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90_HB0468enr
65 ILCS 5/8-11-17 from Ch. 24, par. 8-11-17
Amends the Illinois Municipal Code. Allows a
municipality that has imposed a telecommunications tax and
whose territory includes part of another unit of local
government or school district to exempt the unit of local
government or school district from the tax. Allows a
municipality that has imposed a telecommunications tax to (i)
reduce the rate of the tax for persons 65 years of age or
older or (ii) exempt persons 65 years of age or older from
the tax.
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1 AN ACT to amend the Illinois Municipal Code by changing
2 Section 8-11-17.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Municipal Code is amended by
6 changing Section 8-11-17 as follows:
7 (65 ILCS 5/8-11-17) (from Ch. 24, par. 8-11-17)
8 Sec. 8-11-17. Municipal telecommunications tax.
9 (a) Beginning on the effective date of this amendatory
10 Act of 1991, the corporate authorities of any municipality in
11 this State may tax any or all of the following acts or
12 privileges:
13 (1) The act or privilege of originating in such
14 municipality or receiving in such municipality intrastate
15 telecommunications by a person at a rate not to exceed 5%
16 of the gross charge for such telecommunications purchased
17 at retail from a retailer by such person. However, such
18 tax is not imposed on such act or privilege to the extent
19 such act or privilege may not, under the Constitution and
20 statutes of the United States, be made the subject of
21 taxation by municipalities in this State.
22 (2) The act or privilege of originating in such
23 municipality or receiving in such municipality interstate
24 telecommunications by a person at a rate not to exceed 5%
25 of the gross charge for such telecommunications purchased
26 at retail from a retailer by such person. To prevent
27 actual multi-state taxation of the act or privilege that
28 is subject to taxation under this paragraph, any
29 taxpayer, upon proof that the taxpayer has paid a tax in
30 another state on such event, shall be allowed a credit
31 against any tax enacted pursuant to an ordinance
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1 authorized by this paragraph to the extent of the amount
2 of such tax properly due and paid in such other state
3 which was not previously allowed as a credit against any
4 other state or local tax in this State. However, such
5 tax is not imposed on the act or privilege to the extent
6 such act or privilege may not, under the Constitution and
7 statutes of the United States, be made the subject of
8 taxation by municipalities in this State.
9 (3) The taxes authorized by paragraphs (1) and (2)
10 of subsection (a) of this Section may only be levied if
11 such municipality does not then have in effect an
12 occupation tax imposed on persons engaged in the business
13 of transmitting messages by means of electricity as
14 authorized by Section 8-11-2 of the Illinois Municipal
15 Code.
16 (b) The tax authorized by this Section shall be
17 collected from the taxpayer by a retailer maintaining a place
18 of business in this State and making or effectuating the sale
19 at retail and shall be remitted by such retailer to the
20 municipality. Any tax required to be collected pursuant to
21 an ordinance authorized by this Section and any such tax
22 collected by such retailer shall constitute a debt owed by
23 the retailer to such municipality. Retailers shall collect
24 the tax from the taxpayer by adding the tax to the gross
25 charge for the act or privilege of originating or receiving
26 telecommunications when sold for use, in the manner
27 prescribed by the municipality. The tax authorized by this
28 Section shall constitute a debt of the purchaser to the
29 retailer who provides such taxable services until paid and,
30 if unpaid, is recoverable at law in the same manner as the
31 original charge for such taxable services. If the retailer
32 fails to collect the tax from the taxpayer, then the taxpayer
33 shall be required to pay the tax directly to the municipality
34 in the manner provided by the municipality. The municipality
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1 imposing the tax shall provide for its administration and
2 enforcement.
3 Beginning January 1, 1994, retailers filing tax returns
4 pursuant to this Section shall, at the time of filing such
5 return, pay to the municipality the amount of the tax imposed
6 by this Section, less a commission of 1.75% which is allowed
7 to reimburse the retailer for the expenses incurred in
8 keeping records, billing the customer, preparing and filing
9 returns, remitting the tax and supplying data to the
10 municipality upon request. No commission may be claimed by a
11 retailer for tax not timely remitted to the municipality.
12 Whenever possible, the tax authorized by this Section
13 shall, when collected, be stated as a distinct item separate
14 and apart from the gross charge for telecommunications.
15 (c) For the purpose of the taxes authorized by this
16 Section:
17 (1) "Amount paid" means the amount charged to the
18 taxpayer's service address in such municipality
19 regardless of where such amount is billed or paid.
20 (2) "Gross charge" means the amount paid for the
21 act or privilege of originating or receiving
22 telecommunications in such municipality and for all
23 services rendered in connection therewith, valued in
24 money whether paid in money or otherwise, including cash,
25 credits, services and property of every kind or nature,
26 and shall be determined without any deduction on account
27 of the cost of such telecommunications, the cost of the
28 materials used, labor or service costs or any other
29 expense whatsoever. In case credit is extended, the
30 amount thereof shall be included only as and when paid.
31 However, "gross charge" shall not include:
32 (A) any amounts added to a purchaser's bill
33 because of a charge made pursuant to: (i) the tax
34 imposed by this Section, (ii) additional charges
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1 added to a purchaser's bill pursuant to Section
2 9-222 of the Public Utilities Act, (iii) the tax
3 imposed by the Telecommunications Excise Tax Act, or
4 (iv) the tax imposed by Section 4251 of the Internal
5 Revenue Code;
6 (B) charges for a sent collect
7 telecommunication received outside of such
8 municipality;
9 (C) charges for leased time on equipment or
10 charges for the storage of data or information or
11 subsequent retrieval or the processing of data or
12 information intended to change its form or content.
13 Such equipment includes, but is not limited to, the
14 use of calculators, computers, data processing
15 equipment, tabulating equipment or accounting
16 equipment and also includes the usage of computers
17 under a time-sharing agreement;
18 (D) charges for customer equipment, including
19 such equipment that is leased or rented by the
20 customer from any source, wherein such charges are
21 disaggregated and separately identified from other
22 charges;
23 (E) charges to business enterprises certified
24 under Section 9-222.1 of the Public Utilities Act to
25 the extent of such exemption and during the period
26 of time specified by the Department of Commerce and
27 Community Affairs;
28 (F) charges for telecommunications and all
29 services and equipment provided in connection
30 therewith between a parent corporation and its
31 wholly owned subsidiaries or between wholly owned
32 subsidiaries when the tax imposed under this Section
33 has already been paid to a retailer and only to the
34 extent that the charges between the parent
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1 corporation and wholly owned subsidiaries or between
2 wholly owned subsidiaries represent expense
3 allocation between the corporations and not the
4 generation of profit for the corporation rendering
5 such service;
6 (G) bad debts ("bad debt" means any portion of
7 a debt that is related to a sale at retail for which
8 gross charges are not otherwise deductible or
9 excludable that has become worthless or
10 uncollectable, as determined under applicable
11 federal income tax standards; if the portion of the
12 debt deemed to be bad is subsequently paid, the
13 retailer shall report and pay the tax on that
14 portion during the reporting period in which the
15 payment is made); or
16 (H) charges paid by inserting coins in
17 coin-operated telecommunication devices.
18 (3) "Interstate telecommunications" means all
19 telecommunications that either originate or terminate
20 outside this State.
21 (4) "Intrastate telecommunications" means all
22 telecommunications that originate and terminate within
23 this State.
24 (5) "Person" means any natural individual, firm,
25 trust, estate, partnership, association, joint stock
26 company, joint venture, corporation, limited liability
27 company, or a receiver, trustee, guardian or other
28 representative appointed by order of any court, the
29 Federal and State governments, including State
30 universities created by statute, or any city, town,
31 county, or other political subdivision of this State.
32 (6) "Purchase at retail" means the acquisition,
33 consumption or use of telecommunications through a sale
34 at retail.
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1 (7) "Retailer" means and includes every person
2 engaged in the business of making sales at retail as
3 defined in this Section. A municipality may, in its
4 discretion, upon application, authorize the collection of
5 the tax hereby imposed by any retailer not maintaining a
6 place of business within this State, who to the
7 satisfaction of the municipality, furnishes adequate
8 security to insure collection and payment of the tax.
9 Such retailer shall be issued, without charge, a permit
10 to collect such tax. When so authorized, it shall be the
11 duty of such retailer to collect the tax upon all of the
12 gross charges for telecommunications in such municipality
13 in the same manner and subject to the same requirements
14 as a retailer maintaining a place of business within such
15 municipality.
16 (8) "Retailer maintaining a place of business in
17 this State", or any like term, means and includes any
18 retailer having or maintaining within this State,
19 directly or by a subsidiary, an office, distribution
20 facilities, transmission facilities, sales office,
21 warehouse or other place of business, or any agent or
22 other representative operating within this State under
23 the authority of the retailer or its subsidiary,
24 irrespective of whether such place of business or agent
25 or other representative is located here permanently or
26 temporarily, or whether such retailer or subsidiary is
27 licensed to do business in this State.
28 (9) "Sale at retail" means the transmitting,
29 supplying or furnishing of telecommunications and all
30 services rendered in connection therewith for a
31 consideration, to persons other than the Federal and
32 State governments, and State universities created by
33 statute and other than between a parent corporation and
34 its wholly owned subsidiaries or between wholly owned
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1 subsidiaries, when the tax has already been paid to a
2 retailer and the gross charge made by one such
3 corporation to another such corporation is not greater
4 than the gross charge paid to the retailer for their use
5 or consumption and not for resale.
6 (10) "Service address" means the location of
7 telecommunications equipment from which
8 telecommunications services are originated or at which
9 telecommunications services are received by a taxpayer.
10 If this is not a defined location, as in the case of
11 mobile phones, paging systems, maritime systems,
12 air-to-ground systems and the like, "service address"
13 shall mean the location of a taxpayer's primary use of
14 the telecommunication equipment as defined by telephone
15 number, authorization code, or location in Illinois where
16 bills are sent.
17 (11) "Taxpayer" means a person who individually or
18 through his agents, employees, or permittees engages in
19 the act or privilege of originating in such municipality
20 or receiving in such municipality telecommunications and
21 who incurs a tax liability under any ordinance authorized
22 by this Section.
23 (12) "Telecommunications", in addition to the usual
24 and popular meaning, includes, but is not limited to,
25 messages or information transmitted through use of local,
26 toll and wide area telephone service, channel services,
27 telegraph services, teletypewriter service, computer
28 exchange services; cellular mobile telecommunications
29 service, specialized mobile radio services, paging
30 service, or any other form of mobile and portable one-way
31 or two-way communications, or any other transmission of
32 messages or information by electronic or similar means,
33 between or among points by wire, cable, fiber optics,
34 laser, microwave, radio, satellite or similar facilities.
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1 The definition of "telecommunications" shall not include
2 value added services in which computer processing
3 applications are used to act on the form, content, code
4 and protocol of the information for purposes other than
5 transmission. "Telecommunications" shall not include
6 purchase of telecommunications by a telecommunications
7 service provider for use as a component part of the
8 service provided by him to the ultimate retail consumer
9 who originates or terminates the taxable end-to-end
10 communications. Carrier access charges, right of access
11 charges, charges for use of inter-company facilities, and
12 all telecommunications resold in the subsequent provision
13 used as a component of, or integrated into, end-to-end
14 telecommunications service shall be non-taxable as sales
15 for resale.
16 (d) If a person, who originates or receives
17 telecommunications in such municipality claims to be a
18 reseller of such telecommunications, such person shall apply
19 to the municipality for a resale number. Such applicant
20 shall state facts which will show the municipality why such
21 applicant is not liable for tax under any ordinance
22 authorized by this Section on any of such purchases and shall
23 furnish such additional information as the municipality may
24 reasonably require.
25 Upon approval of the application, the municipality shall
26 assign a resale number to the applicant and shall certify
27 such number to the applicant. The municipality may cancel
28 any number which is obtained through misrepresentation, or
29 which is used to send or receive such telecommunication
30 tax-free when such actions in fact are not for resale, or
31 which no longer applies because of the person's having
32 discontinued the making of resales.
33 Except as provided hereinabove in this Section, the act
34 or privilege of sending or receiving telecommunications in
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1 this State shall not be made tax-free on the ground of being
2 a sale for resale unless the person has an active resale
3 number from the municipality and furnishes that number to the
4 retailer in connection with certifying to the retailer that
5 any sale to such person is non-taxable because of being a
6 sale for resale.
7 (e) A municipality that imposes taxes upon
8 telecommunications under this Section and whose territory
9 includes part of another unit of local government or a school
10 district may, by ordinance, exempt the other unit of local
11 government or school district from those taxes.
12 (f) A municipality that imposes taxes upon
13 telecommunications under this Section may, by ordinance, (i)
14 reduce the rate of the tax for persons 65 years of age or
15 older or (ii) exempt persons 65 years of age or older from
16 those taxes.
17 (Source: P.A. 87-17; 87-895; 88-116; 88-480; 88-499; 88-670,
18 eff. 12-2-94.)