35 ILCS 185/5-25

(35 ILCS 185/5-25)

Sec. 5-25. Certification.

(a) The Department shall, no later than July 1, 2020:

(1) establish uniform minimum standards that companies wishing to be designated as a certified service provider in this State must meet;

(2) establish uniform minimum standards that certified automated systems must meet;

(3) establish a certification process to review the systems of companies wishing to be designated as a certified service provider in this State or of companies wishing to use a certified automated process; this certification process shall provide that companies that meet all required standards and whose systems have been tested and approved by the Department for properly determining the taxability of items to be sold, the correct tax rate to apply to a transaction, and the appropriate jurisdictions to which the tax shall be remitted, shall be certified;

(4) enter into a contractual relationship with each company that qualifies as a certified service provider; those contracts shall, at a minimum, provide:

(A) that the certified service provider shall be held liable for the tax imposed under this Act and the Use Tax Act and all applicable local occupation taxes administered by the Department if the certified service provider fails to correctly remit the tax after having been provided with the tax and information by a remote retailer to correctly remit the taxes imposed under this Act and the Use Tax Act and all applicable local occupation taxes administered by the Department; if the certified service provider demonstrates to the satisfaction of the Department that its failure to correctly remit tax on a retail sale resulted from the certified service provider's good faith reliance on incorrect or insufficient information provided by the remote retailer, the certified service provider shall be relieved of liability for the tax on that retail sale; in that case, the remote retailer is liable for any resulting tax due;

(B) the responsibilities of the certified service provider and the remote retailers that contract with the certified service provider related to record keeping and auditing consistent with requirements imposed under the Retailers' Occupation Tax Act and the Use Tax Act;

(C) for the protection and confidentiality of tax information consistent with requirements imposed under the Retailers' Occupation Tax Act and the Use Tax Act;

(D) that a certified service provider may claim the discount provided for in Section 3 of the Retailers' Occupation Tax Act for the tax dollars it collects and timely remits on returns that are timely filed with the Department on behalf of remote retailers; remote retailers using a certified service provider may not claim the discount allowed in Section 3 of the Retailers' Occupation Tax Act with respect to those collections; and

(E) that the certified service provider shall file a separate return for each remote retailer with which it has a Tax Remittance Agreement.

The provisions of this Section shall supersede the provisions of the Illinois Procurement Code.

(b) The Department may act jointly with other states to establish the minimum standards and process for certification required by paragraphs (1), (2), and (3) of subsection (a).

(c) When the systems of a certified service provider or certified automated systems are updated or upgraded, they must be recertified by the Department. Notification of changes shall be provided to the Department prior to implementation. Upon receipt of such notification, the Department shall review and test the changes to assess whether the updated system of the certified service provider or the updated certified automated system can properly determine the taxability of items to be sold, the correct tax rate to apply to a transaction, and the appropriate jurisdictions to which the tax shall be remitted. The Department shall recertify updated systems that meet these requirements. The certified service provider or retailer using a certified automated system shall be liable for any tax resulting from errors caused by use of an updated or upgraded system prior to recertification by the Department. In addition to these procedures, the Department may periodically review the system of a certified service provider or the certified automated system used by a retailer to ensure that the system can properly determine the taxability of items to be sold, the correct tax rate to apply to a transaction, and the appropriate jurisdictions to which the tax shall be remitted.

(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20; 102-634, eff. 8-27-21.)