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| [ House Amendment 003 ] |
90_HB0601ham002
LRB9000420KDmbam01
1 AMENDMENT TO HOUSE BILL 601
2 AMENDMENT NO. . Amend House Bill 601 by replacing
3 everything after the enacting clause with the following:
4 "Section 1. Short title. This Act may be cited as the
5 Automobile Leasing Occupation and Use Tax Act.
6 Section 5. Definitions. "Leasing" means any transfer of
7 the possession or right to possession of an automobile to a
8 user for a valuable consideration for a period of more than 1
9 year.
10 "Automobile" means any motor vehicle of the first
11 division, a motor vehicle of the second division that is a
12 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, or a motor vehicle of
16 the second division that is of the van configuration designed
17 for the transportation of not less than 7 nor more than 16
18 passengers, as defined in Section 1-146 of the Illinois
19 Vehicle Code.
20 "Capitalized cost" means the amount which, when reduced
21 by the amount of the capitalized cost reduction, equals the
22 adjusted capitalized cost. The capitalized cost includes all
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1 items which are capitalized in the lease and after the
2 application of the capitalized cost reduction, amortizes to
3 the residual value by the depreciation portion of the
4 periodic lease payments over the term of the lease. For a
5 single payment lease, the capitalized cost amortizes to the
6 residual value by the depreciation portion of the single
7 lease payment. The capitalized cost may include, without
8 limitation, taxes, registration, license, acquisition,
9 administration, assignment and other fees, and charges for
10 insurance, for a waiver of the contractual obligation to pay
11 the gap amount, for accessories and their installation, for
12 delivering, servicing, repairing, or improving the vehicle,
13 and for other services and benefits incidental to the
14 consumer lease. It also may include, with respect to a
15 vehicle or other property traded in connection with a lease,
16 the unpaid balance of any amount financed under an
17 outstanding vehicle loan agreement or vehicle retail
18 installment contract or the unpaid portion of the early
19 termination obligation under a lease or other obligation of
20 the lessee. The term capitalized cost does not include any
21 lease charge.
22 "Capitalized cost reduction" means payments made by cash,
23 check, rebates, or similar means that are in the nature of
24 down payments made by the lessee and any net trade-in
25 allowance granted by the lessor at the inception of the
26 consumer lease for the purpose of reducing the capitalized
27 cost. The term capitalized cost reduction does not include
28 any base lease payments due at the inception of the lease.
29 "Department" means the Department of Revenue.
30 "Person" means any natural individual, firm, partnership,
31 association, joint stock company, joint venture, public or
32 private corporation, limited liability company, or a
33 receiver, executor, trustee, conservator, or other
34 representatives appointed by order of any court.
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1 "Lessor" means any person, firm, corporation, or
2 association engaged in this State in the business of leasing
3 automobiles for a period of more than one year to users. For
4 this purpose, the objective of making a profit is not
5 necessary to make the leasing activity a business.
6 "Lessee" means any user to whom the possession, or the
7 right to possession, of an automobile is transferred for a
8 period of more than one year for a valuable consideration
9 that is paid by the lessee or by someone else.
10 "Gross receipts" from the leasing of tangible personal
11 property or "lease payments" means the total leasing price
12 less the residual value of the automobile. In the case of
13 leasing transactions in which the consideration is paid to
14 the lessor on an installment basis, the amounts of the
15 payments shall be included by the lessor in gross receipts or
16 lease payments only as and when payments are received by the
17 lessor.
18 "Leasing price" or "lease price" means the consideration
19 paid monthly for leasing an automobile valued in money,
20 whether received in money or otherwise (including cash,
21 credits, property, and services) and shall be determined
22 without any deduction on account of the cost of the property
23 leased, the cost of materials used, labor or service cost, or
24 any other expense whatsoever, and includes charges added for
25 capital contributions and up front payments, but does not
26 include charges that are added by lessors on account of the
27 lessor's tax liability under this Act or any other State of
28 federal law or on account of the lessor's duty to collect,
29 from the lessee, the tax that is imposed by Section 15 of
30 this Act. The phrase "leasing price" or "lease price" does
31 not include charges added on account of the lessor's tax
32 liability under the Chicago Transaction Tax or any other home
33 rule leasing tax on automobiles.
34 "Residual value" means the estimated value of the vehicle
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1 at the end of the scheduled lease term, used by the lessor in
2 determining the base lease payment, as established by the
3 lessor at the time the lessor and lessee enter into the
4 lease.
5 Section 10. Occupation tax imposed; rate. A tax is
6 imposed upon persons engaged in this State in the business of
7 leasing automobiles in Illinois. The tax shall be imposed as
8 follows:
9 (1) A tax is imposed at a rate equal to the sum of
10 1.25%, plus a rate equal to the rate of any additional
11 occupation or use tax imposed by a unit of local
12 government that is authorized to impose and does impose
13 an additional occupation or use tax, of the capitalized
14 cost, to be paid in a lump sum payment at the start of
15 the lease term;
16 (2) A tax is imposed at the rate of 5% of the
17 monthly gross receipts received from the business; and
18 (3) A tax is imposed at the rate of 5% of the value
19 of the automobile at the time a lessee exercises an
20 option to purchase a leased vehicle.
21 No tax shall be imposed under this Section, however, if
22 the lessor is prohibited by federal law from charging tax to
23 the lessee. Every person engaged in this State in the
24 business of leasing automobiles shall apply to the Department
25 (upon a form prescribed and furnished by the Department) for
26 a certificate of registration under this Act. The certificate
27 of registration that is issued by the Department to a
28 retailer under the Retailers' Occupation Tax Act shall permit
29 the lessor to engage in a business that is taxable under this
30 Section without registering separately with the Department.
31 The tax imposed by this Section shall, when collected, be
32 stated as a distinct item separate and apart from the lease
33 price of the automobile.
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1 The Department has power to administer and enforce this
2 Section, to collect all taxes and penalties due under this
3 Section, to dispose of taxes and penalties so collected in
4 the manner provided in this Act, and to determine all rights
5 to credit memoranda arising on account of the erroneous
6 payment of tax or penalty under this Act. In the
7 administration of, and compliance with, this Section, the
8 Department and persons who are subject to this Section shall
9 have the same rights, remedies, privileges, immunities,
10 powers and duties, shall be subject to the same conditions,
11 restrictions, limitations, penalties, and definitions of
12 terms, and shall employ the same modes of procedure as are
13 prescribed in Sections 1, 1a, 2, 2-10 (in respect to all
14 provisions therein other than the State rate of tax), 2-40,
15 2a, 2b, 2c, 3 (except provisions relating to transaction
16 returns and quarter monthly payments), 4, 5, 5a, 5b, 5c, 5d,
17 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12
18 and 13 of the Retailers' Occupation Tax Act and Section 3-7
19 of the Uniform Penalty and Interest Act as fully as if those
20 provisions were set forth in this Section. Of the moneys
21 collected under this Section, the amounts collected from the
22 1.25% tax and any additional occupation or use tax imposed by
23 a unit of local government that is authorized to impose and
24 does impose an additional occupation or use tax at the start
25 of the lease term shall be deposited into the Automobile
26 Leasing and Occupation and Use Tax Distribution Fund and all
27 other moneys shall be distributed as provided in Section 3 of
28 the Retailers' Occupation Tax Act, except that for purposes
29 of this distribution, the required distributions into the
30 County and Mass Transit District Fund and the Local
31 Government Tax Fund shall not apply.
32 Allocation of Automobile Leasing Occupation and Use Tax
33 attributable to units of local government shall be determined
34 by the location in this State from which an automobile is
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1 removed from a retailer's inventory for subsequent lease
2 under this Act. Lessors required to file returns under this
3 Act must specifically identify receipts from lease
4 transactions that are attributable to each unit of local
5 government as determined in this Section.
6 To the extent not inconsistent with this Act, references
7 in the incorporated Sections of the Retailers' Occupation Tax
8 Act to retailers, to sellers, or to persons engaged in the
9 business of selling tangible personal property shall mean
10 lessors as defined in this Act. References in those
11 incorporated Sections to sales of tangible personal property
12 shall mean leases of tangible personal property subject to
13 this Act. References in those incorporated Sections to
14 selling price of tangible personal property shall mean
15 leasing price of tangible personal property subject to this
16 Act.
17 Section 15. Use tax imposed; rate. A tax is imposed upon
18 the privilege of using, in this State, an automobile that is
19 leased from a lessor. The tax shall be imposed as follows:
20 (1) A tax is imposed at a rate equal to the sum of
21 1.25%, plus a rate equal to the rate of any additional
22 occupation or use tax imposed by a unit of local
23 government that is authorized to impose and does impose
24 an additional occupation or use tax, of the capitalized
25 cost, to be paid in a lump sum payment at the start of
26 the lease term; and
27 (2) A tax is imposed at the rate of 5% of the
28 monthly leasing price of the automobile paid to the
29 lessor under any lease agreement.
30 No tax shall be imposed under this Section, however, if
31 the lessor is prohibited by federal law from charging tax to
32 the lessee.
33 The tax imposed by this Section shall be collected from
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1 the lessee by a lessor maintaining a place of business in
2 this State and remitted to the Department.
3 The tax imposed by this Section and not paid to a lessor
4 pursuant to the preceding paragraph of this Section shall be
5 paid to the Department directly by any person using the
6 automobile within this State.
7 The tax imposed by this Section shall, when collected, be
8 stated as a distinct item separate and apart from the lease
9 price of the automobile.
10 The Department has full power to administer and enforce
11 this Section; to collect all taxes, penalties, and interest
12 due under this Section; to dispose of taxes, penalties, and
13 interest so collected in the manner provided in this Act; and
14 to determine all rights to credit memoranda or refunds
15 arising on account of the erroneous payment of tax, penalty,
16 or interest under this Section. In the administration of, and
17 compliance with, this Section, the Department and persons who
18 are subject to this Section shall have the same rights,
19 remedies, privileges, immunities, powers, and duties, shall
20 be subject to the same conditions, restrictions, limitations,
21 penalties, and definitions of terms, and shall employ the
22 same modes of procedure as are prescribed in Sections 2, 3,
23 3-10, 3-45, 3-55, 3-65, 3a, 4, 6, 7, 8, 9 (except provisions
24 relating to transaction returns and quarter monthly
25 payments), 10, 11, 12, 12a, 12b, 13, 14, 15, 19, 20, 21 and
26 22 of the Use Tax Act, and are not inconsistent with this
27 Section, as fully as if those provisions were set forth in
28 this Section. Of the moneys collected under this Section, the
29 amounts collected from the 1.25% tax and any additional
30 occupation or use tax imposed by a unit of local government
31 that is authorized to impose and does impose an additional
32 occupation or use tax at the start of the lease term shall be
33 deposited into the Automobile Leasing and Occupation and Use
34 Tax Distribution Fund and all other moneys shall be
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1 distributed as provided in Section 3 of the Retailers'
2 Occupation Tax Act, except that for purposes of this
3 distribution, the required distributions into the County and
4 Mass Transit District Fund and the Local Government Tax Fund
5 shall not apply.
6 To the extent not inconsistent with this Act, references
7 in the incorporated Sections of the Use Tax Act to retailers,
8 to sellers, or to persons engaged in the business of selling
9 tangible personal property shall mean lessors as defined in
10 this Act. References in those incorporated Sections to sales
11 of tangible personal property shall mean leases of tangible
12 personal property subject to this Act. References in those
13 incorporated Sections to selling price of tangible personal
14 property shall mean leasing price of tangible personal
15 property subject to this Act.
16 Section 45. The State Finance Act is amended by changing
17 Sections 6z-18 and 6z-20 and adding Sections 5.449 and 6z-42
18 as follows:
19 (30 ILCS 105/5.449 new)
20 Sec. 5.449. The Automobile Leasing Occupation and Use
21 Tax Distribution Fund.
22 (30 ILCS 105/6z-18) (from Ch. 127, par. 142z-18)
23 Sec. 6z-18. A portion of the money paid into the Local
24 Government Tax Fund from sales of food for human consumption
25 which is to be consumed off the premises where it is sold
26 (other than alcoholic beverages, soft drinks and food which
27 has been prepared for immediate consumption) and prescription
28 and nonprescription medicines, drugs, medical appliances and
29 insulin, urine testing materials, syringes and needles used
30 by diabetics, which occurred in municipalities, shall be
31 distributed to each municipality based upon the sales which
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1 occurred in that municipality. The remainder shall be
2 distributed to each county based upon the sales which
3 occurred in the unincorporated area of that county.
4 A portion of the money paid into the Local Government Tax
5 Fund from the 6.25% general use tax rate on the selling price
6 of tangible personal property which is purchased outside
7 Illinois at retail from a retailer and which is titled or
8 registered by any agency of this State's government, and from
9 the 5% leasing use tax rate on automobiles leased from a
10 lessor outside of Illinois and removed from a retailer's
11 inventory outside of Illinois and which are titled or
12 registered in this State, shall be distributed to
13 municipalities as provided in this paragraph. Each
14 municipality shall receive the amount attributable to sales
15 for which Illinois addresses for titling or registration
16 purposes are given as being in such municipality. The
17 remainder of the money paid into the Local Government Tax
18 Fund from such sales shall be distributed to counties. Each
19 county shall receive the amount attributable to sales for
20 which Illinois addresses for titling or registration purposes
21 are given as being located in the unincorporated area of such
22 county.
23 A portion of the money paid into the Local Government Tax
24 Fund from the rate on leases of titled and registered
25 tangible personal property subject to the Automobile Leasing
26 Occupation and Use Tax Act, attributed to municipalities,
27 shall be distributed to each municipality based upon lease
28 transactions subject to the Automobile Leasing Occupation and
29 Use Tax Act attributed to that municipality. The remainder
30 shall be distributed to each county, based upon the lease
31 transactions subject to the Automobile Leasing Occupation and
32 Use Tax Act attributed to the unincorporated area of that
33 county.
34 A portion of the money paid into the Local Government Tax
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1 Fund from the 6.25% general rate on sales subject to taxation
2 under the Retailers' Occupation Tax Act and the Service
3 Occupation Tax Act, which occurred in municipalities, shall
4 be distributed to each municipality, based upon the sales
5 which occurred in that municipality. The remainder shall be
6 distributed to each county, based upon the sales which
7 occurred in the unincorporated area of such county.
8 Whenever the Department determines that a refund of money
9 paid into the Local Government Tax Fund should be made to a
10 claimant instead of issuing a credit memorandum, the
11 Department shall notify the State Comptroller, who shall
12 cause the order to be drawn for the amount specified, and to
13 the person named, in such notification from the Department.
14 Such refund shall be paid by the State Treasurer out of the
15 Local Government Tax Fund.
16 On or before the 25th day of each calendar month, the
17 Department shall prepare and certify to the Comptroller the
18 disbursement of stated sums of money to named municipalities
19 and counties, the municipalities and counties to be those
20 entitled to distribution of taxes or penalties paid to the
21 Department during the second preceding calendar month. The
22 amount to be paid to each municipality or county shall be the
23 amount (not including credit memoranda) collected during the
24 second preceding calendar month by the Department and paid
25 into the Local Government Tax Fund, plus an amount the
26 Department determines is necessary to offset any amounts
27 which were erroneously paid to a different taxing body, and
28 not including an amount equal to the amount of refunds made
29 during the second preceding calendar month by the Department,
30 and not including any amount which the Department determines
31 is necessary to offset any amounts which are payable to a
32 different taxing body but were erroneously paid to the
33 municipality or county. Within 10 days after receipt, by the
34 Comptroller, of the disbursement certification to the
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1 municipalities and counties, provided for in this Section to
2 be given to the Comptroller by the Department, the
3 Comptroller shall cause the orders to be drawn for the
4 respective amounts in accordance with the directions
5 contained in such certification.
6 When certifying the amount of monthly disbursement to a
7 municipality or county under this Section, the Department
8 shall increase or decrease that amount by an amount necessary
9 to offset any misallocation of previous disbursements. The
10 offset amount shall be the amount erroneously disbursed
11 within the 6 months preceding the time a misallocation is
12 discovered.
13 The provisions directing the distributions from the
14 special fund in the State Treasury provided for in this
15 Section shall constitute an irrevocable and continuing
16 appropriation of all amounts as provided herein. The State
17 Treasurer and State Comptroller are hereby authorized to make
18 distributions as provided in this Section.
19 In construing any development, redevelopment, annexation,
20 preannexation or other lawful agreement in effect prior to
21 September 1, 1990, which describes or refers to receipts from
22 a county or municipal retailers' occupation tax, use tax or
23 service occupation tax which now cannot be imposed, such
24 description or reference shall be deemed to include the
25 replacement revenue for such abolished taxes, distributed
26 from the Local Government Tax Fund.
27 (Source: P.A. 86-928; 86-1481.)
28 (30 ILCS 105/6z-20) (from Ch. 127, par. 142z-20)
29 Sec. 6z-20. Of the money received from the 6.25% general
30 rate on sales subject to taxation under the Retailers'
31 Occupation Tax Act and Service Occupation Tax Act and paid
32 into the County and Mass Transit District Fund, distribution
33 to the Regional Transportation Authority tax fund, created
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1 pursuant to Section 4.03 of the Regional Transportation
2 Authority Act, for deposit therein shall be made based upon
3 the retail sales occurring in a county having more than
4 3,000,000 inhabitants. The remainder shall be distributed to
5 each county having 3,000,000 or fewer inhabitants based upon
6 the retail sales occurring in each such county.
7 Of the money received from the rate on leases of titled
8 and registered tangible personal property subject to the
9 Automobile Leasing Occupation and Use Tax Act and paid into
10 the County and Mass Transit District Fund, distribution to
11 the Regional Transportation Authority tax fund, created under
12 Section 4.03 of the Regional Transportation Authority Act,
13 for deposit therein shall be made based upon the lease
14 transactions subject to the Automobile Leasing Occupation and
15 Use Tax Act attributable to a county having more than
16 3,000,000 inhabitants. The remainder shall be distributed to
17 each county having 3,000,000 or fewer inhabitants based upon
18 the lease transactions subject to the Automobile Leasing
19 Occupation and Use Tax Act attributable to that county.
20 Of the money received from the 6.25% general use tax rate
21 on tangible personal property which is purchased outside
22 Illinois at retail from a retailer and which is titled or
23 registered by any agency of this State's government, and from
24 the 5% leasing use tax rate on automobiles leased from a
25 lessor outside of Illinois and removed from a retailer's
26 inventory outside of Illinois and which are titled or
27 registered in this State, and paid into the County and Mass
28 Transit District Fund, the amount for which Illinois
29 addresses for titling or registration purposes are given as
30 being in each county having more than 3,000,000 inhabitants
31 shall be distributed into the Regional Transportation
32 Authority tax fund, created pursuant to Section 4.03 of the
33 Regional Transportation Authority Act. The remainder of the
34 money paid from such sales shall be distributed to each
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1 county based on sales for which Illinois addresses for
2 titling or registration purposes are given as being located
3 in the county. Any money paid into the Regional
4 Transportation Authority Occupation and Use Tax Replacement
5 Fund from the County and Mass Transit District Fund prior to
6 January 14, 1991, which has not been paid to the Authority
7 prior to that date, shall be transferred to the Regional
8 Transportation Authority tax fund.
9 Whenever the Department determines that a refund of money
10 paid into the County and Mass Transit District Fund should be
11 made to a claimant instead of issuing a credit memorandum,
12 the Department shall notify the State Comptroller, who shall
13 cause the order to be drawn for the amount specified, and to
14 the person named, in such notification from the Department.
15 Such refund shall be paid by the State Treasurer out of the
16 County and Mass Transit District Fund.
17 On or before the 25th day of each calendar month, the
18 Department shall prepare and certify to the Comptroller the
19 disbursement of stated sums of money to the Regional
20 Transportation Authority and to named counties, the counties
21 to be those entitled to distribution, as hereinabove
22 provided, of taxes or penalties paid to the Department during
23 the second preceding calendar month. The amount to be paid
24 to the Regional Transportation Authority and each county
25 having 3,000,000 or fewer inhabitants shall be the amount
26 (not including credit memoranda) collected during the second
27 preceding calendar month by the Department and paid into the
28 County and Mass Transit District Fund, plus an amount the
29 Department determines is necessary to offset any amounts
30 which were erroneously paid to a different taxing body, and
31 not including an amount equal to the amount of refunds made
32 during the second preceding calendar month by the Department,
33 and not including any amount which the Department determines
34 is necessary to offset any amounts which were payable to a
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1 different taxing body but were erroneously paid to the
2 Regional Transportation Authority or county. Within 10 days
3 after receipt, by the Comptroller, of the disbursement
4 certification to the Regional Transportation Authority and
5 counties, provided for in this Section to be given to the
6 Comptroller by the Department, the Comptroller shall cause
7 the orders to be drawn for the respective amounts in
8 accordance with the directions contained in such
9 certification.
10 When certifying the amount of a monthly disbursement to
11 the Regional Transportation Authority or to a county under
12 this Section, the Department shall increase or decrease that
13 amount by an amount necessary to offset any misallocation of
14 previous disbursements. The offset amount shall be the
15 amount erroneously disbursed within the 6 months preceding
16 the time a misallocation is discovered.
17 The provisions directing the distributions from the
18 special fund in the State Treasury provided for in this
19 Section and from the Regional Transportation Authority tax
20 fund created by Section 4.03 of the Regional Transportation
21 Authority Act shall constitute an irrevocable and continuing
22 appropriation of all amounts as provided herein. The State
23 Treasurer and State Comptroller are hereby authorized to make
24 distributions as provided in this Section.
25 In construing any development, redevelopment, annexation,
26 preannexation or other lawful agreement in effect prior to
27 September 1, 1990, which describes or refers to receipts from
28 a county or municipal retailers' occupation tax, use tax or
29 service occupation tax which now cannot be imposed, such
30 description or reference shall be deemed to include the
31 replacement revenue for such abolished taxes, distributed
32 from the County and Mass Transit District Fund or Local
33 Government Distributive Fund, as the case may be.
34 (Source: P.A. 86-928; 86-1481; 87-435.)
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1 (30 ILCS 105/6z-42 new)
2 Sec. 6z-42. The Automobile Leasing Occupation and Use
3 Tax Distribution Fund.
4 (a) All moneys received by the Illinois Department of
5 Revenue from the 1.25% tax imposed on the capitalized cost of
6 a vehicle at the start of a lease term under the Automobile
7 Leasing Occupation and Use Tax Act shall be distributed to
8 the appropriate unit of local government by the Department of
9 Revenue as follows:
10 (1) In the case of a lease executed in this State,
11 1% shall be paid into the Local Government Tax Fund and
12 .25% shall be paid into the County and Mass Transit
13 District Fund of the unit of local government from which
14 the automobile is removed from a retailer's inventory for
15 subsequent lease under the Automobile Leasing Occupation
16 and Use Tax Act.
17 (2) In the case of a lease executed outside of this
18 State, 1% shall be paid into the Local Government Tax
19 Fund and .25% shall be paid into the County and Mass
20 Transit District Fund in the unit of local government
21 where the vehicle is titled.
22 (b) All moneys received by the Illinois Department of
23 Revenue from any additional rate under item (1) of Section 10
24 of the Automobile Leasing Occupation and Use Tax Act imposed
25 as an equivalent of any additional occupation or use tax
26 imposed by a unit of local government that is authorized to
27 impose and does impose an additional occupation or use tax on
28 the capitalized cost of a vehicle at the start of a lease
29 term shall be distributed to the unit of local government
30 imposing the tax.".