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91_HB3846
LRB9111238SMdv
1 AN ACT regarding telecommunications taxes, amending named
2 Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Use Tax Act is amended by changing
6 Section 3 as follows:
7 (35 ILCS 105/3) (from Ch. 120, par. 439.3)
8 Sec. 3. Tax imposed.
9 (a) A tax is imposed upon the privilege of using in this
10 State tangible personal property purchased at retail from a
11 retailer, including computer software, and including
12 photographs, negatives, and positives that are the product of
13 photoprocessing, but not including products of
14 photoprocessing produced for use in motion pictures for
15 commercial exhibition.
16 (b) Beginning January 1, 2001, a tax is imposed upon the
17 privilege of using in this State prepaid telephone calling
18 card arrangements, as defined in Section 2 of the
19 Telecommunications Excise Tax Act, purchased at retail from a
20 retailer.
21 If the sale of prepaid calling card arrangements does not
22 take place at the retailer's place of business, the sale
23 shall be conclusively determined to take place at the
24 location of the retailer's acceptance of a purchase order; or
25 if the location of the purchase order is outside of this
26 State, the sale shall be conclusively determined to take
27 place at the customer's shipping address; or if no item is
28 shipped, the sale shall be conclusively determined to take
29 place at the customer's credit card billing address.
30 (Source: P.A. 91-51, eff. 6-30-99.)
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1 Section 10. The Service Use Tax Act is amended by
2 changing Section 3 as follows:
3 (35 ILCS 110/3) (from Ch. 120, par. 439.33)
4 Sec. 3. Tax imposed.
5 (a) A tax is imposed upon the privilege of using in this
6 State real or tangible personal property acquired as an
7 incident to the purchase of a service from a serviceman,
8 including computer software, and including photographs,
9 negatives, and positives that are the product of
10 photoprocessing, but not including products of
11 photoprocessing produced for use in motion pictures for
12 public commercial exhibition.
13 (b) Beginning January 1, 2001, a tax is imposed upon the
14 privilege of using in this State prepaid telephone calling
15 card arrangements, as defined in Section 2 of the
16 Telecommunications Excise Tax Act, acquired as an incident to
17 the purchase of a service from a serviceman.
18 If the sale of prepaid calling card arrangements does not
19 take place at the retailer's place of business, the sale
20 shall be conclusively determined to take place at the
21 location of the retailer's acceptance of a purchase order; or
22 if the location of the purchase order is outside of this
23 State, the sale shall be conclusively determined to take
24 place at the customer's shipping address; or if no item is
25 shipped, the sale shall be conclusively determined to take
26 place at the customer's credit card billing address.
27 (Source: P.A. 91-51, eff. 6-30-99.)
28 Section 15. The Service Occupation Tax Act is amended by
29 changing Section 3 as follows:
30 (35 ILCS 115/3) (from Ch. 120, par. 439.103)
31 Sec. 3. Tax imposed.
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1 (a) A tax is imposed upon all persons engaged in the
2 business of making sales of service ( referred to as
3 "servicemen") on all tangible personal property transferred
4 as an incident of a sale of service, including computer
5 software, and including photographs, negatives, and positives
6 that are the product of photoprocessing, but not including
7 products of photoprocessing produced for use in motion
8 pictures for public commercial exhibition.
9 (b) Beginning January 1, 2001, a tax is imposed upon all
10 persons engaged in the business of making sales of service
11 (referred to as "servicemen") on prepaid telephone calling
12 card arrangements, as defined in Section 2 of the
13 Telecommunications Excise Tax Act, transferred as an incident
14 of a sale of service.
15 If the sale of prepaid calling card arrangements does not
16 take place at the retailer's place of business, the sale
17 shall be conclusively determined to take place at the
18 location of the retailer's acceptance of a purchase order; or
19 if the location of the purchase order is outside of this
20 State, the sale shall be conclusively determined to take
21 place at the customer's shipping address; or if no item is
22 shipped, the sale shall be conclusively determined to take
23 place at the customer's credit card billing address.
24 (Source: P.A. 91-51, eff. 6-30-99.)
25 Section 20. The Retailers' Occupation Tax Act is amended
26 by changing Section 2 as follows:
27 (35 ILCS 120/2) (from Ch. 120, par. 441)
28 Sec. 2. Tax imposed.
29 (a) A tax is imposed upon persons engaged in the
30 business of selling at retail tangible personal property,
31 including computer software, and including photographs,
32 negatives, and positives that are the product of
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1 photoprocessing, but not including products of
2 photoprocessing produced for use in motion pictures for
3 public commercial exhibition.
4 (b) Beginning January 1, 2001, a tax is imposed upon
5 persons engaged in the business of selling at retail prepaid
6 telephone calling card arrangements, as defined in Section 2
7 of the Telecommunications Excise Tax Act.
8 If the sale of prepaid calling card arrangements does not
9 take place at the retailer's place of business, the sale
10 shall be conclusively determined to take place at the
11 location of the retailer's acceptance of a purchase order; or
12 if the location of the purchase order is outside of this
13 State, the sale shall be conclusively determined to take
14 place at the customer's shipping address; or if no item is
15 shipped, the sale shall be conclusively determined to take
16 place at the customer's credit card billing address.
17 (Source: P.A. 91-51, eff. 6-30-99.)
18 Section 25. The Telecommunications Excise Tax Act is
19 amended by changing Section 2 as follows:
20 (35 ILCS 630/2) (from Ch. 120, par. 2002)
21 Sec. 2. As used in this Article, unless the context
22 clearly requires otherwise:
23 (a) "Gross charge" means the amount paid for the act or
24 privilege of originating or receiving telecommunications in
25 this State and for all services and equipment provided in
26 connection therewith by a retailer, valued in money whether
27 paid in money or otherwise, including cash, credits, services
28 and property of every kind or nature, and shall be determined
29 without any deduction on account of the cost of such
30 telecommunications, the cost of materials used, labor or
31 service costs or any other expense whatsoever. In case
32 credit is extended, the amount thereof shall be included only
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1 as and when paid. "Gross charges" for private line service
2 shall include charges imposed at each channel point within
3 this State, charges for the channel mileage between each
4 channel point within this State, and charges for that portion
5 of the interstate inter-office channel provided within
6 Illinois. However, "gross charges" shall not include:
7 (1) any amounts added to a purchaser's bill because
8 of a charge made pursuant to (i) the tax imposed by this
9 Article; (ii) charges added to customers' bills pursuant
10 to the provisions of Sections 9-221 or 9-222 of the
11 Public Utilities Act, as amended, or any similar charges
12 added to customers' bills by retailers who are not
13 subject to rate regulation by the Illinois Commerce
14 Commission for the purpose of recovering any of the tax
15 liabilities or other amounts specified in such provisions
16 of such Act; or (iii) the tax imposed by Section 4251 of
17 the Internal Revenue Code;
18 (2) charges for a sent collect telecommunication
19 received outside of the State;
20 (3) charges for leased time on equipment or charges
21 for the storage of data or information for subsequent
22 retrieval or the processing of data or information
23 intended to change its form or content. Such equipment
24 includes, but is not limited to, the use of calculators,
25 computers, data processing equipment, tabulating
26 equipment or accounting equipment and also includes the
27 usage of computers under a time-sharing agreement;
28 (4) charges for customer equipment, including such
29 equipment that is leased or rented by the customer from
30 any source, wherein such charges are disaggregated and
31 separately identified from other charges;
32 (5) charges to business enterprises certified under
33 Section 9-222.1 of the Public Utilities Act, as amended,
34 to the extent of such exemption and during the period of
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1 time specified by the Department of Commerce and
2 Community Affairs;
3 (6) charges for telecommunications and all services
4 and equipment provided in connection therewith between a
5 parent corporation and its wholly owned subsidiaries or
6 between wholly owned subsidiaries when the tax imposed
7 under this Article has already been paid to a retailer
8 and only to the extent that the charges between the
9 parent corporation and wholly owned subsidiaries or
10 between wholly owned subsidiaries represent expense
11 allocation between the corporations and not the
12 generation of profit for the corporation rendering such
13 service;
14 (7) bad debts. Bad debt means any portion of a debt
15 that is related to a sale at retail for which gross
16 charges are not otherwise deductible or excludable that
17 has become worthless or uncollectable, as determined
18 under applicable federal income tax standards. If the
19 portion of the debt deemed to be bad is subsequently
20 paid, the retailer shall report and pay the tax on that
21 portion during the reporting period in which the payment
22 is made;
23 (8) charges paid by inserting coins in
24 coin-operated telecommunication devices;
25 (9) amounts paid by telecommunications retailers
26 under the Telecommunications Municipal Infrastructure
27 Maintenance Fee Act.
28 (b) "Amount paid" means the amount charged to the
29 taxpayer's service address in this State regardless of where
30 such amount is billed or paid.
31 (c) "Telecommunications", in addition to the meaning
32 ordinarily and popularly ascribed to it, includes, without
33 limitation, messages or information transmitted through use
34 of local, toll and wide area telephone service; private line
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1 services; channel services; telegraph services;
2 teletypewriter; computer exchange services; cellular mobile
3 telecommunications service; specialized mobile radio;
4 stationary two way radio; paging service; or any other form
5 of mobile and portable one-way or two-way communications; or
6 any other transmission of messages or information by
7 electronic or similar means, between or among points by wire,
8 cable, fiber-optics, laser, microwave, radio, satellite or
9 similar facilities. As used in this Act, "private line" means
10 a dedicated non-traffic sensitive service for a single
11 customer, that entitles the customer to exclusive or priority
12 use of a communications channel or group of channels, from
13 one or more specified locations to one or more other
14 specified locations.
15 The definition of "telecommunications" shall not include
16 value added services in which computer processing
17 applications are used to act on the form, content, code and
18 protocol of the information for purposes other than
19 transmission. "Telecommunications" shall not include
20 purchases of telecommunications by a telecommunications
21 service provider for use as a component part of the service
22 provided by him to the ultimate retail consumer who
23 originates or terminates the taxable end-to-end
24 communications. Beginning January 1, 2001,
25 "telecommunications" shall not include prepaid telephone
26 calling card arrangements; "prepaid telephone calling card
27 arrangement" means the right to exclusively purchase
28 telecommunications services, whether an initial purchase or a
29 recharge, that must be paid for in advance and that enables
30 the origination of calls using an access number and
31 authorization code, whether manually or electronically
32 dialed. Carrier access charges, right of access charges,
33 charges for use of inter-company facilities, and all
34 telecommunications resold in the subsequent provision of,
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1 used as a component of, or integrated into end-to-end
2 telecommunications service shall be non-taxable as sales for
3 resale.
4 (d) "Interstate telecommunications" means all
5 telecommunications that either originate or terminate outside
6 this State.
7 (e) "Intrastate telecommunications" means all
8 telecommunications that originate and terminate within this
9 State.
10 (f) "Department" means the Department of Revenue of the
11 State of Illinois.
12 (g) "Director" means the Director of Revenue for the
13 Department of Revenue of the State of Illinois.
14 (h) "Taxpayer" means a person who individually or
15 through his agents, employees or permittees engages in the
16 act or privilege of originating or receiving
17 telecommunications in this State and who incurs a tax
18 liability under this Article.
19 (i) "Person" means any natural individual, firm, trust,
20 estate, partnership, association, joint stock company, joint
21 venture, corporation, limited liability company, or a
22 receiver, trustee, guardian or other representative appointed
23 by order of any court, the Federal and State governments,
24 including State universities created by statute or any city,
25 town, county or other political subdivision of this State.
26 (j) "Purchase at retail" means the acquisition,
27 consumption or use of telecommunication through a sale at
28 retail.
29 (k) "Sale at retail" means the transmitting, supplying
30 or furnishing of telecommunications and all services and
31 equipment provided in connection therewith for a
32 consideration to persons other than the Federal and State
33 governments, and State universities created by statute and
34 other than between a parent corporation and its wholly owned
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1 subsidiaries or between wholly owned subsidiaries for their
2 use or consumption and not for resale.
3 (l) "Retailer" means and includes every person engaged
4 in the business of making sales at retail as defined in this
5 Article. The Department may, in its discretion, upon
6 application, authorize the collection of the tax hereby
7 imposed by any retailer not maintaining a place of business
8 within this State, who, to the satisfaction of the
9 Department, furnishes adequate security to insure collection
10 and payment of the tax. Such retailer shall be issued,
11 without charge, a permit to collect such tax. When so
12 authorized, it shall be the duty of such retailer to collect
13 the tax upon all of the gross charges for telecommunications
14 in this State in the same manner and subject to the same
15 requirements as a retailer maintaining a place of business
16 within this State. The permit may be revoked by the
17 Department at its discretion.
18 (m) "Retailer maintaining a place of business in this
19 State", or any like term, means and includes any retailer
20 having or maintaining within this State, directly or by a
21 subsidiary, an office, distribution facilities, transmission
22 facilities, sales office, warehouse or other place of
23 business, or any agent or other representative operating
24 within this State under the authority of the retailer or its
25 subsidiary, irrespective of whether such place of business or
26 agent or other representative is located here permanently or
27 temporarily, or whether such retailer or subsidiary is
28 licensed to do business in this State.
29 (n) "Service address" means the location of
30 telecommunications equipment from which the
31 telecommunications services are originated or at which
32 telecommunications services are received by a taxpayer. In
33 the event this may not be a defined location, as in the case
34 of mobile phones, paging systems, maritime systems,
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1 air-to-ground systems and the like, service address shall
2 mean the location of a taxpayer's primary use of the
3 telecommunications equipment as defined by telephone number,
4 authorization code, or location in Illinois where bills are
5 sent.
6 (Source: P.A. 90-562, eff. 12-16-97.)
7 Section 30. The Illinois Municipal Code is amended by
8 changing Sections 8-11-2 and 8-11-17 as follows:
9 (65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2)
10 Sec. 8-11-2. The corporate authorities of any
11 municipality may tax any or all of the following occupations
12 or privileges:
13 1. Persons engaged in the business of transmitting
14 messages by means of electricity or radio magnetic waves,
15 or fiber optics, at a rate not to exceed 5% of the gross
16 receipts from that business originating within the
17 corporate limits of the municipality.
18 2. Persons engaged in the business of distributing,
19 supplying, furnishing, or selling gas for use or
20 consumption within the corporate limits of a municipality
21 of 500,000 or fewer population, and not for resale, at a
22 rate not to exceed 5% of the gross receipts therefrom.
23 2a. Persons engaged in the business of
24 distributing, supplying, furnishing, or selling gas for
25 use or consumption within the corporate limits of a
26 municipality of over 500,000 population, and not for
27 resale, at a rate not to exceed 8% of the gross receipts
28 therefrom. If imposed, this tax shall be paid in monthly
29 payments.
30 3. The privilege of using or consuming electricity
31 acquired in a purchase at retail and used or consumed
32 within the corporate limits of the municipality at rates
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1 not to exceed the following maximum rates, calculated on
2 a monthly basis for each purchaser:
3 (i) For the first 2,000 kilowatt-hours used or
4 consumed in a month; 0.61 cents per kilowatt-hour;
5 (ii) For the next 48,000 kilowatt-hours used or
6 consumed in a month; 0.40 cents per kilowatt-hour;
7 (iii) For the next 50,000 kilowatt-hours used or
8 consumed in a month; 0.36 cents per kilowatt-hour;
9 (iv) For the next 400,000 kilowatt-hours used or
10 consumed in a month; 0.35 cents per kilowatt-hour;
11 (v) For the next 500,000 kilowatt-hours used or
12 consumed in a month; 0.34 cents per kilowatt-hour;
13 (vi) For the next 2,000,000 kilowatt-hours used or
14 consumed in a month; 0.32 cents per kilowatt-hour;
15 (vii) For the next 2,000,000 kilowatt-hours used or
16 consumed in a month; 0.315 cents per kilowatt-hour;
17 (viii) For the next 5,000,000 kilowatt-hours used
18 or consumed in a month; 0.31 cents per kilowatt-hour;
19 (ix) For the next 10,000,000 kilowatt-hours used or
20 consumed in a month; 0.305 cents per kilowatt-hour; and
21 (x) For all electricity used or consumed in excess
22 of 20,000,000 kilowatt-hours in a month, 0.30 cents per
23 kilowatt-hour.
24 If a municipality imposes a tax at rates lower than
25 either the maximum rates specified in this Section or the
26 alternative maximum rates promulgated by the Illinois
27 Commerce Commission, as provided below, the tax rates
28 shall be imposed upon the kilowatt hour categories set
29 forth above with the same proportional relationship as
30 that which exists among such maximum rates.
31 Notwithstanding the foregoing, until December 31, 2008,
32 no municipality shall establish rates that are in excess
33 of rates reasonably calculated to produce revenues that
34 equal the maximum total revenues such municipality could
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1 have received under the tax authorized by this
2 subparagraph in the last full calendar year prior to the
3 effective date of Section 65 of this amendatory Act of
4 1997; provided that this shall not be a limitation on the
5 amount of tax revenues actually collected by such
6 municipality.
7 Upon the request of the corporate authorities of a
8 municipality, the Illinois Commerce Commission shall,
9 within 90 days after receipt of such request, promulgate
10 alternative rates for each of these kilowatt-hour
11 categories that will reflect, as closely as reasonably
12 practical for that municipality, the distribution of the
13 tax among classes of purchasers as if the tax were based
14 on a uniform percentage of the purchase price of
15 electricity. A municipality that has adopted an
16 ordinance imposing a tax pursuant to subparagraph 3 as it
17 existed prior to the effective date of Section 65 of this
18 amendatory Act of 1997 may, rather than imposing the tax
19 permitted by this amendatory Act of 1997, continue to
20 impose the tax pursuant to that ordinance with respect to
21 gross receipts received from residential customers
22 through July 31, 1999, and with respect to gross receipts
23 from any non-residential customer until the first bill
24 issued to such customer for delivery services in
25 accordance with Section 16-104 of the Public Utilities
26 Act but in no case later than the last bill issued to
27 such customer before December 31, 2000. No ordinance
28 imposing the tax permitted by this amendatory Act of 1997
29 shall be applicable to any non-residential customer until
30 the first bill issued to such customer for delivery
31 services in accordance with Section 16-104 of the Public
32 Utilities Act but in no case later than the last bill
33 issued to such non-residential customer before December
34 31, 2000.
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1 4. Persons engaged in the business of distributing,
2 supplying, furnishing, or selling water for use or
3 consumption within the corporate limits of the
4 municipality, and not for resale, at a rate not to exceed
5 5% of the gross receipts therefrom.
6 None of the taxes authorized by this Section may be
7 imposed with respect to any transaction in interstate
8 commerce or otherwise to the extent to which the business or
9 privilege may not, under the constitution and statutes of the
10 United States, be made the subject of taxation by this State
11 or any political sub-division thereof; nor shall any persons
12 engaged in the business of distributing, supplying,
13 furnishing, selling or transmitting gas, water, or
14 electricity, or engaged in the business of transmitting
15 messages, or using or consuming electricity acquired in a
16 purchase at retail, be subject to taxation under the
17 provisions of this Section for those transactions that are or
18 may become subject to taxation under the provisions of the
19 "Municipal Retailers' Occupation Tax Act" authorized by
20 Section 8-11-1; nor shall any tax authorized by this Section
21 be imposed upon any person engaged in a business or on any
22 privilege unless the tax is imposed in like manner and at the
23 same rate upon all persons engaged in businesses of the same
24 class in the municipality, whether privately or municipally
25 owned or operated, or exercising the same privilege within
26 the municipality.
27 Any of the taxes enumerated in this Section may be in
28 addition to the payment of money, or value of products or
29 services furnished to the municipality by the taxpayer as
30 compensation for the use of its streets, alleys, or other
31 public places, or installation and maintenance therein,
32 thereon or thereunder of poles, wires, pipes or other
33 equipment used in the operation of the taxpayer's business.
34 (a) If the corporate authorities of any home rule
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1 municipality have adopted an ordinance that imposed a tax on
2 public utility customers, between July 1, 1971, and October
3 1, 1981, on the good faith belief that they were exercising
4 authority pursuant to Section 6 of Article VII of the 1970
5 Illinois Constitution, that action of the corporate
6 authorities shall be declared legal and valid,
7 notwithstanding a later decision of a judicial tribunal
8 declaring the ordinance invalid. No municipality shall be
9 required to rebate, refund, or issue credits for any taxes
10 described in this paragraph, and those taxes shall be deemed
11 to have been levied and collected in accordance with the
12 Constitution and laws of this State.
13 (b) In any case in which (i) prior to October 19, 1979,
14 the corporate authorities of any municipality have adopted an
15 ordinance imposing a tax authorized by this Section (or by
16 the predecessor provision of the "Revised Cities and Villages
17 Act") and have explicitly or in practice interpreted gross
18 receipts to include either charges added to customers' bills
19 pursuant to the provision of paragraph (a) of Section 36 of
20 the Public Utilities Act or charges added to customers' bills
21 by taxpayers who are not subject to rate regulation by the
22 Illinois Commerce Commission for the purpose of recovering
23 any of the tax liabilities or other amounts specified in such
24 paragraph (a) of Section 36 of that Act, and (ii) on or after
25 October 19, 1979, a judicial tribunal has construed gross
26 receipts to exclude all or part of those charges, then
27 neither those municipality nor any taxpayer who paid the tax
28 shall be required to rebate, refund, or issue credits for any
29 tax imposed or charge collected from customers pursuant to
30 the municipality's interpretation prior to October 19, 1979.
31 This paragraph reflects a legislative finding that it would
32 be contrary to the public interest to require a municipality
33 or its taxpayers to refund taxes or charges attributable to
34 the municipality's more inclusive interpretation of gross
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1 receipts prior to October 19, 1979, and is not intended to
2 prescribe or limit judicial construction of this Section. The
3 legislative finding set forth in this subsection does not
4 apply to taxes imposed after the effective date of this
5 amendatory Act of 1995.
6 (c) The tax authorized by subparagraph 3 shall be
7 collected from the purchaser by the person maintaining a
8 place of business in this State who delivers the electricity
9 to the purchaser. This tax shall constitute a debt of the
10 purchaser to the person who delivers the electricity to the
11 purchaser and if unpaid, is recoverable in the same manner as
12 the original charge for delivering the electricity. Any tax
13 required to be collected pursuant to an ordinance authorized
14 by subparagraph 3 and any such tax collected by a person
15 delivering electricity shall constitute a debt owed to the
16 municipality by such person delivering the electricity,
17 provided, that the person delivering electricity shall be
18 allowed credit for such tax related to deliveries of
19 electricity the charges for which are written off as
20 uncollectible, and provided further, that if such charges are
21 thereafter collected, the delivering supplier shall be
22 obligated to remit such tax. For purposes of this subsection
23 (c), any partial payment not specifically identified by the
24 purchaser shall be deemed to be for the delivery of
25 electricity. Persons delivering electricity shall collect the
26 tax from the purchaser by adding such tax to the gross charge
27 for delivering the electricity, in the manner prescribed by
28 the municipality. Persons delivering electricity shall also
29 be authorized to add to such gross charge an amount equal to
30 3% of the tax to reimburse the person delivering electricity
31 for the expenses incurred in keeping records, billing
32 customers, preparing and filing returns, remitting the tax
33 and supplying data to the municipality upon request. If the
34 person delivering electricity fails to collect the tax from
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1 the purchaser, then the purchaser shall be required to pay
2 the tax directly to the municipality in the manner prescribed
3 by the municipality. Persons delivering electricity who file
4 returns pursuant to this paragraph (c) shall, at the time of
5 filing such return, pay the municipality the amount of the
6 tax collected pursuant to subparagraph 3.
7 (d) For the purpose of the taxes enumerated in this
8 Section:
9 "Gross receipts" means the consideration received for the
10 transmission of messages, the consideration received for
11 distributing, supplying, furnishing or selling gas for use or
12 consumption and not for resale, and the consideration
13 received for distributing, supplying, furnishing or selling
14 water for use or consumption and not for resale, and for all
15 services rendered in connection therewith valued in money,
16 whether received in money or otherwise, including cash,
17 credit, services and property of every kind and material and
18 for all services rendered therewith, and shall be determined
19 without any deduction on account of the cost of transmitting
20 such messages, without any deduction on account of the cost
21 of the service, product or commodity supplied, the cost of
22 materials used, labor or service cost, or any other expenses
23 whatsoever. "Gross receipts" shall not include that portion
24 of the consideration received for distributing, supplying,
25 furnishing, or selling gas or water to, or for the
26 transmission of messages for, business enterprises described
27 in paragraph (e) of this Section to the extent and during the
28 period in which the exemption authorized by paragraph (e) is
29 in effect or for school districts or units of local
30 government described in paragraph (f) during the period in
31 which the exemption authorized in paragraph (f) is in effect.
32 "Gross receipts" shall not include amounts paid by
33 telecommunications retailers under the Telecommunications
34 Municipal Infrastructure Maintenance Fee Act.
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1 For utility bills issued on or after May 1, 1996, but
2 before May 1, 1997, and for receipts from those utility
3 bills, "gross receipts" does not include one-third of (i)
4 amounts added to customers' bills under Section 9-222 of the
5 Public Utilities Act, or (ii) amounts added to customers'
6 bills by taxpayers who are not subject to rate regulation by
7 the Illinois Commerce Commission for the purpose of
8 recovering any of the tax liabilities described in Section
9 9-222 of the Public Utilities Act. For utility bills issued
10 on or after May 1, 1997, but before May 1, 1998, and for
11 receipts from those utility bills, "gross receipts" does not
12 include two-thirds of (i) amounts added to customers' bills
13 under Section 9-222 of the Public Utilities Act, or (ii)
14 amount added to customers' bills by taxpayers who are not
15 subject to rate regulation by the Illinois Commerce
16 Commission for the purpose of recovering any of the tax
17 liabilities described in Section 9-222 of the Public
18 Utilities Act. For utility bills issued on or after May 1,
19 1998, and for receipts from those utility bills, "gross
20 receipts" does not include (i) amounts added to customers'
21 bills under Section 9-222 of the Public Utilities Act, or
22 (ii) amounts added to customers' bills by taxpayers who are
23 not subject to rate regulation by the Illinois Commerce
24 Commission for the purpose of recovering any of the tax
25 liabilities described in Section 9-222 of the Public
26 Utilities Act.
27 For purposes of this Section "gross receipts" shall not
28 include (i) amounts added to customers' bills under Section
29 9-221 of the Public Utilities Act, or (ii) charges added to
30 customers' bills to recover the surcharge imposed under the
31 Emergency Telephone System Act. This paragraph is not
32 intended to nor does it make any change in the meaning of
33 "gross receipts" for the purposes of this Section, but is
34 intended to remove possible ambiguities, thereby confirming
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1 the existing meaning of "gross receipts" prior to the
2 effective date of this amendatory Act of 1995.
3 The words "transmitting messages", in addition to the
4 usual and popular meaning of person to person communication,
5 shall include the furnishing, for a consideration, of
6 services or facilities (whether owned or leased), or both, to
7 persons in connection with the transmission of messages where
8 those persons do not, in turn, receive any consideration in
9 connection therewith, but shall not include such furnishing
10 of services or facilities to persons for the transmission of
11 messages to the extent that any such services or facilities
12 for the transmission of messages are furnished for a
13 consideration, by those persons to other persons, for the
14 transmission of messages. Beginning January 1, 2001,
15 "transmitting messages" shall not include prepaid telephone
16 calling card arrangements; "prepaid telephone calling card
17 arrangement" means the right to exclusively purchase
18 telecommunications services, whether an initial purchase or a
19 recharge, that must be paid for in advance and that enables
20 the origination of calls using an access number and
21 authorization code, whether manually or electronically
22 dialed.
23 "Person" as used in this Section means any natural
24 individual, firm, trust, estate, partnership, association,
25 joint stock company, joint adventure, corporation, limited
26 liability company, municipal corporation, the State or any of
27 its political subdivisions, any State university created by
28 statute, or a receiver, trustee, guardian or other
29 representative appointed by order of any court.
30 "Person maintaining a place of business in this State"
31 shall mean any person having or maintaining within this
32 State, directly or by a subsidiary or other affiliate, an
33 office, generation facility, distribution facility,
34 transmission facility, sales office or other place of
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1 business, or any employee, agent, or other representative
2 operating within this State under the authority of the person
3 or its subsidiary or other affiliate, irrespective of whether
4 such place of business or agent or other representative is
5 located in this State permanently or temporarily, or whether
6 such person, subsidiary or other affiliate is licensed or
7 qualified to do business in this State.
8 "Public utility" shall have the meaning ascribed to it in
9 Section 3-105 of the Public Utilities Act and shall include
10 telecommunications carriers as defined in Section 13-202 of
11 that Act and alternative retail electric suppliers as defined
12 in Section 16-102 of that Act.
13 "Purchase at retail" shall mean any acquisition of
14 electricity by a purchaser for purposes of use or
15 consumption, and not for resale, but shall not include the
16 use of electricity by a public utility directly in the
17 generation, production, transmission, delivery or sale of
18 electricity.
19 "Purchaser" shall mean any person who uses or consumes,
20 within the corporate limits of the municipality, electricity
21 acquired in a purchase at retail.
22 In the case of persons engaged in the business of
23 transmitting messages through the use of mobile equipment,
24 such as cellular phones and paging systems, the gross
25 receipts from the business shall be deemed to originate
26 within the corporate limits of a municipality only if the
27 address to which the bills for the service are sent is within
28 those corporate limits. If, however, that address is not
29 located within a municipality that imposes a tax under this
30 Section, then (i) if the party responsible for the bill is
31 not an individual, the gross receipts from the business shall
32 be deemed to originate within the corporate limits of the
33 municipality where that party's principal place of business
34 in Illinois is located, and (ii) if the party responsible for
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1 the bill is an individual, the gross receipts from the
2 business shall be deemed to originate within the corporate
3 limits of the municipality where that party's principal
4 residence in Illinois is located.
5 (e) Any municipality that imposes taxes upon public
6 utilities or upon the privilege of using or consuming
7 electricity pursuant to this Section whose territory includes
8 any part of an enterprise zone or federally designated
9 Foreign Trade Zone or Sub-Zone may, by a majority vote of its
10 corporate authorities, exempt from those taxes for a period
11 not exceeding 20 years any specified percentage of gross
12 receipts of public utilities received from, or electricity
13 used or consumed by, business enterprises that:
14 (1) either (i) make investments that cause the
15 creation of a minimum of 200 full-time equivalent jobs in
16 Illinois, (ii) make investments of at least $175,000,000
17 that cause the creation of a minimum of 150 full-time
18 equivalent jobs in Illinois, or (iii) make investments
19 that cause the retention of a minimum of 1,000 full-time
20 jobs in Illinois; and
21 (2) are either (i) located in an Enterprise Zone
22 established pursuant to the Illinois Enterprise Zone Act
23 or (ii) Department of Commerce and Community Affairs
24 designated High Impact Businesses located in a federally
25 designated Foreign Trade Zone or Sub-Zone; and
26 (3) are certified by the Department of Commerce and
27 Community Affairs as complying with the requirements
28 specified in clauses (1) and (2) of this paragraph (e).
29 Upon adoption of the ordinance authorizing the exemption,
30 the municipal clerk shall transmit a copy of that ordinance
31 to the Department of Commerce and Community Affairs. The
32 Department of Commerce and Community Affairs shall determine
33 whether the business enterprises located in the municipality
34 meet the criteria prescribed in this paragraph. If the
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1 Department of Commerce and Community Affairs determines that
2 the business enterprises meet the criteria, it shall grant
3 certification. The Department of Commerce and Community
4 Affairs shall act upon certification requests within 30 days
5 after receipt of the ordinance.
6 Upon certification of the business enterprise by the
7 Department of Commerce and Community Affairs, the Department
8 of Commerce and Community Affairs shall notify the Department
9 of Revenue of the certification. The Department of Revenue
10 shall notify the public utilities of the exemption status of
11 the gross receipts received from, and the electricity used or
12 consumed by, the certified business enterprises. Such
13 exemption status shall be effective within 3 months after
14 certification.
15 (f) A municipality that imposes taxes upon public
16 utilities or upon the privilege of using or consuming
17 electricity under this Section and whose territory includes
18 part of another unit of local government or a school district
19 may by ordinance exempt the other unit of local government or
20 school district from those taxes.
21 (g) The amendment of this Section by Public Act 84-127
22 shall take precedence over any other amendment of this
23 Section by any other amendatory Act passed by the 84th
24 General Assembly before the effective date of Public Act
25 84-127.
26 (h) In any case in which, before July 1, 1992, a person
27 engaged in the business of transmitting messages through the
28 use of mobile equipment, such as cellular phones and paging
29 systems, has determined the municipality within which the
30 gross receipts from the business originated by reference to
31 the location of its transmitting or switching equipment, then
32 (i) neither the municipality to which tax was paid on that
33 basis nor the taxpayer that paid tax on that basis shall be
34 required to rebate, refund, or issue credits for any such tax
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1 or charge collected from customers to reimburse the taxpayer
2 for the tax and (ii) no municipality to which tax would have
3 been paid with respect to those gross receipts if the
4 provisions of this amendatory Act of 1991 had been in effect
5 before July 1, 1992, shall have any claim against the
6 taxpayer for any amount of the tax.
7 (Source: P.A. 89-325, eff. 1-1-96; 90-16, eff. 6-16-97;
8 90-561, eff. 8-1-98; 90-562, eff. 12-16-97; 90-655, eff.
9 7-30-98.)
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
22 such act or privilege may not, under the Constitution and
23 statutes of the United States, be made the subject of
24 taxation by municipalities in this State.
25 (2) The act or privilege of originating in such
26 municipality or receiving in such municipality interstate
27 telecommunications by a person at a rate not to exceed 5%
28 of the gross charge for such telecommunications purchased
29 at retail from a retailer by such person. To prevent
30 actual multi-state taxation of the act or privilege that
31 is subject to taxation under this paragraph, any
32 taxpayer, upon proof that the taxpayer has paid a tax in
33 another state on such event, shall be allowed a credit
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1 against any tax enacted pursuant to an ordinance
2 authorized by this paragraph to the extent of the amount
3 of such tax properly due and paid in such other state
4 which was not previously allowed as a credit against any
5 other state or local tax in this State. However, such
6 tax is not imposed on the act or privilege to the extent
7 such act or privilege may not, under the Constitution and
8 statutes of the United States, be made the subject of
9 taxation by municipalities in this State.
10 (3) The taxes authorized by paragraphs (1) and (2)
11 of subsection (a) of this Section may only be levied if
12 such municipality does not then have in effect an
13 occupation tax imposed on persons engaged in the business
14 of transmitting messages by means of electricity as
15 authorized by Section 8-11-2 of the Illinois Municipal
16 Code.
17 (b) The tax authorized by this Section shall be
18 collected from the taxpayer by a retailer maintaining a place
19 of business in this State and making or effectuating the sale
20 at retail and shall be remitted by such retailer to the
21 municipality. Any tax required to be collected pursuant to
22 an ordinance authorized by this Section and any such tax
23 collected by such retailer shall constitute a debt owed by
24 the retailer to such municipality. Retailers shall collect
25 the tax from the taxpayer by adding the tax to the gross
26 charge for the act or privilege of originating or receiving
27 telecommunications when sold for use, in the manner
28 prescribed by the municipality. The tax authorized by this
29 Section shall constitute a debt of the purchaser to the
30 retailer who provides such taxable services until paid and,
31 if unpaid, is recoverable at law in the same manner as the
32 original charge for such taxable services. If the retailer
33 fails to collect the tax from the taxpayer, then the taxpayer
34 shall be required to pay the tax directly to the municipality
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1 in the manner provided by the municipality. The municipality
2 imposing the tax shall provide for its administration and
3 enforcement.
4 Beginning January 1, 1994, retailers filing tax returns
5 pursuant to this Section shall, at the time of filing such
6 return, pay to the municipality the amount of the tax imposed
7 by this Section, less a commission of 1.75% which is allowed
8 to reimburse the retailer for the expenses incurred in
9 keeping records, billing the customer, preparing and filing
10 returns, remitting the tax and supplying data to the
11 municipality upon request. No commission may be claimed by a
12 retailer for tax not timely remitted to the municipality.
13 Whenever possible, the tax authorized by this Section
14 shall, when collected, be stated as a distinct item separate
15 and apart from the gross charge for telecommunications.
16 (c) For the purpose of the taxes authorized by this
17 Section:
18 (1) "Amount paid" means the amount charged to the
19 taxpayer's service address in such municipality
20 regardless of where such amount is billed or paid.
21 (2) "Gross charge" means the amount paid for the
22 act or privilege of originating or receiving
23 telecommunications in such municipality and for all
24 services rendered in connection therewith, valued in
25 money whether paid in money or otherwise, including cash,
26 credits, services and property of every kind or nature,
27 and shall be determined without any deduction on account
28 of the cost of such telecommunications, the cost of the
29 materials used, labor or service costs or any other
30 expense whatsoever. In case credit is extended, the
31 amount thereof shall be included only as and when paid.
32 However, "gross charge" shall not include:
33 (A) any amounts added to a purchaser's bill
34 because of a charge made pursuant to: (i) the tax
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1 imposed by this Section, (ii) additional charges
2 added to a purchaser's bill pursuant to Section
3 9-222 of the Public Utilities Act, (iii) the tax
4 imposed by the Telecommunications Excise Tax Act, or
5 (iv) the tax imposed by Section 4251 of the Internal
6 Revenue Code;
7 (B) charges for a sent collect
8 telecommunication received outside of such
9 municipality;
10 (C) charges for leased time on equipment or
11 charges for the storage of data or information or
12 subsequent retrieval or the processing of data or
13 information intended to change its form or content.
14 Such equipment includes, but is not limited to, the
15 use of calculators, computers, data processing
16 equipment, tabulating equipment or accounting
17 equipment and also includes the usage of computers
18 under a time-sharing agreement;
19 (D) charges for customer equipment, including
20 such equipment that is leased or rented by the
21 customer from any source, wherein such charges are
22 disaggregated and separately identified from other
23 charges;
24 (E) charges to business enterprises certified
25 under Section 9-222.1 of the Public Utilities Act to
26 the extent of such exemption and during the period
27 of time specified by the Department of Commerce and
28 Community Affairs;
29 (F) charges for telecommunications and all
30 services and equipment provided in connection
31 therewith between a parent corporation and its
32 wholly owned subsidiaries or between wholly owned
33 subsidiaries when the tax imposed under this Section
34 has already been paid to a retailer and only to the
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1 extent that the charges between the parent
2 corporation and wholly owned subsidiaries or between
3 wholly owned subsidiaries represent expense
4 allocation between the corporations and not the
5 generation of profit for the corporation rendering
6 such service;
7 (G) bad debts ("bad debt" means any portion of
8 a debt that is related to a sale at retail for which
9 gross charges are not otherwise deductible or
10 excludable that has become worthless or
11 uncollectable, as determined under applicable
12 federal income tax standards; if the portion of the
13 debt deemed to be bad is subsequently paid, the
14 retailer shall report and pay the tax on that
15 portion during the reporting period in which the
16 payment is made);
17 (H) charges paid by inserting coins in
18 coin-operated telecommunication devices; or
19 (I) amounts paid by telecommunications
20 retailers under the Telecommunications Municipal
21 Infrastructure Maintenance Fee Act.
22 (3) "Interstate telecommunications" means all
23 telecommunications that either originate or terminate
24 outside this State.
25 (4) "Intrastate telecommunications" means all
26 telecommunications that originate and terminate within
27 this State.
28 (5) "Person" means any natural individual, firm,
29 trust, estate, partnership, association, joint stock
30 company, joint venture, corporation, limited liability
31 company, or a receiver, trustee, guardian or other
32 representative appointed by order of any court, the
33 Federal and State governments, including State
34 universities created by statute, or any city, town,
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1 county, or other political subdivision of this State.
2 (6) "Purchase at retail" means the acquisition,
3 consumption or use of telecommunications through a sale
4 at retail.
5 (7) "Retailer" means and includes every person
6 engaged in the business of making sales at retail as
7 defined in this Section. A municipality may, in its
8 discretion, upon application, authorize the collection of
9 the tax hereby imposed by any retailer not maintaining a
10 place of business within this State, who to the
11 satisfaction of the municipality, furnishes adequate
12 security to insure collection and payment of the tax.
13 Such retailer shall be issued, without charge, a permit
14 to collect such tax. When so authorized, it shall be the
15 duty of such retailer to collect the tax upon all of the
16 gross charges for telecommunications in such municipality
17 in the same manner and subject to the same requirements
18 as a retailer maintaining a place of business within such
19 municipality.
20 (8) "Retailer maintaining a place of business in
21 this State", or any like term, means and includes any
22 retailer having or maintaining within this State,
23 directly or by a subsidiary, an office, distribution
24 facilities, transmission facilities, sales office,
25 warehouse or other place of business, or any agent or
26 other representative operating within this State under
27 the authority of the retailer or its subsidiary,
28 irrespective of whether such place of business or agent
29 or other representative is located here permanently or
30 temporarily, or whether such retailer or subsidiary is
31 licensed to do business in this State.
32 (9) "Sale at retail" means the transmitting,
33 supplying or furnishing of telecommunications and all
34 services rendered in connection therewith for a
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1 consideration, to persons other than the Federal and
2 State governments, and State universities created by
3 statute and other than between a parent corporation and
4 its wholly owned subsidiaries or between wholly owned
5 subsidiaries, when the tax has already been paid to a
6 retailer and the gross charge made by one such
7 corporation to another such corporation is not greater
8 than the gross charge paid to the retailer for their use
9 or consumption and not for resale.
10 (10) "Service address" means the location of
11 telecommunications equipment from which
12 telecommunications services are originated or at which
13 telecommunications services are received by a taxpayer.
14 If this is not a defined location, as in the case of
15 mobile phones, paging systems, maritime systems,
16 air-to-ground systems and the like, "service address"
17 shall mean the location of a taxpayer's primary use of
18 the telecommunication equipment as defined by telephone
19 number, authorization code, or location in Illinois where
20 bills are sent.
21 (11) "Taxpayer" means a person who individually or
22 through his agents, employees, or permittees engages in
23 the act or privilege of originating in such municipality
24 or receiving in such municipality telecommunications and
25 who incurs a tax liability under any ordinance authorized
26 by this Section.
27 (12) "Telecommunications", in addition to the usual
28 and popular meaning, includes, but is not limited to,
29 messages or information transmitted through use of local,
30 toll and wide area telephone service, channel services,
31 telegraph services, teletypewriter service, computer
32 exchange services; cellular mobile telecommunications
33 service, specialized mobile radio services, paging
34 service, or any other form of mobile and portable one-way
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1 or two-way communications, or any other transmission of
2 messages or information by electronic or similar means,
3 between or among points by wire, cable, fiber optics,
4 laser, microwave, radio, satellite or similar facilities.
5 The definition of "telecommunications" shall not
6 include value added services in which computer processing
7 applications are used to act on the form, content, code
8 and protocol of the information for purposes other than
9 transmission. "Telecommunications" shall not include
10 purchase of telecommunications by a telecommunications
11 service provider for use as a component part of the
12 service provided by him to the ultimate retail consumer
13 who originates or terminates the taxable end-to-end
14 communications. Beginning January 1, 2001,
15 "telecommunications" shall not include prepaid telephone
16 calling card arrangements; "prepaid telephone calling
17 card arrangement" means the right to exclusively purchase
18 telecommunications services, whether an initial purchase
19 or a recharge, that must be paid for in advance and that
20 enables the origination of calls using an access number
21 and authorization code, whether manually or
22 electronically dialed. Carrier access charges, right of
23 access charges, charges for use of inter-company
24 facilities, and all telecommunications resold in the
25 subsequent provision used as a component of, or
26 integrated into, end-to-end telecommunications service
27 shall be non-taxable as sales for resale.
28 (d) If a person, who originates or receives
29 telecommunications in such municipality claims to be a
30 reseller of such telecommunications, such person shall apply
31 to the municipality for a resale number. Such applicant
32 shall state facts which will show the municipality why such
33 applicant is not liable for tax under any ordinance
34 authorized by this Section on any of such purchases and shall
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1 furnish such additional information as the municipality may
2 reasonably require.
3 Upon approval of the application, the municipality shall
4 assign a resale number to the applicant and shall certify
5 such number to the applicant. The municipality may cancel
6 any number which is obtained through misrepresentation, or
7 which is used to send or receive such telecommunication
8 tax-free when such actions in fact are not for resale, or
9 which no longer applies because of the person's having
10 discontinued the making of resales.
11 Except as provided hereinabove in this Section, the act
12 or privilege of sending or receiving telecommunications in
13 this State shall not be made tax-free on the ground of being
14 a sale for resale unless the person has an active resale
15 number from the municipality and furnishes that number to the
16 retailer in connection with certifying to the retailer that
17 any sale to such person is non-taxable because of being a
18 sale for resale.
19 (e) A municipality that imposes taxes upon
20 telecommunications under this Section and whose territory
21 includes part of another unit of local government or a school
22 district may, by ordinance, exempt the other unit of local
23 government or school district from those taxes.
24 (f) A municipality that imposes taxes upon
25 telecommunications under this Section may, by ordinance, (i)
26 reduce the rate of the tax for persons 65 years of age or
27 older or (ii) exempt persons 65 years of age or older from
28 those taxes. Taxes related to such rate reductions or
29 exemptions shall be rebated from the municipality directly to
30 persons qualified for the rate reduction or exemption as
31 determined by the municipality's ordinance.
32 (Source: P.A. 90-357, eff. 1-1-98; 90-562, eff. 12-16-97.)
33 Section 99. Effective date. This Act takes effect upon
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1 becoming law.