Public Act 93-0286

SB1102 Enrolled                      LRB093 07188 SJM 07343 b

    AN ACT in relation to taxes.

    Be it  enacted  by  the  People  of  the  State  of  Illinois,
represented in the General Assembly:

    Section 5.  The  Telecommunications  Excise  Tax  Act  is
amended by changing Section 2 as follows:

    (35 ILCS 630/2) (from Ch. 120, par. 2002)
    (Text of Section before amendment by P.A. 92-878)
    Sec.  2.   As  used  in  this Article, unless the context
clearly requires otherwise:
    (a)  "Gross charge" means the amount paid for the act  or
privilege  of  originating or receiving telecommunications in
this State and for all services  and  equipment  provided  in
connection  therewith  by a retailer, valued in money whether
paid in money or otherwise, including cash, credits, services
and property of every kind or nature, and shall be determined
without  any  deduction  on  account  of  the  cost  of  such
telecommunications, the cost  of  materials  used,  labor  or
service  costs  or  any  other  expense  whatsoever.  In case
credit is extended, the amount thereof shall be included only
as and when paid. "Gross charges" for  private  line  service
shall  include  charges  imposed at each channel point within
this State, charges for  the  channel  mileage  between  each
channel point within this State, and charges for that portion
of   the  interstate  inter-office  channel  provided  within
Illinois. However, "gross charges" shall not include:
         (1)  any amounts added to a purchaser's bill because
    of a charge made pursuant to (i) the tax imposed by  this
    Article;  (ii) charges added to customers' bills pursuant
    to the provisions of  Sections  9-221  or  9-222  of  the
    Public  Utilities Act, as amended, or any similar charges
    added to  customers'  bills  by  retailers  who  are  not
    subject  to  rate  regulation  by  the  Illinois Commerce
    Commission for the purpose of recovering any of  the  tax
    liabilities or other amounts specified in such provisions
    of such Act; (iii) the tax imposed by Section 4251 of the
    Internal  Revenue  Code;  (iv) 911 surcharges; or (v) the
    tax    imposed    by     the     Simplified     Municipal
    Telecommunications Tax Act;
         (2)  charges  for  a  sent collect telecommunication
    received outside of the State;
         (3)  charges for leased time on equipment or charges
    for the storage of data  or  information  for  subsequent
    retrieval  or  the  processing  of  data  or  information
    intended  to  change its form or content.  Such equipment
    includes, but is not limited to, the use of  calculators,
    computers,    data   processing   equipment,   tabulating
    equipment or accounting equipment and also  includes  the
    usage of computers under a time-sharing agreement;
         (4)  charges  for customer equipment, including such
    equipment that is leased or rented by the  customer  from
    any  source,  wherein  such charges are disaggregated and
    separately identified from other charges;
         (5)  charges to business enterprises certified under
    Section 9-222.1 of the Public Utilities Act, as  amended,
    to  the extent of such exemption and during the period of
    time  specified  by  the  Department  of   Commerce   and
    Community Affairs;
         (6)  charges for telecommunications and all services
    and  equipment provided in connection therewith between a
    parent corporation and its wholly owned  subsidiaries  or
    between  wholly  owned  subsidiaries when the tax imposed
    under this Article has already been paid  to  a  retailer
    and  only  to  the  extent  that  the charges between the
    parent  corporation  and  wholly  owned  subsidiaries  or
    between  wholly  owned  subsidiaries  represent   expense
    allocation   between   the   corporations   and  not  the
    generation of profit for the corporation  rendering  such
    service;
         (7)  bad debts. Bad debt means any portion of a debt
    that  is  related  to  a  sale  at retail for which gross
    charges are not otherwise deductible or  excludable  that
    has  become  worthless  or  uncollectable,  as determined
    under applicable federal income tax  standards.   If  the
    portion  of  the  debt  deemed  to be bad is subsequently
    paid, the retailer shall report and pay the tax  on  that
    portion  during the reporting period in which the payment
    is made;
         (8)  charges   paid   by    inserting    coins    in
    coin-operated telecommunication devices;
         (9)  amounts  paid  by  telecommunications retailers
    under  the  Telecommunications  Municipal  Infrastructure
    Maintenance Fee Act.
    (b)  "Amount  paid"  means  the  amount  charged  to  the
taxpayer's service address in this State regardless of  where
such amount is billed or paid.
    (c)  "Telecommunications",  in  addition  to  the meaning
ordinarily and popularly ascribed to  it,  includes,  without
limitation,  messages  or information transmitted through use
of local, toll and wide area telephone service; private  line
services;     channel     services;    telegraph    services;
teletypewriter; computer exchange services;  cellular  mobile
telecommunications   service;   specialized   mobile   radio;
stationary  two  way radio; paging service; or any other form
of mobile and portable one-way or two-way communications;  or
any   other   transmission  of  messages  or  information  by
electronic or similar means, between or among points by wire,
cable, fiber-optics, laser, microwave,  radio,  satellite  or
similar  facilities.   As  used  in  this Act, "private line"
means a dedicated non-traffic sensitive service for a  single
customer, that entitles the customer to exclusive or priority
use  of  a  communications channel or group of channels, from
one  or  more  specified  locations  to  one  or  more  other
specified locations.  The definition of  "telecommunications"
shall  not  include  value  added  services in which computer
processing applications are used to act on the form, content,
code and protocol of the information for purposes other  than
transmission.    "Telecommunications"   shall   not   include
purchases   of  telecommunications  by  a  telecommunications
service provider for use as a component part of  the  service
provided   by   him  to  the  ultimate  retail  consumer  who
originates   or    terminates    the    taxable    end-to-end
communications.   Carrier  access  charges,  right  of access
charges, charges for use of inter-company facilities, and all
telecommunications resold in  the  subsequent  provision  of,
used  as  a  component  of,  or  integrated  into  end-to-end
telecommunications  service shall be non-taxable as sales for
resale.
    (d)  "Interstate    telecommunications"     means     all
telecommunications that either originate or terminate outside
this State.
    (e)  "Intrastate     telecommunications"     means    all
telecommunications that originate and terminate  within  this
State.
    (f)  "Department"  means the Department of Revenue of the
State of Illinois.
    (g)  "Director" means the Director  of  Revenue  for  the
Department of Revenue of the State of Illinois.
    (h)  "Taxpayer"   means  a  person  who  individually  or
through his agents, employees or permittees  engages  in  the
act    or    privilege    of    originating    or   receiving
telecommunications  in  this  State  and  who  incurs  a  tax
liability under this Article.
    (i)  "Person" means any natural individual, firm,  trust,
estate,  partnership, association, joint stock company, joint
venture,  corporation,  limited  liability  company,   or   a
receiver, trustee, guardian or other representative appointed
by  order  of  any  court, the Federal and State governments,
including State universities created by statute or any  city,
town, county or other political subdivision of this State.
    (j)  "Purchase   at   retail"   means   the  acquisition,
consumption or use of telecommunication  through  a  sale  at
retail.
    (k)  "Sale  at  retail" means the transmitting, supplying
or furnishing of  telecommunications  and  all  services  and
equipment    provided   in   connection   therewith   for   a
consideration to persons other than  the  Federal  and  State
governments,  and  State  universities created by statute and
other than between a parent corporation and its wholly  owned
subsidiaries  or  between wholly owned subsidiaries for their
use or consumption and not for resale.
    (l)  "Retailer" means and includes every  person  engaged
in  the business of making sales at retail as defined in this
Article.   The  Department  may,  in  its  discretion,   upon
application,  authorize  the  collection  of  the  tax hereby
imposed by any retailer not maintaining a place  of  business
within   this   State,   who,  to  the  satisfaction  of  the
Department, furnishes adequate security to insure  collection
and  payment  of  the  tax.   Such  retailer shall be issued,
without charge, a  permit  to  collect  such  tax.   When  so
authorized,  it shall be the duty of such retailer to collect
the tax upon all of the gross charges for  telecommunications
in  this  State  in  the  same manner and subject to the same
requirements as a retailer maintaining a  place  of  business
within  this  State.   The  permit  may  be  revoked  by  the
Department at its discretion.
    (m)  "Retailer  maintaining  a  place of business in this
State", or any like term, means  and  includes  any  retailer
having  or  maintaining  within  this State, directly or by a
subsidiary, an office, distribution facilities,  transmission
facilities,   sales  office,  warehouse  or  other  place  of
business, or any  agent  or  other  representative  operating
within  this State under the authority of the retailer or its
subsidiary, irrespective of whether such place of business or
agent or other representative is located here permanently  or
temporarily,  or  whether  such  retailer  or  subsidiary  is
licensed to do business in this State.
    (n)  "Service    address"    means    the   location   of
telecommunications      equipment     from     which      the
telecommunications   services  are  originated  or  at  which
telecommunications services are received by a  taxpayer.   In
the  event this may not be a defined location, as in the case
of mobile phones, paging systems, maritime  systems,  service
address  means the customer's place of primary use as defined
in the Mobile  Telecommunications  Sourcing  Conformity  Act.
For air-to-ground systems and the like, service address shall
mean  the  location  of  a  taxpayer's  primary  use  of  the
telecommunications  equipment as defined by telephone number,
authorization code, or location in Illinois where  bills  are
sent.
    (o)  "Prepaid  telephone  calling  arrangements" mean the
right to exclusively purchase telephone or telecommunications
services that must be paid for  in  advance  and  enable  the
origination   of  one  or  more  intrastate,  interstate,  or
international telephone  calls  or  other  telecommunications
using  an  access  number,  an  authorization  code, or both,
whether manually or electronically dialed, for which  payment
to  a retailer must be made in advance, provided that, unless
recharged, no further service is provided once  that  prepaid
amount  of  service  has  been  consumed.   Prepaid telephone
calling  arrangements  include  the  recharge  of  a  prepaid
calling  arrangement.   For  purposes  of  this   subsection,
"recharge" means the purchase of additional prepaid telephone
or  telecommunications  services whether or not the purchaser
acquires a different access  number  or  authorization  code.
"Prepaid  telephone  calling arrangement" does not include an
arrangement whereby a customer purchases a payment  card  and
pursuant to which the service provider reflects the amount of
such  purchase  as  a  credit  on  an  invoice issued to that
customer under an existing subscription plan.
(Source: P.A. 91-870,  eff.  6-22-00;  92-474,  eff.  8-1-02;
92-526, eff. 1-1-03.)

    (Text of Section after amendment by P.A. 92-878)
    Sec.  2.   As  used  in  this Article, unless the context
clearly requires otherwise:
    (a)  "Gross charge" means the amount paid for the act  or
privilege  of  originating or receiving telecommunications in
this State and for all services  and  equipment  provided  in
connection  therewith  by a retailer, valued in money whether
paid in money or otherwise, including cash, credits, services
and property of every kind or nature, and shall be determined
without  any  deduction  on  account  of  the  cost  of  such
telecommunications, the cost  of  materials  used,  labor  or
service  costs  or  any  other  expense  whatsoever.  In case
credit is extended, the amount thereof shall be included only
as and when paid. "Gross charges" for  private  line  service
shall  include  charges  imposed  at each channel termination
point within this State,  charges  for  the  channel  mileage
between each channel termination point within this State, and
charges  for  that  portion  of  the  interstate inter-office
channel provided within Illinois. Charges for that portion of
the interstate  inter-office  channel  provided  in  Illinois
shall  be  determined  by  the  retailer as follows:  (i) for
interstate inter-office channels having 2 channel termination
points, only one of which is in Illinois, 50%  of  the  total
charge  imposed; or (ii) for interstate inter-office channels
having more than 2 channel termination points, one or more of
which are in Illinois, an amount equal to  the  total  charge
multiplied  by  a  fraction,  the  numerator  of which is the
number of channel termination points within Illinois and  the
denominator   of   which  is  the  total  number  of  channel
termination points; or (iii) any other method that reasonably
apportions the  total  charges  for  interstate  inter-office
channels among the states in which channel termination points
are  located.  Prior  to  January  1,  2004 June 1, 2003, any
apportionment method consistent with this paragraph or  other
method  that  reasonably  apportions  the  total  charges for
interstate inter-office channels among the  states  in  which
channel  terminations points are located shall be accepted as
a reasonable method to determine the charges for that portion
of  the  interstate  inter-office  channel  provided   within
Illinois for that period.  However, "gross charges" shall not
include any of the following:
         (1)  Any amounts added to a purchaser's bill because
    of  a charge made pursuant to (i) the tax imposed by this
    Article; (ii) charges added to customers' bills  pursuant
    to  the  provisions  of  Sections  9-221  or 9-222 of the
    Public Utilities Act, as amended, or any similar  charges
    added  to  customers'  bills  by  retailers  who  are not
    subject to  rate  regulation  by  the  Illinois  Commerce
    Commission  for  the purpose of recovering any of the tax
    liabilities or other amounts specified in such provisions
    of such Act; (iii) the tax imposed by Section 4251 of the
    Internal Revenue Code; (iv) 911 surcharges;  or  (v)  the
    tax     imposed     by     the    Simplified    Municipal
    Telecommunications Tax Act.
         (2)  Charges for a  sent  collect  telecommunication
    received outside of the State.
         (3)  Charges for leased time on equipment or charges
    for  the  storage  of  data or information for subsequent
    retrieval  or  the  processing  of  data  or  information
    intended to change its form or content.   Such  equipment
    includes,  but is not limited to, the use of calculators,
    computers,   data   processing   equipment,    tabulating
    equipment  or  accounting equipment and also includes the
    usage of computers under a time-sharing agreement.
         (4)  Charges for customer equipment, including  such
    equipment  that  is leased or rented by the customer from
    any source, wherein such charges  are  disaggregated  and
    separately identified from other charges.
         (5)  Charges to business enterprises certified under
    Section  9-222.1 of the Public Utilities Act, as amended,
    to the extent of such exemption and during the period  of
    time   specified   by  the  Department  of  Commerce  and
    Community Affairs.
         (6)  Charges for telecommunications and all services
    and equipment provided in connection therewith between  a
    parent  corporation  and its wholly owned subsidiaries or
    between wholly owned subsidiaries when  the  tax  imposed
    under  this  Article  has already been paid to a retailer
    and only to the  extent  that  the  charges  between  the
    parent  corporation  and  wholly  owned  subsidiaries  or
    between   wholly  owned  subsidiaries  represent  expense
    allocation  between  the   corporations   and   not   the
    generation  of  profit for the corporation rendering such
    service.
         (7)  Bad debts. Bad debt means any portion of a debt
    that is related to a  sale  at  retail  for  which  gross
    charges  are  not otherwise deductible or excludable that
    has become  worthless  or  uncollectable,  as  determined
    under  applicable  federal  income tax standards.  If the
    portion of the debt deemed  to  be  bad  is  subsequently
    paid,  the  retailer shall report and pay the tax on that
    portion during the reporting period in which the  payment
    is made.
         (8)  Charges    paid    by    inserting   coins   in
    coin-operated telecommunication devices.
         (9)  Amounts paid  by  telecommunications  retailers
    under  the  Telecommunications  Municipal  Infrastructure
    Maintenance Fee Act.
         (10)  Charges    for    nontaxable    services    or
    telecommunications  if  (i)  those charges are aggregated
    with  other  charges  for  telecommunications  that   are
    taxable,  (ii) those charges are not separately stated on
    the customer bill or invoice, and (iii) the retailer  can
    reasonably   identify   the  nontaxable  charges  on  the
    retailer's books and records kept in the  regular  course
    of  business. If the nontaxable charges cannot reasonably
    be identified, the gross charge from  the  sale  of  both
    taxable  and  nontaxable  services  or telecommunications
    billed on a combined basis shall  be  attributed  to  the
    taxable  services  or  telecommunications.  The burden of
    proving nontaxable charges shall be on  the  retailer  of
    the telecommunications.
    (b)  "Amount  paid"  means  the  amount  charged  to  the
taxpayer's  service address in this State regardless of where
such amount is billed or paid.
    (c)  "Telecommunications", in  addition  to  the  meaning
ordinarily  and  popularly  ascribed to it, includes, without
limitation, messages or information transmitted  through  use
of  local, toll and wide area telephone service; private line
services;    channel    services;     telegraph     services;
teletypewriter;  computer  exchange services; cellular mobile
telecommunications   service;   specialized   mobile   radio;
stationary two way radio; paging service; or any  other  form
of  mobile and portable one-way or two-way communications; or
any  other  transmission  of  messages  or   information   by
electronic or similar means, between or among points by wire,
cable,  fiber-optics,  laser,  microwave, radio, satellite or
similar facilities.  As used  in  this  Act,  "private  line"
means  a dedicated non-traffic sensitive service for a single
customer, that entitles the customer to exclusive or priority
use of a communications channel or group  of  channels,  from
one  or  more  specified  locations  to  one  or  more  other
specified  locations.  The definition of "telecommunications"
shall not include value  added  services  in  which  computer
processing applications are used to act on the form, content,
code  and protocol of the information for purposes other than
transmission.    "Telecommunications"   shall   not   include
purchases  of  telecommunications  by  a   telecommunications
service  provider  for use as a component part of the service
provided  by  him  to  the  ultimate  retail   consumer   who
originates    or    terminates    the    taxable   end-to-end
communications.  Carrier  access  charges,  right  of  access
charges, charges for use of inter-company facilities, and all
telecommunications  resold  in  the  subsequent provision of,
used  as  a  component  of,  or  integrated  into  end-to-end
telecommunications service shall be non-taxable as sales  for
resale.
    (d)  "Interstate     telecommunications"     means    all
telecommunications that either originate or terminate outside
this State.
    (e)  "Intrastate    telecommunications"     means     all
telecommunications  that  originate and terminate within this
State.
    (f)  "Department" means the Department of Revenue of  the
State of Illinois.
    (g)  "Director"  means  the  Director  of Revenue for the
Department of Revenue of the State of Illinois.
    (h)  "Taxpayer"  means  a  person  who  individually   or
through  his  agents,  employees or permittees engages in the
act   or    privilege    of    originating    or    receiving
telecommunications  in  this  State  and  who  incurs  a  tax
liability under this Article.
    (i)  "Person"  means any natural individual, firm, trust,
estate, partnership, association, joint stock company,  joint
venture,   corporation,   limited  liability  company,  or  a
receiver, trustee, guardian or other representative appointed
by order of any court, the  Federal  and  State  governments,
including  State universities created by statute or any city,
town, county or other political subdivision of this State.
    (j)  "Purchase  at   retail"   means   the   acquisition,
consumption  or  use  of  telecommunication through a sale at
retail.
    (k)  "Sale at retail" means the  transmitting,  supplying
or  furnishing  of  telecommunications  and  all services and
equipment   provided   in   connection   therewith   for    a
consideration  to  persons  other  than the Federal and State
governments, and State universities created  by  statute  and
other  than between a parent corporation and its wholly owned
subsidiaries or between wholly owned subsidiaries  for  their
use or consumption and not for resale.
    (l)  "Retailer"  means  and includes every person engaged
in the business of making sales at retail as defined in  this
Article.    The  Department  may,  in  its  discretion,  upon
application, authorize  the  collection  of  the  tax  hereby
imposed  by  any retailer not maintaining a place of business
within  this  State,  who,  to  the   satisfaction   of   the
Department,  furnishes adequate security to insure collection
and payment of the  tax.   Such  retailer  shall  be  issued,
without  charge,  a  permit  to  collect  such  tax.  When so
authorized, it shall be the duty of such retailer to  collect
the  tax upon all of the gross charges for telecommunications
in this State in the same manner  and  subject  to  the  same
requirements  as  a  retailer maintaining a place of business
within  this  State.   The  permit  may  be  revoked  by  the
Department at its discretion.
    (m)  "Retailer maintaining a place of  business  in  this
State",  or  any  like  term, means and includes any retailer
having or maintaining within this State,  directly  or  by  a
subsidiary,  an office, distribution facilities, transmission
facilities,  sales  office,  warehouse  or  other  place   of
business,  or  any  agent  or  other representative operating
within this State under the authority of the retailer or  its
subsidiary, irrespective of whether such place of business or
agent  or other representative is located here permanently or
temporarily,  or  whether  such  retailer  or  subsidiary  is
licensed to do business in this State.
    (n)  "Service   address"   means    the    location    of
telecommunications       equipment     from     which     the
telecommunications  services  are  originated  or  at   which
telecommunications  services  are received by a taxpayer.  In
the event this may not be a defined location, as in the  case
of  mobile  phones, paging systems, maritime systems, service
address means the customer's place of primary use as  defined
in  the  Mobile  Telecommunications  Sourcing Conformity Act.
For air-to-ground systems and the like, service address shall
mean  the  location  of  a  taxpayer's  primary  use  of  the
telecommunications equipment as defined by telephone  number,
authorization  code,  or location in Illinois where bills are
sent.
    (o)  "Prepaid telephone calling  arrangements"  mean  the
right to exclusively purchase telephone or telecommunications
services  that  must  be  paid  for in advance and enable the
origination  of  one  or  more  intrastate,  interstate,   or
international  telephone  calls  or  other telecommunications
using an access  number,  an  authorization  code,  or  both,
whether  manually or electronically dialed, for which payment
to a retailer must be made in advance, provided that,  unless
recharged,  no  further service is provided once that prepaid
amount of  service  has  been  consumed.   Prepaid  telephone
calling  arrangements  include  the  recharge  of  a  prepaid
calling   arrangement.   For  purposes  of  this  subsection,
"recharge" means the purchase of additional prepaid telephone
or telecommunications services whether or not  the  purchaser
acquires  a  different  access  number or authorization code.
"Prepaid telephone calling arrangement" does not  include  an
arrangement  whereby  a customer purchases a payment card and
pursuant to which the service provider reflects the amount of
such purchase as a  credit  on  an  invoice  issued  to  that
customer under an existing subscription plan.
(Source:  P.A.  91-870,  eff.  6-22-00;  92-474, eff. 8-1-02;
92-526, eff. 1-1-03; 92-878, eff. 1-1-04.)

    Section  10.    The   Telecommunications   Infrastructure
Maintenance  Fee  Act  is  amended  by changing Section 10 as
follows:

    (35 ILCS 635/10)
    (Text of Section before amendment by P.A. 92-878)
    Sec. 10.  Definitions.
    (a)  "Gross  charges"  means  the  amount   paid   to   a
telecommunications  retailer  for  the  act  or  privilege of
originating or receiving telecommunications in this State and
for all services rendered in connection therewith, valued  in
money  whether  paid  in  money or otherwise, including cash,
credits, services, and property of every kind or nature,  and
shall  be  determined without any deduction on account of the
cost of such telecommunications, the cost  of  the  materials
used,   labor   or   service  costs,  or  any  other  expense
whatsoever.  In case credit is extended, the  amount  thereof
shall  be included only as and when paid. "Gross charges" for
private line service shall include charges  imposed  at  each
channel  point  within  this  State,  charges for the channel

mileage between each channel point  within  this  State,  and
charges  for  that  portion  of  the  interstate inter-office
channel provided within Illinois.  However,  "gross  charges"
shall not include:
         (1)  any amounts added to a purchaser's bill because
    of  a  charge  made  under:  (i)  the fee imposed by this
    Section, (ii) additional charges added to  a  purchaser's
    bill under Section 9-221 or 9-222 of the Public Utilities
    Act,  (iii)  the  tax  imposed  by the Telecommunications
    Excise Tax Act, (iv) 911 surcharges, (v) the tax  imposed
    by Section 4251 of the Internal Revenue Code, or (vi) the
    tax     imposed     by     the    Simplified    Municipal
    Telecommunications Tax Act;
         (2)  charges for a  sent  collect  telecommunication
    received outside of this State;
         (3)  charges for leased time on equipment or charges
    for  the  storage  of  data  or information or subsequent
    retrieval  or  the  processing  of  data  or  information
    intended to change its form or content.   Such  equipment
    includes,  but is not limited to, the use of calculators,
    computers,   data   processing   equipment,    tabulating
    equipment,  or accounting equipment and also includes the
    usage of computers under a time-sharing agreement;
         (4)  charges for customer equipment, including  such
    equipment  that  is leased or rented by the customer from
    any source, wherein such charges  are  disaggregated  and
    separately identified from other charges;
         (5)  charges to business enterprises certified under
    Section 9-222.1 of the Public Utilities Act to the extent
    of such exemption and during the period of time specified
    by the Department of Commerce and Community Affairs;
         (6)  charges for telecommunications and all services
    and  equipment provided in connection therewith between a
    parent corporation and its wholly owned  subsidiaries  or
    between wholly owned subsidiaries, and only to the extent
    that  the  charges  between  the  parent  corporation and
    wholly  owned  subsidiaries  or  between   wholly   owned
    subsidiaries  represent  expense  allocation  between the
    corporations and not the generation of profit other  than
    a   regulatory   required   profit  for  the  corporation
    rendering such services;
         (7)  bad debts ("bad debt" means any  portion  of  a
    debt  that is related to a sale at retail for which gross
    charges are not otherwise deductible or  excludable  that
    has  become  worthless  or  uncollectible,  as determined
    under applicable federal income  tax  standards;  if  the
    portion  of  the  debt  deemed  to be bad is subsequently
    paid, the retailer shall report and pay the tax  on  that
    portion  during the reporting period in which the payment
    is made); or
         (8)  charges   paid   by    inserting    coins    in
    coin-operated telecommunication devices.
    (a-5)  "Department"  means  the  Illinois  Department  of
Revenue.
    (b)  "Telecommunications"  includes,  but  is not limited
to, messages or information transmitted through use of local,
toll, and wide  area  telephone  service,  channel  services,
telegraph services, teletypewriter service, computer exchange
services,  private  line  services,  specialized mobile radio
services,  or  any  other   transmission   of   messages   or
information  by electronic or similar means, between or among
points by wire, cable, fiber optics, laser, microwave, radio,
satellite, or similar facilities.  Unless the context clearly
requires otherwise, "telecommunications" shall  also  include
wireless    telecommunications    as   hereinafter   defined.
"Telecommunications" shall not include value  added  services
in  which computer processing applications are used to act on
the form, content, code, and protocol of the information  for
purposes other than transmission.  "Telecommunications" shall
not    include    purchase   of   telecommunications   by   a
telecommunications service provider for use  as  a  component
part  of  the  service provided by him or her to the ultimate
retail consumer who originates or terminates  the  end-to-end
communications.   Retailer  access  charges,  right of access
charges, charges for use of intercompany facilities, and  all
telecommunications  resold  in  the  subsequent provision and
used as  a  component  of,  or  integrated  into,  end-to-end
telecommunications  service  shall  not  be included in gross
charges as sales for resale.  "Telecommunications" shall  not
include  the  provision  of  cable  services  through a cable
system as defined in the Cable Communications Act of 1984 (47
U.S.C. Sections  521  and  following)  as  now  or  hereafter
amended  or  through  an  open video system as defined in the
Rules of the Federal  Communications  Commission  (47  C.D.F.
76.1550   and   following)   as  now  or  hereafter  amended.
Beginning  January  1,  2001,   prepaid   telephone   calling
arrangements  shall  not  be  considered "telecommunications"
subject to the tax imposed under this Act.  For  purposes  of
this  Section, "prepaid telephone calling arrangements" means
that term as  defined  in  Section  2-27  of  the  Retailers'
Occupation Tax Act.
    (c)  "Wireless   telecommunications"   includes  cellular
mobile telephone  services,  personal  wireless  services  as
defined  in  Section  704(C) of the Telecommunications Act of
1996 (Public Law No. 104-104) as now  or  hereafter  amended,
including  all  commercial  mobile radio services, and paging
services.
    (d)  "Telecommunications  retailer"  or   "retailer"   or
"carrier"  means  and  includes  every  person engaged in the
business of making sales of telecommunications at  retail  as
defined   in  this  Section.   The  Department  may,  in  its
discretion, upon applications, authorize  the  collection  of
the  fee  hereby  imposed  by  any retailer not maintaining a
place of business within this State, who, to the satisfaction
of the Department,  furnishes  adequate  security  to  insure
collection  and  payment  of the fee.  When so authorized, it
shall be the duty of such retailer to pay the fee upon all of
the gross charges for telecommunications in the  same  manner
and   subject   to   the  same  requirements  as  a  retailer
maintaining a place of business within this State.
    (e)  "Retailer maintaining a place of  business  in  this
State",  or  any  like  term, means and includes any retailer
having or maintaining within this State,  directly  or  by  a
subsidiary,  an office, distribution facilities, transmission
facilities,  sales  office,  warehouse,  or  other  place  of
business, or any  agent  or  other  representative  operating
within  this State under the authority of the retailer or its
subsidiary, irrespective of whether such place of business or
agent or other representative is located here permanently  or
temporarily,  or  whether  such  retailer  or  subsidiary  is
licensed to do business in this State.
    (f)  "Sale  of  telecommunications  at  retail" means the
transmitting, supplying, or furnishing of  telecommunications
and  all  services  rendered  in  connection  therewith for a
consideration, other than between a  parent  corporation  and
its   wholly  owned  subsidiaries  or  between  wholly  owned
subsidiaries,  when  the  gross  charge  made  by  one   such
corporation  to  another such corporation is not greater than
the gross charge paid  to  the  retailer  for  their  use  or
consumption and not for sale.
    (g)  "Service    address"    means    the   location   of
telecommunications equipment  from  which  telecommunications
services   are  originated  or  at  which  telecommunications
services are received.  If this is not a defined location, as
in the case of wireless telecommunications,  paging  systems,
maritime  systems, service address means the customer's place
of primary use as defined in  the  Mobile  Telecommunications
Sourcing  Conformity Act.  For air-to-ground systems, and the
like, "service  address"  shall  mean  the  location  of  the
customer's primary use of the telecommunications equipment as
defined by the location in Illinois where bills are sent.
(Source:  P.A.  91-870,  eff.  6-22-00;  92-474, eff. 8-1-02;
92-526, eff. 1-1-03.)

    (Text of Section after amendment by P.A. 92-878)
    Sec. 10.  Definitions.
    (a)  "Gross  charges"  means  the  amount   paid   to   a
telecommunications  retailer  for  the  act  or  privilege of
originating or receiving telecommunications in this State and
for all services rendered in connection therewith, valued  in
money  whether  paid  in  money or otherwise, including cash,
credits, services, and property of every kind or nature,  and
shall  be  determined without any deduction on account of the
cost of such telecommunications, the cost  of  the  materials
used,   labor   or   service  costs,  or  any  other  expense
whatsoever.  In case credit is extended, the  amount  thereof
shall  be included only as and when paid. "Gross charges" for
private line service shall include charges  imposed  at  each
channel  termination point within this State, charges for the
channel mileage between each channel termination point within
this State, and charges for that portion  of  the  interstate
inter-office  channel  provided  within Illinois. Charges for
that portion of the interstate inter-office channel  provided
in  Illinois  shall be determined by the retailer as follows:
(i) for interstate inter-office  channels  having  2  channel
termination  points, only one of which is in Illinois, 50% of
the total charge imposed; or (ii) for interstate inter-office
channels having more than 2 channel termination  points,  one
or  more  of  which  are  in Illinois, an amount equal to the
total charge multiplied by a fraction, the numerator of which
is the number of channel termination points  within  Illinois
and  the  denominator of which is the total number of channel
termination points; or (iii) any other method that reasonably
apportions the  total  charges  for  interstate  inter-office
channels among the states in which channel termination points
are  located.  Prior  to  January  1, 2004, June 1, 2003, any
apportionment method consistent with this paragraph or  other
method  that  reasonably  apportions  the  total  charges for
interstate inter-office channels among the  states  in  which
channel  terminations points are located shall be accepted as
a reasonable method to determine the charges for that portion
of  the  interstate  inter-office  channel  provided   within
Illinois  for that period. However, "gross charges" shall not
include any of the following:
         (1)  Any amounts added to a purchaser's bill because
    of a charge made under:  (i)  the  fee  imposed  by  this
    Section,  (ii)  additional charges added to a purchaser's
    bill under Section 9-221 or 9-222 of the Public Utilities
    Act, (iii) the  tax  imposed  by  the  Telecommunications
    Excise  Tax Act, (iv) 911 surcharges, (v) the tax imposed
    by Section 4251 of the Internal Revenue Code, or (vi) the
    tax    imposed    by     the     Simplified     Municipal
    Telecommunications Tax Act.
         (2)  Charges  for  a  sent collect telecommunication
    received outside of this State.
         (3)  Charges for leased time on equipment or charges
    for the storage of  data  or  information  or  subsequent
    retrieval  or  the  processing  of  data  or  information
    intended  to  change its form or content.  Such equipment
    includes, but is not limited to, the use of  calculators,
    computers,    data   processing   equipment,   tabulating
    equipment, or accounting equipment and also includes  the
    usage of computers under a time-sharing agreement.
         (4)  Charges  for customer equipment, including such
    equipment that is leased or rented by the  customer  from
    any  source,  wherein  such charges are disaggregated and
    separately identified from other charges.
         (5)  Charges to business enterprises certified under
    Section 9-222.1 of the Public Utilities Act to the extent
    of such exemption and during the period of time specified
    by the Department of Commerce and Community Affairs.
         (6)  Charges for telecommunications and all services
    and equipment provided in connection therewith between  a
    parent  corporation  and its wholly owned subsidiaries or
    between wholly owned subsidiaries, and only to the extent
    that the  charges  between  the  parent  corporation  and
    wholly   owned   subsidiaries  or  between  wholly  owned
    subsidiaries represent  expense  allocation  between  the
    corporations  and not the generation of profit other than
    a  regulatory  required  profit   for   the   corporation
    rendering such services.
         (7)  Bad  debts  ("bad  debt" means any portion of a
    debt that is related to a sale at retail for which  gross
    charges  are  not otherwise deductible or excludable that
    has become  worthless  or  uncollectible,  as  determined
    under  applicable  federal  income  tax standards; if the
    portion of the debt deemed  to  be  bad  is  subsequently
    paid,  the  retailer shall report and pay the tax on that
    portion during the reporting period in which the  payment
    is made).
         (8)  Charges    paid    by    inserting   coins   in
    coin-operated telecommunication devices.
         (9)  Charges    for    nontaxable    services     or
    telecommunications  if  (i)  those charges are aggregated
    with  other  charges  for  telecommunications  that   are
    taxable,  (ii) those charges are not separately stated on
    the customer bill or invoice, and (iii) the retailer  can
    reasonably   identify   the  nontaxable  charges  on  the
    retailer's books and records kept in the  regular  course
    of business.  If the nontaxable charges cannot reasonably
    be  identified,  the  gross  charge from the sale of both
    taxable and  nontaxable  services  or  telecommunications
    billed  on  a  combined  basis shall be attributed to the
    taxable services or  telecommunications.  The  burden  of
    proving  nontaxable  charges  shall be on the retailer of
    the telecommunications.
    (a-5)  "Department"  means  the  Illinois  Department  of
Revenue.
    (b)  "Telecommunications" includes, but  is  not  limited
to, messages or information transmitted through use of local,
toll,  and  wide  area  telephone  service, channel services,
telegraph services, teletypewriter service, computer exchange
services, private line  services,  specialized  mobile  radio
services,   or   any   other   transmission  of  messages  or
information by electronic or similar means, between or  among
points by wire, cable, fiber optics, laser, microwave, radio,
satellite, or similar facilities.  Unless the context clearly
requires  otherwise,  "telecommunications" shall also include
wireless   telecommunications   as    hereinafter    defined.
"Telecommunications"  shall  not include value added services
in which computer processing applications are used to act  on
the  form, content, code, and protocol of the information for
purposes other than transmission.  "Telecommunications" shall
not   include   purchase   of   telecommunications    by    a
telecommunications  service  provider  for use as a component
part of the service provided by him or her  to  the  ultimate
retail  consumer  who originates or terminates the end-to-end
communications.  Retailer access  charges,  right  of  access
charges,  charges for use of intercompany facilities, and all
telecommunications resold in  the  subsequent  provision  and
used  as  a  component  of,  or  integrated  into, end-to-end
telecommunications service shall not  be  included  in  gross
charges  as sales for resale.  "Telecommunications" shall not
include the provision  of  cable  services  through  a  cable
system as defined in the Cable Communications Act of 1984 (47
U.S.C.  Sections  521  and  following)  as  now  or hereafter
amended or through an open video system  as  defined  in  the
Rules  of  the  Federal  Communications Commission (47 C.D.F.
76.1550  and  following)  as  now   or   hereafter   amended.
Beginning   January   1,   2001,  prepaid  telephone  calling
arrangements shall  not  be  considered  "telecommunications"
subject  to  the tax imposed under this Act.  For purposes of
this Section, "prepaid telephone calling arrangements"  means
that  term  as  defined  in  Section  2-27  of the Retailers'
Occupation Tax Act.
    (c)  "Wireless  telecommunications"   includes   cellular
mobile  telephone  services,  personal  wireless  services as
defined in Section 704(C) of the  Telecommunications  Act  of
1996  (Public  Law  No. 104-104) as now or hereafter amended,
including all commercial mobile radio  services,  and  paging
services.
    (d)  "Telecommunications   retailer"   or  "retailer"  or
"carrier" means and includes  every  person  engaged  in  the
business  of  making sales of telecommunications at retail as
defined  in  this  Section.   The  Department  may,  in   its
discretion,  upon  applications,  authorize the collection of
the fee hereby imposed by  any  retailer  not  maintaining  a
place of business within this State, who, to the satisfaction
of  the  Department,  furnishes  adequate  security to insure
collection and payment of the fee.  When  so  authorized,  it
shall be the duty of such retailer to pay the fee upon all of
the  gross  charges for telecommunications in the same manner
and  subject  to  the  same  requirements   as   a   retailer
maintaining a place of business within this State.
    (e)  "Retailer  maintaining  a  place of business in this
State", or any like term, means  and  includes  any  retailer
having  or  maintaining  within  this State, directly or by a
subsidiary, an office, distribution facilities,  transmission
facilities,  sales  office,  warehouse,  or  other  place  of
business,  or  any  agent  or  other representative operating
within this State under the authority of the retailer or  its
subsidiary, irrespective of whether such place of business or
agent  or other representative is located here permanently or
temporarily,  or  whether  such  retailer  or  subsidiary  is
licensed to do business in this State.
    (f)  "Sale of telecommunications  at  retail"  means  the
transmitting,  supplying, or furnishing of telecommunications
and all services  rendered  in  connection  therewith  for  a
consideration,  other  than  between a parent corporation and
its  wholly  owned  subsidiaries  or  between  wholly   owned
subsidiaries,   when  the  gross  charge  made  by  one  such
corporation to another such corporation is not  greater  than
the  gross  charge  paid  to  the  retailer  for their use or
consumption and not for sale.
    (g)  "Service   address"   means    the    location    of
telecommunications  equipment  from  which telecommunications
services  are  originated  or  at  which   telecommunications
services are received.  If this is not a defined location, as
in  the  case of wireless telecommunications, paging systems,
maritime systems, service address means the customer's  place
of  primary  use  as defined in the Mobile Telecommunications
Sourcing Conformity Act.  For air-to-ground systems, and  the
like,  "service  address"  shall  mean  the  location  of the
customer's primary use of the telecommunications equipment as
defined by the location in Illinois where bills are sent.
(Source: P.A. 91-870,  eff.  6-22-00;  92-474,  eff.  8-1-02;
92-526, eff. 1-1-03; 92-878, eff. 1-1-04.)

    Section  15.  The Simplified Municipal Telecommunications
Tax Act is amended by changing Sections 5-7, 5-10,  and  5-20
as follows:
    (35 ILCS 636/5-7)
    (Text of Section before amendment by P.A. 92-878)
    Sec.  5-7.   Definitions.   For  purposes  of  the  taxes
authorized by this Act:
    "Amount  paid" means the amount charged to the taxpayer's
service address in such municipality regardless of where such
amount is billed or paid.
    "Department" means the Illinois Department of Revenue.
    "Gross charge" means the  amount  paid  for  the  act  or
privilege  of  originating or receiving telecommunications in
such municipality and for all services and equipment provided
in connection  therewith  by  a  retailer,  valued  in  money
whether  paid in money or otherwise, including cash, credits,
services and property of every kind or nature, and  shall  be
determined  without  any  deduction on account of the cost of
such telecommunications, the  cost  of  the  materials  used,
labor  or  service costs or any other expense whatsoever.  In
case credit is extended, the amount thereof shall be included
only as and when  paid.  "Gross  charges"  for  private  line
service  shall  include charges imposed at each channel point
within this State, charges for the  channel  mileage  between
each  channel  point  within this State, and charges for that
portion  of  the  interstate  inter-office  channel  provided
within Illinois. However, "gross charge" shall not include:
         (1)  any amounts added to a purchaser's bill because
    of a charge made pursuant to: (i) the tax imposed by this
    Act, (ii)  the  tax  imposed  by  the  Telecommunications
    Excise  Tax Act, (iii) the tax imposed by Section 4251 of
    the Internal Revenue Code, (iv) 911  surcharges,  or  (v)
    charges   added  to  customers'  bills  pursuant  to  the
    provisions of  Section  9-221  or  9-222  of  the  Public
    Utilities  Act,  as amended, or any similar charges added
    to customers' bills by retailers who are not  subject  to
    rate  regulation  by the Illinois Commerce Commission for
    the purpose of recovering any of the tax  liabilities  or
    other amounts specified in those provisions of the Public
    Utilities Act;
         (2)  charges  for  a  sent collect telecommunication
    received outside of such municipality;
         (3)  charges for leased time on equipment or charges
    for the storage of data  or  information  for  subsequent
    retrieval  or  the  processing  of  data  or  information
    intended  to  change its form or content.  Such equipment
    includes, but is not limited to, the use of  calculators,
    computers,    data   processing   equipment,   tabulating
    equipment or accounting equipment and also  includes  the
    usage of computers under a time-sharing agreement;
         (4)  charges  for customer equipment, including such
    equipment that is leased or rented by the  customer  from
    any  source,  wherein  such charges are disaggregated and
    separately identified from other charges;
         (5)  charges to business  enterprises  certified  as
    exempt  under Section 9-222.1 of the Public Utilities Act
    to the extent of such exemption and during the period  of
    time   specified   by  the  Department  of  Commerce  and
    Community Affairs;
         (6)  charges for telecommunications and all services
    and equipment provided in connection therewith between  a
    parent  corporation  and its wholly owned subsidiaries or
    between wholly owned subsidiaries when  the  tax  imposed
    under  this  Act  has already been paid to a retailer and
    only to the extent that the charges  between  the  parent
    corporation  and  wholly  owned  subsidiaries  or between
    wholly owned subsidiaries  represent  expense  allocation
    between the corporations and not the generation of profit
    for the corporation rendering such service;
         (7)  bad  debts  ("bad  debt" means any portion of a
    debt that is related to a sale at retail for which  gross
    charges  are  not otherwise deductible or excludable that
    has become  worthless  or  uncollectible,  as  determined
    under  applicable  federal  income  tax standards; if the
    portion of the debt deemed  to  be  bad  is  subsequently
    paid,  the  retailer shall report and pay the tax on that
    portion during the reporting period in which the  payment
    is made);
         (8)  charges    paid    by    inserting   coins   in
    coin-operated telecommunication devices; or
         (9)  amounts paid  by  telecommunications  retailers
    under  the  Telecommunications Infrastructure Maintenance
    Fee Act.
    "Interstate      telecommunications"      means       all
telecommunications that either originate or terminate outside
this State.
    "Intrastate       telecommunications"      means      all
telecommunications that originate and terminate  within  this
State.
    "Person"  means  any  natural  individual,  firm,  trust,
estate,  partnership, association, joint stock company, joint
venture,  corporation,  limited  liability  company,   or   a
receiver,   trustee,   guardian,   or   other  representative
appointed by order  of  any  court,  the  Federal  and  State
governments, including State universities created by statute,
or  any city, town, county, or other political subdivision of
this State.
    "Purchase at retail" means the  acquisition,  consumption
or use of telecommunications through a sale at retail.
    "Retailer" means and includes every person engaged in the
business  of  making  sales  at  retail  as  defined  in this
Section.  The  Department  may,  in  its   discretion,   upon
application,  authorize  the  collection  of  the  tax hereby
imposed by any retailer not maintaining a place  of  business
within   this   State,   who,  to  the  satisfaction  of  the
Department, furnishes adequate security to insure  collection
and  payment  of  the  tax.   Such  retailer shall be issued,
without charge, a  permit  to  collect  such  tax.   When  so
authorized,  it shall be the duty of such retailer to collect
the tax upon all of the gross charges for  telecommunications
in  this  State  in  the  same manner and subject to the same
requirements as a retailer maintaining a  place  of  business
within  this  State.   The  permit  may  be  revoked  by  the
Department at its discretion.
    "Retailer maintaining a place of business in this State",
or  any  like term, means and includes any retailer having or
maintaining within this State, directly or by  a  subsidiary,
an  office, distribution facilities, transmission facilities,
sales office, warehouse or other place of  business,  or  any
agent  or  other  representative  operating within this State
under the  authority  of  the  retailer  or  its  subsidiary,
irrespective  of  whether  such place of business or agent or
other  representative  is   located   here   permanently   or
temporarily,  or  whether  such  retailer  or  subsidiary  is
licensed to do business in this State.
    "Sale  at  retail"  means  the transmitting, supplying or
furnishing  of  telecommunications  and  all   services   and
equipment    provided   in   connection   therewith   for   a
consideration, to persons other than the  Federal  and  State
governments,  and  State  universities created by statute and
other than between a parent corporation and its wholly  owned
subsidiaries  or  between wholly owned subsidiaries for their
use or consumption and not for resale.
    "Service    address"    means     the     location     of
telecommunications  equipment  from  which telecommunications
services  are  originated  or  at  which   telecommunications
services  are  received by a taxpayer.  In the event this may
not be a defined location, as in the case of  mobile  phones,
paging  systems,  and maritime systems, service address means
the customer's place of primary use as defined in the  Mobile
Telecommunications     Sourcing    Conformity    Act.     For
air-to-ground systems and the like, "service  address"  shall
mean  the  location  of  a  taxpayer's  primary  use  of  the
telecommunications  equipment as defined by telephone number,
authorization code, or location in Illinois where  bills  are
sent.
    "Taxpayer" means a person who individually or through his
or her agents, employees, or permittees engages in the act or
privilege of originating or receiving telecommunications in a
municipality  and who incurs a tax liability as authorized by
this Act.
    "Telecommunications",  in   addition   to   the   meaning
ordinarily  and  popularly  ascribed to it, includes, without
limitation, messages or information transmitted  through  use
of local, toll, and wide area telephone service, private line
services,     channel     services,    telegraph    services,
teletypewriter, computer exchange services,  cellular  mobile
telecommunications   service,   specialized   mobile   radio,
stationary  two-way  radio, paging service, or any other form
of mobile and portable one-way or two-way communications,  or
any   other   transmission  of  messages  or  information  by
electronic or similar means, between or among points by wire,
cable, fiber optics, laser, microwave, radio,  satellite,  or
similar  facilities.   As  used  in  this Act, "private line"
means a dedicated non-traffic sensitive service for a  single
customer, that entitles the customer to exclusive or priority
use  of  a  communications channel or group of channels, from
one  or  more  specified  locations  to  one  or  more  other
specified locations.  The definition of  "telecommunications"
shall  not  include  value  added  services in which computer
processing applications are used to act on the form, content,
code, and protocol of the information for purposes other than
transmission.    "Telecommunications"   shall   not   include
purchases  of  telecommunications  by  a   telecommunications
service  provider  for use as a component part of the service
provided by such provider to the ultimate retail consumer who
originates   or    terminates    the    taxable    end-to-end
communications.   Carrier  access  charges,  right  of access
charges, charges for use of inter-company facilities, and all
telecommunications resold in  the  subsequent  provision  of,
used  as  a  component  of,  or  integrated  into, end-to-end
telecommunications service shall be non-taxable as sales  for
resale.   Prepaid telephone calling arrangements shall not be
considered "telecommunications" subject to  the  tax  imposed
under  this  Act.   For  purposes  of  this Section, "prepaid
telephone calling arrangements" means that term as defined in
Section 2-27 of the Retailers' Occupations Tax Act.
(Source: P.A. 92-526, eff. 7-1-02.)

    (Text of Section after amendment by P.A. 92-878)
    Sec.  5-7.   Definitions.   For  purposes  of  the  taxes
authorized by this Act:
    "Amount paid" means the amount charged to the  taxpayer's
service address in such municipality regardless of where such
amount is billed or paid.
    "Department" means the Illinois Department of Revenue.
    "Gross  charge"  means  the  amount  paid  for the act or
privilege of originating or receiving  telecommunications  in
such municipality and for all services and equipment provided
in  connection  therewith  by  a  retailer,  valued  in money
whether paid in money or otherwise, including cash,  credits,
services  and  property of every kind or nature, and shall be
determined without any deduction on account of  the  cost  of
such  telecommunications,  the  cost  of  the materials used,
labor or service costs or any other expense  whatsoever.   In
case credit is extended, the amount thereof shall be included
only  as  and  when  paid.  "Gross  charges" for private line
service  shall  include  charges  imposed  at  each   channel
termination  point  within  a municipality that has imposed a
tax under this  Section  and  this  State,  charges  for  the
channel mileage between each channel point within this State,
and  charges  for that portion of the interstate inter-office
channels channel provided within that municipality  Illinois.
Charges  for  that  portion  of  the  interstate inter-office
channel connecting 2 or more channel termination points,  one
or  more  of  which  is  located  within  the  jurisdictional
boundary  of  such  municipality,  shall be determined by the
retailer by multiplying an amount equal to the  total  charge
for  the inter-office channel by a fraction, the numerator of
which is the number of channel termination  points  that  are
located   within   the   jurisdictional   boundary   of   the
municipality and the denominator of which is the total number
of  channel  termination points connected by the inter-office
channel. Prior to January 1, 2004, any method consistent with
this paragraph or other method that reasonably apportions the
total   charges   for   inter-office   channels   among   the
municipalities  in  which  channel  termination  points   are
located shall be accepted as a reasonable method to determine
the  taxable  portion  of  an  inter-office  channel provided
within a municipality for that period  provided  in  Illinois
shall  be  determined  by  the  retailer as follows:  (i) for
interstate inter-office channels having 2 channel termination
points, only one of which is in Illinois, 50%  of  the  total
charge  imposed;  (ii)  for  interstate inter-office channels
having more than 2 channel termination points, one or more of
which are in Illinois, an amount equal to  the  total  charge
multiplied  by  a  fraction,  the  numerator  of which is the
number of channel termination points within Illinois and  the
denominator   of   which  is  the  total  number  of  channel
termination points; or (iii) any other method that reasonably
apportions the  total  charges  for  interstate  inter-office
channels among the states in which channel termination points
are  located. Prior to June 1, 2003, any apportionment method
consistent  with  this  paragraph  shall  be  accepted  as  a
reasonable method to determine the charges for  that  portion
of   the  interstate  inter-office  channel  provided  within
Illinois for that period. However, "gross charge"  shall  not
include any of the following:
         (1)  Any amounts added to a purchaser's bill because
    of a charge made pursuant to: (i) the tax imposed by this
    Act,  (ii)  the  tax  imposed  by  the Telecommunications
    Excise Tax Act, (iii) the tax imposed by Section 4251  of
    the  Internal  Revenue  Code, (iv) 911 surcharges, or (v)
    charges  added  to  customers'  bills  pursuant  to   the
    provisions  of  Section  9-221  or  9-222  of  the Public
    Utilities Act, as amended, or any similar  charges  added
    to  customers'  bills by retailers who are not subject to
    rate regulation by the Illinois Commerce  Commission  for
    the  purpose  of recovering any of the tax liabilities or
    other amounts specified in those provisions of the Public
    Utilities Act.
         (2)  Charges for a  sent  collect  telecommunication
    received outside of such municipality.
         (3)  Charges for leased time on equipment or charges
    for  the  storage  of  data or information for subsequent
    retrieval  or  the  processing  of  data  or  information
    intended to change its form or content.   Such  equipment
    includes,  but is not limited to, the use of calculators,
    computers,   data   processing   equipment,    tabulating
    equipment  or  accounting equipment and also includes the
    usage of computers under a time-sharing agreement.
         (4)  Charges for customer equipment, including  such
    equipment  that  is leased or rented by the customer from
    any source, wherein such charges  are  disaggregated  and
    separately identified from other charges.
         (5)  Charges  to  business  enterprises certified as
    exempt under Section 9-222.1 of the Public Utilities  Act
    to  the extent of such exemption and during the period of
    time  specified  by  the  Department  of   Commerce   and
    Community Affairs.
         (6)  Charges for telecommunications and all services
    and  equipment provided in connection therewith between a
    parent corporation and its wholly owned  subsidiaries  or
    between  wholly  owned  subsidiaries when the tax imposed
    under this Act has already been paid to  a  retailer  and
    only  to  the  extent that the charges between the parent
    corporation and  wholly  owned  subsidiaries  or  between
    wholly  owned  subsidiaries  represent expense allocation
    between the corporations and not the generation of profit
    for the corporation rendering such service.
         (7)  Bad debts ("bad debt" means any  portion  of  a
    debt  that is related to a sale at retail for which gross
    charges are not otherwise deductible or  excludable  that
    has  become  worthless  or  uncollectible,  as determined
    under applicable federal income  tax  standards;  if  the
    portion  of  the  debt  deemed  to be bad is subsequently
    paid, the retailer shall report and pay the tax  on  that
    portion  during the reporting period in which the payment
    is made).
         (8)  Charges   paid   by    inserting    coins    in
    coin-operated telecommunication devices.
         (9)  Amounts  paid  by  telecommunications retailers
    under the Telecommunications  Infrastructure  Maintenance
    Fee Act.
         (10)  Charges    for    nontaxable    services    or
    telecommunications  if  (i)  those charges are aggregated
    with  other  charges  for  telecommunications  that   are
    taxable,  (ii) those charges are not separately stated on
    the customer bill or invoice, and (iii) the retailer  can
    reasonably   identify   the  nontaxable  charges  on  the
    retailer's books and records kept in the  regular  course
    of  business. If the nontaxable charges cannot reasonably
    be identified, the gross charge from  the  sale  of  both
    taxable  and  nontaxable  services  or telecommunications
    billed on a combined basis shall  be  attributed  to  the
    taxable  services  or  telecommunications.  The burden of
    proving nontaxable charges shall be on  the  retailer  of
    the telecommunications.
    "Interstate       telecommunications"      means      all
telecommunications that either originate or terminate outside
this State.
    "Intrastate      telecommunications"      means       all
telecommunications  that  originate and terminate within this
State.
    "Person"  means  any  natural  individual,  firm,  trust,
estate, partnership, association, joint stock company,  joint
venture,   corporation,   limited  liability  company,  or  a
receiver,  trustee,   guardian,   or   other   representative
appointed  by  order  of  any  court,  the  Federal and State
governments, including State universities created by statute,
or any city, town, county, or other political subdivision  of
this State.
    "Purchase  at  retail" means the acquisition, consumption
or use of telecommunications through a sale at retail.
    "Retailer" means and includes every person engaged in the
business of  making  sales  at  retail  as  defined  in  this
Section.   The   Department  may,  in  its  discretion,  upon
application, authorize  the  collection  of  the  tax  hereby
imposed  by  any retailer not maintaining a place of business
within  this  State,  who,  to  the   satisfaction   of   the
Department,  furnishes adequate security to insure collection
and payment of the  tax.   Such  retailer  shall  be  issued,
without  charge,  a  permit  to  collect  such  tax.  When so
authorized, it shall be the duty of such retailer to  collect
the  tax upon all of the gross charges for telecommunications
in this State in the same manner  and  subject  to  the  same
requirements  as  a  retailer maintaining a place of business
within  this  State.   The  permit  may  be  revoked  by  the
Department at its discretion.
    "Retailer maintaining a place of business in this State",
or any like term, means and includes any retailer  having  or
maintaining  within  this State, directly or by a subsidiary,
an office, distribution facilities, transmission  facilities,
sales  office,  warehouse  or other place of business, or any
agent or other representative  operating  within  this  State
under  the  authority  of  the  retailer  or  its subsidiary,
irrespective of whether such place of business  or  agent  or
other   representative   is   located   here  permanently  or
temporarily,  or  whether  such  retailer  or  subsidiary  is
licensed to do business in this State.
    "Sale at retail" means  the  transmitting,  supplying  or
furnishing   of   telecommunications  and  all  services  and
equipment   provided   in   connection   therewith   for    a
consideration,  to  persons  other than the Federal and State
governments, and State universities created  by  statute  and
other  than between a parent corporation and its wholly owned
subsidiaries or between wholly owned subsidiaries  for  their
use or consumption and not for resale.
    "Service     address"     means     the    location    of
telecommunications equipment  from  which  telecommunications
services   are  originated  or  at  which  telecommunications
services are received by a taxpayer.  In the event  this  may
not  be  a defined location, as in the case of mobile phones,
paging systems, and maritime systems, service  address  means
the  customer's place of primary use as defined in the Mobile
Telecommunications    Sourcing    Conformity    Act.      For
air-to-ground  systems  and the like, "service address" shall
mean  the  location  of  a  taxpayer's  primary  use  of  the
telecommunications equipment as defined by telephone  number,
authorization  code,  or location in Illinois where bills are
sent.
    "Taxpayer" means a person who individually or through his
or her agents, employees, or permittees engages in the act or
privilege of originating or receiving telecommunications in a
municipality and who incurs a tax liability as authorized  by
this Act.
    "Telecommunications",   in   addition   to   the  meaning
ordinarily and popularly ascribed to  it,  includes,  without
limitation,  messages  or information transmitted through use
of local, toll, and wide area telephone service, private line
services,    channel    services,     telegraph     services,
teletypewriter,  computer  exchange services, cellular mobile
telecommunications   service,   specialized   mobile   radio,
stationary two-way radio, paging service, or any  other  form
of  mobile and portable one-way or two-way communications, or
any  other  transmission  of  messages  or   information   by
electronic or similar means, between or among points by wire,
cable,  fiber  optics, laser, microwave, radio, satellite, or
similar facilities.  As used  in  this  Act,  "private  line"
means  a dedicated non-traffic sensitive service for a single
customer, that entitles the customer to exclusive or priority
use of a communications channel or group  of  channels,  from
one  or  more  specified  locations  to  one  or  more  other
specified  locations.  The definition of "telecommunications"
shall not include value  added  services  in  which  computer
processing applications are used to act on the form, content,
code, and protocol of the information for purposes other than
transmission.    "Telecommunications"   shall   not   include
purchases   of  telecommunications  by  a  telecommunications
service provider for use as a component part of  the  service
provided by such provider to the ultimate retail consumer who
originates    or    terminates    the    taxable   end-to-end
communications.  Carrier  access  charges,  right  of  access
charges, charges for use of inter-company facilities, and all
telecommunications  resold  in  the  subsequent provision of,
used as  a  component  of,  or  integrated  into,  end-to-end
telecommunications  service shall be non-taxable as sales for
resale.  Prepaid telephone calling arrangements shall not  be
considered  "telecommunications"  subject  to the tax imposed
under this Act.   For  purposes  of  this  Section,  "prepaid
telephone calling arrangements" means that term as defined in
Section 2-27 of the Retailers' Occupation Tax Act.
(Source: P.A. 92-526, eff. 7-1-02; 92-878, eff. 1-1-04.)

    (35 ILCS 636/5-10)
    Sec.  5-10.  Authority.  The corporate authorities of any
municipality in this  State  may  tax  any  and  all  of  the
following acts or privileges:
    (a)  The   act   or  privilege  of  originating  in  such
municipality or receiving  in  such  municipality  intrastate
telecommunications   by   a   person.   To   prevent   actual
multi-municipal  taxation  of  the  act  or privilege that is
subject to taxation under this subsection, any taxpayer, upon
proof  that  the  taxpayer  has  paid  a   tax   in   another
municipality on that event, shall be allowed a credit against
any  tax enacted pursuant to or authorized by this Section to
the extent of the amount of the tax properly due and paid  in
the  municipality that was not previously allowed as a credit
against any other municipal tax. However,  such  tax  is  not
imposed  on  such  act or privilege to the extent such act or
privilege may not, under the Constitution and statutes of the
United  States,  be  made  the   subject   of   taxation   by
municipalities in this State.
    (b)  The   act   or  privilege  of  originating  in  such
municipality or receiving  in  such  municipality  interstate
telecommunications by a person. To prevent actual multi-state
or  multi-municipal  taxation of the act or privilege that is
subject to taxation under this subsection, any taxpayer, upon
proof that the taxpayer has paid a tax in  another  state  or
municipality  in this State on such event, shall be allowed a
credit against any tax enacted pursuant to or  authorized  by
this Section to the extent of the amount of such tax properly
due and paid in such other state or such tax properly due and
paid in a municipality in this State which was not previously
allowed  as  a credit against any other state or local tax in
this State.  However, such tax is not imposed on the  act  or
privilege  to the extent such act or privilege may not, under
the Constitution and statutes of the United States,  be  made
the subject of taxation by municipalities in this State.
(Source: P.A. 92-526, eff. 7-1-02.)

    (35 ILCS 636/5-20)
    Sec. 5-20. Imposition.
    (a)  On  and  after  January  1, 2003, for municipalities
with populations of less than 500,000, the tax authorized  by
this  Act  shall  be  imposed (except as provided in Sections
5-25 and 5-30 of  this  Act),  amended,  or  repealed  by  an
ordinance  adopted by the municipality, which ordinance shall
be filed by the municipality with the Department pursuant  to
the rules of the Department.
         (1)  Any  ordinance adopted by a municipality with a
    population of less than 500,000 which attempts to impose,
    amend or repeal the tax authorized by this Act  shall  be
    of  no  force  and  effect  until  properly filed with an
    appropriate form with the Department.
         (2)  Any certified copy of an  ordinance  (i)  filed
    with  the  Department  prior  to October 1, 2002 shall be
    effective  with  respect  to  gross  charges  billed   by
    telecommunications  retailers on or after January 1, 2003
    and (ii) thereafter any certified copy  of  an  ordinance
    filed with the Department on or after October 1, 2002 and
    before  April  1,  2003 prior to any April 1 or October 1
    shall be effective with respect to gross  charges  billed
    by telecommunications retailers on or after the following
    July  1,  2003  or  January 1, respectively. On and after
    April 1, 2003, any certified copy of an  ordinance  filed
    with the Department on or before September 20 or March 20
    shall  be  effective with respect to gross charges billed
    by telecommunications retailers on or after the following
    January 1 or  July  1,  respectively.  If  the  certified
    ordinance  is  filed  with  the  Department  on or before
    September 20, the Department shall determine  by  October
    10  whether  the  ordinance meets the criteria under this
    Act.  If  the  certified  ordinance  is  filed  with  the
    Department on or before March 20,  the  Department  shall
    determine  by  April  10  whether the ordinance meets the
    criteria under this  Act.  If  the  ordinance  meets  the
    criteria,     the    Department    shall    notify    the
    telecommunications  retailers  via  a  posting   on   the
    Department's  web site that the ordinance is approved and
    shall list  the  rate.  For  ordinances  filed  with  the
    Department  on  or before September 20, notification must
    be made no later than October 10.  For  ordinances  filed
    with  the  Department on or before March 20, notification
    must be made no later than April 10.
    (b)  On and after January  1,  2003,  for  municipalities
with  populations  of  500,000 or more, the tax authorized by
this Act shall be imposed,  amended,  or  repealed,  and  any
authorized   exemptions   granted,  by  the  adoption  of  an
ordinance  and   notification   to   the   telecommunications
retailers.
(Source: P.A. 92-526, eff. 7-1-02.)

    Section  95.   No  acceleration or delay.  Where this Act
makes changes in a statute that is represented in this Act by
text that is not yet or no longer in effect (for  example,  a
Section  represented  by  multiple versions), the use of that
text does not accelerate or delay the taking  effect  of  (i)
the  changes made by this Act or (ii) provisions derived from
any other Public Act.

    Section 99.  Effective date.  This Act  takes  effect  on
January  1, 2004, except that this Section and the changes to
Sections  5-10  and  5-20   of   the   Simplified   Municipal
Telecommunications Tax Act take effect upon becoming law.