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91_SB0659eng
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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, 2000, 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. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
31 86-953; 86-1394; 86-1475; 87-876.)
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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, 2000, 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. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
28 86-1028; 86-1475; 87-879.)
29 Section 15. The Service Occupation Tax Act is amended by
30 changing Section 3 as follows:
31 (35 ILCS 115/3) (from Ch. 120, par. 439.103)
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1 Sec. 3. Tax imposed.
2 (a) A tax is imposed upon all persons engaged in the
3 business of making sales of service (referred to as
4 "servicemen") on all tangible personal property transferred
5 as an incident of a sale of service, including computer
6 software, and including photographs, negatives, and positives
7 that are the product of photoprocessing, but not including
8 products of photoprocessing produced for use in motion
9 pictures for public commercial exhibition.
10 (b) Beginning January 1, 2000, a tax is imposed upon all
11 persons engaged in the business of making sales of service
12 (referred to as "servicemen") on prepaid telephone calling
13 card arrangements, as defined in Section 2 of the
14 Telecommunications Excise Tax Act, transferred as an incident
15 of a sale of service.
16 If the sale of prepaid calling card arrangements does not
17 take place at the retailer's place of business, the sale
18 shall be conclusively determined to take place at the
19 location of the retailer's acceptance of a purchase order; or
20 if the location of the purchase order is outside of this
21 State, the sale shall be conclusively determined to take
22 place at the customer's shipping address; or if no item is
23 shipped, the sale shall be conclusively determined to take
24 place at the customer's credit card billing address.
25 (Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
26 86-1028; 86-1475.)
27 Section 20. The Retailers' Occupation Tax Act is amended
28 by changing Section 2 as follows:
29 (35 ILCS 120/2) (from Ch. 120, par. 441)
30 Sec. 2. Tax imposed.
31 (a) A tax is imposed upon persons engaged in the
32 business of selling at retail tangible personal property,
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1 including computer software, and including photographs,
2 negatives, and positives that are the product of
3 photoprocessing, but not including products of
4 photoprocessing produced for use in motion pictures for
5 public commercial exhibition.
6 (b) Beginning January 1, 2000, a tax is imposed upon
7 persons engaged in the business of selling at retail prepaid
8 telephone calling card arrangements, as defined in Section 2
9 of the Telecommunications Excise Tax Act.
10 If the sale of prepaid calling card arrangements does not
11 take place at the retailer's place of business, the sale
12 shall be conclusively determined to take place at the
13 location of the retailer's acceptance of a purchase order; or
14 if the location of the purchase order is outside of this
15 State, the sale shall be conclusively determined to take
16 place at the customer's shipping address; or if no item is
17 shipped, the sale shall be conclusively determined to take
18 place at the customer's credit card billing address.
19 (Source: P.A. 86-44; 86-244; 86-252; 86-444; 86-820; 86-905;
20 86-928; 86-953; 86-1394; 86-1475.)
21 Section 25. The Telecommunications Excise Tax Act is
22 amended by changing Section 2 as follows:
23 (35 ILCS 630/2) (from Ch. 120, par. 2002)
24 Sec. 2. As used in this Article, unless the context
25 clearly requires otherwise:
26 (a) "Gross charge" means the amount paid for the act or
27 privilege of originating or receiving telecommunications in
28 this State and for all services and equipment provided in
29 connection therewith by a retailer, valued in money whether
30 paid in money or otherwise, including cash, credits, services
31 and property of every kind or nature, and shall be determined
32 without any deduction on account of the cost of such
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1 telecommunications, the cost of materials used, labor or
2 service costs or any other expense whatsoever. In case
3 credit is extended, the amount thereof shall be included only
4 as and when paid. "Gross charges" for private line service
5 shall include charges imposed at each channel point within
6 this State, charges for the channel mileage between each
7 channel point within this State, and charges for that portion
8 of the interstate inter-office channel provided within
9 Illinois. However, "gross charges" shall not include:
10 (1) any amounts added to a purchaser's bill because
11 of a charge made pursuant to (i) the tax imposed by this
12 Article; (ii) charges added to customers' bills pursuant
13 to the provisions of Sections 9-221 or 9-222 of the
14 Public Utilities Act, as amended, or any similar charges
15 added to customers' bills by retailers who are not
16 subject to rate regulation by the Illinois Commerce
17 Commission for the purpose of recovering any of the tax
18 liabilities or other amounts specified in such provisions
19 of such Act; or (iii) the tax imposed by Section 4251 of
20 the Internal Revenue Code;
21 (2) charges for a sent collect telecommunication
22 received outside of the State;
23 (3) charges for leased time on equipment or charges
24 for the storage of data or information for subsequent
25 retrieval or the processing of data or information
26 intended to change its form or content. Such equipment
27 includes, but is not limited to, the use of calculators,
28 computers, data processing equipment, tabulating
29 equipment or accounting equipment and also includes the
30 usage of computers under a time-sharing agreement;
31 (4) charges for customer equipment, including such
32 equipment that is leased or rented by the customer from
33 any source, wherein such charges are disaggregated and
34 separately identified from other charges;
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1 (5) charges to business enterprises certified under
2 Section 9-222.1 of the Public Utilities Act, as amended,
3 to the extent of such exemption and during the period of
4 time specified by the Department of Commerce and
5 Community Affairs;
6 (6) charges for telecommunications and all services
7 and equipment provided in connection therewith between a
8 parent corporation and its wholly owned subsidiaries or
9 between wholly owned subsidiaries when the tax imposed
10 under this Article has already been paid to a retailer
11 and only to the extent that the charges between the
12 parent corporation and wholly owned subsidiaries or
13 between wholly owned subsidiaries represent expense
14 allocation between the corporations and not the
15 generation of profit for the corporation rendering such
16 service;
17 (7) bad debts. Bad debt means any portion of a debt
18 that is related to a sale at retail for which gross
19 charges are not otherwise deductible or excludable that
20 has become worthless or uncollectable, as determined
21 under applicable federal income tax standards. If the
22 portion of the debt deemed to be bad is subsequently
23 paid, the retailer shall report and pay the tax on that
24 portion during the reporting period in which the payment
25 is made;
26 (8) charges paid by inserting coins in
27 coin-operated telecommunication devices;
28 (9) amounts paid by telecommunications retailers
29 under the Telecommunications Municipal Infrastructure
30 Maintenance Fee Act.
31 (b) "Amount paid" means the amount charged to the
32 taxpayer's service address in this State regardless of where
33 such amount is billed or paid.
34 (c) "Telecommunications", in addition to the meaning
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1 ordinarily and popularly ascribed to it, includes, without
2 limitation, messages or information transmitted through use
3 of local, toll and wide area telephone service; private line
4 services; channel services; telegraph services;
5 teletypewriter; computer exchange services; cellular mobile
6 telecommunications service; specialized mobile radio;
7 stationary two way radio; paging service; or any other form
8 of mobile and portable one-way or two-way communications; or
9 any other transmission of messages or information by
10 electronic or similar means, between or among points by wire,
11 cable, fiber-optics, laser, microwave, radio, satellite or
12 similar facilities. As used in this Act, "private line" means
13 a dedicated non-traffic sensitive service for a single
14 customer, that entitles the customer to exclusive or priority
15 use of a communications channel or group of channels, from
16 one or more specified locations to one or more other
17 specified locations.
18 The definition of "telecommunications" shall not include
19 value added services in which computer processing
20 applications are used to act on the form, content, code and
21 protocol of the information for purposes other than
22 transmission. "Telecommunications" shall not include
23 purchases of telecommunications by a telecommunications
24 service provider for use as a component part of the service
25 provided by him to the ultimate retail consumer who
26 originates or terminates the taxable end-to-end
27 communications. Beginning January 1, 2000,
28 "telecommunications" shall not include prepaid telephone
29 calling card arrangements; "prepaid telephone calling card
30 arrangement" means the right to exclusively purchase
31 telecommunications services, whether an initial purchase or a
32 recharge, that must be paid for in advance and that enables
33 the origination of calls using an access number and
34 authorization code, whether manually or electronically
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1 dialed. Carrier access charges, right of access charges,
2 charges for use of inter-company facilities, and all
3 telecommunications resold in the subsequent provision of,
4 used as a component of, or integrated into end-to-end
5 telecommunications service shall be non-taxable as sales for
6 resale.
7 (d) "Interstate telecommunications" means all
8 telecommunications that either originate or terminate outside
9 this State.
10 (e) "Intrastate telecommunications" means all
11 telecommunications that originate and terminate within this
12 State.
13 (f) "Department" means the Department of Revenue of the
14 State of Illinois.
15 (g) "Director" means the Director of Revenue for the
16 Department of Revenue of the State of Illinois.
17 (h) "Taxpayer" means a person who individually or
18 through his agents, employees or permittees engages in the
19 act or privilege of originating or receiving
20 telecommunications in this State and who incurs a tax
21 liability under this Article.
22 (i) "Person" means any natural individual, firm, trust,
23 estate, partnership, association, joint stock company, joint
24 venture, corporation, limited liability company, or a
25 receiver, trustee, guardian or other representative appointed
26 by order of any court, the Federal and State governments,
27 including State universities created by statute or any city,
28 town, county or other political subdivision of this State.
29 (j) "Purchase at retail" means the acquisition,
30 consumption or use of telecommunication through a sale at
31 retail.
32 (k) "Sale at retail" means the transmitting, supplying
33 or furnishing of telecommunications and all services and
34 equipment provided in connection therewith for a
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1 consideration to persons other than the Federal and State
2 governments, and State universities created by statute and
3 other than between a parent corporation and its wholly owned
4 subsidiaries or between wholly owned subsidiaries for their
5 use or consumption and not for resale.
6 (l) "Retailer" means and includes every person engaged
7 in the business of making sales at retail as defined in this
8 Article. The Department may, in its discretion, upon
9 application, authorize the collection of the tax hereby
10 imposed by any retailer not maintaining a place of business
11 within this State, who, to the satisfaction of the
12 Department, furnishes adequate security to insure collection
13 and payment of the tax. Such retailer shall be issued,
14 without charge, a permit to collect such tax. When so
15 authorized, it shall be the duty of such retailer to collect
16 the tax upon all of the gross charges for telecommunications
17 in this State in the same manner and subject to the same
18 requirements as a retailer maintaining a place of business
19 within this State. The permit may be revoked by the
20 Department at its discretion.
21 (m) "Retailer maintaining a place of business in this
22 State", or any like term, means and includes any retailer
23 having or maintaining within this State, directly or by a
24 subsidiary, an office, distribution facilities, transmission
25 facilities, sales office, warehouse or other place of
26 business, or any agent or other representative operating
27 within this State under the authority of the retailer or its
28 subsidiary, irrespective of whether such place of business or
29 agent 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 (n) "Service address" means the location of
33 telecommunications equipment from which the
34 telecommunications services are originated or at which
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1 telecommunications services are received by a taxpayer. In
2 the event this may not be a defined location, as in the case
3 of mobile phones, paging systems, maritime systems,
4 air-to-ground systems and the like, service address shall
5 mean the location of a taxpayer's primary use of the
6 telecommunications equipment as defined by telephone number,
7 authorization code, or location in Illinois where bills are
8 sent.
9 (Source: P.A. 90-562, eff. 12-16-97.)
10 Section 30. The Illinois Municipal Code is amended by
11 changing Sections 8-11-2 and 8-11-17 as follows:
12 (65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2)
13 Sec. 8-11-2. The corporate authorities of any
14 municipality may tax any or all of the following occupations
15 or privileges:
16 1. Persons engaged in the business of transmitting
17 messages by means of electricity or radio magnetic waves,
18 or fiber optics, at a rate not to exceed 5% of the gross
19 receipts from that business originating within the
20 corporate limits of the municipality.
21 2. Persons engaged in the business of distributing,
22 supplying, furnishing, or selling gas for use or
23 consumption within the corporate limits of a municipality
24 of 500,000 or fewer population, and not for resale, at a
25 rate not to exceed 5% of the gross receipts therefrom.
26 2a. Persons engaged in the business of
27 distributing, supplying, furnishing, or selling gas for
28 use or consumption within the corporate limits of a
29 municipality of over 500,000 population, and not for
30 resale, at a rate not to exceed 8% of the gross receipts
31 therefrom. If imposed, this tax shall be paid in monthly
32 payments.
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1 3. The privilege of using or consuming electricity
2 acquired in a purchase at retail and used or consumed
3 within the corporate limits of the municipality at rates
4 not to exceed the following maximum rates, calculated on
5 a monthly basis for each purchaser:
6 (i) For the first 2,000 kilowatt-hours used or
7 consumed in a month; 0.61 cents per kilowatt-hour;
8 (ii) For the next 48,000 kilowatt-hours used or
9 consumed in a month; 0.40 cents per kilowatt-hour;
10 (iii) For the next 50,000 kilowatt-hours used or
11 consumed in a month; 0.36 cents per kilowatt-hour;
12 (iv) For the next 400,000 kilowatt-hours used or
13 consumed in a month; 0.35 cents per kilowatt-hour;
14 (v) For the next 500,000 kilowatt-hours used or
15 consumed in a month; 0.34 cents per kilowatt-hour;
16 (vi) For the next 2,000,000 kilowatt-hours used or
17 consumed in a month; 0.32 cents per kilowatt-hour;
18 (vii) For the next 2,000,000 kilowatt-hours used or
19 consumed in a month; 0.315 cents per kilowatt-hour;
20 (viii) For the next 5,000,000 kilowatt-hours used
21 or consumed in a month; 0.31 cents per kilowatt-hour;
22 (ix) For the next 10,000,000 kilowatt-hours used or
23 consumed in a month; 0.305 cents per kilowatt-hour; and
24 (x) For all electricity used or consumed in excess
25 of 20,000,000 kilowatt-hours in a month, 0.30 cents per
26 kilowatt-hour.
27 If a municipality imposes a tax at rates lower than
28 either the maximum rates specified in this Section or the
29 alternative maximum rates promulgated by the Illinois
30 Commerce Commission, as provided below, the tax rates
31 shall be imposed upon the kilowatt hour categories set
32 forth above with the same proportional relationship as
33 that which exists among such maximum rates.
34 Notwithstanding the foregoing, until December 31, 2008,
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1 no municipality shall establish rates that are in excess
2 of rates reasonably calculated to produce revenues that
3 equal the maximum total revenues such municipality could
4 have received under the tax authorized by this
5 subparagraph in the last full calendar year prior to the
6 effective date of Section 65 of this amendatory Act of
7 1997; provided that this shall not be a limitation on the
8 amount of tax revenues actually collected by such
9 municipality.
10 Upon the request of the corporate authorities of a
11 municipality, the Illinois Commerce Commission shall,
12 within 90 days after receipt of such request, promulgate
13 alternative rates for each of these kilowatt-hour
14 categories that will reflect, as closely as reasonably
15 practical for that municipality, the distribution of the
16 tax among classes of purchasers as if the tax were based
17 on a uniform percentage of the purchase price of
18 electricity. A municipality that has adopted an
19 ordinance imposing a tax pursuant to subparagraph 3 as it
20 existed prior to the effective date of Section 65 of this
21 amendatory Act of 1997 may, rather than imposing the tax
22 permitted by this amendatory Act of 1997, continue to
23 impose the tax pursuant to that ordinance with respect to
24 gross receipts received from residential customers
25 through July 31, 1999, and with respect to gross receipts
26 from any non-residential customer until the first bill
27 issued to such customer for delivery services in
28 accordance with Section 16-104 of the Public Utilities
29 Act but in no case later than the last bill issued to
30 such customer before December 31, 2000. No ordinance
31 imposing the tax permitted by this amendatory Act of 1997
32 shall be applicable to any non-residential customer until
33 the first bill issued to such customer for delivery
34 services in accordance with Section 16-104 of the Public
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1 Utilities Act but in no case later than the last bill
2 issued to such non-residential customer before December
3 31, 2000.
4 4. Persons engaged in the business of distributing,
5 supplying, furnishing, or selling water for use or
6 consumption within the corporate limits of the
7 municipality, and not for resale, at a rate not to exceed
8 5% of the gross receipts therefrom.
9 None of the taxes authorized by this Section may be
10 imposed with respect to any transaction in interstate
11 commerce or otherwise to the extent to which the business or
12 privilege may not, under the constitution and statutes of the
13 United States, be made the subject of taxation by this State
14 or any political sub-division thereof; nor shall any persons
15 engaged in the business of distributing, supplying,
16 furnishing, selling or transmitting gas, water, or
17 electricity, or engaged in the business of transmitting
18 messages, or using or consuming electricity acquired in a
19 purchase at retail, be subject to taxation under the
20 provisions of this Section for those transactions that are or
21 may become subject to taxation under the provisions of the
22 "Municipal Retailers' Occupation Tax Act" authorized by
23 Section 8-11-1; nor shall any tax authorized by this Section
24 be imposed upon any person engaged in a business or on any
25 privilege unless the tax is imposed in like manner and at the
26 same rate upon all persons engaged in businesses of the same
27 class in the municipality, whether privately or municipally
28 owned or operated, or exercising the same privilege within
29 the municipality.
30 Any of the taxes enumerated in this Section may be in
31 addition to the payment of money, or value of products or
32 services furnished to the municipality by the taxpayer as
33 compensation for the use of its streets, alleys, or other
34 public places, or installation and maintenance therein,
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1 thereon or thereunder of poles, wires, pipes or other
2 equipment used in the operation of the taxpayer's business.
3 (a) If the corporate authorities of any home rule
4 municipality have adopted an ordinance that imposed a tax on
5 public utility customers, between July 1, 1971, and October
6 1, 1981, on the good faith belief that they were exercising
7 authority pursuant to Section 6 of Article VII of the 1970
8 Illinois Constitution, that action of the corporate
9 authorities shall be declared legal and valid,
10 notwithstanding a later decision of a judicial tribunal
11 declaring the ordinance invalid. No municipality shall be
12 required to rebate, refund, or issue credits for any taxes
13 described in this paragraph, and those taxes shall be deemed
14 to have been levied and collected in accordance with the
15 Constitution and laws of this State.
16 (b) In any case in which (i) prior to October 19, 1979,
17 the corporate authorities of any municipality have adopted an
18 ordinance imposing a tax authorized by this Section (or by
19 the predecessor provision of the "Revised Cities and Villages
20 Act") and have explicitly or in practice interpreted gross
21 receipts to include either charges added to customers' bills
22 pursuant to the provision of paragraph (a) of Section 36 of
23 the Public Utilities Act or charges added to customers' bills
24 by taxpayers who are not subject to rate regulation by the
25 Illinois Commerce Commission for the purpose of recovering
26 any of the tax liabilities or other amounts specified in such
27 paragraph (a) of Section 36 of that Act, and (ii) on or after
28 October 19, 1979, a judicial tribunal has construed gross
29 receipts to exclude all or part of those charges, then
30 neither those municipality nor any taxpayer who paid the tax
31 shall be required to rebate, refund, or issue credits for any
32 tax imposed or charge collected from customers pursuant to
33 the municipality's interpretation prior to October 19, 1979.
34 This paragraph reflects a legislative finding that it would
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1 be contrary to the public interest to require a municipality
2 or its taxpayers to refund taxes or charges attributable to
3 the municipality's more inclusive interpretation of gross
4 receipts prior to October 19, 1979, and is not intended to
5 prescribe or limit judicial construction of this Section. The
6 legislative finding set forth in this subsection does not
7 apply to taxes imposed after the effective date of this
8 amendatory Act of 1995.
9 (c) The tax authorized by subparagraph 3 shall be
10 collected from the purchaser by the person maintaining a
11 place of business in this State who delivers the electricity
12 to the purchaser. This tax shall constitute a debt of the
13 purchaser to the person who delivers the electricity to the
14 purchaser and if unpaid, is recoverable in the same manner as
15 the original charge for delivering the electricity. Any tax
16 required to be collected pursuant to an ordinance authorized
17 by subparagraph 3 and any such tax collected by a person
18 delivering electricity shall constitute a debt owed to the
19 municipality by such person delivering the electricity,
20 provided, that the person delivering electricity shall be
21 allowed credit for such tax related to deliveries of
22 electricity the charges for which are written off as
23 uncollectible, and provided further, that if such charges are
24 thereafter collected, the delivering supplier shall be
25 obligated to remit such tax. For purposes of this subsection
26 (c), any partial payment not specifically identified by the
27 purchaser shall be deemed to be for the delivery of
28 electricity. Persons delivering electricity shall collect the
29 tax from the purchaser by adding such tax to the gross charge
30 for delivering the electricity, in the manner prescribed by
31 the municipality. Persons delivering electricity shall also
32 be authorized to add to such gross charge an amount equal to
33 3% of the tax to reimburse the person delivering electricity
34 for the expenses incurred in keeping records, billing
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1 customers, preparing and filing returns, remitting the tax
2 and supplying data to the municipality upon request. If the
3 person delivering electricity fails to collect the tax from
4 the purchaser, then the purchaser shall be required to pay
5 the tax directly to the municipality in the manner prescribed
6 by the municipality. Persons delivering electricity who file
7 returns pursuant to this paragraph (c) shall, at the time of
8 filing such return, pay the municipality the amount of the
9 tax collected pursuant to subparagraph 3.
10 (d) For the purpose of the taxes enumerated in this
11 Section:
12 "Gross receipts" means the consideration received for the
13 transmission of messages, the consideration received for
14 distributing, supplying, furnishing or selling gas for use or
15 consumption and not for resale, and the consideration
16 received for distributing, supplying, furnishing or selling
17 water for use or consumption and not for resale, and for all
18 services rendered in connection therewith valued in money,
19 whether received in money or otherwise, including cash,
20 credit, services and property of every kind and material and
21 for all services rendered therewith, and shall be determined
22 without any deduction on account of the cost of transmitting
23 such messages, without any deduction on account of the cost
24 of the service, product or commodity supplied, the cost of
25 materials used, labor or service cost, or any other expenses
26 whatsoever. "Gross receipts" shall not include that portion
27 of the consideration received for distributing, supplying,
28 furnishing, or selling gas or water to, or for the
29 transmission of messages for, business enterprises described
30 in paragraph (e) of this Section to the extent and during the
31 period in which the exemption authorized by paragraph (e) is
32 in effect or for school districts or units of local
33 government described in paragraph (f) during the period in
34 which the exemption authorized in paragraph (f) is in effect.
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1 "Gross receipts" shall not include amounts paid by
2 telecommunications retailers under the Telecommunications
3 Municipal Infrastructure Maintenance Fee Act.
4 For utility bills issued on or after May 1, 1996, but
5 before May 1, 1997, and for receipts from those utility
6 bills, "gross receipts" does not include one-third of (i)
7 amounts added to customers' bills under Section 9-222 of the
8 Public Utilities Act, or (ii) amounts added to customers'
9 bills by taxpayers who are not subject to rate regulation by
10 the Illinois Commerce Commission for the purpose of
11 recovering any of the tax liabilities described in Section
12 9-222 of the Public Utilities Act. For utility bills issued
13 on or after May 1, 1997, but before May 1, 1998, and for
14 receipts from those utility bills, "gross receipts" does not
15 include two-thirds of (i) amounts added to customers' bills
16 under Section 9-222 of the Public Utilities Act, or (ii)
17 amount added to customers' bills by taxpayers who are not
18 subject to rate regulation by the Illinois Commerce
19 Commission for the purpose of recovering any of the tax
20 liabilities described in Section 9-222 of the Public
21 Utilities Act. For utility bills issued on or after May 1,
22 1998, and for receipts from those utility bills, "gross
23 receipts" does not include (i) amounts added to customers'
24 bills under Section 9-222 of the Public Utilities Act, or
25 (ii) amounts added to customers' bills by taxpayers who are
26 not subject to rate regulation by the Illinois Commerce
27 Commission for the purpose of recovering any of the tax
28 liabilities described in Section 9-222 of the Public
29 Utilities Act.
30 For purposes of this Section "gross receipts" shall not
31 include (i) amounts added to customers' bills under Section
32 9-221 of the Public Utilities Act, or (ii) charges added to
33 customers' bills to recover the surcharge imposed under the
34 Emergency Telephone System Act. This paragraph is not
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1 intended to nor does it make any change in the meaning of
2 "gross receipts" for the purposes of this Section, but is
3 intended to remove possible ambiguities, thereby confirming
4 the existing meaning of "gross receipts" prior to the
5 effective date of this amendatory Act of 1995.
6 The words "transmitting messages", in addition to the
7 usual and popular meaning of person to person communication,
8 shall include the furnishing, for a consideration, of
9 services or facilities (whether owned or leased), or both, to
10 persons in connection with the transmission of messages where
11 those persons do not, in turn, receive any consideration in
12 connection therewith, but shall not include such furnishing
13 of services or facilities to persons for the transmission of
14 messages to the extent that any such services or facilities
15 for the transmission of messages are furnished for a
16 consideration, by those persons to other persons, for the
17 transmission of messages. Beginning January 1, 2000,
18 "transmitting messages" shall not include prepaid telephone
19 calling card arrangements; "prepaid telephone calling card
20 arrangement" means the right to exclusively purchase
21 telecommunications services, whether an initial purchase or a
22 recharge, that must be paid for in advance and that enables
23 the origination of calls using an access number and
24 authorization code, whether manually or electronically
25 dialed.
26 "Person" as used in this Section means any natural
27 individual, firm, trust, estate, partnership, association,
28 joint stock company, joint adventure, corporation, limited
29 liability company, municipal corporation, the State or any of
30 its political subdivisions, any State university created by
31 statute, or a receiver, trustee, guardian or other
32 representative appointed by order of any court.
33 "Person maintaining a place of business in this State"
34 shall mean any person having or maintaining within this
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1 State, directly or by a subsidiary or other affiliate, an
2 office, generation facility, distribution facility,
3 transmission facility, sales office or other place of
4 business, or any employee, agent, or other representative
5 operating within this State under the authority of the person
6 or its subsidiary or other affiliate, irrespective of whether
7 such place of business or agent or other representative is
8 located in this State permanently or temporarily, or whether
9 such person, subsidiary or other affiliate is licensed or
10 qualified to do business in this State.
11 "Public utility" shall have the meaning ascribed to it in
12 Section 3-105 of the Public Utilities Act and shall include
13 telecommunications carriers as defined in Section 13-202 of
14 that Act and alternative retail electric suppliers as defined
15 in Section 16-102 of that Act.
16 "Purchase at retail" shall mean any acquisition of
17 electricity by a purchaser for purposes of use or
18 consumption, and not for resale, but shall not include the
19 use of electricity by a public utility directly in the
20 generation, production, transmission, delivery or sale of
21 electricity.
22 "Purchaser" shall mean any person who uses or consumes,
23 within the corporate limits of the municipality, electricity
24 acquired in a purchase at retail.
25 In the case of persons engaged in the business of
26 transmitting messages through the use of mobile equipment,
27 such as cellular phones and paging systems, the gross
28 receipts from the business shall be deemed to originate
29 within the corporate limits of a municipality only if the
30 address to which the bills for the service are sent is within
31 those corporate limits. If, however, that address is not
32 located within a municipality that imposes a tax under this
33 Section, then (i) if the party responsible for the bill is
34 not an individual, the gross receipts from the business shall
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1 be deemed to originate within the corporate limits of the
2 municipality where that party's principal place of business
3 in Illinois is located, and (ii) if the party responsible for
4 the bill is an individual, the gross receipts from the
5 business shall be deemed to originate within the corporate
6 limits of the municipality where that party's principal
7 residence in Illinois is located.
8 (e) Any municipality that imposes taxes upon public
9 utilities or upon the privilege of using or consuming
10 electricity pursuant to this Section whose territory includes
11 any part of an enterprise zone or federally designated
12 Foreign Trade Zone or Sub-Zone may, by a majority vote of its
13 corporate authorities, exempt from those taxes for a period
14 not exceeding 20 years any specified percentage of gross
15 receipts of public utilities received from, or electricity
16 used or consumed by, business enterprises that:
17 (1) either (i) make investments that cause the
18 creation of a minimum of 200 full-time equivalent jobs in
19 Illinois, (ii) make investments of at least $175,000,000
20 that cause the creation of a minimum of 150 full-time
21 equivalent jobs in Illinois, or (iii) make investments
22 that cause the retention of a minimum of 1,000 full-time
23 jobs in Illinois; and
24 (2) are either (i) located in an Enterprise Zone
25 established pursuant to the Illinois Enterprise Zone Act
26 or (ii) Department of Commerce and Community Affairs
27 designated High Impact Businesses located in a federally
28 designated Foreign Trade Zone or Sub-Zone; and
29 (3) are certified by the Department of Commerce and
30 Community Affairs as complying with the requirements
31 specified in clauses (1) and (2) of this paragraph (e).
32 Upon adoption of the ordinance authorizing the exemption,
33 the municipal clerk shall transmit a copy of that ordinance
34 to the Department of Commerce and Community Affairs. The
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1 Department of Commerce and Community Affairs shall determine
2 whether the business enterprises located in the municipality
3 meet the criteria prescribed in this paragraph. If the
4 Department of Commerce and Community Affairs determines that
5 the business enterprises meet the criteria, it shall grant
6 certification. The Department of Commerce and Community
7 Affairs shall act upon certification requests within 30 days
8 after receipt of the ordinance.
9 Upon certification of the business enterprise by the
10 Department of Commerce and Community Affairs, the Department
11 of Commerce and Community Affairs shall notify the Department
12 of Revenue of the certification. The Department of Revenue
13 shall notify the public utilities of the exemption status of
14 the gross receipts received from, and the electricity used or
15 consumed by, the certified business enterprises. Such
16 exemption status shall be effective within 3 months after
17 certification.
18 (f) A municipality that imposes taxes upon public
19 utilities or upon the privilege of using or consuming
20 electricity under this Section and whose territory includes
21 part of another unit of local government or a school district
22 may by ordinance exempt the other unit of local government or
23 school district from those taxes.
24 (g) The amendment of this Section by Public Act 84-127
25 shall take precedence over any other amendment of this
26 Section by any other amendatory Act passed by the 84th
27 General Assembly before the effective date of Public Act
28 84-127.
29 (h) In any case in which, before July 1, 1992, a person
30 engaged in the business of transmitting messages through the
31 use of mobile equipment, such as cellular phones and paging
32 systems, has determined the municipality within which the
33 gross receipts from the business originated by reference to
34 the location of its transmitting or switching equipment, then
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1 (i) neither the municipality to which tax was paid on that
2 basis nor the taxpayer that paid tax on that basis shall be
3 required to rebate, refund, or issue credits for any such tax
4 or charge collected from customers to reimburse the taxpayer
5 for the tax and (ii) no municipality to which tax would have
6 been paid with respect to those gross receipts if the
7 provisions of this amendatory Act of 1991 had been in effect
8 before July 1, 1992, shall have any claim against the
9 taxpayer for any amount of the tax.
10 (Source: P.A. 89-325, eff. 1-1-96; 90-16, eff. 6-16-97;
11 90-561, eff. 8-1-98; 90-562, eff. 12-16-97; 90-655, eff.
12 7-30-98.)
13 (65 ILCS 5/8-11-17) (from Ch. 24, par. 8-11-17)
14 Sec. 8-11-17. Municipal telecommunications tax.
15 (a) Beginning on the effective date of this amendatory
16 Act of 1991, the corporate authorities of any municipality in
17 this State may tax any or all of the following acts or
18 privileges:
19 (1) The act or privilege of originating in such
20 municipality or receiving in such municipality intrastate
21 telecommunications by a person at a rate not to exceed 5%
22 of the gross charge for such telecommunications purchased
23 at retail from a retailer by such person. However, such
24 tax is not imposed on such act or privilege to the extent
25 such act or privilege may not, under the Constitution and
26 statutes of the United States, be made the subject of
27 taxation by municipalities in this State.
28 (2) The act or privilege of originating in such
29 municipality or receiving in such municipality interstate
30 telecommunications by a person at a rate not to exceed 5%
31 of the gross charge for such telecommunications purchased
32 at retail from a retailer by such person. To prevent
33 actual multi-state taxation of the act or privilege that
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1 is subject to taxation under this paragraph, any
2 taxpayer, upon proof that the taxpayer has paid a tax in
3 another state on such event, shall be allowed a credit
4 against any tax enacted pursuant to an ordinance
5 authorized by this paragraph to the extent of the amount
6 of such tax properly due and paid in such other state
7 which was not previously allowed as a credit against any
8 other state or local tax in this State. However, such
9 tax is not imposed on the act or privilege to the extent
10 such act or privilege may not, under the Constitution and
11 statutes of the United States, be made the subject of
12 taxation by municipalities in this State.
13 (3) The taxes authorized by paragraphs (1) and (2)
14 of subsection (a) of this Section may only be levied if
15 such municipality does not then have in effect an
16 occupation tax imposed on persons engaged in the business
17 of transmitting messages by means of electricity as
18 authorized by Section 8-11-2 of the Illinois Municipal
19 Code.
20 (b) The tax authorized by this Section shall be
21 collected from the taxpayer by a retailer maintaining a place
22 of business in this State and making or effectuating the sale
23 at retail and shall be remitted by such retailer to the
24 municipality. Any tax required to be collected pursuant to
25 an ordinance authorized by this Section and any such tax
26 collected by such retailer shall constitute a debt owed by
27 the retailer to such municipality. Retailers shall collect
28 the tax from the taxpayer by adding the tax to the gross
29 charge for the act or privilege of originating or receiving
30 telecommunications when sold for use, in the manner
31 prescribed by the municipality. The tax authorized by this
32 Section shall constitute a debt of the purchaser to the
33 retailer who provides such taxable services until paid and,
34 if unpaid, is recoverable at law in the same manner as the
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1 original charge for such taxable services. If the retailer
2 fails to collect the tax from the taxpayer, then the taxpayer
3 shall be required to pay the tax directly to the municipality
4 in the manner provided by the municipality. The municipality
5 imposing the tax shall provide for its administration and
6 enforcement.
7 Beginning January 1, 1994, retailers filing tax returns
8 pursuant to this Section shall, at the time of filing such
9 return, pay to the municipality the amount of the tax imposed
10 by this Section, less a commission of 1.75% which is allowed
11 to reimburse the retailer for the expenses incurred in
12 keeping records, billing the customer, preparing and filing
13 returns, remitting the tax and supplying data to the
14 municipality upon request. No commission may be claimed by a
15 retailer for tax not timely remitted to the municipality.
16 Whenever possible, the tax authorized by this Section
17 shall, when collected, be stated as a distinct item separate
18 and apart from the gross charge for telecommunications.
19 (c) For the purpose of the taxes authorized by this
20 Section:
21 (1) "Amount paid" means the amount charged to the
22 taxpayer's service address in such municipality
23 regardless of where such amount is billed or paid.
24 (2) "Gross charge" means the amount paid for the
25 act or privilege of originating or receiving
26 telecommunications in such municipality and for all
27 services rendered in connection therewith, valued in
28 money whether paid in money or otherwise, including cash,
29 credits, services and property of every kind or nature,
30 and shall be determined without any deduction on account
31 of the cost of such telecommunications, the cost of the
32 materials used, labor or service costs or any other
33 expense whatsoever. In case credit is extended, the
34 amount thereof shall be included only as and when paid.
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1 However, "gross charge" shall not include:
2 (A) any amounts added to a purchaser's bill
3 because of a charge made pursuant to: (i) the tax
4 imposed by this Section, (ii) additional charges
5 added to a purchaser's bill pursuant to Section
6 9-222 of the Public Utilities Act, (iii) the tax
7 imposed by the Telecommunications Excise Tax Act, or
8 (iv) the tax imposed by Section 4251 of the Internal
9 Revenue Code;
10 (B) charges for a sent collect
11 telecommunication received outside of such
12 municipality;
13 (C) charges for leased time on equipment or
14 charges for the storage of data or information or
15 subsequent retrieval or the processing of data or
16 information intended to change its form or content.
17 Such equipment includes, but is not limited to, the
18 use of calculators, computers, data processing
19 equipment, tabulating equipment or accounting
20 equipment and also includes the usage of computers
21 under a time-sharing agreement;
22 (D) charges for customer equipment, including
23 such equipment that is leased or rented by the
24 customer from any source, wherein such charges are
25 disaggregated and separately identified from other
26 charges;
27 (E) charges to business enterprises certified
28 under Section 9-222.1 of the Public Utilities Act to
29 the extent of such exemption and during the period
30 of time specified by the Department of Commerce and
31 Community Affairs;
32 (F) charges for telecommunications and all
33 services and equipment provided in connection
34 therewith between a parent corporation and its
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1 wholly owned subsidiaries or between wholly owned
2 subsidiaries when the tax imposed under this Section
3 has already been paid to a retailer and only to the
4 extent that the charges between the parent
5 corporation and wholly owned subsidiaries or between
6 wholly owned subsidiaries represent expense
7 allocation between the corporations and not the
8 generation of profit for the corporation rendering
9 such service;
10 (G) bad debts ("bad debt" means any portion of
11 a debt that is related to a sale at retail for which
12 gross charges are not otherwise deductible or
13 excludable that has become worthless or
14 uncollectable, as determined under applicable
15 federal income tax standards; if the portion of the
16 debt deemed to be bad is subsequently paid, the
17 retailer shall report and pay the tax on that
18 portion during the reporting period in which the
19 payment is made);
20 (H) charges paid by inserting coins in
21 coin-operated telecommunication devices; or
22 (I) amounts paid by telecommunications
23 retailers under the Telecommunications Municipal
24 Infrastructure Maintenance Fee Act.
25 (3) "Interstate telecommunications" means all
26 telecommunications that either originate or terminate
27 outside this State.
28 (4) "Intrastate telecommunications" means all
29 telecommunications that originate and terminate within
30 this State.
31 (5) "Person" means any natural individual, firm,
32 trust, estate, partnership, association, joint stock
33 company, joint venture, corporation, limited liability
34 company, or a receiver, trustee, guardian or other
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1 representative appointed by order of any court, the
2 Federal and State governments, including State
3 universities created by statute, or any city, town,
4 county, or other political subdivision of this State.
5 (6) "Purchase at retail" means the acquisition,
6 consumption or use of telecommunications through a sale
7 at retail.
8 (7) "Retailer" means and includes every person
9 engaged in the business of making sales at retail as
10 defined in this Section. A municipality may, in its
11 discretion, upon application, authorize the collection of
12 the tax hereby imposed by any retailer not maintaining a
13 place of business within this State, who to the
14 satisfaction of the municipality, furnishes adequate
15 security to insure collection and payment of the tax.
16 Such retailer shall be issued, without charge, a permit
17 to collect such tax. When so authorized, it shall be the
18 duty of such retailer to collect the tax upon all of the
19 gross charges for telecommunications in such municipality
20 in the same manner and subject to the same requirements
21 as a retailer maintaining a place of business within such
22 municipality.
23 (8) "Retailer maintaining a place of business in
24 this State", or any like term, means and includes any
25 retailer having or maintaining within this State,
26 directly or by a subsidiary, an office, distribution
27 facilities, transmission facilities, sales office,
28 warehouse or other place of business, or any agent or
29 other representative operating within this State under
30 the authority of the retailer or its subsidiary,
31 irrespective of whether such place of business or agent
32 or other representative is located here permanently or
33 temporarily, or whether such retailer or subsidiary is
34 licensed to do business in this State.
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1 (9) "Sale at retail" means the transmitting,
2 supplying or furnishing of telecommunications and all
3 services rendered in connection therewith for a
4 consideration, to persons other than the Federal and
5 State governments, and State universities created by
6 statute and other than between a parent corporation and
7 its wholly owned subsidiaries or between wholly owned
8 subsidiaries, when the tax has already been paid to a
9 retailer and the gross charge made by one such
10 corporation to another such corporation is not greater
11 than the gross charge paid to the retailer for their use
12 or consumption and not for resale.
13 (10) "Service address" means the location of
14 telecommunications equipment from which
15 telecommunications services are originated or at which
16 telecommunications services are received by a taxpayer.
17 If this is not a defined location, as in the case of
18 mobile phones, paging systems, maritime systems,
19 air-to-ground systems and the like, "service address"
20 shall mean the location of a taxpayer's primary use of
21 the telecommunication equipment as defined by telephone
22 number, authorization code, or location in Illinois where
23 bills are sent.
24 (11) "Taxpayer" means a person who individually or
25 through his agents, employees, or permittees engages in
26 the act or privilege of originating in such municipality
27 or receiving in such municipality telecommunications and
28 who incurs a tax liability under any ordinance authorized
29 by this Section.
30 (12) "Telecommunications", in addition to the usual
31 and popular meaning, includes, but is not limited to,
32 messages or information transmitted through use of local,
33 toll and wide area telephone service, channel services,
34 telegraph services, teletypewriter service, computer
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1 exchange services; cellular mobile telecommunications
2 service, specialized mobile radio services, paging
3 service, or any other form of mobile and portable one-way
4 or two-way communications, or any other transmission of
5 messages or information by electronic or similar means,
6 between or among points by wire, cable, fiber optics,
7 laser, microwave, radio, satellite or similar facilities.
8 The definition of "telecommunications" shall not
9 include value added services in which computer processing
10 applications are used to act on the form, content, code
11 and protocol of the information for purposes other than
12 transmission. "Telecommunications" shall not include
13 purchase of telecommunications by a telecommunications
14 service provider for use as a component part of the
15 service provided by him to the ultimate retail consumer
16 who originates or terminates the taxable end-to-end
17 communications. Beginning January 1, 2000,
18 "telecommunications" shall not include prepaid telephone
19 calling card arrangements; "prepaid telephone calling
20 card arrangement" means the right to exclusively purchase
21 telecommunications services, whether an initial purchase
22 or a recharge, that must be paid for in advance and that
23 enables the origination of calls using an access number
24 and authorization code, whether manually or
25 electronically dialed. Carrier access charges, right of
26 access charges, charges for use of inter-company
27 facilities, and all telecommunications resold in the
28 subsequent provision used as a component of, or
29 integrated into, end-to-end telecommunications service
30 shall be non-taxable as sales for resale.
31 (d) If a person, who originates or receives
32 telecommunications in such municipality claims to be a
33 reseller of such telecommunications, such person shall apply
34 to the municipality for a resale number. Such applicant
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1 shall state facts which will show the municipality why such
2 applicant is not liable for tax under any ordinance
3 authorized by this Section on any of such purchases and shall
4 furnish such additional information as the municipality may
5 reasonably require.
6 Upon approval of the application, the municipality shall
7 assign a resale number to the applicant and shall certify
8 such number to the applicant. The municipality may cancel
9 any number which is obtained through misrepresentation, or
10 which is used to send or receive such telecommunication
11 tax-free when such actions in fact are not for resale, or
12 which no longer applies because of the person's having
13 discontinued the making of resales.
14 Except as provided hereinabove in this Section, the act
15 or privilege of sending or receiving telecommunications in
16 this State shall not be made tax-free on the ground of being
17 a sale for resale unless the person has an active resale
18 number from the municipality and furnishes that number to the
19 retailer in connection with certifying to the retailer that
20 any sale to such person is non-taxable because of being a
21 sale for resale.
22 (e) A municipality that imposes taxes upon
23 telecommunications under this Section and whose territory
24 includes part of another unit of local government or a school
25 district may, by ordinance, exempt the other unit of local
26 government or school district from those taxes.
27 (f) A municipality that imposes taxes upon
28 telecommunications under this Section may, by ordinance, (i)
29 reduce the rate of the tax for persons 65 years of age or
30 older or (ii) exempt persons 65 years of age or older from
31 those taxes. Taxes related to such rate reductions or
32 exemptions shall be rebated from the municipality directly to
33 persons qualified for the rate reduction or exemption as
34 determined by the municipality's ordinance.
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1 (Source: P.A. 90-357, eff. 1-1-98; 90-562, eff. 12-16-97.)
2 Section 99. Effective date. This Act takes effect upon
3 becoming law.