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90_HB1867
35 ILCS 105/2 from Ch. 120, par. 439.2
35 ILCS 120/1 from Ch. 120, par. 440
Amends the Use Tax Act and the Retailers' Occupation Tax
Act. Provides that "traded-in credits" shall be available
for all transactions including but not limited to private
party transactions, commercial transactions, and individual
sales.
LRB9004757DNks
LRB9004757DNks
1 AN ACT concerning occupation and use taxes.
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
5 Section 2 as follows:
6 (35 ILCS 105/2) (from Ch. 120, par. 439.2)
7 Sec. 2. "Use" means the exercise by any person of any
8 right or power over tangible personal property incident to
9 the ownership of that property, except that it does not
10 include the sale of such property in any form as tangible
11 personal property in the regular course of business to the
12 extent that such property is not first subjected to a use for
13 which it was purchased, and does not include the use of such
14 property by its owner for demonstration purposes: Provided
15 that the property purchased is deemed to be purchased for the
16 purpose of resale, despite first being used, to the extent to
17 which it is resold as an ingredient of an intentionally
18 produced product or by-product of manufacturing. "Use" does
19 not mean the demonstration use or interim use of tangible
20 personal property by a retailer before he sells that tangible
21 personal property. For watercraft or aircraft, if the period
22 of demonstration use or interim use by the retailer exceeds
23 18 months, the retailer shall pay on the retailers' original
24 cost price the tax imposed by this Act, and no credit for
25 that tax is permitted if the watercraft or aircraft is
26 subsequently sold by the retailer. "Use" does not mean the
27 physical incorporation of tangible personal property, to the
28 extent not first subjected to a use for which it was
29 purchased, as an ingredient or constituent, into other
30 tangible personal property (a) which is sold in the regular
31 course of business or (b) which the person incorporating such
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1 ingredient or constituent therein has undertaken at the time
2 of such purchase to cause to be transported in interstate
3 commerce to destinations outside the State of Illinois:
4 Provided that the property purchased is deemed to be
5 purchased for the purpose of resale, despite first being
6 used, to the extent to which it is resold as an ingredient of
7 an intentionally produced product or by-product of
8 manufacturing.
9 "Watercraft" means a Class 2, Class 3, or Class 4
10 watercraft as defined in Section 3-2 of the Boat Registration
11 and Safety Act, a personal watercraft, or any boat equipped
12 with an inboard motor.
13 "Purchase at retail" means the acquisition of the
14 ownership of or title to tangible personal property through a
15 sale at retail.
16 "Purchaser" means anyone who, through a sale at retail,
17 acquires the ownership of tangible personal property for a
18 valuable consideration.
19 "Sale at retail" means any transfer of the ownership of
20 or title to tangible personal property to a purchaser, for
21 the purpose of use, and not for the purpose of resale in any
22 form as tangible personal property to the extent not first
23 subjected to a use for which it was purchased, for a valuable
24 consideration: Provided that the property purchased is deemed
25 to be purchased for the purpose of resale, despite first
26 being used, to the extent to which it is resold as an
27 ingredient of an intentionally produced product or by-product
28 of manufacturing. For this purpose, slag produced as an
29 incident to manufacturing pig iron or steel and sold is
30 considered to be an intentionally produced by-product of
31 manufacturing. "Sale at retail" includes any such transfer
32 made for resale unless made in compliance with Section 2c of
33 the Retailers' Occupation Tax Act, as incorporated by
34 reference into Section 12 of this Act. Transactions whereby
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1 the possession of the property is transferred but the seller
2 retains the title as security for payment of the selling
3 price are sales.
4 "Sale at retail" shall also be construed to include any
5 Illinois florist's sales transaction in which the purchase
6 order is received in Illinois by a florist and the sale is
7 for use or consumption, but the Illinois florist has a
8 florist in another state deliver the property to the
9 purchaser or the purchaser's donee in such other state.
10 The purchase, employment and transfer of such tangible
11 personal property as newsprint and ink for the primary
12 purpose of conveying news (with or without other information)
13 is not a purchase, use or sale of tangible personal property.
14 "Selling price" means the consideration for a sale valued
15 in money whether received in money or otherwise, including
16 cash, credits, property other than as hereinafter provided,
17 and services, but not including the value of or credit given
18 for traded-in tangible personal property where the item that
19 is traded-in is of like kind and character as that which is
20 being sold, and shall be determined without any deduction on
21 account of the cost of the property sold, the cost of
22 materials used, labor or service cost or any other expense
23 whatsoever, but does not include interest or finance charges
24 which appear as separate items on the bill of sale or sales
25 contract nor charges that are added to prices by sellers on
26 account of the seller's tax liability under the "Retailers'
27 Occupation Tax Act", or on account of the seller's duty to
28 collect, from the purchaser, the tax that is imposed by this
29 Act, or on account of the seller's tax liability under
30 Section 8-11-1 of the Illinois Municipal Code, as heretofore
31 and hereafter amended, or on account of the seller's tax
32 liability under the "County Retailers' Occupation Tax Act".
33 Effective December 1, 1985, "selling price" shall include
34 charges that are added to prices by sellers on account of the
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1 seller's tax liability under the Cigarette Tax Act, on
2 account of the seller's duty to collect, from the purchaser,
3 the tax imposed under the Cigarette Use Tax Act, and on
4 account of the seller's duty to collect, from the purchaser,
5 any cigarette tax imposed by a home rule unit. "Traded-in
6 credits" shall be available for all transactions including
7 but not limited to private party transactions, commercial
8 transactions, and individual sales.
9 The phrase "like kind and character" shall be liberally
10 construed (including but not limited to any form of motor
11 vehicle for any form of motor vehicle, or any kind of farm or
12 agricultural implement for any other kind of farm or
13 agricultural implement), while not including a kind of item
14 which, if sold at retail by that retailer, would be exempt
15 from retailers' occupation tax and use tax as an isolated or
16 occasional sale.
17 "Department" means the Department of Revenue.
18 "Person" means any natural individual, firm, partnership,
19 association, joint stock company, joint adventure, public or
20 private corporation, limited liability company, or a
21 receiver, executor, trustee, guardian or other representative
22 appointed by order of any court.
23 "Retailer" means and includes every person engaged in the
24 business of making sales at retail as defined in this
25 Section.
26 A person who holds himself or herself out as being
27 engaged (or who habitually engages) in selling tangible
28 personal property at retail is a retailer hereunder with
29 respect to such sales (and not primarily in a service
30 occupation) notwithstanding the fact that such person designs
31 and produces such tangible personal property on special order
32 for the purchaser and in such a way as to render the property
33 of value only to such purchaser, if such tangible personal
34 property so produced on special order serves substantially
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1 the same function as stock or standard items of tangible
2 personal property that are sold at retail.
3 A person whose activities are organized and conducted
4 primarily as a not-for-profit service enterprise, and who
5 engages in selling tangible personal property at retail
6 (whether to the public or merely to members and their guests)
7 is a retailer with respect to such transactions, excepting
8 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
15 for profit. The selling of school books and school supplies
16 by schools at retail to students is not "primarily for the
17 purposes of" the school which does such selling. This
18 paragraph does not apply to nor subject to taxation
19 occasional dinners, social or similar activities of a person
20 organized and operated exclusively for charitable, religious
21 or educational purposes, whether or not such activities are
22 open to the public.
23 A person who is the recipient of a grant or contract
24 under Title VII of the Older Americans Act of 1965 (P.L.
25 92-258) and serves meals to participants in the federal
26 Nutrition Program for the Elderly in return for contributions
27 established in amount by the individual participant pursuant
28 to a schedule of suggested fees as provided for in the
29 federal Act is not a retailer under this Act with respect to
30 such transactions.
31 Persons who engage in the business of transferring
32 tangible personal property upon the redemption of trading
33 stamps are retailers hereunder when engaged in such business.
34 The isolated or occasional sale of tangible personal
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1 property at retail by a person who does not hold himself out
2 as being engaged (or who does not habitually engage) in
3 selling such tangible personal property at retail or a sale
4 through a bulk vending machine does not make such person a
5 retailer hereunder. However, any person who is engaged in a
6 business which is not subject to the tax imposed by the
7 "Retailers' Occupation Tax Act" because of involving the sale
8 of or a contract to sell real estate or a construction
9 contract to improve real estate, but who, in the course of
10 conducting such business, transfers tangible personal
11 property to users or consumers in the finished form in which
12 it was purchased, and which does not become real estate,
13 under any provision of a construction contract or real estate
14 sale or real estate sales agreement entered into with some
15 other person arising out of or because of such nontaxable
16 business, is a retailer to the extent of the value of the
17 tangible personal property so transferred. If, in such
18 transaction, a separate charge is made for the tangible
19 personal property so transferred, the value of such property,
20 for the purposes of this Act, is the amount so separately
21 charged, but not less than the cost of such property to the
22 transferor; if no separate charge is made, the value of such
23 property, for the purposes of this Act, is the cost to the
24 transferor of such tangible personal property.
25 "Retailer maintaining a place of business in this State",
26 or any like term, means and includes any of the following
27 retailers:
28 1. A retailer having or maintaining within this
29 State, directly or by a subsidiary, an office,
30 distribution house, sales house, warehouse or other place
31 of business, or any agent or other representative
32 operating within this State under the authority of the
33 retailer or its subsidiary, irrespective of whether such
34 place of business or agent or other representative is
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1 located here permanently or temporarily, or whether such
2 retailer or subsidiary is licensed to do business in this
3 State. However, the ownership of property that is located
4 at the premises of a printer with which the retailer has
5 contracted for printing and that consists of the final
6 printed product, property that becomes a part of the
7 final printed product, or copy from which the printed
8 product is produced shall not result in the retailer
9 being deemed to have or maintain an office, distribution
10 house, sales house, warehouse, or other place of business
11 within this State.
12 2. A retailer soliciting orders for tangible
13 personal property by means of a telecommunication or
14 television shopping system (which utilizes toll free
15 numbers) which is intended by the retailer to be
16 broadcast by cable television or other means of
17 broadcasting, to consumers located in this State.
18 3. A retailer, pursuant to a contract with a
19 broadcaster or publisher located in this State,
20 soliciting orders for tangible personal property by means
21 of advertising which is disseminated primarily to
22 consumers located in this State and only secondarily to
23 bordering jurisdictions.
24 4. A retailer soliciting orders for tangible
25 personal property by mail if the solicitations are
26 substantial and recurring and if the retailer benefits
27 from any banking, financing, debt collection,
28 telecommunication, or marketing activities occurring in
29 this State or benefits from the location in this State of
30 authorized installation, servicing, or repair facilities.
31 5. A retailer that is owned or controlled by the
32 same interests that own or control any retailer engaging
33 in business in the same or similar line of business in
34 this State.
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1 6. A retailer having a franchisee or licensee
2 operating under its trade name if the franchisee or
3 licensee is required to collect the tax under this
4 Section.
5 7. A retailer, pursuant to a contract with a cable
6 television operator located in this State, soliciting
7 orders for tangible personal property by means of
8 advertising which is transmitted or distributed over a
9 cable television system in this State.
10 8. A retailer engaging in activities in Illinois,
11 which activities in the state in which the retail
12 business engaging in such activities is located would
13 constitute maintaining a place of business in that state.
14 "Bulk vending machine" means a nonelectrically operated
15 vending machine, containing unsorted confections, nuts or
16 other merchandise which, when a coin of a denomination not
17 larger than one cent is inserted, are dispensed in equal
18 portions, at random and without selection by the customer.
19 (Source: P.A. 88-194; 88-361; 88-480; 88-660, eff. 9-16-94;
20 88-669, eff. 11-29-94; 88-670, eff. 12-2-94.)
21 Section 10. The Retailers' Occupation Tax Act is amended
22 by changing Section 1 as follows:
23 (35 ILCS 120/1) (from Ch. 120, par. 440)
24 Sec. 1. Definitions. "Sale at retail" means any
25 transfer of the ownership of or title to tangible personal
26 property to a purchaser, for the purpose of use or
27 consumption, and not for the purpose of resale in any form as
28 tangible personal property to the extent not first subjected
29 to a use for which it was purchased, for a valuable
30 consideration: Provided that the property purchased is
31 deemed to be purchased for the purpose of resale, despite
32 first being used, to the extent to which it is resold as an
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1 ingredient of an intentionally produced product or byproduct
2 of manufacturing. For this purpose, slag produced as an
3 incident to manufacturing pig iron or steel and sold is
4 considered to be an intentionally produced byproduct of
5 manufacturing. Transactions whereby the possession of the
6 property is transferred but the seller retains the title as
7 security for payment of the selling price shall be deemed to
8 be sales.
9 "Sale at retail" shall be construed to include any
10 transfer of the ownership of or title to tangible personal
11 property to a purchaser, for use or consumption by any other
12 person to whom such purchaser may transfer the tangible
13 personal property without a valuable consideration, and to
14 include any transfer, whether made for or without a valuable
15 consideration, for resale in any form as tangible personal
16 property unless made in compliance with Section 2c of this
17 Act.
18 Sales of tangible personal property, which property, to
19 the extent not first subjected to a use for which it was
20 purchased, as an ingredient or constituent, goes into and
21 forms a part of tangible personal property subsequently the
22 subject of a "Sale at retail", are not sales at retail as
23 defined in this Act: Provided that the property purchased is
24 deemed to be purchased for the purpose of resale, despite
25 first being used, to the extent to which it is resold as an
26 ingredient of an intentionally produced product or byproduct
27 of manufacturing.
28 "Sale at retail" shall be construed to include any
29 Illinois florist's sales transaction in which the purchase
30 order is received in Illinois by a florist and the sale is
31 for use or consumption, but the Illinois florist has a
32 florist in another state deliver the property to the
33 purchaser or the purchaser's donee in such other state.
34 The purchase, employment and transfer of such tangible
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1 personal property as newsprint and ink for the primary
2 purpose of conveying news (with or without other information)
3 is not a purchase, use or sale of tangible personal property.
4 A person whose activities are organized and conducted
5 primarily as a not-for-profit service enterprise, and who
6 engages in selling tangible personal property at retail
7 (whether to the public or merely to members and their guests)
8 is engaged in the business of selling tangible personal
9 property at retail with respect to such transactions,
10 excepting only a person organized and operated exclusively
11 for charitable, religious or educational purposes either (1),
12 to the extent of sales by such person to its members,
13 students, patients or inmates of tangible personal property
14 to be used primarily for the purposes of such person, or (2),
15 to the extent of sales by such person of tangible personal
16 property which is not sold or offered for sale by persons
17 organized for profit. The selling of school books and school
18 supplies by schools at retail to students is not "primarily
19 for the purposes of" the school which does such selling. The
20 provisions of this paragraph shall not apply to nor subject
21 to taxation occasional dinners, socials or similar activities
22 of a person organized and operated exclusively for
23 charitable, religious or educational purposes, whether or not
24 such activities are open to the public.
25 A person who is the recipient of a grant or contract
26 under Title VII of the Older Americans Act of 1965 (P.L.
27 92-258) and serves meals to participants in the federal
28 Nutrition Program for the Elderly in return for contributions
29 established in amount by the individual participant pursuant
30 to a schedule of suggested fees as provided for in the
31 federal Act is not engaged in the business of selling
32 tangible personal property at retail with respect to such
33 transactions.
34 "Purchaser" means anyone who, through a sale at retail,
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1 acquires the ownership of or title to tangible personal
2 property for a valuable consideration.
3 "Reseller of motor fuel" means any person engaged in the
4 business of selling or delivering or transferring title of
5 motor fuel to another person other than for use or
6 consumption. No person shall act as a reseller of motor fuel
7 within this State without first being registered as a
8 reseller pursuant to Section 2c or a retailer pursuant to
9 Section 2a.
10 "Selling price" or the "amount of sale" means the
11 consideration for a sale valued in money whether received in
12 money or otherwise, including cash, credits, property, other
13 than as hereinafter provided, and services, but not including
14 the value of or credit given for traded-in tangible personal
15 property where the item that is traded-in is of like kind and
16 character as that which is being sold, and shall be
17 determined without any deduction on account of the cost of
18 the property sold, the cost of materials used, labor or
19 service cost or any other expense whatsoever, but does not
20 include charges that are added to prices by sellers on
21 account of the seller's tax liability under this Act, or on
22 account of the seller's duty to collect, from the purchaser,
23 the tax that is imposed by the Use Tax Act, or on account of
24 the seller's tax liability under Section 8-11-1 of the
25 Illinois Municipal Code, as heretofore and hereafter amended,
26 or on account of the seller's tax liability under the County
27 Retailers' Occupation Tax Act, or on account of the seller's
28 tax liability under the Home Rule Municipal Soft Drink
29 Retailers' Occupation Tax, or on account of the seller's tax
30 liability under any tax imposed under the "Regional
31 Transportation Authority Act", approved December 12, 1973.
32 Effective December 1, 1985, "selling price" shall include
33 charges that are added to prices by sellers on account of the
34 seller's tax liability under the Cigarette Tax Act, on
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1 account of the sellers' duty to collect, from the purchaser,
2 the tax imposed under the Cigarette Use Tax Act, and on
3 account of the seller's duty to collect, from the purchaser,
4 any cigarette tax imposed by a home rule unit. "Traded-in
5 credits" shall be available for all transactions including
6 but not limited to private party transactions, commercial
7 transactions, and individual sales.
8 The phrase "like kind and character" shall be liberally
9 construed (including but not limited to any form of motor
10 vehicle for any form of motor vehicle, or any kind of farm or
11 agricultural implement for any other kind of farm or
12 agricultural implement), while not including a kind of item
13 which, if sold at retail by that retailer, would be exempt
14 from retailers' occupation tax and use tax as an isolated or
15 occasional sale.
16 "Gross receipts" from the sales of tangible personal
17 property at retail means the total selling price or the
18 amount of such sales, as hereinbefore defined. In the case
19 of charge and time sales, the amount thereof shall be
20 included only as and when payments are received by the
21 seller. Receipts or other consideration derived by a seller
22 from the sale, transfer or assignment of accounts receivable
23 to a wholly owned subsidiary will not be deemed payments
24 prior to the time the purchaser makes payment on such
25 accounts.
26 "Department" means the Department of Revenue.
27 "Person" means any natural individual, firm, partnership,
28 association, joint stock company, joint adventure, public or
29 private corporation, limited liability company, or a
30 receiver, executor, trustee, guardian or other representative
31 appointed by order of any court.
32 The isolated or occasional sale of tangible personal
33 property at retail by a person who does not hold himself out
34 as being engaged (or who does not habitually engage) in
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1 selling such tangible personal property at retail, or a sale
2 through a bulk vending machine, does not constitute engaging
3 in a business of selling such tangible personal property at
4 retail within the meaning of this Act; provided that any
5 person who is engaged in a business which is not subject to
6 the tax imposed by this Act because of involving the sale of
7 or a contract to sell real estate or a construction contract
8 to improve real estate or a construction contract to
9 engineer, install, and maintain an integrated system of
10 products, but who, in the course of conducting such business,
11 transfers tangible personal property to users or consumers in
12 the finished form in which it was purchased, and which does
13 not become real estate or was not engineered and installed,
14 under any provision of a construction contract or real estate
15 sale or real estate sales agreement entered into with some
16 other person arising out of or because of such nontaxable
17 business, is engaged in the business of selling tangible
18 personal property at retail to the extent of the value of the
19 tangible personal property so transferred. If, in such a
20 transaction, a separate charge is made for the tangible
21 personal property so transferred, the value of such property,
22 for the purpose of this Act, shall be the amount so
23 separately charged, but not less than the cost of such
24 property to the transferor; if no separate charge is made,
25 the value of such property, for the purposes of this Act, is
26 the cost to the transferor of such tangible personal
27 property. Construction contracts for the improvement of real
28 estate consisting of engineering, installation, and
29 maintenance of voice, data, video, security, and all
30 telecommunication systems do not constitute engaging in a
31 business of selling tangible personal property at retail
32 within the meaning of this Act if they are sold at one
33 specified contract price.
34 A person who holds himself or herself out as being
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1 engaged (or who habitually engages) in selling tangible
2 personal property at retail is a person engaged in the
3 business of selling tangible personal property at retail
4 hereunder with respect to such sales (and not primarily in a
5 service occupation) notwithstanding the fact that such person
6 designs and produces such tangible personal property on
7 special order for the purchaser and in such a way as to
8 render the property of value only to such purchaser, if such
9 tangible personal property so produced on special order
10 serves substantially the same function as stock or standard
11 items of tangible personal property that are sold at retail.
12 Persons who engage in the business of transferring
13 tangible personal property upon the redemption of trading
14 stamps are engaged in the business of selling such property
15 at retail and shall be liable for and shall pay the tax
16 imposed by this Act on the basis of the retail value of the
17 property transferred upon redemption of such stamps.
18 "Bulk vending machine" means a nonelectrically operated
19 vending machine, containing unsorted confections, nuts or
20 other merchandise which, when a coin of a denomination not
21 larger than one cent is inserted, are dispensed in equal
22 portions, at random and without selection by the customer.
23 (Source: P.A. 88-420; 88-480; 88-507; 88-670, eff. 12-2-94.)