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90_HB2363ham003
LRB9007368JSgcam01
1 AMENDMENT TO HOUSE BILL 2363
2 AMENDMENT NO. . Amend House Bill 2363 on page 1 by
3 replacing lines 1 and 2 with the following:
4 "AN ACT in relation to taxation, amending named Acts.";
5 and
6 on page 10 by inserting immediately below line 7 the
7 following:
8 "Section 10. The Illinois Municipal Code is amended by
9 changing Section 8-11-17 as follows:
10 (65 ILCS 5/8-11-17) (from Ch. 24, par. 8-11-17)
11 Sec. 8-11-17. Municipal telecommunications tax.
12 (a) Beginning on the effective date of this amendatory
13 Act of 1991, the corporate authorities of any municipality in
14 this State may tax any or all of the following acts or
15 privileges:
16 (1) The act or privilege of originating in such
17 municipality or receiving in such municipality intrastate
18 telecommunications by a person at a rate not to exceed 5%
19 of the gross charge for such telecommunications purchased
20 at retail from a retailer by such person. However, such
21 tax is not imposed on such act or privilege to the extent
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1 such act or privilege may not, under the Constitution and
2 statutes of the United States, be made the subject of
3 taxation by municipalities in this State.
4 (2) The act or privilege of originating in such
5 municipality or receiving in such municipality interstate
6 telecommunications by a person at a rate not to exceed 5%
7 of the gross charge for such telecommunications purchased
8 at retail from a retailer by such person. To prevent
9 actual multi-state taxation of the act or privilege that
10 is subject to taxation under this paragraph, any
11 taxpayer, upon proof that the taxpayer has paid a tax in
12 another state on such event, shall be allowed a credit
13 against any tax enacted pursuant to an ordinance
14 authorized by this paragraph to the extent of the amount
15 of such tax properly due and paid in such other state
16 which was not previously allowed as a credit against any
17 other state or local tax in this State. However, such
18 tax is not imposed on the act or privilege to the extent
19 such act or privilege may not, under the Constitution and
20 statutes of the United States, be made the subject of
21 taxation by municipalities in this State.
22 (3) The taxes authorized by paragraphs (1) and (2)
23 of subsection (a) of this Section may only be levied if
24 such municipality does not then have in effect an
25 occupation tax imposed on persons engaged in the business
26 of transmitting messages by means of electricity as
27 authorized by Section 8-11-2 of the Illinois Municipal
28 Code.
29 (b) The tax authorized by this Section shall be
30 collected from the taxpayer by a retailer maintaining a place
31 of business in this State and making or effectuating the sale
32 at retail and shall be remitted by such retailer to the
33 municipality. Any tax required to be collected pursuant to
34 an ordinance authorized by this Section and any such tax
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1 collected by such retailer shall constitute a debt owed by
2 the retailer to such municipality. Retailers shall collect
3 the tax from the taxpayer by adding the tax to the gross
4 charge for the act or privilege of originating or receiving
5 telecommunications when sold for use, in the manner
6 prescribed by the municipality. The tax authorized by this
7 Section shall constitute a debt of the purchaser to the
8 retailer who provides such taxable services until paid and,
9 if unpaid, is recoverable at law in the same manner as the
10 original charge for such taxable services. If the retailer
11 fails to collect the tax from the taxpayer, then the taxpayer
12 shall be required to pay the tax directly to the municipality
13 in the manner provided by the municipality. The municipality
14 imposing the tax shall provide for its administration and
15 enforcement.
16 Beginning January 1, 1994, retailers filing tax returns
17 pursuant to this Section shall, at the time of filing such
18 return, pay to the municipality the amount of the tax imposed
19 by this Section, less a commission of 1.75% which is allowed
20 to reimburse the retailer for the expenses incurred in
21 keeping records, billing the customer, preparing and filing
22 returns, remitting the tax and supplying data to the
23 municipality upon request. No commission may be claimed by a
24 retailer for tax not timely remitted to the municipality.
25 Whenever possible, the tax authorized by this Section
26 shall, when collected, be stated as a distinct item separate
27 and apart from the gross charge for telecommunications.
28 (c) For the purpose of the taxes authorized by this
29 Section:
30 (1) "Amount paid" means the amount charged to the
31 taxpayer's service address in such municipality
32 regardless of where such amount is billed or paid.
33 (2) "Gross charge" means the amount paid for the
34 act or privilege of originating or receiving
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1 telecommunications in such municipality and for all
2 services rendered in connection therewith, valued in
3 money whether paid in money or otherwise, including cash,
4 credits, services and property of every kind or nature,
5 and shall be determined without any deduction on account
6 of the cost of such telecommunications, the cost of the
7 materials used, labor or service costs or any other
8 expense whatsoever. In case credit is extended, the
9 amount thereof shall be included only as and when paid.
10 However, "gross charge" shall not include:
11 (A) any amounts added to a purchaser's bill
12 because of a charge made pursuant to: (i) the tax
13 imposed by this Section, (ii) additional charges
14 added to a purchaser's bill pursuant to Section
15 9-222 of the Public Utilities Act, (iii) the tax
16 imposed by the Telecommunications Excise Tax Act, or
17 (iv) the tax imposed by Section 4251 of the Internal
18 Revenue Code;
19 (B) charges for a sent collect
20 telecommunication received outside of such
21 municipality;
22 (C) charges for leased time on equipment or
23 charges for the storage of data or information or
24 subsequent retrieval or the processing of data or
25 information intended to change its form or content.
26 Such equipment includes, but is not limited to, the
27 use of calculators, computers, data processing
28 equipment, tabulating equipment or accounting
29 equipment and also includes the usage of computers
30 under a time-sharing agreement;
31 (D) charges for customer equipment, including
32 such equipment that is leased or rented by the
33 customer from any source, wherein such charges are
34 disaggregated and separately identified from other
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1 charges;
2 (E) charges to business enterprises certified
3 under Section 9-222.1 of the Public Utilities Act to
4 the extent of such exemption and during the period
5 of time specified by the Department of Commerce and
6 Community Affairs;
7 (F) charges for telecommunications and all
8 services and equipment provided in connection
9 therewith between a parent corporation and its
10 wholly owned subsidiaries or between wholly owned
11 subsidiaries when the tax imposed under this Section
12 has already been paid to a retailer and only to the
13 extent that the charges between the parent
14 corporation and wholly owned subsidiaries or between
15 wholly owned subsidiaries represent expense
16 allocation between the corporations and not the
17 generation of profit for the corporation rendering
18 such service;
19 (G) bad debts ("bad debt" means any portion of
20 a debt that is related to a sale at retail for which
21 gross charges are not otherwise deductible or
22 excludable that has become worthless or
23 uncollectable, as determined under applicable
24 federal income tax standards; if the portion of the
25 debt deemed to be bad is subsequently paid, the
26 retailer shall report and pay the tax on that
27 portion during the reporting period in which the
28 payment is made); or
29 (H) charges paid by inserting coins in
30 coin-operated telecommunication devices.
31 (3) "Interstate telecommunications" means all
32 telecommunications that either originate or terminate
33 outside this State.
34 (4) "Intrastate telecommunications" means all
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1 telecommunications that originate and terminate within
2 this State.
3 (5) "Person" means any natural individual, firm,
4 trust, estate, partnership, association, joint stock
5 company, joint venture, corporation, limited liability
6 company, or a receiver, trustee, guardian or other
7 representative appointed by order of any court, the
8 Federal and State governments, including State
9 universities created by statute, or any city, town,
10 county, or other political subdivision of this State.
11 (6) "Purchase at retail" means the acquisition,
12 consumption or use of telecommunications through a sale
13 at retail.
14 (7) "Retailer" means and includes every person
15 engaged in the business of making sales at retail as
16 defined in this Section. A municipality may, in its
17 discretion, upon application, authorize the collection of
18 the tax hereby imposed by any retailer not maintaining a
19 place of business within this State, who to the
20 satisfaction of the municipality, furnishes adequate
21 security to insure collection and payment of the tax.
22 Such retailer shall be issued, without charge, a permit
23 to collect such tax. When so authorized, it shall be the
24 duty of such retailer to collect the tax upon all of the
25 gross charges for telecommunications in such municipality
26 in the same manner and subject to the same requirements
27 as a retailer maintaining a place of business within such
28 municipality.
29 (8) "Retailer maintaining a place of business in
30 this State", or any like term, means and includes any
31 retailer having or maintaining within this State,
32 directly or by a subsidiary, an office, distribution
33 facilities, transmission facilities, sales office,
34 warehouse or other place of business, or any agent or
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1 other representative operating within this State under
2 the authority of the retailer or its subsidiary,
3 irrespective of whether such place of business or agent
4 or other representative is located here permanently or
5 temporarily, or whether such retailer or subsidiary is
6 licensed to do business in this State.
7 (9) "Sale at retail" means the transmitting,
8 supplying or furnishing of telecommunications and all
9 services rendered in connection therewith for a
10 consideration, to persons other than the Federal and
11 State governments, and State universities created by
12 statute and other than between a parent corporation and
13 its wholly owned subsidiaries or between wholly owned
14 subsidiaries, when the tax has already been paid to a
15 retailer and the gross charge made by one such
16 corporation to another such corporation is not greater
17 than the gross charge paid to the retailer for their use
18 or consumption and not for resale.
19 (10) "Service address" means the location of
20 telecommunications equipment from which
21 telecommunications services are originated or at which
22 telecommunications services are received by a taxpayer.
23 If this is not a defined location, as in the case of
24 mobile phones, paging systems, maritime systems,
25 air-to-ground systems and the like, "service address"
26 shall mean the location of a taxpayer's primary use of
27 the telecommunication equipment as defined by telephone
28 number, authorization code, or location in Illinois where
29 bills are sent.
30 (11) "Taxpayer" means a person who individually or
31 through his agents, employees, or permittees engages in
32 the act or privilege of originating in such municipality
33 or receiving in such municipality telecommunications and
34 who incurs a tax liability under any ordinance authorized
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1 by this Section.
2 (12) "Telecommunications", in addition to the usual
3 and popular meaning, includes, but is not limited to,
4 messages or information transmitted through use of local,
5 toll and wide area telephone service, channel services,
6 telegraph services, teletypewriter service, computer
7 exchange services; cellular mobile telecommunications
8 service, specialized mobile radio services, paging
9 service, or any other form of mobile and portable one-way
10 or two-way communications, or any other transmission of
11 messages or information by electronic or similar means,
12 between or among points by wire, cable, fiber optics,
13 laser, microwave, radio, satellite or similar facilities.
14 The definition of "telecommunications" shall not include
15 value added services in which computer processing
16 applications are used to act on the form, content, code
17 and protocol of the information for purposes other than
18 transmission. "Telecommunications" shall not include
19 purchase of telecommunications by a telecommunications
20 service provider for use as a component part of the
21 service provided by him to the ultimate retail consumer
22 who originates or terminates the taxable end-to-end
23 communications. Carrier access charges, right of access
24 charges, charges for use of inter-company facilities, and
25 all telecommunications resold in the subsequent provision
26 used as a component of, or integrated into, end-to-end
27 telecommunications service shall be non-taxable as sales
28 for resale.
29 (d) If a person, who originates or receives
30 telecommunications in such municipality claims to be a
31 reseller of such telecommunications, such person shall apply
32 to the municipality for a resale number. Such applicant
33 shall state facts which will show the municipality why such
34 applicant is not liable for tax under any ordinance
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1 authorized by this Section on any of such purchases and shall
2 furnish such additional information as the municipality may
3 reasonably require.
4 Upon approval of the application, the municipality shall
5 assign a resale number to the applicant and shall certify
6 such number to the applicant. The municipality may cancel
7 any number which is obtained through misrepresentation, or
8 which is used to send or receive such telecommunication
9 tax-free when such actions in fact are not for resale, or
10 which no longer applies because of the person's having
11 discontinued the making of resales.
12 Except as provided hereinabove in this Section, the act
13 or privilege of sending or receiving telecommunications in
14 this State shall not be made tax-free on the ground of being
15 a sale for resale unless the person has an active resale
16 number from the municipality and furnishes that number to the
17 retailer in connection with certifying to the retailer that
18 any sale to such person is non-taxable because of being a
19 sale for resale.
20 (e) A municipality that imposes taxes upon
21 telecommunications under this Section and whose territory
22 includes part of another unit of local government or a school
23 district may, by ordinance, exempt the other unit of local
24 government or school district from those taxes.
25 (f) A municipality that imposes taxes upon
26 telecommunications under this Section may, by ordinance, (i)
27 reduce the rate of the tax for persons 65 years of age or
28 older or (ii) exempt persons 65 years of age or older from
29 those taxes. Taxes related to such rate reductions or
30 exemptions shall be rebated from the municipality directly to
31 persons qualified for the rate reduction or exemption as
32 determined by the municipality's ordinance.
33 (Source: P.A. 90-357, eff. 1-1-98.)".