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91_SB1118eng SB1118 Engrossed 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, 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 Engrossed -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income; 14 (D-5) An amount, to the extent not included in 15 adjusted gross income, equal to the amount of money 16 withdrawn by the taxpayer in the taxable year from a 17 medical care savings account and the interest earned 18 on the account in the taxable year of a withdrawal 19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 Engrossed -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 Engrossed -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 beginning on or after January 1, 2000, Sections 26 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the 27 Internal Revenue Code; the provisions of this 28 subparagraph are exempt from the provisions of 29 Section 250; 30 (N) An amount equal to all amounts included in 31 such total which are exempt from taxation by this 32 State either by reason of its statutes or 33 Constitution or by reason of the Constitution, 34 treaties or statutes of the United States; provided SB1118 Engrossed -5- LRB9102874PTpkA 1 that, in the case of any statute of this State that 2 exempts income derived from bonds or other 3 obligations from the tax imposed under this Act, the 4 amount exempted shall be the interest net of bond 5 premium amortization; 6 (O) An amount equal to any contribution made 7 to a job training project established pursuant to 8 the Tax Increment Allocation Redevelopment Act; 9 (P) An amount equal to the amount of the 10 deduction used to compute the federal income tax 11 credit for restoration of substantial amounts held 12 under claim of right for the taxable year pursuant 13 to Section 1341 of the Internal Revenue Code of 14 1986; 15 (Q) An amount equal to any amounts included in 16 such total, received by the taxpayer as an 17 acceleration in the payment of life, endowment or 18 annuity benefits in advance of the time they would 19 otherwise be payable as an indemnity for a terminal 20 illness; 21 (R) An amount equal to the amount of any 22 federal or State bonus paid to veterans of the 23 Persian Gulf War; 24 (S) An amount, to the extent included in 25 adjusted gross income, equal to the amount of a 26 contribution made in the taxable year on behalf of 27 the taxpayer to a medical care savings account 28 established under the Medical Care Savings Account 29 Act to the extent the contribution is accepted by 30 the account administrator as provided in that Act; 31 (T) An amount, to the extent included in 32 adjusted gross income, equal to the amount of 33 interest earned in the taxable year on a medical 34 care savings account established under the Medical SB1118 Engrossed -6- LRB9102874PTpkA 1 Care Savings Account Act on behalf of the taxpayer, 2 other than interest added pursuant to item (D-5) of 3 this paragraph (2); 4 (U) For one taxable year beginning on or after 5 January 1, 1994, an amount equal to the total amount 6 of tax imposed and paid under subsections (a) and 7 (b) of Section 201 of this Act on grant amounts 8 received by the taxpayer under the Nursing Home 9 Grant Assistance Act during the taxpayer's taxable 10 years 1992 and 1993; 11 (V) Beginning with tax years ending on or 12 after December 31, 1995 and ending with tax years 13 ending on or before December 31, 1999, an amount 14 equal to the amount paid by a taxpayer who is a 15 self-employed taxpayer, a partner of a partnership, 16 or a shareholder in a Subchapter S corporation for 17 health insurance or long-term care insurance for 18 that taxpayer or that taxpayer's spouse or 19 dependents, to the extent that the amount paid for 20 that health insurance or long-term care insurance 21 may be deducted under Section 213 of the Internal 22 Revenue Code of 1986, has not been deducted on the 23 federal income tax return of the taxpayer, and does 24 not exceed the taxable income attributable to that 25 taxpayer's income, self-employment income, or 26 Subchapter S corporation income; except that no 27 deduction shall be allowed under this item (V) if 28 the taxpayer is eligible to participate in any 29 health insurance or long-term care insurance plan of 30 an employer of the taxpayer or the taxpayer's 31 spouse. The amount of the health insurance and 32 long-term care insurance subtracted under this item 33 (V) shall be determined by multiplying total health 34 insurance and long-term care insurance premiums paid SB1118 Engrossed -7- LRB9102874PTpkA 1 by the taxpayer times a number that represents the 2 fractional percentage of eligible medical expenses 3 under Section 213 of the Internal Revenue Code of 4 1986 not actually deducted on the taxpayer's federal 5 income tax return; and 6 (W) For taxable years beginning on or after 7 January 1, 1998, all amounts included in the 8 taxpayer's federal gross income in the taxable year 9 from amounts converted from a regular IRA to a Roth 10 IRA. This paragraph is exempt from the provisions of 11 Section 250. 12 (b) Corporations. 13 (1) In general. In the case of a corporation, base 14 income means an amount equal to the taxpayer's taxable 15 income for the taxable year as modified by paragraph (2). 16 (2) Modifications. The taxable income referred to 17 in paragraph (1) shall be modified by adding thereto the 18 sum of the following amounts: 19 (A) An amount equal to all amounts paid or 20 accrued to the taxpayer as interest and all 21 distributions received from regulated investment 22 companies during the taxable year to the extent 23 excluded from gross income in the computation of 24 taxable income; 25 (B) An amount equal to the amount of tax 26 imposed by this Act to the extent deducted from 27 gross income in the computation of taxable income 28 for the taxable year; 29 (C) In the case of a regulated investment 30 company, an amount equal to the excess of (i) the 31 net long-term capital gain for the taxable year, 32 over (ii) the amount of the capital gain dividends 33 designated as such in accordance with Section 34 852(b)(3)(C) of the Internal Revenue Code and any SB1118 Engrossed -8- LRB9102874PTpkA 1 amount designated under Section 852(b)(3)(D) of the 2 Internal Revenue Code, attributable to the taxable 3 year.(this amendatory Act of 1995 (Public Act 4 89-89) is declarative of existing law and is not a 5 new enactment);.6 (D) The amount of any net operating loss 7 deduction taken in arriving at taxable income, other 8 than a net operating loss carried forward from a 9 taxable year ending prior to December 31, 1986;and10 (E) For taxable years in which a net operating 11 loss carryback or carryforward from a taxable year 12 ending prior to December 31, 1986 is an element of 13 taxable income under paragraph (1) of subsection (e) 14 or subparagraph (E) of paragraph (2) of subsection 15 (e), the amount by which addition modifications 16 other than those provided by this subparagraph (E) 17 exceeded subtraction modifications in such earlier 18 taxable year, with the following limitations applied 19 in the order that they are listed: 20 (i) the addition modification relating to 21 the net operating loss carried back or forward 22 to the taxable year from any taxable year 23 ending prior to December 31, 1986 shall be 24 reduced by the amount of addition modification 25 under this subparagraph (E) which related to 26 that net operating loss and which was taken 27 into account in calculating the base income of 28 an earlier taxable year, and 29 (ii) the addition modification relating 30 to the net operating loss carried back or 31 forward to the taxable year from any taxable 32 year ending prior to December 31, 1986 shall 33 not exceed the amount of such carryback or 34 carryforward; SB1118 Engrossed -9- LRB9102874PTpkA 1 For taxable years in which there is a net 2 operating loss carryback or carryforward from more 3 than one other taxable year ending prior to December 4 31, 1986, the addition modification provided in this 5 subparagraph (E) shall be the sum of the amounts 6 computed independently under the preceding 7 provisions of this subparagraph (E) for each such 8 taxable year;,and 9 (E-5) For taxable years ending after December 10 31, 1997, an amount equal to any eligible 11 remediation costs that the corporation deducted in 12 computing adjusted gross income and for which the 13 corporation claims a credit under subsection (l) of 14 Section 201; 15 and by deducting from the total so obtained the sum of 16 the following amounts: 17 (F) An amount equal to the amount of any tax 18 imposed by this Act which was refunded to the 19 taxpayer and included in such total for the taxable 20 year; 21 (G) An amount equal to any amount included in 22 such total under Section 78 of the Internal Revenue 23 Code; 24 (H) In the case of a regulated investment 25 company, an amount equal to the amount of exempt 26 interest dividends as defined in subsection (b) (5) 27 of Section 852 of the Internal Revenue Code, paid to 28 shareholders for the taxable year; 29 (I) With the exception of any amounts 30 subtracted under subparagraph (J), an amount equal 31 to the sum of all amounts disallowed as deductions 32 by (i) Sections 171(a)(2), and 265(a)(2) and amounts 33 disallowed as interest expense by Section 291(a)(3) 34 of the Internal Revenue Code, as now or hereafter SB1118 Engrossed -10- LRB9102874PTpkA 1 amended, and all amounts of expenses allocable to 2 interest and disallowed as deductions by Section 3 265(a)(1) of the Internal Revenue Code, as now or 4 hereafter amended; and (ii) for taxable years 5 beginning on or after January 1, 2000, Sections 6 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the 7 Internal Revenue Code; the provisions of this 8 subparagraph are exempt from the provisions of 9 Section 250; 10 (J) An amount equal to all amounts included in 11 such total which are exempt from taxation by this 12 State either by reason of its statutes or 13 Constitution or by reason of the Constitution, 14 treaties or statutes of the United States; provided 15 that, in the case of any statute of this State that 16 exempts income derived from bonds or other 17 obligations from the tax imposed under this Act, the 18 amount exempted shall be the interest net of bond 19 premium amortization; 20 (K) An amount equal to those dividends 21 included in such total which were paid by a 22 corporation which conducts business operations in an 23 Enterprise Zone or zones created under the Illinois 24 Enterprise Zone Act and conducts substantially all 25 of its operations in an Enterprise Zone or zones; 26 (L) An amount equal to those dividends 27 included in such total that were paid by a 28 corporation that conducts business operations in a 29 federally designated Foreign Trade Zone or Sub-Zone 30 and that is designated a High Impact Business 31 located in Illinois; provided that dividends 32 eligible for the deduction provided in subparagraph 33 (K) of paragraph 2 of this subsection shall not be 34 eligible for the deduction provided under this SB1118 Engrossed -11- LRB9102874PTpkA 1 subparagraph (L); 2 (M) For any taxpayer that is a financial 3 organization within the meaning of Section 304(c) of 4 this Act, an amount included in such total as 5 interest income from a loan or loans made by such 6 taxpayer to a borrower, to the extent that such a 7 loan is secured by property which is eligible for 8 the Enterprise Zone Investment Credit. To determine 9 the portion of a loan or loans that is secured by 10 property eligible for a Section 201(h) investment 11 credit to the borrower, the entire principal amount 12 of the loan or loans between the taxpayer and the 13 borrower should be divided into the basis of the 14 Section 201(h) investment credit property which 15 secures the loan or loans, using for this purpose 16 the original basis of such property on the date that 17 it was placed in service in the Enterprise Zone. 18 The subtraction modification available to taxpayer 19 in any year under this subsection shall be that 20 portion of the total interest paid by the borrower 21 with respect to such loan attributable to the 22 eligible property as calculated under the previous 23 sentence; 24 (M-1) For any taxpayer that is a financial 25 organization within the meaning of Section 304(c) of 26 this Act, an amount included in such total as 27 interest income from a loan or loans made by such 28 taxpayer to a borrower, to the extent that such a 29 loan is secured by property which is eligible for 30 the High Impact Business Investment Credit. To 31 determine the portion of a loan or loans that is 32 secured by property eligible for a Section 201(i) 33 investment credit to the borrower, the entire 34 principal amount of the loan or loans between the SB1118 Engrossed -12- LRB9102874PTpkA 1 taxpayer and the borrower should be divided into the 2 basis of the Section 201(i) investment credit 3 property which secures the loan or loans, using for 4 this purpose the original basis of such property on 5 the date that it was placed in service in a 6 federally designated Foreign Trade Zone or Sub-Zone 7 located in Illinois. No taxpayer that is eligible 8 for the deduction provided in subparagraph (M) of 9 paragraph (2) of this subsection shall be eligible 10 for the deduction provided under this subparagraph 11 (M-1). The subtraction modification available to 12 taxpayers in any year under this subsection shall be 13 that portion of the total interest paid by the 14 borrower with respect to such loan attributable to 15 the eligible property as calculated under the 16 previous sentence; 17 (N) Two times any contribution made during the 18 taxable year to a designated zone organization to 19 the extent that the contribution (i) qualifies as a 20 charitable contribution under subsection (c) of 21 Section 170 of the Internal Revenue Code and (ii) 22 must, by its terms, be used for a project approved 23 by the Department of Commerce and Community Affairs 24 under Section 11 of the Illinois Enterprise Zone 25 Act; 26 (O) An amount equal to: (i) 85% for taxable 27 years ending on or before December 31, 1992, or, a 28 percentage equal to the percentage allowable under 29 Section 243(a)(1) of the Internal Revenue Code of 30 1986 for taxable years ending after December 31, 31 1992, of the amount by which dividends included in 32 taxable income and received from a corporation that 33 is not created or organized under the laws of the 34 United States or any state or political subdivision SB1118 Engrossed -13- LRB9102874PTpkA 1 thereof, including, for taxable years ending on or 2 after December 31, 1988, dividends received or 3 deemed received or paid or deemed paid under 4 Sections 951 through 964 of the Internal Revenue 5 Code, exceed the amount of the modification provided 6 under subparagraph (G) of paragraph (2) of this 7 subsection (b) which is related to such dividends; 8 plus (ii) 100% of the amount by which dividends, 9 included in taxable income and received, including, 10 for taxable years ending on or after December 31, 11 1988, dividends received or deemed received or paid 12 or deemed paid under Sections 951 through 964 of the 13 Internal Revenue Code, from any such corporation 14 specified in clause (i) that would but for the 15 provisions of Section 1504 (b) (3) of the Internal 16 Revenue Code be treated as a member of the 17 affiliated group which includes the dividend 18 recipient, exceed the amount of the modification 19 provided under subparagraph (G) of paragraph (2) of 20 this subsection (b) which is related to such 21 dividends; 22 (P) An amount equal to any contribution made 23 to a job training project established pursuant to 24 the Tax Increment Allocation Redevelopment Act; and 25 (Q) An amount equal to the amount of the 26 deduction used to compute the federal income tax 27 credit for restoration of substantial amounts held 28 under claim of right for the taxable year pursuant 29 to Section 1341 of the Internal Revenue Code of 30 1986. 31 (3) Special rule. For purposes of paragraph (2) 32 (A), "gross income" in the case of a life insurance 33 company, for tax years ending on and after December 31, 34 1994, shall mean the gross investment income for the SB1118 Engrossed -14- LRB9102874PTpkA 1 taxable year. 2 (c) Trusts and estates. 3 (1) In general. In the case of a trust or estate, 4 base income means an amount equal to the taxpayer's 5 taxable income for the taxable year as modified by 6 paragraph (2). 7 (2) Modifications. Subject to the provisions of 8 paragraph (3), the taxable income referred to in 9 paragraph (1) shall be modified by adding thereto the sum 10 of the following amounts: 11 (A) An amount equal to all amounts paid or 12 accrued to the taxpayer as interest or dividends 13 during the taxable year to the extent excluded from 14 gross income in the computation of taxable income; 15 (B) In the case of (i) an estate, $600; (ii) a 16 trust which, under its governing instrument, is 17 required to distribute all of its income currently, 18 $300; and (iii) any other trust, $100, but in each 19 such case, only to the extent such amount was 20 deducted in the computation of taxable income; 21 (C) An amount equal to the amount of tax 22 imposed by this Act to the extent deducted from 23 gross income in the computation of taxable income 24 for the taxable year; 25 (D) The amount of any net operating loss 26 deduction taken in arriving at taxable income, other 27 than a net operating loss carried forward from a 28 taxable year ending prior to December 31, 1986; 29 (E) For taxable years in which a net operating 30 loss carryback or carryforward from a taxable year 31 ending prior to December 31, 1986 is an element of 32 taxable income under paragraph (1) of subsection (e) 33 or subparagraph (E) of paragraph (2) of subsection 34 (e), the amount by which addition modifications SB1118 Engrossed -15- LRB9102874PTpkA 1 other than those provided by this subparagraph (E) 2 exceeded subtraction modifications in such taxable 3 year, with the following limitations applied in the 4 order that they are listed: 5 (i) the addition modification relating to 6 the net operating loss carried back or forward 7 to the taxable year from any taxable year 8 ending prior to December 31, 1986 shall be 9 reduced by the amount of addition modification 10 under this subparagraph (E) which related to 11 that net operating loss and which was taken 12 into account in calculating the base income of 13 an earlier taxable year, and 14 (ii) the addition modification relating 15 to the net operating loss carried back or 16 forward to the taxable year from any taxable 17 year ending prior to December 31, 1986 shall 18 not exceed the amount of such carryback or 19 carryforward; 20 For taxable years in which there is a net 21 operating loss carryback or carryforward from more 22 than one other taxable year ending prior to December 23 31, 1986, the addition modification provided in this 24 subparagraph (E) shall be the sum of the amounts 25 computed independently under the preceding 26 provisions of this subparagraph (E) for each such 27 taxable year; 28 (F) For taxable years ending on or after 29 January 1, 1989, an amount equal to the tax deducted 30 pursuant to Section 164 of the Internal Revenue Code 31 if the trust or estate is claiming the same tax for 32 purposes of the Illinois foreign tax credit under 33 Section 601 of this Act; 34 (G) An amount equal to the amount of the SB1118 Engrossed -16- LRB9102874PTpkA 1 capital gain deduction allowable under the Internal 2 Revenue Code, to the extent deducted from gross 3 income in the computation of taxable income; and 4 (G-5) For taxable years ending after December 5 31, 1997, an amount equal to any eligible 6 remediation costs that the trust or estate deducted 7 in computing adjusted gross income and for which the 8 trust or estate claims a credit under subsection (l) 9 of Section 201; 10 and by deducting from the total so obtained the sum of 11 the following amounts: 12 (H) An amount equal to all amounts included in 13 such total pursuant to the provisions of Sections 14 402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 15 408 of the Internal Revenue Code or included in such 16 total as distributions under the provisions of any 17 retirement or disability plan for employees of any 18 governmental agency or unit, or retirement payments 19 to retired partners, which payments are excluded in 20 computing net earnings from self employment by 21 Section 1402 of the Internal Revenue Code and 22 regulations adopted pursuant thereto; 23 (I) The valuation limitation amount; 24 (J) An amount equal to the amount of any tax 25 imposed by this Act which was refunded to the 26 taxpayer and included in such total for the taxable 27 year; 28 (K) An amount equal to all amounts included in 29 taxable income as modified by subparagraphs (A), 30 (B), (C), (D), (E), (F) and (G) which are exempt 31 from taxation by this State either by reason of its 32 statutes or Constitution or by reason of the 33 Constitution, treaties or statutes of the United 34 States; provided that, in the case of any statute of SB1118 Engrossed -17- LRB9102874PTpkA 1 this State that exempts income derived from bonds or 2 other obligations from the tax imposed under this 3 Act, the amount exempted shall be the interest net 4 of bond premium amortization; 5 (L) With the exception of any amounts 6 subtracted under subparagraph (K), an amount equal 7 to the sum of all amounts disallowed as deductions 8 by (i) Sections 171(a)(2) and 265(a)(2) of the 9 Internal Revenue Code, as now or hereafter amended, 10 and all amounts of expenses allocable to interest 11 and disallowed as deductions by Section 265(1) of 12 the Internal Revenue Code of 1954, as now or 13 hereafter amended; and (ii) for taxable years 14 beginning on or after January 1, 2000, Sections 15 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the 16 Internal Revenue Code; the provisions of this 17 subparagraph are exempt from the provisions of 18 Section 250; 19 (M) An amount equal to those dividends 20 included in such total which were paid by a 21 corporation which conducts business operations in an 22 Enterprise Zone or zones created under the Illinois 23 Enterprise Zone Act and conducts substantially all 24 of its operations in an Enterprise Zone or Zones; 25 (N) An amount equal to any contribution made 26 to a job training project established pursuant to 27 the Tax Increment Allocation Redevelopment Act; 28 (O) 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 Engrossed -18- LRB9102874PTpkA 1 (M) of paragraph (2) of this subsection shall not be 2 eligible for the deduction provided under this 3 subparagraph (O); and 4 (P) An amount equal to the amount of the 5 deduction used to compute the federal income tax 6 credit for restoration of substantial amounts held 7 under claim of right for the taxable year pursuant 8 to Section 1341 of the Internal Revenue Code of 9 1986. 10 (3) Limitation. The amount of any modification 11 otherwise required under this subsection shall, under 12 regulations prescribed by the Department, be adjusted by 13 any amounts included therein which were properly paid, 14 credited, or required to be distributed, or permanently 15 set aside for charitable purposes pursuant to Internal 16 Revenue Code Section 642(c) during the taxable year. 17 (d) Partnerships. 18 (1) In general. In the case of a partnership, base 19 income means an amount equal to the taxpayer's taxable 20 income for the taxable year as modified by paragraph (2). 21 (2) Modifications. The taxable income referred to 22 in paragraph (1) shall be modified by adding thereto the 23 sum of the following amounts: 24 (A) An amount equal to all amounts paid or 25 accrued to the taxpayer as interest or dividends 26 during the taxable year to the extent excluded from 27 gross income in the computation of taxable income; 28 (B) An amount equal to the amount of tax 29 imposed by this Act to the extent deducted from 30 gross income for the taxable year;and31 (C) The amount of deductions allowed to the 32 partnership pursuant to Section 707 (c) of the 33 Internal Revenue Code in calculating its taxable 34 income; and SB1118 Engrossed -19- LRB9102874PTpkA 1 (D) An amount equal to the amount of the 2 capital gain deduction allowable under the Internal 3 Revenue Code, to the extent deducted from gross 4 income in the computation of taxable income; 5 and by deducting from the total so obtained the following 6 amounts: 7 (E) The valuation limitation amount; 8 (F) An amount equal to the amount of any tax 9 imposed by this Act which was refunded to the 10 taxpayer and included in such total for the taxable 11 year; 12 (G) An amount equal to all amounts included in 13 taxable income as modified by subparagraphs (A), 14 (B), (C) and (D) which are exempt from taxation by 15 this State either by reason of its statutes or 16 Constitution or by reason of the Constitution, 17 treaties or statutes of the United States; provided 18 that, in the case of any statute of this State that 19 exempts income derived from bonds or other 20 obligations from the tax imposed under this Act, the 21 amount exempted shall be the interest net of bond 22 premium amortization; 23 (H) Any income of the partnership which 24 constitutes personal service income as defined in 25 Section 1348 (b) (1) of the Internal Revenue Code 26 (as in effect December 31, 1981) or a reasonable 27 allowance for compensation paid or accrued for 28 services rendered by partners to the partnership, 29 whichever is greater; 30 (I) An amount equal to all amounts of income 31 distributable to an entity subject to the Personal 32 Property Tax Replacement Income Tax imposed by 33 subsections (c) and (d) of Section 201 of this Act 34 including amounts distributable to organizations SB1118 Engrossed -20- LRB9102874PTpkA 1 exempt from federal income tax by reason of Section 2 501(a) of the Internal Revenue Code; 3 (J) With the exception of any amounts 4 subtracted under subparagraph (G), an amount equal 5 to the sum of all amounts disallowed as deductions 6 by (i) Sections 171(a)(2), and 265(2) of the 7 Internal Revenue Code of 1954, as now or hereafter 8 amended, and all amounts of expenses allocable to 9 interest and disallowed as deductions by Section 10 265(1) of the Internal Revenue Code, as now or 11 hereafter amended; and (ii) for taxable years 12 beginning on or after January 1, 2000, Sections 13 171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the 14 Internal Revenue Code; the provisions of this 15 subparagraph are exempt from the provisions of 16 Section 250; 17 (K) An amount equal to those dividends 18 included in such total which were paid by a 19 corporation which conducts business operations in an 20 Enterprise Zone or zones created under the Illinois 21 Enterprise Zone Act, enacted by the 82nd General 22 Assembly, and which does not conduct such operations 23 other than in an Enterprise Zone or Zones; 24 (L) An amount equal to any contribution made 25 to a job training project established pursuant to 26 the Real Property Tax Increment Allocation 27 Redevelopment Act; 28 (M) 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 Engrossed -21- LRB9102874PTpkA 1 (K) of paragraph (2) of this subsection shall not be 2 eligible for the deduction provided under this 3 subparagraph (M); and 4 (N) An amount equal to the amount of the 5 deduction used to compute the federal income tax 6 credit for restoration of substantial amounts held 7 under claim of right for the taxable year pursuant 8 to Section 1341 of the Internal Revenue Code of 9 1986. 10 (e) Gross income; adjusted gross income; taxable income. 11 (1) In general. Subject to the provisions of 12 paragraph (2) and subsection (b) (3), for purposes of 13 this Section and Section 803(e), a taxpayer's gross 14 income, adjusted gross income, or taxable income for the 15 taxable year shall mean the amount of gross income, 16 adjusted gross income or taxable income properly 17 reportable for federal income tax purposes for the 18 taxable year under the provisions of the Internal Revenue 19 Code. Taxable income may be less than zero. However, for 20 taxable years ending on or after December 31, 1986, net 21 operating loss carryforwards from taxable years ending 22 prior to December 31, 1986, may not exceed the sum of 23 federal taxable income for the taxable year before net 24 operating loss deduction, plus the excess of addition 25 modifications over subtraction modifications for the 26 taxable year. For taxable years ending prior to December 27 31, 1986, taxable income may never be an amount in excess 28 of the net operating loss for the taxable year as defined 29 in subsections (c) and (d) of Section 172 of the Internal 30 Revenue Code, provided that when taxable income of a 31 corporation (other than a Subchapter S corporation), 32 trust, or estate is less than zero and addition 33 modifications, other than those provided by subparagraph 34 (E) of paragraph (2) of subsection (b) for corporations SB1118 Engrossed -22- LRB9102874PTpkA 1 or subparagraph (E) of paragraph (2) of subsection (c) 2 for trusts and estates, exceed subtraction modifications, 3 an addition modification must be made under those 4 subparagraphs for any other taxable year to which the 5 taxable income less than zero (net operating loss) is 6 applied under Section 172 of the Internal Revenue Code or 7 under subparagraph (E) of paragraph (2) of this 8 subsection (e) applied in conjunction with Section 172 of 9 the Internal Revenue Code. 10 (2) Special rule. For purposes of paragraph (1) of 11 this subsection, the taxable income properly reportable 12 for federal income tax purposes shall mean: 13 (A) Certain life insurance companies. In the 14 case of a life insurance company subject to the tax 15 imposed by Section 801 of the Internal Revenue Code, 16 life insurance company taxable income, plus the 17 amount of distribution from pre-1984 policyholder 18 surplus accounts as calculated under Section 815a of 19 the Internal Revenue Code; 20 (B) Certain other insurance companies. In the 21 case of mutual insurance companies subject to the 22 tax imposed by Section 831 of the Internal Revenue 23 Code, insurance company taxable income; 24 (C) Regulated investment companies. In the 25 case of a regulated investment company subject to 26 the tax imposed by Section 852 of the Internal 27 Revenue Code, investment company taxable income; 28 (D) Real estate investment trusts. In the 29 case of a real estate investment trust subject to 30 the tax imposed by Section 857 of the Internal 31 Revenue Code, real estate investment trust taxable 32 income; 33 (E) Consolidated corporations. In the case of 34 a corporation which is a member of an affiliated SB1118 Engrossed -23- LRB9102874PTpkA 1 group of corporations filing a consolidated income 2 tax return for the taxable year for federal income 3 tax purposes, taxable income determined as if such 4 corporation had filed a separate return for federal 5 income tax purposes for the taxable year and each 6 preceding taxable year for which it was a member of 7 an affiliated group. For purposes of this 8 subparagraph, the taxpayer's separate taxable income 9 shall be determined as if the election provided by 10 Section 243(b) (2) of the Internal Revenue Code had 11 been in effect for all such years; 12 (F) Cooperatives. In the case of a 13 cooperative corporation or association, the taxable 14 income of such organization determined in accordance 15 with the provisions of Section 1381 through 1388 of 16 the Internal Revenue Code; 17 (G) Subchapter S corporations. In the case 18 of: (i) a Subchapter S corporation for which there 19 is in effect an election for the taxable year under 20 Section 1362 of the Internal Revenue Code, the 21 taxable income of such corporation determined in 22 accordance with Section 1363(b) of the Internal 23 Revenue Code, except that taxable income shall take 24 into account those items which are required by 25 Section 1363(b)(1) of the Internal Revenue Code to 26 be separately stated; and (ii) a Subchapter S 27 corporation for which there is in effect a federal 28 election to opt out of the provisions of the 29 Subchapter S Revision Act of 1982 and have applied 30 instead the prior federal Subchapter S rules as in 31 effect on July 1, 1982, the taxable income of such 32 corporation determined in accordance with the 33 federal Subchapter S rules as in effect on July 1, 34 1982; and SB1118 Engrossed -24- LRB9102874PTpkA 1 (H) Partnerships. In the case of a 2 partnership, taxable income determined in accordance 3 with Section 703 of the Internal Revenue Code, 4 except that taxable income shall take into account 5 those items which are required by Section 703(a)(1) 6 to be separately stated but which would be taken 7 into account by an individual in calculating his 8 taxable income. 9 (f) Valuation limitation amount. 10 (1) In general. The valuation limitation amount 11 referred to in subsections (a) (2) (G), (c) (2) (I) and 12 (d)(2) (E) is an amount equal to: 13 (A) The sum of the pre-August 1, 1969 14 appreciation amounts (to the extent consisting of 15 gain reportable under the provisions of Section 1245 16 or 1250 of the Internal Revenue Code) for all 17 property in respect of which such gain was reported 18 for the taxable year; plus 19 (B) The lesser of (i) the sum of the 20 pre-August 1, 1969 appreciation amounts (to the 21 extent consisting of capital gain) for all property 22 in respect of which such gain was reported for 23 federal income tax purposes for the taxable year, or 24 (ii) the net capital gain for the taxable year, 25 reduced in either case by any amount of such gain 26 included in the amount determined under subsection 27 (a) (2) (F) or (c) (2) (H). 28 (2) Pre-August 1, 1969 appreciation amount. 29 (A) If the fair market value of property 30 referred to in paragraph (1) was readily 31 ascertainable on August 1, 1969, the pre-August 1, 32 1969 appreciation amount for such property is the 33 lesser of (i) the excess of such fair market value 34 over the taxpayer's basis (for determining gain) for SB1118 Engrossed -25- LRB9102874PTpkA 1 such property on that date (determined under the 2 Internal Revenue Code as in effect on that date), or 3 (ii) the total gain realized and reportable for 4 federal income tax purposes in respect of the sale, 5 exchange or other disposition of such property. 6 (B) If the fair market value of property 7 referred to in paragraph (1) was not readily 8 ascertainable on August 1, 1969, the pre-August 1, 9 1969 appreciation amount for such property is that 10 amount which bears the same ratio to the total gain 11 reported in respect of the property for federal 12 income tax purposes for the taxable year, as the 13 number of full calendar months in that part of the 14 taxpayer's holding period for the property ending 15 July 31, 1969 bears to the number of full calendar 16 months in the taxpayer's entire holding period for 17 the property. 18 (C) The Department shall prescribe such 19 regulations as may be necessary to carry out the 20 purposes of this paragraph. 21 (g) Double deductions. Unless specifically provided 22 otherwise, nothing in this Section shall permit the same item 23 to be deducted more than once. 24 (h) Legislative intention. Except as expressly provided 25 by this Section there shall be no modifications or 26 limitations on the amounts of income, gain, loss or deduction 27 taken into account in determining gross income, adjusted 28 gross income or taxable income for federal income tax 29 purposes for the taxable year, or in the amount of such items 30 entering into the computation of base income and net income 31 under this Act for such taxable year, whether in respect of 32 property values as of August 1, 1969 or otherwise. 33 (Source: P.A. 89-89, eff. 6-30-95; 89-235, eff. 8-4-95; SB1118 Engrossed -26- LRB9102874PTpkA 1 89-418, eff. 11-15-95; 89-460, eff. 5-24-96; 89-626, eff. 2 8-9-96; 90-491, eff. 1-1-98; 90-717, eff. 8-7-98; 90-770, 3 eff. 8-14-98; revised 9-21-98.) 4 (35 ILCS 5/207) (from Ch. 120, par. 2-207) 5 Sec. 207. Net Losses. 6 (a) If after applying all of the modifications provided 7 for in paragraph (2) of Section 203(b), paragraph (2) of 8 Section 203(c) and paragraph (2) of Section 203(d) and the 9 allocation and apportionment provisions of Article 3 of this 10 Act, the taxpayer's net income results in a loss; 11 (1) for any taxable year ending prior to December 12 31, 1999, such loss shall be allowed as a carryover or 13 carryback deduction in the manner allowed under Section 14 172 of the Internal Revenue Code; and 15 (2) for any taxable year ending on or after 16 December 31, 1999, such loss shall be allowed as a 17 carryback to each of the 2 taxable years preceding the 18 taxable year of such loss and shall be a net operating 19 carryover to each of the 20 taxable years following the 20 taxable year of such loss. 21 (A) The taxpayer may elect to relinquish the 22 entire carryback period with respect to such loss. 23 Such election shall be made in the form and manner 24 prescribed by the Department and shall be made by 25 the due date (including extensions of time) for 26 filing the taxpayer's return for the taxable year in 27 which such loss is incurred, and such election, once 28 made, shall be irrevocable. 29 (B) The entire amount of such loss shall be 30 carried to the earliest taxable year to which such 31 loss may be carried. The amount of such loss which 32 shall be carried to each of the other taxable years 33 shall be the excess, if any, of the amount of such SB1118 Engrossed -27- LRB9102874PTpkA 1 loss over the sum of the deductions for carryback or 2 carryover of such loss allowable for each of the 3 prior taxable years to which such loss may be 4 carried. 5 (b) Any loss determined under subsection (a) of this 6 Section must be carried back or carried forward in the same 7 manner for purposes of subsections (a) and (b) of Section 201 8 of this Act as for purposes of subsections (c) and (d) of 9 Section 201 of this Act. 10 (Source: P.A. 85-731.) 11 (35 ILCS 5/405 new) 12 Sec. 405. Carryovers in certain acquisitions. 13 (a) In the case of the acquisition of assets of a 14 corporation by another corporation described in Section 15 381(a) of the Internal Revenue Code, the acquiring 16 corporation shall succeed to and take into account, as of the 17 close of the day of distribution or transfer, all Article 2 18 credits and net losses under Section 207 of the corporation 19 from which the assets where acquired, without limitation 20 under Section 382 of the Internal Revenue Code or the 21 separate return limitation year regulations promulgated under 22 Section 1502 of the Internal Revenue Code. 23 (b) In the case of the acquisition of assets of a 24 partnership by another partnership in a transaction in which 25 the acquiring partnership is considered to be a continuation 26 of the partnership from which the assets were acquired under 27 the provisions of Section 708 of the Internal Revenue Code 28 and any regulations promulgated under that Section, the 29 acquiring partnership shall succeed to and take into account, 30 as of the close of the day of distribution or transfer, all 31 Article 2 credits and net losses under Section 207 of the 32 partnership from which the assets were acquired. 33 (c) The provisions of this amendatory Act of the 91st SB1118 Engrossed -28- LRB9102874PTpkA 1 General Assembly shall apply to all acquisitions occurring in 2 taxable years ending on or after December 31, 1986; provided 3 that if a taxpayer's Illinois income tax liability for any 4 taxable year, as assessed under Section 903 prior to January 5 1, 1999, was computed without taking into account all of the 6 Article 2 credits and net losses under Section 207 as allowed 7 by this Section: 8 (1) no refund shall be payable to the taxpayer for 9 that taxable year as the result of allowing any portion 10 of the Article 2 credits or net losses under Section 207 11 that were not taken into account in computing the tax 12 assessed prior to January 1, 1999; 13 (2) any deficiency which has not been paid may be 14 reduced (but not below zero) by the allowance of some or 15 all of the Article 2 credits or net losses under Section 16 207 that were not taken into account in computing the tax 17 assessed prior to January 1, 1999; and 18 (3) in the case of any Article 2 credit or net loss 19 under Section 207 that, pursuant to this subsection (c), 20 could not be taken into account either in computing the 21 tax assessed prior to January 1, 1999 for a taxable year 22 or in reducing a deficiency for that taxable year under 23 paragraph (2) of subsection (c), the allowance of such 24 credit or loss in any other taxable year shall not be 25 denied on the grounds that such credit or loss should 26 properly have been claimed in that taxable year under 27 subsection (a) or (b). 28 (35 ILCS 5/502) (from Ch. 120, par. 5-502) 29 Sec. 502. Returns and notices. 30 (a) In general. A return with respect to the taxes 31 imposed by this Act shall be made by every person for any 32 taxable year: 33 (1) For which such person is liable for a tax SB1118 Engrossed -29- LRB9102874PTpkA 1 imposed by this Act, or 2 (2) In the case of a resident or in the case of a 3 corporation which is qualified to do business in this 4 State, for which such person is required to make a 5 federal income tax return, regardless of whether such 6 person is liable for a tax imposed by this Act. However, 7 this paragraph shall not require a resident to make a 8 return if such person has an Illinois base income of the 9 basic amount in Section 204(b) or less and is either 10 claimed as a dependent on another person's tax return 11 under the Internal Revenue Code of 1986, or is claimed as 12 a dependent on another person's tax return under this 13 Act. 14 (b) Fiduciaries and receivers. 15 (1) Decedents. If an individual is deceased, any 16 return or notice required of such individual under this 17 Act shall be made by his executor, administrator, or 18 other person charged with the property of such decedent. 19 (2) Individuals under a disability. If an 20 individual is unable to make a return or notice required 21 under this Act, the return or notice required of such 22 individual shall be made by his duly authorized agent, 23 guardian, fiduciary or other person charged with the care 24 of the person or property of such individual. 25 (3) Estates and trusts. Returns or notices required 26 of an estate or a trust shall be made by the fiduciary 27 thereof. 28 (4) Receivers, trustees and assignees for 29 corporations. In a case where a receiver, trustee in 30 bankruptcy, or assignee, by order of a court of competent 31 jurisdiction, by operation of law, or otherwise, has 32 possession of or holds title to all or substantially all 33 the property or business of a corporation, whether or not 34 such property or business is being operated, such SB1118 Engrossed -30- LRB9102874PTpkA 1 receiver, trustee, or assignee shall make the returns and 2 notices required of such corporation in the same manner 3 and form as corporations are required to make such 4 returns and notices. 5 (c) Joint returns by husband and wife. 6 (1) Except as provided in paragraph (3), if a 7 husband and wife file a joint federal income tax return 8 for a taxable year they shall file a joint return under 9 this Act for such taxable year and their liabilities 10 shall be joint and several, but if the federal income tax 11 liability of either spouse is determined on a separate 12 federal income tax return, they shall file separate 13 returns under this Act. 14 (2) If neither spouse is required to file a federal 15 income tax return and either or both are required to file 16 a return under this Act, they may elect to file separate 17 or joint returns and pursuant to such election their 18 liabilities shall be separate or joint and several. 19 (3) If either husband or wife is a resident and the 20 other is a nonresident, they shall file separate returns 21 in this State on such forms as may be required by the 22 Department in which event their tax liabilities shall be 23 separate; but they may elect to determine their joint net 24 income and file a joint return as if both were residents 25 and in such case, their liabilities shall be joint and 26 several. 27 (4) Innocent spouses. 28 (A) However, for tax liabilities arising and 29 paid prior to the effective date of this amendatory 30 Act of the 91st General Assembly, an innocent spouse 31 shall be relieved of liability for tax (including 32 interest and penalties) for any taxable year for 33 which a joint return has been made, upon submission 34 of proof that the Internal Revenue Service has made SB1118 Engrossed -31- LRB9102874PTpkA 1 a determination under Section 6013(e) of the 2 Internal Revenue Code, for the same taxable year, 3 which determination relieved the spouse from 4 liability for federal income taxes. If there is no 5 federal income tax liability at issue for the same 6 taxable year, the Department shall rely on the 7 provisions of Section 6013(e) to determine whether 8 the person requesting innocent spouse abatement of 9 tax, penalty, and interest is entitled to that 10 relief. 11 (B) For tax liabilities arising after the 12 effective date of this amendatory Act of the 91st 13 General Assembly or which arose prior to that 14 effective date, but remain unpaid as of the 15 effective date, if an individual who filed a joint 16 return for any taxable year has made an election 17 under this paragraph, the individual's liability for 18 any tax shown on the joint return shall not exceed 19 the individual's separate return amount and the 20 individual's liability for any deficiency assessed 21 for that taxable year shall not exceed the portion 22 of the deficiency properly allocable to the 23 individual. For purposes of this paragraph: 24 (i) An election properly made pursuant to 25 Section 6015 of the Internal Revenue Code shall 26 constitute an election under this paragraph, 27 provided that the election shall not be 28 effective until the individual has notified the 29 Department of the election in the form and 30 manner prescribed by the Department. 31 (ii) If no election has been made under 32 Section 6015, the individual may make an 33 election under this paragraph in the form and 34 manner prescribed by the Department, provided SB1118 Engrossed -32- LRB9102874PTpkA 1 that no election may be made if the Department 2 finds that assets were transferred between 3 individuals filing a joint return as part of a 4 scheme by such individuals to avoid payment of 5 Illinois income tax and the election shall not 6 eliminate the individual's liability for any 7 portion of a deficiency attributable to an 8 error on the return of which the individual had 9 actual knowledge as of the date of filing. 10 (iii) In determining the separate return 11 amount or portion of any deficiency 12 attributable to an individual, the Department 13 shall follow the provisions in Section 6015(b) 14 and (c) of the Internal Revenue Code. 15 (iv) In determining the validity of an 16 individual's election under subparagraph (ii) 17 and in determining an electing individual's 18 separate return amount or portion of any 19 deficiency under subparagraph (iii), any 20 determination made by the Secretary of the 21 Treasury under Section 6015(a) of the Internal 22 Revenue Code regarding criteria for eligibility 23 or under Section 6015(b) or (c) of the Internal 24 Revenue Code regarding the allocation of any 25 item of income, deduction, payment, or credit 26 between an individual making the federal 27 election and that individual's spouse shall be 28 conclusively presumed to be correct. With 29 respect to any item that is not the subject of 30 a determination by the Secretary of the 31 Treasury, in any proceeding involving this 32 subsection, the individual making the election 33 shall have the burden of proof with respect to 34 any item except that the Department shall have SB1118 Engrossed -33- LRB9102874PTpkA 1 the burden of proof with respect to items in 2 subdivision (ii). 3 (v) Any election made by an individual 4 under this subsection shall apply to all years 5 for which that individual and the spouse named 6 in the election have filed a joint return. 7 (vi) After receiving a notice that the 8 federal election has been made or after 9 receiving an election under subdivision (ii), 10 the Department shall take no collection action 11 against the electing individual for any 12 liability arising from a joint return covered 13 by the election until the Department has 14 notified the electing individual in writing 15 that the election is invalid or of the portion 16 of the liability the Department has allocated 17 to the electing individual. Within 60 days 18 (150 days if the individual is outside the 19 United States) after the issuance of such 20 notification, the individual may file a written 21 protest of the denial of the election or of the 22 Department's determination of the liability 23 allocated to him or her and shall be granted a 24 hearing within the Department under the 25 provisions of Section 908. If a protest is 26 filed, the Department shall take no collection 27 action against the electing individual until 28 the decision regarding the protest has become 29 final under subsection (d) of Section 908 or, 30 if administrative review of the Department's 31 decision is requested under Section 1201, until 32 the decision of the court becomes final. 33 (d) Partnerships. Every partnership having any base 34 income allocable to this State in accordance with section SB1118 Engrossed -34- LRB9102874PTpkA 1 305(c) shall retain information concerning all items of 2 income, gain, loss and deduction; the names and addresses of 3 all of the partners, or names and addresses of members of a 4 limited liability company, or other persons who would be 5 entitled to share in the base income of the partnership if 6 distributed; the amount of the distributive share of each; 7 and such other pertinent information as the Department may by 8 forms or regulations prescribe. The partnership shall make 9 that information available to the Department when requested 10 by the Department. 11 (e) For taxable years ending on or after December 31, 12 1985, and before December 31, 1993, taxpayers that are 13 corporations (other than Subchapter S corporations) having 14 the same taxable year and that are members of the same 15 unitary business group may elect to be treated as one 16 taxpayer for purposes of any original return, amended return 17 which includes the same taxpayers of the unitary group which 18 joined in the election to file the original return, 19 extension, claim for refund, assessment, collection and 20 payment and determination of the group's tax liability under 21 this Act. This subsection (e) does not permit the election to 22 be made for some, but not all, of the purposes enumerated 23 above. For taxable years ending on or after December 31, 24 1987, corporate members (other than Subchapter S 25 corporations) of the same unitary business group making this 26 subsection (e) election are not required to have the same 27 taxable year. 28 For taxable years ending on or after December 31, 1993, 29 taxpayers that are corporations (other than Subchapter S 30 corporations) and that are members of the same unitary 31 business group shall be treated as one taxpayer for purposes 32 of any original return, amended return which includes the 33 same taxpayers of the unitary group which joined in filing 34 the original return, extension, claim for refund, assessment, SB1118 Engrossed -35- LRB9102874PTpkA 1 collection and payment and determination of the group's tax 2 liability under this Act. 3 (f) The Department may promulgate regulations to permit 4 nonresident individual partners of the same partnership, 5 nonresident Subchapter S corporation shareholders of the same 6 Subchapter S corporation, and nonresident individuals 7 transacting an insurance business in Illinois under a Lloyds 8 plan of operation, and nonresident individual members of the 9 same limited liability company that is treated as a 10 partnership under Section 1501 (a)(16) of this Act, to file 11 composite individual income tax returns reflecting the 12 composite income of such individuals allocable to Illinois 13 and to make composite individual income tax payments. The 14 Department may by regulation also permit such composite 15 returns to include the income tax owed by Illinois residents 16 attributable to their income from partnerships, Subchapter S 17 corporations, insurance businesses organized under a Lloyds 18 plan of operation, or limited liability companies that are 19 treated as partnership under Section 1501 (a)(16) of this 20 Act, in which case such Illinois residents will be permitted 21 to claim credits on their individual returns for their shares 22 of the composite tax payments. This subsection (f) applies 23 to taxable years ending on or after December 31, 1987. 24 (g) The Department may adopt rules to authorize the 25 electronic filing of any return required to be filed under 26 this Section. 27 (Source: P.A. 90-613, eff. 7-9-98.) 28 (35 ILCS 5/601.1) (Ch. 120, par. 6-601.1) 29 Sec. 601.1. (a) Beginning on October 1, 1993, a taxpayer 30 who has an average monthly tax liability of $150,000 or more 31 under Article 7 of this Act shall make all payments required 32 by rules of the Department by electronic funds transfer. 33 Beginning October 1, 1993, a taxpayer who has an average SB1118 Engrossed -36- LRB9102874PTpkA 1 quarterly estimated tax payment obligation of $450,000 or 2 more under Article 8 of this Act shall make all payments 3 required by rules of the Department by electronic funds 4 transfer. Beginning on October 1, 1994, a taxpayer who has 5 an average monthly tax liability of $100,000 or more under 6 Article 7 of this Act shall make all payments required by 7 rules of the Department by electronic funds transfer. 8 Beginning October 1, 1994, a taxpayer who has an average 9 quarterly estimated tax payment obligation of $300,000 or 10 more under Article 8 of this Act shall make all payments 11 required by rules of the Department by electronic funds 12 transfer. Beginning on October 1, 1995, a taxpayer who has 13 an average monthly tax liability of $50,000 or more under 14 Article 7 of this Act shall make all payments required by 15 rules of the Department by electronic funds transfer. 16 Beginning October 1, 1995, a taxpayer who has an average 17 quarterly estimated tax payment obligation of $150,000 or 18 more under Article 8 of this Act shall make all payments 19 required by rules of the Department by electronic funds 20 transfer. Beginning on October 1, 2000, and for all liability 21 periods thereafter, a taxpayer who has an average annual tax 22 liability of $50,000 or more under Article 7 of this Act 23 shall make all payments required by rules of the Department 24 by electronic funds transfer. Beginning October 1, 2000, a 25 taxpayer who has an average quarterly estimated tax payment 26 obligation of $12,500 or more under Article 8 of this Act 27 shall make all payments required by rules of the Department 28 by electronic funds transfer. 29 (b) Any taxpayer who is not required to make payments by 30 electronic funds transfer may make payments by electronic 31 funds transfer with the permission of the Department. 32 (c) All taxpayers required to make payments by 33 electronic funds transfer and any taxpayers who wish to 34 voluntarily make payments by electronic funds transfer shall SB1118 Engrossed -37- LRB9102874PTpkA 1 make those payments in the manner authorized by the 2 Department. 3 (d) The Department shall notify all taxpayers required 4 to make payments by electronic funds transfer. All 5 taxpayers notified by the Department shall make payments by 6 electronic funds transfer for a minimum of one year beginning 7 on October 1. In determining the threshold amounts under 8 subsection (a), the Department shall calculate the averages 9 as follows: 10 (1) the total liability under Article 7 for the 11 preceding tax year (and, prior to October 1, 2000, 12 divided by 12); or 13 (2) for purposes of estimated payments under 14 Article 8, the total tax obligation of the taxpayer for 15 the previous tax year divided by 4. 16 (e) The Department shall adopt such rules as are 17 necessary to effectuate a program of electronic funds 18 transfer and the requirements of this Section. 19 (Source: P.A. 87-1132; 87-1246.) 20 (35 ILCS 5/905) (from Ch. 120, par. 9-905) 21 Sec. 905. Limitations on Notices of Deficiency. 22 (a) In general. Except as otherwise provided in this 23 Act: 24 (1) A notice of deficiency shall be issued not 25 later than 3 years after the date the return was filed, 26 and 27 (2) No deficiency shall be assessed or collected 28 with respect to the year for which the return was filed 29 unless such notice is issued within such period. 30 (b) Omission of more than 25% of income. If the taxpayer 31 omits from base income an amount properly includible therein 32 which is in excess of 25% of the amount of base income stated 33 in the return, a notice of deficiency may be issued not later SB1118 Engrossed -38- LRB9102874PTpkA 1 than 6 years after the return was filed. For purposes of this 2 paragraph, there shall not be taken into account any amount 3 which is omitted in the return if such amount is disclosed in 4 the return, or in a statement attached to the return, in a 5 manner adequate to apprise the Department of the nature and 6 the amount of such item. 7 (c) No return or fraudulent return. If no return is 8 filed or a false and fraudulent return is filed with intent 9 to evade the tax imposed by this Act, a notice of deficiency 10 may be issued at any time. 11 (d) Failure to report federal change. If a taxpayer 12 fails to notify the Department in any case where notification 13 is required by Section 304(c) or 506(b), or fails to report a 14 change or correction which is treated in the same manner as 15 if it were a deficiency for federal income tax purposes, a 16 notice of deficiency may be issued (i) at any time or (ii) on 17 or after the effective date of this amendatory Act of the 18 91st General Assembly, at any time for the taxable year for 19 which the notification is required or for any taxable year to 20 which the taxpayer may carry an Article 2 credit, or a 21 Section 207 loss, earned, incurred, or used in the year for 22 which the notification is required; provided, however, that 23 the amount of any proposed assessment set forth in the notice 24 shall be limited to the amount of any deficiency resulting 25 under this Act from the recomputation of the taxpayer's net 26 income, Article 2 credits, or Section 207 loss earned, 27 incurred, or used in the taxable year for which the 28 notification is required after giving effect to the item or 29 items required to be reported. 30 (e) Report of federal change. 31 (1) Before the effective date of this amendatory 32 Act of the 91st General Assembly, in any case where 33 notification of an alteration is given as required by 34 Section 506(b), a notice of deficiency may be issued at SB1118 Engrossed -39- LRB9102874PTpkA 1 any time within 2 years after the date such notification 2 is given, provided, however, that the amount of any 3 proposed assessment set forth in such notice shall be 4 limited to the amount of any deficiency resulting under 5 this Act from recomputation of the taxpayer's net income, 6 net loss, or Article 2 credits for the taxable year after 7 giving effect to the item or items reflected in the 8 reported alteration. 9 (2) On and after the effective date of this 10 amendatory Act of the 91st General Assembly, in any case 11 where notification of an alteration is given as required 12 by Section 506(b), a notice of deficiency may be issued 13 at any time within 2 years after the date such 14 notification is given for the taxable year for which the 15 notification is given or for any taxable year to which 16 the taxpayer may carry an Article 2 credit, or a Section 17 207 loss, earned, incurred, or used in the year for which 18 the notification is given, provided, however, that the 19 amount of any proposed assessment set forth in such 20 notice shall be limited to the amount of any deficiency 21 resulting under this Act from recomputation of the 22 taxpayer's net income, Article 2 credits, or Section 207 23 loss earned, incurred, or used in the taxable year for 24 which the notification is given after giving effect to 25 the item or items reflected in the reported alteration. 26 (f) Extension by agreement. Where, before the expiration 27 of the time prescribed in this section for the issuance of a 28 notice of deficiency, both the Department and the taxpayer 29 shall have consented in writing to its issuance after such 30 time, such notice may be issued at any time prior to the 31 expiration of the period agreed upon. The period so agreed 32 upon may be extended by subsequent agreements in writing made 33 before the expiration of the period previously agreed upon. 34 (g) Erroneous refunds. In any case in which there has SB1118 Engrossed -40- LRB9102874PTpkA 1 been an erroneous refund of tax payable under this Act, a 2 notice of deficiency may be issued at any time within 2 years 3 from the making of such refund, or within 5 years from the 4 making of such refund if it appears that any part of the 5 refund was induced by fraud or the misrepresentation of a 6 material fact, provided, however, that the amount of any 7 proposed assessment set forth in such notice shall be limited 8 to the amount of such erroneous refund. 9 Beginning July 1, 1993, in any case in which there has 10 been a refund of tax payable under this Act attributable to a 11 net loss carryback as provided for in Section 207, and that 12 refund is subsequently determined to be an erroneous refund 13 due to a reduction in the amount of the net loss which was 14 originally carried back, a notice of deficiency for the 15 erroneous refund amount may be issued at any time during the 16 same time period in which a notice of deficiency can be 17 issued on the loss year creating the carryback amount and 18 subsequent erroneous refund. The amount of any proposed 19 assessment set forth in the notice shall be limited to the 20 amount of such erroneous refund. 21 (h) Time return deemed filed. For purposes of this 22 Section a tax return filed before the last day prescribed by 23 law (including any extension thereof) shall be deemed to have 24 been filed on such last day. 25 (i) Request for prompt determination of liability. For 26 purposes of Subsection (a)(1), in the case of a tax return 27 required under this Act in respect of a decedent, or by his 28 estate during the period of administration, or by a 29 corporation, the period referred to in such Subsection shall 30 be 18 months after a written request for prompt determination 31 of liability is filed with the Department (at such time and 32 in such form and manner as the Department shall by 33 regulations prescribe) by the executor, administrator, or 34 other fiduciary representing the estate of such decedent, or SB1118 Engrossed -41- LRB9102874PTpkA 1 by such corporation, but not more than 3 years after the date 2 the return was filed. This Subsection shall not apply in the 3 case of a corporation unless: 4 (1) (A) Such written request notifies the 5 Department that the corporation contemplates dissolution 6 at or before the expiration of such 18-month period, (B) 7 the dissolution is begun in good faith before the 8 expiration of such 18-month period, and (C) the 9 dissolution is completed; 10 (2) (A) Such written request notifies the 11 Department that a dissolution has in good faith been 12 begun, and (B) the dissolution is completed; or 13 (3) A dissolution has been completed at the time 14 such written request is made. 15 (j) Withholding tax. In the case of returns required 16 under Article 7 of this Act (with respect to any amounts 17 withheld as tax or any amounts required to have been withheld 18 as tax) a notice of deficiency shall be issued not later than 19 3 years after the 15th day of the 4th month following the 20 close of the calendar year in which such withholding was 21 required. 22 (k) Penalties for failure to make information reports. 23 A notice of deficiency for the penalties provided by 24 Subsection 1405.1(c) of this Act may not be issued more than 25 3 years after the due date of the reports with respect to 26 which the penalties are asserted. 27 (l) Penalty for failure to file withholding returns. A 28 notice of deficiency for penalties provided by Section 1004 29 of this Act for taxpayer's failure to file withholding 30 returns may not be issued more than three years after the 31 15th day of the 4th month following the close of the calendar 32 year in which the withholding giving rise to taxpayer's 33 obligation to file those returns occurred. 34 (m) Transferee liability. A notice of deficiency may be SB1118 Engrossed -42- LRB9102874PTpkA 1 issued to a transferee relative to a liability asserted under 2 Section 1405 during time periods defined as follows: 3 1) Initial Transferee. In the case of the 4 liability of an initial transferee, up to 2 years after 5 the expiration of the period of limitation for assessment 6 against the transferor, except that if a court proceeding 7 for review of the assessment against the transferor has 8 begun, then up to 2 years after the return of the 9 certified copy of the judgment in the court proceeding. 10 2) Transferee of Transferee. In the case of the 11 liability of a transferee, up to 2 years after the 12 expiration of the period of limitation for assessment 13 against the preceding transferee, but not more than 3 14 years after the expiration of the period of limitation 15 for assessment against the initial transferor; except 16 that if, before the expiration of the period of 17 limitation for the assessment of the liability of the 18 transferee, a court proceeding for the collection of the 19 tax or liability in respect thereof has been begun 20 against the initial transferor or the last preceding 21 transferee, as the case may be, then the period of 22 limitation for assessment of the liability of the 23 transferee shall expire 2 years after the return of the 24 certified copy of the judgment in the court proceeding. 25 (Source: P.A. 90-491, eff. 1-1-98.) 26 (35 ILCS 5/911) (from Ch. 120, par. 9-911) 27 Sec. 911. Limitations on Claims for Refund. 28 (a) In general. Except as otherwise provided in this 29 Act: 30 (1) A claim for refund shall be filed not later 31 than 3 years after the date the return was filed (in the 32 case of returns required under Article 7 of this Act 33 respecting any amounts withheld as tax, not later than 3 SB1118 Engrossed -43- LRB9102874PTpkA 1 years after the 15th day of the 4th month following the 2 close of the calendar year in which such withholding was 3 made), or one year after the date the tax was paid, 4 whichever is the later; and 5 (2) No credit or refund shall be allowed or made 6 with respect to the year for which the claim was filed 7 unless such claim is filed within such period. 8 (b) Federal changes. 9 (1) In general. In any case where notification of 10 an alteration is required by Section 506 (b), a claim for 11 refund may be filed within 2 years after the date on 12 which such notification was due (regardless of whether 13 such notice was given), but the amount recoverable 14 pursuant to a claim filed under this Section shall be 15 limited to the amount of any overpayment resulting under 16 this Act from recomputation of the taxpayer's net income, 17 net loss, or Article 2 credits for the taxable year after 18 giving effect to the item or items reflected in the 19 alteration required to be reported. 20 (2) Tentative carryback adjustments paid before 21 January 1, 1974. If, as the result of the payment before 22 January 1, 1974 of a federal tentative carryback 23 adjustment, a notification of an alteration is required 24 under Section 506 (b), a claim for refund may be filed at 25 any time before January 1, 1976, but the amount 26 recoverable pursuant to a claim filed under this Section 27 shall be limited to the amount of any overpayment 28 resulting under this Act from recomputation of the 29 taxpayer's base income for the taxable year after giving 30 effect to the federal alteration resulting from the 31 tentative carryback adjustment irrespective of any 32 limitation imposed in paragraph (l) of this subsection. 33 (c) Extension by agreement. Where, before the 34 expiration of the time prescribed in this section for the SB1118 Engrossed -44- LRB9102874PTpkA 1 filing of a claim for refund, both the Department and the 2 claimant shall have consented in writing to its filing after 3 such time, such claim may be filed at any time prior to the 4 expiration of the period agreed upon. The period so agreed 5 upon may be extended by subsequent agreements in writing made 6 before the expiration of the period previously agreed upon. 7 (d) Limit on amount of credit or refund. 8 (1) Limit where claim filed within 3-year period. 9 If the claim was filed by the claimant during the 3-year 10 period prescribed in subsection (a), the amount of the 11 credit or refund shall not exceed the portion of the tax 12 paid within the period, immediately preceding the filing 13 of the claim, equal to 3 years plus the period of any 14 extension of time for filing the return. 15 (2) Limit where claim not filed within 3-year 16 period. If the claim was not filed within such 3-year 17 period, the amount of the credit or refund shall not 18 exceed the portion of the tax paid during the one year 19 immediately preceding the filing of the claim. 20 (e) Time return deemed filed. For purposes of this 21 section a tax return filed before the last day prescribed by 22 law for the filing of such return (including any extensions 23 thereof) shall be deemed to have been filed on such last day. 24 (f) No claim for refund based on the taxpayer's taking a 25 credit for estimated tax payments as provided by Section 601 26 (b) (2) or for any amount paid by a taxpayer pursuant to 27 Section 602(a) or for any amount of credit for tax withheld 28 pursuant to Section 701 may be filed more than 3 years after 29 the due date, as provided by Section 505, of the return which 30 was required to be filed relative to the taxable year for 31 which the payments were made or for which the tax was 32 withheld. The changes in this subsection (f) made by this 33 amendatory Act of 1987 shall apply to all taxable years 34 ending on or after December 31, 1969. SB1118 Engrossed -45- LRB9102874PTpkA 1 (g) Special Period of Limitation with Respect to Net 2 Loss Carrybacks. If the claim for refund relates to an 3 overpayment attributable to a net loss carryback as provided 4 by Section 207, in lieu of the 3 year period of limitation 5 prescribed in subsection (a), the period shall be that period 6 which ends 3 years after the time prescribed by law for 7 filing the return (including extensions thereof) for the 8 taxable year of the net loss which results in such carryback 9 (or, on and after the effective date of this amendatory Act 10 of the 91st General Assembly, with respect to a change in the 11 carryover of an Article 2 credit to a taxable year resulting 12 from the carryback of a Section 207 loss incurred in a 13 taxable year beginning on or after January 1, 2000, the 14 period shall be that period that ends 3 years after the time 15 prescribed by law for filing the return (including extensions 16 of that time) for that subsequent taxable year), or the 17 period prescribed in subsection (c) in respect of such 18 taxable year, whichever expires later. In the case of such a 19 claim, the amount of the refund may exceed the portion of the 20 tax paid within the period provided in subsection (d) to the 21 extent of the amount of the overpayment attributable to such 22 carryback. On and after the effective date of this amendatory 23 Act of the 91st General Assembly, if the claim for refund 24 relates to an overpayment attributable to the carryover of an 25 Article 2 credit, or of a Section 207 loss, earned, incurred 26 (in a taxable year beginning on or after January 1, 2000), or 27 used in a year for which a notification of a change affecting 28 federal taxable income must be filed under subsection (b) of 29 Section 506, the claim may be filed within the period 30 prescribed in paragraph (1) of subsection (b) in respect of 31 the year for which the notification is required. In the case 32 of such a claim, the amount of the refund may exceed the 33 portion of the tax paid within the period provided in 34 subsection (d) to the extent of the amount of the overpayment SB1118 Engrossed -46- LRB9102874PTpkA 1 attributable to the recomputation of the taxpayer's Article 2 2 credits, or Section 207 loss, earned, incurred, or used in 3 the taxable year for which the notification is given. 4 (Source: P.A. 90-491, eff. 1-1-98.) 5 Section 10. The Use Tax Act is amended by changing 6 Sections 9 and 10 as follows: 7 (35 ILCS 105/9) (from Ch. 120, par. 439.9) 8 Sec. 9. Except as to motor vehicles, watercraft, 9 aircraft, and trailers that are required to be registered 10 with an agency of this State, each retailer required or 11 authorized to collect the tax imposed by this Act shall pay 12 to the Department the amount of such tax (except as otherwise 13 provided) at the time when he is required to file his return 14 for the period during which such tax was collected, less a 15 discount of 2.1% prior to January 1, 1990, and 1.75% on and 16 after January 1, 1990, or $5 per calendar year, whichever is 17 greater, which is allowed to reimburse the retailer for 18 expenses incurred in collecting the tax, keeping records, 19 preparing and filing returns, remitting the tax and supplying 20 data to the Department on request. In the case of retailers 21 who report and pay the tax on a transaction by transaction 22 basis, as provided in this Section, such discount shall be 23 taken with each such tax remittance instead of when such 24 retailer files his periodic return. A retailer need not 25 remit that part of any tax collected by him to the extent 26 that he is required to remit and does remit the tax imposed 27 by the Retailers' Occupation Tax Act, with respect to the 28 sale of the same property. 29 Where such tangible personal property is sold under a 30 conditional sales contract, or under any other form of sale 31 wherein the payment of the principal sum, or a part thereof, 32 is extended beyond the close of the period for which the SB1118 Engrossed -47- LRB9102874PTpkA 1 return is filed, the retailer, in collecting the tax (except 2 as to motor vehicles, watercraft, aircraft, and trailers that 3 are required to be registered with an agency of this State), 4 may collect for each tax return period, only the tax 5 applicable to that part of the selling price actually 6 received during such tax return period. 7 Except as provided in this Section, on or before the 8 twentieth day of each calendar month, such retailer shall 9 file a return for the preceding calendar month. Such return 10 shall be filed on forms prescribed by the Department and 11 shall furnish such information as the Department may 12 reasonably require. 13 The Department may require returns to be filed on a 14 quarterly basis. If so required, a return for each calendar 15 quarter shall be filed on or before the twentieth day of the 16 calendar month following the end of such calendar quarter. 17 The taxpayer shall also file a return with the Department for 18 each of the first two months of each calendar quarter, on or 19 before the twentieth day of the following calendar month, 20 stating: 21 1. The name of the seller; 22 2. The address of the principal place of business 23 from which he engages in the business of selling tangible 24 personal property at retail in this State; 25 3. The total amount of taxable receipts received by 26 him during the preceding calendar month from sales of 27 tangible personal property by him during such preceding 28 calendar month, including receipts from charge and time 29 sales, but less all deductions allowed by law; 30 4. The amount of credit provided in Section 2d of 31 this Act; 32 5. The amount of tax due; 33 5-5. The signature of the taxpayer; and 34 6. Such other reasonable information as the SB1118 Engrossed -48- LRB9102874PTpkA 1 Department may require. 2 If a taxpayer fails to sign a return within 30 days after 3 the proper notice and demand for signature by the Department, 4 the return shall be considered valid and any amount shown to 5 be due on the return shall be deemed assessed. 6 Beginning October 1, 1993, a taxpayer who has an average 7 monthly tax liability of $150,000 or more shall make all 8 payments required by rules of the Department by electronic 9 funds transfer. Beginning October 1, 1994, a taxpayer who has 10 an average monthly tax liability of $100,000 or more shall 11 make all payments required by rules of the Department by 12 electronic funds transfer. Beginning October 1, 1995, a 13 taxpayer who has an average monthly tax liability of $50,000 14 or more shall make all payments required by rules of the 15 Department by electronic funds transfer. Beginning October 1, 16 2000, a taxpayer who has an annual tax liability of $50,000 17 or more shall make all payments required by rules of the 18 Department by electronic funds transfer. The term "annual 19 tax liability" shall be the sum of the taxpayer's liabilities 20 under this Act, and under all other State and local 21 occupation and use tax laws administered by the Department, 22 for the immediately preceding calendar year. The term 23 "average monthly tax liability" means the sum of the 24 taxpayer's liabilities under this Act, and under all other 25 State and local occupation and use tax laws administered by 26 the Department, for the immediately preceding calendar year 27 divided by 12. 28 Before August 1 of each year beginning in 1993, the 29 Department shall notify all taxpayers required to make 30 payments by electronic funds transfer. All taxpayers required 31 to make payments by electronic funds transfer shall make 32 those payments for a minimum of one year beginning on October 33 1. 34 Any taxpayer not required to make payments by electronic SB1118 Engrossed -49- LRB9102874PTpkA 1 funds transfer may make payments by electronic funds transfer 2 with the permission of the Department. 3 All taxpayers required to make payment by electronic 4 funds transfer and any taxpayers authorized to voluntarily 5 make payments by electronic funds transfer shall make those 6 payments in the manner authorized by the Department. 7 The Department shall adopt such rules as are necessary to 8 effectuate a program of electronic funds transfer and the 9 requirements of this Section. 10 Before October 1, 2000, if the taxpayer's average monthly 11 tax liability to the Department under this Act, the 12 Retailers' Occupation Tax Act, the Service Occupation Tax 13 Act, the Service Use Tax Act was $10,000 or more during the 14 preceding 4 complete calendar quarters, he shall file a 15 return with the Department each month by the 20th day of the 16 month next following the month during which such tax 17 liability is incurred and shall make payments to the 18 Department on or before the 7th, 15th, 22nd and last day of 19 the month during which such liability is incurred. On and 20 after October 1, 2000, if the taxpayer's average monthly tax 21 liability to the Department under this Act, the Retailers' 22 Occupation Tax Act, the Service Occupation Tax Act, and the 23 Service Use Tax Act was $25,000 or more during the preceding 24 4 complete calendar quarters, he shall file a return with the 25 Department each month by the 20th day of the month next 26 following the month during which such tax liability is 27 incurred and shall make payment to the Department on or 28 before the 7th, 15th, 22nd and last day or the month during 29 which such liability is incurred. If the month during which 30 such tax liability is incurred began prior to January 1, 31 1985, each payment shall be in an amount equal to 1/4 of the 32 taxpayer's actual liability for the month or an amount set by 33 the Department not to exceed 1/4 of the average monthly 34 liability of the taxpayer to the Department for the preceding SB1118 Engrossed -50- LRB9102874PTpkA 1 4 complete calendar quarters (excluding the month of highest 2 liability and the month of lowest liability in such 4 quarter 3 period). If the month during which such tax liability is 4 incurred begins on or after January 1, 1985, and prior to 5 January 1, 1987, each payment shall be in an amount equal to 6 22.5% of the taxpayer's actual liability for the month or 7 27.5% of the taxpayer's liability for the same calendar month 8 of the preceding year. If the month during which such tax 9 liability is incurred begins on or after January 1, 1987, and 10 prior to January 1, 1988, each payment shall be in an amount 11 equal to 22.5% of the taxpayer's actual liability for the 12 month or 26.25% of the taxpayer's liability for the same 13 calendar month of the preceding year. If the month during 14 which such tax liability is incurred begins on or after 15 January 1, 1988, and prior to January 1, 1989, or begins on 16 or after January 1, 1996, each payment shall be in an amount 17 equal to 22.5% of the taxpayer's actual liability for the 18 month or 25% of the taxpayer's liability for the same 19 calendar month of the preceding year. If the month during 20 which such tax liability is incurred begins on or after 21 January 1, 1989, and prior to January 1, 1996, each payment 22 shall be in an amount equal to 22.5% of the taxpayer's actual 23 liability for the month or 25% of the taxpayer's liability 24 for the same calendar month of the preceding year or 100% of 25 the taxpayer's actual liability for the quarter monthly 26 reporting period. The amount of such quarter monthly 27 payments shall be credited against the final tax liability of 28 the taxpayer's return for that month. Before October 1, 29 2000, once applicable, the requirement of the making of 30 quarter monthly payments to the Department shall continue 31 until such taxpayer's average monthly liability to the 32 Department during the preceding 4 complete calendar quarters 33 (excluding the month of highest liability and the month of 34 lowest liability) is less than $9,000, or until such SB1118 Engrossed -51- LRB9102874PTpkA 1 taxpayer's average monthly liability to the Department as 2 computed for each calendar quarter of the 4 preceding 3 complete calendar quarter period is less than $10,000. 4 However, if a taxpayer can show the Department that a 5 substantial change in the taxpayer's business has occurred 6 which causes the taxpayer to anticipate that his average 7 monthly tax liability for the reasonably foreseeable future 8 will fall below the $10,000 threshold stated above, then such 9 taxpayer may petition the Department for change in such 10 taxpayer's reporting status. On and after October 1, 2000, 11 once applicable, the requirement of the making of quarter 12 monthly payments to the Department shall continue until such 13 taxpayer's average monthly liability to the Department during 14 the preceding 4 complete calendar quarters (excluding the 15 month of highest liability and the month of lowest liability) 16 is less than $24,000 or until such taxpayer's average monthly 17 liability to the Department as computed for each calendar 18 quarter of the 4 preceding complete calendar quarter period 19 is less than $25,000. However, if a taxpayer can show the 20 Department that a substantial change in the taxpayer's 21 business has occurred which causes the taxpayer to anticipate 22 that his average monthly tax liability for the reasonably 23 foreseeable future will fall below the $25,000 threshold 24 stated above, then such taxpayer may petition the Department 25 for a change in such taxpayer's reporting status. The 26 Department shall change such taxpayer's reporting status 27 unless it finds that such change is seasonal in nature and 28 not likely to be long term. If any such quarter monthly 29 payment is not paid at the time or in the amount required by 30 this Section, then the taxpayer shall be liable for penalties 31 and interest on the difference between the minimum amount due 32 and the amount of such quarter monthly payment actually and 33 timely paid, except insofar as the taxpayer has previously 34 made payments for that month to the Department in excess of SB1118 Engrossed -52- LRB9102874PTpkA 1 the minimum payments previously due as provided in this 2 Section. The Department shall make reasonable rules and 3 regulations to govern the quarter monthly payment amount and 4 quarter monthly payment dates for taxpayers who file on other 5 than a calendar monthly basis. 6 If any such payment provided for in this Section exceeds 7 the taxpayer's liabilities under this Act, the Retailers' 8 Occupation Tax Act, the Service Occupation Tax Act and the 9 Service Use Tax Act, as shown by an original monthly return, 10 the Department shall issue to the taxpayer a credit 11 memorandum no later than 30 days after the date of payment, 12 which memorandum may be submitted by the taxpayer to the 13 Department in payment of tax liability subsequently to be 14 remitted by the taxpayer to the Department or be assigned by 15 the taxpayer to a similar taxpayer under this Act, the 16 Retailers' Occupation Tax Act, the Service Occupation Tax Act 17 or the Service Use Tax Act, in accordance with reasonable 18 rules and regulations to be prescribed by the Department, 19 except that if such excess payment is shown on an original 20 monthly return and is made after December 31, 1986, no credit 21 memorandum shall be issued, unless requested by the taxpayer. 22 If no such request is made, the taxpayer may credit such 23 excess payment against tax liability subsequently to be 24 remitted by the taxpayer to the Department under this Act, 25 the Retailers' Occupation Tax Act, the Service Occupation Tax 26 Act or the Service Use Tax Act, in accordance with reasonable 27 rules and regulations prescribed by the Department. If the 28 Department subsequently determines that all or any part of 29 the credit taken was not actually due to the taxpayer, the 30 taxpayer's 2.1% or 1.75% vendor's discount shall be reduced 31 by 2.1% or 1.75% of the difference between the credit taken 32 and that actually due, and the taxpayer shall be liable for 33 penalties and interest on such difference. 34 If the retailer is otherwise required to file a monthly SB1118 Engrossed -53- LRB9102874PTpkA 1 return and if the retailer's average monthly tax liability to 2 the Department does not exceed $200, the Department may 3 authorize his returns to be filed on a quarter annual basis, 4 with the return for January, February, and March of a given 5 year being due by April 20 of such year; with the return for 6 April, May and June of a given year being due by July 20 of 7 such year; with the return for July, August and September of 8 a given year being due by October 20 of such year, and with 9 the return for October, November and December of a given year 10 being due by January 20 of the following year. 11 If the retailer is otherwise required to file a monthly 12 or quarterly return and if the retailer's average monthly tax 13 liability to the Department does not exceed $50, the 14 Department may authorize his returns to be filed on an annual 15 basis, with the return for a given year being due by January 16 20 of the following year. 17 Such quarter annual and annual returns, as to form and 18 substance, shall be subject to the same requirements as 19 monthly returns. 20 Notwithstanding any other provision in this Act 21 concerning the time within which a retailer may file his 22 return, in the case of any retailer who ceases to engage in a 23 kind of business which makes him responsible for filing 24 returns under this Act, such retailer shall file a final 25 return under this Act with the Department not more than one 26 month after discontinuing such business. 27 In addition, with respect to motor vehicles, watercraft, 28 aircraft, and trailers that are required to be registered 29 with an agency of this State, every retailer selling this 30 kind of tangible personal property shall file, with the 31 Department, upon a form to be prescribed and supplied by the 32 Department, a separate return for each such item of tangible 33 personal property which the retailer sells, except that 34 where, in the same transaction, a retailer of aircraft, SB1118 Engrossed -54- LRB9102874PTpkA 1 watercraft, motor vehicles or trailers transfers more than 2 one aircraft, watercraft, motor vehicle or trailer to another 3 aircraft, watercraft, motor vehicle or trailer retailer for 4 the purpose of resale, that seller for resale may report the 5 transfer of all the aircraft, watercraft, motor vehicles or 6 trailers involved in that transaction to the Department on 7 the same uniform invoice-transaction reporting return form. 8 For purposes of this Section, "watercraft" means a Class 2, 9 Class 3, or Class 4 watercraft as defined in Section 3-2 of 10 the Boat Registration and Safety Act, a personal watercraft, 11 or any boat equipped with an inboard motor. 12 The transaction reporting return in the case of motor 13 vehicles or trailers that are required to be registered with 14 an agency of this State, shall be the same document as the 15 Uniform Invoice referred to in Section 5-402 of the Illinois 16 Vehicle Code and must show the name and address of the 17 seller; the name and address of the purchaser; the amount of 18 the selling price including the amount allowed by the 19 retailer for traded-in property, if any; the amount allowed 20 by the retailer for the traded-in tangible personal property, 21 if any, to the extent to which Section 2 of this Act allows 22 an exemption for the value of traded-in property; the balance 23 payable after deducting such trade-in allowance from the 24 total selling price; the amount of tax due from the retailer 25 with respect to such transaction; the amount of tax collected 26 from the purchaser by the retailer on such transaction (or 27 satisfactory evidence that such tax is not due in that 28 particular instance, if that is claimed to be the fact); the 29 place and date of the sale; a sufficient identification of 30 the property sold; such other information as is required in 31 Section 5-402 of the Illinois Vehicle Code, and such other 32 information as the Department may reasonably require. 33 The transaction reporting return in the case of 34 watercraft and aircraft must show the name and address of the SB1118 Engrossed -55- LRB9102874PTpkA 1 seller; the name and address of the purchaser; the amount of 2 the selling price including the amount allowed by the 3 retailer for traded-in property, if any; the amount allowed 4 by the retailer for the traded-in tangible personal property, 5 if any, to the extent to which Section 2 of this Act allows 6 an exemption for the value of traded-in property; the balance 7 payable after deducting such trade-in allowance from the 8 total selling price; the amount of tax due from the retailer 9 with respect to such transaction; the amount of tax collected 10 from the purchaser by the retailer on such transaction (or 11 satisfactory evidence that such tax is not due in that 12 particular instance, if that is claimed to be the fact); the 13 place and date of the sale, a sufficient identification of 14 the property sold, and such other information as the 15 Department may reasonably require. 16 Such transaction reporting return shall be filed not 17 later than 20 days after the date of delivery of the item 18 that is being sold, but may be filed by the retailer at any 19 time sooner than that if he chooses to do so. The 20 transaction reporting return and tax remittance or proof of 21 exemption from the tax that is imposed by this Act may be 22 transmitted to the Department by way of the State agency with 23 which, or State officer with whom, the tangible personal 24 property must be titled or registered (if titling or 25 registration is required) if the Department and such agency 26 or State officer determine that this procedure will expedite 27 the processing of applications for title or registration. 28 With each such transaction reporting return, the retailer 29 shall remit the proper amount of tax due (or shall submit 30 satisfactory evidence that the sale is not taxable if that is 31 the case), to the Department or its agents, whereupon the 32 Department shall issue, in the purchaser's name, a tax 33 receipt (or a certificate of exemption if the Department is 34 satisfied that the particular sale is tax exempt) which such SB1118 Engrossed -56- LRB9102874PTpkA 1 purchaser may submit to the agency with which, or State 2 officer with whom, he must title or register the tangible 3 personal property that is involved (if titling or 4 registration is required) in support of such purchaser's 5 application for an Illinois certificate or other evidence of 6 title or registration to such tangible personal property. 7 No retailer's failure or refusal to remit tax under this 8 Act precludes a user, who has paid the proper tax to the 9 retailer, from obtaining his certificate of title or other 10 evidence of title or registration (if titling or registration 11 is required) upon satisfying the Department that such user 12 has paid the proper tax (if tax is due) to the retailer. The 13 Department shall adopt appropriate rules to carry out the 14 mandate of this paragraph. 15 If the user who would otherwise pay tax to the retailer 16 wants the transaction reporting return filed and the payment 17 of tax or proof of exemption made to the Department before 18 the retailer is willing to take these actions and such user 19 has not paid the tax to the retailer, such user may certify 20 to the fact of such delay by the retailer, and may (upon the 21 Department being satisfied of the truth of such 22 certification) transmit the information required by the 23 transaction reporting return and the remittance for tax or 24 proof of exemption directly to the Department and obtain his 25 tax receipt or exemption determination, in which event the 26 transaction reporting return and tax remittance (if a tax 27 payment was required) shall be credited by the Department to 28 the proper retailer's account with the Department, but 29 without the 2.1% or 1.75% discount provided for in this 30 Section being allowed. When the user pays the tax directly 31 to the Department, he shall pay the tax in the same amount 32 and in the same form in which it would be remitted if the tax 33 had been remitted to the Department by the retailer. 34 Where a retailer collects the tax with respect to the SB1118 Engrossed -57- LRB9102874PTpkA 1 selling price of tangible personal property which he sells 2 and the purchaser thereafter returns such tangible personal 3 property and the retailer refunds the selling price thereof 4 to the purchaser, such retailer shall also refund, to the 5 purchaser, the tax so collected from the purchaser. When 6 filing his return for the period in which he refunds such tax 7 to the purchaser, the retailer may deduct the amount of the 8 tax so refunded by him to the purchaser from any other use 9 tax which such retailer may be required to pay or remit to 10 the Department, as shown by such return, if the amount of the 11 tax to be deducted was previously remitted to the Department 12 by such retailer. If the retailer has not previously 13 remitted the amount of such tax to the Department, he is 14 entitled to no deduction under this Act upon refunding such 15 tax to the purchaser. 16 Any retailer filing a return under this Section shall 17 also include (for the purpose of paying tax thereon) the 18 total tax covered by such return upon the selling price of 19 tangible personal property purchased by him at retail from a 20 retailer, but as to which the tax imposed by this Act was not 21 collected from the retailer filing such return, and such 22 retailer shall remit the amount of such tax to the Department 23 when filing such return. 24 If experience indicates such action to be practicable, 25 the Department may prescribe and furnish a combination or 26 joint return which will enable retailers, who are required to 27 file returns hereunder and also under the Retailers' 28 Occupation Tax Act, to furnish all the return information 29 required by both Acts on the one form. 30 Where the retailer has more than one business registered 31 with the Department under separate registration under this 32 Act, such retailer may not file each return that is due as a 33 single return covering all such registered businesses, but 34 shall file separate returns for each such registered SB1118 Engrossed -58- LRB9102874PTpkA 1 business. 2 Beginning January 1, 1990, each month the Department 3 shall pay into the State and Local Sales Tax Reform Fund, a 4 special fund in the State Treasury which is hereby created, 5 the net revenue realized for the preceding month from the 1% 6 tax on sales of food for human consumption which is to be 7 consumed off the premises where it is sold (other than 8 alcoholic beverages, soft drinks and food which has been 9 prepared for immediate consumption) and prescription and 10 nonprescription medicines, drugs, medical appliances and 11 insulin, urine testing materials, syringes and needles used 12 by diabetics. 13 Beginning January 1, 1990, each month the Department 14 shall pay into the County and Mass Transit District Fund 4% 15 of the net revenue realized for the preceding month from the 16 6.25% general rate on the selling price of tangible personal 17 property which is purchased outside Illinois at retail from a 18 retailer and which is titled or registered by an agency of 19 this State's government. 20 Beginning January 1, 1990, each month the Department 21 shall pay into the State and Local Sales Tax Reform Fund, a 22 special fund in the State Treasury, 20% of the net revenue 23 realized for the preceding month from the 6.25% general rate 24 on the selling price of tangible personal property, other 25 than tangible personal property which is purchased outside 26 Illinois at retail from a retailer and which is titled or 27 registered by an agency of this State's government. 28 Beginning January 1, 1990, each month the Department 29 shall pay into the Local Government Tax Fund 16% 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 which is purchased outside Illinois at retail from a 33 retailer and which is titled or registered by an agency of 34 this State's government. SB1118 Engrossed -59- LRB9102874PTpkA 1 Of the remainder of the moneys received by the Department 2 pursuant to this Act, (a) 1.75% thereof shall be paid into 3 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2% 4 and on and after July 1, 1989, 3.8% thereof shall be paid 5 into the Build Illinois Fund; provided, however, that if in 6 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%, 7 as the case may be, of the moneys received by the Department 8 and required to be paid into the Build Illinois Fund pursuant 9 to Section 3 of the Retailers' Occupation Tax Act, Section 9 10 of the Use Tax Act, Section 9 of the Service Use Tax Act, and 11 Section 9 of the Service Occupation Tax Act, such Acts being 12 hereinafter called the "Tax Acts" and such aggregate of 2.2% 13 or 3.8%, as the case may be, of moneys being hereinafter 14 called the "Tax Act Amount", and (2) the amount transferred 15 to the Build Illinois Fund from the State and Local Sales Tax 16 Reform Fund shall be less than the Annual Specified Amount 17 (as defined in Section 3 of the Retailers' Occupation Tax 18 Act), an amount equal to the difference shall be immediately 19 paid into the Build Illinois Fund from other moneys received 20 by the Department pursuant to the Tax Acts; and further 21 provided, that if on the last business day of any month the 22 sum of (1) the Tax Act Amount required to be deposited into 23 the Build Illinois Bond Account in the Build Illinois Fund 24 during such month and (2) the amount transferred during such 25 month to the Build Illinois Fund from the State and Local 26 Sales Tax Reform Fund shall have been less than 1/12 of the 27 Annual Specified Amount, an amount equal to the difference 28 shall be immediately paid into the Build Illinois Fund from 29 other moneys received by the Department pursuant to the Tax 30 Acts; and, further provided, that in no event shall the 31 payments required under the preceding proviso result in 32 aggregate payments into the Build Illinois Fund pursuant to 33 this clause (b) for any fiscal year in excess of the greater 34 of (i) the Tax Act Amount or (ii) the Annual Specified Amount SB1118 Engrossed -60- LRB9102874PTpkA 1 for such fiscal year; and, further provided, that the amounts 2 payable into the Build Illinois Fund under this clause (b) 3 shall be payable only until such time as the aggregate amount 4 on deposit under each trust indenture securing Bonds issued 5 and outstanding pursuant to the Build Illinois Bond Act is 6 sufficient, taking into account any future investment income, 7 to fully provide, in accordance with such indenture, for the 8 defeasance of or the payment of the principal of, premium, if 9 any, and interest on the Bonds secured by such indenture and 10 on any Bonds expected to be issued thereafter and all fees 11 and costs payable with respect thereto, all as certified by 12 the Director of the Bureau of the Budget. If on the last 13 business day of any month in which Bonds are outstanding 14 pursuant to the Build Illinois Bond Act, the aggregate of the 15 moneys deposited in the Build Illinois Bond Account in the 16 Build Illinois Fund in such month shall be less than the 17 amount required to be transferred in such month from the 18 Build Illinois Bond Account to the Build Illinois Bond 19 Retirement and Interest Fund pursuant to Section 13 of the 20 Build Illinois Bond Act, an amount equal to such deficiency 21 shall be immediately paid from other moneys received by the 22 Department pursuant to the Tax Acts to the Build Illinois 23 Fund; provided, however, that any amounts paid to the Build 24 Illinois Fund in any fiscal year pursuant to this sentence 25 shall be deemed to constitute payments pursuant to clause (b) 26 of the preceding sentence and shall reduce the amount 27 otherwise payable for such fiscal year pursuant to clause (b) 28 of the preceding sentence. The moneys received by the 29 Department pursuant to this Act and required to be deposited 30 into the Build Illinois Fund are subject to the pledge, claim 31 and charge set forth in Section 12 of the Build Illinois Bond 32 Act. 33 Subject to payment of amounts into the Build Illinois 34 Fund as provided in the preceding paragraph or in any SB1118 Engrossed -61- LRB9102874PTpkA 1 amendment thereto hereafter enacted, the following specified 2 monthly installment of the amount requested in the 3 certificate of the Chairman of the Metropolitan Pier and 4 Exposition Authority provided under Section 8.25f of the 5 State Finance Act, but not in excess of the sums designated 6 as "Total Deposit", shall be deposited in the aggregate from 7 collections under Section 9 of the Use Tax Act, Section 9 of 8 the Service Use Tax Act, Section 9 of the Service Occupation 9 Tax Act, and Section 3 of the Retailers' Occupation Tax Act 10 into the McCormick Place Expansion Project Fund in the 11 specified fiscal years. 12 Fiscal Year Total Deposit 13 1993 $0 14 1994 53,000,000 15 1995 58,000,000 16 1996 61,000,000 17 1997 64,000,000 18 1998 68,000,000 19 1999 71,000,000 20 2000 75,000,000 21 2001 80,000,000 22 2002 84,000,000 23 2003 89,000,000 24 2004 93,000,000 25 2005 97,000,000 26 2006 102,000,000 27 2007 and 106,000,000 28 each fiscal year 29 thereafter that bonds 30 are outstanding under 31 Section 13.2 of the 32 Metropolitan Pier and 33 Exposition Authority 34 Act, but not after fiscal year 2029. SB1118 Engrossed -62- LRB9102874PTpkA 1 Beginning July 20, 1993 and in each month of each fiscal 2 year thereafter, one-eighth of the amount requested in the 3 certificate of the Chairman of the Metropolitan Pier and 4 Exposition Authority for that fiscal year, less the amount 5 deposited into the McCormick Place Expansion Project Fund by 6 the State Treasurer in the respective month under subsection 7 (g) of Section 13 of the Metropolitan Pier and Exposition 8 Authority Act, plus cumulative deficiencies in the deposits 9 required under this Section for previous months and years, 10 shall be deposited into the McCormick Place Expansion Project 11 Fund, until the full amount requested for the fiscal year, 12 but not in excess of the amount specified above as "Total 13 Deposit", has been deposited. 14 Subject to payment of amounts into the Build Illinois 15 Fund and the McCormick Place Expansion Project Fund pursuant 16 to the preceding paragraphs or in any amendment thereto 17 hereafter enacted, each month the Department shall pay into 18 the Local Government Distributive Fund .4% of the net revenue 19 realized for the preceding month from the 5% general rate, or 20 .4% of 80% of the net revenue realized for the preceding 21 month from the 6.25% general rate, as the case may be, on the 22 selling price of tangible personal property which amount 23 shall, subject to appropriation, be distributed as provided 24 in Section 2 of the State Revenue Sharing Act. No payments or 25 distributions pursuant to this paragraph shall be made if the 26 tax imposed by this Act on photoprocessing products is 27 declared unconstitutional, or if the proceeds from such tax 28 are unavailable for distribution because of litigation. 29 Subject to payment of amounts into the Build Illinois 30 Fund, the McCormick Place Expansion Project Fund, and the 31 Local Government Distributive Fund pursuant to the preceding 32 paragraphs or in any amendments thereto hereafter enacted, 33 beginning July 1, 1993, the Department shall each month pay 34 into the Illinois Tax Increment Fund 0.27% of 80% of the net SB1118 Engrossed -63- LRB9102874PTpkA 1 revenue realized for the preceding month from the 6.25% 2 general rate on the selling price of tangible personal 3 property. 4 Of the remainder of the moneys received by the Department 5 pursuant to this Act, 75% thereof shall be paid into the 6 State Treasury and 25% shall be reserved in a special account 7 and used only for the transfer to the Common School Fund as 8 part of the monthly transfer from the General Revenue Fund in 9 accordance with Section 8a of the State Finance Act. 10 As soon as possible after the first day of each month, 11 upon certification of the Department of Revenue, the 12 Comptroller shall order transferred and the Treasurer shall 13 transfer from the General Revenue Fund to the Motor Fuel Tax 14 Fund an amount equal to 1.7% of 80% of the net revenue 15 realized under this Act for the second preceding month; 16 except that this transfer shall not be made for the months 17 February through June of 1992. 18 Net revenue realized for a month shall be the revenue 19 collected by the State pursuant to this Act, less the amount 20 paid out during that month as refunds to taxpayers for 21 overpayment of liability. 22 For greater simplicity of administration, manufacturers, 23 importers and wholesalers whose products are sold at retail 24 in Illinois by numerous retailers, and who wish to do so, may 25 assume the responsibility for accounting and paying to the 26 Department all tax accruing under this Act with respect to 27 such sales, if the retailers who are affected do not make 28 written objection to the Department to this arrangement. 29 (Source: P.A. 89-379, eff. 1-1-96; 89-626, eff. 8-9-96; 30 90-491, eff. 1-1-99; 90-612, eff. 7-8-98.) 31 (35 ILCS 105/10) (from Ch. 120, par. 439.10) 32 Sec. 10. Except as to motor vehicles and aircraft, when 33 tangible personal property is purchased from a retailer for SB1118 Engrossed -64- LRB9102874PTpkA 1 use in this State by a purchaser who did not pay the tax 2 imposed by this Act to the retailer, and who does not file 3 returns with the Department as a retailer under Section 9 of 4 this Act, such purchaser (by the last day of the month 5 following the calendar month in which such purchaser makes 6 any payment upon the selling price of such property) shall, 7 except as provided in this Section, file a return with the 8 Department and pay the tax upon that portion of the selling 9 price so paid by the purchaser during the preceding calendar 10 month. When tangible personal property, including but not 11 limited to motor vehicles and aircraft, is purchased by a 12 lessor, under a lease for one year or longer, executed or in 13 effect at the time of purchase to an interstate carrier for 14 hire, who did not pay the tax imposed by this Act to the 15 retailer, such lessor (by the last day of the month following 16 the calendar month in which such property reverts to the use 17 of such lessor) shall file a return with the Department and 18 pay the tax upon the fair market value of such property on 19 the date of such reversion. However, in determining the fair 20 market value at the time of reversion, the fair market value 21 of such property shall not exceed the original purchase price 22 of the property that was paid by the lessor at the time of 23 purchase. Such return shall be filed on a form prescribed 24 by the Department and shall contain such information as the 25 Department may reasonably require. Such return and payment 26 from the purchaser shall be submitted to the Department 27 sooner than the last day of the month after the month in 28 which the purchase is made to the extent that that may be 29 necessary in order to secure the title to a motor vehicle or 30 the certificate of registration for an aircraft. However, 31 except as to motor vehicles and aircraft, if the purchaser's 32 annual use tax liability does not exceed $600, the purchaser 33 may file the return on an annual basis on or before April 34 15th of the year following the year use tax liability was SB1118 Engrossed -65- LRB9102874PTpkA 1 incurred. 2 In addition with respect to motor vehicles and aircraft, 3 a purchaser of such tangible personal property for use in 4 this State, who purchases such tangible personal property 5 from an out-of-state retailer, shall file with the 6 Department, upon a form to be prescribed and supplied by the 7 Department, a return for each such item of tangible personal 8 property purchased. Such return in the case of motor 9 vehicles and aircraft must show the name and address of the 10 seller, the name, address of purchaser, the amount of the 11 selling price including the amount allowed by the retailer 12 for traded in property, if any; the amount allowed by the 13 retailer for the traded-in tangible personal property, if 14 any, to the extent to which Section 2 of this Act allows an 15 exemption for the value of traded-in property; the balance 16 payable after deducting such trade-in allowance from the 17 total selling price; the amount of tax due from the purchaser 18 with respect to such transaction; the amount of tax collected 19 from the purchaser by the retailer on such transaction (or 20 satisfactory evidence that such tax is not due in that 21 particular instance if that is claimed to be the fact); the 22 place and date of the sale, a sufficient identification of 23 the property sold, and such other information as the 24 Department may reasonably require. 25 Such return shall be filed not later than 30 days after 26 such motor vehicle or aircraft is brought into this State for 27 use. 28 The return and tax remittance or proof of exemption from 29 the tax that is imposed by this Act 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 Engrossed -66- LRB9102874PTpkA 1 applications for title or registration. 2 With each such return, the purchaser shall remit the 3 proper amount of tax due (or shall submit satisfactory 4 evidence that the sale is not taxable if that is the case), 5 to the Department or its agents, whereupon the Department 6 shall issue, in the purchaser's name, a tax receipt (or a 7 certificate of exemption if the Department is satisfied that 8 the particular sale is tax exempt) which such purchaser may 9 submit to the agency with which, or State officer with whom, 10 he must title or register the tangible personal property that 11 is involved (if titling or registration is required) in 12 support of such purchaser's application for an Illinois 13 certificate or other evidence of title or registration to 14 such tangible personal property. 15 When a purchaser pays a tax imposed by this Act directly 16 to the Department, the Department (upon request therefor from 17 such purchaser) shall issue an appropriate receipt to such 18 purchaser showing that he has paid such tax to the 19 Department. Such receipt shall be sufficient to relieve the 20 purchaser from further liability for the tax to which such 21 receipt may refer. 22 A user who is liable to pay use tax directly to the 23 Department only occasionally and not on a frequently 24 recurring basis, and who is not required to file returns with 25 the Department as a retailer under Section 9 of this Act, or 26 under the "Retailers' Occupation Tax Act", or as a registrant 27 with the Department under the "Service Occupation Tax Act" or 28 the "Service Use Tax Act", need not register with the 29 Department. However, if such a user has a frequently 30 recurring direct use tax liability to pay to the Department, 31 such user shall be required to register with the Department 32 on forms prescribed by the Department and to obtain and 33 display a certificate of registration from the Department. 34 In that event, all of the provisions of Section 9 of this Act SB1118 Engrossed -67- LRB9102874PTpkA 1 concerning the filing of regular monthly, quarterly or annual 2 tax returns and all of the provisions of Section 2a of the 3 "Retailers' Occupation Tax Act" concerning the requirements 4 for registrants to post bond or other security with the 5 Department, as the provisions of such sections now exist or 6 may hereafter be amended, shall apply to such users to the 7 same extent as if such provisions were included herein. 8 (Source: P.A. 87-876.) 9 Section 15. The Service Use Tax Act is amended by 10 changing Sections 3-10 and 9 as follows: 11 (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10) 12 Sec. 3-10. Rate of tax. Unless otherwise provided in 13 this Section, the tax imposed by this Act is at the rate of 14 6.25% of the selling price of tangible personal property 15 transferred as an incident to the sale of service, but, for 16 the purpose of computing this tax, in no event shall the 17 selling price be less than the cost price of the property to 18 the serviceman. 19 With respect to gasohol, as defined in the Use Tax Act, 20 the tax imposed by this Act applies to 70% of the selling 21 price of property transferred as an incident to the sale of 22 service on or after January 1, 1990, and before July 1, 2003, 23 and to 100% of the selling price thereafter. 24 At the election of any registered serviceman made for 25 each fiscal year, sales of service in which the aggregate 26 annual cost price of tangible personal property transferred 27 as an incident to the sales of service is less than 35%, or 28 75% in the case of servicemen transferring prescription drugs 29 or servicemen engaged in graphic arts production, of the 30 aggregate annual total gross receipts from all sales of 31 service, the tax imposed by this Act shall be based on the 32 serviceman's cost price of the tangible personal property SB1118 Engrossed -68- LRB9102874PTpkA 1 transferred as an incident to the sale of those services. 2 The tax shall be imposed at the rate of 1% on food 3 prepared for immediate consumption and transferred incident 4 to a sale of service subject to this Act or the Service 5 Occupation Tax Act by an entity licensed under the Hospital 6 Licensing Act,orthe Nursing Home Care Act, or the Child 7 Care Act of 1969. The tax shall also be imposed at the rate 8 of 1% on food for human consumption that is to be consumed 9 off the premises where it is sold (other than alcoholic 10 beverages, soft drinks, and food that has been prepared for 11 immediate consumption and is not otherwise included in this 12 paragraph) and prescription and nonprescription medicines, 13 drugs, medical appliances, modifications to a motor vehicle 14 for the purpose of rendering it usable by a disabled person, 15 and insulin, urine testing materials, syringes, and needles 16 used by diabetics, for human use. For the purposes of this 17 Section, the term "soft drinks" means any complete, finished, 18 ready-to-use, non-alcoholic drink, whether carbonated or not, 19 including but not limited to soda water, cola, fruit juice, 20 vegetable juice, carbonated water, and all other preparations 21 commonly known as soft drinks of whatever kind or description 22 that are contained in any closed or sealed bottle, can, 23 carton, or container, regardless of size. "Soft drinks" does 24 not include coffee, tea, non-carbonated water, infant 25 formula, milk or milk products as defined in the Grade A 26 Pasteurized Milk and Milk Products Act, or drinks containing 27 50% or more natural fruit or vegetable juice. 28 Notwithstanding any other provisions of this Act, "food 29 for human consumption that is to be consumed off the premises 30 where it is sold" includes all food sold through a vending 31 machine, except soft drinks and food products that are 32 dispensed hot from a vending machine, regardless of the 33 location of the vending machine. 34 If the property that is acquired from a serviceman is SB1118 Engrossed -69- LRB9102874PTpkA 1 acquired outside Illinois and used outside Illinois before 2 being brought to Illinois for use here and is taxable under 3 this Act, the "selling price" on which the tax is computed 4 shall be reduced by an amount that represents a reasonable 5 allowance for depreciation for the period of prior 6 out-of-state use. 7 (Source: P.A. 89-359, eff. 8-17-95; 89-420, eff. 6-1-96; 8 89-463, eff. 5-31-96; 89-626, eff. 8-9-96; 90-605, eff. 9 6-30-98; 90-606, eff. 6-30-98.) 10 (35 ILCS 110/9) (from Ch. 120, par. 439.39) 11 Sec. 9. Each serviceman required or authorized to 12 collect the tax herein imposed shall pay to the Department 13 the amount of such tax (except as otherwise provided) at the 14 time when he is required to file his return for the period 15 during which such tax was collected, less a discount of 2.1% 16 prior to January 1, 1990 and 1.75% on and after January 1, 17 1990, or $5 per calendar year, whichever is greater, which is 18 allowed to reimburse the serviceman for expenses incurred in 19 collecting the tax, keeping records, preparing and filing 20 returns, remitting the tax and supplying data to the 21 Department on request. A serviceman need not remit that part 22 of any tax collected by him to the extent that he is required 23 to pay and does pay the tax imposed by the Service Occupation 24 Tax Act with respect to his sale of service involving the 25 incidental transfer by him of the same property. 26 Except as provided hereinafter in this Section, on or 27 before the twentieth day of each calendar month, such 28 serviceman shall file a return for the preceding calendar 29 month in accordance with reasonable Rules and Regulations to 30 be promulgated by the Department. Such return shall be filed 31 on a form prescribed by the Department and shall contain such 32 information as the Department may reasonably require. 33 The Department may require returns to be filed on a SB1118 Engrossed -70- 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 Beginning October 1, 1993, a taxpayer who has an average 27 monthly tax liability of $150,000 or more shall make all 28 payments required by rules of the Department by electronic 29 funds transfer. Beginning October 1, 1994, a taxpayer who 30 has an average monthly tax liability of $100,000 or more 31 shall make all payments required by rules of the Department 32 by electronic funds transfer. Beginning October 1, 1995, a 33 taxpayer who has an average monthly tax liability of $50,000 34 or more shall make all payments required by rules of the SB1118 Engrossed -71- LRB9102874PTpkA 1 Department by electronic funds transfer. Beginning October 1, 2 2000, a taxpayer who has an annual tax liability of $50,000 3 or more shall make all payments required by rules of the 4 Department by electronic funds transfer. The term "annual 5 tax liability" shall be the sum of the taxpayer's liabilities 6 under this Act, and under all other State and local 7 occupation and use tax laws administered by the Department, 8 for the immediately preceding calendar year. The term 9 "average monthly tax liability" means the sum of the 10 taxpayer's liabilities under this Act, and under all other 11 State and local occupation and use tax laws administered by 12 the Department, for the immediately preceding calendar year 13 divided by 12. 14 Before August 1 of each year beginning in 1993, the 15 Department shall notify all taxpayers required to make 16 payments by electronic funds transfer. All taxpayers required 17 to make payments by electronic funds transfer shall make 18 those payments for a minimum of one year beginning on October 19 1. 20 Any taxpayer not required to make payments by electronic 21 funds transfer may make payments by electronic funds transfer 22 with the permission of the Department. 23 All taxpayers required to make payment by electronic 24 funds transfer and any taxpayers authorized to voluntarily 25 make payments by electronic funds transfer shall make those 26 payments in the manner authorized by the Department. 27 The Department shall adopt such rules as are necessary to 28 effectuate a program of electronic funds transfer and the 29 requirements of this Section. 30 If the serviceman is otherwise required to file a monthly 31 return and if the serviceman's average monthly tax liability 32 to the Department does not exceed $200, the Department may 33 authorize his returns to be filed on a quarter annual basis, 34 with the return for January, February and March of a given SB1118 Engrossed -72- LRB9102874PTpkA 1 year being due by April 20 of such year; with the return for 2 April, May and June of a given year being due by July 20 of 3 such year; with the return for July, August and September of 4 a given year being due by October 20 of such year, and with 5 the return for October, November and December of a given year 6 being due by January 20 of the following year. 7 If the serviceman is otherwise required to file a monthly 8 or quarterly return and if the serviceman's average monthly 9 tax liability to the Department does not exceed $50, the 10 Department may authorize his returns to be filed on an annual 11 basis, with the return for a given year being due by January 12 20 of the following year. 13 Such quarter annual and annual returns, as to form and 14 substance, shall be subject to the same requirements as 15 monthly returns. 16 Notwithstanding any other provision in this Act 17 concerning the time within which a serviceman may file his 18 return, in the case of any serviceman who ceases to engage in 19 a kind of business which makes him responsible for filing 20 returns under this Act, such serviceman shall file a final 21 return under this Act with the Department not more than 1 22 month after discontinuing such business. 23 Where a serviceman collects the tax with respect to the 24 selling price of property which he sells and the purchaser 25 thereafter returns such property and the serviceman refunds 26 the selling price thereof to the purchaser, such serviceman 27 shall also refund, to the purchaser, the tax so collected 28 from the purchaser. When filing his return for the period in 29 which he refunds such tax to the purchaser, the serviceman 30 may deduct the amount of the tax so refunded by him to the 31 purchaser from any other Service Use Tax, Service Occupation 32 Tax, retailers' occupation tax or use tax which such 33 serviceman may be required to pay or remit to the Department, 34 as shown by such return, provided that the amount of the tax SB1118 Engrossed -73- LRB9102874PTpkA 1 to be deducted shall previously have been remitted to the 2 Department by such serviceman. If the serviceman shall not 3 previously have remitted the amount of such tax to the 4 Department, he shall be entitled to no deduction hereunder 5 upon refunding such tax to the purchaser. 6 Any serviceman filing a return hereunder shall also 7 include the total tax upon the selling price of tangible 8 personal property purchased for use by him as an incident to 9 a sale of service, and such serviceman shall remit the amount 10 of such tax to the Department when filing such return. 11 If experience indicates such action to be practicable, 12 the Department may prescribe and furnish a combination or 13 joint return which will enable servicemen, who are required 14 to file returns hereunder and also under the Service 15 Occupation Tax Act, to furnish all the return information 16 required by both Acts on the one form. 17 Where the serviceman has more than one business 18 registered with the Department under separate registration 19 hereunder, such serviceman shall not file each return that is 20 due as a single return covering all such registered 21 businesses, but shall file separate returns for each such 22 registered business. 23 Beginning January 1, 1990, each month the Department 24 shall pay into the State and Local Tax Reform Fund, a special 25 fund in the State Treasury, the net revenue realized for the 26 preceding month from the 1% tax on sales of food for human 27 consumption which is to be consumed off the premises where it 28 is sold (other than alcoholic beverages, soft drinks and food 29 which has been prepared for immediate consumption) and 30 prescription and nonprescription medicines, drugs, medical 31 appliances and insulin, urine testing materials, syringes and 32 needles used by diabetics. 33 Beginning January 1, 1990, each month the Department 34 shall pay into the State and Local Sales Tax Reform Fund 20% SB1118 Engrossed -74- LRB9102874PTpkA 1 of the net revenue realized for the preceding month from the 2 6.25% general rate on transfers of tangible personal 3 property, other than tangible personal property which is 4 purchased outside Illinois at retail from a retailer and 5 which is titled or registered by an agency of this State's 6 government. 7 Of the remainder of the moneys received by the Department 8 pursuant to this Act, (a) 1.75% thereof shall be paid into 9 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2% 10 and on and after July 1, 1989, 3.8% thereof shall be paid 11 into the Build Illinois Fund; provided, however, that if in 12 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%, 13 as the case may be, of the moneys received by the Department 14 and required to be paid into the Build Illinois Fund pursuant 15 to Section 3 of the Retailers' Occupation Tax Act, Section 9 16 of the Use Tax Act, Section 9 of the Service Use Tax Act, and 17 Section 9 of the Service Occupation Tax Act, such Acts being 18 hereinafter called the "Tax Acts" and such aggregate of 2.2% 19 or 3.8%, as the case may be, of moneys being hereinafter 20 called the "Tax Act Amount", and (2) the amount transferred 21 to the Build Illinois Fund from the State and Local Sales Tax 22 Reform Fund shall be less than the Annual Specified Amount 23 (as defined in Section 3 of the Retailers' Occupation Tax 24 Act), an amount equal to the difference shall be immediately 25 paid into the Build Illinois Fund from other moneys received 26 by the Department pursuant to the Tax Acts; and further 27 provided, that if on the last business day of any month the 28 sum of (1) the Tax Act Amount required to be deposited into 29 the Build Illinois Bond Account in the Build Illinois Fund 30 during such month and (2) the amount transferred during such 31 month to the Build Illinois Fund from the State and Local 32 Sales Tax Reform Fund shall have been less than 1/12 of the 33 Annual Specified Amount, an amount equal to the difference 34 shall be immediately paid into the Build Illinois Fund from SB1118 Engrossed -75- LRB9102874PTpkA 1 other moneys received by the Department pursuant to the Tax 2 Acts; and, further provided, that in no event shall the 3 payments required under the preceding proviso result in 4 aggregate payments into the Build Illinois Fund pursuant to 5 this clause (b) for any fiscal year in excess of the greater 6 of (i) the Tax Act Amount or (ii) the Annual Specified Amount 7 for such fiscal year; and, further provided, that the amounts 8 payable into the Build Illinois Fund under this clause (b) 9 shall be payable only until such time as the aggregate amount 10 on deposit under each trust indenture securing Bonds issued 11 and outstanding pursuant to the Build Illinois Bond Act is 12 sufficient, taking into account any future investment income, 13 to fully provide, in accordance with such indenture, for the 14 defeasance of or the payment of the principal of, premium, if 15 any, and interest on the Bonds secured by such indenture and 16 on any Bonds expected to be issued thereafter and all fees 17 and costs payable with respect thereto, all as certified by 18 the Director of the Bureau of the Budget. If on the last 19 business day of any month in which Bonds are outstanding 20 pursuant to the Build Illinois Bond Act, the aggregate of the 21 moneys deposited in the Build Illinois Bond Account in the 22 Build Illinois Fund in such month shall be less than the 23 amount required to be transferred in such month from the 24 Build Illinois Bond Account to the Build Illinois Bond 25 Retirement and Interest Fund pursuant to Section 13 of the 26 Build Illinois Bond Act, an amount equal to such deficiency 27 shall be immediately paid from other moneys received by the 28 Department pursuant to the Tax Acts to the Build Illinois 29 Fund; provided, however, that any amounts paid to the Build 30 Illinois Fund in any fiscal year pursuant to this sentence 31 shall be deemed to constitute payments pursuant to clause (b) 32 of the preceding sentence and shall reduce the amount 33 otherwise payable for such fiscal year pursuant to clause (b) 34 of the preceding sentence. The moneys received by the SB1118 Engrossed -76- LRB9102874PTpkA 1 Department pursuant to this Act and required to be deposited 2 into the Build Illinois Fund are subject to the pledge, claim 3 and charge set forth in Section 12 of the Build Illinois Bond 4 Act. 5 Subject to payment of amounts into the Build Illinois 6 Fund as provided in the preceding paragraph or in any 7 amendment thereto hereafter enacted, the following specified 8 monthly installment of the amount requested in the 9 certificate of the Chairman of the Metropolitan Pier and 10 Exposition Authority provided under Section 8.25f of the 11 State Finance Act, but not in excess of the sums designated 12 as "Total Deposit", shall be deposited in the aggregate from 13 collections under Section 9 of the Use Tax Act, Section 9 of 14 the Service Use Tax Act, Section 9 of the Service Occupation 15 Tax Act, and Section 3 of the Retailers' Occupation Tax Act 16 into the McCormick Place Expansion Project Fund in the 17 specified fiscal years. 18 Fiscal Year Total Deposit 19 1993 $0 20 1994 53,000,000 21 1995 58,000,000 22 1996 61,000,000 23 1997 64,000,000 24 1998 68,000,000 25 1999 71,000,000 26 2000 75,000,000 27 2001 80,000,000 28 2002 84,000,000 29 2003 89,000,000 30 2004 93,000,000 31 2005 97,000,000 32 2006 102,000,000 33 2007 and 106,000,000 34 each fiscal year SB1118 Engrossed -77- LRB9102874PTpkA 1 thereafter that bonds 2 are outstanding under 3 Section 13.2 of the 4 Metropolitan Pier and 5 Exposition Authority Act, 6 but not after fiscal year 2029. 7 Beginning July 20, 1993 and in each month of each fiscal 8 year thereafter, one-eighth of the amount requested in the 9 certificate of the Chairman of the Metropolitan Pier and 10 Exposition Authority for that fiscal year, less the amount 11 deposited into the McCormick Place Expansion Project Fund by 12 the State Treasurer in the respective month under subsection 13 (g) of Section 13 of the Metropolitan Pier and Exposition 14 Authority Act, plus cumulative deficiencies in the deposits 15 required under this Section for previous months and years, 16 shall be deposited into the McCormick Place Expansion Project 17 Fund, until the full amount requested for the fiscal year, 18 but not in excess of the amount specified above as "Total 19 Deposit", has been deposited. 20 Subject to payment of amounts into the Build Illinois 21 Fund and the McCormick Place Expansion Project Fund pursuant 22 to the preceding paragraphs or in any amendment thereto 23 hereafter enacted, each month the Department shall pay into 24 the Local Government Distributive Fund 0.4% of the net 25 revenue realized for the preceding month from the 5% general 26 rate or 0.4% of 80% of the net revenue realized for the 27 preceding month from the 6.25% general rate, as the case may 28 be, on the selling price of tangible personal property which 29 amount shall, subject to appropriation, be distributed as 30 provided in Section 2 of the State Revenue Sharing Act. No 31 payments or distributions pursuant to this paragraph shall be 32 made if the tax imposed by this Act on photo processing 33 products is declared unconstitutional, or if the proceeds 34 from such tax are unavailable for distribution because of SB1118 Engrossed -78- LRB9102874PTpkA 1 litigation. 2 Subject to payment of amounts into the Build Illinois 3 Fund, the McCormick Place Expansion Project Fund, and the 4 Local Government Distributive Fund pursuant to the preceding 5 paragraphs or in any amendments thereto hereafter enacted, 6 beginning July 1, 1993, the Department shall each month pay 7 into the Illinois Tax Increment Fund 0.27% of 80% of the net 8 revenue realized for the preceding month from the 6.25% 9 general rate on the selling price of tangible personal 10 property. 11 All remaining moneys received by the Department pursuant 12 to this Act shall be paid into the General Revenue Fund of 13 the State Treasury. 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, 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 (Source: P.A. 89-379, eff. 1-1-96; 90-612, eff. 7-8-98.) 27 Section 20. The Service Occupation Tax Act is amended by 28 changing Sections 3-10 and 9 as follows: 29 (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10) 30 Sec. 3-10. Rate of tax. Unless otherwise provided in 31 this Section, the tax imposed by this Act is at the rate of 32 6.25% of the "selling price", as defined in Section 2 of the SB1118 Engrossed -79- LRB9102874PTpkA 1 Service Use Tax Act, of the tangible personal property. For 2 the purpose of computing this tax, in no event shall the 3 "selling price" be less than the cost price to the serviceman 4 of the tangible personal property transferred. The selling 5 price of each item of tangible personal property transferred 6 as an incident of a sale of service may be shown as a 7 distinct and separate item on the serviceman's billing to the 8 service customer. If the selling price is not so shown, the 9 selling price of the tangible personal property is deemed to 10 be 50% of the serviceman's entire billing to the service 11 customer. When, however, a serviceman contracts to design, 12 develop, and produce special order machinery or equipment, 13 the tax imposed by this Act shall be based on the 14 serviceman's cost price of the tangible personal property 15 transferred incident to the completion of the contract. 16 With respect to gasohol, as defined in the Use Tax Act, 17 the tax imposed by this Act shall apply to 70% of the cost 18 price of property transferred as an incident to the sale of 19 service on or after January 1, 1990, and before July 1, 2003, 20 and to 100% of the cost price thereafter. 21 At the election of any registered serviceman made for 22 each fiscal year, sales of service in which the aggregate 23 annual cost price of tangible personal property transferred 24 as an incident to the sales of service is less than 35%, or 25 75% in the case of servicemen transferring prescription drugs 26 or servicemen engaged in graphic arts production, of the 27 aggregate annual total gross receipts from all sales of 28 service, the tax imposed by this Act shall be based on the 29 serviceman's cost price of the tangible personal property 30 transferred incident to the sale of those services. 31 The tax shall be imposed at the rate of 1% on food 32 prepared for immediate consumption and transferred incident 33 to a sale of service subject to this Act or the Service 34 Occupation Tax Act by an entity licensed under the Hospital SB1118 Engrossed -80- LRB9102874PTpkA 1 Licensing Act,orthe Nursing Home Care Act, or the Child 2 Care Act of 1969. The tax shall also be imposed at the rate 3 of 1% on food for human consumption that is to be consumed 4 off the premises where it is sold (other than alcoholic 5 beverages, soft drinks, and food that has been prepared for 6 immediate consumption and is not otherwise included in this 7 paragraph) and prescription and nonprescription medicines, 8 drugs, medical appliances, modifications to a motor vehicle 9 for the purpose of rendering it usable by a disabled person, 10 and insulin, urine testing materials, syringes, and needles 11 used by diabetics, for human use. For the purposes of this 12 Section, the term "soft drinks" means any complete, finished, 13 ready-to-use, non-alcoholic drink, whether carbonated or not, 14 including but not limited to soda water, cola, fruit juice, 15 vegetable juice, carbonated water, and all other preparations 16 commonly known as soft drinks of whatever kind or description 17 that are contained in any closed or sealed can, carton, or 18 container, regardless of size. "Soft drinks" does not 19 include coffee, tea, non-carbonated water, infant formula, 20 milk or milk products as defined in the Grade A Pasteurized 21 Milk and Milk Products Act, or drinks containing 50% or more 22 natural fruit or vegetable juice. 23 Notwithstanding any other provisions of this Act, "food 24 for human consumption that is to be consumed off the premises 25 where it is sold" includes all food sold through a vending 26 machine, except soft drinks and food products that are 27 dispensed hot from a vending machine, regardless of the 28 location of the vending machine. 29 (Source: P.A. 89-359, eff. 8-17-95; 89-420, eff. 6-1-96; 30 89-463, eff. 5-31-96; 89-626, eff. 8-9-96; 90-605, eff. 31 6-30-98; 90-606, eff. 6-30-98.) 32 (35 ILCS 115/9) (from Ch. 120, par. 439.109) 33 Sec. 9. Each serviceman required or authorized to SB1118 Engrossed -81- LRB9102874PTpkA 1 collect the tax herein imposed shall pay to the Department 2 the amount of such tax at the time when he is required to 3 file his return for the period during which such tax was 4 collectible, less a discount of 2.1% prior to January 1, 5 1990, and 1.75% on and after January 1, 1990, or $5 per 6 calendar year, whichever is greater, which is allowed to 7 reimburse the serviceman for expenses incurred in collecting 8 the tax, keeping records, preparing and filing returns, 9 remitting the tax and supplying data to the Department on 10 request. 11 Where such tangible personal property is sold under a 12 conditional sales contract, or under any other form of sale 13 wherein the payment of the principal sum, or a part thereof, 14 is extended beyond the close of the period for which the 15 return is filed, the serviceman, in collecting the tax may 16 collect, for each tax return period, only the tax applicable 17 to the part of the selling price actually received during 18 such tax return period. 19 Except as provided hereinafter in this Section, on or 20 before the twentieth day of each calendar month, such 21 serviceman shall file a return for the preceding calendar 22 month in accordance with reasonable rules and regulations to 23 be promulgated by the Department of Revenue. Such return 24 shall be filed on a form prescribed by the Department and 25 shall contain such information as the Department may 26 reasonably require. 27 The Department may require returns to be filed on a 28 quarterly basis. If so required, a return for each calendar 29 quarter shall be filed on or before the twentieth day of the 30 calendar month following the end of such calendar quarter. 31 The taxpayer shall also file a return with the Department for 32 each of the first two months of each calendar quarter, on or 33 before the twentieth day of the following calendar month, 34 stating: SB1118 Engrossed -82- LRB9102874PTpkA 1 1. The name of the seller; 2 2. The address of the principal place of business 3 from which he engages in business as a serviceman in this 4 State; 5 3. The total amount of taxable receipts received by 6 him during the preceding calendar month, including 7 receipts from charge and time sales, but less all 8 deductions allowed by law; 9 4. The amount of credit provided in Section 2d of 10 this Act; 11 5. The amount of tax due; 12 5-5. The signature of the taxpayer; and 13 6. Such other reasonable information as the 14 Department may require. 15 If a taxpayer fails to sign a return within 30 days after 16 the proper notice and demand for signature by the Department, 17 the return shall be considered valid and any amount shown to 18 be due on the return shall be deemed assessed. 19 A serviceman may accept a Manufacturer's Purchase Credit 20 certification from a purchaser in satisfaction of Service Use 21 Tax as provided in Section 3-70 of the Service Use Tax Act if 22 the purchaser provides the appropriate documentation as 23 required by Section 3-70 of the Service Use Tax Act. A 24 Manufacturer's Purchase Credit certification, accepted by a 25 serviceman as provided in Section 3-70 of the Service Use Tax 26 Act, may be used by that serviceman to satisfy Service 27 Occupation Tax liability in the amount claimed in the 28 certification, not to exceed 6.25% of the receipts subject to 29 tax from a qualifying purchase. 30 If the serviceman's average monthly tax liability to the 31 Department does not exceed $200, the Department may authorize 32 his returns to be filed on a quarter annual basis, with the 33 return for January, February and March of a given year being 34 due by April 20 of such year; with the return for April, May SB1118 Engrossed -83- LRB9102874PTpkA 1 and June of a given year being due by July 20 of such year; 2 with the return for July, August and September of a given 3 year being due by October 20 of such year, and with the 4 return for October, November and December of a given year 5 being due by January 20 of the following year. 6 If the serviceman's average monthly tax liability to the 7 Department does not exceed $50, the Department may authorize 8 his returns to be filed on an annual basis, with the return 9 for a given year being due by January 20 of the following 10 year. 11 Such quarter annual and annual returns, as to form and 12 substance, shall be subject to the same requirements as 13 monthly returns. 14 Notwithstanding any other provision in this Act 15 concerning the time within which a serviceman may file his 16 return, in the case of any serviceman who ceases to engage in 17 a kind of business which makes him responsible for filing 18 returns under this Act, such serviceman shall file a final 19 return under this Act with the Department not more than 1 20 month after discontinuing such business. 21 Beginning October 1, 1993, a taxpayer who has an average 22 monthly tax liability of $150,000 or more shall make all 23 payments required by rules of the Department by electronic 24 funds transfer. Beginning October 1, 1994, a taxpayer who 25 has an average monthly tax liability of $100,000 or more 26 shall make all payments required by rules of the Department 27 by electronic funds transfer. Beginning October 1, 1995, a 28 taxpayer who has an average monthly tax liability of $50,000 29 or more shall make all payments required by rules of the 30 Department by electronic funds transfer. Beginning October 31 1, 2000, a taxpayer who has an annual tax liability of 32 $50,000 or more shall make all payments required by rules of 33 the Department by electronic funds transfer. The term 34 "annual tax liability" shall be the sum of the taxpayer's SB1118 Engrossed -84- LRB9102874PTpkA 1 liabilities under this Act, and under all other State and 2 local occupation and use tax laws administered by the 3 Department, for the immediately preceding calendar year. The 4 term "average monthly tax liability" means the sum of the 5 taxpayer's liabilities under this Act, and under all other 6 State and local occupation and use tax laws administered by 7 the Department, for the immediately preceding calendar year 8 divided by 12. 9 Before August 1 of each year beginning in 1993, the 10 Department shall notify all taxpayers required to make 11 payments by electronic funds transfer. All taxpayers 12 required to make payments by electronic funds transfer shall 13 make those payments for a minimum of one year beginning on 14 October 1. 15 Any taxpayer not required to make payments by electronic 16 funds transfer may make payments by electronic funds transfer 17 with the permission of the Department. 18 All taxpayers required to make payment by electronic 19 funds transfer and any taxpayers authorized to voluntarily 20 make payments by electronic funds transfer shall make those 21 payments in the manner authorized by the Department. 22 The Department shall adopt such rules as are necessary to 23 effectuate a program of electronic funds transfer and the 24 requirements of this Section. 25 Where a serviceman collects the tax with respect to the 26 selling price of tangible personal property which he sells 27 and the purchaser thereafter returns such tangible personal 28 property and the serviceman refunds the selling price thereof 29 to the purchaser, such serviceman shall also refund, to the 30 purchaser, the tax so collected from the purchaser. When 31 filing his return for the period in which he refunds such tax 32 to the purchaser, the serviceman may deduct the amount of the 33 tax so refunded by him to the purchaser from any other 34 Service Occupation Tax, Service Use Tax, Retailers' SB1118 Engrossed -85- LRB9102874PTpkA 1 Occupation Tax or Use Tax which such serviceman may be 2 required to pay or remit to the Department, as shown by such 3 return, provided that the amount of the tax to be deducted 4 shall previously have been remitted to the Department by such 5 serviceman. If the serviceman shall not previously have 6 remitted the amount of such tax to the Department, he shall 7 be entitled to no deduction hereunder upon refunding such tax 8 to the purchaser. 9 If experience indicates such action to be practicable, 10 the Department may prescribe and furnish a combination or 11 joint return which will enable servicemen, who are required 12 to file returns hereunder and also under the Retailers' 13 Occupation Tax Act, the Use Tax Act or the Service Use Tax 14 Act, to furnish all the return information required by all 15 said Acts on the one form. 16 Where the serviceman has more than one business 17 registered with the Department under separate registrations 18 hereunder, such serviceman shall file separate returns for 19 each registered business. 20 Beginning January 1, 1990, each month the Department 21 shall pay into the Local Government Tax Fund the revenue 22 realized for the preceding month from the 1% tax on sales of 23 food for human consumption which is to be consumed off the 24 premises where it is sold (other than alcoholic beverages, 25 soft drinks and food which has been prepared for immediate 26 consumption) and prescription and nonprescription medicines, 27 drugs, medical appliances and insulin, urine testing 28 materials, syringes and needles used by diabetics. 29 Beginning January 1, 1990, each month the Department 30 shall pay into the County and Mass Transit District Fund 4% 31 of the revenue realized for the preceding month from the 32 6.25% general rate. 33 Beginning January 1, 1990, each month the Department 34 shall pay into the Local Government Tax Fund 16% of the SB1118 Engrossed -86- LRB9102874PTpkA 1 revenue realized for the preceding month from the 6.25% 2 general rate on transfers of tangible personal property. 3 Of the remainder of the moneys received by the Department 4 pursuant to this Act, (a) 1.75% thereof shall be paid into 5 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2% 6 and on and after July 1, 1989, 3.8% thereof shall be paid 7 into the Build Illinois Fund; provided, however, that if in 8 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%, 9 as the case may be, of the moneys received by the Department 10 and required to be paid into the Build Illinois Fund pursuant 11 to Section 3 of the Retailers' Occupation Tax Act, Section 9 12 of the Use Tax Act, Section 9 of the Service Use Tax Act, and 13 Section 9 of the Service Occupation Tax Act, such Acts being 14 hereinafter called the "Tax Acts" and such aggregate of 2.2% 15 or 3.8%, as the case may be, of moneys being hereinafter 16 called the "Tax Act Amount", and (2) the amount transferred 17 to the Build Illinois Fund from the State and Local Sales Tax 18 Reform Fund shall be less than the Annual Specified Amount 19 (as defined in Section 3 of the Retailers' Occupation Tax 20 Act), an amount equal to the difference shall be immediately 21 paid into the Build Illinois Fund from other moneys received 22 by the Department pursuant to the Tax Acts; and further 23 provided, that if on the last business day of any month the 24 sum of (1) the Tax Act Amount required to be deposited into 25 the Build Illinois Account in the Build Illinois Fund during 26 such month and (2) the amount transferred during such month 27 to the Build Illinois Fund from the State and Local Sales Tax 28 Reform Fund shall have been less than 1/12 of the Annual 29 Specified Amount, an amount equal to the difference shall be 30 immediately paid into the Build Illinois Fund from other 31 moneys received by the Department pursuant to the Tax Acts; 32 and, further provided, that in no event shall the payments 33 required under the preceding proviso result in aggregate 34 payments into the Build Illinois Fund pursuant to this clause SB1118 Engrossed -87- LRB9102874PTpkA 1 (b) for any fiscal year in excess of the greater of (i) the 2 Tax Act Amount or (ii) the Annual Specified Amount for such 3 fiscal year; and, further provided, that the amounts payable 4 into the Build Illinois Fund under this clause (b) shall be 5 payable only until such time as the aggregate amount on 6 deposit under each trust indenture securing Bonds issued and 7 outstanding pursuant to the Build Illinois Bond Act is 8 sufficient, taking into account any future investment income, 9 to fully provide, in accordance with such indenture, for the 10 defeasance of or the payment of the principal of, premium, if 11 any, and interest on the Bonds secured by such indenture and 12 on any Bonds expected to be issued thereafter and all fees 13 and costs payable with respect thereto, all as certified by 14 the Director of the Bureau of the Budget. If on the last 15 business day of any month in which Bonds are outstanding 16 pursuant to the Build Illinois Bond Act, the aggregate of the 17 moneys deposited in the Build Illinois Bond Account in the 18 Build Illinois Fund in such month shall be less than the 19 amount required to be transferred in such month from the 20 Build Illinois Bond Account to the Build Illinois Bond 21 Retirement and Interest Fund pursuant to Section 13 of the 22 Build Illinois Bond Act, an amount equal to such deficiency 23 shall be immediately paid from other moneys received by the 24 Department pursuant to the Tax Acts to the Build Illinois 25 Fund; provided, however, that any amounts paid to the Build 26 Illinois Fund in any fiscal year pursuant to this sentence 27 shall be deemed to constitute payments pursuant to clause (b) 28 of the preceding sentence and shall reduce the amount 29 otherwise payable for such fiscal year pursuant to clause (b) 30 of the preceding sentence. The moneys received by the 31 Department pursuant to this Act and required to be deposited 32 into the Build Illinois Fund are subject to the pledge, claim 33 and charge set forth in Section 12 of the Build Illinois Bond 34 Act. SB1118 Engrossed -88- LRB9102874PTpkA 1 Subject to payment of amounts into the Build Illinois 2 Fund as provided in the preceding paragraph or in any 3 amendment thereto hereafter enacted, the following specified 4 monthly installment of the amount requested in the 5 certificate of the Chairman of the Metropolitan Pier and 6 Exposition Authority provided under Section 8.25f of the 7 State Finance Act, but not in excess of the sums designated 8 as "Total Deposit", shall be deposited in the aggregate from 9 collections under Section 9 of the Use Tax Act, Section 9 of 10 the Service Use Tax Act, Section 9 of the Service Occupation 11 Tax Act, and Section 3 of the Retailers' Occupation Tax Act 12 into the McCormick Place Expansion Project Fund in the 13 specified fiscal years. 14 Fiscal Year Total Deposit 15 1993 $0 16 1994 53,000,000 17 1995 58,000,000 18 1996 61,000,000 19 1997 64,000,000 20 1998 68,000,000 21 1999 71,000,000 22 2000 75,000,000 23 2001 80,000,000 24 2002 84,000,000 25 2003 89,000,000 26 2004 93,000,000 27 2005 97,000,000 28 2006 102,000,000 29 2007 and 106,000,000 30 each fiscal year 31 thereafter that bonds 32 are outstanding under 33 Section 13.2 of the 34 Metropolitan Pier and SB1118 Engrossed -89- LRB9102874PTpkA 1 Exposition Authority 2 Act, but not after fiscal year 2029. 3 Beginning July 20, 1993 and in each month of each fiscal 4 year thereafter, one-eighth of the amount requested in the 5 certificate of the Chairman of the Metropolitan Pier and 6 Exposition Authority for that fiscal year, less the amount 7 deposited into the McCormick Place Expansion Project Fund by 8 the State Treasurer in the respective month under subsection 9 (g) of Section 13 of the Metropolitan Pier and Exposition 10 Authority Act, plus cumulative deficiencies in the deposits 11 required under this Section for previous months and years, 12 shall be deposited into the McCormick Place Expansion Project 13 Fund, until the full amount requested for the fiscal year, 14 but not in excess of the amount specified above as "Total 15 Deposit", has been deposited. 16 Subject to payment of amounts into the Build Illinois 17 Fund and the McCormick Place Expansion Project Fund pursuant 18 to the preceding paragraphs or in any amendment thereto 19 hereafter enacted, each month the Department shall pay into 20 the Local Government Distributive Fund 0.4% of the net 21 revenue realized for the preceding month from the 5% general 22 rate or 0.4% of 80% of the net revenue realized for the 23 preceding month from the 6.25% general rate, as the case may 24 be, on the selling price of tangible personal property which 25 amount shall, subject to appropriation, be distributed as 26 provided in Section 2 of the State Revenue Sharing Act. No 27 payments or distributions pursuant to this paragraph shall be 28 made if the tax imposed by this Act on photoprocessing 29 products is declared unconstitutional, or if the proceeds 30 from such tax are unavailable for distribution because of 31 litigation. 32 Subject to payment of amounts into the Build Illinois 33 Fund, the McCormick Place Expansion Project Fund, and the 34 Local Government Distributive Fund pursuant to the preceding SB1118 Engrossed -90- LRB9102874PTpkA 1 paragraphs or in any amendments thereto hereafter enacted, 2 beginning July 1, 1993, the Department shall each month pay 3 into the Illinois Tax Increment Fund 0.27% of 80% of the net 4 revenue realized for the preceding month from the 6.25% 5 general rate on the selling price of tangible personal 6 property. 7 Remaining moneys received by the Department pursuant to 8 this Act shall be paid into the General Revenue Fund of the 9 State Treasury. 10 The Department may, upon separate written notice to a 11 taxpayer, require the taxpayer to prepare and file with the 12 Department on a form prescribed by the Department within not 13 less than 60 days after receipt of the notice an annual 14 information return for the tax year specified in the notice. 15 Such annual return to the Department shall include a 16 statement of gross receipts as shown by the taxpayer's last 17 Federal income tax return. If the total receipts of the 18 business as reported in the Federal income tax return do not 19 agree with the gross receipts reported to the Department of 20 Revenue for the same period, the taxpayer shall attach to his 21 annual return a schedule showing a reconciliation of the 2 22 amounts and the reasons for the difference. The taxpayer's 23 annual return to the Department shall also disclose the cost 24 of goods sold by the taxpayer during the year covered by such 25 return, opening and closing inventories of such goods for 26 such year, cost of goods used from stock or taken from stock 27 and given away by the taxpayer during such year, pay roll 28 information of the taxpayer's business during such year and 29 any additional reasonable information which the Department 30 deems would be helpful in determining the accuracy of the 31 monthly, quarterly or annual returns filed by such taxpayer 32 as hereinbefore provided for in this Section. 33 If the annual information return required by this Section 34 is not filed when and as required, the taxpayer shall be SB1118 Engrossed -91- LRB9102874PTpkA 1 liable as follows: 2 (i) Until January 1, 1994, the taxpayer shall be 3 liable for a penalty equal to 1/6 of 1% of the tax due 4 from such taxpayer under this Act during the period to be 5 covered by the annual return for each month or fraction 6 of a month until such return is filed as required, the 7 penalty to be assessed and collected in the same manner 8 as any other penalty provided for in this Act. 9 (ii) On and after January 1, 1994, the taxpayer 10 shall be liable for a penalty as described in Section 3-4 11 of the Uniform Penalty and Interest Act. 12 The chief executive officer, proprietor, owner or highest 13 ranking manager shall sign the annual return to certify the 14 accuracy of the information contained therein. Any person 15 who willfully signs the annual return containing false or 16 inaccurate information shall be guilty of perjury and 17 punished accordingly. The annual return form prescribed by 18 the Department shall include a warning that the person 19 signing the return may be liable for perjury. 20 The foregoing portion of this Section concerning the 21 filing of an annual information return shall not apply to a 22 serviceman who is not required to file an income tax return 23 with the United States Government. 24 As soon as possible after the first day of each month, 25 upon certification of the Department of Revenue, the 26 Comptroller shall order transferred and the Treasurer shall 27 transfer from the General Revenue Fund to the Motor Fuel Tax 28 Fund an amount equal to 1.7% of 80% of the net revenue 29 realized under this Act for the second preceding month; 30 except that this transfer shall not be made for the months 31 February through June, 1992. 32 Net revenue realized for a month shall be the revenue 33 collected by the State pursuant to this Act, less the amount 34 paid out during that month as refunds to taxpayers for SB1118 Engrossed -92- LRB9102874PTpkA 1 overpayment of liability. 2 For greater simplicity of administration, it shall be 3 permissible for manufacturers, importers and wholesalers 4 whose products are sold by numerous servicemen in Illinois, 5 and who wish to do so, to assume the responsibility for 6 accounting and paying to the Department all tax accruing 7 under this Act with respect to such sales, if the servicemen 8 who are affected do not make written objection to the 9 Department to this arrangement. 10 (Source: P.A. 89-89, eff. 6-30-95; 89-235, eff. 8-4-95; 11 89-379, eff. 1-1-96; 89-626, eff. 8-9-96; 90-612, eff. 12 7-8-98.) 13 Section 25. The Retailers' Occupation Tax Act is amended 14 by changing Section 3 as follows: 15 (35 ILCS 120/3) (from Ch. 120, par. 442) 16 Sec. 3. Except as provided in this Section, on or before 17 the twentieth day of each calendar month, every person 18 engaged in the business of selling tangible personal property 19 at retail in this State during the preceding calendar month 20 shall file a return with the Department, stating: 21 1. The name of the seller; 22 2. His residence address and the address of his 23 principal place of business and the address of the 24 principal place of business (if that is a different 25 address) from which he engages in the business of selling 26 tangible personal property at retail in this State; 27 3. Total amount of receipts received by him during 28 the preceding calendar month or quarter, as the case may 29 be, from sales of tangible personal property, and from 30 services furnished, by him during such preceding calendar 31 month or quarter; 32 4. Total amount received by him during the SB1118 Engrossed -93- LRB9102874PTpkA 1 preceding calendar month or quarter on charge and time 2 sales of tangible personal property, and from services 3 furnished, by him prior to the month or quarter for which 4 the return is filed; 5 5. Deductions allowed by law; 6 6. Gross receipts which were received by him during 7 the preceding calendar month or quarter and upon the 8 basis of which the tax is imposed; 9 7. The amount of credit provided in Section 2d of 10 this Act; 11 8. The amount of tax due; 12 9. The signature of the taxpayer; and 13 10. Such other reasonable information as the 14 Department may require. 15 If a taxpayer fails to sign a return within 30 days after 16 the proper notice and demand for signature by the Department, 17 the return shall be considered valid and any amount shown to 18 be due on the return shall be deemed assessed. 19 Each return shall be accompanied by the statement of 20 prepaid tax issued pursuant to Section 2e for which credit is 21 claimed. 22 A retailer may accept a Manufacturer's Purchase Credit 23 certification from a purchaser in satisfaction of Use Tax as 24 provided in Section 3-85 of the Use Tax Act if the purchaser 25 provides the appropriate documentation as required by Section 26 3-85 of the Use Tax Act. A Manufacturer's Purchase Credit 27 certification, accepted by a retailer as provided in Section 28 3-85 of the Use Tax Act, may be used by that retailer to 29 satisfy Retailers' Occupation Tax liability in the amount 30 claimed in the certification, not to exceed 6.25% of the 31 receipts subject to tax from a qualifying purchase. 32 The Department may require returns to be filed on a 33 quarterly basis. If so required, a return for each calendar 34 quarter shall be filed on or before the twentieth day of the SB1118 Engrossed -94- LRB9102874PTpkA 1 calendar month following the end of such calendar quarter. 2 The taxpayer shall also file a return with the Department for 3 each of the first two months of each calendar quarter, on or 4 before the twentieth day of the following calendar month, 5 stating: 6 1. The name of the seller; 7 2. The address of the principal place of business 8 from which he engages in the business of selling tangible 9 personal property at retail in this State; 10 3. The total amount of taxable receipts received by 11 him during the preceding calendar month from sales of 12 tangible personal property by him during such preceding 13 calendar month, including receipts from charge and time 14 sales, but less all deductions allowed by law; 15 4. The amount of credit provided in Section 2d of 16 this Act; 17 5. The amount of tax due; and 18 6. Such other reasonable information as the 19 Department may require. 20 If a total amount of less than $1 is payable, refundable 21 or creditable, such amount shall be disregarded if it is less 22 than 50 cents and shall be increased to $1 if it is 50 cents 23 or more. 24 Beginning October 1, 1993, a taxpayer who has an average 25 monthly tax liability of $150,000 or more shall make all 26 payments required by rules of the Department by electronic 27 funds transfer. Beginning October 1, 1994, a taxpayer who 28 has an average monthly tax liability of $100,000 or more 29 shall make all payments required by rules of the Department 30 by electronic funds transfer. Beginning October 1, 1995, a 31 taxpayer who has an average monthly tax liability of $50,000 32 or more shall make all payments required by rules of the 33 Department by electronic funds transfer. Beginning October 34 1, 2000, a taxpayer who has an annual tax liability of SB1118 Engrossed -95- LRB9102874PTpkA 1 $50,000 or more shall make all payments required by rules of 2 the Department by electronic funds transfer. The term 3 "annual tax liability" shall be the sum of the taxpayer's 4 liabilities under this Act, and under all other State and 5 local occupation and use tax laws administered by the 6 Department, for the immediately preceding calendar year. The 7 term "average monthly tax liability" shall be the sum of the 8 taxpayer's liabilities under this Act, and under all other 9 State and local occupation and use tax laws administered by 10 the Department, for the immediately preceding calendar year 11 divided by 12. 12 Before August 1 of each year beginning in 1993, the 13 Department shall notify all taxpayers required to make 14 payments by electronic funds transfer. All taxpayers 15 required to make payments by electronic funds transfer shall 16 make those payments for a minimum of one year beginning on 17 October 1. 18 Any taxpayer not required to make payments by electronic 19 funds transfer may make payments by electronic funds transfer 20 with the permission of the Department. 21 All taxpayers required to make payment by electronic 22 funds transfer and any taxpayers authorized to voluntarily 23 make payments by electronic funds transfer shall make those 24 payments in the manner authorized by the Department. 25 The Department shall adopt such rules as are necessary to 26 effectuate a program of electronic funds transfer and the 27 requirements of this Section. 28 Any amount which is required to be shown or reported on 29 any return or other document under this Act shall, if such 30 amount is not a whole-dollar amount, be increased to the 31 nearest whole-dollar amount in any case where the fractional 32 part of a dollar is 50 cents or more, and decreased to the 33 nearest whole-dollar amount where the fractional part of a 34 dollar is less than 50 cents. SB1118 Engrossed -96- LRB9102874PTpkA 1 If the retailer is otherwise required to file a monthly 2 return and if the retailer's average monthly tax liability to 3 the Department does not exceed $200, the Department may 4 authorize his returns to be filed on a quarter annual basis, 5 with the return for January, February and March of a given 6 year being due by April 20 of such year; with the return for 7 April, May and June of a given year being due by July 20 of 8 such year; with the return for July, August and September of 9 a given year being due by October 20 of such year, and with 10 the return for October, November and December of a given year 11 being due by January 20 of the following year. 12 If the retailer is otherwise required to file a monthly 13 or quarterly return and if the retailer's average monthly tax 14 liability with the Department does not exceed $50, the 15 Department may authorize his returns to be filed on an annual 16 basis, with the return for a given year being due by January 17 20 of the following 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 retailer may file his 23 return, in the case of any retailer who ceases to engage in a 24 kind of business which makes him responsible for filing 25 returns under this Act, such retailer shall file a final 26 return under this Act with the Department not more than one 27 month after discontinuing such business. 28 Where the same person has more than one business 29 registered with the Department under separate registrations 30 under this Act, such person may not file each return that is 31 due as a single return covering all such registered 32 businesses, but shall file separate returns for each such 33 registered business. 34 In addition, with respect to motor vehicles, watercraft, SB1118 Engrossed -97- LRB9102874PTpkA 1 aircraft, and trailers that are required to be registered 2 with an agency of this State, every retailer selling this 3 kind of tangible personal property shall file, with the 4 Department, upon a form to be prescribed and supplied by the 5 Department, a separate return for each such item of tangible 6 personal property which the retailer sells, except that 7 where, in the same transaction, a retailer of aircraft, 8 watercraft, motor vehicles or trailers transfers more than 9 one aircraft, watercraft, motor vehicle or trailer to another 10 aircraft, watercraft, motor vehicle retailer or trailer 11 retailer for the purpose of resale, that seller for resale 12 may report the transfer of all aircraft, watercraft, motor 13 vehicles or trailers involved in that transaction to the 14 Department on the same uniform invoice-transaction reporting 15 return form. For purposes of this Section, "watercraft" 16 means a Class 2, Class 3, or Class 4 watercraft as defined in 17 Section 3-2 of the Boat Registration and Safety Act, a 18 personal watercraft, or any boat equipped with an inboard 19 motor. 20 Any retailer who sells only motor vehicles, watercraft, 21 aircraft, or trailers that are required to be registered with 22 an agency of this State, so that all retailers' occupation 23 tax liability is required to be reported, and is reported, on 24 such transaction reporting returns and who is not otherwise 25 required to file monthly or quarterly returns, need not file 26 monthly or quarterly returns. However, those retailers shall 27 be required to file returns on an annual basis. 28 The transaction reporting return, in the case of motor 29 vehicles or trailers that are required to be registered with 30 an agency of this State, shall be the same document as the 31 Uniform Invoice referred to in Section 5-402 of The Illinois 32 Vehicle Code and must show the name and address of the 33 seller; the name and address of the purchaser; the amount of 34 the selling price including the amount allowed by the SB1118 Engrossed -98- LRB9102874PTpkA 1 retailer for traded-in property, if any; the amount allowed 2 by the retailer for the traded-in tangible personal property, 3 if any, to the extent to which Section 1 of this Act allows 4 an exemption for the value of traded-in property; the balance 5 payable after deducting such trade-in allowance from the 6 total selling price; the amount of tax due from the retailer 7 with respect to such transaction; the amount of tax collected 8 from the purchaser by the retailer on such transaction (or 9 satisfactory evidence that such tax is not due in that 10 particular instance, if that is claimed to be the fact); the 11 place and date of the sale; a sufficient identification of 12 the property sold; such other information as is required in 13 Section 5-402 of The Illinois Vehicle Code, and such other 14 information as the Department may reasonably require. 15 The transaction reporting return in the case of 16 watercraft or aircraft must show the name and address of the 17 seller; the name and address of the purchaser; the amount of 18 the selling price including the amount allowed by the 19 retailer for traded-in property, if any; the amount allowed 20 by the retailer for the traded-in tangible personal property, 21 if any, to the extent to which Section 1 of this Act allows 22 an exemption for the value of traded-in property; the balance 23 payable after deducting such trade-in allowance from the 24 total selling price; the amount of tax due from the retailer 25 with respect to such transaction; the amount of tax collected 26 from the purchaser by the retailer on such transaction (or 27 satisfactory evidence that such tax is not due in that 28 particular instance, if that is claimed to be the fact); the 29 place and date of the sale, a sufficient identification of 30 the property sold, and such other information as the 31 Department may reasonably require. 32 Such transaction reporting return shall be filed not 33 later than 20 days after the day of delivery of the item that 34 is being sold, but may be filed by the retailer at any time SB1118 Engrossed -99- LRB9102874PTpkA 1 sooner than that if he chooses to do so. The transaction 2 reporting return and tax remittance or proof of exemption 3 from the Illinois use tax may be transmitted to the 4 Department by way of the State agency with which, or State 5 officer with whom the tangible personal property must be 6 titled or registered (if titling or registration is required) 7 if the Department and such agency or State officer determine 8 that this procedure will expedite the processing of 9 applications for title or registration. 10 With each such transaction reporting return, the retailer 11 shall remit the proper amount of tax due (or shall submit 12 satisfactory evidence that the sale is not taxable if that is 13 the case), to the Department or its agents, whereupon the 14 Department shall issue, in the purchaser's name, a use tax 15 receipt (or a certificate of exemption if the Department is 16 satisfied that the particular sale is tax exempt) which such 17 purchaser may submit to the agency with which, or State 18 officer with whom, he must title or register the tangible 19 personal property that is involved (if titling or 20 registration is required) in support of such purchaser's 21 application for an Illinois certificate or other evidence of 22 title or registration to such tangible personal property. 23 No retailer's failure or refusal to remit tax under this 24 Act precludes a user, who has paid the proper tax to the 25 retailer, from obtaining his certificate of title or other 26 evidence of title or registration (if titling or registration 27 is required) upon satisfying the Department that such user 28 has paid the proper tax (if tax is due) to the retailer. The 29 Department shall adopt appropriate rules to carry out the 30 mandate of this paragraph. 31 If the user who would otherwise pay tax to the retailer 32 wants the transaction reporting return filed and the payment 33 of the tax or proof of exemption made to the Department 34 before the retailer is willing to take these actions and such SB1118 Engrossed -100- LRB9102874PTpkA 1 user has not paid the tax to the retailer, such user may 2 certify to the fact of such delay by the retailer and may 3 (upon the Department being satisfied of the truth of such 4 certification) transmit the information required by the 5 transaction reporting return and the remittance for tax or 6 proof of exemption directly to the Department and obtain his 7 tax receipt or exemption determination, in which event the 8 transaction reporting return and tax remittance (if a tax 9 payment was required) shall be credited by the Department to 10 the proper retailer's account with the Department, but 11 without the 2.1% or 1.75% discount provided for in this 12 Section being allowed. When the user pays the tax directly 13 to the Department, he shall pay the tax in the same amount 14 and in the same form in which it would be remitted if the tax 15 had been remitted to the Department by the retailer. 16 Refunds made by the seller during the preceding return 17 period to purchasers, on account of tangible personal 18 property returned to the seller, shall be allowed as a 19 deduction under subdivision 5 of his monthly or quarterly 20 return, as the case may be, in case the seller had 21 theretofore included the receipts from the sale of such 22 tangible personal property in a return filed by him and had 23 paid the tax imposed by this Act with respect to such 24 receipts. 25 Where the seller is a corporation, the return filed on 26 behalf of such corporation shall be signed by the president, 27 vice-president, secretary or treasurer or by the properly 28 accredited agent of such corporation. 29 Where the seller is a limited liability company, the 30 return filed on behalf of the limited liability company shall 31 be signed by a manager, member, or properly accredited agent 32 of the limited liability company. 33 Except as provided in this Section, the retailer filing 34 the return under this Section shall, at the time of filing SB1118 Engrossed -101- LRB9102874PTpkA 1 such return, pay to the Department the amount of tax imposed 2 by this Act less a discount of 2.1% prior to January 1, 1990 3 and 1.75% on and after January 1, 1990, or $5 per calendar 4 year, whichever is greater, which is allowed to reimburse the 5 retailer for the expenses incurred in keeping records, 6 preparing and filing returns, remitting the tax and supplying 7 data to the Department on request. Any prepayment made 8 pursuant to Section 2d of this Act shall be included in the 9 amount on which such 2.1% or 1.75% discount is computed. In 10 the case of retailers who report and pay the tax on a 11 transaction by transaction basis, as provided in this 12 Section, such discount shall be taken with each such tax 13 remittance instead of when such retailer files his periodic 14 return. 15 Before October 1, 2000, if the taxpayer's average monthly 16 tax liability to the Department under this Act, the Use Tax 17 Act, the Service Occupation Tax Act, and the Service Use Tax 18 Act, excluding any liability for prepaid sales tax to be 19 remitted in accordance with Section 2d of this Act, was 20 $10,000 or more during the preceding 4 complete calendar 21 quarters, he shall file a return with the Department each 22 month by the 20th day of the month next following the month 23 during which such tax liability is incurred and shall make 24 payments to the Department on or before the 7th, 15th, 22nd 25 and last day of the month during which such liability is 26 incurred. On and after October 1, 2000, if the taxpayer's 27 average monthly tax liability to the Department under this 28 Act, the Use Tax Act, the Service Occupation Tax Act, and the 29 Service Use Tax Act, excluding any liability for prepaid 30 sales tax to be remitted in accordance with Section 2d of 31 this Act, was $25,000 or more during the preceding 4 complete 32 calendar quarters, he shall file a return with the Department 33 each month by the 20th day of the month next following the 34 month during which such tax liability is incurred and shall SB1118 Engrossed -102- LRB9102874PTpkA 1 make payment to the Department on or before the 7th, 15th, 2 22nd and last day of the month during which such liability is 3 incurred. If the month during which such tax liability is 4 incurred began prior to January 1, 1985, each payment shall 5 be in an amount equal to 1/4 of the taxpayer's actual 6 liability for the month or an amount set by the Department 7 not to exceed 1/4 of the average monthly liability of the 8 taxpayer to the Department for the preceding 4 complete 9 calendar quarters (excluding the month of highest liability 10 and the month of lowest liability in such 4 quarter period). 11 If the month during which such tax liability is incurred 12 begins on or after January 1, 1985 and prior to January 1, 13 1987, each payment shall be in an amount equal to 22.5% of 14 the taxpayer's actual liability for the month or 27.5% of the 15 taxpayer's liability for the same calendar month of the 16 preceding year. If the month during which such tax liability 17 is incurred begins on or after January 1, 1987 and prior to 18 January 1, 1988, each payment shall be in an amount equal to 19 22.5% of the taxpayer's actual liability for the month or 20 26.25% of the taxpayer's liability for the same calendar 21 month of the preceding year. If the month during which such 22 tax liability is incurred begins on or after January 1, 1988, 23 and prior to January 1, 1989, or begins on or after January 24 1, 1996, each payment shall be in an amount equal to 22.5% of 25 the taxpayer's actual liability for the month or 25% of the 26 taxpayer's liability for the same calendar month of the 27 preceding year. If the month during which such tax liability 28 is incurred begins on or after January 1, 1989, and prior to 29 January 1, 1996, each payment shall be in an amount equal to 30 22.5% of the taxpayer's actual liability for the month or 25% 31 of the taxpayer's liability for the same calendar month of 32 the preceding year or 100% of the taxpayer's actual liability 33 for the quarter monthly reporting period. The amount of such 34 quarter monthly payments shall be credited against the final SB1118 Engrossed -103- LRB9102874PTpkA 1 tax liability of the taxpayer's return for that month. 2 Before October 1, 2000, once applicable, the requirement of 3 the making of quarter monthly payments to the Department by 4 taxpayers having an average monthly tax liability of $10,000 5 or more as determined in the manner provided above shall 6 continue until such taxpayer's average monthly liability to 7 the Department during the preceding 4 complete calendar 8 quarters (excluding the month of highest liability and the 9 month of lowest liability) is less than $9,000, or until such 10 taxpayer's average monthly liability to the Department as 11 computed for each calendar quarter of the 4 preceding 12 complete calendar quarter period is less than $10,000. 13 However, if a taxpayer can show the Department that a 14 substantial change in the taxpayer's business has occurred 15 which causes the taxpayer to anticipate that his average 16 monthly tax liability for the reasonably foreseeable future 17 will fall below the $10,000 threshold stated above, then such 18 taxpayer may petition the Department for a change in such 19 taxpayer's reporting status. On and after October 1, 2000, 20 once applicable, the requirement of the making of quarter 21 monthly payments to the Department by taxpayers having an 22 average monthly tax liability of $25,000 or more as 23 determined in the manner provided above shall continue until 24 such taxpayer's average monthly liability to the Department 25 during the preceding 4 complete calendar quarters (excluding 26 the month of highest liability and the month of lowest 27 liability) is less than $24,000 or until such taxpayer's 28 average monthly liability to the Department as computed for 29 each calendar quarter of the 4 preceding complete calendar 30 quarter period is less than $25,000. However, if a taxpayer 31 can show the Department that a substantial change in the 32 taxpayer's business has occurred which causes the taxpayer to 33 anticipate that his average monthly tax liability for the 34 reasonably foreseeable future will fall below the $25,000 SB1118 Engrossed -104- LRB9102874PTpkA 1 threshold stated above, then such taxpayer may petition the 2 Department for a change in such taxpayer's reporting status. 3 The Department shall change such taxpayer's reporting status 4 unless it finds that such change is seasonal in nature and 5 not likely to be long term. If any such quarter monthly 6 payment is not paid at the time or in the amount required by 7 this Section, then the taxpayer shall be liable for penalties 8 and interest on the difference between the minimum amount due 9 as a payment and the amount of such quarter monthly payment 10 actually and timely paid, except insofar as the taxpayer has 11 previously made payments for that month to the Department in 12 excess of the minimum payments previously due as provided in 13 this Section. The Department shall make reasonable rules and 14 regulations to govern the quarter monthly payment amount and 15 quarter monthly payment dates for taxpayers who file on other 16 than a calendar monthly basis. 17 Without regard to whether a taxpayer is required to make 18 quarter monthly payments as specified above, any taxpayer who 19 is required by Section 2d of this Act to collect and remit 20 prepaid taxes and has collected prepaid taxes which average 21 in excess of $25,000 per month during the preceding 2 22 complete calendar quarters, shall file a return with the 23 Department as required by Section 2f and shall make payments 24 to the Department on or before the 7th, 15th, 22nd and last 25 day of the month during which such liability is incurred. If 26 the month during which such tax liability is incurred began 27 prior to the effective date of this amendatory Act of 1985, 28 each payment shall be in an amount not less than 22.5% of the 29 taxpayer's actual liability under Section 2d. If the month 30 during which such tax liability is incurred begins on or 31 after January 1, 1986, each payment shall be in an amount 32 equal to 22.5% of the taxpayer's actual liability for the 33 month or 27.5% of the taxpayer's liability for the same 34 calendar month of the preceding calendar year. If the month SB1118 Engrossed -105- LRB9102874PTpkA 1 during which such tax liability is incurred begins on or 2 after January 1, 1987, each payment shall be in an amount 3 equal to 22.5% of the taxpayer's actual liability for the 4 month or 26.25% of the taxpayer's liability for the same 5 calendar month of the preceding year. The amount of such 6 quarter monthly payments shall be credited against the final 7 tax liability of the taxpayer's return for that month filed 8 under this Section or Section 2f, as the case may be. Once 9 applicable, the requirement of the making of quarter monthly 10 payments to the Department pursuant to this paragraph shall 11 continue until such taxpayer's average monthly prepaid tax 12 collections during the preceding 2 complete calendar quarters 13 is $25,000 or less. If any such quarter monthly payment is 14 not paid at the time or in the amount required, the taxpayer 15 shall be liable for penalties and interest on such 16 difference, except insofar as the taxpayer has previously 17 made payments for that month in excess of the minimum 18 payments previously due. 19 If any payment provided for in this Section exceeds the 20 taxpayer's liabilities under this Act, the Use Tax Act, the 21 Service Occupation Tax Act and the Service Use Tax Act, as 22 shown on an original monthly return, the Department shall, if 23 requested by the taxpayer, issue to the taxpayer a credit 24 memorandum no later than 30 days after the date of payment. 25 The credit evidenced by such credit memorandum may be 26 assigned by the taxpayer to a similar taxpayer under this 27 Act, the Use Tax Act, the Service Occupation Tax Act or the 28 Service Use Tax Act, in accordance with reasonable rules and 29 regulations to be prescribed by the Department. If no such 30 request is made, the taxpayer may credit such excess payment 31 against tax liability subsequently to be remitted to the 32 Department under this Act, the Use Tax Act, the Service 33 Occupation Tax Act or the Service Use Tax Act, in accordance 34 with reasonable rules and regulations prescribed by the SB1118 Engrossed -106- LRB9102874PTpkA 1 Department. If the Department subsequently determined that 2 all or any part of the credit taken was not actually due to 3 the taxpayer, the taxpayer's 2.1% and 1.75% vendor's discount 4 shall be reduced by 2.1% or 1.75% of the difference between 5 the credit taken and that actually due, and that taxpayer 6 shall be liable for penalties and interest on such 7 difference. 8 If a retailer of motor fuel is entitled to a credit under 9 Section 2d of this Act which exceeds the taxpayer's liability 10 to the Department under this Act for the month which the 11 taxpayer is filing a return, the Department shall issue the 12 taxpayer a credit memorandum for the excess. 13 Beginning January 1, 1990, each month the Department 14 shall pay into the Local Government Tax Fund, a special fund 15 in the State treasury which is hereby created, the net 16 revenue realized for the preceding month from the 1% tax on 17 sales of food for human consumption which is to be consumed 18 off the premises where it is sold (other than alcoholic 19 beverages, soft drinks and food which has been prepared for 20 immediate consumption) and prescription and nonprescription 21 medicines, drugs, medical appliances and insulin, urine 22 testing materials, syringes and needles used by diabetics. 23 Beginning January 1, 1990, each month the Department 24 shall pay into the County and Mass Transit District Fund, a 25 special fund in the State treasury which is hereby created, 26 4% of the net revenue realized for the preceding month from 27 the 6.25% general rate. 28 Beginning January 1, 1990, each month the Department 29 shall pay into the Local Government Tax Fund 16% 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 Of the remainder of the moneys received by the Department 34 pursuant to this Act, (a) 1.75% thereof shall be paid into SB1118 Engrossed -107- LRB9102874PTpkA 1 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2% 2 and on and after July 1, 1989, 3.8% thereof shall be paid 3 into the Build Illinois Fund; provided, however, that if in 4 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%, 5 as the case may be, of the moneys received by the Department 6 and required to be paid into the Build Illinois Fund pursuant 7 to this Act, Section 9 of the Use Tax Act, Section 9 of the 8 Service Use Tax Act, and Section 9 of the Service Occupation 9 Tax Act, such Acts being hereinafter called the "Tax Acts" 10 and such aggregate of 2.2% or 3.8%, as the case may be, of 11 moneys being hereinafter called the "Tax Act Amount", and (2) 12 the amount transferred to the Build Illinois Fund from the 13 State and Local Sales Tax Reform Fund shall be less than the 14 Annual Specified Amount (as hereinafter defined), an amount 15 equal to the difference shall be immediately paid into the 16 Build Illinois Fund from other moneys received by the 17 Department pursuant to the Tax Acts; the "Annual Specified 18 Amount" means the amounts specified below for fiscal years 19 1986 through 1993: 20 Fiscal Year Annual Specified Amount 21 1986 $54,800,000 22 1987 $76,650,000 23 1988 $80,480,000 24 1989 $88,510,000 25 1990 $115,330,000 26 1991 $145,470,000 27 1992 $182,730,000 28 1993 $206,520,000; 29 and means the Certified Annual Debt Service Requirement (as 30 defined in Section 13 of the Build Illinois Bond Act) or the 31 Tax Act Amount, whichever is greater, for fiscal year 1994 32 and each fiscal year thereafter; and further provided, that 33 if on the last business day of any month the sum of (1) the 34 Tax Act Amount required to be deposited into the Build SB1118 Engrossed -108- LRB9102874PTpkA 1 Illinois Bond Account in the Build Illinois Fund during such 2 month and (2) the amount transferred to the Build Illinois 3 Fund from the State and Local Sales Tax Reform Fund shall 4 have been less than 1/12 of the Annual Specified Amount, an 5 amount equal to the difference shall be immediately paid into 6 the Build Illinois Fund from other moneys received by the 7 Department pursuant to the Tax Acts; and, further provided, 8 that in no event shall the payments required under the 9 preceding proviso result in aggregate payments into the Build 10 Illinois Fund pursuant to this clause (b) for any fiscal year 11 in excess of the greater of (i) the Tax Act Amount or (ii) 12 the Annual Specified Amount for such fiscal year. The 13 amounts payable into the Build Illinois Fund under clause (b) 14 of the first sentence in this paragraph shall be payable only 15 until such time as the aggregate amount on deposit under each 16 trust indenture securing Bonds issued and outstanding 17 pursuant to the Build Illinois Bond Act is sufficient, taking 18 into account any future investment income, to fully provide, 19 in accordance with such indenture, for the defeasance of or 20 the payment of the principal of, premium, if any, and 21 interest on the Bonds secured by such indenture and on any 22 Bonds expected to be issued thereafter and all fees and costs 23 payable with respect thereto, all as certified by the 24 Director of the Bureau of the Budget. If on the last 25 business day of any month in which Bonds are outstanding 26 pursuant to the Build Illinois Bond Act, the aggregate of 27 moneys deposited in the Build Illinois Bond Account in the 28 Build Illinois Fund in such month shall be less than the 29 amount required to be transferred in such month from the 30 Build Illinois Bond Account to the Build Illinois Bond 31 Retirement and Interest Fund pursuant to Section 13 of the 32 Build Illinois Bond Act, an amount equal to such deficiency 33 shall be immediately paid from other moneys received by the 34 Department pursuant to the Tax Acts to the Build Illinois SB1118 Engrossed -109- LRB9102874PTpkA 1 Fund; provided, however, that any amounts paid to the Build 2 Illinois Fund in any fiscal year pursuant to this sentence 3 shall be deemed to constitute payments pursuant to clause (b) 4 of the first sentence of this paragraph and shall reduce the 5 amount otherwise payable for such fiscal year pursuant to 6 that clause (b). The moneys received by the Department 7 pursuant to this Act and required to be deposited into the 8 Build Illinois Fund are subject to the pledge, claim and 9 charge set forth in Section 12 of the Build Illinois Bond 10 Act. 11 Subject to payment of amounts into the Build Illinois 12 Fund as provided in the preceding paragraph or in any 13 amendment thereto hereafter enacted, the following specified 14 monthly installment of the amount requested in the 15 certificate of the Chairman of the Metropolitan Pier and 16 Exposition Authority provided under Section 8.25f of the 17 State Finance Act, but not in excess of sums designated as 18 "Total Deposit", shall be deposited in the aggregate from 19 collections under Section 9 of the Use Tax Act, Section 9 of 20 the Service Use Tax Act, Section 9 of the Service Occupation 21 Tax Act, and Section 3 of the Retailers' Occupation Tax Act 22 into the McCormick Place Expansion Project Fund in the 23 specified fiscal years. 24 Fiscal Year Total Deposit 25 1993 $0 26 1994 53,000,000 27 1995 58,000,000 28 1996 61,000,000 29 1997 64,000,000 30 1998 68,000,000 31 1999 71,000,000 32 2000 75,000,000 33 2001 80,000,000 34 2002 84,000,000 SB1118 Engrossed -110- LRB9102874PTpkA 1 2003 89,000,000 2 2004 93,000,000 3 2005 97,000,000 4 2006 102,000,000 5 2007 and 106,000,000 6 each fiscal year 7 thereafter that bonds 8 are outstanding under 9 Section 13.2 of the 10 Metropolitan Pier and 11 Exposition Authority 12 Act, but not after fiscal year 2029. 13 Beginning July 20, 1993 and in each month of each fiscal 14 year thereafter, one-eighth of the amount requested in the 15 certificate of the Chairman of the Metropolitan Pier and 16 Exposition Authority for that fiscal year, less the amount 17 deposited into the McCormick Place Expansion Project Fund by 18 the State Treasurer in the respective month under subsection 19 (g) of Section 13 of the Metropolitan Pier and Exposition 20 Authority Act, plus cumulative deficiencies in the deposits 21 required under this Section for previous months and years, 22 shall be deposited into the McCormick Place Expansion Project 23 Fund, until the full amount requested for the fiscal year, 24 but not in excess of the amount specified above as "Total 25 Deposit", has been deposited. 26 Subject to payment of amounts into the Build Illinois 27 Fund and the McCormick Place Expansion Project Fund pursuant 28 to the preceding paragraphs or in any amendment thereto 29 hereafter enacted, each month the Department shall pay into 30 the Local Government Distributive Fund 0.4% of the net 31 revenue realized for the preceding month from the 5% general 32 rate or 0.4% of 80% of the net revenue realized for the 33 preceding month from the 6.25% general rate, as the case may 34 be, on the selling price of tangible personal property which SB1118 Engrossed -111- LRB9102874PTpkA 1 amount shall, subject to appropriation, be distributed as 2 provided in Section 2 of the State Revenue Sharing Act. No 3 payments or distributions pursuant to this paragraph shall be 4 made if the tax imposed by this Act on photoprocessing 5 products is declared unconstitutional, or if the proceeds 6 from such tax are unavailable for distribution because of 7 litigation. 8 Subject to payment of amounts into the Build Illinois 9 Fund, the McCormick Place Expansion Project to the preceding 10 paragraphs or in any amendments thereto hereafter enacted, 11 beginning July 1, 1993, the Department shall each month pay 12 into the Illinois Tax Increment Fund 0.27% of 80% of the net 13 revenue realized for the preceding month from the 6.25% 14 general rate on the selling price of tangible personal 15 property. 16 Of the remainder of the moneys received by the Department 17 pursuant to this Act, 75% thereof shall be paid into the 18 State Treasury and 25% shall be reserved in a special account 19 and used only for the transfer to the Common School Fund as 20 part of the monthly transfer from the General Revenue Fund in 21 accordance with Section 8a of the State Finance Act. 22 The Department may, upon separate written notice to a 23 taxpayer, require the taxpayer to prepare and file with the 24 Department on a form prescribed by the Department within not 25 less than 60 days after receipt of the notice an annual 26 information return for the tax year specified in the notice. 27 Such annual return to the Department shall include a 28 statement of gross receipts as shown by the retailer's last 29 Federal income tax return. If the total receipts of the 30 business as reported in the Federal income tax return do not 31 agree with the gross receipts reported to the Department of 32 Revenue for the same period, the retailer shall attach to his 33 annual return a schedule showing a reconciliation of the 2 34 amounts and the reasons for the difference. The retailer's SB1118 Engrossed -112- LRB9102874PTpkA 1 annual return to the Department shall also disclose the cost 2 of goods sold by the retailer during the year covered by such 3 return, opening and closing inventories of such goods for 4 such year, costs of goods used from stock or taken from stock 5 and given away by the retailer during such year, payroll 6 information of the retailer's business during such year and 7 any additional reasonable information which the Department 8 deems would be helpful in determining the accuracy of the 9 monthly, quarterly or annual returns filed by such retailer 10 as provided for in this Section. 11 If the annual information return required by this Section 12 is not filed when and as required, the taxpayer shall be 13 liable as follows: 14 (i) Until January 1, 1994, the taxpayer shall be 15 liable for a penalty equal to 1/6 of 1% of the tax due 16 from such taxpayer under this Act during the period to be 17 covered by the annual return for each month or fraction 18 of a month until such return is filed as required, the 19 penalty to be assessed and collected in the same manner 20 as any other penalty provided for in this Act. 21 (ii) On and after January 1, 1994, the taxpayer 22 shall be liable for a penalty as described in Section 3-4 23 of the Uniform Penalty and Interest Act. 24 The chief executive officer, proprietor, owner or highest 25 ranking manager shall sign the annual return to certify the 26 accuracy of the information contained therein. Any person 27 who willfully signs the annual return containing false or 28 inaccurate information shall be guilty of perjury and 29 punished accordingly. The annual return form prescribed by 30 the Department shall include a warning that the person 31 signing the return may be liable for perjury. 32 The provisions of this Section concerning the filing of 33 an annual information return do not apply to a retailer who 34 is not required to file an income tax return with the United SB1118 Engrossed -113- LRB9102874PTpkA 1 States Government. 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 For greater simplicity of administration, manufacturers, 15 importers and wholesalers whose products are sold at retail 16 in Illinois by numerous retailers, and who wish to do so, may 17 assume the responsibility for accounting and paying to the 18 Department all tax accruing under this Act with respect to 19 such sales, if the retailers who are affected do not make 20 written objection to the Department to this arrangement. 21 Any person who promotes, organizes, provides retail 22 selling space for concessionaires or other types of sellers 23 at the Illinois State Fair, DuQuoin State Fair, county fairs, 24 local fairs, art shows, flea markets and similar exhibitions 25 or events, including any transient merchant as defined by 26 Section 2 of the Transient Merchant Act of 1987, is required 27 to file a report with the Department providing the name of 28 the merchant's business, the name of the person or persons 29 engaged in merchant's business, the permanent address and 30 Illinois Retailers Occupation Tax Registration Number of the 31 merchant, the dates and location of the event and other 32 reasonable information that the Department may require. The 33 report must be filed not later than the 20th day of the month 34 next following the month during which the event with retail SB1118 Engrossed -114- LRB9102874PTpkA 1 sales was held. Any person who fails to file a report 2 required by this Section commits a business offense and is 3 subject to a fine not to exceed $250. 4 Any person engaged in the business of selling tangible 5 personal property at retail as a concessionaire or other type 6 of seller at the Illinois State Fair, county fairs, art 7 shows, flea markets and similar exhibitions or events, or any 8 transient merchants, as defined by Section 2 of the Transient 9 Merchant Act of 1987, may be required to make a daily report 10 of the amount of such sales to the Department and to make a 11 daily payment of the full amount of tax due. The Department 12 shall impose this requirement when it finds that there is a 13 significant risk of loss of revenue to the State at such an 14 exhibition or event. Such a finding shall be based on 15 evidence that a substantial number of concessionaires or 16 other sellers who are not residents of Illinois will be 17 engaging in the business of selling tangible personal 18 property at retail at the exhibition or event, or other 19 evidence of a significant risk of loss of revenue to the 20 State. The Department shall notify concessionaires and other 21 sellers affected by the imposition of this requirement. In 22 the absence of notification by the Department, the 23 concessionaires and other sellers shall file their returns as 24 otherwise required in this Section. 25 (Source: P.A. 89-89, eff. 6-30-95; 89-235, eff. 8-4-95; 26 89-379, eff. 1-1-96; 89-626, eff. 8-9-96; 90-491, eff. 27 1-1-99; 90-612, eff. 7-8-98.) 28 Section 30. The Telecommunications Excise Tax Act is 29 amended by changing Section 6 as follows: 30 (35 ILCS 630/6) (from Ch. 120, par. 2006) 31 Sec. 6. Except as provided hereinafter in this Section, 32 on or before the 15th day of each month each retailer SB1118 Engrossed -115- LRB9102874PTpkA 1 maintaining a place of business in this State shall make a 2 return to the Department for the preceding calendar month, 3 stating: 4 1. His name; 5 2. The address of his principal place of business, 6 and the address of the principal place of business (if 7 that is a different address) from which he engages in the 8 business of transmitting telecommunications; 9 3. Total amount of gross charges billed by him 10 during the preceding calendar month for providing 11 telecommunications during such calendar month; 12 4. Total amount received by him during the 13 preceding calendar month on credit extended; 14 5. Deductions allowed by law; 15 6. Gross charges which were billed by him during 16 the preceding calendar month and upon the basis of which 17 the tax is imposed; 18 7. Amount of tax (computed upon Item 6); 19 8. Such other reasonable information as the 20 Department may require. 21 Any taxpayer required to make payments under this Section 22 may make the payments by electronic funds transfer. The 23 Department shall adopt rules necessary to effectuate a 24 program of electronic funds transfer. 25 If the retailer's average monthly tax billings due to the 26 Department do not exceed $200$100, the Department may 27 authorize his returns to be filed on a quarter annual basis, 28 with the return for January, February and March of a given 29 year being due by April 15 of such year; with the return for 30 April, May and June of a given year being due by July 15 of 31 such year; with the return for July, August and September of 32 a given year being due by October 15 of such year; and with 33 the return of October, November and December of a given year 34 being due by January 15 of the following year. SB1118 Engrossed -116- LRB9102874PTpkA 1 If the retailer is otherwise required to file a monthly 2 or quarterly return and if the retailer's average monthly tax 3 billings due to the Department do not exceed $50, the 4 Department may authorize his or her return to be filed on an 5 annual basis, with the return for a given year being due by 6 January 15th of the following year. 7 Notwithstanding any other provision of this Article 8 containing the time within which a retailer may file his 9 return, in the case of any retailer who ceases to engage in a 10 kind of business which makes him responsible for filing 11 returns under this Article, such retailer shall file a final 12 return under this Article with the Department not more than 13 one month after discontinuing such business. 14 In making such return, the retailer shall determine the 15 value of any consideration other than money received by him 16 and he shall include such value in his return. Such 17 determination shall be subject to review and revision by the 18 Department in the manner hereinafter provided for the 19 correction of returns. 20 Each retailer whose average monthly liability to the 21 Department under this Article was $10,000 or more during the 22 preceding calendar year, excluding the month of highest 23 liability and the month of lowest liability in such calendar 24 year, and who is not operated by a unit of local government, 25 shall make estimated payments to the Department on or before 26 the 7th, 15th, 22nd and last day of the month during which 27 tax collection liability to the Department is incurred in an 28 amount not less than the lower of either 22.5% of the 29 retailer's actual tax collections for the month or 25% of the 30 retailer's actual tax collections for the same calendar month 31 of the preceding year. The amount of such quarter monthly 32 payments shall be credited against the final liability of the 33 retailer's return for that month. Any outstanding credit, 34 approved by the Department, arising from the retailer's SB1118 Engrossed -117- LRB9102874PTpkA 1 overpayment of its final liability for any month may be 2 applied to reduce the amount of any subsequent quarter 3 monthly payment or credited against the final liability of 4 the retailer's return for any subsequent month. If any 5 quarter monthly payment is not paid at the time or in the 6 amount required by this Section, the retailer shall be liable 7 for penalty and interest on the difference between the 8 minimum amount due as a payment and the amount of such 9 payment actually and timely paid, except insofar as the 10 retailer has previously made payments for that month to the 11 Department in excess of the minimum payments previously due. 12 If the Director finds that the information required for 13 the making of an accurate return cannot reasonably be 14 compiled by a retailer within 15 days after the close of the 15 calendar month for which a return is to be made, he may grant 16 an extension of time for the filing of such return for a 17 period of not to exceed 31 calendar days. The granting of 18 such an extension may be conditioned upon the deposit by the 19 retailer with the Department of an amount of money not 20 exceeding the amount estimated by the Director to be due with 21 the return so extended. All such deposits, including any 22 heretofore made with the Department, shall be credited 23 against the retailer's liabilities under this Article. If 24 any such deposit exceeds the retailer's present and probable 25 future liabilities under this Article, the Department shall 26 issue to the retailer a credit memorandum, which may be 27 assigned by the retailer to a similar retailer under this 28 Article, in accordance with reasonable rules and regulations 29 to be prescribed by the Department. 30 The retailer making the return herein provided for shall, 31 at the time of making such return, pay to the Department the 32 amount of tax herein imposed. On and after the effective date 33 of this Article of 1985, $1,000,000 of the moneys received by 34 the Department of Revenue pursuant to this Article shall be SB1118 Engrossed -118- LRB9102874PTpkA 1 paid each month into the Common School Fund and the remainder 2 into the General Revenue Fund. On and after February 1, 1998, 3 however, of the moneys received by the Department of Revenue 4 pursuant to the additional taxes imposed by this amendatory 5 Act of 1997 one-half shall be deposited into the School 6 Infrastructure Fund and one-half shall be deposited into the 7 Common School Fund. 8 (Source: P.A. 90-16, eff. 6-16-97; 90-548, eff. 12-4-97.) 9 Section 99. Effective date. This Act takes effect upon 10 becoming law. SB1118 Engrossed -119- 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