemen cumulatively enter into 200 or more separate | 14 | | transactions for the sale of service to purchasers in | 15 | | Illinois. | 16 | | A marketplace facilitator shall determine on a quarterly | 17 | | basis, ending on the last day of March, June, September, and | 18 | | December, whether he or she meets the criteria of either | 19 | | paragraph (1) or (2) of this subsection (b) for the preceding | 20 | | 12-month period. If the marketplace facilitator meets the | 21 | | criteria of either paragraph (1) or (2) for a 12-month period, | 22 | | he or she is considered a serviceman maintaining a place of | 23 | | business in this State and is required to collect and remit the | 24 | | tax imposed under this Act and file returns for one year. At | 25 | | the end of that one-year period, the marketplace facilitator | 26 | | shall determine whether the marketplace facilitator met the |
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| 1 | | criteria of either paragraph (1) or (2) during the preceding | 2 | | 12-month period. If the marketplace facilitator met the | 3 | | criteria in either paragraph (1) or (2) for the preceding | 4 | | 12-month period, he or she is considered a serviceman | 5 | | maintaining a place of business in this State and is required | 6 | | to collect and remit the tax imposed under this Act and file | 7 | | returns for the subsequent year. If, at the end of a one-year | 8 | | period, a marketplace facilitator that was required to collect | 9 | | and remit the tax imposed under this Act determines that he or | 10 | | she did not meet the criteria in either paragraph (1) or (2) | 11 | | during the preceding 12-month period, the marketplace | 12 | | facilitator shall subsequently 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 | | paragraph (1) or (2) for the preceding 12-month period. | 16 | | (c) A marketplace facilitator that meets either of the | 17 | | thresholds in subsection (b) of this Section is considered the | 18 | | serviceman for each sale of service made through its | 19 | | marketplace and is liable for collecting and remitting the tax | 20 | | under this Act on all such sales. The marketplace facilitator | 21 | | has all the rights and duties, and is required to comply with | 22 | | the same requirements and procedures, as all other servicemen | 23 | | maintaining a place of business in this State who are | 24 | | registered or who are required to be registered to collect and | 25 | | remit the tax imposed by this Act. | 26 | | (d) A marketplace facilitator shall: |
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| 1 | | (1) certify to each marketplace serviceman that the | 2 | | marketplace facilitator assumes the rights and duties of a | 3 | | serviceman under this Act with respect to sales of service | 4 | | made by the marketplace serviceman through the | 5 | | marketplace; and | 6 | | (2) collect taxes imposed by this Act as required by | 7 | | Section 3-40 of this Act for sales of service made through | 8 | | the marketplace. | 9 | | (e) A marketplace serviceman shall retain books and | 10 | | records for all sales of service made through a marketplace in | 11 | | accordance with the requirements of Section 11. | 12 | | (f) A marketplace serviceman shall furnish to the | 13 | | marketplace facilitator information that is necessary for the | 14 | | marketplace facilitator to correctly collect and remit taxes | 15 | | for a sale of service. The information may include a | 16 | | certification that an item transferred incident to a sale of | 17 | | service under this Act is taxable, not taxable, exempt from | 18 | | taxation, or taxable at a specified rate. A marketplace | 19 | | serviceman shall be held harmless for liability for the tax | 20 | | imposed under this Act when a marketplace facilitator fails to | 21 | | correctly collect and remit tax after having been provided | 22 | | with information by a marketplace serviceman to correctly | 23 | | collect and remit taxes imposed under this Act. | 24 | | (g) Except as provided in subsection (h), if the | 25 | | marketplace facilitator demonstrates to the satisfaction of | 26 | | the Department that its failure to correctly collect and remit |
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| 1 | | tax on a sale of service resulted from the marketplace | 2 | | facilitator's good faith reliance on incorrect or insufficient | 3 | | information provided by a marketplace serviceman, it shall be | 4 | | relieved of liability for the tax on that sale of service. In | 5 | | this case, a marketplace serviceman is liable for any | 6 | | resulting tax due. | 7 | | (h) A marketplace facilitator and marketplace serviceman | 8 | | that are affiliates, as defined by subsection (a), are jointly | 9 | | and severally liable for tax liability resulting from a sale | 10 | | of service made by the affiliated marketplace serviceman | 11 | | through the marketplace. | 12 | | (i) This Section does not affect the tax liability of a | 13 | | purchaser under this Act. | 14 | | (j) The Department may adopt rules for the administration | 15 | | and enforcement of the provisions of this Section.
| 16 | | (Source: P.A. 101-9, eff. 6-5-19.) | 17 | | Section 15. The Retailers' Occupation Tax Act is amended | 18 | | by changing Section 1 as follows:
| 19 | | (35 ILCS 120/1) (from Ch. 120, par. 440)
| 20 | | Sec. 1. Definitions. "Sale at retail" means any transfer | 21 | | of the
ownership of or title to
tangible personal property to a | 22 | | purchaser, for the purpose of use or
consumption, and not for | 23 | | the purpose of resale in any form as tangible
personal | 24 | | property to the extent not first subjected to a use for which |
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| 1 | | it
was purchased, for a valuable consideration: Provided that | 2 | | the property
purchased is deemed to be purchased for the | 3 | | purpose of resale, despite
first being used, to the extent to | 4 | | which it is resold as an ingredient of
an intentionally | 5 | | produced product or byproduct of manufacturing. For this
| 6 | | purpose, slag produced as an incident to manufacturing pig | 7 | | iron or steel
and sold is considered to be an intentionally | 8 | | produced byproduct of
manufacturing. Transactions whereby the | 9 | | possession of the property is
transferred but the seller | 10 | | retains the title as security for payment of the
selling price | 11 | | shall be deemed to be sales.
| 12 | | "Sale at retail" shall be construed to include any | 13 | | transfer of the
ownership of or title to tangible personal | 14 | | property to a purchaser, for use
or consumption by any other | 15 | | person to whom such purchaser may transfer the
tangible | 16 | | personal property without a valuable consideration, and to | 17 | | include
any transfer, whether made for or without a valuable | 18 | | consideration, for
resale in any form as tangible personal | 19 | | property unless made in compliance
with Section 2c of this | 20 | | Act.
| 21 | | Sales of tangible personal property, which property, to | 22 | | the extent not
first subjected to a use for which it was | 23 | | purchased, as an ingredient or
constituent, goes into and | 24 | | forms a part of tangible personal property
subsequently the | 25 | | subject of a "Sale at retail", are not sales at retail as
| 26 | | defined in this Act: Provided that the property purchased is |
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| 1 | | deemed to be
purchased for the purpose of resale, despite | 2 | | first being used, to the
extent to which it is resold as an | 3 | | ingredient of an intentionally produced
product or byproduct | 4 | | of manufacturing.
| 5 | | "Sale at retail" shall be construed to include any | 6 | | Illinois florist's
sales transaction in which the purchase | 7 | | order is received in Illinois by a
florist and the sale is for | 8 | | use or consumption, but the Illinois florist
has a florist in | 9 | | another state deliver the property to the purchaser or the
| 10 | | purchaser's donee in such other state.
| 11 | | Nonreusable tangible personal property that is used by | 12 | | persons engaged in
the business of operating a restaurant, | 13 | | cafeteria, or drive-in is a sale for
resale when it is | 14 | | transferred to customers in the ordinary course of business
as | 15 | | part of the sale of food or beverages and is used to deliver, | 16 | | package, or
consume food or beverages, regardless of where | 17 | | consumption of the food or
beverages occurs. Examples of those | 18 | | items include, but are not limited to
nonreusable, paper and | 19 | | plastic cups, plates, baskets, boxes, sleeves, buckets
or | 20 | | other containers, utensils, straws, placemats, napkins, doggie | 21 | | bags, and
wrapping or packaging
materials that are transferred | 22 | | to customers as part of the sale of food or
beverages in the | 23 | | ordinary course of business.
| 24 | | The purchase, employment and transfer of such tangible | 25 | | personal property
as newsprint and ink for the primary purpose | 26 | | of conveying news (with or
without other information) is not a |
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| 1 | | purchase, use or sale of tangible
personal property.
| 2 | | A person whose activities are organized and conducted | 3 | | primarily as a
not-for-profit service enterprise, and who | 4 | | engages in selling tangible
personal property at retail | 5 | | (whether to the public or merely to members and
their guests) | 6 | | is engaged in the business of selling tangible personal
| 7 | | property at retail with respect to such transactions, | 8 | | excepting only a
person organized and operated exclusively for | 9 | | charitable, religious or
educational purposes either (1), to | 10 | | the extent of sales by such person to
its members, students, | 11 | | patients or inmates of tangible personal property to
be used | 12 | | primarily for the purposes of such person, or (2), to the | 13 | | extent of
sales by such person of tangible personal property | 14 | | which is not sold or
offered for sale by persons organized for | 15 | | profit. The selling of school
books and school supplies by | 16 | | schools at retail to students is not
"primarily for the | 17 | | purposes of" the school which does such selling. The
| 18 | | provisions of this paragraph shall not apply to nor subject to | 19 | | taxation
occasional dinners, socials or similar activities of | 20 | | a person organized and
operated exclusively for charitable, | 21 | | religious or educational purposes,
whether or not such | 22 | | activities are open to the public.
| 23 | | A person who is the recipient of a grant or contract under | 24 | | Title VII of
the Older Americans Act of 1965 (P.L. 92-258) and | 25 | | serves meals to
participants in the federal Nutrition Program | 26 | | for the Elderly in return for
contributions established in |
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| 1 | | amount by the individual participant pursuant
to a schedule of | 2 | | suggested fees as provided for in the federal Act is not
| 3 | | engaged in the business of selling tangible personal property | 4 | | at retail
with respect to such transactions.
| 5 | | "Purchaser" means anyone who, through a sale at retail, | 6 | | acquires the
ownership of or title to tangible personal | 7 | | property for a valuable
consideration.
| 8 | | "Reseller of motor fuel" means any person engaged in the | 9 | | business of selling
or delivering or transferring title of | 10 | | motor fuel to another person
other than for use or | 11 | | consumption.
No person shall act as a reseller of motor fuel | 12 | | within this State without
first being registered as a reseller | 13 | | pursuant to Section 2c or a retailer
pursuant to Section 2a.
| 14 | | "Selling price" or the "amount of sale" means the | 15 | | consideration for a
sale valued in money whether received in | 16 | | money or otherwise, including
cash, credits, property, other | 17 | | than as hereinafter provided, and services,
but, prior to | 18 | | January 1, 2020 and beginning again on January 1, 2022, not | 19 | | including the value of or credit given for traded-in tangible
| 20 | | personal property where the item that is traded-in is of like | 21 | | kind and
character as that which is being sold; beginning | 22 | | January 1, 2020 and until January 1, 2022, "selling price" | 23 | | includes the portion of the value of or credit given for | 24 | | traded-in motor vehicles of the First Division as defined in | 25 | | Section 1-146 of the Illinois Vehicle Code of like kind and | 26 | | character as that which is being sold that exceeds $10,000. |
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| 1 | | "Selling price" shall be determined without any
deduction on | 2 | | account of the cost of the property sold, the cost of
materials | 3 | | used, labor or service cost or any other expense whatsoever, | 4 | | but
does not include charges that are added to prices by | 5 | | sellers on account of
the seller's tax liability under this | 6 | | Act, or on account of the seller's
duty to collect, from the | 7 | | purchaser, the tax that is imposed by the Use Tax
Act, or, | 8 | | except as otherwise provided with respect to any cigarette tax | 9 | | imposed by a home rule unit, on account of the seller's tax | 10 | | liability under any local occupation tax administered by the | 11 | | Department, or, except as otherwise provided with respect to | 12 | | any cigarette tax imposed by a home rule unit on account of the | 13 | | seller's duty to collect, from the purchasers, the tax that is | 14 | | imposed under any local use tax administered by the | 15 | | Department.
Effective December 1, 1985, "selling price" shall | 16 | | include charges that
are added to prices by sellers on account | 17 | | of the seller's
tax liability under the Cigarette Tax Act, on | 18 | | account of the sellers'
duty to collect, from the purchaser, | 19 | | the tax imposed under the Cigarette
Use Tax Act, and on account | 20 | | of the seller's duty to collect, from the
purchaser, any | 21 | | cigarette tax imposed by a home rule unit.
| 22 | | Notwithstanding any law to the contrary, for any motor | 23 | | vehicle, as defined in Section 1-146 of the Vehicle Code, that | 24 | | is sold on or after January 1, 2015 for the purpose of leasing | 25 | | the vehicle for a defined period that is longer than one year | 26 | | and (1) is a motor vehicle of the second division that: (A) is |
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| 1 | | a self-contained motor vehicle designed or permanently | 2 | | converted to provide living quarters for recreational, | 3 | | camping, or travel use, with direct walk through access to the | 4 | | living quarters from the driver's seat; (B) is of the van | 5 | | configuration designed for the transportation of not less than | 6 | | 7 nor more than 16 passengers; or (C) has a gross vehicle | 7 | | weight rating of 8,000 pounds or less or (2) is a motor vehicle | 8 | | of the first division, "selling price" or "amount of sale" | 9 | | means the consideration received by the lessor pursuant to the | 10 | | lease contract, including amounts due at lease signing and all | 11 | | monthly or other regular payments charged over the term of the | 12 | | lease. Also included in the selling price is any amount | 13 | | received by the lessor from the lessee for the leased vehicle | 14 | | that is not calculated at the time the lease is executed, | 15 | | including, but not limited to, excess mileage charges and | 16 | | charges for excess wear and tear. For sales that occur in | 17 | | Illinois, with respect to any amount received by the lessor | 18 | | from the lessee for the leased vehicle that is not calculated | 19 | | at the time the lease is executed, the lessor who purchased the | 20 | | motor vehicle does not incur the tax imposed by the Use Tax Act | 21 | | on those amounts, and the retailer who makes the retail sale of | 22 | | the motor vehicle to the lessor is not required to collect the | 23 | | tax imposed by the Use Tax Act or to pay the tax imposed by | 24 | | this Act on those amounts. However, the lessor who purchased | 25 | | the motor vehicle assumes the liability for reporting and | 26 | | paying the tax on those amounts directly to the Department in |
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| 1 | | the same form (Illinois Retailers' Occupation Tax, and local | 2 | | retailers' occupation taxes, if applicable) in which the | 3 | | retailer would have reported and paid such tax if the retailer | 4 | | had accounted for the tax to the Department. For amounts | 5 | | received by the lessor from the lessee that are not calculated | 6 | | at the time the lease is executed, the lessor must file the | 7 | | return and pay the tax to the Department by the due date | 8 | | otherwise required by this Act for returns other than | 9 | | transaction returns. If the retailer is entitled under this | 10 | | Act to a discount for collecting and remitting the tax imposed | 11 | | under this Act to the Department with respect to the sale of | 12 | | the motor vehicle to the lessor, then the right to the discount | 13 | | provided in this Act shall be transferred to the lessor with | 14 | | respect to the tax paid by the lessor for any amount received | 15 | | by the lessor from the lessee for the leased vehicle that is | 16 | | not calculated at the time the lease is executed; provided | 17 | | that the discount is only allowed if the return is timely filed | 18 | | and for amounts timely paid. The "selling price" of a motor | 19 | | vehicle that is sold on or after January 1, 2015 for the | 20 | | purpose of leasing for a defined period of longer than one year | 21 | | shall not be reduced by the value of or credit given for | 22 | | traded-in tangible personal property owned by the lessor, nor | 23 | | shall it be reduced by the value of or credit given for | 24 | | traded-in tangible personal property owned by the lessee, | 25 | | regardless of whether the trade-in value thereof is assigned | 26 | | by the lessee to the lessor. In the case of a motor vehicle |
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| 1 | | that is sold for the purpose of leasing for a defined period of | 2 | | longer than one year, the sale occurs at the time of the | 3 | | delivery of the vehicle, regardless of the due date of any | 4 | | lease payments. A lessor who incurs a Retailers' Occupation | 5 | | Tax liability on the sale of a motor vehicle coming off lease | 6 | | may not take a credit against that liability for the Use Tax | 7 | | the lessor paid upon the purchase of the motor vehicle (or for | 8 | | any tax the lessor paid with respect to any amount received by | 9 | | the lessor from the lessee for the leased vehicle that was not | 10 | | calculated at the time the lease was executed) if the selling | 11 | | price of the motor vehicle at the time of purchase was | 12 | | calculated using the definition of "selling price" as defined | 13 | | in this paragraph.
Notwithstanding any other provision of this | 14 | | Act to the contrary, lessors shall file all returns and make | 15 | | all payments required under this paragraph to the Department | 16 | | by electronic means in the manner and form as required by the | 17 | | Department. This paragraph does not apply to leases of motor | 18 | | vehicles for which, at the time the lease is entered into, the | 19 | | term of the lease is not a defined period, including leases | 20 | | with a defined initial period with the option to continue the | 21 | | lease on a month-to-month or other basis beyond the initial | 22 | | defined period. | 23 | | The phrase "like kind and character" shall be liberally | 24 | | construed
(including but not limited to any form of motor | 25 | | vehicle for any form of
motor vehicle, or any kind of farm or | 26 | | agricultural implement for any other
kind of farm or |
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| 1 | | agricultural implement), while not including a kind of item
| 2 | | which, if sold at retail by that retailer, would be exempt from | 3 | | retailers'
occupation tax and use tax as an isolated or | 4 | | occasional sale.
| 5 | | "Gross receipts" from the sales of tangible personal | 6 | | property at retail
means the total selling price or the amount | 7 | | of such sales, as hereinbefore
defined. In the case of charge | 8 | | and time sales, the amount thereof shall be
included only as | 9 | | and when payments are received by the seller.
Receipts or | 10 | | other consideration derived by a seller from
the sale, | 11 | | transfer or assignment of accounts receivable to a wholly | 12 | | owned
subsidiary will not be deemed payments prior to the time | 13 | | the purchaser
makes payment on such accounts.
| 14 | | "Department" means the Department of Revenue.
| 15 | | "Person" means any natural individual, firm, partnership, | 16 | | association,
joint stock company, joint adventure, public or | 17 | | private corporation, limited
liability company, or a receiver, | 18 | | executor, trustee, guardian or other
representative appointed | 19 | | by order of any court.
| 20 | | The isolated or occasional sale of tangible personal | 21 | | property at retail
by a person who does not hold himself out as | 22 | | being engaged (or who does not
habitually engage) in selling | 23 | | such tangible personal property at retail, or
a sale through a | 24 | | bulk vending machine, does not constitute engaging in a
| 25 | | business of selling such tangible personal property at retail | 26 | | within the
meaning of this Act; provided that any person who is |
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| 1 | | engaged in a business
which is not subject to the tax imposed | 2 | | by this Act because of involving
the sale of or a contract to | 3 | | sell real estate or a construction contract to
improve real | 4 | | estate or a construction contract to engineer, install, and
| 5 | | maintain an integrated system of products, but who, in the | 6 | | course of
conducting such business,
transfers tangible | 7 | | personal property to users or consumers in the finished
form | 8 | | in which it was purchased, and which does not become real | 9 | | estate or was
not engineered and installed, under any | 10 | | provision of a construction contract or
real estate sale or | 11 | | real estate sales agreement entered into with some other
| 12 | | person arising out of or because of such nontaxable business, | 13 | | is engaged in the
business of selling tangible personal | 14 | | property at retail to the extent of the
value of the tangible | 15 | | personal property so transferred. If, in such a
transaction, a | 16 | | separate charge is made for the tangible personal property so
| 17 | | transferred, the value of such property, for the purpose of | 18 | | this Act, shall be
the amount so separately charged, but not | 19 | | less than the cost of such property
to the transferor; if no | 20 | | separate charge is made, the value of such property,
for the | 21 | | purposes of this Act, is the cost to the transferor of such | 22 | | tangible
personal property. Construction contracts for the | 23 | | improvement of real estate
consisting of engineering, | 24 | | installation, and maintenance of voice, data, video,
security, | 25 | | and all telecommunication systems do not constitute engaging | 26 | | in a
business of selling tangible personal property at retail |
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| 1 | | within the meaning of
this Act if they are sold at one | 2 | | specified contract price.
| 3 | | A person who holds himself or herself out as being engaged | 4 | | (or who habitually
engages) in selling tangible personal | 5 | | property at retail is a person
engaged in the business of | 6 | | selling tangible personal property at retail
hereunder with | 7 | | respect to such sales (and not primarily in a service
| 8 | | occupation) notwithstanding the fact that such person designs | 9 | | and produces
such tangible personal property on special order | 10 | | for the purchaser and in
such a way as to render the property | 11 | | of value only to such purchaser, if
such tangible personal | 12 | | property so produced on special order serves
substantially the | 13 | | same function as stock or standard items of tangible
personal | 14 | | property that are sold at retail.
| 15 | | Persons who engage in the business of transferring | 16 | | tangible personal
property upon the redemption of trading | 17 | | stamps are engaged in the business
of selling such property at | 18 | | retail and shall be liable for and shall pay
the tax imposed by | 19 | | this Act on the basis of the retail value of the
property | 20 | | transferred upon redemption of such stamps.
| 21 | | "Bulk vending machine" means a vending machine,
containing | 22 | | unsorted confections, nuts, toys, or other items designed
| 23 | | primarily to be used or played with by children
which, when a | 24 | | coin or coins of a denomination not larger than $0.50 are
| 25 | | inserted, are dispensed in equal portions, at random and
| 26 | | without selection by the customer.
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| 1 | | "Remote retailer" means a retailer that does not maintain | 2 | | within this State, directly or by a subsidiary, an office, | 3 | | distribution house, sales house, warehouse or other place of | 4 | | business, or any agent or other representative operating | 5 | | within this State under the authority of the retailer or its | 6 | | subsidiary, irrespective of whether such place of business or | 7 | | agent is located here permanently or temporarily or whether | 8 | | such retailer or subsidiary is licensed to do business in this | 9 | | State. | 10 | | "Marketplace" means a physical or electronic place, forum, | 11 | | platform, application, or other method by which a marketplace | 12 | | seller sells or offers to sell items. | 13 | | "Marketplace facilitator" means a person who, pursuant to | 14 | | an agreement with an unrelated third-party marketplace seller, | 15 | | directly or indirectly through one or more affiliates | 16 | | facilitates a retail sale by an unrelated third party | 17 | | marketplace seller by: | 18 | | (1) listing or advertising for sale by the marketplace | 19 | | seller in a marketplace, tangible personal property that | 20 | | is subject to tax under this Act; and | 21 | | (2) either directly or indirectly, through agreements | 22 | | or arrangements with third parties, collecting payment | 23 | | from the customer and transmitting that payment to the | 24 | | marketplace seller regardless of whether the marketplace | 25 | | facilitator receives compensation or other consideration | 26 | | in exchange for its services. |
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| 1 | | A person who provides advertising services, including | 2 | | listing products for sale, is not considered a marketplace | 3 | | facilitator, so long as the advertising service platform or | 4 | | forum does not engage, directly or indirectly through one or | 5 | | more affiliated persons, in the activities described in | 6 | | paragraph (2) of this definition of "marketplace facilitator". | 7 | | "Marketplace facilitator" does not include any person | 8 | | licensed under the Auction License Act. This exemption does | 9 | | not apply to any person who is an Internet auction listing | 10 | | service, as defined by the Auction License Act. | 11 | | "Marketplace facilitator" does not include a delivery | 12 | | network company that delivers tangible personal property on | 13 | | behalf of a marketplace seller that is engaged in business as a | 14 | | retail vendor. | 15 | | "Delivery network company" means a business that | 16 | | facilitates, through the use of an Internet website or mobile | 17 | | application, the delivery of local products. | 18 | | "Local product" means any item, including food, other than | 19 | | freight, mail, or a package to which
postage has been affixed. | 20 | | "Marketplace seller" means a person that makes sales | 21 | | through a marketplace operated by an unrelated third party | 22 | | marketplace facilitator. | 23 | | (Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20; | 24 | | 102-353, eff. 1-1-22; 102-634, eff. 8-27-21; 102-813, eff. | 25 | | 5-13-22.)
| 26 | | Section 99. Effective date. This Act takes effect upon |
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| 1 | | becoming law.
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