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91_SB1118enr SB1118 Enrolled LRB9102874PTpkA 1 AN ACT concerning taxation. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Income Tax Act is amended by 5 changing Sections 203, 207, 304, 502, 601.1, 905, and 911 and 6 adding Section 405 as follows: 7 (35 ILCS 5/203) (from Ch. 120, par. 2-203) 8 Sec. 203. Base income defined. 9 (a) Individuals. 10 (1) In general. In the case of an individual, base 11 income means an amount equal to the taxpayer's adjusted 12 gross income for the taxable year as modified by 13 paragraph (2). 14 (2) Modifications. The adjusted gross income 15 referred to in paragraph (1) shall be modified by adding 16 thereto the sum of the following amounts: 17 (A) An amount equal to all amounts paid or 18 accrued to the taxpayer as interest or dividends 19 during the taxable year to the extent excluded from 20 gross income in the computation of adjusted gross 21 income, except stock dividends of qualified public 22 utilities described in Section 305(e) of the 23 Internal Revenue Code; 24 (B) An amount equal to the amount of tax 25 imposed by this Act to the extent deducted from 26 gross income in the computation of adjusted gross 27 income for the taxable year; 28 (C) An amount equal to the amount received 29 during the taxable year as a recovery or refund of 30 real property taxes paid with respect to the 31 taxpayer's principal residence under the Revenue Act SB1118 Enrolled -2- LRB9102874PTpkA 1 of 1939 and for which a deduction was previously 2 taken under subparagraph (L) of this paragraph (2) 3 prior to July 1, 1991, the retrospective application 4 date of Article 4 of Public Act 87-17. In the case 5 of multi-unit or multi-use structures and farm 6 dwellings, the taxes on the taxpayer's principal 7 residence shall be that portion of the total taxes 8 for the entire property which is attributable to 9 such principal residence; 10 (D) An amount equal to the amount of the 11 capital gain deduction allowable under the Internal 12 Revenue Code, to the extent deducted from gross 13 income in the computation of adjusted gross income; 14 (D-5) An amount, to the extent not included in 15 adjusted gross income, equal to the amount of money 16 withdrawn by the taxpayer in the taxable year from a 17 medical care savings account and the interest earned 18 on the account in the taxable year of a withdrawal 19 pursuant to subsection (b) of Section 20 of the 20 Medical Care Savings Account Act; and 21 (D-10) For taxable years ending after December 22 31, 1997, an amount equal to any eligible 23 remediation costs that the individual deducted in 24 computing adjusted gross income and for which the 25 individual claims a credit under subsection (l) of 26 Section 201; 27 and by deducting from the total so obtained the sum of 28 the following amounts: 29 (E) Any amount included in such total in 30 respect of any compensation (including but not 31 limited to any compensation paid or accrued to a 32 serviceman while a prisoner of war or missing in 33 action) paid to a resident by reason of being on 34 active duty in the Armed Forces of the United States SB1118 Enrolled -3- LRB9102874PTpkA 1 and in respect of any compensation paid or accrued 2 to a resident who as a governmental employee was a 3 prisoner of war or missing in action, and in respect 4 of any compensation paid to a resident in 1971 or 5 thereafter for annual training performed pursuant to 6 Sections 502 and 503, Title 32, United States Code 7 as a member of the Illinois National Guard; 8 (F) An amount equal to all amounts included in 9 such total pursuant to the provisions of Sections 10 402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and 11 408 of the Internal Revenue Code, or included in 12 such total as distributions under the provisions of 13 any retirement or disability plan for employees of 14 any governmental agency or unit, or retirement 15 payments to retired partners, which payments are 16 excluded in computing net earnings from self 17 employment by Section 1402 of the Internal Revenue 18 Code and regulations adopted pursuant thereto; 19 (G) The valuation limitation amount; 20 (H) An amount equal to the amount of any tax 21 imposed by this Act which was refunded to the 22 taxpayer and included in such total for the taxable 23 year; 24 (I) An amount equal to all amounts included in 25 such total pursuant to the provisions of Section 111 26 of the Internal Revenue Code as a recovery of items 27 previously deducted from adjusted gross income in 28 the computation of taxable income; 29 (J) An amount equal to those dividends 30 included in such total which were paid by a 31 corporation which conducts business operations in an 32 Enterprise Zone or zones created under the Illinois 33 Enterprise Zone Act, and conducts substantially all 34 of its operations in an Enterprise Zone or zones; SB1118 Enrolled -4- LRB9102874PTpkA 1 (K) An amount equal to those dividends 2 included in such total that were paid by a 3 corporation that conducts business operations in a 4 federally designated Foreign Trade Zone or Sub-Zone 5 and that is designated a High Impact Business 6 located in Illinois; provided that dividends 7 eligible for the deduction provided in subparagraph 8 (J) of paragraph (2) of this subsection shall not be 9 eligible for the deduction provided under this 10 subparagraph (K); 11 (L) For taxable years ending after December 12 31, 1983, an amount equal to all social security 13 benefits and railroad retirement benefits included 14 in such total pursuant to Sections 72(r) and 86 of 15 the Internal Revenue Code; 16 (M) With the exception of any amounts 17 subtracted under subparagraph (N), an amount equal 18 to the sum of all amounts disallowed as deductions 19 by (i) Sections 171(a)(2), and 265(2) of the 20 Internal Revenue Code of 1954, as now or hereafter 21 amended, and all amounts of expenses allocable to 22 interest and disallowed as deductions by Section 23 265(1) of the Internal Revenue Code of 1954, as now 24 or hereafter amended; and (ii) for taxable years 25 ending on or after the effective date of this 26 amendatory Act of the 91st General Assembly, 27 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) 28 of the Internal Revenue Code; the provisions of this 29 subparagraph are exempt from the provisions of 30 Section 250; 31 (N) An amount equal to all amounts included in 32 such total which are exempt from taxation by this 33 State either by reason of its statutes or 34 Constitution or by reason of the Constitution, SB1118 Enrolled -5- LRB9102874PTpkA 1 treaties or statutes of the United States; provided 2 that, in the case of any statute of this State that 3 exempts income derived from bonds or other 4 obligations from the tax imposed under this Act, the 5 amount exempted shall be the interest net of bond 6 premium amortization; 7 (O) An amount equal to any contribution made 8 to a job training project established pursuant to 9 the Tax Increment Allocation Redevelopment Act; 10 (P) An amount equal to the amount of the 11 deduction used to compute the federal income tax 12 credit for restoration of substantial amounts held 13 under claim of right for the taxable year pursuant 14 to Section 1341 of the Internal Revenue Code of 15 1986; 16 (Q) An amount equal to any amounts included in 17 such total, received by the taxpayer as an 18 acceleration in the payment of life, endowment or 19 annuity benefits in advance of the time they would 20 otherwise be payable as an indemnity for a terminal 21 illness; 22 (R) An amount equal to the amount of any 23 federal or State bonus paid to veterans of the 24 Persian Gulf War; 25 (S) An amount, to the extent included in 26 adjusted gross income, equal to the amount of a 27 contribution made in the taxable year on behalf of 28 the taxpayer to a medical care savings account 29 established under the Medical Care Savings Account 30 Act to the extent the contribution is accepted by 31 the account administrator as provided in that Act; 32 (T) An amount, to the extent included in 33 adjusted gross income, equal to the amount of 34 interest earned in the taxable year on a medical SB1118 Enrolled -6- LRB9102874PTpkA 1 care savings account established under the Medical 2 Care Savings Account Act on behalf of the taxpayer, 3 other than interest added pursuant to item (D-5) of 4 this paragraph (2); 5 (U) For one taxable year beginning on or after 6 January 1, 1994, an amount equal to the total amount 7 of tax imposed and paid under subsections (a) and 8 (b) of Section 201 of this Act on grant amounts 9 received by the taxpayer under the Nursing Home 10 Grant Assistance Act during the taxpayer's taxable 11 years 1992 and 1993; 12 (V) Beginning with tax years ending on or 13 after December 31, 1995 and ending with tax years 14 ending on or before December 31, 1999, an amount 15 equal to the amount paid by a taxpayer who is a 16 self-employed taxpayer, a partner of a partnership, 17 or a shareholder in a Subchapter S corporation for 18 health insurance or long-term care insurance for 19 that taxpayer or that taxpayer's spouse or 20 dependents, to the extent that the amount paid for 21 that health insurance or long-term care insurance 22 may be deducted under Section 213 of the Internal 23 Revenue Code of 1986, has not been deducted on the 24 federal income tax return of the taxpayer, and does 25 not exceed the taxable income attributable to that 26 taxpayer's income, self-employment income, or 27 Subchapter S corporation income; except that no 28 deduction shall be allowed under this item (V) if 29 the taxpayer is eligible to participate in any 30 health insurance or long-term care insurance plan of 31 an employer of the taxpayer or the taxpayer's 32 spouse. The amount of the health insurance and 33 long-term care insurance subtracted under this item 34 (V) shall be determined by multiplying total health SB1118 Enrolled -7- LRB9102874PTpkA 1 insurance and long-term care insurance premiums paid 2 by the taxpayer times a number that represents the 3 fractional percentage of eligible medical expenses 4 under Section 213 of the Internal Revenue Code of 5 1986 not actually deducted on the taxpayer's federal 6 income tax return; and 7 (W) For taxable years beginning on or after 8 January 1, 1998, all amounts included in the 9 taxpayer's federal gross income in the taxable year 10 from amounts converted from a regular IRA to a Roth 11 IRA. This paragraph is exempt from the provisions of 12 Section 250. 13 (b) Corporations. 14 (1) In general. In the case of a corporation, base 15 income means an amount equal to the taxpayer's taxable 16 income for the taxable year as modified by paragraph (2). 17 (2) Modifications. The taxable income referred to 18 in paragraph (1) shall be modified by adding thereto the 19 sum of the following amounts: 20 (A) An amount equal to all amounts paid or 21 accrued to the taxpayer as interest and all 22 distributions received from regulated investment 23 companies during the taxable year to the extent 24 excluded from gross income in the computation of 25 taxable income; 26 (B) An amount equal to the amount of tax 27 imposed by this Act to the extent deducted from 28 gross income in the computation of taxable income 29 for the taxable year; 30 (C) In the case of a regulated investment 31 company, an amount equal to the excess of (i) the 32 net long-term capital gain for the taxable year, 33 over (ii) the amount of the capital gain dividends 34 designated as such in accordance with Section SB1118 Enrolled -8- LRB9102874PTpkA 1 852(b)(3)(C) of the Internal Revenue Code and any 2 amount designated under Section 852(b)(3)(D) of the 3 Internal Revenue Code, attributable to the taxable 4 year.(this amendatory Act of 1995 (Public Act 5 89-89) is declarative of existing law and is not a 6 new enactment);.7 (D) The amount of any net operating loss 8 deduction taken in arriving at taxable income, other 9 than a net operating loss carried forward from a 10 taxable year ending prior to December 31, 1986;and11 (E) For taxable years in which a net operating 12 loss carryback or carryforward from a taxable year 13 ending prior to December 31, 1986 is an element of 14 taxable income under paragraph (1) of subsection (e) 15 or subparagraph (E) of paragraph (2) of subsection 16 (e), the amount by which addition modifications 17 other than those provided by this subparagraph (E) 18 exceeded subtraction modifications in such earlier 19 taxable year, with the following limitations applied 20 in the order that they are listed: 21 (i) the addition modification relating to 22 the net operating loss carried back or forward 23 to the taxable year from any taxable year 24 ending prior to December 31, 1986 shall be 25 reduced by the amount of addition modification 26 under this subparagraph (E) which related to 27 that net operating loss and which was taken 28 into account in calculating the base income of 29 an earlier taxable year, and 30 (ii) the addition modification relating 31 to the net operating loss carried back or 32 forward to the taxable year from any taxable 33 year ending prior to December 31, 1986 shall 34 not exceed the amount of such carryback or SB1118 Enrolled -9- LRB9102874PTpkA 1 carryforward; 2 For taxable years in which there is a net 3 operating loss carryback or carryforward from more 4 than one other taxable year ending prior to December 5 31, 1986, the addition modification provided in this 6 subparagraph (E) shall be the sum of the amounts 7 computed independently under the preceding 8 provisions of this subparagraph (E) for each such 9 taxable year;,and 10 (E-5) For taxable years ending after December 11 31, 1997, an amount equal to any eligible 12 remediation costs that the corporation deducted in 13 computing adjusted gross income and for which the 14 corporation claims a credit under subsection (l) of 15 Section 201; 16 and by deducting from the total so obtained the sum of 17 the following amounts: 18 (F) An amount equal to the amount of any tax 19 imposed by this Act which was refunded to the 20 taxpayer and included in such total for the taxable 21 year; 22 (G) An amount equal to any amount included in 23 such total under Section 78 of the Internal Revenue 24 Code; 25 (H) In the case of a regulated investment 26 company, an amount equal to the amount of exempt 27 interest dividends as defined in subsection (b) (5) 28 of Section 852 of the Internal Revenue Code, paid to 29 shareholders for the taxable year; 30 (I) With the exception of any amounts 31 subtracted under subparagraph (J), an amount equal 32 to the sum of all amounts disallowed as deductions 33 by (i) Sections 171(a)(2), and 265(a)(2) and amounts 34 disallowed as interest expense by Section 291(a)(3) SB1118 Enrolled -10- LRB9102874PTpkA 1 of the Internal Revenue Code, as now or hereafter 2 amended, and all amounts of expenses allocable to 3 interest and disallowed as deductions by Section 4 265(a)(1) of the Internal Revenue Code, as now or 5 hereafter amended; and (ii) for taxable years ending 6 on or after the effective date of this amendatory 7 Act of the 91st General Assembly, Sections 8 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the 9 Internal Revenue Code; the provisions of this 10 subparagraph are exempt from the provisions of 11 Section 250; 12 (J) An amount equal to all amounts included in 13 such total which are exempt from taxation by this 14 State either by reason of its statutes or 15 Constitution or by reason of the Constitution, 16 treaties or statutes of the United States; provided 17 that, in the case of any statute of this State that 18 exempts income derived from bonds or other 19 obligations from the tax imposed under this Act, the 20 amount exempted shall be the interest net of bond 21 premium amortization; 22 (K) An amount equal to those dividends 23 included in such total which were paid by a 24 corporation which conducts business operations in an 25 Enterprise Zone or zones created under the Illinois 26 Enterprise Zone Act and conducts substantially all 27 of its operations in an Enterprise Zone or zones; 28 (L) An amount equal to those dividends 29 included in such total that were paid by a 30 corporation that conducts business operations in a 31 federally designated Foreign Trade Zone or Sub-Zone 32 and that is designated a High Impact Business 33 located in Illinois; provided that dividends 34 eligible for the deduction provided in subparagraph SB1118 Enrolled -11- LRB9102874PTpkA 1 (K) of paragraph 2 of this subsection shall not be 2 eligible for the deduction provided under this 3 subparagraph (L); 4 (M) For any taxpayer that is a financial 5 organization within the meaning of Section 304(c) of 6 this Act, an amount included in such total as 7 interest income from a loan or loans made by such 8 taxpayer to a borrower, to the extent that such a 9 loan is secured by property which is eligible for 10 the Enterprise Zone Investment Credit. To determine 11 the portion of a loan or loans that is secured by 12 property eligible for a Section 201(h) investment 13 credit to the borrower, the entire principal amount 14 of the loan or loans between the taxpayer and the 15 borrower should be divided into the basis of the 16 Section 201(h) investment credit property which 17 secures the loan or loans, using for this purpose 18 the original basis of such property on the date that 19 it was placed in service in the Enterprise Zone. 20 The subtraction modification available to taxpayer 21 in any year under this subsection shall be that 22 portion of the total interest paid by the borrower 23 with respect to such loan attributable to the 24 eligible property as calculated under the previous 25 sentence; 26 (M-1) For any taxpayer that is a financial 27 organization within the meaning of Section 304(c) of 28 this Act, an amount included in such total as 29 interest income from a loan or loans made by such 30 taxpayer to a borrower, to the extent that such a 31 loan is secured by property which is eligible for 32 the High Impact Business Investment Credit. To 33 determine the portion of a loan or loans that is 34 secured by property eligible for a Section 201(i) SB1118 Enrolled -12- LRB9102874PTpkA 1 investment credit to the borrower, the entire 2 principal amount of the loan or loans between the 3 taxpayer and the borrower should be divided into the 4 basis of the Section 201(i) investment credit 5 property which secures the loan or loans, using for 6 this purpose the original basis of such property on 7 the date that it was placed in service in a 8 federally designated Foreign Trade Zone or Sub-Zone 9 located in Illinois. No taxpayer that is eligible 10 for the deduction provided in subparagraph (M) of 11 paragraph (2) of this subsection shall be eligible 12 for the deduction provided under this subparagraph 13 (M-1). The subtraction modification available to 14 taxpayers in any year under this subsection shall be 15 that portion of the total interest paid by the 16 borrower with respect to such loan attributable to 17 the eligible property as calculated under the 18 previous sentence; 19 (N) Two times any contribution made during the 20 taxable year to a designated zone organization to 21 the extent that the contribution (i) qualifies as a 22 charitable contribution under subsection (c) of 23 Section 170 of the Internal Revenue Code and (ii) 24 must, by its terms, be used for a project approved 25 by the Department of Commerce and Community Affairs 26 under Section 11 of the Illinois Enterprise Zone 27 Act; 28 (O) An amount equal to: (i) 85% for taxable 29 years ending on or before December 31, 1992, or, a 30 percentage equal to the percentage allowable under 31 Section 243(a)(1) of the Internal Revenue Code of 32 1986 for taxable years ending after December 31, 33 1992, of the amount by which dividends included in 34 taxable income and received from a corporation that SB1118 Enrolled -13- LRB9102874PTpkA 1 is not created or organized under the laws of the 2 United States or any state or political subdivision 3 thereof, including, for taxable years ending on or 4 after December 31, 1988, dividends received or 5 deemed received or paid or deemed paid under 6 Sections 951 through 964 of the Internal Revenue 7 Code, exceed the amount of the modification provided 8 under subparagraph (G) of paragraph (2) of this 9 subsection (b) which is related to such dividends; 10 plus (ii) 100% of the amount by which dividends, 11 included in taxable income and received, including, 12 for taxable years ending on or after December 31, 13 1988, dividends received or deemed received or paid 14 or deemed paid under Sections 951 through 964 of the 15 Internal Revenue Code, from any such corporation 16 specified in clause (i) that would but for the 17 provisions of Section 1504 (b) (3) of the Internal 18 Revenue Code be treated as a member of the 19 affiliated group which includes the dividend 20 recipient, exceed the amount of the modification 21 provided under subparagraph (G) of paragraph (2) of 22 this subsection (b) which is related to such 23 dividends; 24 (P) An amount equal to any contribution made 25 to a job training project established pursuant to 26 the Tax Increment Allocation Redevelopment Act; and 27 (Q) An amount equal to the amount of the 28 deduction used to compute the federal income tax 29 credit for restoration of substantial amounts held 30 under claim of right for the taxable year pursuant 31 to Section 1341 of the Internal Revenue Code of 32 1986. 33 (3) Special rule. For purposes of paragraph (2) 34 (A), "gross income" in the case of a life insurance SB1118 Enrolled -14- LRB9102874PTpkA 1 company, for tax years ending on and after December 31, 2 1994, shall mean the gross investment income for the 3 taxable year. 4 (c) Trusts and estates. 5 (1) In general. In the case of a trust or estate, 6 base income means an amount equal to the taxpayer's 7 taxable income for the taxable year as modified by 8 paragraph (2). 9 (2) Modifications. Subject to the provisions of 10 paragraph (3), the taxable income referred to in 11 paragraph (1) shall be modified by adding thereto the sum 12 of the following amounts: 13 (A) An amount equal to all amounts paid or 14 accrued to the taxpayer as interest or dividends 15 during the taxable year to the extent excluded from 16 gross income in the computation of taxable income; 17 (B) In the case of (i) an estate, $600; (ii) a 18 trust which, under its governing instrument, is 19 required to distribute all of its income currently, 20 $300; and (iii) any other trust, $100, but in each 21 such case, only to the extent such amount was 22 deducted in the computation of taxable income; 23 (C) An amount equal to the amount of tax 24 imposed by this Act to the extent deducted from 25 gross income in the computation of taxable income 26 for the taxable year; 27 (D) The amount of any net operating loss 28 deduction taken in arriving at taxable income, other 29 than a net operating loss carried forward from a 30 taxable year ending prior to December 31, 1986; 31 (E) For taxable years in which a net operating 32 loss carryback or carryforward from a taxable year 33 ending prior to December 31, 1986 is an element of 34 taxable income under paragraph (1) of subsection (e) SB1118 Enrolled -15- LRB9102874PTpkA 1 or subparagraph (E) of paragraph (2) of subsection 2 (e), the amount by which addition modifications 3 other than those provided by this subparagraph (E) 4 exceeded subtraction modifications in such taxable 5 year, with the following limitations applied in the 6 order that they are listed: 7 (i) the addition modification relating to 8 the net operating loss carried back or forward 9 to the taxable year from any taxable year 10 ending prior to December 31, 1986 shall be 11 reduced by the amount of addition modification 12 under this subparagraph (E) which related to 13 that net operating loss and which was taken 14 into account in calculating the base income of 15 an earlier taxable year, and 16 (ii) the addition modification relating 17 to the net operating loss carried back or 18 forward to the taxable year from any taxable 19 year ending prior to December 31, 1986 shall 20 not exceed the amount of such carryback or 21 carryforward; 22 For taxable years in which there is a net 23 operating loss carryback or carryforward from more 24 than one other taxable year ending prior to December 25 31, 1986, the addition modification provided in this 26 subparagraph (E) shall be the sum of the amounts 27 computed independently under the preceding 28 provisions of this subparagraph (E) for each such 29 taxable year; 30 (F) For taxable years ending on or after 31 January 1, 1989, an amount equal to the tax deducted 32 pursuant to Section 164 of the Internal Revenue Code 33 if the trust or estate is claiming the same tax for 34 purposes of the Illinois foreign tax credit under SB1118 Enrolled -16- LRB9102874PTpkA 1 Section 601 of this Act; 2 (G) An amount equal to the amount of the 3 capital gain deduction allowable under the Internal 4 Revenue Code, to the extent deducted from gross 5 income in the computation of taxable income; and 6 (G-5) For taxable years ending after December 7 31, 1997, an amount equal to any eligible 8 remediation costs that the trust or estate deducted 9 in computing adjusted gross income and for which the 10 trust or estate claims a credit under subsection (l) 11 of Section 201; 12 and by deducting from the total so obtained the sum of 13 the following amounts: 14 (H) An amount equal to all amounts included in 15 such total pursuant to the provisions of Sections 16 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 17 408 of the Internal Revenue Code or included in such 18 total as distributions under the provisions of any 19 retirement or disability plan for employees of any 20 governmental agency or unit, or retirement payments 21 to retired partners, which payments are excluded in 22 computing net earnings from self employment by 23 Section 1402 of the Internal Revenue Code and 24 regulations adopted pursuant thereto; 25 (I) The valuation limitation amount; 26 (J) An amount equal to the amount of any tax 27 imposed by this Act which was refunded to the 28 taxpayer and included in such total for the taxable 29 year; 30 (K) An amount equal to all amounts included in 31 taxable income as modified by subparagraphs (A), 32 (B), (C), (D), (E), (F) and (G) which are exempt 33 from taxation by this State either by reason of its 34 statutes or Constitution or by reason of the SB1118 Enrolled -17- LRB9102874PTpkA 1 Constitution, treaties or statutes of the United 2 States; provided that, in the case of any statute of 3 this State that exempts income derived from bonds or 4 other obligations from the tax imposed under this 5 Act, the amount exempted shall be the interest net 6 of bond premium amortization; 7 (L) With the exception of any amounts 8 subtracted under subparagraph (K), an amount equal 9 to the sum of all amounts disallowed as deductions 10 by (i) Sections 171(a)(2) and 265(a)(2) of the 11 Internal Revenue Code, as now or hereafter amended, 12 and all amounts of expenses allocable to interest 13 and disallowed as deductions by Section 265(1) of 14 the Internal Revenue Code of 1954, as now or 15 hereafter amended; and (ii) for taxable years ending 16 on or after the effective date of this amendatory 17 Act of the 91st General Assembly, Sections 18 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the 19 Internal Revenue Code; the provisions of this 20 subparagraph are exempt from the provisions of 21 Section 250; 22 (M) An amount equal to those dividends 23 included in such total which were paid by a 24 corporation which conducts business operations in an 25 Enterprise Zone or zones created under the Illinois 26 Enterprise Zone Act and conducts substantially all 27 of its operations in an Enterprise Zone or Zones; 28 (N) An amount equal to any contribution made 29 to a job training project established pursuant to 30 the Tax Increment Allocation Redevelopment Act; 31 (O) An amount equal to those dividends 32 included in such total that were paid by a 33 corporation that conducts business operations in a 34 federally designated Foreign Trade Zone or Sub-Zone SB1118 Enrolled -18- LRB9102874PTpkA 1 and that is designated a High Impact Business 2 located in Illinois; provided that dividends 3 eligible for the deduction provided in subparagraph 4 (M) of paragraph (2) of this subsection shall not be 5 eligible for the deduction provided under this 6 subparagraph (O); and 7 (P) An amount equal to the amount of the 8 deduction used to compute the federal income tax 9 credit for restoration of substantial amounts held 10 under claim of right for the taxable year pursuant 11 to Section 1341 of the Internal Revenue Code of 12 1986. 13 (3) Limitation. The amount of any modification 14 otherwise required under this subsection shall, under 15 regulations prescribed by the Department, be adjusted by 16 any amounts included therein which were properly paid, 17 credited, or required to be distributed, or permanently 18 set aside for charitable purposes pursuant to Internal 19 Revenue Code Section 642(c) during the taxable year. 20 (d) Partnerships. 21 (1) In general. In the case of a partnership, base 22 income means an amount equal to the taxpayer's taxable 23 income for the taxable year as modified by paragraph (2). 24 (2) Modifications. The taxable income referred to 25 in paragraph (1) shall be modified by adding thereto the 26 sum of the following amounts: 27 (A) An amount equal to all amounts paid or 28 accrued to the taxpayer as interest or dividends 29 during the taxable year to the extent excluded from 30 gross income in the computation of taxable income; 31 (B) An amount equal to the amount of tax 32 imposed by this Act to the extent deducted from 33 gross income for the taxable year;and34 (C) The amount of deductions allowed to the SB1118 Enrolled -19- LRB9102874PTpkA 1 partnership pursuant to Section 707 (c) of the 2 Internal Revenue Code in calculating its taxable 3 income; and 4 (D) An amount equal to the amount of the 5 capital gain deduction allowable under the Internal 6 Revenue Code, to the extent deducted from gross 7 income in the computation of taxable income; 8 and by deducting from the total so obtained the following 9 amounts: 10 (E) The valuation limitation amount; 11 (F) An amount equal to the amount of any tax 12 imposed by this Act which was refunded to the 13 taxpayer and included in such total for the taxable 14 year; 15 (G) An amount equal to all amounts included in 16 taxable income as modified by subparagraphs (A), 17 (B), (C) and (D) which are exempt from taxation by 18 this State either by reason of its statutes or 19 Constitution or by reason of the Constitution, 20 treaties or statutes of the United States; provided 21 that, in the case of any statute of this State that 22 exempts income derived from bonds or other 23 obligations from the tax imposed under this Act, the 24 amount exempted shall be the interest net of bond 25 premium amortization; 26 (H) Any income of the partnership which 27 constitutes personal service income as defined in 28 Section 1348 (b) (1) of the Internal Revenue Code 29 (as in effect December 31, 1981) or a reasonable 30 allowance for compensation paid or accrued for 31 services rendered by partners to the partnership, 32 whichever is greater; 33 (I) An amount equal to all amounts of income 34 distributable to an entity subject to the Personal SB1118 Enrolled -20- LRB9102874PTpkA 1 Property Tax Replacement Income Tax imposed by 2 subsections (c) and (d) of Section 201 of this Act 3 including amounts distributable to organizations 4 exempt from federal income tax by reason of Section 5 501(a) of the Internal Revenue Code; 6 (J) With the exception of any amounts 7 subtracted under subparagraph (G), an amount equal 8 to the sum of all amounts disallowed as deductions 9 by (i) Sections 171(a)(2), and 265(2) of the 10 Internal Revenue Code of 1954, as now or hereafter 11 amended, and all amounts of expenses allocable to 12 interest and disallowed as deductions by Section 13 265(1) of the Internal Revenue Code, as now or 14 hereafter amended; and (ii) for taxable years 15 _ending on or after the effective date of this 16 amendatory Act of the 91st General Assembly, 17 Sections 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) 18 of the Internal Revenue Code; the provisions of this 19 subparagraph are exempt from the provisions of 20 Section 250; 21 (K) An amount equal to those dividends 22 included in such total which were paid by a 23 corporation which conducts business operations in an 24 Enterprise Zone or zones created under the Illinois 25 Enterprise Zone Act, enacted by the 82nd General 26 Assembly, and which does not conduct such operations 27 other than in an Enterprise Zone or Zones; 28 (L) An amount equal to any contribution made 29 to a job training project established pursuant to 30 the Real Property Tax Increment Allocation 31 Redevelopment Act; 32 (M) An amount equal to those dividends 33 included in such total that were paid by a 34 corporation that conducts business operations in a SB1118 Enrolled -21- LRB9102874PTpkA 1 federally designated Foreign Trade Zone or Sub-Zone 2 and that is designated a High Impact Business 3 located in Illinois; provided that dividends 4 eligible for the deduction provided in subparagraph 5 (K) of paragraph (2) of this subsection shall not be 6 eligible for the deduction provided under this 7 subparagraph (M); and 8 (N) An amount equal to the amount of the 9 deduction used to compute the federal income tax 10 credit for restoration of substantial amounts held 11 under claim of right for the taxable year pursuant 12 to Section 1341 of the Internal Revenue Code of 13 1986. 14 (e) Gross income; adjusted gross income; taxable income. 15 (1) In general. Subject to the provisions of 16 paragraph (2) and subsection (b) (3), for purposes of 17 this Section and Section 803(e), a taxpayer's gross 18 income, adjusted gross income, or taxable income for the 19 taxable year shall mean the amount of gross income, 20 adjusted gross income or taxable income properly 21 reportable for federal income tax purposes for the 22 taxable year under the provisions of the Internal Revenue 23 Code. Taxable income may be less than zero. However, for 24 taxable years ending on or after December 31, 1986, net 25 operating loss carryforwards from taxable years ending 26 prior to December 31, 1986, may not exceed the sum of 27 federal taxable income for the taxable year before net 28 operating loss deduction, plus the excess of addition 29 modifications over subtraction modifications for the 30 taxable year. For taxable years ending prior to December 31 31, 1986, taxable income may never be an amount in excess 32 of the net operating loss for the taxable year as defined 33 in subsections (c) and (d) of Section 172 of the Internal 34 Revenue Code, provided that when taxable income of a SB1118 Enrolled -22- LRB9102874PTpkA 1 corporation (other than a Subchapter S corporation), 2 trust, or estate is less than zero and addition 3 modifications, other than those provided by subparagraph 4 (E) of paragraph (2) of subsection (b) for corporations 5 or subparagraph (E) of paragraph (2) of subsection (c) 6 for trusts and estates, exceed subtraction modifications, 7 an addition modification must be made under those 8 subparagraphs for any other taxable year to which the 9 taxable income less than zero (net operating loss) is 10 applied under Section 172 of the Internal Revenue Code or 11 under subparagraph (E) of paragraph (2) of this 12 subsection (e) applied in conjunction with Section 172 of 13 the Internal Revenue Code. 14 (2) Special rule. For purposes of paragraph (1) of 15 this subsection, the taxable income properly reportable 16 for federal income tax purposes shall mean: 17 (A) Certain life insurance companies. In the 18 case of a life insurance company subject to the tax 19 imposed by Section 801 of the Internal Revenue Code, 20 life insurance company taxable income, plus the 21 amount of distribution from pre-1984 policyholder 22 surplus accounts as calculated under Section 815a of 23 the Internal Revenue Code; 24 (B) Certain other insurance companies. In the 25 case of mutual insurance companies subject to the 26 tax imposed by Section 831 of the Internal Revenue 27 Code, insurance company taxable income; 28 (C) Regulated investment companies. In the 29 case of a regulated investment company subject to 30 the tax imposed by Section 852 of the Internal 31 Revenue Code, investment company taxable income; 32 (D) Real estate investment trusts. In the 33 case of a real estate investment trust subject to 34 the tax imposed by Section 857 of the Internal SB1118 Enrolled -23- LRB9102874PTpkA 1 Revenue Code, real estate investment trust taxable 2 income; 3 (E) Consolidated corporations. In the case of 4 a corporation which is a member of an affiliated 5 group of corporations filing a consolidated income 6 tax return for the taxable year for federal income 7 tax purposes, taxable income determined as if such 8 corporation had filed a separate return for federal 9 income tax purposes for the taxable year and each 10 preceding taxable year for which it was a member of 11 an affiliated group. For purposes of this 12 subparagraph, the taxpayer's separate taxable income 13 shall be determined as if the election provided by 14 Section 243(b) (2) of the Internal Revenue Code had 15 been in effect for all such years; 16 (F) Cooperatives. In the case of a 17 cooperative corporation or association, the taxable 18 income of such organization determined in accordance 19 with the provisions of Section 1381 through 1388 of 20 the Internal Revenue Code; 21 (G) Subchapter S corporations. In the case 22 of: (i) a Subchapter S corporation for which there 23 is in effect an election for the taxable year under 24 Section 1362 of the Internal Revenue Code, the 25 taxable income of such corporation determined in 26 accordance with Section 1363(b) of the Internal 27 Revenue Code, except that taxable income shall take 28 into account those items which are required by 29 Section 1363(b)(1) of the Internal Revenue Code to 30 be separately stated; and (ii) a Subchapter S 31 corporation for which there is in effect a federal 32 election to opt out of the provisions of the 33 Subchapter S Revision Act of 1982 and have applied 34 instead the prior federal Subchapter S rules as in SB1118 Enrolled -24- LRB9102874PTpkA 1 effect on July 1, 1982, the taxable income of such 2 corporation determined in accordance with the 3 federal Subchapter S rules as in effect on July 1, 4 1982; and 5 (H) Partnerships. In the case of a 6 partnership, taxable income determined in accordance 7 with Section 703 of the Internal Revenue Code, 8 except that taxable income shall take into account 9 those items which are required by Section 703(a)(1) 10 to be separately stated but which would be taken 11 into account by an individual in calculating his 12 taxable income. 13 (f) Valuation limitation amount. 14 (1) In general. The valuation limitation amount 15 referred to in subsections (a) (2) (G), (c) (2) (I) and 16 (d)(2) (E) is an amount equal to: 17 (A) The sum of the pre-August 1, 1969 18 appreciation amounts (to the extent consisting of 19 gain reportable under the provisions of Section 1245 20 or 1250 of the Internal Revenue Code) for all 21 property in respect of which such gain was reported 22 for the taxable year; plus 23 (B) The lesser of (i) the sum of the 24 pre-August 1, 1969 appreciation amounts (to the 25 extent consisting of capital gain) for all property 26 in respect of which such gain was reported for 27 federal income tax purposes for the taxable year, or 28 (ii) the net capital gain for the taxable year, 29 reduced in either case by any amount of such gain 30 included in the amount determined under subsection 31 (a) (2) (F) or (c) (2) (H). 32 (2) Pre-August 1, 1969 appreciation amount. 33 (A) If the fair market value of property 34 referred to in paragraph (1) was readily SB1118 Enrolled -25- LRB9102874PTpkA 1 ascertainable on August 1, 1969, the pre-August 1, 2 1969 appreciation amount for such property is the 3 lesser of (i) the excess of such fair market value 4 over the taxpayer's basis (for determining gain) for 5 such property on that date (determined under the 6 Internal Revenue Code as in effect on that date), or 7 (ii) the total gain realized and reportable for 8 federal income tax purposes in respect of the sale, 9 exchange or other disposition of such property. 10 (B) If the fair market value of property 11 referred to in paragraph (1) was not readily 12 ascertainable on August 1, 1969, the pre-August 1, 13 1969 appreciation amount for such property is that 14 amount which bears the same ratio to the total gain 15 reported in respect of the property for federal 16 income tax purposes for the taxable year, as the 17 number of full calendar months in that part of the 18 taxpayer's holding period for the property ending 19 July 31, 1969 bears to the number of full calendar 20 months in the taxpayer's entire holding period for 21 the property. 22 (C) The Department shall prescribe such 23 regulations as may be necessary to carry out the 24 purposes of this paragraph. 25 (g) Double deductions. Unless specifically provided 26 otherwise, nothing in this Section shall permit the same item 27 to be deducted more than once. 28 (h) Legislative intention. Except as expressly provided 29 by this Section there shall be no modifications or 30 limitations on the amounts of income, gain, loss or deduction 31 taken into account in determining gross income, adjusted 32 gross income or taxable income for federal income tax 33 purposes for the taxable year, or in the amount of such items SB1118 Enrolled -26- LRB9102874PTpkA 1 entering into the computation of base income and net income 2 under this Act for such taxable year, whether in respect of 3 property values as of August 1, 1969 or otherwise. 4 (Source: P.A. 89-89, eff. 6-30-95; 89-235, eff. 8-4-95; 5 89-418, eff. 11-15-95; 89-460, eff. 5-24-96; 89-626, eff. 6 8-9-96; 90-491, eff. 1-1-98; 90-717, eff. 8-7-98; 90-770, 7 eff. 8-14-98; revised 9-21-98.) 8 (35 ILCS 5/207) (from Ch. 120, par. 2-207) 9 Sec. 207. Net Losses. 10 (a) If after applying all of the modifications provided 11 for in paragraph (2) of Section 203(b), paragraph (2) of 12 Section 203(c) and paragraph (2) of Section 203(d) and the 13 allocation and apportionment provisions of Article 3 of this 14 Act, the taxpayer's net income results in a loss; 15 (1) for any taxable year ending prior to December 16 31, 1999, such loss shall be allowed as a carryover or 17 carryback deduction in the manner allowed under Section 18 172 of the Internal Revenue Code; and 19 (2) for any taxable year ending on or after 20 December 31, 1999, such loss shall be allowed as a 21 carryback to each of the 2 taxable years preceding the 22 taxable year of such loss and shall be a net operating 23 carryover to each of the 20 taxable years following the 24 taxable year of such loss. 25 (A) The taxpayer may elect to relinquish the 26 entire carryback period with respect to such loss. 27 Such election shall be made in the form and manner 28 prescribed by the Department and shall be made by 29 the due date (including extensions of time) for 30 filing the taxpayer's return for the taxable year in 31 which such loss is incurred, and such election, once 32 made, shall be irrevocable. 33 (B) The entire amount of such loss shall be SB1118 Enrolled -27- LRB9102874PTpkA 1 carried to the earliest taxable year to which such 2 loss may be carried. The amount of such loss which 3 shall be carried to each of the other taxable years 4 shall be the excess, if any, of the amount of such 5 loss over the sum of the deductions for carryback or 6 carryover of such loss allowable for each of the 7 prior taxable years to which such loss may be 8 carried. 9 (b) Any loss determined under subsection (a) of this 10 Section must be carried back or carried forward in the same 11 manner for purposes of subsections (a) and (b) of Section 201 12 of this Act as for purposes of subsections (c) and (d) of 13 Section 201 of this Act. 14 (Source: P.A. 85-731.) 15 (35 ILCS 5/304) (from Ch. 120, par. 3-304) 16 Sec. 304. Business income of persons other than 17 residents. 18 (a) In general. The business income of a person other 19 than a resident shall be allocated to this State if such 20 person's business income is derived solely from this State. 21 If a person other than a resident derives business income 22 from this State and one or more other states, then, for tax 23 years ending on or before December 30, 1998, and except as 24 otherwise provided by this Section, such person's business 25 income shall be apportioned to this State by multiplying the 26 income by a fraction, the numerator of which is the sum of 27 the property factor (if any), the payroll factor (if any) and 28 200% of the sales factor (if any), and the denominator of 29 which is 4 reduced by the number of factors other than the 30 sales factor which have a denominator of zero and by an 31 additional 2 if the sales factor has a denominator of zero. 32 For tax years ending on or after December 31, 1998, and 33 except as otherwise provided by this Section, persons other SB1118 Enrolled -28- LRB9102874PTpkA 1 than residents who derive business income from this State and 2 one or more other states shall compute their apportionment 3 factor by weighting their property, payroll, and sales 4 factors as provided in subsection (h) of this Section. 5 (1) Property factor. 6 (A) The property factor is a fraction, the 7 numerator of which is the average value of the person's 8 real and tangible personal property owned or rented and 9 used in the trade or business in this State during the 10 taxable year and the denominator of which is the average 11 value of all the person's real and tangible personal 12 property owned or rented and used in the trade or 13 business during the taxable year. 14 (B) Property owned by the person is valued at its 15 original cost. Property rented by the person is valued at 16 8 times the net annual rental rate. Net annual rental 17 rate is the annual rental rate paid by the person less 18 any annual rental rate received by the person from 19 sub-rentals. 20 (C) The average value of property shall be 21 determined by averaging the values at the beginning and 22 ending of the taxable year but the Director may require 23 the averaging of monthly values during the taxable year 24 if reasonably required to reflect properly the average 25 value of the person's property. 26 (2) Payroll factor. 27 (A) The payroll factor is a fraction, the numerator 28 of which is the total amount paid in this State during 29 the taxable year by the person for compensation, and the 30 denominator of which is the total compensation paid 31 everywhere during the taxable year. 32 (B) Compensation is paid in this State if: 33 (i) The individual's service is performed 34 entirely within this State; SB1118 Enrolled -29- LRB9102874PTpkA 1 (ii) The individual's service is performed 2 both within and without this State, but the service 3 performed without this State is incidental to the 4 individual's service performed within this State; or 5 (iii) Some of the service is performed within 6 this State and either the base of operations, or if 7 there is no base of operations, the place from which 8 the service is directed or controlled is within this 9 State, or the base of operations or the place from 10 which the service is directed or controlled is not 11 in any state in which some part of the service is 12 performed, but the individual's residence is in this 13 State. 14 Beginning with taxable years ending on or after 15 December 31, 1992, for residents of states that impose a 16 comparable tax liability on residents of this State, for 17 purposes of item (i) of this paragraph (B), in the case 18 of persons who perform personal services under personal 19 service contracts for sports performances, services by 20 that person at a sporting event taking place in Illinois 21 shall be deemed to be a performance entirely within this 22 State. 23 (3) Sales factor. 24 (A) The sales factor is a fraction, the numerator 25 of which is the total sales of the person in this State 26 during the taxable year, and the denominator of which is 27 the total sales of the person everywhere during the 28 taxable year. 29 (B) Sales of tangible personal property are in this 30 State if: 31 (i) The property is delivered or shipped to a 32 purchaser, other than the United States government, 33 within this State regardless of the f. o. b. point 34 or other conditions of the sale; or SB1118 Enrolled -30- LRB9102874PTpkA 1 (ii) The property is shipped from an office, 2 store, warehouse, factory or other place of storage 3 in this State and either the purchaser is the United 4 States government or the person is not taxable in 5 the state of the purchaser; provided, however, that 6 premises owned or leased by a person who has 7 independently contracted with the seller for the 8 printing of newspapers, periodicals or books shall 9 not be deemed to be an office, store, warehouse, 10 factory or other place of storage for purposes of 11 this Section. Sales of tangible personal property 12 are not in this State if the seller and purchaser 13 would be members of the same unitary business group 14 but for the fact that either the seller or purchaser 15 is a person with 80% or more of total business 16 activity outside of the United States and the 17 property is purchased for resale. 18 (B-1) Patents, copyrights, trademarks, and similar 19 items of intangible personal property. 20 (i) Gross receipts from the licensing, sale, 21 or other disposition of a patent, copyright, 22 trademark, or similar item of intangible personal 23 property are in this State to the extent the item is 24 utilized in this State during the year the gross 25 receipts are included in gross income. 26 (ii) Place of utilization. 27 (I) A patent is utilized in a state to 28 the extent that it is employed in production, 29 fabrication, manufacturing, or other processing 30 in the state or to the extent that a patented 31 product is produced in the state. If a patent 32 is utilized in more than one state, the extent 33 to which it is utilized in any one state shall 34 be a fraction equal to the gross receipts of SB1118 Enrolled -31- LRB9102874PTpkA 1 the licensee or purchaser from sales or leases 2 of items produced, fabricated, manufactured, or 3 processed within that state using the patent 4 and of patented items produced within that 5 state, divided by the total of such gross 6 receipts for all states in which the patent is 7 utilized. 8 (II) A copyright is utilized in a state 9 to the extent that printing or other 10 publication originates in the state. If a 11 copyright is utilized in more than one state, 12 the extent to which it is utilized in any one 13 state shall be a fraction equal to the gross 14 receipts from sales or licenses of materials 15 printed or published in that state divided by 16 the total of such gross receipts for all states 17 in which the copyright is utilized. 18 (III) Trademarks and other items of 19 intangible personal property governed by this 20 paragraph (B-1) are utilized in the state in 21 which the commercial domicile of the licensee 22 or purchaser is located. 23 (iii) If the state of utilization of an item 24 of property governed by this paragraph (B-1) cannot 25 be determined from the taxpayer's books and records 26 or from the books and records of any person related 27 to the taxpayer within the meaning of Section 267(b) 28 of the Internal Revenue Code, 26 U.S.C. 267, the 29 gross receipts attributable to that item shall be 30 excluded from both the numerator and the denominator 31 of the sales factor. 32 (B-2) Gross receipts from the license, sale, or 33 other disposition of patents, copyrights, trademarks, and 34 similar items of intangible personal property may be SB1118 Enrolled -32- LRB9102874PTpkA 1 included in the numerator or denominator of the sales 2 factor only if gross receipts from licenses, sales, or 3 other disposition of such items comprise more than 50% of 4 the taxpayer's total gross receipts included in gross 5 income during the tax year and during each of the 2 6 immediately preceding tax years; provided that, when a 7 taxpayer is a member of a unitary business group, such 8 determination shall be made on the basis of the gross 9 receipts of the entire unitary business group. 10 (C) Sales, other than sales governed by paragraphs 11 (B) and (B-1)of tangible personal property, are in this 12 State if: 13 (i) The income-producing activity is performed 14 in this State; or 15 (ii) The income-producing activity is 16 performed both within and without this State and a 17 greater proportion of the income-producing activity 18 is performed within this State than without this 19 State, based on performance costs. 20 (D) For taxable years ending on or after December 21 31, 1995, the following items of income shall not be 22 included in the numerator or denominator of the sales 23 factor: dividends; amounts included under Section 78 of 24 the Internal Revenue Code; and Subpart F income as 25 defined in Section 952 of the Internal Revenue Code. No 26 inference shall be drawn from the enactment of this 27 paragraph (D) in construing this Section for taxable 28 years ending before December 31, 1995. 29 (E) Paragraphs (B-1) and (B-2) shall apply to tax 30 years ending on or after December 31, 1999, provided that 31 a taxpayer may elect to apply the provisions of these 32 paragraphs to prior tax years. Such election shall be 33 made in the form and manner prescribed by the Department, 34 shall be irrevocable, and shall apply to all tax years; SB1118 Enrolled -33- LRB9102874PTpkA 1 provided that, if a taxpayer's Illinois income tax 2 liability for any tax year, as assessed under Section 903 3 prior to January 1, 1999, was computed in a manner 4 contrary to the provisions of paragraphs (B-1) or (B-2), 5 no refund shall be payable to the taxpayer for that tax 6 year to the extent such refund is the result of applying 7 the provisions of paragraph (B-1) or (B-2) retroactively. 8 In the case of a unitary business group, such election 9 shall apply to all members of such group for every tax 10 year such group is in existence, but shall not apply to 11 any taxpayer for any period during which that taxpayer is 12 not a member of such group. 13 (b) Insurance companies. 14 (1) In general. Except as otherwise provided by 15 paragraph (2), business income of an insurance company 16 for a taxable year shall be apportioned to this State by 17 multiplying such income by a fraction, the numerator of 18 which is the direct premiums written for insurance upon 19 property or risk in this State, and the denominator of 20 which is the direct premiums written for insurance upon 21 property or risk everywhere. For purposes of this 22 subsection, the term "direct premiums written" means the 23 total amount of direct premiums written, assessments and 24 annuity considerations as reported for the taxable year 25 on the annual statement filed by the company with the 26 Illinois Director of Insurance in the form approved by 27 the National Convention of Insurance Commissioners or 28 such other form as may be prescribed in lieu thereof. 29 (2) Reinsurance. If the principal source of 30 premiums written by an insurance company consists of 31 premiums for reinsurance accepted by it, the business 32 income of such company shall be apportioned to this State 33 by multiplying such income by a fraction, the numerator 34 of which is the sum of (i) direct premiums written for SB1118 Enrolled -34- LRB9102874PTpkA 1 insurance upon property or risk in this State, plus (ii) 2 premiums written for reinsurance accepted in respect of 3 property or risk in this State, and the denominator of 4 which is the sum of (iii) direct premiums written for 5 insurance upon property or risk everywhere, plus (iv) 6 premiums written for reinsurance accepted in respect of 7 property or risk everywhere. For purposes of this 8 paragraph, premiums written for reinsurance accepted in 9 respect of property or risk in this State, whether or not 10 otherwise determinable, may, at the election of the 11 company, be determined on the basis of the proportion 12 which premiums written for reinsurance accepted from 13 companies commercially domiciled in Illinois bears to 14 premiums written for reinsurance accepted from all 15 sources, or, alternatively, in the proportion which the 16 sum of the direct premiums written for insurance upon 17 property or risk in this State by each ceding company 18 from which reinsurance is accepted bears to the sum of 19 the total direct premiums written by each such ceding 20 company for the taxable year. 21 (c) Financial organizations. 22 (1) In general. Business income of a financial 23 organization shall be apportioned to this State by 24 multiplying such income by a fraction, the numerator of 25 which is its business income from sources within this 26 State, and the denominator of which is its business 27 income from all sources. For the purposes of this 28 subsection, the business income of a financial 29 organization from sources within this State is the sum of 30 the amounts referred to in subparagraphs (A) through (E) 31 following, but excluding the adjusted income of an 32 international banking facility as determined in paragraph 33 (2): 34 (A) Fees, commissions or other compensation SB1118 Enrolled -35- LRB9102874PTpkA 1 for financial services rendered within this State; 2 (B) Gross profits from trading in stocks, 3 bonds or other securities managed within this State; 4 (C) Dividends, and interest from Illinois 5 customers, which are received within this State; 6 (D) Interest charged to customers at places of 7 business maintained within this State for carrying 8 debit balances of margin accounts, without deduction 9 of any costs incurred in carrying such accounts; and 10 (E) Any other gross income resulting from the 11 operation as a financial organization within this 12 State. In computing the amounts referred to in 13 paragraphs (A) through (E) of this subsection, any 14 amount received by a member of an affiliated group 15 (determined under Section 1504(a) of the Internal 16 Revenue Code but without reference to whether any 17 such corporation is an "includible corporation" 18 under Section 1504(b) of the Internal Revenue Code) 19 from another member of such group shall be included 20 only to the extent such amount exceeds expenses of 21 the recipient directly related thereto. 22 (2) International Banking Facility. 23 (A) Adjusted Income. The adjusted income of 24 an international banking facility is its income 25 reduced by the amount of the floor amount. 26 (B) Floor Amount. The floor amount shall be 27 the amount, if any, determined by multiplying the 28 income of the international banking facility by a 29 fraction, not greater than one, which is determined 30 as follows: 31 (i) The numerator shall be: 32 The average aggregate, determined on a 33 quarterly basis, of the financial 34 organization's loans to banks in foreign SB1118 Enrolled -36- LRB9102874PTpkA 1 countries, to foreign domiciled borrowers 2 (except where secured primarily by real estate) 3 and to foreign governments and other foreign 4 official institutions, as reported for its 5 branches, agencies and offices within the state 6 on its "Consolidated Report of Condition", 7 Schedule A, Lines 2.c., 5.b., and 7.a., which 8 was filed with the Federal Deposit Insurance 9 Corporation and other regulatory authorities, 10 for the year 1980, minus 11 The average aggregate, determined on a 12 quarterly basis, of such loans (other than 13 loans of an international banking facility), as 14 reported by the financial institution for its 15 branches, agencies and offices within the 16 state, on the corresponding Schedule and lines 17 of the Consolidated Report of Condition for the 18 current taxable year, provided, however, that 19 in no case shall the amount determined in this 20 clause (the subtrahend) exceed the amount 21 determined in the preceding clause (the 22 minuend); and 23 (ii) the denominator shall be the average 24 aggregate, determined on a quarterly basis, of 25 the international banking facility's loans to 26 banks in foreign countries, to foreign 27 domiciled borrowers (except where secured 28 primarily by real estate) and to foreign 29 governments and other foreign official 30 institutions, which were recorded in its 31 financial accounts for the current taxable 32 year. 33 (C) Change to Consolidated Report of Condition 34 and in Qualification. In the event the Consolidated SB1118 Enrolled -37- LRB9102874PTpkA 1 Report of Condition which is filed with the Federal 2 Deposit Insurance Corporation and other regulatory 3 authorities is altered so that the information 4 required for determining the floor amount is not 5 found on Schedule A, lines 2.c., 5.b. and 7.a., the 6 financial institution shall notify the Department 7 and the Department may, by regulations or otherwise, 8 prescribe or authorize the use of an alternative 9 source for such information. The financial 10 institution shall also notify the Department should 11 its international banking facility fail to qualify 12 as such, in whole or in part, or should there be any 13 amendment or change to the Consolidated Report of 14 Condition, as originally filed, to the extent such 15 amendment or change alters the information used in 16 determining the floor amount. 17 (d) Transportation services. Business income derived 18 from furnishing transportation services shall be apportioned 19 to this State in accordance with paragraphs (1) and (2): 20 (1) Such business income (other than that derived 21 from transportation by pipeline) shall be apportioned to 22 this State by multiplying such income by a fraction, the 23 numerator of which is the revenue miles of the person in 24 this State, and the denominator of which is the revenue 25 miles of the person everywhere. For purposes of this 26 paragraph, a revenue mile is the transportation of 1 27 passenger or 1 net ton of freight the distance of 1 mile 28 for a consideration. Where a person is engaged in the 29 transportation of both passengers and freight, the 30 fraction above referred to shall be determined by means 31 of an average of the passenger revenue mile fraction and 32 the freight revenue mile fraction, weighted to reflect 33 the person's 34 (A) relative railway operating income from SB1118 Enrolled -38- LRB9102874PTpkA 1 total passenger and total freight service, as 2 reported to the Interstate Commerce Commission, in 3 the case of transportation by railroad, and 4 (B) relative gross receipts from passenger and 5 freight transportation, in case of transportation 6 other than by railroad. 7 (2) Such business income derived from 8 transportation by pipeline shall be apportioned to this 9 State by multiplying such income by a fraction, the 10 numerator of which is the revenue miles of the person in 11 this State, and the denominator of which is the revenue 12 miles of the person everywhere. For the purposes of this 13 paragraph, a revenue mile is the transportation by 14 pipeline of 1 barrel of oil, 1,000 cubic feet of gas, or 15 of any specified quantity of any other substance, the 16 distance of 1 mile for a consideration. 17 (e) Combined apportionment. Where 2 or more persons are 18 engaged in a unitary business as described in subsection 19 (a)(27) of Section 1501, a part of which is conducted in this 20 State by one or more members of the group, the business 21 income attributable to this State by any such member or 22 members shall be apportioned by means of the combined 23 apportionment method. 24 (f) Alternative allocation. If the allocation and 25 apportionment provisions of subsections (a) through (e) and 26 of subsection (h) do not fairly represent the extent of a 27 person's business activity in this State, the person may 28 petition for, or the Director may require, in respect of all 29 or any part of the person's business activity, if reasonable: 30 (1) Separate accounting; 31 (2) The exclusion of any one or more factors; 32 (3) The inclusion of one or more additional factors 33 which will fairly represent the person's business 34 activities in this State; or SB1118 Enrolled -39- LRB9102874PTpkA 1 (4) The employment of any other method to 2 effectuate an equitable allocation and apportionment of 3 the person's business income. 4 (g) Cross reference. For allocation of business income 5 by residents, see Section 301(a). 6 (h) For tax years ending on or after December 31, 1998, 7 the apportionment factor of persons who apportion their 8 business income to this State under subsection (a) shall be 9 equal to: 10 (1) for tax years ending on or after December 31, 11 1998 and before December 31, 1999, 16 2/3% of the 12 property factor plus 16 2/3% of the payroll factor plus 13 66 2/3% of the sales factor; 14 (2) for tax years ending on or after December 31, 15 1999 and before December 31, 2000, 8 1/3% of the property 16 factor plus 8 1/3% of the payroll factor plus 83 1/3% of 17 the sales factor; 18 (3) for tax years ending on or after December 31, 19 2000, the sales factor. 20 If, in any tax year ending on or after December 31, 1998 and 21 before December 31, 2000, the denominator of the payroll, 22 property, or sales factor is zero, the apportionment factor 23 computed in paragraph (1) or (2) of this subsection for that 24 year shall be divided by an amount equal to 100% minus the 25 percentage weight given to each factor whose denominator is 26 equal to zero. 27 (Source: P.A. 89-379, eff. 1-1-96; 89-399, eff. 8-20-95; 28 89-626, eff. 8-9-96; 90-562, eff. 12-16-97; 90-613, eff. 29 7-9-98.) 30 (35 ILCS 5/405 new) 31 Sec. 405. Carryovers in certain acquisitions. 32 (a) In the case of the acquisition of assets of a 33 corporation by another corporation described in Section SB1118 Enrolled -40- LRB9102874PTpkA 1 381(a) of the Internal Revenue Code, the acquiring 2 corporation shall succeed to and take into account, as of the 3 close of the day of distribution or transfer, all Article 2 4 credits and net losses under Section 207 of the corporation 5 from which the assets where acquired, without limitation 6 under Section 382 of the Internal Revenue Code or the 7 separate return limitation year regulations promulgated under 8 Section 1502 of the Internal Revenue Code. 9 (b) In the case of the acquisition of assets of a 10 partnership by another partnership in a transaction in which 11 the acquiring partnership is considered to be a continuation 12 of the partnership from which the assets were acquired under 13 the provisions of Section 708 of the Internal Revenue Code 14 and any regulations promulgated under that Section, the 15 acquiring partnership shall succeed to and take into account, 16 as of the close of the day of distribution or transfer, all 17 Article 2 credits and net losses under Section 207 of the 18 partnership from which the assets were acquired. 19 (c) The provisions of this amendatory Act of the 91st 20 General Assembly shall apply to all acquisitions occurring in 21 taxable years ending on or after December 31, 1986; provided 22 that if a taxpayer's Illinois income tax liability for any 23 taxable year, as assessed under Section 903 prior to January 24 1, 1999, was computed without taking into account all of the 25 Article 2 credits and net losses under Section 207 as allowed 26 by this Section: 27 (1) no refund shall be payable to the taxpayer for 28 that taxable year as the result of allowing any portion 29 of the Article 2 credits or net losses under Section 207 30 that were not taken into account in computing the tax 31 assessed prior to January 1, 1999; 32 (2) any deficiency which has not been paid may be 33 reduced (but not below zero) by the allowance of some or 34 all of the Article 2 credits or net losses under Section SB1118 Enrolled -41- LRB9102874PTpkA 1 207 that were not taken into account in computing the tax 2 assessed prior to January 1, 1999; and 3 (3) in the case of any Article 2 credit or net loss 4 under Section 207 that, pursuant to this subsection (c), 5 could not be taken into account either in computing the 6 tax assessed prior to January 1, 1999 for a taxable year 7 or in reducing a deficiency for that taxable year under 8 paragraph (2) of subsection (c), the allowance of such 9 credit or loss in any other taxable year shall not be 10 denied on the grounds that such credit or loss should 11 properly have been claimed in that taxable year under 12 subsection (a) or (b). 13 (35 ILCS 5/502) (from Ch. 120, par. 5-502) 14 Sec. 502. Returns and notices. 15 (a) In general. A return with respect to the taxes 16 imposed by this Act shall be made by every person for any 17 taxable year: 18 (1) For which such person is liable for a tax 19 imposed by this Act, or 20 (2) In the case of a resident or in the case of a 21 corporation which is qualified to do business in this 22 State, for which such person is required to make a 23 federal income tax return, regardless of whether such 24 person is liable for a tax imposed by this Act. However, 25 this paragraph shall not require a resident to make a 26 return if such person has an Illinois base income of the 27 basic amount in Section 204(b) or less and is either 28 claimed as a dependent on another person's tax return 29 under the Internal Revenue Code of 1986, or is claimed as 30 a dependent on another person's tax return under this 31 Act. 32 (b) Fiduciaries and receivers. 33 (1) Decedents. If an individual is deceased, any SB1118 Enrolled -42- LRB9102874PTpkA 1 return or notice required of such individual under this 2 Act shall be made by his executor, administrator, or 3 other person charged with the property of such decedent. 4 (2) Individuals under a disability. If an 5 individual is unable to make a return or notice required 6 under this Act, the return or notice required of such 7 individual shall be made by his duly authorized agent, 8 guardian, fiduciary or other person charged with the care 9 of the person or property of such individual. 10 (3) Estates and trusts. Returns or notices required 11 of an estate or a trust shall be made by the fiduciary 12 thereof. 13 (4) Receivers, trustees and assignees for 14 corporations. In a case where a receiver, trustee in 15 bankruptcy, or assignee, by order of a court of competent 16 jurisdiction, by operation of law, or otherwise, has 17 possession of or holds title to all or substantially all 18 the property or business of a corporation, whether or not 19 such property or business is being operated, such 20 receiver, trustee, or assignee shall make the returns and 21 notices required of such corporation in the same manner 22 and form as corporations are required to make such 23 returns and notices. 24 (c) Joint returns by husband and wife. 25 (1) Except as provided in paragraph (3), if a 26 husband and wife file a joint federal income tax return 27 for a taxable year they shall file a joint return under 28 this Act for such taxable year and their liabilities 29 shall be joint and several, but if the federal income tax 30 liability of either spouse is determined on a separate 31 federal income tax return, they shall file separate 32 returns under this Act. 33 (2) If neither spouse is required to file a federal 34 income tax return and either or both are required to file SB1118 Enrolled -43- LRB9102874PTpkA 1 a return under this Act, they may elect to file separate 2 or joint returns and pursuant to such election their 3 liabilities shall be separate or joint and several. 4 (3) If either husband or wife is a resident and the 5 other is a nonresident, they shall file separate returns 6 in this State on such forms as may be required by the 7 Department in which event their tax liabilities shall be 8 separate; but they may elect to determine their joint net 9 income and file a joint return as if both were residents 10 and in such case, their liabilities shall be joint and 11 several. 12 (4) Innocent spouses. 13 (A) However, for tax liabilities arising and 14 paid prior to the effective date of this amendatory 15 Act of the 91st General Assembly, an innocent spouse 16 shall be relieved of liability for tax (including 17 interest and penalties) for any taxable year for 18 which a joint return has been made, upon submission 19 of proof that the Internal Revenue Service has made 20 a determination under Section 6013(e) of the 21 Internal Revenue Code, for the same taxable year, 22 which determination relieved the spouse from 23 liability for federal income taxes. If there is no 24 federal income tax liability at issue for the same 25 taxable year, the Department shall rely on the 26 provisions of Section 6013(e) to determine whether 27 the person requesting innocent spouse abatement of 28 tax, penalty, and interest is entitled to that 29 relief. 30 (B) For tax liabilities arising after the 31 effective date of this amendatory Act of the 91st 32 General Assembly or which arose prior to that 33 effective date, but remain unpaid as of the 34 effective date, if an individual who filed a joint SB1118 Enrolled -44- LRB9102874PTpkA 1 return for any taxable year has made an election 2 under this paragraph, the individual's liability for 3 any tax shown on the joint return shall not exceed 4 the individual's separate return amount and the 5 individual's liability for any deficiency assessed 6 for that taxable year shall not exceed the portion 7 of the deficiency properly allocable to the 8 individual. For purposes of this paragraph: 9 (i) An election properly made pursuant to 10 Section 6015 of the Internal Revenue Code shall 11 constitute an election under this paragraph, 12 provided that the election shall not be 13 effective until the individual has notified the 14 Department of the election in the form and 15 manner prescribed by the Department. 16 (ii) If no election has been made under 17 Section 6015, the individual may make an 18 election under this paragraph in the form and 19 manner prescribed by the Department, provided 20 that no election may be made if the Department 21 finds that assets were transferred between 22 individuals filing a joint return as part of a 23 scheme by such individuals to avoid payment of 24 Illinois income tax and the election shall not 25 eliminate the individual's liability for any 26 portion of a deficiency attributable to an 27 error on the return of which the individual had 28 actual knowledge as of the date of filing. 29 (iii) In determining the separate return 30 amount or portion of any deficiency 31 attributable to an individual, the Department 32 shall follow the provisions in Section 6015(b) 33 and (c) of the Internal Revenue Code. 34 (iv) In determining the validity of an SB1118 Enrolled -45- LRB9102874PTpkA 1 individual's election under subparagraph (ii) 2 and in determining an electing individual's 3 separate return amount or portion of any 4 deficiency under subparagraph (iii), any 5 determination made by the Secretary of the 6 Treasury under Section 6015(a) of the Internal 7 Revenue Code regarding criteria for eligibility 8 or under Section 6015(b) or (c) of the Internal 9 Revenue Code regarding the allocation of any 10 item of income, deduction, payment, or credit 11 between an individual making the federal 12 election and that individual's spouse shall be 13 conclusively presumed to be correct. With 14 respect to any item that is not the subject of 15 a determination by the Secretary of the 16 Treasury, in any proceeding involving this 17 subsection, the individual making the election 18 shall have the burden of proof with respect to 19 any item except that the Department shall have 20 the burden of proof with respect to items in 21 subdivision (ii). 22 (v) Any election made by an individual 23 under this subsection shall apply to all years 24 for which that individual and the spouse named 25 in the election have filed a joint return. 26 (vi) After receiving a notice that the 27 federal election has been made or after 28 receiving an election under subdivision (ii), 29 the Department shall take no collection action 30 against the electing individual for any 31 liability arising from a joint return covered 32 by the election until the Department has 33 notified the electing individual in writing 34 that the election is invalid or of the portion SB1118 Enrolled -46- LRB9102874PTpkA 1 of the liability the Department has allocated 2 to the electing individual. Within 60 days 3 (150 days if the individual is outside the 4 United States) after the issuance of such 5 notification, the individual may file a written 6 protest of the denial of the election or of the 7 Department's determination of the liability 8 allocated to him or her and shall be granted a 9 hearing within the Department under the 10 provisions of Section 908. If a protest is 11 filed, the Department shall take no collection 12 action against the electing individual until 13 the decision regarding the protest has become 14 final under subsection (d) of Section 908 or, 15 if administrative review of the Department's 16 decision is requested under Section 1201, until 17 the decision of the court becomes final. 18 (d) Partnerships. Every partnership having any base 19 income allocable to this State in accordance with section 20 305(c) shall retain information concerning all items of 21 income, gain, loss and deduction; the names and addresses of 22 all of the partners, or names and addresses of members of a 23 limited liability company, or other persons who would be 24 entitled to share in the base income of the partnership if 25 distributed; the amount of the distributive share of each; 26 and such other pertinent information as the Department may by 27 forms or regulations prescribe. The partnership shall make 28 that information available to the Department when requested 29 by the Department. 30 (e) For taxable years ending on or after December 31, 31 1985, and before December 31, 1993, taxpayers that are 32 corporations (other than Subchapter S corporations) having 33 the same taxable year and that are members of the same 34 unitary business group may elect to be treated as one SB1118 Enrolled -47- LRB9102874PTpkA 1 taxpayer for purposes of any original return, amended return 2 which includes the same taxpayers of the unitary group which 3 joined in the election to file the original return, 4 extension, claim for refund, assessment, collection and 5 payment and determination of the group's tax liability under 6 this Act. This subsection (e) does not permit the election to 7 be made for some, but not all, of the purposes enumerated 8 above. For taxable years ending on or after December 31, 9 1987, corporate members (other than Subchapter S 10 corporations) of the same unitary business group making this 11 subsection (e) election are not required to have the same 12 taxable year. 13 For taxable years ending on or after December 31, 1993, 14 taxpayers that are corporations (other than Subchapter S 15 corporations) and that are members of the same unitary 16 business group shall be treated as one taxpayer for purposes 17 of any original return, amended return which includes the 18 same taxpayers of the unitary group which joined in filing 19 the original return, extension, claim for refund, assessment, 20 collection and payment and determination of the group's tax 21 liability under this Act. 22 (f) The Department may promulgate regulations to permit 23 nonresident individual partners of the same partnership, 24 nonresident Subchapter S corporation shareholders of the same 25 Subchapter S corporation, and nonresident individuals 26 transacting an insurance business in Illinois under a Lloyds 27 plan of operation, and nonresident individual members of the 28 same limited liability company that is treated as a 29 partnership under Section 1501 (a)(16) of this Act, to file 30 composite individual income tax returns reflecting the 31 composite income of such individuals allocable to Illinois 32 and to make composite individual income tax payments. The 33 Department may by regulation also permit such composite 34 returns to include the income tax owed by Illinois residents SB1118 Enrolled -48- LRB9102874PTpkA 1 attributable to their income from partnerships, Subchapter S 2 corporations, insurance businesses organized under a Lloyds 3 plan of operation, or limited liability companies that are 4 treated as partnership under Section 1501 (a)(16) of this 5 Act, in which case such Illinois residents will be permitted 6 to claim credits on their individual returns for their shares 7 of the composite tax payments. This subsection (f) applies 8 to taxable years ending on or after December 31, 1987. 9 (g) The Department may adopt rules to authorize the 10 electronic filing of any return required to be filed under 11 this Section. 12 (Source: P.A. 90-613, eff. 7-9-98.) 13 (35 ILCS 5/601.1) (Ch. 120, par. 6-601.1) 14 Sec. 601.1. (a) Beginning on October 1, 1993, a taxpayer 15 who has an average monthly tax liability of $150,000 or more 16 under Article 7 of this Act shall make all payments required 17 by rules of the Department by electronic funds transfer. 18 Beginning October 1, 1993, a taxpayer who has an average 19 quarterly estimated tax payment obligation of $450,000 or 20 more under Article 8 of this Act shall make all payments 21 required by rules of the Department by electronic funds 22 transfer. Beginning on October 1, 1994, a taxpayer who has 23 an average monthly tax liability of $100,000 or more under 24 Article 7 of this Act shall make all payments required by 25 rules of the Department by electronic funds transfer. 26 Beginning October 1, 1994, a taxpayer who has an average 27 quarterly estimated tax payment obligation of $300,000 or 28 more under Article 8 of this Act shall make all payments 29 required by rules of the Department by electronic funds 30 transfer. Beginning on October 1, 1995, a taxpayer who has 31 an average monthly tax liability of $50,000 or more under 32 Article 7 of this Act shall make all payments required by 33 rules of the Department by electronic funds transfer. SB1118 Enrolled -49- LRB9102874PTpkA 1 Beginning October 1, 1995, a taxpayer who has an average 2 quarterly estimated tax payment obligation of $150,000 or 3 more under Article 8 of this Act shall make all payments 4 required by rules of the Department by electronic funds 5 transfer. Beginning on October 1, 2000, and for all liability 6 periods thereafter, a taxpayer who has an average annual tax 7 liability of $200,000 or more under Article 7 of this Act 8 shall make all payments required by rules of the Department 9 by electronic funds transfer. Beginning October 1, 2000, a 10 taxpayer who has an average quarterly estimated tax payment 11 obligation of $50,000 or more under Article 8 of this Act 12 shall make all payments required by rules of the Department 13 by electronic funds transfer. 14 (b) Any taxpayer who is not required to make payments by 15 electronic funds transfer may make payments by electronic 16 funds transfer with the permission of the Department. 17 (c) All taxpayers required to make payments by 18 electronic funds transfer and any taxpayers who wish to 19 voluntarily make payments by electronic funds transfer shall 20 make those payments in the manner authorized by the 21 Department. 22 (d) The Department shall notify all taxpayers required 23 to make payments by electronic funds transfer. All 24 taxpayers notified by the Department shall make payments by 25 electronic funds transfer for a minimum of one year beginning 26 on October 1. In determining the threshold amounts under 27 subsection (a), the Department shall calculate the averages 28 as follows: 29 (1) the total liability under Article 7 for the 30 preceding tax year (and, prior to October 1, 2000, 31 divided by 12); or 32 (2) for purposes of estimated payments under 33 Article 8, the total tax obligation of the taxpayer for 34 the previous tax year divided by 4. SB1118 Enrolled -50- LRB9102874PTpkA 1 (e) The Department shall adopt such rules as are 2 necessary to effectuate a program of electronic funds 3 transfer and the requirements of this Section. 4 (Source: P.A. 87-1132; 87-1246.) 5 (35 ILCS 5/905) (from Ch. 120, par. 9-905) 6 Sec. 905. Limitations on Notices of Deficiency. 7 (a) In general. Except as otherwise provided in this 8 Act: 9 (1) A notice of deficiency shall be issued not 10 later than 3 years after the date the return was filed, 11 and 12 (2) No deficiency shall be assessed or collected 13 with respect to the year for which the return was filed 14 unless such notice is issued within such period. 15 (b) Omission of more than 25% of income. If the taxpayer 16 omits from base income an amount properly includible therein 17 which is in excess of 25% of the amount of base income stated 18 in the return, a notice of deficiency may be issued not later 19 than 6 years after the return was filed. For purposes of this 20 paragraph, there shall not be taken into account any amount 21 which is omitted in the return if such amount is disclosed in 22 the return, or in a statement attached to the return, in a 23 manner adequate to apprise the Department of the nature and 24 the amount of such item. 25 (c) No return or fraudulent return. If no return is 26 filed or a false and fraudulent return is filed with intent 27 to evade the tax imposed by this Act, a notice of deficiency 28 may be issued at any time. 29 (d) Failure to report federal change. If a taxpayer 30 fails to notify the Department in any case where notification 31 is required by Section 304(c) or 506(b), or fails to report a 32 change or correction which is treated in the same manner as 33 if it were a deficiency for federal income tax purposes, a SB1118 Enrolled -51- LRB9102874PTpkA 1 notice of deficiency may be issued (i) at any time or (ii) on 2 or after the effective date of this amendatory Act of the 3 91st General Assembly, at any time for the taxable year for 4 which the notification is required or for any taxable year to 5 which the taxpayer may carry an Article 2 credit, or a 6 Section 207 loss, earned, incurred, or used in the year for 7 which the notification is required; provided, however, that 8 the amount of any proposed assessment set forth in the notice 9 shall be limited to the amount of any deficiency resulting 10 under this Act from the recomputation of the taxpayer's net 11 income, Article 2 credits, or Section 207 loss earned, 12 incurred, or used in the taxable year for which the 13 notification is required after giving effect to the item or 14 items required to be reported. 15 (e) Report of federal change. 16 (1) Before the effective date of this amendatory 17 Act of the 91st General Assembly, in any case where 18 notification of an alteration is given as required by 19 Section 506(b), a notice of deficiency may be issued at 20 any time within 2 years after the date such notification 21 is given, provided, however, that the amount of any 22 proposed assessment set forth in such notice shall be 23 limited to the amount of any deficiency resulting under 24 this Act from recomputation of the taxpayer's net income, 25 net loss, or Article 2 credits for the taxable year after 26 giving effect to the item or items reflected in the 27 reported alteration. 28 (2) On and after the effective date of this 29 amendatory Act of the 91st General Assembly, in any case 30 where notification of an alteration is given as required 31 by Section 506(b), a notice of deficiency may be issued 32 at any time within 2 years after the date such 33 notification is given for the taxable year for which the 34 notification is given or for any taxable year to which SB1118 Enrolled -52- LRB9102874PTpkA 1 the taxpayer may carry an Article 2 credit, or a Section 2 207 loss, earned, incurred, or used in the year for which 3 the notification is given, provided, however, that the 4 amount of any proposed assessment set forth in such 5 notice shall be limited to the amount of any deficiency 6 resulting under this Act from recomputation of the 7 taxpayer's net income, Article 2 credits, or Section 207 8 loss earned, incurred, or used in the taxable year for 9 which the notification is given after giving effect to 10 the item or items reflected in the reported alteration. 11 (f) Extension by agreement. Where, before the expiration 12 of the time prescribed in this section for the issuance of a 13 notice of deficiency, both the Department and the taxpayer 14 shall have consented in writing to its issuance after such 15 time, such notice may be issued at any time prior to the 16 expiration of the period agreed upon. The period so agreed 17 upon may be extended by subsequent agreements in writing made 18 before the expiration of the period previously agreed upon. 19 (g) Erroneous refunds. In any case in which there has 20 been an erroneous refund of tax payable under this Act, a 21 notice of deficiency may be issued at any time within 2 years 22 from the making of such refund, or within 5 years from the 23 making of such refund if it appears that any part of the 24 refund was induced by fraud or the misrepresentation of a 25 material fact, provided, however, that the amount of any 26 proposed assessment set forth in such notice shall be limited 27 to the amount of such erroneous refund. 28 Beginning July 1, 1993, in any case in which there has 29 been a refund of tax payable under this Act attributable to a 30 net loss carryback as provided for in Section 207, and that 31 refund is subsequently determined to be an erroneous refund 32 due to a reduction in the amount of the net loss which was 33 originally carried back, a notice of deficiency for the 34 erroneous refund amount may be issued at any time during the SB1118 Enrolled -53- LRB9102874PTpkA 1 same time period in which a notice of deficiency can be 2 issued on the loss year creating the carryback amount and 3 subsequent erroneous refund. The amount of any proposed 4 assessment set forth in the notice shall be limited to the 5 amount of such erroneous refund. 6 (h) Time return deemed filed. For purposes of this 7 Section a tax return filed before the last day prescribed by 8 law (including any extension thereof) shall be deemed to have 9 been filed on such last day. 10 (i) Request for prompt determination of liability. For 11 purposes of Subsection (a)(1), in the case of a tax return 12 required under this Act in respect of a decedent, or by his 13 estate during the period of administration, or by a 14 corporation, the period referred to in such Subsection shall 15 be 18 months after a written request for prompt determination 16 of liability is filed with the Department (at such time and 17 in such form and manner as the Department shall by 18 regulations prescribe) by the executor, administrator, or 19 other fiduciary representing the estate of such decedent, or 20 by such corporation, but not more than 3 years after the date 21 the return was filed. This Subsection shall not apply in the 22 case of a corporation unless: 23 (1) (A) Such written request notifies the 24 Department that the corporation contemplates dissolution 25 at or before the expiration of such 18-month period, (B) 26 the dissolution is begun in good faith before the 27 expiration of such 18-month period, and (C) the 28 dissolution is completed; 29 (2) (A) Such written request notifies the 30 Department that a dissolution has in good faith been 31 begun, and (B) the dissolution is completed; or 32 (3) A dissolution has been completed at the time 33 such written request is made. 34 (j) Withholding tax. In the case of returns required SB1118 Enrolled -54- LRB9102874PTpkA 1 under Article 7 of this Act (with respect to any amounts 2 withheld as tax or any amounts required to have been withheld 3 as tax) a notice of deficiency shall be issued not later than 4 3 years after the 15th day of the 4th month following the 5 close of the calendar year in which such withholding was 6 required. 7 (k) Penalties for failure to make information reports. 8 A notice of deficiency for the penalties provided by 9 Subsection 1405.1(c) of this Act may not be issued more than 10 3 years after the due date of the reports with respect to 11 which the penalties are asserted. 12 (l) Penalty for failure to file withholding returns. A 13 notice of deficiency for penalties provided by Section 1004 14 of this Act for taxpayer's failure to file withholding 15 returns may not be issued more than three years after the 16 15th day of the 4th month following the close of the calendar 17 year in which the withholding giving rise to taxpayer's 18 obligation to file those returns occurred. 19 (m) Transferee liability. A notice of deficiency may be 20 issued to a transferee relative to a liability asserted under 21 Section 1405 during time periods defined as follows: 22 1) Initial Transferee. In the case of the 23 liability of an initial transferee, up to 2 years after 24 the expiration of the period of limitation for assessment 25 against the transferor, except that if a court proceeding 26 for review of the assessment against the transferor has 27 begun, then up to 2 years after the return of the 28 certified copy of the judgment in the court proceeding. 29 2) Transferee of Transferee. In the case of the 30 liability of a transferee, up to 2 years after the 31 expiration of the period of limitation for assessment 32 against the preceding transferee, but not more than 3 33 years after the expiration of the period of limitation 34 for assessment against the initial transferor; except SB1118 Enrolled -55- LRB9102874PTpkA 1 that if, before the expiration of the period of 2 limitation for the assessment of the liability of the 3 transferee, a court proceeding for the collection of the 4 tax or liability in respect thereof has been begun 5 against the initial transferor or the last preceding 6 transferee, as the case may be, then the period of 7 limitation for assessment of the liability of the 8 transferee shall expire 2 years after the return of the 9 certified copy of the judgment in the court proceeding. 10 (Source: P.A. 90-491, eff. 1-1-98.) 11 (35 ILCS 5/911) (from Ch. 120, par. 9-911) 12 Sec. 911. Limitations on Claims for Refund. 13 (a) In general. Except as otherwise provided in this 14 Act: 15 (1) A claim for refund shall be filed not later 16 than 3 years after the date the return was filed (in the 17 case of returns required under Article 7 of this Act 18 respecting any amounts withheld as tax, not later than 3 19 years after the 15th day of the 4th month following the 20 close of the calendar year in which such withholding was 21 made), or one year after the date the tax was paid, 22 whichever is the later; and 23 (2) No credit or refund shall be allowed or made 24 with respect to the year for which the claim was filed 25 unless such claim is filed within such period. 26 (b) Federal changes. 27 (1) In general. In any case where notification of 28 an alteration is required by Section 506 (b), a claim for 29 refund may be filed within 2 years after the date on 30 which such notification was due (regardless of whether 31 such notice was given), but the amount recoverable 32 pursuant to a claim filed under this Section shall be 33 limited to the amount of any overpayment resulting under SB1118 Enrolled -56- LRB9102874PTpkA 1 this Act from recomputation of the taxpayer's net income, 2 net loss, or Article 2 credits for the taxable year after 3 giving effect to the item or items reflected in the 4 alteration required to be reported. 5 (2) Tentative carryback adjustments paid before 6 January 1, 1974. If, as the result of the payment before 7 January 1, 1974 of a federal tentative carryback 8 adjustment, a notification of an alteration is required 9 under Section 506 (b), a claim for refund may be filed at 10 any time before January 1, 1976, but the amount 11 recoverable pursuant to a claim filed under this Section 12 shall be limited to the amount of any overpayment 13 resulting under this Act from recomputation of the 14 taxpayer's base income for the taxable year after giving 15 effect to the federal alteration resulting from the 16 tentative carryback adjustment irrespective of any 17 limitation imposed in paragraph (l) of this subsection. 18 (c) Extension by agreement. Where, before the 19 expiration of the time prescribed in this section for the 20 filing of a claim for refund, both the Department and the 21 claimant shall have consented in writing to its filing after 22 such time, such claim may be filed at any time prior to the 23 expiration of the period agreed upon. The period so agreed 24 upon may be extended by subsequent agreements in writing made 25 before the expiration of the period previously agreed upon. 26 (d) Limit on amount of credit or refund. 27 (1) Limit where claim filed within 3-year period. 28 If the claim was filed by the claimant during the 3-year 29 period prescribed in subsection (a), the amount of the 30 credit or refund shall not exceed the portion of the tax 31 paid within the period, immediately preceding the filing 32 of the claim, equal to 3 years plus the period of any 33 extension of time for filing the return. 34 (2) Limit where claim not filed within 3-year SB1118 Enrolled -57- LRB9102874PTpkA 1 period. If the claim was not filed within such 3-year 2 period, the amount of the credit or refund shall not 3 exceed the portion of the tax paid during the one year 4 immediately preceding the filing of the claim. 5 (e) Time return deemed filed. For purposes of this 6 section a tax return filed before the last day prescribed by 7 law for the filing of such return (including any extensions 8 thereof) shall be deemed to have been filed on such last day. 9 (f) No claim for refund based on the taxpayer's taking a 10 credit for estimated tax payments as provided by Section 601 11 (b) (2) or for any amount paid by a taxpayer pursuant to 12 Section 602(a) or for any amount of credit for tax withheld 13 pursuant to Section 701 may be filed more than 3 years after 14 the due date, as provided by Section 505, of the return which 15 was required to be filed relative to the taxable year for 16 which the payments were made or for which the tax was 17 withheld. The changes in this subsection (f) made by this 18 amendatory Act of 1987 shall apply to all taxable years 19 ending on or after December 31, 1969. 20 (g) Special Period of Limitation with Respect to Net 21 Loss Carrybacks. If the claim for refund relates to an 22 overpayment attributable to a net loss carryback as provided 23 by Section 207, in lieu of the 3 year period of limitation 24 prescribed in subsection (a), the period shall be that period 25 which ends 3 years after the time prescribed by law for 26 filing the return (including extensions thereof) for the 27 taxable year of the net loss which results in such carryback 28 (or, on and after the effective date of this amendatory Act 29 of the 91st General Assembly, with respect to a change in the 30 carryover of an Article 2 credit to a taxable year resulting 31 from the carryback of a Section 207 loss incurred in a 32 taxable year beginning on or after January 1, 2000, the 33 period shall be that period that ends 3 years after the time 34 prescribed by law for filing the return (including extensions SB1118 Enrolled -58- LRB9102874PTpkA 1 of that time) for that subsequent taxable year), or the 2 period prescribed in subsection (c) in respect of such 3 taxable year, whichever expires later. In the case of such a 4 claim, the amount of the refund may exceed the portion of the 5 tax paid within the period provided in subsection (d) to the 6 extent of the amount of the overpayment attributable to such 7 carryback. On and after the effective date of this amendatory 8 Act of the 91st General Assembly, if the claim for refund 9 relates to an overpayment attributable to the carryover of an 10 Article 2 credit, or of a Section 207 loss, earned, incurred 11 (in a taxable year beginning on or after January 1, 2000), or 12 used in a year for which a notification of a change affecting 13 federal taxable income must be filed under subsection (b) of 14 Section 506, the claim may be filed within the period 15 prescribed in paragraph (1) of subsection (b) in respect of 16 the year for which the notification is required. In the case 17 of such a claim, the amount of the refund may exceed the 18 portion of the tax paid within the period provided in 19 subsection (d) to the extent of the amount of the overpayment 20 attributable to the recomputation of the taxpayer's Article 2 21 credits, or Section 207 loss, earned, incurred, or used in 22 the taxable year for which the notification is given. 23 (Source: P.A. 90-491, eff. 1-1-98.) 24 Section 10. The Use Tax Act is amended by changing 25 Sections 3-30, 9, and 10 as follows: 26 (35 ILCS 105/3-30) (from Ch. 120, par. 439.3-30) 27 Sec. 3-30. Graphic arts production. For the purposes of 28 this Act, "graphic arts production" means printing, including 29 ink jet printing, by one or more of thecommonprocesses 30 described in Groups 323110 through 323122 of Subsector 323, 31 Groups 511110 through 511199 of Subsector 511, and Group 32 512230 of Subsector 512 of the North American Industry SB1118 Enrolled -59- LRB9102874PTpkA 1 Classification System published by the U.S. Office of 2 Management and Budget, 1997 editionor graphic arts3production services as those processes and services are4defined in Major Group 27 of the U. S. Standard Industrial5Classification Manual. Graphic arts production does not 6 include (i) the transfer of images onto paper or other 7 tangible personal property by means of photocopying or (ii) 8 final printed products in electronic or audio form, including 9 the production of software or audio-books. 10 (Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928; 11 86-953; 86-1394; 86-1475.) 12 (35 ILCS 105/9) (from Ch. 120, par. 439.9) 13 Sec. 9. Except as to motor vehicles, watercraft, 14 aircraft, and trailers that are required to be registered 15 with an agency of this State, each retailer required or 16 authorized to collect the tax imposed by this Act shall pay 17 to the Department the amount of such tax (except as otherwise 18 provided) at the time when he is required to file his return 19 for the period during which such tax was collected, less a 20 discount of 2.1% prior to January 1, 1990, and 1.75% on and 21 after January 1, 1990, or $5 per calendar year, whichever is 22 greater, which is allowed to reimburse the retailer for 23 expenses incurred in collecting the tax, keeping records, 24 preparing and filing returns, remitting the tax and supplying 25 data to the Department on request. In the case of retailers 26 who report and pay the tax on a transaction by transaction 27 basis, as provided in this Section, such discount shall be 28 taken with each such tax remittance instead of when such 29 retailer files his periodic return. A retailer need not 30 remit that part of any tax collected by him to the extent 31 that he is required to remit and does remit the tax imposed 32 by the Retailers' Occupation Tax Act, with respect to the 33 sale of the same property. SB1118 Enrolled -60- LRB9102874PTpkA 1 Where such tangible personal property is sold under a 2 conditional sales contract, or under any other form of sale 3 wherein the payment of the principal sum, or a part thereof, 4 is extended beyond the close of the period for which the 5 return is filed, the retailer, in collecting the tax (except 6 as to motor vehicles, watercraft, aircraft, and trailers that 7 are required to be registered with an agency of this State), 8 may collect for each tax return period, only the tax 9 applicable to that part of the selling price actually 10 received during such tax return period. 11 Except as provided in this Section, on or before the 12 twentieth day of each calendar month, such retailer shall 13 file a return for the preceding calendar month. Such return 14 shall be filed on forms prescribed by the Department and 15 shall furnish such information as the Department may 16 reasonably require. 17 The Department may require returns to be filed on a 18 quarterly basis. If so required, a return for each calendar 19 quarter shall be filed on or before the twentieth day of the 20 calendar month following the end of such calendar quarter. 21 The taxpayer shall also file a return with the Department for 22 each of the first two months of each calendar quarter, on or 23 before the twentieth day of the following calendar month, 24 stating: 25 1. The name of the seller; 26 2. The address of the principal place of business 27 from which he engages in the business of selling tangible 28 personal property at retail in this State; 29 3. The total amount of taxable receipts received by 30 him during the preceding calendar month from sales of 31 tangible personal property by him during such preceding 32 calendar month, including receipts from charge and time 33 sales, but less all deductions allowed by law; 34 4. The amount of credit provided in Section 2d of SB1118 Enrolled -61- LRB9102874PTpkA 1 this Act; 2 5. The amount of tax due; 3 5-5. The signature of the taxpayer; and 4 6. Such other reasonable information as the 5 Department may require. 6 If a taxpayer fails to sign a return within 30 days after 7 the proper notice and demand for signature by the Department, 8 the return shall be considered valid and any amount shown to 9 be due on the return shall be deemed assessed. 10 Beginning October 1, 1993, a taxpayer who has an average 11 monthly tax liability of $150,000 or more shall make all 12 payments required by rules of the Department by electronic 13 funds transfer. Beginning October 1, 1994, a taxpayer who has 14 an average monthly tax liability of $100,000 or more shall 15 make all payments required by rules of the Department by 16 electronic funds transfer. Beginning October 1, 1995, a 17 taxpayer who has an average monthly tax liability of $50,000 18 or more shall make all payments required by rules of the 19 Department by electronic funds transfer. Beginning October 1, 20 2000, a taxpayer who has an annual tax liability of $200,000 21 or more shall make all payments required by rules of the 22 Department by electronic funds transfer. The term "annual 23 tax liability" shall be the sum of the taxpayer's liabilities 24 under this Act, and under all other State and local 25 occupation and use tax laws administered by the Department, 26 for the immediately preceding calendar year. The term 27 "average monthly tax liability" means the sum of the 28 taxpayer's liabilities under this Act, and under all other 29 State and local occupation and use tax laws administered by 30 the Department, for the immediately preceding calendar year 31 divided by 12. 32 Before August 1 of each year beginning in 1993, the 33 Department shall notify all taxpayers required to make 34 payments by electronic funds transfer. All taxpayers required SB1118 Enrolled -62- LRB9102874PTpkA 1 to make payments by electronic funds transfer shall make 2 those payments for a minimum of one year beginning on October 3 1. 4 Any taxpayer not required to make payments by electronic 5 funds transfer may make payments by electronic funds transfer 6 with the permission of the Department. 7 All taxpayers required to make payment by electronic 8 funds transfer and any taxpayers authorized to voluntarily 9 make payments by electronic funds transfer shall make those 10 payments in the manner authorized by the Department. 11 The Department shall adopt such rules as are necessary to 12 effectuate a program of electronic funds transfer and the 13 requirements of this Section. 14 Before October 1, 2000, if the taxpayer's average monthly 15 tax liability to the Department under this Act, the 16 Retailers' Occupation Tax Act, the Service Occupation Tax 17 Act, the Service Use Tax Act was $10,000 or more during the 18 preceding 4 complete calendar quarters, he shall file a 19 return with the Department each month by the 20th day of the 20 month next following the month during which such tax 21 liability is incurred and shall make payments to the 22 Department on or before the 7th, 15th, 22nd and last day of 23 the month during which such liability is incurred. On and 24 after October 1, 2000, if the taxpayer's average monthly tax 25 liability to the Department under this Act, the Retailers' 26 Occupation Tax Act, the Service Occupation Tax Act, and the 27 Service Use Tax Act was $20,000 or more during the preceding 28 4 complete calendar quarters, he shall file a return with the 29 Department each month by the 20th day of the month next 30 following the month during which such tax liability is 31 incurred and shall make payment to the Department on or 32 before the 7th, 15th, 22nd and last day or the month during 33 which such liability is incurred. If the month during which 34 such tax liability is incurred began prior to January 1, SB1118 Enrolled -63- LRB9102874PTpkA 1 1985, each payment shall be in an amount equal to 1/4 of the 2 taxpayer's actual liability for the month or an amount set by 3 the Department not to exceed 1/4 of the average monthly 4 liability of the taxpayer to the Department for the preceding 5 4 complete calendar quarters (excluding the month of highest 6 liability and the month of lowest liability in such 4 quarter 7 period). If the month during which such tax liability is 8 incurred begins on or after January 1, 1985, and prior to 9 January 1, 1987, each payment shall be in an amount equal to 10 22.5% of the taxpayer's actual liability for the month or 11 27.5% of the taxpayer's liability for the same calendar month 12 of the preceding year. If the month during which such tax 13 liability is incurred begins on or after January 1, 1987, and 14 prior to January 1, 1988, each payment shall be in an amount 15 equal to 22.5% of the taxpayer's actual liability for the 16 month or 26.25% of the taxpayer's liability for the same 17 calendar month of the preceding year. If the month during 18 which such tax liability is incurred begins on or after 19 January 1, 1988, and prior to January 1, 1989, or begins on 20 or after January 1, 1996, each payment shall be in an amount 21 equal to 22.5% of the taxpayer's actual liability for the 22 month or 25% of the taxpayer's liability for the same 23 calendar month of the preceding year. If the month during 24 which such tax liability is incurred begins on or after 25 January 1, 1989, and prior to January 1, 1996, each payment 26 shall be in an amount equal to 22.5% of the taxpayer's actual 27 liability for the month or 25% of the taxpayer's liability 28 for the same calendar month of the preceding year or 100% of 29 the taxpayer's actual liability for the quarter monthly 30 reporting period. The amount of such quarter monthly 31 payments shall be credited against the final tax liability of 32 the taxpayer's return for that month. Before October 1, 33 2000, once applicable, the requirement of the making of 34 quarter monthly payments to the Department shall continue SB1118 Enrolled -64- LRB9102874PTpkA 1 until such taxpayer's average monthly liability to the 2 Department during the preceding 4 complete calendar quarters 3 (excluding the month of highest liability and the month of 4 lowest liability) is less than $9,000, or until such 5 taxpayer's average monthly liability to the Department as 6 computed for each calendar quarter of the 4 preceding 7 complete calendar quarter period is less than $10,000. 8 However, if a taxpayer can show the Department that a 9 substantial change in the taxpayer's business has occurred 10 which causes the taxpayer to anticipate that his average 11 monthly tax liability for the reasonably foreseeable future 12 will fall below the $10,000 threshold stated above, then such 13 taxpayer may petition the Department for change in such 14 taxpayer's reporting status. On and after October 1, 2000, 15 once applicable, the requirement of the making of quarter 16 monthly payments to the Department shall continue until such 17 taxpayer's average monthly liability to the Department during 18 the preceding 4 complete calendar quarters (excluding the 19 month of highest liability and the month of lowest liability) 20 is less than $19,000 or until such taxpayer's average monthly 21 liability to the Department as computed for each calendar 22 quarter of the 4 preceding complete calendar quarter period 23 is less than $20,000. However, if a taxpayer can show the 24 Department that a substantial change in the taxpayer's 25 business has occurred which causes the taxpayer to anticipate 26 that his average monthly tax liability for the reasonably 27 foreseeable future will fall below the $20,000 threshold 28 stated above, then such taxpayer may petition the Department 29 for a change in such taxpayer's reporting status. The 30 Department shall change such taxpayer's reporting status 31 unless it finds that such change is seasonal in nature and 32 not likely to be long term. If any such quarter monthly 33 payment is not paid at the time or in the amount required by 34 this Section, then the taxpayer shall be liable for penalties SB1118 Enrolled -65- LRB9102874PTpkA 1 and interest on the difference between the minimum amount due 2 and the amount of such quarter monthly payment actually and 3 timely paid, except insofar as the taxpayer has previously 4 made payments for that month to the Department in excess of 5 the minimum payments previously due as provided in this 6 Section. The Department shall make reasonable rules and 7 regulations to govern the quarter monthly payment amount and 8 quarter monthly payment dates for taxpayers who file on other 9 than a calendar monthly basis. 10 If any such payment provided for in this Section exceeds 11 the taxpayer's liabilities under this Act, the Retailers' 12 Occupation Tax Act, the Service Occupation Tax Act and the 13 Service Use Tax Act, as shown by an original monthly return, 14 the Department shall issue to the taxpayer a credit 15 memorandum no later than 30 days after the date of payment, 16 which memorandum may be submitted by the taxpayer to the 17 Department in payment of tax liability subsequently to be 18 remitted by the taxpayer to the Department or be assigned by 19 the taxpayer to a similar taxpayer under this Act, the 20 Retailers' Occupation Tax Act, the Service Occupation Tax Act 21 or the Service Use Tax Act, in accordance with reasonable 22 rules and regulations to be prescribed by the Department, 23 except that if such excess payment is shown on an original 24 monthly return and is made after December 31, 1986, no credit 25 memorandum shall be issued, unless requested by the taxpayer. 26 If no such request is made, the taxpayer may credit such 27 excess payment against tax liability subsequently to be 28 remitted by the taxpayer to the Department under this Act, 29 the Retailers' Occupation Tax Act, the Service Occupation Tax 30 Act or the Service Use Tax Act, in accordance with reasonable 31 rules and regulations prescribed by the Department. If the 32 Department subsequently determines that all or any part of 33 the credit taken was not actually due to the taxpayer, the 34 taxpayer's 2.1% or 1.75% vendor's discount shall be reduced SB1118 Enrolled -66- LRB9102874PTpkA 1 by 2.1% or 1.75% of the difference between the credit taken 2 and that actually due, and the taxpayer shall be liable for 3 penalties and interest on such difference. 4 If the retailer is otherwise required to file a monthly 5 return and if the retailer's average monthly tax liability to 6 the Department does not exceed $200, the Department may 7 authorize his returns to be filed on a quarter annual basis, 8 with the return for January, February, and March of a given 9 year being due by April 20 of such year; with the return for 10 April, May and June of a given year being due by July 20 of 11 such year; with the return for July, August and September of 12 a given year being due by October 20 of such year, and with 13 the return for October, November and December of a given year 14 being due by January 20 of the following year. 15 If the retailer is otherwise required to file a monthly 16 or quarterly return and if the retailer's average monthly tax 17 liability to the Department does not exceed $50, the 18 Department may authorize his returns to be filed on an annual 19 basis, with the return for a given year being due by January 20 20 of the following year. 21 Such quarter annual and annual returns, as to form and 22 substance, shall be subject to the same requirements as 23 monthly returns. 24 Notwithstanding any other provision in this Act 25 concerning the time within which a retailer may file his 26 return, in the case of any retailer who ceases to engage in a 27 kind of business which makes him responsible for filing 28 returns under this Act, such retailer shall file a final 29 return under this Act with the Department not more than one 30 month after discontinuing such business. 31 In addition, with respect to motor vehicles, watercraft, 32 aircraft, and trailers that are required to be registered 33 with an agency of this State, every retailer selling this 34 kind of tangible personal property shall file, with the SB1118 Enrolled -67- LRB9102874PTpkA 1 Department, upon a form to be prescribed and supplied by the 2 Department, a separate return for each such item of tangible 3 personal property which the retailer sells, except that 4 where, in the same transaction, a retailer of aircraft, 5 watercraft, motor vehicles or trailers transfers more than 6 one aircraft, watercraft, motor vehicle or trailer to another 7 aircraft, watercraft, motor vehicle or trailer retailer for 8 the purpose of resale, that seller for resale may report the 9 transfer of all the aircraft, watercraft, motor vehicles or 10 trailers involved in that transaction to the Department on 11 the same uniform invoice-transaction reporting return form. 12 For purposes of this Section, "watercraft" means a Class 2, 13 Class 3, or Class 4 watercraft as defined in Section 3-2 of 14 the Boat Registration and Safety Act, a personal watercraft, 15 or any boat equipped with an inboard motor. 16 The transaction reporting return in the case of motor 17 vehicles or trailers that are required to be registered with 18 an agency of this State, shall be the same document as the 19 Uniform Invoice referred to in Section 5-402 of the Illinois 20 Vehicle Code and must show the name and address of the 21 seller; the name and address of the purchaser; the amount of 22 the selling price including the amount allowed by the 23 retailer for traded-in property, if any; the amount allowed 24 by the retailer for the traded-in tangible personal property, 25 if any, to the extent to which Section 2 of this Act allows 26 an exemption for the value of traded-in property; the balance 27 payable after deducting such trade-in allowance from the 28 total selling price; the amount of tax due from the retailer 29 with respect to such transaction; the amount of tax collected 30 from the purchaser by the retailer on such transaction (or 31 satisfactory evidence that such tax is not due in that 32 particular instance, if that is claimed to be the fact); the 33 place and date of the sale; a sufficient identification of 34 the property sold; such other information as is required in SB1118 Enrolled -68- LRB9102874PTpkA 1 Section 5-402 of the Illinois Vehicle Code, and such other 2 information as the Department may reasonably require. 3 The transaction reporting return in the case of 4 watercraft and aircraft must show the name and address of the 5 seller; the name and address of the purchaser; the amount of 6 the selling price including the amount allowed by the 7 retailer for traded-in property, if any; the amount allowed 8 by the retailer for the traded-in tangible personal property, 9 if any, to the extent to which Section 2 of this Act allows 10 an exemption for the value of traded-in property; the balance 11 payable after deducting such trade-in allowance from the 12 total selling price; the amount of tax due from the retailer 13 with respect to such transaction; the amount of tax collected 14 from the purchaser by the retailer on such transaction (or 15 satisfactory evidence that such tax is not due in that 16 particular instance, if that is claimed to be the fact); the 17 place and date of the sale, a sufficient identification of 18 the property sold, and such other information as the 19 Department may reasonably require. 20 Such transaction reporting return shall be filed not 21 later than 20 days after the date of delivery of the item 22 that is being sold, but may be filed by the retailer at any 23 time sooner than that if he chooses to do so. The 24 transaction reporting return and tax remittance or proof of 25 exemption from the tax that is imposed by this Act may be 26 transmitted to the Department by way of the State agency with 27 which, or State officer with whom, the tangible personal 28 property must be titled or registered (if titling or 29 registration is required) if the Department and such agency 30 or State officer determine that this procedure will expedite 31 the processing of applications for title or registration. 32 With each such transaction reporting return, the retailer 33 shall remit the proper amount of tax due (or shall submit 34 satisfactory evidence that the sale is not taxable if that is SB1118 Enrolled -69- LRB9102874PTpkA 1 the case), to the Department or its agents, whereupon the 2 Department shall issue, in the purchaser's name, a tax 3 receipt (or a certificate of exemption if the Department is 4 satisfied that the particular sale is tax exempt) which such 5 purchaser may submit to the agency with which, or State 6 officer with whom, he must title or register the tangible 7 personal property that is involved (if titling or 8 registration is required) in support of such purchaser's 9 application for an Illinois certificate or other evidence of 10 title or registration to such tangible personal property. 11 No retailer's failure or refusal to remit tax under this 12 Act precludes a user, who has paid the proper tax to the 13 retailer, from obtaining his certificate of title or other 14 evidence of title or registration (if titling or registration 15 is required) upon satisfying the Department that such user 16 has paid the proper tax (if tax is due) to the retailer. The 17 Department shall adopt appropriate rules to carry out the 18 mandate of this paragraph. 19 If the user who would otherwise pay tax to the retailer 20 wants the transaction reporting return filed and the payment 21 of tax or proof of exemption made to the Department before 22 the retailer is willing to take these actions and such user 23 has not paid the tax to the retailer, such user may certify 24 to the fact of such delay by the retailer, and may (upon the 25 Department being satisfied of the truth of such 26 certification) transmit the information required by the 27 transaction reporting return and the remittance for tax or 28 proof of exemption directly to the Department and obtain his 29 tax receipt or exemption determination, in which event the 30 transaction reporting return and tax remittance (if a tax 31 payment was required) shall be credited by the Department to 32 the proper retailer's account with the Department, but 33 without the 2.1% or 1.75% discount provided for in this 34 Section being allowed. When the user pays the tax directly SB1118 Enrolled -70- LRB9102874PTpkA 1 to the Department, he shall pay the tax in the same amount 2 and in the same form in which it would be remitted if the tax 3 had been remitted to the Department by the retailer. 4 Where a retailer collects the tax with respect to the 5 selling price of tangible personal property which he sells 6 and the purchaser thereafter returns such tangible personal 7 property and the retailer refunds the selling price thereof 8 to the purchaser, such retailer shall also refund, to the 9 purchaser, the tax so collected from the purchaser. When 10 filing his return for the period in which he refunds such tax 11 to the purchaser, the retailer may deduct the amount of the 12 tax so refunded by him to the purchaser from any other use 13 tax which such retailer may be required to pay or remit to 14 the Department, as shown by such return, if the amount of the 15 tax to be deducted was previously remitted to the Department 16 by such retailer. If the retailer has not previously 17 remitted the amount of such tax to the Department, he is 18 entitled to no deduction under this Act upon refunding such 19 tax to the purchaser. 20 Any retailer filing a return under this Section shall 21 also include (for the purpose of paying tax thereon) the 22 total tax covered by such return upon the selling price of 23 tangible personal property purchased by him at retail from a 24 retailer, but as to which the tax imposed by this Act was not 25 collected from the retailer filing such return, and such 26 retailer shall remit the amount of such tax to the Department 27 when filing such return. 28 If experience indicates such action to be practicable, 29 the Department may prescribe and furnish a combination or 30 joint return which will enable retailers, who are required to 31 file returns hereunder and also under the Retailers' 32 Occupation Tax Act, to furnish all the return information 33 required by both Acts on the one form. 34 Where the retailer has more than one business registered SB1118 Enrolled -71- LRB9102874PTpkA 1 with the Department under separate registration under this 2 Act, such retailer may not file each return that is due as a 3 single return covering all such registered businesses, but 4 shall file separate returns for each such registered 5 business. 6 Beginning January 1, 1990, each month the Department 7 shall pay into the State and Local Sales Tax Reform Fund, a 8 special fund in the State Treasury which is hereby created, 9 the net revenue realized for the preceding month from the 1% 10 tax on sales of food for human consumption which is to be 11 consumed off the premises where it is sold (other than 12 alcoholic beverages, soft drinks and food which has been 13 prepared for immediate consumption) and prescription and 14 nonprescription medicines, drugs, medical appliances and 15 insulin, urine testing materials, syringes and needles used 16 by diabetics. 17 Beginning January 1, 1990, each month the Department 18 shall pay into the County and Mass Transit District Fund 4% 19 of the net revenue realized for the preceding month from the 20 6.25% general rate on the selling price of tangible personal 21 property which is purchased outside Illinois at retail from a 22 retailer and which is titled or registered by an agency of 23 this State's government. 24 Beginning January 1, 1990, each month the Department 25 shall pay into the State and Local Sales Tax Reform Fund, a 26 special fund in the State Treasury, 20% of the net revenue 27 realized for the preceding month from the 6.25% general rate 28 on the selling price of tangible personal property, other 29 than tangible personal property which is purchased outside 30 Illinois at retail from a retailer and which is titled or 31 registered by an agency of this State's government. 32 Beginning January 1, 1990, each month the Department 33 shall pay into the Local Government Tax Fund 16% of the net 34 revenue realized for the preceding month from the 6.25% SB1118 Enrolled -72- LRB9102874PTpkA 1 general rate on the selling price of tangible personal 2 property which is purchased outside Illinois at retail from a 3 retailer and which is titled or registered by an agency of 4 this State's government. 5 Of the remainder of the moneys received by the Department 6 pursuant to this Act, (a) 1.75% thereof shall be paid into 7 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2% 8 and on and after July 1, 1989, 3.8% thereof shall be paid 9 into the Build Illinois Fund; provided, however, that if in 10 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%, 11 as the case may be, of the moneys received by the Department 12 and required to be paid into the Build Illinois Fund pursuant 13 to Section 3 of the Retailers' Occupation Tax Act, Section 9 14 of the Use Tax Act, Section 9 of the Service Use Tax Act, and 15 Section 9 of the Service Occupation Tax Act, such Acts being 16 hereinafter called the "Tax Acts" and such aggregate of 2.2% 17 or 3.8%, as the case may be, of moneys being hereinafter 18 called the "Tax Act Amount", and (2) the amount transferred 19 to the Build Illinois Fund from the State and Local Sales Tax 20 Reform Fund shall be less than the Annual Specified Amount 21 (as defined in Section 3 of the Retailers' Occupation Tax 22 Act), an amount equal to the difference shall be immediately 23 paid into the Build Illinois Fund from other moneys received 24 by the Department pursuant to the Tax Acts; and further 25 provided, that if on the last business day of any month the 26 sum of (1) the Tax Act Amount required to be deposited into 27 the Build Illinois Bond Account in the Build Illinois Fund 28 during such month and (2) the amount transferred during such 29 month to the Build Illinois Fund from the State and Local 30 Sales Tax Reform Fund shall have been less than 1/12 of the 31 Annual Specified Amount, an amount equal to the difference 32 shall be immediately paid into the Build Illinois Fund from 33 other moneys received by the Department pursuant to the Tax 34 Acts; and, further provided, that in no event shall the SB1118 Enrolled -73- LRB9102874PTpkA 1 payments required under the preceding proviso result in 2 aggregate payments into the Build Illinois Fund pursuant to 3 this clause (b) for any fiscal year in excess of the greater 4 of (i) the Tax Act Amount or (ii) the Annual Specified Amount 5 for such fiscal year; and, further provided, that the amounts 6 payable into the Build Illinois Fund under this clause (b) 7 shall be payable only until such time as the aggregate amount 8 on deposit under each trust indenture securing Bonds issued 9 and outstanding pursuant to the Build Illinois Bond Act is 10 sufficient, taking into account any future investment income, 11 to fully provide, in accordance with such indenture, for the 12 defeasance of or the payment of the principal of, premium, if 13 any, and interest on the Bonds secured by such indenture and 14 on any Bonds expected to be issued thereafter and all fees 15 and costs payable with respect thereto, all as certified by 16 the Director of the Bureau of the Budget. If on the last 17 business day of any month in which Bonds are outstanding 18 pursuant to the Build Illinois Bond Act, the aggregate of the 19 moneys deposited in the Build Illinois Bond Account in the 20 Build Illinois Fund in such month shall be less than the 21 amount required to be transferred in such month from the 22 Build Illinois Bond Account to the Build Illinois Bond 23 Retirement and Interest Fund pursuant to Section 13 of the 24 Build Illinois Bond Act, an amount equal to such deficiency 25 shall be immediately paid from other moneys received by the 26 Department pursuant to the Tax Acts to the Build Illinois 27 Fund; provided, however, that any amounts paid to the Build 28 Illinois Fund in any fiscal year pursuant to this sentence 29 shall be deemed to constitute payments pursuant to clause (b) 30 of the preceding sentence and shall reduce the amount 31 otherwise payable for such fiscal year pursuant to clause (b) 32 of the preceding sentence. The moneys received by the 33 Department pursuant to this Act and required to be deposited 34 into the Build Illinois Fund are subject to the pledge, claim SB1118 Enrolled -74- LRB9102874PTpkA 1 and charge set forth in Section 12 of the Build Illinois Bond 2 Act. 3 Subject to payment of amounts into the Build Illinois 4 Fund as provided in the preceding paragraph or in any 5 amendment thereto hereafter enacted, the following specified 6 monthly installment of the amount requested in the 7 certificate of the Chairman of the Metropolitan Pier and 8 Exposition Authority provided under Section 8.25f of the 9 State Finance Act, but not in excess of the sums designated 10 as "Total Deposit", shall be deposited in the aggregate from 11 collections under Section 9 of the Use Tax Act, Section 9 of 12 the Service Use Tax Act, Section 9 of the Service Occupation 13 Tax Act, and Section 3 of the Retailers' Occupation Tax Act 14 into the McCormick Place Expansion Project Fund in the 15 specified fiscal years. 16 Fiscal Year Total Deposit 17 1993 $0 18 1994 53,000,000 19 1995 58,000,000 20 1996 61,000,000 21 1997 64,000,000 22 1998 68,000,000 23 1999 71,000,000 24 2000 75,000,000 25 2001 80,000,000 26 2002 84,000,000 27 2003 89,000,000 28 2004 93,000,000 29 2005 97,000,000 30 2006 102,000,000 31 2007 and 106,000,000 32 each fiscal year 33 thereafter that bonds 34 are outstanding under SB1118 Enrolled -75- LRB9102874PTpkA 1 Section 13.2 of the 2 Metropolitan Pier and 3 Exposition Authority 4 Act, but not after fiscal year 2029. 5 Beginning July 20, 1993 and in each month of each fiscal 6 year thereafter, one-eighth of the amount requested in the 7 certificate of the Chairman of the Metropolitan Pier and 8 Exposition Authority for that fiscal year, less the amount 9 deposited into the McCormick Place Expansion Project Fund by 10 the State Treasurer in the respective month under subsection 11 (g) of Section 13 of the Metropolitan Pier and Exposition 12 Authority Act, plus cumulative deficiencies in the deposits 13 required under this Section for previous months and years, 14 shall be deposited into the McCormick Place Expansion Project 15 Fund, until the full amount requested for the fiscal year, 16 but not in excess of the amount specified above as "Total 17 Deposit", has been deposited. 18 Subject to payment of amounts into the Build Illinois 19 Fund and the McCormick Place Expansion Project Fund pursuant 20 to the preceding paragraphs or in any amendment thereto 21 hereafter enacted, each month the Department shall pay into 22 the Local Government Distributive Fund .4% of the net revenue 23 realized for the preceding month from the 5% general rate, or 24 .4% of 80% of the net revenue realized for the preceding 25 month from the 6.25% general rate, as the case may be, on the 26 selling price of tangible personal property which amount 27 shall, subject to appropriation, be distributed as provided 28 in Section 2 of the State Revenue Sharing Act. No payments or 29 distributions pursuant to this paragraph shall be made if the 30 tax imposed by this Act on photoprocessing products is 31 declared unconstitutional, or if the proceeds from such tax 32 are unavailable for distribution because of litigation. 33 Subject to payment of amounts into the Build Illinois 34 Fund, the McCormick Place Expansion Project Fund, and the SB1118 Enrolled -76- LRB9102874PTpkA 1 Local Government Distributive Fund pursuant to the preceding 2 paragraphs or in any amendments thereto hereafter enacted, 3 beginning July 1, 1993, the Department shall each month pay 4 into the Illinois Tax Increment Fund 0.27% of 80% of the net 5 revenue realized for the preceding month from the 6.25% 6 general rate on the selling price of tangible personal 7 property. 8 Of the remainder of the moneys received by the Department 9 pursuant to this Act, 75% thereof shall be paid into the 10 State Treasury and 25% shall be reserved in a special account 11 and used only for the transfer to the Common School Fund as 12 part of the monthly transfer from the General Revenue Fund in 13 accordance with Section 8a of the State Finance Act. 14 As soon as possible after the first day of each month, 15 upon certification of the Department of Revenue, the 16 Comptroller shall order transferred and the Treasurer shall 17 transfer from the General Revenue Fund to the Motor Fuel Tax 18 Fund an amount equal to 1.7% of 80% of the net revenue 19 realized under this Act for the second preceding month; 20 except that this transfer shall not be made for the months 21 February through June of 1992. 22 Net revenue realized for a month shall be the revenue 23 collected by the State pursuant to this Act, less the amount 24 paid out during that month as refunds to taxpayers for 25 overpayment of liability. 26 For greater simplicity of administration, manufacturers, 27 importers and wholesalers whose products are sold at retail 28 in Illinois by numerous retailers, and who wish to do so, may 29 assume the responsibility for accounting and paying to the 30 Department all tax accruing under this Act with respect to 31 such sales, if the retailers who are affected do not make 32 written objection to the Department to this arrangement. 33 (Source: P.A. 89-379, eff. 1-1-96; 89-626, eff. 8-9-96; 34 90-491, eff. 1-1-99; 90-612, eff. 7-8-98.) SB1118 Enrolled -77- LRB9102874PTpkA 1 (35 ILCS 105/10) (from Ch. 120, par. 439.10) 2 Sec. 10. Except as to motor vehicles and aircraft, when 3 tangible personal property is purchased from a retailer for 4 use in this State by a purchaser who did not pay the tax 5 imposed by this Act to the retailer, and who does not file 6 returns with the Department as a retailer under Section 9 of 7 this Act, such purchaser (by the last day of the month 8 following the calendar month in which such purchaser makes 9 any payment upon the selling price of such property) shall, 10 except as provided in this Section, file a return with the 11 Department and pay the tax upon that portion of the selling 12 price so paid by the purchaser during the preceding calendar 13 month. When tangible personal property, including but not 14 limited to motor vehicles and aircraft, is purchased by a 15 lessor, under a lease for one year or longer, executed or in 16 effect at the time of purchase to an interstate carrier for 17 hire, who did not pay the tax imposed by this Act to the 18 retailer, such lessor (by the last day of the month following 19 the calendar month in which such property reverts to the use 20 of such lessor) shall file a return with the Department and 21 pay the tax upon the fair market value of such property on 22 the date of such reversion. However, in determining the fair 23 market value at the time of reversion, the fair market value 24 of such property shall not exceed the original purchase price 25 of the property that was paid by the lessor at the time of 26 purchase. Such return shall be filed on a form prescribed 27 by the Department and shall contain such information as the 28 Department may reasonably require. Such return and payment 29 from the purchaser shall be submitted to the Department 30 sooner than the last day of the month after the month in 31 which the purchase is made to the extent that that may be 32 necessary in order to secure the title to a motor vehicle or 33 the certificate of registration for an aircraft. However, 34 except as to motor vehicles and aircraft, if the purchaser's SB1118 Enrolled -78- LRB9102874PTpkA 1 annual use tax liability does not exceed $600, the purchaser 2 may file the return on an annual basis on or before April 3 15th of the year following the year use tax liability was 4 incurred. 5 In addition with respect to motor vehicles and aircraft, 6 a purchaser of such tangible personal property for use in 7 this State, who purchases such tangible personal property 8 from an out-of-state retailer, shall file with the 9 Department, upon a form to be prescribed and supplied by the 10 Department, a return for each such item of tangible personal 11 property purchased. Such return in the case of motor 12 vehicles and aircraft must show the name and address of the 13 seller, the name, address of purchaser, the amount of the 14 selling price including the amount allowed by the retailer 15 for traded in property, if any; the amount allowed by the 16 retailer for the traded-in tangible personal property, if 17 any, to the extent to which Section 2 of this Act allows an 18 exemption for the value of traded-in property; the balance 19 payable after deducting such trade-in allowance from the 20 total selling price; the amount of tax due from the purchaser 21 with respect to such transaction; the amount of tax collected 22 from the purchaser by the retailer on such transaction (or 23 satisfactory evidence that such tax is not due in that 24 particular instance if that is claimed to be the fact); the 25 place and date of the sale, a sufficient identification of 26 the property sold, and such other information as the 27 Department may reasonably require. 28 Such return shall be filed not later than 30 days after 29 such motor vehicle or aircraft is brought into this State for 30 use. 31 The return and tax remittance or proof of exemption from 32 the tax that is imposed by this Act may be transmitted to the 33 Department by way of the State agency with which, or State 34 officer with whom, the tangible personal property must be SB1118 Enrolled -79- LRB9102874PTpkA 1 titled or registered (if titling or registration is required) 2 if the Department and such agency or State officer determine 3 that this procedure will expedite the processing of 4 applications for title or registration. 5 With each such return, the purchaser shall remit the 6 proper amount of tax due (or shall submit satisfactory 7 evidence that the sale is not taxable if that is the case), 8 to the Department or its agents, whereupon the Department 9 shall issue, in the purchaser's name, a tax receipt (or a 10 certificate of exemption if the Department is satisfied that 11 the particular sale is tax exempt) which such purchaser may 12 submit to the agency with which, or State officer with whom, 13 he must title or register the tangible personal property that 14 is involved (if titling or registration is required) in 15 support of such purchaser's application for an Illinois 16 certificate or other evidence of title or registration to 17 such tangible personal property. 18 When a purchaser pays a tax imposed by this Act directly 19 to the Department, the Department (upon request therefor from 20 such purchaser) shall issue an appropriate receipt to such 21 purchaser showing that he has paid such tax to the 22 Department. Such receipt shall be sufficient to relieve the 23 purchaser from further liability for the tax to which such 24 receipt may refer. 25 A user who is liable to pay use tax directly to the 26 Department only occasionally and not on a frequently 27 recurring basis, and who is not required to file returns with 28 the Department as a retailer under Section 9 of this Act, or 29 under the "Retailers' Occupation Tax Act", or as a registrant 30 with the Department under the "Service Occupation Tax Act" or 31 the "Service Use Tax Act", need not register with the 32 Department. However, if such a user has a frequently 33 recurring direct use tax liability to pay to the Department, 34 such user shall be required to register with the Department SB1118 Enrolled -80- LRB9102874PTpkA 1 on forms prescribed by the Department and to obtain and 2 display a certificate of registration from the Department. 3 In that event, all of the provisions of Section 9 of this Act 4 concerning the filing of regular monthly, quarterly or annual 5 tax returns and all of the provisions of Section 2a of the 6 "Retailers' Occupation Tax Act" concerning the requirements 7 for registrants to post bond or other security with the 8 Department, as the provisions of such sections now exist or 9 may hereafter be amended, shall apply to such users to the 10 same extent as if such provisions were included herein. 11 (Source: P.A. 87-876.) 12 Section 15. The Service Use Tax Act is amended by 13 changing Sections 3-10, 3-30, and 9 as follows: 14 (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10) 15 Sec. 3-10. Rate of tax. Unless otherwise provided in 16 this Section, the tax imposed by this Act is at the rate of 17 6.25% of the selling price of tangible personal property 18 transferred as an incident to the sale of service, but, for 19 the purpose of computing this tax, in no event shall the 20 selling price be less than the cost price of the property to 21 the serviceman. 22 With respect to gasohol, as defined in the Use Tax Act, 23 the tax imposed by this Act applies to 70% of the selling 24 price of property transferred as an incident to the sale of 25 service on or after January 1, 1990, and before July 1, 2003, 26 and to 100% of the selling price thereafter. 27 At the election of any registered serviceman made for 28 each fiscal year, sales of service in which the aggregate 29 annual cost price of tangible personal property transferred 30 as an incident to the sales of service is less than 35%, or 31 75% in the case of servicemen transferring prescription drugs 32 or servicemen engaged in graphic arts production, of the SB1118 Enrolled -81- LRB9102874PTpkA 1 aggregate annual total gross receipts from all sales of 2 service, the tax imposed by this Act shall be based on the 3 serviceman's cost price of the tangible personal property 4 transferred as an incident to the sale of those services. 5 The tax shall be imposed at the rate of 1% on food 6 prepared for immediate consumption and transferred incident 7 to a sale of service subject to this Act or the Service 8 Occupation Tax Act by an entity licensed under the Hospital 9 Licensing Act,orthe Nursing Home Care Act, or the Child 10 Care Act of 1969. The tax shall also be imposed at the rate 11 of 1% on food for human consumption that is to be consumed 12 off the premises where it is sold (other than alcoholic 13 beverages, soft drinks, and food that has been prepared for 14 immediate consumption and is not otherwise included in this 15 paragraph) and prescription and nonprescription medicines, 16 drugs, medical appliances, modifications to a motor vehicle 17 for the purpose of rendering it usable by a disabled person, 18 and insulin, urine testing materials, syringes, and needles 19 used by diabetics, for human use. For the purposes of this 20 Section, the term "soft drinks" means any complete, finished, 21 ready-to-use, non-alcoholic drink, whether carbonated or not, 22 including but not limited to soda water, cola, fruit juice, 23 vegetable juice, carbonated water, and all other preparations 24 commonly known as soft drinks of whatever kind or description 25 that are contained in any closed or sealed bottle, can, 26 carton, or container, regardless of size. "Soft drinks" does 27 not include coffee, tea, non-carbonated water, infant 28 formula, milk or milk products as defined in the Grade A 29 Pasteurized Milk and Milk Products Act, or drinks containing 30 50% or more natural fruit or vegetable juice. 31 Notwithstanding any other provisions of this Act, "food 32 for human consumption that is to be consumed off the premises 33 where it is sold" includes all food sold through a vending 34 machine, except soft drinks and food products that are SB1118 Enrolled -82- LRB9102874PTpkA 1 dispensed hot from a vending machine, regardless of the 2 location of the vending machine. 3 If the property that is acquired from a serviceman is 4 acquired outside Illinois and used outside Illinois before 5 being brought to Illinois for use here and is taxable under 6 this Act, the "selling price" on which the tax is computed 7 shall be reduced by an amount that represents a reasonable 8 allowance for depreciation for the period of prior 9 out-of-state use. 10 (Source: P.A. 89-359, eff. 8-17-95; 89-420, eff. 6-1-96; 11 89-463, eff. 5-31-96; 89-626, eff. 8-9-96; 90-605, eff. 12 6-30-98; 90-606, eff. 6-30-98.) 13 (35 ILCS 110/3-30) (from Ch. 120, par. 439.33-30) 14 Sec. 3-30. Graphic arts production. For the purposes of 15 this Act, "graphic arts production" means printing, including 16 ink jet printing, by one or more of thecommonprocesses 17 described in Groups 323110 through 323122 of Subsector 323, 18 Groups 511110 through 511199 of Subsector 511, and Group 19 512230 of Subsector 512 of the North American Industry 20 Classification System published by the U.S. Office of 21 Management and Budget, 1997 editionor graphic arts22production services as those processes and services are23defined in the Major Group 27 of the U.S. Standard Industrial24Classification Manual. Graphic arts production does not 25 include (i) the transfer of images onto paper or other 26 tangible personal property by means of photocopying or (ii) 27 final printed products in electronic or audio form, including 28 the production of software or audio-books. 29 (Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928; 30 86-1028; 86-1475.) 31 (35 ILCS 110/9) (from Ch. 120, par. 439.39) 32 Sec. 9. Each serviceman required or authorized to SB1118 Enrolled -83- LRB9102874PTpkA 1 collect the tax herein imposed shall pay to the Department 2 the amount of such tax (except as otherwise provided) at the 3 time when he is required to file his return for the period 4 during which such tax was collected, less a discount of 2.1% 5 prior to January 1, 1990 and 1.75% on and after January 1, 6 1990, or $5 per calendar year, whichever is greater, which is 7 allowed to reimburse the serviceman for expenses incurred in 8 collecting the tax, keeping records, preparing and filing 9 returns, remitting the tax and supplying data to the 10 Department on request. A serviceman need not remit that part 11 of any tax collected by him to the extent that he is required 12 to pay and does pay the tax imposed by the Service Occupation 13 Tax Act with respect to his sale of service involving the 14 incidental transfer by him of the same property. 15 Except as provided hereinafter in this Section, on or 16 before the twentieth day of each calendar month, such 17 serviceman shall file a return for the preceding calendar 18 month in accordance with reasonable Rules and Regulations to 19 be promulgated by the Department. Such return shall be filed 20 on a form prescribed by the Department and shall contain such 21 information as the Department may reasonably require. 22 The Department may require returns to be filed on a 23 quarterly basis. If so required, a return for each calendar 24 quarter shall be filed on or before the twentieth day of the 25 calendar month following the end of such calendar quarter. 26 The taxpayer shall also file a return with the Department for 27 each of the first two months of each calendar quarter, on or 28 before the twentieth day of the following calendar month, 29 stating: 30 1. The name of the seller; 31 2. The address of the principal place of business 32 from which he engages in business as a serviceman in this 33 State; 34 3. The total amount of taxable receipts received by SB1118 Enrolled -84- LRB9102874PTpkA 1 him during the preceding calendar month, including 2 receipts from charge and time sales, but less all 3 deductions allowed by law; 4 4. The amount of credit provided in Section 2d of 5 this Act; 6 5. The amount of tax due; 7 5-5. The signature of the taxpayer; and 8 6. Such other reasonable information as the 9 Department may require. 10 If a taxpayer fails to sign a return within 30 days after 11 the proper notice and demand for signature by the Department, 12 the return shall be considered valid and any amount shown to 13 be due on the return shall be deemed assessed. 14 Beginning October 1, 1993, a taxpayer who has an average 15 monthly tax liability of $150,000 or more shall make all 16 payments required by rules of the Department by electronic 17 funds transfer. Beginning October 1, 1994, a taxpayer who 18 has an average monthly tax liability of $100,000 or more 19 shall make all payments required by rules of the Department 20 by electronic funds transfer. Beginning October 1, 1995, a 21 taxpayer who has an average monthly tax liability of $50,000 22 or more shall make all payments required by rules of the 23 Department by electronic funds transfer. Beginning October 1, 24 2000, a taxpayer who has an annual tax liability of $200,000 25 or more shall make all payments required by rules of the 26 Department by electronic funds transfer. The term "annual 27 tax liability" shall be the sum of the taxpayer's liabilities 28 under this Act, and under all other State and local 29 occupation and use tax laws administered by the Department, 30 for the immediately preceding calendar year. The term 31 "average monthly tax liability" means the sum of the 32 taxpayer's liabilities under this Act, and under all other 33 State and local occupation and use tax laws administered by 34 the Department, for the immediately preceding calendar year SB1118 Enrolled -85- LRB9102874PTpkA 1 divided by 12. 2 Before August 1 of each year beginning in 1993, the 3 Department shall notify all taxpayers required to make 4 payments by electronic funds transfer. All taxpayers required 5 to make payments by electronic funds transfer shall make 6 those payments for a minimum of one year beginning on October 7 1. 8 Any taxpayer not required to make payments by electronic 9 funds transfer may make payments by electronic funds transfer 10 with the permission of the Department. 11 All taxpayers required to make payment by electronic 12 funds transfer and any taxpayers authorized to voluntarily 13 make payments by electronic funds transfer shall make those 14 payments in the manner authorized by the Department. 15 The Department shall adopt such rules as are necessary to 16 effectuate a program of electronic funds transfer and the 17 requirements of this Section. 18 If the serviceman is otherwise required to file a monthly 19 return and if the serviceman's average monthly tax liability 20 to the Department does not exceed $200, the Department may 21 authorize his returns to be filed on a quarter annual basis, 22 with the return for January, February and March of a given 23 year being due by April 20 of such year; with the return for 24 April, May and June of a given year being due by July 20 of 25 such year; with the return for July, August and September of 26 a given year being due by October 20 of such year, and with 27 the return for October, November and December of a given year 28 being due by January 20 of the following year. 29 If the serviceman is otherwise required to file a monthly 30 or quarterly return and if the serviceman's average monthly 31 tax liability to the Department does not exceed $50, the 32 Department may authorize his returns to be filed on an annual 33 basis, with the return for a given year being due by January 34 20 of the following year. SB1118 Enrolled -86- LRB9102874PTpkA 1 Such quarter annual and annual returns, as to form and 2 substance, shall be subject to the same requirements as 3 monthly returns. 4 Notwithstanding any other provision in this Act 5 concerning the time within which a serviceman may file his 6 return, in the case of any serviceman who ceases to engage in 7 a kind of business which makes him responsible for filing 8 returns under this Act, such serviceman shall file a final 9 return under this Act with the Department not more than 1 10 month after discontinuing such business. 11 Where a serviceman collects the tax with respect to the 12 selling price of property which he sells and the purchaser 13 thereafter returns such property and the serviceman refunds 14 the selling price thereof to the purchaser, such serviceman 15 shall also refund, to the purchaser, the tax so collected 16 from the purchaser. When filing his return for the period in 17 which he refunds such tax to the purchaser, the serviceman 18 may deduct the amount of the tax so refunded by him to the 19 purchaser from any other Service Use Tax, Service Occupation 20 Tax, retailers' occupation tax or use tax which such 21 serviceman may be required to pay or remit to the Department, 22 as shown by such return, provided that the amount of the tax 23 to be deducted shall previously have been remitted to the 24 Department by such serviceman. If the serviceman shall not 25 previously have remitted the amount of such tax to the 26 Department, he shall be entitled to no deduction hereunder 27 upon refunding such tax to the purchaser. 28 Any serviceman filing a return hereunder shall also 29 include the total tax upon the selling price of tangible 30 personal property purchased for use by him as an incident to 31 a sale of service, and such serviceman shall remit the amount 32 of such tax to the Department when filing such return. 33 If experience indicates such action to be practicable, 34 the Department may prescribe and furnish a combination or SB1118 Enrolled -87- LRB9102874PTpkA 1 joint return which will enable servicemen, who are required 2 to file returns hereunder and also under the Service 3 Occupation Tax Act, to furnish all the return information 4 required by both Acts on the one form. 5 Where the serviceman has more than one business 6 registered with the Department under separate registration 7 hereunder, such serviceman shall not file each return that is 8 due as a single return covering all such registered 9 businesses, but shall file separate returns for each such 10 registered business. 11 Beginning January 1, 1990, each month the Department 12 shall pay into the State and Local Tax Reform Fund, a special 13 fund in the State Treasury, the net revenue realized for the 14 preceding month from the 1% tax on sales of food for human 15 consumption which is to be consumed off the premises where it 16 is sold (other than alcoholic beverages, soft drinks and food 17 which has been prepared for immediate consumption) and 18 prescription and nonprescription medicines, drugs, medical 19 appliances and insulin, urine testing materials, syringes and 20 needles used by diabetics. 21 Beginning January 1, 1990, each month the Department 22 shall pay into the State and Local Sales Tax Reform Fund 20% 23 of the net revenue realized for the preceding month from the 24 6.25% general rate on transfers of tangible personal 25 property, other than tangible personal property which is 26 purchased outside Illinois at retail from a retailer and 27 which is titled or registered by an agency of this State's 28 government. 29 Of the remainder of the moneys received by the Department 30 pursuant to this Act, (a) 1.75% thereof shall be paid into 31 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2% 32 and on and after July 1, 1989, 3.8% thereof shall be paid 33 into the Build Illinois Fund; provided, however, that if in 34 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%, SB1118 Enrolled -88- LRB9102874PTpkA 1 as the case may be, of the moneys received by the Department 2 and required to be paid into the Build Illinois Fund pursuant 3 to Section 3 of the Retailers' Occupation Tax Act, Section 9 4 of the Use Tax Act, Section 9 of the Service Use Tax Act, and 5 Section 9 of the Service Occupation Tax Act, such Acts being 6 hereinafter called the "Tax Acts" and such aggregate of 2.2% 7 or 3.8%, as the case may be, of moneys being hereinafter 8 called the "Tax Act Amount", and (2) the amount transferred 9 to the Build Illinois Fund from the State and Local Sales Tax 10 Reform Fund shall be less than the Annual Specified Amount 11 (as defined in Section 3 of the Retailers' Occupation Tax 12 Act), an amount equal to the difference shall be immediately 13 paid into the Build Illinois Fund from other moneys received 14 by the Department pursuant to the Tax Acts; and further 15 provided, that if on the last business day of any month the 16 sum of (1) the Tax Act Amount required to be deposited into 17 the Build Illinois Bond Account in the Build Illinois Fund 18 during such month and (2) the amount transferred during such 19 month to the Build Illinois Fund from the State and Local 20 Sales Tax Reform Fund shall have been less than 1/12 of the 21 Annual Specified Amount, an amount equal to the difference 22 shall be immediately paid into the Build Illinois Fund from 23 other moneys received by the Department pursuant to the Tax 24 Acts; and, further provided, that in no event shall the 25 payments required under the preceding proviso result in 26 aggregate payments into the Build Illinois Fund pursuant to 27 this clause (b) for any fiscal year in excess of the greater 28 of (i) the Tax Act Amount or (ii) the Annual Specified Amount 29 for such fiscal year; and, further provided, that the amounts 30 payable into the Build Illinois Fund under this clause (b) 31 shall be payable only until such time as the aggregate amount 32 on deposit under each trust indenture securing Bonds issued 33 and outstanding pursuant to the Build Illinois Bond Act is 34 sufficient, taking into account any future investment income, SB1118 Enrolled -89- LRB9102874PTpkA 1 to fully provide, in accordance with such indenture, for the 2 defeasance of or the payment of the principal of, premium, if 3 any, and interest on the Bonds secured by such indenture and 4 on any Bonds expected to be issued thereafter and all fees 5 and costs payable with respect thereto, all as certified by 6 the Director of the Bureau of the Budget. If on the last 7 business day of any month in which Bonds are outstanding 8 pursuant to the Build Illinois Bond Act, the aggregate of the 9 moneys deposited in the Build Illinois Bond Account in the 10 Build Illinois Fund in such month shall be less than the 11 amount required to be transferred in such month from the 12 Build Illinois Bond Account to the Build Illinois Bond 13 Retirement and Interest Fund pursuant to Section 13 of the 14 Build Illinois Bond Act, an amount equal to such deficiency 15 shall be immediately paid from other moneys received by the 16 Department pursuant to the Tax Acts to the Build Illinois 17 Fund; provided, however, that any amounts paid to the Build 18 Illinois Fund in any fiscal year pursuant to this sentence 19 shall be deemed to constitute payments pursuant to clause (b) 20 of the preceding sentence and shall reduce the amount 21 otherwise payable for such fiscal year pursuant to clause (b) 22 of the preceding sentence. The moneys received by the 23 Department pursuant to this Act and required to be deposited 24 into the Build Illinois Fund are subject to the pledge, claim 25 and charge set forth in Section 12 of the Build Illinois Bond 26 Act. 27 Subject to payment of amounts into the Build Illinois 28 Fund as provided in the preceding paragraph or in any 29 amendment thereto hereafter enacted, the following specified 30 monthly installment of the amount requested in the 31 certificate of the Chairman of the Metropolitan Pier and 32 Exposition Authority provided under Section 8.25f of the 33 State Finance Act, but not in excess of the sums designated 34 as "Total Deposit", shall be deposited in the aggregate from SB1118 Enrolled -90- LRB9102874PTpkA 1 collections under Section 9 of the Use Tax Act, Section 9 of 2 the Service Use Tax Act, Section 9 of the Service Occupation 3 Tax Act, and Section 3 of the Retailers' Occupation Tax Act 4 into the McCormick Place Expansion Project Fund in the 5 specified fiscal years. 6 Fiscal Year Total Deposit 7 1993 $0 8 1994 53,000,000 9 1995 58,000,000 10 1996 61,000,000 11 1997 64,000,000 12 1998 68,000,000 13 1999 71,000,000 14 2000 75,000,000 15 2001 80,000,000 16 2002 84,000,000 17 2003 89,000,000 18 2004 93,000,000 19 2005 97,000,000 20 2006 102,000,000 21 2007 and 106,000,000 22 each fiscal year 23 thereafter that bonds 24 are outstanding under 25 Section 13.2 of the 26 Metropolitan Pier and 27 Exposition Authority Act, 28 but not after fiscal year 2029. 29 Beginning July 20, 1993 and in each month of each fiscal 30 year thereafter, one-eighth of the amount requested in the 31 certificate of the Chairman of the Metropolitan Pier and 32 Exposition Authority for that fiscal year, less the amount 33 deposited into the McCormick Place Expansion Project Fund by 34 the State Treasurer in the respective month under subsection SB1118 Enrolled -91- LRB9102874PTpkA 1 (g) of Section 13 of the Metropolitan Pier and Exposition 2 Authority Act, plus cumulative deficiencies in the deposits 3 required under this Section for previous months and years, 4 shall be deposited into the McCormick Place Expansion Project 5 Fund, until the full amount requested for the fiscal year, 6 but not in excess of the amount specified above as "Total 7 Deposit", has been deposited. 8 Subject to payment of amounts into the Build Illinois 9 Fund and the McCormick Place Expansion Project Fund pursuant 10 to the preceding paragraphs or in any amendment thereto 11 hereafter enacted, each month the Department shall pay into 12 the Local Government Distributive Fund 0.4% of the net 13 revenue realized for the preceding month from the 5% general 14 rate or 0.4% of 80% of the net revenue realized for the 15 preceding month from the 6.25% general rate, as the case may 16 be, on the selling price of tangible personal property which 17 amount shall, subject to appropriation, be distributed as 18 provided in Section 2 of the State Revenue Sharing Act. No 19 payments or distributions pursuant to this paragraph shall be 20 made if the tax imposed by this Act on photo processing 21 products is declared unconstitutional, or if the proceeds 22 from such tax are unavailable for distribution because of 23 litigation. 24 Subject to payment of amounts into the Build Illinois 25 Fund, the McCormick Place Expansion Project Fund, and the 26 Local Government Distributive Fund pursuant to the preceding 27 paragraphs or in any amendments thereto hereafter enacted, 28 beginning July 1, 1993, the Department shall each month pay 29 into the Illinois Tax Increment Fund 0.27% of 80% of the net 30 revenue realized for the preceding month from the 6.25% 31 general rate on the selling price of tangible personal 32 property. 33 All remaining moneys received by the Department pursuant 34 to this Act shall be paid into the General Revenue Fund of SB1118 Enrolled -92- LRB9102874PTpkA 1 the State Treasury. 2 As soon as possible after the first day of each month, 3 upon certification of the Department of Revenue, the 4 Comptroller shall order transferred and the Treasurer shall 5 transfer from the General Revenue Fund to the Motor Fuel Tax 6 Fund an amount equal to 1.7% of 80% of the net revenue 7 realized under this Act for the second preceding month; 8 except that this transfer shall not be made for the months 9 February through June, 1992. 10 Net revenue realized for a month shall be the revenue 11 collected by the State pursuant to this Act, less the amount 12 paid out during that month as refunds to taxpayers for 13 overpayment of liability. 14 (Source: P.A. 89-379, eff. 1-1-96; 90-612, eff. 7-8-98.) 15 Section 20. The Service Occupation Tax Act is amended by 16 changing Sections 3-10, 3-30, and 9 as follows: 17 (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10) 18 Sec. 3-10. Rate of tax. Unless otherwise provided in 19 this Section, the tax imposed by this Act is at the rate of 20 6.25% of the "selling price", as defined in Section 2 of the 21 Service Use Tax Act, of the tangible personal property. For 22 the purpose of computing this tax, in no event shall the 23 "selling price" be less than the cost price to the serviceman 24 of the tangible personal property transferred. The selling 25 price of each item of tangible personal property transferred 26 as an incident of a sale of service may be shown as a 27 distinct and separate item on the serviceman's billing to the 28 service customer. If the selling price is not so shown, the 29 selling price of the tangible personal property is deemed to 30 be 50% of the serviceman's entire billing to the service 31 customer. When, however, a serviceman contracts to design, 32 develop, and produce special order machinery or equipment, SB1118 Enrolled -93- LRB9102874PTpkA 1 the tax imposed by this Act shall be based on the 2 serviceman's cost price of the tangible personal property 3 transferred incident to the completion of the contract. 4 With respect to gasohol, as defined in the Use Tax Act, 5 the tax imposed by this Act shall apply to 70% of the cost 6 price of property transferred as an incident to the sale of 7 service on or after January 1, 1990, and before July 1, 2003, 8 and to 100% of the cost price thereafter. 9 At the election of any registered serviceman made for 10 each fiscal year, sales of service in which the aggregate 11 annual cost price of tangible personal property transferred 12 as an incident to the sales of service is less than 35%, or 13 75% in the case of servicemen transferring prescription drugs 14 or servicemen engaged in graphic arts production, of the 15 aggregate annual total gross receipts from all sales of 16 service, the tax imposed by this Act shall be based on the 17 serviceman's cost price of the tangible personal property 18 transferred incident to the sale of those services. 19 The tax shall be imposed at the rate of 1% on food 20 prepared for immediate consumption and transferred incident 21 to a sale of service subject to this Act or the Service 22 Occupation Tax Act by an entity licensed under the Hospital 23 Licensing Act,orthe Nursing Home Care Act, or the Child 24 Care Act of 1969. The tax shall also be imposed at the rate 25 of 1% on food for human consumption that is to be consumed 26 off the premises where it is sold (other than alcoholic 27 beverages, soft drinks, and food that has been prepared for 28 immediate consumption and is not otherwise included in this 29 paragraph) and prescription and nonprescription medicines, 30 drugs, medical appliances, modifications to a motor vehicle 31 for the purpose of rendering it usable by a disabled person, 32 and insulin, urine testing materials, syringes, and needles 33 used by diabetics, for human use. For the purposes of this 34 Section, the term "soft drinks" means any complete, finished, SB1118 Enrolled -94- LRB9102874PTpkA 1 ready-to-use, non-alcoholic drink, whether carbonated or not, 2 including but not limited to soda water, cola, fruit juice, 3 vegetable juice, carbonated water, and all other preparations 4 commonly known as soft drinks of whatever kind or description 5 that are contained in any closed or sealed can, carton, or 6 container, regardless of size. "Soft drinks" does not 7 include coffee, tea, non-carbonated water, infant formula, 8 milk or milk products as defined in the Grade A Pasteurized 9 Milk and Milk Products Act, or drinks containing 50% or more 10 natural fruit or vegetable juice. 11 Notwithstanding any other provisions of this Act, "food 12 for human consumption that is to be consumed off the premises 13 where it is sold" includes all food sold through a vending 14 machine, except soft drinks and food products that are 15 dispensed hot from a vending machine, regardless of the 16 location of the vending machine. 17 (Source: P.A. 89-359, eff. 8-17-95; 89-420, eff. 6-1-96; 18 89-463, eff. 5-31-96; 89-626, eff. 8-9-96; 90-605, eff. 19 6-30-98; 90-606, eff. 6-30-98.) 20 (35 ILCS 115/3-30) (from Ch. 120, par. 439.103-30) 21 Sec. 3-30. Graphic arts production. For purposes of this 22 Act, "graphic arts production" means printing, including ink 23 jet printing, by one or more of thecommonprocesses 24 described in Groups 323110 through 323122 of Subsector 323, 25 Groups 511110 through 511199 of Subsector 511, and Group 26 512230 of Subsector 512 of the North American Industry 27 Classification System published by the U.S. Office of 28 Management and Budget, 1997 editionor graphic arts29production services as those processes and services are30defined in Major Group 27 of the U.S. Standard Industrial31Classification Manual. Graphic arts production does not 32 include (i) the transfer of images onto paper or other 33 tangible personal property by means of photocopying or (ii) SB1118 Enrolled -95- LRB9102874PTpkA 1 final printed products in electronic or audio form, including 2 the production of software or audio-books. 3 (Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928; 4 86-1028; 86-1475.) 5 (35 ILCS 115/9) (from Ch. 120, par. 439.109) 6 Sec. 9. Each serviceman required or authorized to 7 collect the tax herein imposed shall pay to the Department 8 the amount of such tax at the time when he is required to 9 file his return for the period during which such tax was 10 collectible, less a discount of 2.1% prior to January 1, 11 1990, and 1.75% on and after January 1, 1990, or $5 per 12 calendar year, whichever is greater, which is allowed to 13 reimburse the serviceman for expenses incurred in collecting 14 the tax, keeping records, preparing and filing returns, 15 remitting the tax and supplying data to the Department on 16 request. 17 Where such tangible personal property is sold under a 18 conditional sales contract, or under any other form of sale 19 wherein the payment of the principal sum, or a part thereof, 20 is extended beyond the close of the period for which the 21 return is filed, the serviceman, in collecting the tax may 22 collect, for each tax return period, only the tax applicable 23 to the part of the selling price actually received during 24 such tax return period. 25 Except as provided hereinafter in this Section, on or 26 before the twentieth day of each calendar month, such 27 serviceman shall file a return for the preceding calendar 28 month in accordance with reasonable rules and regulations to 29 be promulgated by the Department of Revenue. Such return 30 shall be filed on a form prescribed by the Department and 31 shall contain such information as the Department may 32 reasonably require. 33 The Department may require returns to be filed on a SB1118 Enrolled -96- LRB9102874PTpkA 1 quarterly basis. If so required, a return for each calendar 2 quarter shall be filed on or before the twentieth day of the 3 calendar month following the end of such calendar quarter. 4 The taxpayer shall also file a return with the Department for 5 each of the first two months of each calendar quarter, on or 6 before the twentieth day of the following calendar month, 7 stating: 8 1. The name of the seller; 9 2. The address of the principal place of business 10 from which he engages in business as a serviceman in this 11 State; 12 3. The total amount of taxable receipts received by 13 him during the preceding calendar month, including 14 receipts from charge and time sales, but less all 15 deductions allowed by law; 16 4. The amount of credit provided in Section 2d of 17 this Act; 18 5. The amount of tax due; 19 5-5. The signature of the taxpayer; and 20 6. Such other reasonable information as the 21 Department may require. 22 If a taxpayer fails to sign a return within 30 days after 23 the proper notice and demand for signature by the Department, 24 the return shall be considered valid and any amount shown to 25 be due on the return shall be deemed assessed. 26 A serviceman may accept a Manufacturer's Purchase Credit 27 certification from a purchaser in satisfaction of Service Use 28 Tax as provided in Section 3-70 of the Service Use Tax Act if 29 the purchaser provides the appropriate documentation as 30 required by Section 3-70 of the Service Use Tax Act. A 31 Manufacturer's Purchase Credit certification, accepted by a 32 serviceman as provided in Section 3-70 of the Service Use Tax 33 Act, may be used by that serviceman to satisfy Service 34 Occupation Tax liability in the amount claimed in the SB1118 Enrolled -97- LRB9102874PTpkA 1 certification, not to exceed 6.25% of the receipts subject to 2 tax from a qualifying purchase. 3 If the serviceman's average monthly tax liability to the 4 Department does not exceed $200, the Department may authorize 5 his returns to be filed on a quarter annual basis, with the 6 return for January, February and March of a given year being 7 due by April 20 of such year; with the return for April, May 8 and June of a given year being due by July 20 of such year; 9 with the return for July, August and September of a given 10 year being due by October 20 of such year, and with the 11 return for October, November and December of a given year 12 being due by January 20 of the following year. 13 If the serviceman's average monthly tax liability to the 14 Department does not exceed $50, the Department may authorize 15 his returns to be filed on an annual basis, with the return 16 for a given year being due by January 20 of the following 17 year. 18 Such quarter annual and annual returns, as to form and 19 substance, shall be subject to the same requirements as 20 monthly returns. 21 Notwithstanding any other provision in this Act 22 concerning the time within which a serviceman may file his 23 return, in the case of any serviceman who ceases to engage in 24 a kind of business which makes him responsible for filing 25 returns under this Act, such serviceman shall file a final 26 return under this Act with the Department not more than 1 27 month after discontinuing such business. 28 Beginning October 1, 1993, a taxpayer who has an average 29 monthly tax liability of $150,000 or more shall make all 30 payments required by rules of the Department by electronic 31 funds transfer. Beginning October 1, 1994, a taxpayer who 32 has an average monthly tax liability of $100,000 or more 33 shall make all payments required by rules of the Department 34 by electronic funds transfer. Beginning October 1, 1995, a SB1118 Enrolled -98- LRB9102874PTpkA 1 taxpayer who has an average monthly tax liability of $50,000 2 or more shall make all payments required by rules of the 3 Department by electronic funds transfer. Beginning October 4 1, 2000, a taxpayer who has an annual tax liability of 5 $200,000 or more shall make all payments required by rules of 6 the Department by electronic funds transfer. The term 7 "annual tax liability" shall be the sum of the taxpayer's 8 liabilities under this Act, and under all other State and 9 local occupation and use tax laws administered by the 10 Department, for the immediately preceding calendar year. The 11 term "average monthly tax liability" means the sum of the 12 taxpayer's liabilities under this Act, and under all other 13 State and local occupation and use tax laws administered by 14 the Department, for the immediately preceding calendar year 15 divided by 12. 16 Before August 1 of each year beginning in 1993, the 17 Department shall notify all taxpayers required to make 18 payments by electronic funds transfer. All taxpayers 19 required to make payments by electronic funds transfer shall 20 make those payments for a minimum of one year beginning on 21 October 1. 22 Any taxpayer not required to make payments by electronic 23 funds transfer may make payments by electronic funds transfer 24 with the permission of the Department. 25 All taxpayers required to make payment by electronic 26 funds transfer and any taxpayers authorized to voluntarily 27 make payments by electronic funds transfer shall make those 28 payments in the manner authorized by the Department. 29 The Department shall adopt such rules as are necessary to 30 effectuate a program of electronic funds transfer and the 31 requirements of this Section. 32 Where a serviceman collects the tax with respect to the 33 selling price of tangible personal property which he sells 34 and the purchaser thereafter returns such tangible personal SB1118 Enrolled -99- LRB9102874PTpkA 1 property and the serviceman refunds the selling price thereof 2 to the purchaser, such serviceman shall also refund, to the 3 purchaser, the tax so collected from the purchaser. When 4 filing his return for the period in which he refunds such tax 5 to the purchaser, the serviceman may deduct the amount of the 6 tax so refunded by him to the purchaser from any other 7 Service Occupation Tax, Service Use Tax, Retailers' 8 Occupation Tax or Use Tax which such serviceman may be 9 required to pay or remit to the Department, as shown by such 10 return, provided that the amount of the tax to be deducted 11 shall previously have been remitted to the Department by such 12 serviceman. If the serviceman shall not previously have 13 remitted the amount of such tax to the Department, he shall 14 be entitled to no deduction hereunder upon refunding such tax 15 to the purchaser. 16 If experience indicates such action to be practicable, 17 the Department may prescribe and furnish a combination or 18 joint return which will enable servicemen, who are required 19 to file returns hereunder and also under the Retailers' 20 Occupation Tax Act, the Use Tax Act or the Service Use Tax 21 Act, to furnish all the return information required by all 22 said Acts on the one form. 23 Where the serviceman has more than one business 24 registered with the Department under separate registrations 25 hereunder, such serviceman shall file separate returns for 26 each registered business. 27 Beginning January 1, 1990, each month the Department 28 shall pay into the Local Government Tax Fund the revenue 29 realized for the preceding month from the 1% tax on sales of 30 food for human consumption which is to be consumed off the 31 premises where it is sold (other than alcoholic beverages, 32 soft drinks and food which has been prepared for immediate 33 consumption) and prescription and nonprescription medicines, 34 drugs, medical appliances and insulin, urine testing SB1118 Enrolled -100- LRB9102874PTpkA 1 materials, syringes and needles used by diabetics. 2 Beginning January 1, 1990, each month the Department 3 shall pay into the County and Mass Transit District Fund 4% 4 of the revenue realized for the preceding month from the 5 6.25% general rate. 6 Beginning January 1, 1990, each month the Department 7 shall pay into the Local Government Tax Fund 16% of the 8 revenue realized for the preceding month from the 6.25% 9 general rate on transfers of tangible personal property. 10 Of the remainder of the moneys received by the Department 11 pursuant to this Act, (a) 1.75% thereof shall be paid into 12 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2% 13 and on and after July 1, 1989, 3.8% thereof shall be paid 14 into the Build Illinois Fund; provided, however, that if in 15 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%, 16 as the case may be, of the moneys received by the Department 17 and required to be paid into the Build Illinois Fund pursuant 18 to Section 3 of the Retailers' Occupation Tax Act, Section 9 19 of the Use Tax Act, Section 9 of the Service Use Tax Act, and 20 Section 9 of the Service Occupation Tax Act, such Acts being 21 hereinafter called the "Tax Acts" and such aggregate of 2.2% 22 or 3.8%, as the case may be, of moneys being hereinafter 23 called the "Tax Act Amount", and (2) the amount transferred 24 to the Build Illinois Fund from the State and Local Sales Tax 25 Reform Fund shall be less than the Annual Specified Amount 26 (as defined in Section 3 of the Retailers' Occupation Tax 27 Act), an amount equal to the difference shall be immediately 28 paid into the Build Illinois Fund from other moneys received 29 by the Department pursuant to the Tax Acts; and further 30 provided, that if on the last business day of any month the 31 sum of (1) the Tax Act Amount required to be deposited into 32 the Build Illinois Account in the Build Illinois Fund during 33 such month and (2) the amount transferred during such month 34 to the Build Illinois Fund from the State and Local Sales Tax SB1118 Enrolled -101- LRB9102874PTpkA 1 Reform Fund shall have been less than 1/12 of the Annual 2 Specified Amount, an amount equal to the difference shall be 3 immediately paid into the Build Illinois Fund from other 4 moneys received by the Department pursuant to the Tax Acts; 5 and, further provided, that in no event shall the payments 6 required under the preceding proviso result in aggregate 7 payments into the Build Illinois Fund pursuant to this clause 8 (b) for any fiscal year in excess of the greater of (i) the 9 Tax Act Amount or (ii) the Annual Specified Amount for such 10 fiscal year; and, further provided, that the amounts payable 11 into the Build Illinois Fund under this clause (b) shall be 12 payable only until such time as the aggregate amount on 13 deposit under each trust indenture securing Bonds issued and 14 outstanding pursuant to the Build Illinois Bond Act is 15 sufficient, taking into account any future investment income, 16 to fully provide, in accordance with such indenture, for the 17 defeasance of or the payment of the principal of, premium, if 18 any, and interest on the Bonds secured by such indenture and 19 on any Bonds expected to be issued thereafter and all fees 20 and costs payable with respect thereto, all as certified by 21 the Director of the Bureau of the Budget. If on the last 22 business day of any month in which Bonds are outstanding 23 pursuant to the Build Illinois Bond Act, the aggregate of the 24 moneys deposited in the Build Illinois Bond Account in the 25 Build Illinois Fund in such month shall be less than the 26 amount required to be transferred in such month from the 27 Build Illinois Bond Account to the Build Illinois Bond 28 Retirement and Interest Fund pursuant to Section 13 of the 29 Build Illinois Bond Act, an amount equal to such deficiency 30 shall be immediately paid from other moneys received by the 31 Department pursuant to the Tax Acts to the Build Illinois 32 Fund; provided, however, that any amounts paid to the Build 33 Illinois Fund in any fiscal year pursuant to this sentence 34 shall be deemed to constitute payments pursuant to clause (b) SB1118 Enrolled -102- LRB9102874PTpkA 1 of the preceding sentence and shall reduce the amount 2 otherwise payable for such fiscal year pursuant to clause (b) 3 of the preceding sentence. The moneys received by the 4 Department pursuant to this Act and required to be deposited 5 into the Build Illinois Fund are subject to the pledge, claim 6 and charge set forth in Section 12 of the Build Illinois Bond 7 Act. 8 Subject to payment of amounts into the Build Illinois 9 Fund as provided in the preceding paragraph or in any 10 amendment thereto hereafter enacted, the following specified 11 monthly installment of the amount requested in the 12 certificate of the Chairman of the Metropolitan Pier and 13 Exposition Authority provided under Section 8.25f of the 14 State Finance Act, but not in excess of the sums designated 15 as "Total Deposit", shall be deposited in the aggregate from 16 collections under Section 9 of the Use Tax Act, Section 9 of 17 the Service Use Tax Act, Section 9 of the Service Occupation 18 Tax Act, and Section 3 of the Retailers' Occupation Tax Act 19 into the McCormick Place Expansion Project Fund in the 20 specified fiscal years. 21 Fiscal Year Total Deposit 22 1993 $0 23 1994 53,000,000 24 1995 58,000,000 25 1996 61,000,000 26 1997 64,000,000 27 1998 68,000,000 28 1999 71,000,000 29 2000 75,000,000 30 2001 80,000,000 31 2002 84,000,000 32 2003 89,000,000 33 2004 93,000,000 34 2005 97,000,000 SB1118 Enrolled -103- LRB9102874PTpkA 1 2006 102,000,000 2 2007 and 106,000,000 3 each fiscal year 4 thereafter that bonds 5 are outstanding under 6 Section 13.2 of the 7 Metropolitan Pier and 8 Exposition Authority 9 Act, but not after fiscal year 2029. 10 Beginning July 20, 1993 and in each month of each fiscal 11 year thereafter, one-eighth of the amount requested in the 12 certificate of the Chairman of the Metropolitan Pier and 13 Exposition Authority for that fiscal year, less the amount 14 deposited into the McCormick Place Expansion Project Fund by 15 the State Treasurer in the respective month under subsection 16 (g) of Section 13 of the Metropolitan Pier and Exposition 17 Authority Act, plus cumulative deficiencies in the deposits 18 required under this Section for previous months and years, 19 shall be deposited into the McCormick Place Expansion Project 20 Fund, until the full amount requested for the fiscal year, 21 but not in excess of the amount specified above as "Total 22 Deposit", has been deposited. 23 Subject to payment of amounts into the Build Illinois 24 Fund and the McCormick Place Expansion Project Fund pursuant 25 to the preceding paragraphs or in any amendment thereto 26 hereafter enacted, each month the Department shall pay into 27 the Local Government Distributive Fund 0.4% of the net 28 revenue realized for the preceding month from the 5% general 29 rate or 0.4% of 80% of the net revenue realized for the 30 preceding month from the 6.25% general rate, as the case may 31 be, on the selling price of tangible personal property which 32 amount shall, subject to appropriation, be distributed as 33 provided in Section 2 of the State Revenue Sharing Act. No 34 payments or distributions pursuant to this paragraph shall be SB1118 Enrolled -104- LRB9102874PTpkA 1 made if the tax imposed by this Act on photoprocessing 2 products is declared unconstitutional, or if the proceeds 3 from such tax are unavailable for distribution because of 4 litigation. 5 Subject to payment of amounts into the Build Illinois 6 Fund, the McCormick Place Expansion Project Fund, and the 7 Local Government Distributive Fund pursuant to the preceding 8 paragraphs or in any amendments thereto hereafter enacted, 9 beginning July 1, 1993, the Department shall each month pay 10 into the Illinois Tax Increment Fund 0.27% of 80% of the net 11 revenue realized for the preceding month from the 6.25% 12 general rate on the selling price of tangible personal 13 property. 14 Remaining moneys received by the Department pursuant to 15 this Act shall be paid into the General Revenue Fund of the 16 State Treasury. 17 The Department may, upon separate written notice to a 18 taxpayer, require the taxpayer to prepare and file with the 19 Department on a form prescribed by the Department within not 20 less than 60 days after receipt of the notice an annual 21 information return for the tax year specified in the notice. 22 Such annual return to the Department shall include a 23 statement of gross receipts as shown by the taxpayer's last 24 Federal income tax return. If the total receipts of the 25 business as reported in the Federal income tax return do not 26 agree with the gross receipts reported to the Department of 27 Revenue for the same period, the taxpayer shall attach to his 28 annual return a schedule showing a reconciliation of the 2 29 amounts and the reasons for the difference. The taxpayer's 30 annual return to the Department shall also disclose the cost 31 of goods sold by the taxpayer during the year covered by such 32 return, opening and closing inventories of such goods for 33 such year, cost of goods used from stock or taken from stock 34 and given away by the taxpayer during such year, pay roll SB1118 Enrolled -105- LRB9102874PTpkA 1 information of the taxpayer's business during such year and 2 any additional reasonable information which the Department 3 deems would be helpful in determining the accuracy of the 4 monthly, quarterly or annual returns filed by such taxpayer 5 as hereinbefore provided for in this Section. 6 If the annual information return required by this Section 7 is not filed when and as required, the taxpayer shall be 8 liable as follows: 9 (i) Until January 1, 1994, the taxpayer shall be 10 liable for a penalty equal to 1/6 of 1% of the tax due 11 from such taxpayer under this Act during the period to be 12 covered by the annual return for each month or fraction 13 of a month until such return is filed as required, the 14 penalty to be assessed and collected in the same manner 15 as any other penalty provided for in this Act. 16 (ii) On and after January 1, 1994, the taxpayer 17 shall be liable for a penalty as described in Section 3-4 18 of the Uniform Penalty and Interest Act. 19 The chief executive officer, proprietor, owner or highest 20 ranking manager shall sign the annual return to certify the 21 accuracy of the information contained therein. Any person 22 who willfully signs the annual return containing false or 23 inaccurate information shall be guilty of perjury and 24 punished accordingly. The annual return form prescribed by 25 the Department shall include a warning that the person 26 signing the return may be liable for perjury. 27 The foregoing portion of this Section concerning the 28 filing of an annual information return shall not apply to a 29 serviceman who is not required to file an income tax return 30 with the United States Government. 31 As soon as possible after the first day of each month, 32 upon certification of the Department of Revenue, the 33 Comptroller shall order transferred and the Treasurer shall 34 transfer from the General Revenue Fund to the Motor Fuel Tax SB1118 Enrolled -106- LRB9102874PTpkA 1 Fund an amount equal to 1.7% of 80% of the net revenue 2 realized under this Act for the second preceding month; 3 except that this transfer shall not be made for the months 4 February through June, 1992. 5 Net revenue realized for a month shall be the revenue 6 collected by the State pursuant to this Act, less the amount 7 paid out during that month as refunds to taxpayers for 8 overpayment of liability. 9 For greater simplicity of administration, it shall be 10 permissible for manufacturers, importers and wholesalers 11 whose products are sold by numerous servicemen in Illinois, 12 and who wish to do so, to assume the responsibility for 13 accounting and paying to the Department all tax accruing 14 under this Act with respect to such sales, if the servicemen 15 who are affected do not make written objection to the 16 Department to this arrangement. 17 (Source: P.A. 89-89, eff. 6-30-95; 89-235, eff. 8-4-95; 18 89-379, eff. 1-1-96; 89-626, eff. 8-9-96; 90-612, eff. 19 7-8-98.) 20 Section 25. The Retailers' Occupation Tax Act is amended 21 by changing Sections 2-30 and 3 as follows: 22 (35 ILCS 120/2-30) (from Ch. 120, par. 441-30) 23 Sec. 2-30. Graphic arts production. For purposes of 24 this Act, "graphic arts production" means printing, including 25 ink jet printing, by one or more of thecommonprocesses 26 described in Groups 323110 through 323122 of Subsector 323, 27 Groups 511110 through 511199 of Subsector 511, and Group 28 512230 of Subsector 512 of the North American Industry 29 Classification System published by the U.S. Office of 30 Management and Budget, 1997 editionor graphic arts31production services as those processes and services are32defined in Major Group 27 of the U.S. Standard IndustrialSB1118 Enrolled -107- LRB9102874PTpkA 1Classification Manual. Graphic arts production does not 2 include (i) the transfer of images onto paper or other 3 tangible personal property by means of photocopying or (ii) 4 final printed products in electronic or audio form, including 5 the production of software or audio-books. 6 (Source: P.A. 86-44; 86-244; 86-252; 86-444; 86-820; 86-905; 7 86-928; 86-953; 86-1394; 86-1475.) 8 (35 ILCS 120/3) (from Ch. 120, par. 442) 9 Sec. 3. Except as provided in this Section, on or before 10 the twentieth day of each calendar month, every person 11 engaged in the business of selling tangible personal property 12 at retail in this State during the preceding calendar month 13 shall file a return with the Department, stating: 14 1. The name of the seller; 15 2. His residence address and the address of his 16 principal place of business and the address of the 17 principal place of business (if that is a different 18 address) from which he engages in the business of selling 19 tangible personal property at retail in this State; 20 3. Total amount of receipts received by him during 21 the preceding calendar month or quarter, as the case may 22 be, from sales of tangible personal property, and from 23 services furnished, by him during such preceding calendar 24 month or quarter; 25 4. Total amount received by him during the 26 preceding calendar month or quarter on charge and time 27 sales of tangible personal property, and from services 28 furnished, by him prior to the month or quarter for which 29 the return is filed; 30 5. Deductions allowed by law; 31 6. Gross receipts which were received by him during 32 the preceding calendar month or quarter and upon the 33 basis of which the tax is imposed; SB1118 Enrolled -108- LRB9102874PTpkA 1 7. The amount of credit provided in Section 2d of 2 this Act; 3 8. The amount of tax due; 4 9. The signature of the taxpayer; and 5 10. Such other reasonable information as the 6 Department may require. 7 If a taxpayer fails to sign a return within 30 days after 8 the proper notice and demand for signature by the Department, 9 the return shall be considered valid and any amount shown to 10 be due on the return shall be deemed assessed. 11 Each return shall be accompanied by the statement of 12 prepaid tax issued pursuant to Section 2e for which credit is 13 claimed. 14 A retailer may accept a Manufacturer's Purchase Credit 15 certification from a purchaser in satisfaction of Use Tax as 16 provided in Section 3-85 of the Use Tax Act if the purchaser 17 provides the appropriate documentation as required by Section 18 3-85 of the Use Tax Act. A Manufacturer's Purchase Credit 19 certification, accepted by a retailer as provided in Section 20 3-85 of the Use Tax Act, may be used by that retailer to 21 satisfy Retailers' Occupation Tax liability in the amount 22 claimed in the certification, not to exceed 6.25% of the 23 receipts subject to tax from a qualifying purchase. 24 The Department may require returns to be filed on a 25 quarterly basis. If so required, a return for each calendar 26 quarter shall be filed on or before the twentieth day of the 27 calendar month following the end of such calendar quarter. 28 The taxpayer shall also file a return with the Department for 29 each of the first two months of each calendar quarter, on or 30 before the twentieth day of the following calendar month, 31 stating: 32 1. The name of the seller; 33 2. The address of the principal place of business 34 from which he engages in the business of selling tangible SB1118 Enrolled -109- LRB9102874PTpkA 1 personal property at retail in this State; 2 3. The total amount of taxable receipts received by 3 him during the preceding calendar month from sales of 4 tangible personal property by him during such preceding 5 calendar month, including receipts from charge and time 6 sales, but less all deductions allowed by law; 7 4. The amount of credit provided in Section 2d of 8 this Act; 9 5. The amount of tax due; and 10 6. Such other reasonable information as the 11 Department may require. 12 If a total amount of less than $1 is payable, refundable 13 or creditable, such amount shall be disregarded if it is less 14 than 50 cents and shall be increased to $1 if it is 50 cents 15 or more. 16 Beginning October 1, 1993, a taxpayer who has an average 17 monthly tax liability of $150,000 or more shall make all 18 payments required by rules of the Department by electronic 19 funds transfer. Beginning October 1, 1994, a taxpayer who 20 has an average monthly tax liability of $100,000 or more 21 shall make all payments required by rules of the Department 22 by electronic funds transfer. Beginning October 1, 1995, a 23 taxpayer who has an average monthly tax liability of $50,000 24 or more shall make all payments required by rules of the 25 Department by electronic funds transfer. Beginning October 26 1, 2000, a taxpayer who has an annual tax liability of 27 $200,000 or more shall make all payments required by rules of 28 the Department by electronic funds transfer. The term 29 "annual tax liability" shall be the sum of the taxpayer's 30 liabilities under this Act, and under all other State and 31 local occupation and use tax laws administered by the 32 Department, for the immediately preceding calendar year. The 33 term "average monthly tax liability" shall be the sum of the 34 taxpayer's liabilities under this Act, and under all other SB1118 Enrolled -110- LRB9102874PTpkA 1 State and local occupation and use tax laws administered by 2 the Department, for the immediately preceding calendar year 3 divided by 12. 4 Before August 1 of each year beginning in 1993, the 5 Department shall notify all taxpayers required to make 6 payments by electronic funds transfer. All taxpayers 7 required to make payments by electronic funds transfer shall 8 make those payments for a minimum of one year beginning on 9 October 1. 10 Any taxpayer not required to make payments by electronic 11 funds transfer may make payments by electronic funds transfer 12 with the permission of the Department. 13 All taxpayers required to make payment by electronic 14 funds transfer and any taxpayers authorized to voluntarily 15 make payments by electronic funds transfer shall make those 16 payments in the manner authorized by the Department. 17 The Department shall adopt such rules as are necessary to 18 effectuate a program of electronic funds transfer and the 19 requirements of this Section. 20 Any amount which is required to be shown or reported on 21 any return or other document under this Act shall, if such 22 amount is not a whole-dollar amount, be increased to the 23 nearest whole-dollar amount in any case where the fractional 24 part of a dollar is 50 cents or more, and decreased to the 25 nearest whole-dollar amount where the fractional part of a 26 dollar is less than 50 cents. 27 If the retailer is otherwise required to file a monthly 28 return and if the retailer's average monthly tax liability to 29 the Department does not exceed $200, the Department may 30 authorize his returns to be filed on a quarter annual basis, 31 with the return for January, February and March of a given 32 year being due by April 20 of such year; with the return for 33 April, May and June of a given year being due by July 20 of 34 such year; with the return for July, August and September of SB1118 Enrolled -111- LRB9102874PTpkA 1 a given year being due by October 20 of such year, and with 2 the return for October, November and December of a given year 3 being due by January 20 of the following year. 4 If the retailer is otherwise required to file a monthly 5 or quarterly return and if the retailer's average monthly tax 6 liability with the Department does not exceed $50, the 7 Department may authorize his returns to be filed on an annual 8 basis, with the return for a given year being due by January 9 20 of the following year. 10 Such quarter annual and annual returns, as to form and 11 substance, shall be subject to the same requirements as 12 monthly returns. 13 Notwithstanding any other provision in this Act 14 concerning the time within which a retailer may file his 15 return, in the case of any retailer who ceases to engage in a 16 kind of business which makes him responsible for filing 17 returns under this Act, such retailer shall file a final 18 return under this Act with the Department not more than one 19 month after discontinuing such business. 20 Where the same person has more than one business 21 registered with the Department under separate registrations 22 under this Act, such person may not file each return that is 23 due as a single return covering all such registered 24 businesses, but shall file separate returns for each such 25 registered business. 26 In addition, with respect to motor vehicles, watercraft, 27 aircraft, and trailers that are required to be registered 28 with an agency of this State, every retailer selling this 29 kind of tangible personal property shall file, with the 30 Department, upon a form to be prescribed and supplied by the 31 Department, a separate return for each such item of tangible 32 personal property which the retailer sells, except that 33 where, in the same transaction, a retailer of aircraft, 34 watercraft, motor vehicles or trailers transfers more than SB1118 Enrolled -112- LRB9102874PTpkA 1 one aircraft, watercraft, motor vehicle or trailer to another 2 aircraft, watercraft, motor vehicle retailer or trailer 3 retailer for the purpose of resale, that seller for resale 4 may report the transfer of all aircraft, watercraft, motor 5 vehicles or trailers involved in that transaction to the 6 Department on the same uniform invoice-transaction reporting 7 return form. For purposes of this Section, "watercraft" 8 means a Class 2, Class 3, or Class 4 watercraft as defined in 9 Section 3-2 of the Boat Registration and Safety Act, a 10 personal watercraft, or any boat equipped with an inboard 11 motor. 12 Any retailer who sells only motor vehicles, watercraft, 13 aircraft, or trailers that are required to be registered with 14 an agency of this State, so that all retailers' occupation 15 tax liability is required to be reported, and is reported, on 16 such transaction reporting returns and who is not otherwise 17 required to file monthly or quarterly returns, need not file 18 monthly or quarterly returns. However, those retailers shall 19 be required to file returns on an annual basis. 20 The transaction reporting return, in the case of motor 21 vehicles or trailers that are required to be registered with 22 an agency of this State, shall be the same document as the 23 Uniform Invoice referred to in Section 5-402 of The Illinois 24 Vehicle Code and must show the name and address of the 25 seller; the name and address of the purchaser; the amount of 26 the selling price including the amount allowed by the 27 retailer for traded-in property, if any; the amount allowed 28 by the retailer for the traded-in tangible personal property, 29 if any, to the extent to which Section 1 of this Act allows 30 an exemption for the value of traded-in property; the balance 31 payable after deducting such trade-in allowance from the 32 total selling price; the amount of tax due from the retailer 33 with respect to such transaction; the amount of tax collected 34 from the purchaser by the retailer on such transaction (or SB1118 Enrolled -113- LRB9102874PTpkA 1 satisfactory evidence that such tax is not due in that 2 particular instance, if that is claimed to be the fact); the 3 place and date of the sale; a sufficient identification of 4 the property sold; such other information as is required in 5 Section 5-402 of The Illinois Vehicle Code, and such other 6 information as the Department may reasonably require. 7 The transaction reporting return in the case of 8 watercraft or aircraft must show the name and address of the 9 seller; the name and address of the purchaser; the amount of 10 the selling price including the amount allowed by the 11 retailer for traded-in property, if any; the amount allowed 12 by the retailer for the traded-in tangible personal property, 13 if any, to the extent to which Section 1 of this Act allows 14 an exemption for the value of traded-in property; the balance 15 payable after deducting such trade-in allowance from the 16 total selling price; the amount of tax due from the retailer 17 with respect to such transaction; the amount of tax collected 18 from the purchaser by the retailer on such transaction (or 19 satisfactory evidence that such tax is not due in that 20 particular instance, if that is claimed to be the fact); the 21 place and date of the sale, a sufficient identification of 22 the property sold, and such other information as the 23 Department may reasonably require. 24 Such transaction reporting return shall be filed not 25 later than 20 days after the day of delivery of the item that 26 is being sold, but may be filed by the retailer at any time 27 sooner than that if he chooses to do so. The transaction 28 reporting return and tax remittance or proof of exemption 29 from the Illinois use tax may be transmitted to the 30 Department by way of the State agency with which, or State 31 officer with whom the tangible personal property must be 32 titled or registered (if titling or registration is required) 33 if the Department and such agency or State officer determine 34 that this procedure will expedite the processing of SB1118 Enrolled -114- LRB9102874PTpkA 1 applications for title or registration. 2 With each such transaction reporting return, the retailer 3 shall remit the proper amount of tax due (or shall submit 4 satisfactory evidence that the sale is not taxable if that is 5 the case), to the Department or its agents, whereupon the 6 Department shall issue, in the purchaser's name, a use tax 7 receipt (or a certificate of exemption if the Department is 8 satisfied that the particular sale is tax exempt) which such 9 purchaser may submit to the agency with which, or State 10 officer with whom, he must title or register the tangible 11 personal property that is involved (if titling or 12 registration is required) in support of such purchaser's 13 application for an Illinois certificate or other evidence of 14 title or registration to such tangible personal property. 15 No retailer's failure or refusal to remit tax under this 16 Act precludes a user, who has paid the proper tax to the 17 retailer, from obtaining his certificate of title or other 18 evidence of title or registration (if titling or registration 19 is required) upon satisfying the Department that such user 20 has paid the proper tax (if tax is due) to the retailer. The 21 Department shall adopt appropriate rules to carry out the 22 mandate of this paragraph. 23 If the user who would otherwise pay tax to the retailer 24 wants the transaction reporting return filed and the payment 25 of the tax or proof of exemption made to the Department 26 before the retailer is willing to take these actions and such 27 user has not paid the tax to the retailer, such user may 28 certify to the fact of such delay by the retailer and may 29 (upon the Department being satisfied of the truth of such 30 certification) transmit the information required by the 31 transaction reporting return and the remittance for tax or 32 proof of exemption directly to the Department and obtain his 33 tax receipt or exemption determination, in which event the 34 transaction reporting return and tax remittance (if a tax SB1118 Enrolled -115- LRB9102874PTpkA 1 payment was required) shall be credited by the Department to 2 the proper retailer's account with the Department, but 3 without the 2.1% or 1.75% discount provided for in this 4 Section being allowed. When the user pays the tax directly 5 to the Department, he shall pay the tax in the same amount 6 and in the same form in which it would be remitted if the tax 7 had been remitted to the Department by the retailer. 8 Refunds made by the seller during the preceding return 9 period to purchasers, on account of tangible personal 10 property returned to the seller, shall be allowed as a 11 deduction under subdivision 5 of his monthly or quarterly 12 return, as the case may be, in case the seller had 13 theretofore included the receipts from the sale of such 14 tangible personal property in a return filed by him and had 15 paid the tax imposed by this Act with respect to such 16 receipts. 17 Where the seller is a corporation, the return filed on 18 behalf of such corporation shall be signed by the president, 19 vice-president, secretary or treasurer or by the properly 20 accredited agent of such corporation. 21 Where the seller is a limited liability company, the 22 return filed on behalf of the limited liability company shall 23 be signed by a manager, member, or properly accredited agent 24 of the limited liability company. 25 Except as provided in this Section, the retailer filing 26 the return under this Section shall, at the time of filing 27 such return, pay to the Department the amount of tax imposed 28 by this Act less a discount of 2.1% prior to January 1, 1990 29 and 1.75% on and after January 1, 1990, or $5 per calendar 30 year, whichever is greater, which is allowed to reimburse the 31 retailer for the expenses incurred in keeping records, 32 preparing and filing returns, remitting the tax and supplying 33 data to the Department on request. Any prepayment made 34 pursuant to Section 2d of this Act shall be included in the SB1118 Enrolled -116- LRB9102874PTpkA 1 amount on which such 2.1% or 1.75% discount is computed. In 2 the case of retailers who report and pay the tax on a 3 transaction by transaction basis, as provided in this 4 Section, such discount shall be taken with each such tax 5 remittance instead of when such retailer files his periodic 6 return. 7 Before October 1, 2000, if the taxpayer's average monthly 8 tax liability to the Department under this Act, the Use Tax 9 Act, the Service Occupation Tax Act, and the Service Use Tax 10 Act, excluding any liability for prepaid sales tax to be 11 remitted in accordance with Section 2d of this Act, was 12 $10,000 or more during the preceding 4 complete calendar 13 quarters, he shall file a return with the Department each 14 month by the 20th day of the month next following the month 15 during which such tax liability is incurred and shall make 16 payments to the Department on or before the 7th, 15th, 22nd 17 and last day of the month during which such liability is 18 incurred. On and after October 1, 2000, if the taxpayer's 19 average monthly tax liability to the Department under this 20 Act, the Use Tax Act, the Service Occupation Tax Act, and the 21 Service Use Tax Act, excluding any liability for prepaid 22 sales tax to be remitted in accordance with Section 2d of 23 this Act, was $20,000 or more during the preceding 4 complete 24 calendar quarters, he shall file a return with the Department 25 each month by the 20th day of the month next following the 26 month during which such tax liability is incurred and shall 27 make payment to the Department on or before the 7th, 15th, 28 22nd and last day of the month during which such liability is 29 incurred. If the month during which such tax liability is 30 incurred began prior to January 1, 1985, each payment shall 31 be in an amount equal to 1/4 of the taxpayer's actual 32 liability for the month or an amount set by the Department 33 not to exceed 1/4 of the average monthly liability of the 34 taxpayer to the Department for the preceding 4 complete SB1118 Enrolled -117- LRB9102874PTpkA 1 calendar quarters (excluding the month of highest liability 2 and the month of lowest liability in such 4 quarter period). 3 If the month during which such tax liability is incurred 4 begins on or after January 1, 1985 and prior to January 1, 5 1987, each payment shall be in an amount equal to 22.5% of 6 the taxpayer's actual liability for the month or 27.5% of the 7 taxpayer's liability for the same calendar month of the 8 preceding year. If the month during which such tax liability 9 is incurred begins on or after January 1, 1987 and prior to 10 January 1, 1988, each payment shall be in an amount equal to 11 22.5% of the taxpayer's actual liability for the month or 12 26.25% of the taxpayer's liability for the same calendar 13 month of the preceding year. If the month during which such 14 tax liability is incurred begins on or after January 1, 1988, 15 and prior to January 1, 1989, or begins on or after January 16 1, 1996, each payment shall be in an amount equal to 22.5% of 17 the taxpayer's actual liability for the month or 25% of the 18 taxpayer's liability for the same calendar month of the 19 preceding year. If the month during which such tax liability 20 is incurred begins on or after January 1, 1989, and prior to 21 January 1, 1996, each payment shall be in an amount equal to 22 22.5% of the taxpayer's actual liability for the month or 25% 23 of the taxpayer's liability for the same calendar month of 24 the preceding year or 100% of the taxpayer's actual liability 25 for the quarter monthly reporting period. The amount of such 26 quarter monthly payments shall be credited against the final 27 tax liability of the taxpayer's return for that month. 28 Before October 1, 2000, once applicable, the requirement of 29 the making of quarter monthly payments to the Department by 30 taxpayers having an average monthly tax liability of $10,000 31 or more as determined in the manner provided above shall 32 continue until such taxpayer's average monthly liability to 33 the Department during the preceding 4 complete calendar 34 quarters (excluding the month of highest liability and the SB1118 Enrolled -118- LRB9102874PTpkA 1 month of lowest liability) is less than $9,000, or until such 2 taxpayer's average monthly liability to the Department as 3 computed for each calendar quarter of the 4 preceding 4 complete calendar quarter period is less than $10,000. 5 However, if a taxpayer can show the Department that a 6 substantial change in the taxpayer's business has occurred 7 which causes the taxpayer to anticipate that his average 8 monthly tax liability for the reasonably foreseeable future 9 will fall below the $10,000 threshold stated above, then such 10 taxpayer may petition the Department for a change in such 11 taxpayer's reporting status. On and after October 1, 2000, 12 once applicable, the requirement of the making of quarter 13 monthly payments to the Department by taxpayers having an 14 average monthly tax liability of $20,000 or more as 15 determined in the manner provided above shall continue until 16 such taxpayer's average monthly liability to the Department 17 during the preceding 4 complete calendar quarters (excluding 18 the month of highest liability and the month of lowest 19 liability) is less than $19,000 or until such taxpayer's 20 average monthly liability to the Department as computed for 21 each calendar quarter of the 4 preceding complete calendar 22 quarter period is less than $20,000. However, if a taxpayer 23 can show the Department that a substantial change in the 24 taxpayer's business has occurred which causes the taxpayer to 25 anticipate that his average monthly tax liability for the 26 reasonably foreseeable future will fall below the $20,000 27 threshold stated above, then such taxpayer may petition the 28 Department for a change in such taxpayer's reporting status. 29 The Department shall change such taxpayer's reporting status 30 unless it finds that such change is seasonal in nature and 31 not likely to be long term. If any such quarter monthly 32 payment is not paid at the time or in the amount required by 33 this Section, then the taxpayer shall be liable for penalties 34 and interest on the difference between the minimum amount due SB1118 Enrolled -119- LRB9102874PTpkA 1 as a payment and the amount of such quarter monthly payment 2 actually and timely paid, except insofar as the taxpayer has 3 previously made payments for that month to the Department in 4 excess of the minimum payments previously due as provided in 5 this Section. The Department shall make reasonable rules and 6 regulations to govern the quarter monthly payment amount and 7 quarter monthly payment dates for taxpayers who file on other 8 than a calendar monthly basis. 9 Without regard to whether a taxpayer is required to make 10 quarter monthly payments as specified above, any taxpayer who 11 is required by Section 2d of this Act to collect and remit 12 prepaid taxes and has collected prepaid taxes which average 13 in excess of $25,000 per month during the preceding 2 14 complete calendar quarters, shall file a return with the 15 Department as required by Section 2f and shall make payments 16 to the Department on or before the 7th, 15th, 22nd and last 17 day of the month during which such liability is incurred. If 18 the month during which such tax liability is incurred began 19 prior to the effective date of this amendatory Act of 1985, 20 each payment shall be in an amount not less than 22.5% of the 21 taxpayer's actual liability under Section 2d. If the month 22 during which such tax liability is incurred begins on or 23 after January 1, 1986, each payment shall be in an amount 24 equal to 22.5% of the taxpayer's actual liability for the 25 month or 27.5% of the taxpayer's liability for the same 26 calendar month of the preceding calendar year. If the month 27 during which such tax liability is incurred begins on or 28 after January 1, 1987, each payment shall be in an amount 29 equal to 22.5% of the taxpayer's actual liability for the 30 month or 26.25% of the taxpayer's liability for the same 31 calendar month of the preceding year. The amount of such 32 quarter monthly payments shall be credited against the final 33 tax liability of the taxpayer's return for that month filed 34 under this Section or Section 2f, as the case may be. Once SB1118 Enrolled -120- LRB9102874PTpkA 1 applicable, the requirement of the making of quarter monthly 2 payments to the Department pursuant to this paragraph shall 3 continue until such taxpayer's average monthly prepaid tax 4 collections during the preceding 2 complete calendar quarters 5 is $25,000 or less. If any such quarter monthly payment is 6 not paid at the time or in the amount required, the taxpayer 7 shall be liable for penalties and interest on such 8 difference, except insofar as the taxpayer has previously 9 made payments for that month in excess of the minimum 10 payments previously due. 11 If any payment provided for in this Section exceeds the 12 taxpayer's liabilities under this Act, the Use Tax Act, the 13 Service Occupation Tax Act and the Service Use Tax Act, as 14 shown on an original monthly return, the Department shall, if 15 requested by the taxpayer, issue to the taxpayer a credit 16 memorandum no later than 30 days after the date of payment. 17 The credit evidenced by such credit memorandum may be 18 assigned by the taxpayer to a similar taxpayer under this 19 Act, the Use Tax Act, the Service Occupation Tax Act or the 20 Service Use Tax Act, in accordance with reasonable rules and 21 regulations to be prescribed by the Department. If no such 22 request is made, the taxpayer may credit such excess payment 23 against tax liability subsequently to be remitted to the 24 Department under this Act, the Use Tax Act, the Service 25 Occupation Tax Act or the Service Use Tax Act, in accordance 26 with reasonable rules and regulations prescribed by the 27 Department. If the Department subsequently determined that 28 all or any part of the credit taken was not actually due to 29 the taxpayer, the taxpayer's 2.1% and 1.75% vendor's discount 30 shall be reduced by 2.1% or 1.75% of the difference between 31 the credit taken and that actually due, and that taxpayer 32 shall be liable for penalties and interest on such 33 difference. 34 If a retailer of motor fuel is entitled to a credit under SB1118 Enrolled -121- LRB9102874PTpkA 1 Section 2d of this Act which exceeds the taxpayer's liability 2 to the Department under this Act for the month which the 3 taxpayer is filing a return, the Department shall issue the 4 taxpayer a credit memorandum for the excess. 5 Beginning January 1, 1990, each month the Department 6 shall pay into the Local Government Tax Fund, a special fund 7 in the State treasury which is hereby created, the net 8 revenue realized for the preceding month from the 1% tax on 9 sales of food for human consumption which is to be consumed 10 off the premises where it is sold (other than alcoholic 11 beverages, soft drinks and food which has been prepared for 12 immediate consumption) and prescription and nonprescription 13 medicines, drugs, medical appliances and insulin, urine 14 testing materials, syringes and needles used by diabetics. 15 Beginning January 1, 1990, each month the Department 16 shall pay into the County and Mass Transit District Fund, a 17 special fund in the State treasury which is hereby created, 18 4% of the net revenue realized for the preceding month from 19 the 6.25% general rate. 20 Beginning January 1, 1990, each month the Department 21 shall pay into the Local Government Tax Fund 16% of the net 22 revenue realized for the preceding month from the 6.25% 23 general rate on the selling price of tangible personal 24 property. 25 Of the remainder of the moneys received by the Department 26 pursuant to this Act, (a) 1.75% thereof shall be paid into 27 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2% 28 and on and after July 1, 1989, 3.8% thereof shall be paid 29 into the Build Illinois Fund; provided, however, that if in 30 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%, 31 as the case may be, of the moneys received by the Department 32 and required to be paid into the Build Illinois Fund pursuant 33 to this Act, Section 9 of the Use Tax Act, Section 9 of the 34 Service Use Tax Act, and Section 9 of the Service Occupation SB1118 Enrolled -122- LRB9102874PTpkA 1 Tax Act, such Acts being hereinafter called the "Tax Acts" 2 and such aggregate of 2.2% or 3.8%, as the case may be, of 3 moneys being hereinafter called the "Tax Act Amount", and (2) 4 the amount transferred to the Build Illinois Fund from the 5 State and Local Sales Tax Reform Fund shall be less than the 6 Annual Specified Amount (as hereinafter defined), an amount 7 equal to the difference shall be immediately paid into the 8 Build Illinois Fund from other moneys received by the 9 Department pursuant to the Tax Acts; the "Annual Specified 10 Amount" means the amounts specified below for fiscal years 11 1986 through 1993: 12 Fiscal Year Annual Specified Amount 13 1986 $54,800,000 14 1987 $76,650,000 15 1988 $80,480,000 16 1989 $88,510,000 17 1990 $115,330,000 18 1991 $145,470,000 19 1992 $182,730,000 20 1993 $206,520,000; 21 and means the Certified Annual Debt Service Requirement (as 22 defined in Section 13 of the Build Illinois Bond Act) or the 23 Tax Act Amount, whichever is greater, for fiscal year 1994 24 and each fiscal year thereafter; and further provided, that 25 if on the last business day of any month the sum of (1) the 26 Tax Act Amount required to be deposited into the Build 27 Illinois Bond Account in the Build Illinois Fund during such 28 month and (2) the amount transferred to the Build Illinois 29 Fund from the State and Local Sales Tax Reform Fund shall 30 have been less than 1/12 of the Annual Specified Amount, an 31 amount equal to the difference shall be immediately paid into 32 the Build Illinois Fund from other moneys received by the 33 Department pursuant to the Tax Acts; and, further provided, 34 that in no event shall the payments required under the SB1118 Enrolled -123- LRB9102874PTpkA 1 preceding proviso result in aggregate payments into the Build 2 Illinois Fund pursuant to this clause (b) for any fiscal year 3 in excess of the greater of (i) the Tax Act Amount or (ii) 4 the Annual Specified Amount for such fiscal year. The 5 amounts payable into the Build Illinois Fund under clause (b) 6 of the first sentence in this paragraph shall be payable only 7 until such time as the aggregate amount on deposit under each 8 trust indenture securing Bonds issued and outstanding 9 pursuant to the Build Illinois Bond Act is sufficient, taking 10 into account any future investment income, to fully provide, 11 in accordance with such indenture, for the defeasance of or 12 the payment of the principal of, premium, if any, and 13 interest on the Bonds secured by such indenture and on any 14 Bonds expected to be issued thereafter and all fees and costs 15 payable with respect thereto, all as certified by the 16 Director of the Bureau of the Budget. If on the last 17 business day of any month in which Bonds are outstanding 18 pursuant to the Build Illinois Bond Act, the aggregate of 19 moneys deposited in the Build Illinois Bond Account in the 20 Build Illinois Fund in such month shall be less than the 21 amount required to be transferred in such month from the 22 Build Illinois Bond Account to the Build Illinois Bond 23 Retirement and Interest Fund pursuant to Section 13 of the 24 Build Illinois Bond Act, an amount equal to such deficiency 25 shall be immediately paid from other moneys received by the 26 Department pursuant to the Tax Acts to the Build Illinois 27 Fund; provided, however, that any amounts paid to the Build 28 Illinois Fund in any fiscal year pursuant to this sentence 29 shall be deemed to constitute payments pursuant to clause (b) 30 of the first sentence of this paragraph and shall reduce the 31 amount otherwise payable for such fiscal year pursuant to 32 that clause (b). The moneys received by the Department 33 pursuant to this Act and required to be deposited into the 34 Build Illinois Fund are subject to the pledge, claim and SB1118 Enrolled -124- LRB9102874PTpkA 1 charge set forth in Section 12 of the Build Illinois Bond 2 Act. 3 Subject to payment of amounts into the Build Illinois 4 Fund as provided in the preceding paragraph or in any 5 amendment thereto hereafter enacted, the following specified 6 monthly installment of the amount requested in the 7 certificate of the Chairman of the Metropolitan Pier and 8 Exposition Authority provided under Section 8.25f of the 9 State Finance Act, but not in excess of sums designated as 10 "Total Deposit", shall be deposited in the aggregate from 11 collections under Section 9 of the Use Tax Act, Section 9 of 12 the Service Use Tax Act, Section 9 of the Service Occupation 13 Tax Act, and Section 3 of the Retailers' Occupation Tax Act 14 into the McCormick Place Expansion Project Fund in the 15 specified fiscal years. 16 Fiscal Year Total Deposit 17 1993 $0 18 1994 53,000,000 19 1995 58,000,000 20 1996 61,000,000 21 1997 64,000,000 22 1998 68,000,000 23 1999 71,000,000 24 2000 75,000,000 25 2001 80,000,000 26 2002 84,000,000 27 2003 89,000,000 28 2004 93,000,000 29 2005 97,000,000 30 2006 102,000,000 31 2007 and 106,000,000 32 each fiscal year 33 thereafter that bonds 34 are outstanding under SB1118 Enrolled -125- LRB9102874PTpkA 1 Section 13.2 of the 2 Metropolitan Pier and 3 Exposition Authority 4 Act, but not after fiscal year 2029. 5 Beginning July 20, 1993 and in each month of each fiscal 6 year thereafter, one-eighth of the amount requested in the 7 certificate of the Chairman of the Metropolitan Pier and 8 Exposition Authority for that fiscal year, less the amount 9 deposited into the McCormick Place Expansion Project Fund by 10 the State Treasurer in the respective month under subsection 11 (g) of Section 13 of the Metropolitan Pier and Exposition 12 Authority Act, plus cumulative deficiencies in the deposits 13 required under this Section for previous months and years, 14 shall be deposited into the McCormick Place Expansion Project 15 Fund, until the full amount requested for the fiscal year, 16 but not in excess of the amount specified above as "Total 17 Deposit", has been deposited. 18 Subject to payment of amounts into the Build Illinois 19 Fund and the McCormick Place Expansion Project Fund pursuant 20 to the preceding paragraphs or in any amendment thereto 21 hereafter enacted, each month the Department shall pay into 22 the Local Government Distributive Fund 0.4% of the net 23 revenue realized for the preceding month from the 5% general 24 rate or 0.4% of 80% of the net revenue realized for the 25 preceding month from the 6.25% general rate, as the case may 26 be, on the selling price of tangible personal property which 27 amount shall, subject to appropriation, be distributed as 28 provided in Section 2 of the State Revenue Sharing Act. No 29 payments or distributions pursuant to this paragraph shall be 30 made if the tax imposed by this Act on photoprocessing 31 products is declared unconstitutional, or if the proceeds 32 from such tax are unavailable for distribution because of 33 litigation. 34 Subject to payment of amounts into the Build Illinois SB1118 Enrolled -126- LRB9102874PTpkA 1 Fund, the McCormick Place Expansion Project to the preceding 2 paragraphs or in any amendments thereto hereafter enacted, 3 beginning July 1, 1993, the Department shall each month pay 4 into the Illinois Tax Increment Fund 0.27% of 80% of the net 5 revenue realized for the preceding month from the 6.25% 6 general rate on the selling price of tangible personal 7 property. 8 Of the remainder of the moneys received by the Department 9 pursuant to this Act, 75% thereof shall be paid into the 10 State Treasury and 25% shall be reserved in a special account 11 and used only for the transfer to the Common School Fund as 12 part of the monthly transfer from the General Revenue Fund in 13 accordance with Section 8a of the State Finance Act. 14 The Department may, upon separate written notice to a 15 taxpayer, require the taxpayer to prepare and file with the 16 Department on a form prescribed by the Department within not 17 less than 60 days after receipt of the notice an annual 18 information return for the tax year specified in the notice. 19 Such annual return to the Department shall include a 20 statement of gross receipts as shown by the retailer's last 21 Federal income tax return. If the total receipts of the 22 business as reported in the Federal income tax return do not 23 agree with the gross receipts reported to the Department of 24 Revenue for the same period, the retailer shall attach to his 25 annual return a schedule showing a reconciliation of the 2 26 amounts and the reasons for the difference. The retailer's 27 annual return to the Department shall also disclose the cost 28 of goods sold by the retailer during the year covered by such 29 return, opening and closing inventories of such goods for 30 such year, costs of goods used from stock or taken from stock 31 and given away by the retailer during such year, payroll 32 information of the retailer's business during such year and 33 any additional reasonable information which the Department 34 deems would be helpful in determining the accuracy of the SB1118 Enrolled -127- LRB9102874PTpkA 1 monthly, quarterly or annual returns filed by such retailer 2 as provided for in this Section. 3 If the annual information return required by this Section 4 is not filed when and as required, the taxpayer shall be 5 liable as follows: 6 (i) Until January 1, 1994, the taxpayer shall be 7 liable for a penalty equal to 1/6 of 1% of the tax due 8 from such taxpayer under this Act during the period to be 9 covered by the annual return for each month or fraction 10 of a month until such return is filed as required, the 11 penalty to be assessed and collected in the same manner 12 as any other penalty provided for in this Act. 13 (ii) On and after January 1, 1994, the taxpayer 14 shall be liable for a penalty as described in Section 3-4 15 of the Uniform Penalty and Interest Act. 16 The chief executive officer, proprietor, owner or highest 17 ranking manager shall sign the annual return to certify the 18 accuracy of the information contained therein. Any person 19 who willfully signs the annual return containing false or 20 inaccurate information shall be guilty of perjury and 21 punished accordingly. The annual return form prescribed by 22 the Department shall include a warning that the person 23 signing the return may be liable for perjury. 24 The provisions of this Section concerning the filing of 25 an annual information return do not apply to a retailer who 26 is not required to file an income tax return with the United 27 States Government. 28 As soon as possible after the first day of each month, 29 upon certification of the Department of Revenue, the 30 Comptroller shall order transferred and the Treasurer shall 31 transfer from the General Revenue Fund to the Motor Fuel Tax 32 Fund an amount equal to 1.7% of 80% of the net revenue 33 realized under this Act for the second preceding month; 34 except that this transfer shall not be made for the months SB1118 Enrolled -128- LRB9102874PTpkA 1 February through June, 1992. 2 Net revenue realized for a month shall be the revenue 3 collected by the State pursuant to this Act, less the amount 4 paid out during that month as refunds to taxpayers for 5 overpayment of liability. 6 For greater simplicity of administration, manufacturers, 7 importers and wholesalers whose products are sold at retail 8 in Illinois by numerous retailers, and who wish to do so, may 9 assume the responsibility for accounting and paying to the 10 Department all tax accruing under this Act with respect to 11 such sales, if the retailers who are affected do not make 12 written objection to the Department to this arrangement. 13 Any person who promotes, organizes, provides retail 14 selling space for concessionaires or other types of sellers 15 at the Illinois State Fair, DuQuoin State Fair, county fairs, 16 local fairs, art shows, flea markets and similar exhibitions 17 or events, including any transient merchant as defined by 18 Section 2 of the Transient Merchant Act of 1987, is required 19 to file a report with the Department providing the name of 20 the merchant's business, the name of the person or persons 21 engaged in merchant's business, the permanent address and 22 Illinois Retailers Occupation Tax Registration Number of the 23 merchant, the dates and location of the event and other 24 reasonable information that the Department may require. The 25 report must be filed not later than the 20th day of the month 26 next following the month during which the event with retail 27 sales was held. Any person who fails to file a report 28 required by this Section commits a business offense and is 29 subject to a fine not to exceed $250. 30 Any person engaged in the business of selling tangible 31 personal property at retail as a concessionaire or other type 32 of seller at the Illinois State Fair, county fairs, art 33 shows, flea markets and similar exhibitions or events, or any 34 transient merchants, as defined by Section 2 of the Transient SB1118 Enrolled -129- LRB9102874PTpkA 1 Merchant Act of 1987, may be required to make a daily report 2 of the amount of such sales to the Department and to make a 3 daily payment of the full amount of tax due. The Department 4 shall impose this requirement when it finds that there is a 5 significant risk of loss of revenue to the State at such an 6 exhibition or event. Such a finding shall be based on 7 evidence that a substantial number of concessionaires or 8 other sellers who are not residents of Illinois will be 9 engaging in the business of selling tangible personal 10 property at retail at the exhibition or event, or other 11 evidence of a significant risk of loss of revenue to the 12 State. The Department shall notify concessionaires and other 13 sellers affected by the imposition of this requirement. In 14 the absence of notification by the Department, the 15 concessionaires and other sellers shall file their returns as 16 otherwise required in this Section. 17 (Source: P.A. 89-89, eff. 6-30-95; 89-235, eff. 8-4-95; 18 89-379, eff. 1-1-96; 89-626, eff. 8-9-96; 90-491, eff. 19 1-1-99; 90-612, eff. 7-8-98.) 20 Section 30. The Telecommunications Excise Tax Act is 21 amended by changing Section 6 as follows: 22 (35 ILCS 630/6) (from Ch. 120, par. 2006) 23 Sec. 6. Except as provided hereinafter in this Section, 24 on or before the 15th day of each month each retailer 25 maintaining a place of business in this State shall make a 26 return to the Department for the preceding calendar month, 27 stating: 28 1. His name; 29 2. The address of his principal place of business, 30 and the address of the principal place of business (if 31 that is a different address) from which he engages in the 32 business of transmitting telecommunications; SB1118 Enrolled -130- LRB9102874PTpkA 1 3. Total amount of gross charges billed by him 2 during the preceding calendar month for providing 3 telecommunications during such calendar month; 4 4. Total amount received by him during the 5 preceding calendar month on credit extended; 6 5. Deductions allowed by law; 7 6. Gross charges which were billed by him during 8 the preceding calendar month and upon the basis of which 9 the tax is imposed; 10 7. Amount of tax (computed upon Item 6); 11 8. Such other reasonable information as the 12 Department may require. 13 Any taxpayer required to make payments under this Section 14 may make the payments by electronic funds transfer. The 15 Department shall adopt rules necessary to effectuate a 16 program of electronic funds transfer. 17 If the retailer's average monthly tax billings due to the 18 Department do not exceed $200$100, the Department may 19 authorize his returns to be filed on a quarter annual basis, 20 with the return for January, February and March of a given 21 year being due by April 15 of such year; with the return for 22 April, May and June of a given year being due by July 15 of 23 such year; with the return for July, August and September of 24 a given year being due by October 15 of such year; and with 25 the return of October, November and December of a given year 26 being due by January 15 of the following year. 27 If the retailer is otherwise required to file a monthly 28 or quarterly return and if the retailer's average monthly tax 29 billings due to the Department do not exceed $50, the 30 Department may authorize his or her return to be filed on an 31 annual basis, with the return for a given year being due by 32 January 15th of the following year. 33 Notwithstanding any other provision of this Article 34 containing the time within which a retailer may file his SB1118 Enrolled -131- LRB9102874PTpkA 1 return, in the case of any retailer who ceases to engage in a 2 kind of business which makes him responsible for filing 3 returns under this Article, such retailer shall file a final 4 return under this Article with the Department not more than 5 one month after discontinuing such business. 6 In making such return, the retailer shall determine the 7 value of any consideration other than money received by him 8 and he shall include such value in his return. Such 9 determination shall be subject to review and revision by the 10 Department in the manner hereinafter provided for the 11 correction of returns. 12 Each retailer whose average monthly liability to the 13 Department under this Article was $10,000 or more during the 14 preceding calendar year, excluding the month of highest 15 liability and the month of lowest liability in such calendar 16 year, and who is not operated by a unit of local government, 17 shall make estimated payments to the Department on or before 18 the 7th, 15th, 22nd and last day of the month during which 19 tax collection liability to the Department is incurred in an 20 amount not less than the lower of either 22.5% of the 21 retailer's actual tax collections for the month or 25% of the 22 retailer's actual tax collections for the same calendar month 23 of the preceding year. The amount of such quarter monthly 24 payments shall be credited against the final liability of the 25 retailer's return for that month. Any outstanding credit, 26 approved by the Department, arising from the retailer's 27 overpayment of its final liability for any month may be 28 applied to reduce the amount of any subsequent quarter 29 monthly payment or credited against the final liability of 30 the retailer's return for any subsequent month. If any 31 quarter monthly payment is not paid at the time or in the 32 amount required by this Section, the retailer shall be liable 33 for penalty and interest on the difference between the 34 minimum amount due as a payment and the amount of such SB1118 Enrolled -132- LRB9102874PTpkA 1 payment actually and timely paid, except insofar as the 2 retailer has previously made payments for that month to the 3 Department in excess of the minimum payments previously due. 4 If the Director finds that the information required for 5 the making of an accurate return cannot reasonably be 6 compiled by a retailer within 15 days after the close of the 7 calendar month for which a return is to be made, he may grant 8 an extension of time for the filing of such return for a 9 period of not to exceed 31 calendar days. The granting of 10 such an extension may be conditioned upon the deposit by the 11 retailer with the Department of an amount of money not 12 exceeding the amount estimated by the Director to be due with 13 the return so extended. All such deposits, including any 14 heretofore made with the Department, shall be credited 15 against the retailer's liabilities under this Article. If 16 any such deposit exceeds the retailer's present and probable 17 future liabilities under this Article, the Department shall 18 issue to the retailer a credit memorandum, which may be 19 assigned by the retailer to a similar retailer under this 20 Article, in accordance with reasonable rules and regulations 21 to be prescribed by the Department. 22 The retailer making the return herein provided for shall, 23 at the time of making such return, pay to the Department the 24 amount of tax herein imposed. On and after the effective date 25 of this Article of 1985, $1,000,000 of the moneys received by 26 the Department of Revenue pursuant to this Article shall be 27 paid each month into the Common School Fund and the remainder 28 into the General Revenue Fund. On and after February 1, 1998, 29 however, of the moneys received by the Department of Revenue 30 pursuant to the additional taxes imposed by this amendatory 31 Act of 1997 one-half shall be deposited into the School 32 Infrastructure Fund and one-half shall be deposited into the 33 Common School Fund. 34 (Source: P.A. 90-16, eff. 6-16-97; 90-548, eff. 12-4-97.) SB1118 Enrolled -133- LRB9102874PTpkA 1 Section 99. Effective date. This Act takes effect upon 2 becoming law. SB1118 Enrolled -134- LRB9102874PTpkA 1 INDEX 2 Statutes amended in order of appearance 3 35 ILCS 5/203 from Ch. 120, par. 2-203 4 35 ILCS 5/207 from Ch. 120, par. 2-207 5 35 ILCS 5/405 new 6 35 ILCS 5/502 from Ch. 120, par. 5-502 7 35 ILCS 5/601.1 Ch. 120, par. 6-601.1 8 35 ILCS 5/905 from Ch. 120, par. 9-905 9 35 ILCS 5/911 from Ch. 120, par. 9-911 10 35 ILCS 105/9 from Ch. 120, par. 439.9 11 35 ILCS 105/10 from Ch. 120, par. 439.10 12 35 ILCS 110/3-10 from Ch. 120, par. 439.33-10 13 35 ILCS 110/9 from Ch. 120, par. 439.39 14 35 ILCS 115/3-10 from Ch. 120, par. 439.103-10 15 35 ILCS 115/9 from Ch. 120, par. 439.109 16 35 ILCS 120/3 from Ch. 120, par. 442 17 35 ILCS 630/6 from Ch. 120, par. 2006