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90_HB2363eng
35 ILCS 5/304 from Ch. 120, par. 3-304
Amends the Illinois Income Tax Act. Provides that for
taxable years ending on or after December 31, 1995, dividends
and certain other amounts included under the Internal Revenue
Code shall not be included in the numerator or denominator of
the sales factor (now for taxable years ending on or after
December 31, 1995 and excluding taxable years ending after
December 31, 1997). Effective immediately.
LRB9007368KDks
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1 AN ACT in relation to taxation, amending named Acts.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Income Tax Act is amended by
5 changing Sections 301, 304, and 704 as follows:
6 (35 ILCS 5/301) (from Ch. 120, par. 3-301)
7 Sec. 301. General Rule.
8 (a) Residents. All items of income or deduction which
9 were taken into account in the computation of base income for
10 the taxable year by a resident shall be allocated to this
11 State.
12 (b) Part-year residents. All items of income or
13 deduction which were taken into account in the computation of
14 base income for the taxable year by a part-year resident
15 shall, for that part of the year the part-year resident was a
16 resident of this State, be allocated to this State and, for
17 the remaining part of the year, be allocated to this State
18 only to the extent provided by Section 302, 303 or 304
19 (relating to compensation, nonbusiness income and business
20 income, respectively).
21 (c) Other persons.
22 (1) In general. Any item of income or deduction
23 which was taken into account in the computation of base
24 income for the taxable year by any person other than a
25 resident and which is referred to in Section 302, 303 or
26 304 (relating to compensation, nonbusiness income and
27 business income, respectively) shall be allocated to this
28 State only to the extent provided by such section.
29 (2) Unspecified items. Any item of income or
30 deduction which was taken into account in the computation
31 of base income for the taxable year by any person other
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1 than a resident and which is not otherwise specifically
2 allocated or apportioned pursuant to Section 302, 303 or
3 304 (including, without limitation, interest, dividends,
4 items of income taken into account under the provisions
5 of Sections 401 through 425 of the Internal Revenue Code,
6 and benefit payments received by a beneficiary of a
7 supplemental unemployment benefit trust which is referred
8 to in Section 501(c)(17) of the Internal Revenue Code):
9 (A) in the case of an individual, trust, or
10 estate, shall not be allocated to this State; and
11 (B) in the case of a corporation, trust, or a
12 partnership, shall be allocated to this State if the
13 taxpayer had its commercial domicile in this State
14 at the time such item was paid, incurred or accrued.
15 (Source: P.A. 90-491, eff. 1-1-98.)
16 (35 ILCS 5/304) (from Ch. 120, par. 3-304)
17 Sec. 304. Business income of persons other than
18 residents.
19 (a) In general. The business income of a person other
20 than a resident shall be allocated to this State if such
21 person's business income is derived solely from this State.
22 If a person other than a resident derives business income
23 from this State and one or more other states, then, except as
24 otherwise provided by this Section, such person's business
25 income shall be apportioned to this State by multiplying the
26 income by a fraction, the numerator of which is the sum of
27 the property factor (if any), the payroll factor (if any) and
28 200% of the sales factor (if any), and the denominator of
29 which is 4 reduced by the number of factors other than the
30 sales factor which have a denominator of zero and by an
31 additional 2 if the sales factor has a denominator of zero.
32 (1) Property factor.
33 (A) The property factor is a fraction, the
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1 numerator of which is the average value of the person's
2 real and tangible personal property owned or rented and
3 used in the trade or business in this State during the
4 taxable year and the denominator of which is the average
5 value of all the person's real and tangible personal
6 property owned or rented and used in the trade or
7 business during the taxable year.
8 (B) Property owned by the person is valued at its
9 original cost. Property rented by the person is valued at
10 8 times the net annual rental rate. Net annual rental
11 rate is the annual rental rate paid by the person less
12 any annual rental rate received by the person from
13 sub-rentals.
14 (C) The average value of property shall be
15 determined by averaging the values at the beginning and
16 ending of the taxable year but the Director may require
17 the averaging of monthly values during the taxable year
18 if reasonably required to reflect properly the average
19 value of the person's property.
20 (2) Payroll factor.
21 (A) The payroll factor is a fraction, the numerator
22 of which is the total amount paid in this State during
23 the taxable year by the person for compensation, and the
24 denominator of which is the total compensation paid
25 everywhere during the taxable year.
26 (B) Compensation is paid in this State if:
27 (i) The individual's service is performed
28 entirely within this State;
29 (ii) The individual's service is performed
30 both within and without this State, but the service
31 performed without this State is incidental to the
32 individual's service performed within this State; or
33 (iii) Some of the service is performed within
34 this State and either the base of operations, or if
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1 there is no base of operations, the place from which
2 the service is directed or controlled is within this
3 State, or the base of operations or the place from
4 which the service is directed or controlled is not
5 in any state in which some part of the service is
6 performed, but the individual's residence is in this
7 State.
8 Beginning with taxable years ending on or after
9 December 31, 1992, for residents of states that impose a
10 comparable tax liability on residents of this State, for
11 purposes of item (i) of this paragraph (B), in the case
12 of persons who perform personal services under personal
13 service contracts for sports performances, services by
14 that person at a sporting event taking place in Illinois
15 shall be deemed to be a performance entirely within this
16 State.
17 (3) Sales factor.
18 (A) The sales factor is a fraction, the numerator
19 of which is the total sales of the person in this State
20 during the taxable year, and the denominator of which is
21 the total sales of the person everywhere during the
22 taxable year.
23 (B) Sales of tangible personal property are in this
24 State if:
25 (i) The property is delivered or shipped to a
26 purchaser, other than the United States government,
27 within this State regardless of the f. o. b. point
28 or other conditions of the sale; or
29 (ii) The property is shipped from an office,
30 store, warehouse, factory or other place of storage
31 in this State and either the purchaser is the United
32 States government or the person is not taxable in
33 the state of the purchaser; provided, however, that
34 premises owned or leased by a person who has
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1 independently contracted with the seller for the
2 printing of newspapers, periodicals or books shall
3 not be deemed to be an office, store, warehouse,
4 factory or other place of storage for purposes of
5 this Section. Sales of tangible personal property
6 are not in this State if the seller and purchaser
7 would be members of the same unitary business group
8 but for the fact that either the seller or purchaser
9 is a person with 80% or more of total business
10 activity outside of the United States and the
11 property is purchased for resale.
12 (C) Sales, other than sales of tangible personal
13 property, are in this State if:
14 (i) The income-producing activity is performed
15 in this State; or
16 (ii) The income-producing activity is
17 performed both within and without this State and a
18 greater proportion of the income-producing activity
19 is performed within this State than without this
20 State, based on performance costs.
21 (D) For taxable years ending on or after December
22 31, 1995 and excluding taxable years ending after
23 December 31, 1997, the following items of income shall
24 not be included in the numerator or denominator of the
25 sales factor: dividends; amounts included under Section
26 78 of the Internal Revenue Code; and Subpart F income as
27 defined in Section 952 of the Internal Revenue Code. No
28 inference shall be drawn from the enactment of this
29 paragraph (D) in construing this Section for taxable
30 years ending before December 31, 1995.
31 (b) Insurance companies.
32 (1) In general. Except as otherwise provided by
33 paragraph (2), business income of an insurance company for a
34 taxable year shall be apportioned to this State by
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1 multiplying such income by a fraction, the numerator of which
2 is the direct premiums written for insurance upon property or
3 risk in this State, and the denominator of which is the
4 direct premiums written for insurance upon property or risk
5 everywhere. For purposes of this subsection, the term "direct
6 premiums written" means the total amount of direct premiums
7 written, assessments and annuity considerations as reported
8 for the taxable year on the annual statement filed by the
9 company with the Illinois Director of Insurance in the form
10 approved by the National Convention of Insurance
11 Commissioners or such other form as may be prescribed in lieu
12 thereof.
13 (2) Reinsurance. If the principal source of premiums
14 written by an insurance company consists of premiums for
15 reinsurance accepted by it, the business income of such
16 company shall be apportioned to this State by multiplying
17 such income by a fraction, the numerator of which is the sum
18 of (i) direct premiums written for insurance upon property or
19 risk in this State, plus (ii) premiums written for
20 reinsurance accepted in respect of property or risk in this
21 State, and the denominator of which is the sum of (iii)
22 direct premiums written for insurance upon property or risk
23 everywhere, plus (iv) premiums written for reinsurance
24 accepted in respect of property or risk everywhere. For
25 purposes of this paragraph, premiums written for reinsurance
26 accepted in respect of property or risk in this State,
27 whether or not otherwise determinable, may, at the election
28 of the company, be determined on the basis of the proportion
29 which premiums written for reinsurance accepted from
30 companies commercially domiciled in Illinois bears to
31 premiums written for reinsurance accepted from all sources,
32 or, alternatively, in the proportion which the sum of the
33 direct premiums written for insurance upon property or risk
34 in this State by each ceding company from which reinsurance
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1 is accepted bears to the sum of the total direct premiums
2 written by each such ceding company for the taxable year.
3 (c) Financial organizations.
4 (1) In general. Business income of a financial
5 organization shall be apportioned to this State by
6 multiplying such income by a fraction, the numerator of which
7 is its business income from sources within this State, and
8 the denominator of which is its business income from all
9 sources. For the purposes of this subsection, the business
10 income of a financial organization from sources within this
11 State is the sum of the amounts referred to in subparagraphs
12 (A) through (E) following, but excluding the adjusted income
13 of an international banking facility as determined in
14 paragraph (2):
15 (A) Fees, commissions or other compensation for
16 financial services rendered within this State;
17 (B) Gross profits from trading in stocks, bonds or
18 other securities managed within this State;
19 (C) Dividends, and interest from Illinois
20 customers, which are received within this State;
21 (D) Interest charged to customers at places of
22 business maintained within this State for carrying debit
23 balances of margin accounts, without deduction of any
24 costs incurred in carrying such accounts; and
25 (E) Any other gross income resulting from the
26 operation as a financial organization within this State.
27 In computing the amounts referred to in paragraphs (A)
28 through (E) of this subsection, any amount received by a
29 member of an affiliated group (determined under Section
30 1504(a) of the Internal Revenue Code but without
31 reference to whether any such corporation is an
32 "includible corporation" under Section 1504(b) of the
33 Internal Revenue Code) from another member of such group
34 shall be included only to the extent such amount exceeds
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1 expenses of the recipient directly related thereto.
2 (2) International Banking Facility.
3 (A) Adjusted Income. The adjusted income of an
4 international banking facility is its income reduced by
5 the amount of the floor amount.
6 (B) Floor Amount. The floor amount shall be the
7 amount, if any, determined by multiplying the income of
8 the international banking facility by a fraction, not
9 greater than one, which is determined as follows:
10 (i) The numerator shall be:
11 The average aggregate, determined on a
12 quarterly basis, of the financial organization's
13 loans to banks in foreign countries, to foreign
14 domiciled borrowers (except where secured primarily
15 by real estate) and to foreign governments and other
16 foreign official institutions, as reported for its
17 branches, agencies and offices within the state on
18 its "Consolidated Report of Condition", Schedule A,
19 Lines 2.c., 5.b., and 7.a., which was filed with the
20 Federal Deposit Insurance Corporation and other
21 regulatory authorities, for the year 1980, minus
22 The average aggregate, determined on a
23 quarterly basis, of such loans (other than loans of
24 an international banking facility), as reported by
25 the financial institution for its branches, agencies
26 and offices within the state, on the corresponding
27 Schedule and lines of the Consolidated Report of
28 Condition for the current taxable year, provided,
29 however, that in no case shall the amount determined
30 in this clause (the subtrahend) exceed the amount
31 determined in the preceding clause (the minuend);
32 and
33 (ii) the denominator shall be the average
34 aggregate, determined on a quarterly basis, of the
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1 international banking facility's loans to banks in
2 foreign countries, to foreign domiciled borrowers
3 (except where secured primarily by real estate) and
4 to foreign governments and other foreign official
5 institutions, which were recorded in its financial
6 accounts for the current taxable year.
7 (C) Change to Consolidated Report of Condition and
8 in Qualification. In the event the Consolidated Report
9 of Condition which is filed with the Federal Deposit
10 Insurance Corporation and other regulatory authorities is
11 altered so that the information required for determining
12 the floor amount is not found on Schedule A, lines 2.c.,
13 5.b. and 7.a., the financial institution shall notify the
14 Department and the Department may, by regulations or
15 otherwise, prescribe or authorize the use of an
16 alternative source for such information. The financial
17 institution shall also notify the Department should its
18 international banking facility fail to qualify as such,
19 in whole or in part, or should there be any amendment or
20 change to the Consolidated Report of Condition, as
21 originally filed, to the extent such amendment or change
22 alters the information used in determining the floor
23 amount.
24 (d) Transportation services. Business income derived
25 from furnishing transportation services shall be apportioned
26 to this State in accordance with paragraphs (1) and (2):
27 (1) Such business income (other than that derived
28 from transportation by pipeline) shall be apportioned to
29 this State by multiplying such income by a fraction, the
30 numerator of which is the revenue miles of the person in
31 this State, and the denominator of which is the revenue
32 miles of the person everywhere. For purposes of this
33 paragraph, a revenue mile is the transportation of 1
34 passenger or 1 net ton of freight the distance of 1 mile
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1 for a consideration. Where a person is engaged in the
2 transportation of both passengers and freight, the
3 fraction above referred to shall be determined by means
4 of an average of the passenger revenue mile fraction and
5 the freight revenue mile fraction, weighted to reflect
6 the person's
7 (A) relative railway operating income from
8 total passenger and total freight service, as
9 reported to the Interstate Commerce Commission, in
10 the case of transportation by railroad, and
11 (B) relative gross receipts from passenger and
12 freight transportation, in case of transportation
13 other than by railroad.
14 (2) Such business income derived from
15 transportation by pipeline shall be apportioned to this
16 State by multiplying such income by a fraction, the
17 numerator of which is the revenue miles of the person in
18 this State, and the denominator of which is the revenue
19 miles of the person everywhere. For the purposes of this
20 paragraph, a revenue mile is the transportation by
21 pipeline of 1 barrel of oil, 1,000 cubic feet of gas, or
22 of any specified quantity of any other substance, the
23 distance of 1 mile for a consideration.
24 (e) Combined apportionment. Where 2 or more persons are
25 engaged in a unitary business as described in subsection
26 (a)(27) of Section 1501, a part of which is conducted in this
27 State by one or more members of the group, the business
28 income attributable to this State by any such member or
29 members shall be apportioned by means of the combined
30 apportionment method.
31 (f) Alternative allocation. If the allocation and
32 apportionment provisions of subsections (a) through (e) do
33 not fairly represent the extent of a person's business
34 activity in this State, the person may petition for, or the
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1 Director may require, in respect of all or any part of the
2 person's business activity, if reasonable:
3 (1) Separate accounting;
4 (2) The exclusion of any one or more factors;
5 (3) The inclusion of one or more additional factors
6 which will fairly represent the person's business
7 activities in this State; or
8 (4) The employment of any other method to
9 effectuate an equitable allocation and apportionment of
10 the person's business income.
11 (g) Cross reference. For allocation of business income
12 by residents, see Section 301(a).
13 (Source: P.A. 89-379, eff. 1-1-96; 89-399, eff. 8-20-95;
14 89-626, eff. 8-9-96.)
15 (35 ILCS 5/704) (from Ch. 120, par. 7-704)
16 Sec. 704. Employer's Return and Payment of Tax Withheld.
17 (a) In general, every employer who deducts and withholds
18 or is required to deduct and withhold tax under this Act
19 shall make such payments and returns as hereinafter provided.
20 (b) Quarter Monthly Payments: Returns. Every employer
21 who deducts and withholds or is required to deduct and
22 withhold tax under this Act shall, on or before the third
23 banking day following the close of a quarter monthly period,
24 pay to the Department or to a depositary designated by the
25 Department, pursuant to regulations prescribed by the
26 Department, the taxes so required to be deducted and
27 withheld, whenever the aggregate amount withheld by such
28 employer (together with amounts previously withheld and not
29 paid to the Department) exceeds $1,000. For purposes of this
30 Section, Saturdays, Sundays, legal holidays and local bank
31 holidays are not banking days. A quarter monthly period, for
32 purposes of this subsection, ends on the 7th, 15th, 22nd and
33 last day of each calendar month. Every such employer shall
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1 for each calendar quarter, on or before the last day of the
2 first month following the close of such quarter, and for the
3 calendar year, on or before January 31 of the succeeding
4 calendar year, make a return with respect to such taxes in
5 such form and manner as the Department may by regulations
6 prescribe, and pay to the Department or to a depositary
7 designated by the Department all withheld taxes not
8 previously paid to the Department.
9 (c) Monthly Payments: Returns. Every employer required
10 to deduct and withhold tax under this Act shall, on or before
11 the 15th day of the second and third months of each calendar
12 quarter, and on or before the last day of the month following
13 the last month of each such quarter, pay to the Department or
14 to a depositary designated by the Department, pursuant to
15 regulations prescribed by the Department, the taxes so
16 required to be deducted and withheld, whenever the aggregate
17 amount withheld by such employer (together with amounts
18 previously withheld and not paid to the Department) exceeds
19 $500 but does not exceed $1,000. Every such employer shall
20 for each calendar quarter, on or before the last day of the
21 first month following the close of such quarter, and for the
22 calendar year, on or before January 31 of the succeeding
23 calendar year, make a return with respect to such taxes in
24 such form and manner as the Department may by regulations
25 prescribe, and pay to the Department or to a depositary
26 designated by the Department all withheld taxes not
27 previously paid to the Department.
28 (d) Annual Payments: Returns. Where the amount of
29 compensation paid by an employer is not sufficient to require
30 the withholding of tax from the compensation of any of its
31 employees (or where the aggregate amount withheld is less
32 than $500), the Department may by regulation permit such
33 employer to file only an annual return and to pay the taxes
34 required to be deducted and withheld at the time of filing
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1 such annual return.
2 (e) Annual Return. The Department may, as it deems
3 appropriate, prescribe by regulation for the filing of annual
4 returns in lieu of quarterly returns described in subsections
5 (b) and (c).
6 (e-5) Annual Return and Payment. On and after January
7 1, 1998, notwithstanding subsections (b) through (d) of this
8 Section, every employer who deducts and withholds or is
9 required to deduct and withhold tax from a person engaged in
10 domestic service employment, as that term is defined in
11 Section 3510 of the Internal Revenue Code, may comply with
12 the requirements of this Section by filing an annual return
13 and paying the taxes required to be deducted and withheld on
14 or before the 15th day of the fourth month following the
15 close of the employer's taxable year. The annual return may
16 be submitted with the employer's individual income tax
17 return. Annual Return. Where the tax is withheld from a
18 person engaged in domestic service employment, as that term
19 is defined in Section 3510 of the Internal Revenue Code,
20 returns shall be filed on or before the 15th day of the
21 fourth month following the close of the employer's taxable
22 year.
23 (f) Magnetic Media Filing. Forms W-2 that, pursuant to
24 the Internal Revenue Code and regulations promulgated
25 thereunder, are required to be submitted to the Internal
26 Revenue Service on magnetic media, must also be submitted to
27 the Department on magnetic media for Illinois purposes, if
28 required by the Department.
29 (Source: P.A. 90-374, eff. 8-14-97.)
30 Section 10. The Use Tax Act is amended by changing
31 Section 19 as follows:
32 (35 ILCS 105/19) (from Ch. 120, par. 439.19)
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1 Sec. 19. If it shall appear that an amount of tax or
2 penalty or interest has been paid in error hereunder to the
3 Department by a purchaser, as distinguished from the
4 retailer, whether such amount be paid through a mistake of
5 fact or an error of law, such purchaser may file a claim for
6 credit or refund with the Department in accordance with
7 Sections 6, 6a, 6b, and 6c of the Retailers' Occupation Tax
8 Act. If it shall appear that an amount of tax or penalty or
9 interest has been paid in error to the Department hereunder
10 by a retailer who is required or authorized to collect and
11 remit the use tax, whether such amount be paid through a
12 mistake of fact or an error of law, such retailer may file a
13 claim for credit or refund with the Department in accordance
14 with Sections 6, 6a, 6b, and 6c of the Retailers' Occupation
15 Tax Act, provided that no credit or refund shall be allowed
16 for any amount paid by any such retailer unless it shall
17 appear that he bore the burden of such amount and did not
18 shift the burden thereof to anyone else (as in the case of a
19 duplicated tax payment which the retailer made to the
20 Department and did not collect from anyone else), or unless
21 it shall appear that he or she or his or her legal
22 representative has unconditionally repaid such amount to his
23 vendee (1) who bore the burden thereof and has not shifted
24 such burden directly or indirectly in any manner whatsoever;
25 (2) who, if he has shifted such burden, has repaid
26 unconditionally such amount to his or her own vendee, and (3)
27 who is not entitled to receive any reimbursement therefor
28 from any other source than from his vendor, nor to be
29 relieved of such burden in any other manner whatsoever. If it
30 shall appear that an amount of tax has been paid in error
31 hereunder by the purchaser to a retailer, who retained such
32 tax as reimbursement for his or her tax liability on the same
33 sale under the Retailers' Occupation Tax Act, and who
34 remitted the amount involved to the Department under the
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1 Retailers' Occupation Tax Act, whether such amount be paid
2 through a mistake of fact or an error of law, the procedure
3 for recovering such tax shall be that prescribed in Sections
4 6, 6a, 6b and 6c of the Retailers' Occupation Tax Act.
5 Any credit or refund that is allowed under this Section
6 shall bear interest at the rate and in the manner specified
7 in the Uniform Penalty and Interest Act.
8 Any claim filed hereunder shall be filed upon a form
9 prescribed and furnished by the Department. The claim shall
10 be signed by the claimant (or by the claimant's legal
11 representative if the claimant shall have died or become a
12 person under legal disability), or by a duly authorized agent
13 of the claimant or his or her legal representative.
14 A claim for credit or refund shall be considered to have
15 been filed with the Department on the date upon which it is
16 received by the Department. Upon receipt of any claim for
17 credit or refund filed under this Act, any officer or
18 employee of the Department, authorized in writing by the
19 Director of Revenue to acknowledge receipt of such claims on
20 behalf of the Department, shall execute on behalf of the
21 Department, and shall deliver or mail to the claimant or his
22 duly authorized agent, a written receipt, acknowledging that
23 the claim has been filed with the Department, describing the
24 claim in sufficient detail to identify it and stating the
25 date upon which the claim was received by the Department.
26 Such written receipt shall be prima facie evidence that the
27 Department received the claim described in such receipt and
28 shall be prima facie evidence of the date when such claim was
29 received by the Department. In the absence of such a written
30 receipt, the records of the Department as to when the claim
31 was received by the Department, or as to whether or not the
32 claim was received at all by the Department, shall be deemed
33 to be prima facie correct upon these questions in the event
34 of any dispute between the claimant (or his or her legal
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1 representative) and the Department concerning these
2 questions.
3 In case the Department determines that the claimant is
4 entitled to a refund, such refund shall be made only from
5 such appropriation as may be available for that purpose. If
6 it appears unlikely that the amount appropriated would permit
7 everyone having a claim allowed during the period covered by
8 such appropriation to elect to receive a cash refund, the
9 Department, by rule or regulation, shall provide for the
10 payment of refunds in hardship cases and shall define what
11 types of cases qualify as hardship cases.
12 If a retailer who has failed to pay use tax on gross
13 receipts from retail sales is required by the Department to
14 pay such tax, such retailer, without filing any formal claim
15 with the Department, shall be allowed to take credit against
16 such use tax liability to the extent, if any, to which such
17 retailer has paid an amount equivalent to retailers'
18 occupation tax or has paid use tax in error to his or her
19 vendor or vendors of the same tangible personal property
20 which such retailer bought for resale and did not first use
21 before selling it, and no penalty or interest shall be
22 charged to such retailer on the amount of such credit.
23 However, when such credit is allowed to the retailer by the
24 Department, the vendor is precluded from refunding any of
25 that tax to the retailer and filing a claim for credit or
26 refund with respect thereto with the Department. The
27 provisions of this amendatory Act shall be applied
28 retroactively, regardless of the date of the transaction.
29 (Source: P.A. 87-205.)
30 Section 15. The Service Occupation Tax Act is amended by
31 changing Section 19 as follows:
32 (35 ILCS 115/19) (from Ch. 120, par. 439.119)
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1 Sec. 19. As to any claim for credit or refund filed with
2 the Department on or and after each January 1 and July 1 but
3 on or before June 30 of any given year, no amount of tax or
4 penalty or interest erroneously paid (either in total or
5 partial liquidation of a tax or penalty or interest under
6 this Act) more than 3 years prior to such January 1 and July
7 1, respectively, shall be credited or refunded, except that
8 if both the Department and taxpayer have agreed to an
9 extension of time to issue a notice of tax liability as
10 provided in Section 4 of the Retailers' Occupation Tax Act,
11 such claim may be filed at any time prior to the expiration
12 of the period agreed upon and as to any such claim filed on
13 and after July 1 but on or before December 31 of any given
14 year, no amount of tax or penalty or interest erroneously
15 paid (either in total or partial liquidation of a tax or
16 penalty under this Act) more than 3 years prior to such July
17 1 shall be credited or refunded. No claim shall be allowed
18 for any amount paid to the Department, whether paid
19 voluntarily or involuntarily, if paid in total or partial
20 liquidation of an assessment which had become final before
21 the claim for credit or refund to recover the amount so paid
22 is filed with the Department, or if paid in total or partial
23 liquidation of a judgment or order of court.
24 (Source: P.A. 79-1365; 79-1366.)
25 Section 16. The Property Tax Code is amended by changing
26 Section 9-195 as follows:
27 (35 ILCS 200/9-195)
28 Sec. 9-195. Leasing of exempt property. Except as
29 provided in Section 15-55, when property which is exempt from
30 taxation is leased to another whose property is not exempt,
31 and the leasing of which does not make the property taxable,
32 the leasehold estate and the appurtenances shall be listed as
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1 the property of the lessee thereof, or his or her assignee.
2 Taxes on that property shall be collected in the same manner
3 as on property that is not exempt, and the lessee shall be
4 liable for those taxes. However, no tax lien shall attach to
5 the exempt real estate. Notwithstanding any provision to the
6 contrary, no taxable interest in exempt property is created
7 if that exempt property is leased or otherwise transferred,
8 directly or indirectly, to another whose property is not
9 exempt, and immediately thereafter an agreement is entered
10 into that directly or indirectly transfers the right to use,
11 control, or possess that property back to the exempt owner
12 and that, if title has been transferred, provides an option
13 for a subsequent reverter of title to the exempt owner. The
14 changes made by this amendatory Act of 1997 are declaratory
15 of existing law and shall not be construed as a new
16 enactment. The changes made by Public Acts 88-221 and 88-420
17 that are incorporated into this Section by this amendatory
18 Act of 1993 are declarative of existing law and are not a new
19 enactment.
20 (Source: P.A. 88-455; incorporates 88-221 and 88-420; 88-670,
21 eff. 12-2-94.)
22 Section 20. The Counties Code is amended by changing
23 Section 5-1006.5 as follows:
24 (55 ILCS 5/5-1006.5)
25 Sec. 5-1006.5. Special County Retailers' Occupation Tax
26 For Public Safety.
27 (a) The county board of any county may impose a tax upon
28 all persons engaged in the business of selling tangible
29 personal property, other than personal property titled or
30 registered with an agency of this State's government, at
31 retail in the county on the gross receipts from the sales
32 made in the course of business to provide revenue to be used
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1 exclusively for public safety purposes in that county, if a
2 proposition for the tax has been submitted to the electors of
3 that county and approved by a majority of those voting on the
4 question. If imposed, this tax shall be imposed only in
5 one-quarter percent increments. By resolution, the county
6 board may order the proposition to be submitted at any
7 election. The county clerk shall certify the question to the
8 proper election authority, who shall submit the proposition
9 at an election in accordance with the general election law.
10 The proposition shall be in substantially the following
11 form:
12 "Shall (name of county) be authorized to impose a
13 public safety tax at the rate of .... upon all persons
14 engaged in the business of selling tangible personal
15 property at retail in the county on gross receipts from
16 the sales made in the course of their business to be used
17 for crime prevention, detention, and other public safety
18 purposes?"
19 Votes shall be recorded as Yes or No. If a majority of the
20 electors voting on the proposition vote in favor of it, the
21 county may impose the tax.
22 This additional tax may not be imposed on the sales of
23 food for human consumption that is to be consumed off the
24 premises where it is sold (other than alcoholic beverages,
25 soft drinks, and food which has been prepared for immediate
26 consumption) and prescription and non-prescription medicines,
27 drugs, medical appliances and insulin, urine testing
28 materials, syringes, and needles used by diabetics. The tax
29 imposed by a county under this Section and all civil
30 penalties that may be assessed as an incident of the tax
31 shall be collected and enforced by the Illinois Department of
32 Revenue. The certificate of registration that is issued by
33 the Department to a retailer under the Retailers' Occupation
34 Tax Act shall permit the retailer to engage in a business
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1 that is taxable without registering separately with the
2 Department under an ordinance or resolution under this
3 Section. The Department has full power to administer and
4 enforce this Section, to collect all taxes and penalties due
5 under this Section, to dispose of taxes and penalties so
6 collected in the manner provided in this Section, and to
7 determine all rights to credit memoranda arising on account
8 of the erroneous payment of a tax or penalty under this
9 Section. In the administration of and compliance with this
10 Section, the Department and persons who are subject to this
11 Section shall (i) have the same rights, remedies, privileges,
12 immunities, powers, and duties, (ii) be subject to the same
13 conditions, restrictions, limitations, penalties, and
14 definitions of terms, and (iii) employ the same modes of
15 procedure as are prescribed in Sections 1, 1a, 1a-1, 1d, 1e,
16 1f, 1i, 1j, 2, 2-5, 2-5.5, 2-10 (in respect to all provisions
17 contained in those Sections other than the State rate of
18 tax), 2-15 through 2-70 2-40, 2a, 2b, 2c, 3 (except
19 provisions relating to transaction returns and quarter
20 monthly payments), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, 5i,
21 5j, 5k, 5l, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12, and 13
22 of the Retailers' Occupation Tax Act and Section 3-7 of the
23 Uniform Penalty and Interest Act as if those provisions were
24 set forth in this Section.
25 Persons subject to any tax imposed under the authority
26 granted in this Section may reimburse themselves for their
27 sellers' tax liability by separately stating the tax as an
28 additional charge, which charge may be stated in combination,
29 in a single amount, with State tax which sellers are required
30 to collect under the Use Tax Act, pursuant to such bracketed
31 schedules as the Department may prescribe.
32 Whenever the Department determines that a refund should
33 be made under this Section to a claimant instead of issuing a
34 credit memorandum, the Department shall notify the State
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1 Comptroller, who shall cause the order to be drawn for the
2 amount specified and to the person named in the notification
3 from the Department. The refund shall be paid by the State
4 Treasurer out of the County Public Safety Retailers'
5 Occupation Tax Fund.
6 (b) If a tax has been imposed under subsection (a), a
7 service occupation tax shall also be imposed at the same rate
8 upon all persons engaged, in the county, in the business of
9 making sales of service, who, as an incident to making those
10 sales of service, transfer tangible personal property within
11 the county as an incident to a sale of service. This tax may
12 not be imposed on sales of food for human consumption that is
13 to be consumed off the premises where it is sold (other than
14 alcoholic beverages, soft drinks, and food prepared for
15 immediate consumption) and prescription and non-prescription
16 medicines, drugs, medical appliances and insulin, urine
17 testing materials, syringes, and needles used by diabetics.
18 The tax imposed under this subsection and all civil penalties
19 that may be assessed as an incident thereof shall be
20 collected and enforced by the Department of Revenue. The
21 Department has full power to administer and enforce this
22 subsection; to collect all taxes and penalties due hereunder;
23 to dispose of taxes and penalties so collected in the manner
24 hereinafter provided; and to determine all rights to credit
25 memoranda arising on account of the erroneous payment of tax
26 or penalty hereunder. In the administration of, and
27 compliance with this subsection, the Department and persons
28 who are subject to this paragraph shall (i) have the same
29 rights, remedies, privileges, immunities, powers, and duties,
30 (ii) be subject to the same conditions, restrictions,
31 limitations, penalties, exclusions, exemptions, and
32 definitions of terms, and (iii) employ the same modes of
33 procedure as are prescribed in Sections 1a-1, 2 (except that
34 the reference to State in the definition of supplier
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1 maintaining a place of business in this State shall mean the
2 county), 2a, 3 through 3-50 (in respect to all provisions
3 therein other than the State rate of tax), 4 (except that the
4 reference to the State shall be to the county), 5, 7, 8
5 (except that the jurisdiction to which the tax shall be a
6 debt to the extent indicated in that Section 8 shall be the
7 county), 9 (except as to the disposition of taxes and
8 penalties collected, and except that the returned merchandise
9 credit for this tax may not be taken against any State tax),
10 10, 11, 12 (except the reference therein to Section 2b of the
11 Retailers' Occupation Tax Act), 13 (except that any reference
12 to the State shall mean the county), the first paragraph of
13 Section 15, 16, 17, 18, 19 and 20 of the Service Occupation
14 Tax Act and Section 3-7 of the Uniform Penalty and Interest
15 Act, as fully as if those provisions were set forth herein.
16 Persons subject to any tax imposed under the authority
17 granted in this subsection may reimburse themselves for their
18 serviceman's tax liability by separately stating the tax as
19 an additional charge, which charge may be stated in
20 combination, in a single amount, with State tax that
21 servicemen are authorized to collect under the Service Use
22 Tax Act, in accordance with such bracket schedules as the
23 Department may prescribe.
24 Whenever the Department determines that a refund should
25 be made under this subsection to a claimant instead of
26 issuing a credit memorandum, the Department shall notify the
27 State Comptroller, who shall cause the warrant to be drawn
28 for the amount specified, and to the person named, in the
29 notification from the Department. The refund shall be paid
30 by the State Treasurer out of the County Public Safety
31 Retailers' Occupation Fund.
32 Nothing in this subsection shall be construed to
33 authorize the county to impose a tax upon the privilege of
34 engaging in any business which under the Constitution of the
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1 United States may not be made the subject of taxation by the
2 State.
3 (c) The Department shall immediately pay over to the
4 State Treasurer, Ex Officio, as trustee, all taxes and
5 penalties collected under this Section to be deposited into
6 the County Public Safety Retailers' Occupation Tax Fund,
7 which is created in the State treasury. On or before the
8 25th day of each calendar month, the Department shall prepare
9 and certify to the Comptroller the disbursement of stated
10 sums of money to the counties from which retailers have paid
11 taxes or penalties to the Department during the second
12 preceding calendar month. The amount to be paid to each
13 county shall be the amount (not including credit memoranda)
14 collected under this Section during the second preceding
15 calendar month by the Department plus an amount the
16 Department determines is necessary to offset any amounts that
17 were erroneously paid to a different taxing body, and not
18 including (i) an amount equal to the amount of refunds made
19 during the second preceding calendar month by the Department
20 on behalf of the county and (ii) any amount that the
21 Department determines is necessary to offset any amounts that
22 were payable to a different taxing body but were erroneously
23 paid to the county. Within 10 days after receipt by the
24 Comptroller of the disbursement certification to the counties
25 provided for in this Section to be given to the Comptroller
26 by the Department, the Comptroller shall cause the orders to
27 be drawn for the respective amounts in accordance with
28 directions contained in the certification.
29 In addition to the disbursement required by the preceding
30 paragraph, an allocation shall be made in March of each year
31 to each county that received more than $500,000 in
32 disbursements under the preceding paragraph in the preceding
33 calendar year. The allocation shall be in an amount equal to
34 the average monthly distribution made to each such county
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1 under the preceding paragraph during the preceding calendar
2 year (excluding the 2 months of highest receipts). The
3 distribution made in March of each year subsequent to the
4 year in which an allocation was made pursuant to this
5 paragraph and the preceding paragraph shall be reduced by the
6 amount allocated and disbursed under this paragraph in the
7 preceding calendar year. The Department shall prepare and
8 certify to the Comptroller for disbursement the allocations
9 made in accordance with this paragraph.
10 (d) For the purpose of determining the local
11 governmental unit whose tax is applicable, a retail sale by a
12 producer of coal or another mineral mined in Illinois is a
13 sale at retail at the place where the coal or other mineral
14 mined in Illinois is extracted from the earth. This
15 paragraph does not apply to coal or another mineral when it
16 is delivered or shipped by the seller to the purchaser at a
17 point outside Illinois so that the sale is exempt under the
18 United States Constitution as a sale in interstate or foreign
19 commerce.
20 (e) Nothing in this Section shall be construed to
21 authorize a county to impose a tax upon the privilege of
22 engaging in any business that under the Constitution of the
23 United States may not be made the subject of taxation by this
24 State.
25 (e-5) If a county imposes a tax under this Section, the
26 county board may, by ordinance, discontinue or lower the rate
27 of the tax. If the county board lowers the tax rate or
28 discontinues the tax, a referendum must be held in accordance
29 with subsection (a) of this Section in order to increase the
30 rate of the tax or to reimpose the discontinued tax.
31 (f) The results of any election authorizing a
32 proposition to impose a tax under this Section or effecting a
33 change in the rate of tax, or any ordinance lowering the rate
34 or discontinuing the tax, shall be certified by the county
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1 clerk and filed with the Illinois Department of Revenue on or
2 before the first day of June. The Illinois Department of
3 Revenue shall then proceed to administer and enforce this
4 Section or to lower the rate or discontinue the tax, as the
5 case may be, as of the first day of January next following
6 the filing.
7 (g) When certifying the amount of a monthly disbursement
8 to a county under this Section, the Department shall increase
9 or decrease the amounts by an amount necessary to offset any
10 miscalculation of previous disbursements. The offset amount
11 shall be the amount erroneously disbursed within the previous
12 6 months from the time a miscalculation is discovered.
13 (h) This Section may be cited as the "Special County
14 Occupation Tax For Public Safety Law".
15 (i) For purposes of this Section, "public safety"
16 includes but is not limited to fire fighting, police,
17 medical, ambulance, or other emergency services.
18 (Source: P.A. 89-107, eff. 1-1-96; 89-718, eff. 3-7-97;
19 90-190, eff. 7-24-97; 90-267, eff. 7-30-97; revised 10-8-97.)
20 Section 25. The Illinois Municipal Code is amended by
21 changing Section 8-11-6 as follows:
22 (65 ILCS 5/8-11-6) (from Ch. 24, par. 8-11-6)
23 Sec. 8-11-6. (a) The corporate authorities of a home rule
24 municipality may impose a tax upon the privilege of using, in
25 such municipality, any item of tangible personal property
26 which is purchased at retail from a retailer, and which is
27 titled or registered at a location within the corporate
28 limits of such home rule municipality with an agency of this
29 State's government, at a rate which is an increment of 1/4%
30 and based on the selling price of such tangible personal
31 property, as "selling price" is defined in the Use Tax Act.
32 In home rule municipalities with less than 2,000,000
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1 inhabitants, the tax shall be collected by the municipality
2 imposing the tax from persons whose Illinois address for
3 titling or registration purposes is given as being in such
4 municipality.
5 (b) In home rule municipalities with 2,000,000 or more
6 inhabitants, the corporate authorities of the municipality
7 may additionally impose a tax beginning July 1, 1991 upon the
8 privilege of using in the municipality, any item of tangible
9 personal property, other than tangible personal property
10 titled or registered with an agency of the State's
11 government, that is purchased at retail from a retailer
12 located outside the corporate limits of the municipality, at
13 a rate that is an increment of 1/4% not to exceed 1% and
14 based on the selling price of the tangible personal property,
15 as "selling price" is defined in the Use Tax Act. Such tax
16 shall be collected from the purchaser by the municipality
17 imposing such tax.
18 To prevent multiple home rule taxation, the use in a home
19 rule municipality of tangible personal property that is
20 acquired outside the municipality and caused to be brought
21 into the municipality by a person who has already paid a home
22 rule municipal tax in another municipality in respect to the
23 sale, purchase, or use of that property, shall be exempt to
24 the extent of the amount of the tax properly due and paid in
25 the other home rule municipality.
26 (c) If a municipality having 2,000,000 or more
27 inhabitants imposes the tax authorized by subsection (a),
28 then the tax shall be collected by the Illinois Department of
29 Revenue when the property is purchased at retail from a
30 retailer in the county in which the home rule municipality
31 imposing the tax is located, and in all contiguous counties.
32 The tax shall be remitted to the State, or an exemption
33 determination must be obtained from the Department before the
34 title or certificate of registration for the property may be
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1 issued. The tax or proof of exemption may be transmitted to
2 the Department by way of the State agency with which, or
3 State officer with whom, the tangible personal property must
4 be titled or registered if the Department and that agency or
5 State officer determine that this procedure will expedite the
6 processing of applications for title or registration.
7 The Department shall have full power to administer and
8 enforce this Section to collect all taxes, penalties and
9 interest due hereunder, to dispose of taxes, penalties and
10 interest so collected in the manner hereinafter provided, and
11 determine all rights to credit memoranda or refunds arising
12 on account of the erroneous payment of tax, penalty or
13 interest hereunder. In the administration of and compliance
14 with this Section the Department and persons who are subject
15 to this Section shall have the same rights, remedies,
16 privileges, immunities, powers and duties, and be subject to
17 the same conditions, restrictions, limitations, penalties and
18 definitions of terms, and employ the same modes of procedure
19 as are prescribed in Sections 2 (except the definition of
20 "retailer maintaining a place of business in this State"), 3
21 (except provisions pertaining to the State rate of tax, and
22 except provisions concerning collection or refunding of the
23 tax by retailers), 4, 11, 12, 12a, 14, 15, 19 (except the
24 portions pertaining to claims by retailers and except the
25 last paragraph concerning refunds), 20, 21 and 22 of the Use
26 Tax Act, which are not inconsistent with this Section, as
27 fully as if provisions contained in those Sections of the Use
28 Tax Act were set forth herein.
29 Whenever the Department determines that a refund shall be
30 made under this Section to a claimant instead of issuing a
31 credit memorandum, the Department shall notify the State
32 Comptroller, who shall cause the order to be drawn for the
33 amount specified, and to the person named, in such
34 notification from the Department. Such refund shall be paid
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1 by the State Treasurer out of the home rule municipal
2 retailers' occupation tax fund.
3 The Department shall forthwith pay over to the State
4 Treasurer, ex officio, as trustee, all taxes, penalties and
5 interest collected hereunder. On or before the 25th day of
6 each calendar month, the Department shall prepare and certify
7 to the State Comptroller the disbursement of stated sums of
8 money to named municipalities, the municipality in each
9 instance to be that municipality from which the Department
10 during the second preceding calendar month, collected
11 municipal use tax from any person whose Illinois address for
12 titling or registration purposes is given as being in such
13 municipality. The amount to be paid to each municipality
14 shall be the amount (not including credit memoranda)
15 collected hereunder during the second preceding calendar
16 month by the Department, and not including an amount equal to
17 the amount of refunds made during the second preceding
18 calendar month by the Department on behalf of such
19 municipality, less the amount expended during the second
20 preceding month by the Department to be paid from the
21 appropriation to the Department from the Home Rule Municipal
22 Retailers' Occupation Tax Trust Fund. The appropriation to
23 cover the costs incurred by the Department in administering
24 and enforcing this Section shall not exceed 2% of the amount
25 estimated to be deposited into the Home Rule Municipal
26 Retailers' Occupation Tax Trust Fund during the fiscal year
27 for which the appropriation is made. Within 10 days after
28 receipt by the State Comptroller of the disbursement
29 certification to the municipalities provided for in this
30 Section to be given to the State Comptroller by the
31 Department, the State Comptroller shall cause the orders to
32 be drawn for the respective amounts in accordance with the
33 directions contained in that certification.
34 Any ordinance imposing or discontinuing any tax to be
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1 collected and enforced by the Department under this Section
2 shall be adopted and a certified copy thereof filed with the
3 Department on or before October 1, whereupon the Department
4 of Revenue shall proceed to administer and enforce this
5 Section on behalf of the municipalities as of January 1 next
6 following such adoption and filing.
7 Nothing in this subsection (c) shall prevent a home rule
8 municipality from collecting the tax pursuant to subsection
9 (a) in any situation where such tax is not collected by the
10 Department of Revenue under this subsection (c).
11 (d) Any unobligated balance remaining in the Municipal
12 Retailers' Occupation Tax Fund on December 31, 1989, which
13 fund was abolished by Public Act 85-1135, and all receipts of
14 municipal tax as a result of audits of liability periods
15 prior to January 1, 1990, shall be paid into the Local
16 Government Tax Fund, for distribution as provided by this
17 Section prior to the enactment of Public Act 85-1135. All
18 receipts of municipal tax as a result of an assessment not
19 arising from an audit, for liability periods prior to January
20 1, 1990, shall be paid into the Local Government Tax Fund for
21 distribution before July 1, 1990, as provided by this Section
22 prior to the enactment of Public Act 85-1135, and on and
23 after July 1, 1990, all such receipts shall be distributed as
24 provided in Section 6z-18 of the State Finance Act.
25 (e) As used in this Section, "Municipal" and
26 "Municipality" means a city, village or incorporated town,
27 including an incorporated town which has superseded a civil
28 township.
29 (f) This Section shall be known and may be cited as the
30 "Home Rule Municipal Use Tax Act".
31 (Source: P.A. 87-14; 87-876; 88-116.)
32 (35 ILCS 110/19 rep.)
33 Section 30. The Service Use Tax Act is amended by
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1 repealing Section 19.
2 Section 35. The Property Tax Code is amended, if and
3 only if the provisions of Senate Bill 51 of the 90th General
4 Assembly that are changed by this amendatory Act of 1997
5 become law, by changing Section 14-15 as follows:
6 (35 ILCS 200/14-15)
7 Sec. 14-15. Certificate of error; counties of 3,000,000
8 or more.
9 (a) In counties with 3,000,000 or more inhabitants, if,
10 at any time before judgment is rendered in any proceeding to
11 collect or to enjoin the collection of taxes based upon any
12 assessment of any property belonging to any taxpayer, the
13 county assessor discovers an error or mistake in the
14 assessment, the assessor shall execute a certificate setting
15 forth the nature and cause of the error. The certificate when
16 endorsed by the county assessor, or when endorsed by the
17 county assessor and board of appeals (until the first Monday
18 in December 1998 and the board of review beginning the first
19 Monday in December 1998 and thereafter) where the certificate
20 is executed for any assessment which was the subject of a
21 complaint filed in the board of appeals (until the first
22 Monday in December 1998 and the board of review beginning the
23 first Monday in December 1998 and thereafter) for the tax
24 year for which the certificate is issued, may be received in
25 evidence in any court of competent jurisdiction. When so
26 introduced in evidence such certificate shall become a part
27 of the court records, and shall not be removed from the files
28 except upon the order of the court.
29 A certificate executed under this Section may be issued
30 to the person erroneously assessed. A certificate executed
31 under this Section or a list of the parcels for which
32 certificates have been issued may be presented by the
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1 assessor to the court as an objection in the application for
2 judgment and order of sale for the year in relation to which
3 the certificate is made. The State's Attorney of the county
4 in which the property is situated shall mail a copy of any
5 final judgment entered by the court regarding the certificate
6 to the taxpayer of record for the year in question.
7 Any unpaid taxes after the entry of the final judgment by
8 the court on certificates issued under this Section may be
9 included in a special tax sale, provided that an
10 advertisement is published and a notice is mailed to the
11 person in whose name the taxes were last assessed, in a form
12 and manner substantially similar to the advertisement and
13 notice required under Sections 21-110 and 21-135. The
14 advertisement and sale shall be subject to all provisions of
15 law regulating the annual advertisement and sale of
16 delinquent property, to the extent that those provisions may
17 be made applicable.
18 A certificate of error executed under this Section
19 allowing homestead exemptions under Sections 15-170, 15-172,
20 and 15-175 of this Act (formerly Sections 19.23-1 and
21 19.23-1a of the Revenue Act of 1939) not previously allowed
22 shall be given effect by the county treasurer, who shall mark
23 the tax books and, upon receipt of the following certificate
24 from the county assessor, shall issue refunds to the taxpayer
25 accordingly:
26 "CERTIFICATION
27 I, .................., county assessor, hereby certify
28 that the Certificates of Error set out on the attached
29 list have been duly issued to allow homestead exemptions
30 pursuant to Sections 15-170, 15-172, and 15-175 of the
31 Property Tax Code (formerly Sections 19.23-1 and 19.23-1a
32 of the Revenue Act of 1939) which should have been
33 previously allowed; and that a certified copy of the
34 attached list and this certification have been served
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1 upon the county State's Attorney."
2 The county treasurer has the power to mark the tax books
3 to reflect the issuance of homestead certificates of error
4 issued up to and including 3 years after the date on which
5 the annual judgment and order of sale for that tax year was
6 first entered first day of January of the second year after
7 the year for which the homestead exemption should have been
8 allowed. The county treasurer has the power to issue refunds
9 to the taxpayer as set forth above from and including the
10 first day of January of the second year after the year for
11 which the homestead exemption should have been allowed until
12 all refunds authorized by this Section have been completed.
13 The county treasurer has no power to issue refunds to the
14 taxpayer as set forth above unless the Certification set out
15 in this Section has been served upon the county State's
16 Attorney.
17 (b) Nothing in subsection (a) of this Section shall be
18 construed to prohibit the execution, endorsement, issuance,
19 and adjudication of a certificate of error if (i) the annual
20 judgment and order of sale for the tax year in question is
21 reopened for further proceedings upon consent of the county
22 collector and county assessor, represented by the State's
23 Attorney, and (ii) a new final judgment is subsequently
24 entered pursuant to the certificate. This subsection (b)
25 shall be construed as declarative of existing law and not as
26 a new enactment.
27 (c) No certificate of error, other than a certificate to
28 establish an exemption under Section 14-25, shall be executed
29 for any tax year more than 3 years after the date on which
30 the annual judgment and order of sale for that tax year was
31 first entered.
32 (d) The time limitation of subsection (c) shall not
33 apply to a certificate of error correcting an assessment to
34 $1, under Section 10-35, on a parcel that a subdivision or
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1 planned development has acquired by adverse possession, if
2 during the tax year for which the certificate is executed the
3 subdivision or planned development used the parcel as common
4 area, as defined in Section 10-35, and if application for the
5 certificate of error is made prior to December 31, 1997.
6 (Source: P.A. 88-225; 88-455; 88-660, eff. 9-16-94; 88-670,
7 eff. 12-2-94; 89-126, eff. 7-11-95; 89-671, eff. 8-14-96;
8 90SB0051 enrolled.)
9 Section 40. The Illinois Municipal Code is amended by
10 changing Section 8-11-17 as follows:
11 (65 ILCS 5/8-11-17) (from Ch. 24, par. 8-11-17)
12 Sec. 8-11-17. Municipal telecommunications tax.
13 (a) Beginning on the effective date of this amendatory
14 Act of 1991, the corporate authorities of any municipality in
15 this State may tax any or all of the following acts or
16 privileges:
17 (1) The act or privilege of originating in such
18 municipality or receiving in such municipality intrastate
19 telecommunications by a person at a rate not to exceed 5%
20 of the gross charge for such telecommunications purchased
21 at retail from a retailer by such person. However, such
22 tax is not imposed on such act or privilege to the extent
23 such act or privilege may not, under the Constitution and
24 statutes of the United States, be made the subject of
25 taxation by municipalities in this State.
26 (2) The act or privilege of originating in such
27 municipality or receiving in such municipality interstate
28 telecommunications by a person at a rate not to exceed 5%
29 of the gross charge for such telecommunications purchased
30 at retail from a retailer by such person. To prevent
31 actual multi-state taxation of the act or privilege that
32 is subject to taxation under this paragraph, any
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1 taxpayer, upon proof that the taxpayer has paid a tax in
2 another state on such event, shall be allowed a credit
3 against any tax enacted pursuant to an ordinance
4 authorized by this paragraph to the extent of the amount
5 of such tax properly due and paid in such other state
6 which was not previously allowed as a credit against any
7 other state or local tax in this State. However, such
8 tax is not imposed on the act or privilege to the extent
9 such act or privilege may not, under the Constitution and
10 statutes of the United States, be made the subject of
11 taxation by municipalities in this State.
12 (3) The taxes authorized by paragraphs (1) and (2)
13 of subsection (a) of this Section may only be levied if
14 such municipality does not then have in effect an
15 occupation tax imposed on persons engaged in the business
16 of transmitting messages by means of electricity as
17 authorized by Section 8-11-2 of the Illinois Municipal
18 Code.
19 (b) The tax authorized by this Section shall be
20 collected from the taxpayer by a retailer maintaining a place
21 of business in this State and making or effectuating the sale
22 at retail and shall be remitted by such retailer to the
23 municipality. Any tax required to be collected pursuant to
24 an ordinance authorized by this Section and any such tax
25 collected by such retailer shall constitute a debt owed by
26 the retailer to such municipality. Retailers shall collect
27 the tax from the taxpayer by adding the tax to the gross
28 charge for the act or privilege of originating or receiving
29 telecommunications when sold for use, in the manner
30 prescribed by the municipality. The tax authorized by this
31 Section shall constitute a debt of the purchaser to the
32 retailer who provides such taxable services until paid and,
33 if unpaid, is recoverable at law in the same manner as the
34 original charge for such taxable services. If the retailer
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1 fails to collect the tax from the taxpayer, then the taxpayer
2 shall be required to pay the tax directly to the municipality
3 in the manner provided by the municipality. The municipality
4 imposing the tax shall provide for its administration and
5 enforcement.
6 Beginning January 1, 1994, retailers filing tax returns
7 pursuant to this Section shall, at the time of filing such
8 return, pay to the municipality the amount of the tax imposed
9 by this Section, less a commission of 1.75% which is allowed
10 to reimburse the retailer for the expenses incurred in
11 keeping records, billing the customer, preparing and filing
12 returns, remitting the tax and supplying data to the
13 municipality upon request. No commission may be claimed by a
14 retailer for tax not timely remitted to the municipality.
15 Whenever possible, the tax authorized by this Section
16 shall, when collected, be stated as a distinct item separate
17 and apart from the gross charge for telecommunications.
18 (c) For the purpose of the taxes authorized by this
19 Section:
20 (1) "Amount paid" means the amount charged to the
21 taxpayer's service address in such municipality
22 regardless of where such amount is billed or paid.
23 (2) "Gross charge" means the amount paid for the
24 act or privilege of originating or receiving
25 telecommunications in such municipality and for all
26 services rendered in connection therewith, valued in
27 money whether paid in money or otherwise, including cash,
28 credits, services and property of every kind or nature,
29 and shall be determined without any deduction on account
30 of the cost of such telecommunications, the cost of the
31 materials used, labor or service costs or any other
32 expense whatsoever. In case credit is extended, the
33 amount thereof shall be included only as and when paid.
34 However, "gross charge" shall not include:
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1 (A) any amounts added to a purchaser's bill
2 because of a charge made pursuant to: (i) the tax
3 imposed by this Section, (ii) additional charges
4 added to a purchaser's bill pursuant to Section
5 9-222 of the Public Utilities Act, (iii) the tax
6 imposed by the Telecommunications Excise Tax Act, or
7 (iv) the tax imposed by Section 4251 of the Internal
8 Revenue Code;
9 (B) charges for a sent collect
10 telecommunication received outside of such
11 municipality;
12 (C) charges for leased time on equipment or
13 charges for the storage of data or information or
14 subsequent retrieval or the processing of data or
15 information intended to change its form or content.
16 Such equipment includes, but is not limited to, the
17 use of calculators, computers, data processing
18 equipment, tabulating equipment or accounting
19 equipment and also includes the usage of computers
20 under a time-sharing agreement;
21 (D) charges for customer equipment, including
22 such equipment that is leased or rented by the
23 customer from any source, wherein such charges are
24 disaggregated and separately identified from other
25 charges;
26 (E) charges to business enterprises certified
27 under Section 9-222.1 of the Public Utilities Act to
28 the extent of such exemption and during the period
29 of time specified by the Department of Commerce and
30 Community Affairs;
31 (F) charges for telecommunications and all
32 services and equipment provided in connection
33 therewith between a parent corporation and its
34 wholly owned subsidiaries or between wholly owned
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1 subsidiaries when the tax imposed under this Section
2 has already been paid to a retailer and only to the
3 extent that the charges between the parent
4 corporation and wholly owned subsidiaries or between
5 wholly owned subsidiaries represent expense
6 allocation between the corporations and not the
7 generation of profit for the corporation rendering
8 such service;
9 (G) bad debts ("bad debt" means any portion of
10 a debt that is related to a sale at retail for which
11 gross charges are not otherwise deductible or
12 excludable that has become worthless or
13 uncollectable, as determined under applicable
14 federal income tax standards; if the portion of the
15 debt deemed to be bad is subsequently paid, the
16 retailer shall report and pay the tax on that
17 portion during the reporting period in which the
18 payment is made); or
19 (H) charges paid by inserting coins in
20 coin-operated telecommunication devices.
21 (3) "Interstate telecommunications" means all
22 telecommunications that either originate or terminate
23 outside this State.
24 (4) "Intrastate telecommunications" means all
25 telecommunications that originate and terminate within
26 this State.
27 (5) "Person" means any natural individual, firm,
28 trust, estate, partnership, association, joint stock
29 company, joint venture, corporation, limited liability
30 company, or a receiver, trustee, guardian or other
31 representative appointed by order of any court, the
32 Federal and State governments, including State
33 universities created by statute, or any city, town,
34 county, or other political subdivision of this State.
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1 (6) "Purchase at retail" means the acquisition,
2 consumption or use of telecommunications through a sale
3 at retail.
4 (7) "Retailer" means and includes every person
5 engaged in the business of making sales at retail as
6 defined in this Section. A municipality may, in its
7 discretion, upon application, authorize the collection of
8 the tax hereby imposed by any retailer not maintaining a
9 place of business within this State, who to the
10 satisfaction of the municipality, furnishes adequate
11 security to insure collection and payment of the tax.
12 Such retailer shall be issued, without charge, a permit
13 to collect such tax. When so authorized, it shall be the
14 duty of such retailer to collect the tax upon all of the
15 gross charges for telecommunications in such municipality
16 in the same manner and subject to the same requirements
17 as a retailer maintaining a place of business within such
18 municipality.
19 (8) "Retailer maintaining a place of business in
20 this State", or any like term, means and includes any
21 retailer having or maintaining within this State,
22 directly or by a subsidiary, an office, distribution
23 facilities, transmission facilities, sales office,
24 warehouse or other place of business, or any agent or
25 other representative operating within this State under
26 the authority of the retailer or its subsidiary,
27 irrespective of whether such place of business or agent
28 or other representative is located here permanently or
29 temporarily, or whether such retailer or subsidiary is
30 licensed to do business in this State.
31 (9) "Sale at retail" means the transmitting,
32 supplying or furnishing of telecommunications and all
33 services rendered in connection therewith for a
34 consideration, to persons other than the Federal and
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1 State governments, and State universities created by
2 statute and other than between a parent corporation and
3 its wholly owned subsidiaries or between wholly owned
4 subsidiaries, when the tax has already been paid to a
5 retailer and the gross charge made by one such
6 corporation to another such corporation is not greater
7 than the gross charge paid to the retailer for their use
8 or consumption and not for resale.
9 (10) "Service address" means the location of
10 telecommunications equipment from which
11 telecommunications services are originated or at which
12 telecommunications services are received by a taxpayer.
13 If this is not a defined location, as in the case of
14 mobile phones, paging systems, maritime systems,
15 air-to-ground systems and the like, "service address"
16 shall mean the location of a taxpayer's primary use of
17 the telecommunication equipment as defined by telephone
18 number, authorization code, or location in Illinois where
19 bills are sent.
20 (11) "Taxpayer" means a person who individually or
21 through his agents, employees, or permittees engages in
22 the act or privilege of originating in such municipality
23 or receiving in such municipality telecommunications and
24 who incurs a tax liability under any ordinance authorized
25 by this Section.
26 (12) "Telecommunications", in addition to the usual
27 and popular meaning, includes, but is not limited to,
28 messages or information transmitted through use of local,
29 toll and wide area telephone service, channel services,
30 telegraph services, teletypewriter service, computer
31 exchange services; cellular mobile telecommunications
32 service, specialized mobile radio services, paging
33 service, or any other form of mobile and portable one-way
34 or two-way communications, or any other transmission of
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1 messages or information by electronic or similar means,
2 between or among points by wire, cable, fiber optics,
3 laser, microwave, radio, satellite or similar facilities.
4 The definition of "telecommunications" shall not include
5 value added services in which computer processing
6 applications are used to act on the form, content, code
7 and protocol of the information for purposes other than
8 transmission. "Telecommunications" shall not include
9 purchase of telecommunications by a telecommunications
10 service provider for use as a component part of the
11 service provided by him to the ultimate retail consumer
12 who originates or terminates the taxable end-to-end
13 communications. Carrier access charges, right of access
14 charges, charges for use of inter-company facilities, and
15 all telecommunications resold in the subsequent provision
16 used as a component of, or integrated into, end-to-end
17 telecommunications service shall be non-taxable as sales
18 for resale.
19 (d) If a person, who originates or receives
20 telecommunications in such municipality claims to be a
21 reseller of such telecommunications, such person shall apply
22 to the municipality for a resale number. Such applicant
23 shall state facts which will show the municipality why such
24 applicant is not liable for tax under any ordinance
25 authorized by this Section on any of such purchases and shall
26 furnish such additional information as the municipality may
27 reasonably require.
28 Upon approval of the application, the municipality shall
29 assign a resale number to the applicant and shall certify
30 such number to the applicant. The municipality may cancel
31 any number which is obtained through misrepresentation, or
32 which is used to send or receive such telecommunication
33 tax-free when such actions in fact are not for resale, or
34 which no longer applies because of the person's having
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1 discontinued the making of resales.
2 Except as provided hereinabove in this Section, the act
3 or privilege of sending or receiving telecommunications in
4 this State shall not be made tax-free on the ground of being
5 a sale for resale unless the person has an active resale
6 number from the municipality and furnishes that number to the
7 retailer in connection with certifying to the retailer that
8 any sale to such person is non-taxable because of being a
9 sale for resale.
10 (e) A municipality that imposes taxes upon
11 telecommunications under this Section and whose territory
12 includes part of another unit of local government or a school
13 district may, by ordinance, exempt the other unit of local
14 government or school district from those taxes.
15 (f) A municipality that imposes taxes upon
16 telecommunications under this Section may, by ordinance, (i)
17 reduce the rate of the tax for persons 65 years of age or
18 older or (ii) exempt persons 65 years of age or older from
19 those taxes. Taxes related to such rate reductions or
20 exemptions shall be rebated from the municipality directly to
21 persons qualified for the rate reduction or exemption as
22 determined by the municipality's ordinance.
23 (Source: P.A. 90-357, eff. 1-1-98.)
24 Section 99. Effective date. This Act takes effect upon
25 becoming law.