100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB3522

 

Introduced , by Rep. Robert Martwick

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Income Tax Act. Provides that, for taxable years beginning on or after January 1, 2018, the rate of tax for individuals, trusts, and estates shall be: (1) 4% of the portion of the taxpayer's net income from $0 to $7,500; (2) 5.84% of the portion of the taxpayer's net income exceeding $7,500 but not exceeding $15,000; (3) 6.27% of the portion of the taxpayer's net income exceeding $15,000 but not exceeding $225,000; and (4) 7.65% of the portion of the taxpayer's net income exceeding $225,000. Amends the State Finance Act. Creates the Education Property Tax Relief Fund. Provides that moneys in the Fund shall be distributed to school districts, and sets forth the distribution formula. Provides that transfers from the Tobacco Settlement Recovery Fund to the Budget Stabilization Fund shall cease upon the first transfer of moneys into the Budget Stabilization Fund under the provisions of the amendatory Act. Amends the Budget Stabilization Act. Provides for minimum funding levels to be maintained in the Budget Stabilization Fund and for the transfer of specified amounts to the Budget Stabilization Fund if minimum funding levels are not maintained. Makes other changes. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning on January 1, 2018, the rate of tax shall be 5.75% (currently, 6.25%). Amends various Acts to make conforming changes. Amends the Aircraft Use Tax Law and the Watercraft Use Tax Law. Provides that the rate of tax under those Act shall be 5.75% (currently, 6.25%). Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3522LRB100 05678 HLH 21814 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Fiscally Responsible Illinois Entering New Days and Leaving
6Yesterday (FRIENDLY) Act.
 
7    Section 3. Intent. The General Assembly finds that Illinois
8has operated with structural budget deficits for years, failing
9to secure the revenue necessary to pay for the services that
10are essential to its residents. The State possesses one of the
11highest unfunded pension liabilities among the United States.
12Illinois' unfunded pension liability will continue to grow and
13consume more of the State's general revenues over the life of
14the funding plan. The Illinois Supreme Court recently and
15unequivocally decided that the only guaranteed solution to
16reduce the pension liability is to properly fund the retirement
17systems.
18    The State's individual income tax rate is currently the
19eighth lowest in the country and State spending ranks almost
20last in terms of percentage of education dollars coming from
21the State. Additionally, Illinois' school funding formula is
22the most regressive in the nation and allocates dollars in an
23inequitable manner. Section 1 of Article X of the Illinois

 

 

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1Constitution provides that the "State has the primary
2responsibility for financing the system of public education".
3Yet Illinois provides for only 26% of education spending.
4    Underfunding education has meant diminished resources in
5the classroom and higher property taxes as many communities try
6to make up the shortfall using local funds. The Illinois School
7Funding Reform Commission recently concluded that Illinois
8needs to increase K-12 State education funding by at least
9$3,500,000,000 to meet adequacy, and at least another
10$2,500,000,000 beyond that to become the primary financier of
11K-12 education. With regard to State funding for higher
12education, Illinois ranks second to last among the states when
13comparing current funding to pre-recession levels, having cut
1454% from 2008 to 2016.
15    According to a 2011 Kaiser Family Foundation report,
16Illinois is ranked 49th in Medicaid spending per enrollee.
17While 45.5% of children are enrolled and 20% of the overall
18population of the State is enrolled in Medicaid, Illinois has
19historically been extremely inefficient at capturing federal
20dollars and consistently ranks at or near the bottom in terms
21of bringing in additional federal dollars into the State.
22Illinois ranks as one of the lowest spending states in the
23nation whether considered on a per capita basis or as a share
24of State Gross Domestic Product (GDP).
25    The unfunded liability in pension plans, outstanding debt,
26and the growing backlog of unpaid bills together totals

 

 

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1$232,000,000,000 of total outstanding debt. The State can no
2longer put off addressing its pension debt, and it should not
3make further cuts to human services. The State must invest more
4into the education of its children. The problems start and end
5with the State's dire finances, and as such, the only path
6forward must begin with a restructuring of the way the State
7raises and expends revenue. A restructured financial system
8could secure the present operation of the government and
9provide a path forward towards a State that invests in
10education, provides for our most vulnerable, pays off debts,
11has an economic environment that attracts business, and has a
12reasonable level of taxation.
13    Illinois has the fifth largest economy in the United States
14and a workforce of more than 6.6 million people, the fifth
15largest labor force in the United States. The State should make
16availability of services and reduction of debt liabilities a
17priority.
18    Therefore, Illinois must address its financial problems
19immediately if it is to avoid leaving a bigger problem for
20future generations. It must correct the current financial
21crisis in order to restore basic services and care for its most
22vulnerable citizens.
 
23    Section 5. The Department of Commerce and Economic
24Opportunity Law of the Civil Administrative Code of Illinois is
25amended by changing Section 605-332 as follows:
 

 

 

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1    (20 ILCS 605/605-332)
2    Sec. 605-332. Financial assistance to energy generation
3facilities.
4    (a) As used in this Section:
5    "New electric generating facility" means a
6newly-constructed electric generation plant or a newly
7constructed generation capacity expansion at an existing
8facility, including the transmission lines and associated
9equipment that transfers electricity from points of supply to
10points of delivery, and for which foundation construction
11commenced not sooner than July 1, 2001, which is designed to
12provide baseload electric generation operating on a continuous
13basis throughout the year and:
14        (1) has an aggregate rated generating capacity of at
15    least 400 megawatts for all new units at one site, uses
16    coal or gases derived from coal as its primary fuel source,
17    and supports the creation of at least 150 new Illinois coal
18    mining jobs; or
19        (2) is funded through a federal Department of Energy
20    grant before December 31, 2010 and supports the creation of
21    Illinois coal-mining jobs; or
22        (3) uses coal gasification or integrated
23    gasification-combined cycle units that generate
24    electricity or chemicals, or both, and supports the
25    creation of Illinois coal-mining jobs.

 

 

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1    "New gasification facility" means a newly constructed coal
2gasification facility that generates chemical feedstocks or
3transportation fuels derived from coal (which may include, but
4are not limited to, methane, methanol, and nitrogen
5fertilizer), that supports the creation or retention of
6Illinois coal-mining jobs, and that qualifies for financial
7assistance from the Department before December 31, 2010. A new
8gasification facility does not include a pilot project located
9within Jefferson County or within a county adjacent to
10Jefferson County for synthetic natural gas from coal.
11    "New facility" means a new electric generating facility or
12a new gasification facility. A new facility does not include a
13pilot project located within Jefferson County or within a
14county adjacent to Jefferson County for synthetic natural gas
15from coal.
16    "Eligible business" means an entity that proposes to
17construct a new facility and that has applied to the Department
18to receive financial assistance pursuant to this Section. With
19respect to use and occupation taxes, wherever there is a
20reference to taxes, that reference means only those taxes paid
21on Illinois-mined coal used in a new facility.
22    "Department" means the Illinois Department of Commerce and
23Economic Opportunity.
24    (b) The Department is authorized to provide financial
25assistance to eligible businesses for new facilities from funds
26appropriated by the General Assembly as further provided in

 

 

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1this Section.
2    An eligible business seeking qualification for financial
3assistance for a new facility, for purposes of this Section
4only, shall apply to the Department in the manner specified by
5the Department. Any projections provided by an eligible
6business as part of the application shall be independently
7verified in a manner as set forth by the Department. An
8application shall include, but not be limited to:
9        (1) the projected or actual completion date of the new
10    facility for which financial assistance is sought;
11        (2) copies of documentation deemed acceptable by the
12    Department establishing either (i) the total State
13    occupation and use taxes paid on Illinois-mined coal used
14    at the new facility for a minimum of 4 preceding calendar
15    quarters or (ii) the projected amount of State occupation
16    and use taxes paid on Illinois-mined coal used at the new
17    facility in 4 calendar year quarters after completion of
18    the new facility. Bond proceeds subject to this Section
19    shall not be allocated to an eligible business until the
20    eligible business has demonstrated the revenue stream
21    sufficient to service the debt on the bonds; and
22        (3) the actual or projected amount of capital
23    investment by the eligible business in the new facility.
24    The Department shall determine the maximum amount of
25financial assistance for eligible businesses in accordance
26with this paragraph. The Department shall not provide financial

 

 

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1assistance from general obligation bond funds to any eligible
2business unless it receives a written certification from the
3Director of the Bureau of the Budget (now Governor's Office of
4Management and Budget) that 80% of the State occupation and use
5tax receipts for a minimum of the preceding 4 calendar quarters
6for all eligible businesses or as included in projections on
7approved applications by eligible businesses equal or exceed
8110% of the maximum annual debt service required with respect
9to general obligation bonds issued for that purpose. The
10Department may provide financial assistance not to exceed the
11amount of State general obligation debt calculated as above,
12the amount of actual or projected capital investment in the
13facility, or $100,000,000, whichever is less. Financial
14assistance received pursuant to this Section may be used for
15capital facilities consisting of buildings, structures,
16durable equipment, and land at the new facility. Subject to the
17provisions of the agreement covering the financial assistance,
18a portion of the financial assistance may be required to be
19repaid to the State if certain conditions for the governmental
20purpose of the assistance were not met.
21    An eligible business shall file a monthly report with the
22Illinois Department of Revenue stating the amount of
23Illinois-mined coal purchased during the previous month for use
24in the new facility, the purchase price of that coal, the
25amount of State occupation and use taxes paid on that purchase
26to the seller of the Illinois-mined coal, and such other

 

 

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1information as that Department may reasonably require. In sales
2of Illinois-mined coal between related parties, the purchase
3price of the coal must have been determined in an arm's-length
4transaction. The report shall be filed with the Illinois
5Department of Revenue on or before the 20th day of each month
6on a form provided by that Department. However, no report need
7be filed by an eligible business in a month when it made no
8reportable purchases of coal in the previous month. The
9Illinois Department of Revenue shall provide a summary of such
10reports to the Governor's Office of Management and Budget.
11    Upon granting financial assistance to an eligible
12business, the Department shall certify the name of the eligible
13business to the Illinois Department of Revenue. Beginning with
14the receipt of the first report of State occupation and use
15taxes paid by an eligible business and continuing for a 25-year
16period, the Illinois Department of Revenue shall each month pay
17into the Energy Infrastructure Fund the following amounts: (1)
18until January 1, 2018, 80% of the net revenue realized from the
196.25% general rate on the selling price of Illinois-mined coal
20that was sold to an eligible business; and (2) on and after
21January 1, 2018, 86.96% of the net revenue realized from the
22general rate on the selling price of Illinois-mined coal that
23was sold to an eligible business.
24(Source: P.A. 98-463, eff. 8-16-13.)
 
25    Section 10. The State Finance Act is amended by changing

 

 

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1Sections 6z-18, 6z-20, 6z-43, and 6z-51 and by adding Section
26z-102 as follows:
 
3    (30 ILCS 105/6z-18)  (from Ch. 127, par. 142z-18)
4    Sec. 6z-18. A portion of the money paid into the Local
5Government Tax Fund from sales of food for human consumption
6which is to be consumed off the premises where it is sold
7(other than alcoholic beverages, soft drinks and food which has
8been prepared for immediate consumption) and prescription and
9nonprescription medicines, drugs, medical appliances and
10insulin, urine testing materials, syringes and needles used by
11diabetics, which occurred in municipalities, shall be
12distributed to each municipality based upon the sales which
13occurred in that municipality. The remainder shall be
14distributed to each county based upon the sales which occurred
15in the unincorporated area of that county.
16    A portion of the money paid into the Local Government Tax
17Fund from the 6.25% general use tax rate on the selling price
18of tangible personal property which is purchased outside
19Illinois at retail from a retailer and which is titled or
20registered by any agency of this State's government shall be
21distributed to municipalities as provided in this paragraph.
22Each municipality shall receive the amount attributable to
23sales for which Illinois addresses for titling or registration
24purposes are given as being in such municipality. The remainder
25of the money paid into the Local Government Tax Fund from such

 

 

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1sales shall be distributed to counties. Each county shall
2receive the amount attributable to sales for which Illinois
3addresses for titling or registration purposes are given as
4being located in the unincorporated area of such county.
5    A portion of the money paid into the Local Government Tax
6Fund from the 6.25% general rate (and, beginning July 1, 2000
7and through December 31, 2000, the 1.25% rate on motor fuel and
8gasohol, and beginning on August 6, 2010 through August 15,
92010, the 1.25% rate on sales tax holiday items) on sales
10subject to taxation under the Retailers' Occupation Tax Act and
11the Service Occupation Tax Act, which occurred in
12municipalities, shall be distributed to each municipality,
13based upon the sales which occurred in that municipality. The
14remainder shall be distributed to each county, based upon the
15sales which occurred in the unincorporated area of such county.
16    For the purpose of determining allocation to the local
17government unit, a retail sale by a producer of coal or other
18mineral mined in Illinois is a sale at retail at the place
19where the coal or other mineral mined in Illinois is extracted
20from the earth. This paragraph does not apply to coal or other
21mineral when it is delivered or shipped by the seller to the
22purchaser at a point outside Illinois so that the sale is
23exempt under the United States Constitution as a sale in
24interstate or foreign commerce.
25    Whenever the Department determines that a refund of money
26paid into the Local Government Tax Fund should be made to a

 

 

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1claimant instead of issuing a credit memorandum, the Department
2shall notify the State Comptroller, who shall cause the order
3to be drawn for the amount specified, and to the person named,
4in such notification from the Department. Such refund shall be
5paid by the State Treasurer out of the Local Government Tax
6Fund.
7    As soon as possible after the first day of each month,
8beginning January 1, 2011, upon certification of the Department
9of Revenue, the Comptroller shall order transferred, and the
10Treasurer shall transfer, to the STAR Bonds Revenue Fund the
11local sales tax increment, as defined in the Innovation
12Development and Economy Act, collected during the second
13preceding calendar month for sales within a STAR bond district
14and deposited into the Local Government Tax Fund, less 3% of
15that amount, which shall be transferred into the Tax Compliance
16and Administration Fund and shall be used by the Department,
17subject to appropriation, to cover the costs of the Department
18in administering the Innovation Development and Economy Act.
19    After the monthly transfer to the STAR Bonds Revenue Fund,
20on or before the 25th day of each calendar month, the
21Department shall prepare and certify to the Comptroller the
22disbursement of stated sums of money to named municipalities
23and counties, the municipalities and counties to be those
24entitled to distribution of taxes or penalties paid to the
25Department during the second preceding calendar month. The
26amount to be paid to each municipality or county shall be the

 

 

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1amount (not including credit memoranda) collected during the
2second preceding calendar month by the Department and paid into
3the Local Government Tax Fund, plus an amount the Department
4determines is necessary to offset any amounts which were
5erroneously paid to a different taxing body, and not including
6an amount equal to the amount of refunds made during the second
7preceding calendar month by the Department, and not including
8any amount which the Department determines is necessary to
9offset any amounts which are payable to a different taxing body
10but were erroneously paid to the municipality or county, and
11not including any amounts that are transferred to the STAR
12Bonds Revenue Fund. Within 10 days after receipt, by the
13Comptroller, of the disbursement certification to the
14municipalities and counties, provided for in this Section to be
15given to the Comptroller by the Department, the Comptroller
16shall cause the orders to be drawn for the respective amounts
17in accordance with the directions contained in such
18certification.
19    When certifying the amount of monthly disbursement to a
20municipality or county under this Section, the Department shall
21increase or decrease that amount by an amount necessary to
22offset any misallocation of previous disbursements. The offset
23amount shall be the amount erroneously disbursed within the 6
24months preceding the time a misallocation is discovered.
25    The provisions directing the distributions from the
26special fund in the State Treasury provided for in this Section

 

 

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1shall constitute an irrevocable and continuing appropriation
2of all amounts as provided herein. The State Treasurer and
3State Comptroller are hereby authorized to make distributions
4as provided in this Section.
5    In construing any development, redevelopment, annexation,
6preannexation or other lawful agreement in effect prior to
7September 1, 1990, which describes or refers to receipts from a
8county or municipal retailers' occupation tax, use tax or
9service occupation tax which now cannot be imposed, such
10description or reference shall be deemed to include the
11replacement revenue for such abolished taxes, distributed from
12the Local Government Tax Fund.
13    As soon as possible after the effective date of this
14amendatory Act of the 98th General Assembly, the State
15Comptroller shall order and the State Treasurer shall transfer
16$6,600,000 from the Local Government Tax Fund to the Illinois
17State Medical Disciplinary Fund.
18(Source: P.A. 97-333, eff. 8-12-11; 98-3, eff. 3-8-13.)
 
19    (30 ILCS 105/6z-20)  (from Ch. 127, par. 142z-20)
20    Sec. 6z-20. Of the money received from the 6.25% general
21rate (and, beginning July 1, 2000 and through December 31,
222000, the 1.25% rate on motor fuel and gasohol, and beginning
23on August 6, 2010 through August 15, 2010, the 1.25% rate on
24sales tax holiday items) on sales subject to taxation under the
25Retailers' Occupation Tax Act and Service Occupation Tax Act

 

 

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1and paid into the County and Mass Transit District Fund,
2distribution to the Regional Transportation Authority tax
3fund, created pursuant to Section 4.03 of the Regional
4Transportation Authority Act, for deposit therein shall be made
5based upon the retail sales occurring in a county having more
6than 3,000,000 inhabitants. The remainder shall be distributed
7to each county having 3,000,000 or fewer inhabitants based upon
8the retail sales occurring in each such county.
9    For the purpose of determining allocation to the local
10government unit, a retail sale by a producer of coal or other
11mineral mined in Illinois is a sale at retail at the place
12where the coal or other mineral mined in Illinois is extracted
13from the earth. This paragraph does not apply to coal or other
14mineral when it is delivered or shipped by the seller to the
15purchaser at a point outside Illinois so that the sale is
16exempt under the United States Constitution as a sale in
17interstate or foreign commerce.
18    Of the money received from the 6.25% general use tax rate
19on tangible personal property which is purchased outside
20Illinois at retail from a retailer and which is titled or
21registered by any agency of this State's government and paid
22into the County and Mass Transit District Fund, the amount for
23which Illinois addresses for titling or registration purposes
24are given as being in each county having more than 3,000,000
25inhabitants shall be distributed into the Regional
26Transportation Authority tax fund, created pursuant to Section

 

 

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14.03 of the Regional Transportation Authority Act. The
2remainder of the money paid from such sales shall be
3distributed to each county based on sales for which Illinois
4addresses for titling or registration purposes are given as
5being located in the county. Any money paid into the Regional
6Transportation Authority Occupation and Use Tax Replacement
7Fund from the County and Mass Transit District Fund prior to
8January 14, 1991, which has not been paid to the Authority
9prior to that date, shall be transferred to the Regional
10Transportation Authority tax fund.
11    Whenever the Department determines that a refund of money
12paid into the County and Mass Transit District Fund should be
13made to a claimant instead of issuing a credit memorandum, the
14Department shall notify the State Comptroller, who shall cause
15the order to be drawn for the amount specified, and to the
16person named, in such notification from the Department. Such
17refund shall be paid by the State Treasurer out of the County
18and Mass Transit District Fund.
19    As soon as possible after the first day of each month,
20beginning January 1, 2011, upon certification of the Department
21of Revenue, the Comptroller shall order transferred, and the
22Treasurer shall transfer, to the STAR Bonds Revenue Fund the
23local sales tax increment, as defined in the Innovation
24Development and Economy Act, collected during the second
25preceding calendar month for sales within a STAR bond district
26and deposited into the County and Mass Transit District Fund,

 

 

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1less 3% of that amount, which shall be transferred into the Tax
2Compliance and Administration Fund and shall be used by the
3Department, subject to appropriation, to cover the costs of the
4Department in administering the Innovation Development and
5Economy Act.
6    After the monthly transfer to the STAR Bonds Revenue Fund,
7on or before the 25th day of each calendar month, the
8Department shall prepare and certify to the Comptroller the
9disbursement of stated sums of money to the Regional
10Transportation Authority and to named counties, the counties to
11be those entitled to distribution, as hereinabove provided, of
12taxes or penalties paid to the Department during the second
13preceding calendar month. The amount to be paid to the Regional
14Transportation Authority and each county having 3,000,000 or
15fewer inhabitants shall be the amount (not including credit
16memoranda) collected during the second preceding calendar
17month by the Department and paid into the County and Mass
18Transit District Fund, plus an amount the Department determines
19is necessary to offset any amounts which were erroneously paid
20to a different taxing body, and not including an amount equal
21to the amount of refunds made during the second preceding
22calendar month by the Department, and not including any amount
23which the Department determines is necessary to offset any
24amounts which were payable to a different taxing body but were
25erroneously paid to the Regional Transportation Authority or
26county, and not including any amounts that are transferred to

 

 

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1the STAR Bonds Revenue Fund. Within 10 days after receipt, by
2the Comptroller, of the disbursement certification to the
3Regional Transportation Authority and counties, provided for
4in this Section to be given to the Comptroller by the
5Department, the Comptroller shall cause the orders to be drawn
6for the respective amounts in accordance with the directions
7contained in such certification.
8    When certifying the amount of a monthly disbursement to the
9Regional Transportation Authority or to a county under this
10Section, the Department shall increase or decrease that amount
11by an amount necessary to offset any misallocation of previous
12disbursements. The offset amount shall be the amount
13erroneously disbursed within the 6 months preceding the time a
14misallocation is discovered.
15    The provisions directing the distributions from the
16special fund in the State Treasury provided for in this Section
17and from the Regional Transportation Authority tax fund created
18by Section 4.03 of the Regional Transportation Authority Act
19shall constitute an irrevocable and continuing appropriation
20of all amounts as provided herein. The State Treasurer and
21State Comptroller are hereby authorized to make distributions
22as provided in this Section.
23    In construing any development, redevelopment, annexation,
24preannexation or other lawful agreement in effect prior to
25September 1, 1990, which describes or refers to receipts from a
26county or municipal retailers' occupation tax, use tax or

 

 

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1service occupation tax which now cannot be imposed, such
2description or reference shall be deemed to include the
3replacement revenue for such abolished taxes, distributed from
4the County and Mass Transit District Fund or Local Government
5Distributive Fund, as the case may be.
6(Source: P.A. 96-939, eff. 6-24-10; 96-1012, eff. 7-7-10;
797-333, eff. 8-12-11.)
 
8    (30 ILCS 105/6z-43)
9    Sec. 6z-43. Tobacco Settlement Recovery Fund.
10    (a) There is created in the State Treasury a special fund
11to be known as the Tobacco Settlement Recovery Fund, which
12shall contain 3 accounts: (i) the General Account, (ii) the
13Tobacco Settlement Bond Proceeds Account and (iii) the Tobacco
14Settlement Residual Account. There shall be deposited into the
15several accounts of the Tobacco Settlement Recovery Fund and
16the Attorney General Tobacco Fund all monies paid to the State
17pursuant to (1) the Master Settlement Agreement entered in the
18case of People of the State of Illinois v. Philip Morris, et
19al. (Circuit Court of Cook County, No. 96-L13146) and (2) any
20settlement with or judgment against any tobacco product
21manufacturer other than one participating in the Master
22Settlement Agreement in satisfaction of any released claim as
23defined in the Master Settlement Agreement, as well as any
24other monies as provided by law. Moneys shall be deposited into
25the Tobacco Settlement Bond Proceeds Account and the Tobacco

 

 

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1Settlement Residual Account as provided by the terms of the
2Railsplitter Tobacco Settlement Authority Act, provided that
3an annual amount not less than $2,500,000, subject to
4appropriation, shall be deposited into the Attorney General
5Tobacco Fund for use only by the Attorney General's office. The
6scheduled $2,500,000 deposit into the Tobacco Settlement
7Residual Account for fiscal year 2011 should be transferred to
8the Attorney General Tobacco Fund in fiscal year 2012 as soon
9as this fund has been established. All other moneys available
10to be deposited into the Tobacco Settlement Recovery Fund shall
11be deposited into the General Account. An investment made from
12moneys credited to a specific account constitutes part of that
13account and such account shall be credited with all income from
14the investment of such moneys. The Treasurer may invest the
15moneys in the several accounts the Fund in the same manner, in
16the same types of investments, and subject to the same
17limitations provided in the Illinois Pension Code for the
18investment of pension funds other than those established under
19Article 3 or 4 of the Code. Notwithstanding the foregoing, to
20the extent necessary to preserve the tax-exempt status of any
21bonds issued pursuant to the Railsplitter Tobacco Settlement
22Authority Act, the interest on which is intended to be
23excludable from the gross income of the owners for federal
24income tax purposes, moneys on deposit in the Tobacco
25Settlement Bond Proceeds Account and the Tobacco Settlement
26Residual Account may be invested in obligations the interest

 

 

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1upon which is tax-exempt under the provisions of Section 103 of
2the Internal Revenue Code of 1986, as now or hereafter amended,
3or any successor code or provision.
4    (b) Moneys on deposit in the Tobacco Settlement Bond
5Proceeds Account and the Tobacco Settlement Residual Account
6may be expended, subject to appropriation, for the purposes
7authorized in subsection (g) of Section 3-6 of the Railsplitter
8Tobacco Settlement Authority Act.
9    (c) As soon as may be practical after June 30, 2001 and
10until an initial transfer has been made to the Budget
11Stabilization Fund under subsection (b) of Section 15 of the
12Budget Stabilization Act as amended by this amendatory Act of
13the 100th General Assembly, upon notification from and at the
14direction of the Governor, the State Comptroller shall direct
15and the State Treasurer shall transfer the unencumbered balance
16in the Tobacco Settlement Recovery Fund as of June 30, 2001, as
17determined by the Governor, into the Budget Stabilization Fund.
18The Treasurer may invest the moneys in the Budget Stabilization
19Fund in the same manner, in the same types of investments, and
20subject to the same limitations provided in the Illinois
21Pension Code for the investment of pension funds other than
22those established under Article 3 or 4 of the Code.
23    (d) All federal financial participation moneys received
24pursuant to expenditures from the Fund shall be deposited into
25the General Account.
26(Source: P.A. 99-78, eff. 7-20-15.)
 

 

 

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1    (30 ILCS 105/6z-51)
2    Sec. 6z-51. Budget Stabilization Fund.
3    (a) The Budget Stabilization Fund, a special fund in the
4State Treasury, shall consist of moneys appropriated or
5transferred to that Fund, as provided in Section 6z-43 and as
6otherwise provided by law. All earnings on Budget Stabilization
7Fund investments shall be deposited into that Fund.
8    (b) Until an initial transfer has been made to the Budget
9Stabilization Fund under subsection (b) of Section 15 of the
10Budget Stabilization Act as amended by this amendatory Act of
11the 100th General Assembly, the The State Comptroller may
12direct the State Treasurer to transfer moneys from the Budget
13Stabilization Fund to the General Revenue Fund in order to meet
14cash flow deficits resulting from timing variations between
15disbursements and the receipt of funds within a fiscal year.
16Any moneys so borrowed in any fiscal year other than Fiscal
17Year 2011 shall be repaid by June 30 of the fiscal year in
18which they were borrowed. Any moneys so borrowed in Fiscal Year
192011 shall be repaid no later than July 15, 2011.
20    (c) During Fiscal Year 2017 only, amounts may be expended
21from the Budget Stabilization Fund only pursuant to specific
22authorization by appropriation. Any moneys expended pursuant
23to appropriation shall not be subject to repayment.
24(Source: P.A. 99-523, eff. 6-30-16.)
 

 

 

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1    (30 ILCS 105/6z-102 new)
2    Sec. 6z-102. The Education Property Tax Relief Fund.
3    (a) The Education Property Tax Relief Fund is hereby
4created as a special fund in the State treasury. The moneys
5deposited into the Fund shall be distributed in accordance with
6this Section.
7    (b) Any school district that reduces its operational
8property tax levy for the 2019-2020 school year in relation to
9the district's operational property tax levy for the 2018-2019
10school year is eligible to receive a distribution from the
11Fund, provided that the school district submits an application
12to the Department of Revenue stating the school district's
13operational property tax levy for the 2018-2019 school year and
14the school district's operational property tax levy for the
152019-2020 school year. For the purposes of this Section,
16"operational property tax levy" means the district's aggregate
17property tax levy, less amounts levied for the repayment of
18debt instruments having a repayment term of longer than 24
19months. The Department of Revenue shall develop an application
20for school districts to assist in administering this Section.
21The Director of Revenue shall certify those amounts to the
22State Comptroller.
23    (c) The amount of funds an eligible school district shall
24receive from the Fund is a fraction of the Fund's balance as of
25July 1, 2019, where the numerator is the difference between the
26school district's operational property tax levy for the

 

 

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12019-2020 school year compared to the school district's
2operational property tax levy for the 2018-2019 school year and
3the denominator is the difference between all eligible school
4districts' operational property tax levies for the 2019-2020
5school year compared with the operational property tax levies
6for all eligible school districts for the 2018-2019 school
7year. In no case shall a school district receive more funds
8than the difference between the school district's operational
9property tax levy for the 2018-2019 school year and the school
10district's operational property tax levy for the 2019-2020
11school year.
12    (d) On or prior to August 1, 2019, the amounts determined
13in paragraph (c) of this subsection shall be distributed to
14each eligible school district upon warrant of the Comptroller.
15Any moneys remaining in the Education Property Tax Relief Fund
16after the payment of all claims has been made shall be
17transferred to the Common School Fund.
 
18    Section 12. The Budget Stabilization Act is amended by
19changing Section 15 as follows:
 
20    (30 ILCS 122/15)
21    Sec. 15. Transfers to Budget Stabilization Fund. In
22furtherance of the State's objective for the Budget
23Stabilization Fund to have resources representing 5% of the
24State's annual general funds revenues:

 

 

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1    (a) On January 10, 2018 and each January 10 thereafter, the
2Department on Aging, the Department of Healthcare and Family
3Services, and the Department of Human Services shall certify to
4the Comptroller the amount of invoices that may be paid from
5appropriations in future fiscal years resulting from
6insufficient appropriations in the current fiscal year. In
7addition, the Department of Central Management Services shall
8certify the amount of invoices that may be paid from
9appropriations in future fiscal years due to insufficient
10resources in the Health Insurance Reserve Fund, and the
11Department of Revenue shall certify an estimate of the amount
12of individual and corporate income tax overpayments that will
13not be refunded before the close of the current fiscal year
14resulting from insufficient deposits into the Income Tax Refund
15Fund. On January 15, 2018 and each January 15 thereafter, the
16Comptroller shall issue a report to the Governor and the
17General Assembly detailing the total value of the amounts
18certified by the Department on Aging and the Departments of
19Central Management Services, Healthcare and Family Services,
20Human Services, and Revenue. The report shall also include the
21accounts payable with the Comptroller at the close of business
22on December 31, 2017 and each December 31 thereafter. For each
23fiscal year when the General Assembly's appropriations and
24transfers or diversions as required by law from general funds
25do not exceed 99% of the estimated general funds revenues
26pursuant to subsection (a) of Section 10, the Comptroller shall

 

 

HB3522- 25 -LRB100 05678 HLH 21814 b

1transfer from the General Revenue Fund as provided by this
2Section a total amount equal to 0.5% of the estimated general
3funds revenues to the Budget Stabilization Fund.
4    (b) If the amount of accounts payable reported by the
5Comptroller is an amount less than $3,500,000,000, then, on the
6last day of each month of the next fiscal year or as soon
7thereafter as possible, the Comptroller shall order
8transferred and the Treasurer shall transfer from the General
9Revenue Fund to the Budget Stabilization Fund the lesser of (i)
10$400,000,000 or (ii) the amount necessary to maintain resources
11in the Budget Stabilization Fund that is equal to 5% of the
12total general funds revenues of the prior fiscal year, in equal
13monthly installments. Nothing in this Act prohibits the General
14Assembly from appropriating additional moneys into the Budget
15Stabilization Fund; however, transfers or appropriations shall
16only be made from the Budget Stabilization Fund under
17subsection (d) of this Section. For each fiscal year when the
18General Assembly's appropriations and transfers or diversions
19as required by law from general funds do not exceed 98% of the
20estimated general funds revenues pursuant to subsection (b) of
21Section 10, the Comptroller shall transfer from the General
22Revenue Fund as provided by this Section a total amount equal
23to 1% of the estimated general funds revenues to the Budget
24Stabilization Fund.
25    (c) The Comptroller shall transfer 1/12 of the total amount
26to be transferred each fiscal year under this Section into the

 

 

HB3522- 26 -LRB100 05678 HLH 21814 b

1Budget Stabilization Fund on the first day of each month of
2that fiscal year or as soon thereafter as possible. The balance
3of the Budget Stabilization Fund shall not exceed 5% of the
4total of general funds revenues estimated for that fiscal year.
5If the balance of the Budget Stabilization Fund is equal to 5%
6of the total general funds revenues of the prior fiscal year,
7no further transfers shall be made to the Budget Stabilization
8Fund. However, if the amounts certified to the Comptroller that
9may be paid from future fiscal year resources by the Department
10on Aging and the Departments of Central Management Services,
11Healthcare and Family Services, Human Services, and Revenue
12exceed zero, the Comptroller shall order transferred and the
13Treasurer shall transfer from the General Revenue Fund to the
14Health Insurance Reserve Fund, the Health Care Provider Relief
15Fund, or the Income Tax Refund Fund an amount necessary to
16reduce those amounts to zero, but not to exceed a monthly
17aggregate of $33,333,333. except as provided by subsection (d)
18of this Section.
19    (d) Upon written notice from the Governor to the Clerk of
20the House of Representatives, the Secretary of the Senate, and
21the Secretary of State pursuant to Section 1.1 of the Short
22Term Borrowing Act, the Comptroller may cease the order of any
23further transfers to the Budget Stabilization Fund and may
24order the transfer and the Treasurer shall transfer from the
25Budget Stabilization Fund to the General Revenue Fund an amount
26deemed necessary to maintain the State's accounts payable to an

 

 

HB3522- 27 -LRB100 05678 HLH 21814 b

1amount below $3,500,000,000. In the event that such written
2notice has been provided, the General Assembly may make
3transfers or appropriations from the Budget Stabilization Fund
4as necessary to provide for the health, safety, and welfare of
5the people of the State of Illinois. If the balance of the
6Budget Stabilization Fund exceeds 5% of the total general funds
7revenues estimated for that fiscal year, the additional
8transfers are not required unless there are outstanding
9liabilities under Section 25 of the State Finance Act from
10prior fiscal years. If there are such outstanding Section 25
11liabilities, then the Comptroller shall continue to transfer
121/12 of the total amount identified for transfer to the Budget
13Stabilization Fund on the first day of each month of that
14fiscal year or as soon thereafter as possible to be reserved
15for those Section 25 liabilities. Nothing in this Act prohibits
16the General Assembly from appropriating additional moneys into
17the Budget Stabilization Fund.
18    (e) On or before August 31 of each fiscal year, the amount
19determined to be transferred to the Budget Stabilization Fund
20shall be reconciled to actual general funds revenues for that
21fiscal year. The final transfer for each fiscal year shall be
22adjusted so that the total amount transferred under this
23Section is equal to the amount percentage specified in
24subsection (a) or (b) of this Section, as applicable, based on
25actual general funds revenues calculated consistently with
26subsection (c) of Section 10 of this Act for each fiscal year.

 

 

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1    (f) For the fiscal year beginning July 1, 2006 and for each
2fiscal year thereafter, the budget proposal to the General
3Assembly shall identify liabilities incurred in a prior fiscal
4year under Section 25 of the State Finance Act and the budget
5proposal shall provide funding as allowable pursuant to
6subsection (d) of this Section, if applicable.
7(Source: P.A. 93-660, eff. 7-1-04; 94-839, eff. 6-6-06.)
 
8    Section 15. The Illinois Income Tax Act is amended by
9changing Sections 201 and 901 as follows:
 
10    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
11    Sec. 201. Tax Imposed.
12    (a) In general. A tax measured by net income is hereby
13imposed on every individual, corporation, trust and estate for
14each taxable year ending after July 31, 1969 on the privilege
15of earning or receiving income in or as a resident of this
16State. Such tax shall be in addition to all other occupation or
17privilege taxes imposed by this State or by any municipal
18corporation or political subdivision thereof.
19    (b) Rates. The tax imposed by subsection (a) of this
20Section shall be determined as follows, except as adjusted by
21subsection (d-1):
22        (1) In the case of an individual, trust or estate, for
23    taxable years ending prior to July 1, 1989, an amount equal
24    to 2 1/2% of the taxpayer's net income for the taxable

 

 

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1    year.
2        (2) In the case of an individual, trust or estate, for
3    taxable years beginning prior to July 1, 1989 and ending
4    after June 30, 1989, an amount equal to the sum of (i) 2
5    1/2% of the taxpayer's net income for the period prior to
6    July 1, 1989, as calculated under Section 202.3, and (ii)
7    3% of the taxpayer's net income for the period after June
8    30, 1989, as calculated under Section 202.3.
9        (3) In the case of an individual, trust or estate, for
10    taxable years beginning after June 30, 1989, and ending
11    prior to January 1, 2011, an amount equal to 3% of the
12    taxpayer's net income for the taxable year.
13        (4) In the case of an individual, trust, or estate, for
14    taxable years beginning prior to January 1, 2011, and
15    ending after December 31, 2010, an amount equal to the sum
16    of (i) 3% of the taxpayer's net income for the period prior
17    to January 1, 2011, as calculated under Section 202.5, and
18    (ii) 5% of the taxpayer's net income for the period after
19    December 31, 2010, as calculated under Section 202.5.
20        (5) In the case of an individual, trust, or estate, for
21    taxable years beginning on or after January 1, 2011, and
22    ending prior to January 1, 2015, an amount equal to 5% of
23    the taxpayer's net income for the taxable year.
24        (5.1) In the case of an individual, trust, or estate,
25    for taxable years beginning prior to January 1, 2015, and
26    ending after December 31, 2014, an amount equal to the sum

 

 

HB3522- 30 -LRB100 05678 HLH 21814 b

1    of (i) 5% of the taxpayer's net income for the period prior
2    to January 1, 2015, as calculated under Section 202.5, and
3    (ii) 3.75% of the taxpayer's net income for the period
4    after December 31, 2014, as calculated under Section 202.5.
5        (5.2) In the case of an individual, trust, or estate,
6    for taxable years beginning on or after January 1, 2015,
7    and ending prior to January 1, 2018 January 1, 2025, an
8    amount equal to 3.75% of the taxpayer's net income for the
9    taxable year.
10        (5.3) In the case of an individual, trust, or estate,
11    for taxable years beginning prior to January 1, 2018
12    January 1, 2025, and ending after December 31, 2017
13    December 31, 2024, an amount equal to the sum of (i) for
14    the period prior to January 1, 2018, 3.75% of the
15    taxpayer's net income, as calculated under Section 202.5;
16    and (ii) for the period after December 31, 2017, as
17    calculated under Section 202.5:
18            (A) 4% of the portion of the taxpayer's net income
19        from $0 to $7,500;
20            (B) 5.84% of the portion of the taxpayer's net
21        income exceeding $7,500 but not exceeding $15,000;
22            (C) 6.27% of the portion of the taxpayer's net
23        income exceeding $15,000 but not exceeding $225,000;
24        and
25            (D) 7.65% of the portion of the taxpayer's net
26        income exceeding $225,000.

 

 

HB3522- 31 -LRB100 05678 HLH 21814 b

1         3.75% of the taxpayer's net income for the period
2    prior to January 1, 2025, as calculated under Section
3    202.5, and (ii) 3.25% of the taxpayer's net income for the
4    period after December 31, 2024, as calculated under Section
5    202.5.
6        (5.4) In the case of an individual, trust, or estate,
7    for taxable years beginning on or after January 1, 2018,
8    the following amounts:
9            (A) 4% of the portion of the taxpayer's net income
10        from $0 to $7,500;
11            (B) 5.84% of the portion of the taxpayer's net
12        income exceeding $7,500 but not exceeding $15,000;
13            (C) 6.27% of the portion of the taxpayer's net
14        income exceeding $15,000 but not exceeding $225,000;
15        and
16            (D) 7.65% of the portion of the taxpayer's net
17        income exceeding $225,000. January 1, 2025, an amount
18        equal to 3.25% of the taxpayer's net income for the
19        taxable year.
20        (6) In the case of a corporation, for taxable years
21    ending prior to July 1, 1989, an amount equal to 4% of the
22    taxpayer's net income for the taxable year.
23        (7) In the case of a corporation, for taxable years
24    beginning prior to July 1, 1989 and ending after June 30,
25    1989, an amount equal to the sum of (i) 4% of the
26    taxpayer's net income for the period prior to July 1, 1989,

 

 

HB3522- 32 -LRB100 05678 HLH 21814 b

1    as calculated under Section 202.3, and (ii) 4.8% of the
2    taxpayer's net income for the period after June 30, 1989,
3    as calculated under Section 202.3.
4        (8) In the case of a corporation, for taxable years
5    beginning after June 30, 1989, and ending prior to January
6    1, 2011, an amount equal to 4.8% of the taxpayer's net
7    income for the taxable year.
8        (9) In the case of a corporation, for taxable years
9    beginning prior to January 1, 2011, and ending after
10    December 31, 2010, an amount equal to the sum of (i) 4.8%
11    of the taxpayer's net income for the period prior to
12    January 1, 2011, as calculated under Section 202.5, and
13    (ii) 7% of the taxpayer's net income for the period after
14    December 31, 2010, as calculated under Section 202.5.
15        (10) In the case of a corporation, for taxable years
16    beginning on or after January 1, 2011, and ending prior to
17    January 1, 2015, an amount equal to 7% of the taxpayer's
18    net income for the taxable year.
19        (11) In the case of a corporation, for taxable years
20    beginning prior to January 1, 2015, and ending after
21    December 31, 2014, an amount equal to the sum of (i) 7% of
22    the taxpayer's net income for the period prior to January
23    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
24    of the taxpayer's net income for the period after December
25    31, 2014, as calculated under Section 202.5.
26        (12) In the case of a corporation, for taxable years

 

 

HB3522- 33 -LRB100 05678 HLH 21814 b

1    beginning on or after January 1, 2015, and ending prior to
2    January 1, 2025, an amount equal to 5.25% of the taxpayer's
3    net income for the taxable year.
4        (13) In the case of a corporation, for taxable years
5    beginning prior to January 1, 2025, and ending after
6    December 31, 2024, an amount equal to the sum of (i) 5.25%
7    of the taxpayer's net income for the period prior to
8    January 1, 2025, as calculated under Section 202.5, and
9    (ii) 4.8% of the taxpayer's net income for the period after
10    December 31, 2024, as calculated under Section 202.5.
11        (14) In the case of a corporation, for taxable years
12    beginning on or after January 1, 2025, an amount equal to
13    4.8% of the taxpayer's net income for the taxable year.
14    The rates under this subsection (b) are subject to the
15provisions of Section 201.5.
16    (c) Personal Property Tax Replacement Income Tax.
17Beginning on July 1, 1979 and thereafter, in addition to such
18income tax, there is also hereby imposed the Personal Property
19Tax Replacement Income Tax measured by net income on every
20corporation (including Subchapter S corporations), partnership
21and trust, for each taxable year ending after June 30, 1979.
22Such taxes are imposed on the privilege of earning or receiving
23income in or as a resident of this State. The Personal Property
24Tax Replacement Income Tax shall be in addition to the income
25tax imposed by subsections (a) and (b) of this Section and in
26addition to all other occupation or privilege taxes imposed by

 

 

HB3522- 34 -LRB100 05678 HLH 21814 b

1this State or by any municipal corporation or political
2subdivision thereof.
3    (d) Additional Personal Property Tax Replacement Income
4Tax Rates. The personal property tax replacement income tax
5imposed by this subsection and subsection (c) of this Section
6in the case of a corporation, other than a Subchapter S
7corporation and except as adjusted by subsection (d-1), shall
8be an additional amount equal to 2.85% of such taxpayer's net
9income for the taxable year, except that beginning on January
101, 1981, and thereafter, the rate of 2.85% specified in this
11subsection shall be reduced to 2.5%, and in the case of a
12partnership, trust or a Subchapter S corporation shall be an
13additional amount equal to 1.5% of such taxpayer's net income
14for the taxable year.
15    (d-1) Rate reduction for certain foreign insurers. In the
16case of a foreign insurer, as defined by Section 35A-5 of the
17Illinois Insurance Code, whose state or country of domicile
18imposes on insurers domiciled in Illinois a retaliatory tax
19(excluding any insurer whose premiums from reinsurance assumed
20are 50% or more of its total insurance premiums as determined
21under paragraph (2) of subsection (b) of Section 304, except
22that for purposes of this determination premiums from
23reinsurance do not include premiums from inter-affiliate
24reinsurance arrangements), beginning with taxable years ending
25on or after December 31, 1999, the sum of the rates of tax
26imposed by subsections (b) and (d) shall be reduced (but not

 

 

HB3522- 35 -LRB100 05678 HLH 21814 b

1increased) to the rate at which the total amount of tax imposed
2under this Act, net of all credits allowed under this Act,
3shall equal (i) the total amount of tax that would be imposed
4on the foreign insurer's net income allocable to Illinois for
5the taxable year by such foreign insurer's state or country of
6domicile if that net income were subject to all income taxes
7and taxes measured by net income imposed by such foreign
8insurer's state or country of domicile, net of all credits
9allowed or (ii) a rate of zero if no such tax is imposed on such
10income by the foreign insurer's state of domicile. For the
11purposes of this subsection (d-1), an inter-affiliate includes
12a mutual insurer under common management.
13        (1) For the purposes of subsection (d-1), in no event
14    shall the sum of the rates of tax imposed by subsections
15    (b) and (d) be reduced below the rate at which the sum of:
16            (A) the total amount of tax imposed on such foreign
17        insurer under this Act for a taxable year, net of all
18        credits allowed under this Act, plus
19            (B) the privilege tax imposed by Section 409 of the
20        Illinois Insurance Code, the fire insurance company
21        tax imposed by Section 12 of the Fire Investigation
22        Act, and the fire department taxes imposed under
23        Section 11-10-1 of the Illinois Municipal Code,
24    equals 1.25% for taxable years ending prior to December 31,
25    2003, or 1.75% for taxable years ending on or after
26    December 31, 2003, of the net taxable premiums written for

 

 

HB3522- 36 -LRB100 05678 HLH 21814 b

1    the taxable year, as described by subsection (1) of Section
2    409 of the Illinois Insurance Code. This paragraph will in
3    no event increase the rates imposed under subsections (b)
4    and (d).
5        (2) Any reduction in the rates of tax imposed by this
6    subsection shall be applied first against the rates imposed
7    by subsection (b) and only after the tax imposed by
8    subsection (a) net of all credits allowed under this
9    Section other than the credit allowed under subsection (i)
10    has been reduced to zero, against the rates imposed by
11    subsection (d).
12    This subsection (d-1) is exempt from the provisions of
13Section 250.
14    (e) Investment credit. A taxpayer shall be allowed a credit
15against the Personal Property Tax Replacement Income Tax for
16investment in qualified property.
17        (1) A taxpayer shall be allowed a credit equal to .5%
18    of the basis of qualified property placed in service during
19    the taxable year, provided such property is placed in
20    service on or after July 1, 1984. There shall be allowed an
21    additional credit equal to .5% of the basis of qualified
22    property placed in service during the taxable year,
23    provided such property is placed in service on or after
24    July 1, 1986, and the taxpayer's base employment within
25    Illinois has increased by 1% or more over the preceding
26    year as determined by the taxpayer's employment records

 

 

HB3522- 37 -LRB100 05678 HLH 21814 b

1    filed with the Illinois Department of Employment Security.
2    Taxpayers who are new to Illinois shall be deemed to have
3    met the 1% growth in base employment for the first year in
4    which they file employment records with the Illinois
5    Department of Employment Security. The provisions added to
6    this Section by Public Act 85-1200 (and restored by Public
7    Act 87-895) shall be construed as declaratory of existing
8    law and not as a new enactment. If, in any year, the
9    increase in base employment within Illinois over the
10    preceding year is less than 1%, the additional credit shall
11    be limited to that percentage times a fraction, the
12    numerator of which is .5% and the denominator of which is
13    1%, but shall not exceed .5%. The investment credit shall
14    not be allowed to the extent that it would reduce a
15    taxpayer's liability in any tax year below zero, nor may
16    any credit for qualified property be allowed for any year
17    other than the year in which the property was placed in
18    service in Illinois. For tax years ending on or after
19    December 31, 1987, and on or before December 31, 1988, the
20    credit shall be allowed for the tax year in which the
21    property is placed in service, or, if the amount of the
22    credit exceeds the tax liability for that year, whether it
23    exceeds the original liability or the liability as later
24    amended, such excess may be carried forward and applied to
25    the tax liability of the 5 taxable years following the
26    excess credit years if the taxpayer (i) makes investments

 

 

HB3522- 38 -LRB100 05678 HLH 21814 b

1    which cause the creation of a minimum of 2,000 full-time
2    equivalent jobs in Illinois, (ii) is located in an
3    enterprise zone established pursuant to the Illinois
4    Enterprise Zone Act and (iii) is certified by the
5    Department of Commerce and Community Affairs (now
6    Department of Commerce and Economic Opportunity) as
7    complying with the requirements specified in clause (i) and
8    (ii) by July 1, 1986. The Department of Commerce and
9    Community Affairs (now Department of Commerce and Economic
10    Opportunity) shall notify the Department of Revenue of all
11    such certifications immediately. For tax years ending
12    after December 31, 1988, the credit shall be allowed for
13    the tax year in which the property is placed in service,
14    or, if the amount of the credit exceeds the tax liability
15    for that year, whether it exceeds the original liability or
16    the liability as later amended, such excess may be carried
17    forward and applied to the tax liability of the 5 taxable
18    years following the excess credit years. The credit shall
19    be applied to the earliest year for which there is a
20    liability. If there is credit from more than one tax year
21    that is available to offset a liability, earlier credit
22    shall be applied first.
23        (2) The term "qualified property" means property
24    which:
25            (A) is tangible, whether new or used, including
26        buildings and structural components of buildings and

 

 

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1        signs that are real property, but not including land or
2        improvements to real property that are not a structural
3        component of a building such as landscaping, sewer
4        lines, local access roads, fencing, parking lots, and
5        other appurtenances;
6            (B) is depreciable pursuant to Section 167 of the
7        Internal Revenue Code, except that "3-year property"
8        as defined in Section 168(c)(2)(A) of that Code is not
9        eligible for the credit provided by this subsection
10        (e);
11            (C) is acquired by purchase as defined in Section
12        179(d) of the Internal Revenue Code;
13            (D) is used in Illinois by a taxpayer who is
14        primarily engaged in manufacturing, or in mining coal
15        or fluorite, or in retailing, or was placed in service
16        on or after July 1, 2006 in a River Edge Redevelopment
17        Zone established pursuant to the River Edge
18        Redevelopment Zone Act; and
19            (E) has not previously been used in Illinois in
20        such a manner and by such a person as would qualify for
21        the credit provided by this subsection (e) or
22        subsection (f).
23        (3) For purposes of this subsection (e),
24    "manufacturing" means the material staging and production
25    of tangible personal property by procedures commonly
26    regarded as manufacturing, processing, fabrication, or

 

 

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1    assembling which changes some existing material into new
2    shapes, new qualities, or new combinations. For purposes of
3    this subsection (e) the term "mining" shall have the same
4    meaning as the term "mining" in Section 613(c) of the
5    Internal Revenue Code. For purposes of this subsection (e),
6    the term "retailing" means the sale of tangible personal
7    property for use or consumption and not for resale, or
8    services rendered in conjunction with the sale of tangible
9    personal property for use or consumption and not for
10    resale. For purposes of this subsection (e), "tangible
11    personal property" has the same meaning as when that term
12    is used in the Retailers' Occupation Tax Act, and, for
13    taxable years ending after December 31, 2008, does not
14    include the generation, transmission, or distribution of
15    electricity.
16        (4) The basis of qualified property shall be the basis
17    used to compute the depreciation deduction for federal
18    income tax purposes.
19        (5) If the basis of the property for federal income tax
20    depreciation purposes is increased after it has been placed
21    in service in Illinois by the taxpayer, the amount of such
22    increase shall be deemed property placed in service on the
23    date of such increase in basis.
24        (6) The term "placed in service" shall have the same
25    meaning as under Section 46 of the Internal Revenue Code.
26        (7) If during any taxable year, any property ceases to

 

 

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1    be qualified property in the hands of the taxpayer within
2    48 months after being placed in service, or the situs of
3    any qualified property is moved outside Illinois within 48
4    months after being placed in service, the Personal Property
5    Tax Replacement Income Tax for such taxable year shall be
6    increased. Such increase shall be determined by (i)
7    recomputing the investment credit which would have been
8    allowed for the year in which credit for such property was
9    originally allowed by eliminating such property from such
10    computation and, (ii) subtracting such recomputed credit
11    from the amount of credit previously allowed. For the
12    purposes of this paragraph (7), a reduction of the basis of
13    qualified property resulting from a redetermination of the
14    purchase price shall be deemed a disposition of qualified
15    property to the extent of such reduction.
16        (8) Unless the investment credit is extended by law,
17    the basis of qualified property shall not include costs
18    incurred after December 31, 2018, except for costs incurred
19    pursuant to a binding contract entered into on or before
20    December 31, 2018.
21        (9) Each taxable year ending before December 31, 2000,
22    a partnership may elect to pass through to its partners the
23    credits to which the partnership is entitled under this
24    subsection (e) for the taxable year. A partner may use the
25    credit allocated to him or her under this paragraph only
26    against the tax imposed in subsections (c) and (d) of this

 

 

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1    Section. If the partnership makes that election, those
2    credits shall be allocated among the partners in the
3    partnership in accordance with the rules set forth in
4    Section 704(b) of the Internal Revenue Code, and the rules
5    promulgated under that Section, and the allocated amount of
6    the credits shall be allowed to the partners for that
7    taxable year. The partnership shall make this election on
8    its Personal Property Tax Replacement Income Tax return for
9    that taxable year. The election to pass through the credits
10    shall be irrevocable.
11        For taxable years ending on or after December 31, 2000,
12    a partner that qualifies its partnership for a subtraction
13    under subparagraph (I) of paragraph (2) of subsection (d)
14    of Section 203 or a shareholder that qualifies a Subchapter
15    S corporation for a subtraction under subparagraph (S) of
16    paragraph (2) of subsection (b) of Section 203 shall be
17    allowed a credit under this subsection (e) equal to its
18    share of the credit earned under this subsection (e) during
19    the taxable year by the partnership or Subchapter S
20    corporation, determined in accordance with the
21    determination of income and distributive share of income
22    under Sections 702 and 704 and Subchapter S of the Internal
23    Revenue Code. This paragraph is exempt from the provisions
24    of Section 250.
25    (f) Investment credit; Enterprise Zone; River Edge
26Redevelopment Zone.

 

 

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1        (1) A taxpayer shall be allowed a credit against the
2    tax imposed by subsections (a) and (b) of this Section for
3    investment in qualified property which is placed in service
4    in an Enterprise Zone created pursuant to the Illinois
5    Enterprise Zone Act or, for property placed in service on
6    or after July 1, 2006, a River Edge Redevelopment Zone
7    established pursuant to the River Edge Redevelopment Zone
8    Act. For partners, shareholders of Subchapter S
9    corporations, and owners of limited liability companies,
10    if the liability company is treated as a partnership for
11    purposes of federal and State income taxation, there shall
12    be allowed a credit under this subsection (f) to be
13    determined in accordance with the determination of income
14    and distributive share of income under Sections 702 and 704
15    and Subchapter S of the Internal Revenue Code. The credit
16    shall be .5% of the basis for such property. The credit
17    shall be available only in the taxable year in which the
18    property is placed in service in the Enterprise Zone or
19    River Edge Redevelopment Zone and shall not be allowed to
20    the extent that it would reduce a taxpayer's liability for
21    the tax imposed by subsections (a) and (b) of this Section
22    to below zero. For tax years ending on or after December
23    31, 1985, the credit shall be allowed for the tax year in
24    which the property is placed in service, or, if the amount
25    of the credit exceeds the tax liability for that year,
26    whether it exceeds the original liability or the liability

 

 

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1    as later amended, such excess may be carried forward and
2    applied to the tax liability of the 5 taxable years
3    following the excess credit year. The credit shall be
4    applied to the earliest year for which there is a
5    liability. If there is credit from more than one tax year
6    that is available to offset a liability, the credit
7    accruing first in time shall be applied first.
8        (2) The term qualified property means property which:
9            (A) is tangible, whether new or used, including
10        buildings and structural components of buildings;
11            (B) is depreciable pursuant to Section 167 of the
12        Internal Revenue Code, except that "3-year property"
13        as defined in Section 168(c)(2)(A) of that Code is not
14        eligible for the credit provided by this subsection
15        (f);
16            (C) is acquired by purchase as defined in Section
17        179(d) of the Internal Revenue Code;
18            (D) is used in the Enterprise Zone or River Edge
19        Redevelopment Zone by the taxpayer; and
20            (E) has not been previously used in Illinois in
21        such a manner and by such a person as would qualify for
22        the credit provided by this subsection (f) or
23        subsection (e).
24        (3) The basis of qualified property shall be the basis
25    used to compute the depreciation deduction for federal
26    income tax purposes.

 

 

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1        (4) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in the Enterprise Zone or River Edge
4    Redevelopment Zone by the taxpayer, the amount of such
5    increase shall be deemed property placed in service on the
6    date of such increase in basis.
7        (5) The term "placed in service" shall have the same
8    meaning as under Section 46 of the Internal Revenue Code.
9        (6) If during any taxable year, any property ceases to
10    be qualified property in the hands of the taxpayer within
11    48 months after being placed in service, or the situs of
12    any qualified property is moved outside the Enterprise Zone
13    or River Edge Redevelopment Zone within 48 months after
14    being placed in service, the tax imposed under subsections
15    (a) and (b) of this Section for such taxable year shall be
16    increased. Such increase shall be determined by (i)
17    recomputing the investment credit which would have been
18    allowed for the year in which credit for such property was
19    originally allowed by eliminating such property from such
20    computation, and (ii) subtracting such recomputed credit
21    from the amount of credit previously allowed. For the
22    purposes of this paragraph (6), a reduction of the basis of
23    qualified property resulting from a redetermination of the
24    purchase price shall be deemed a disposition of qualified
25    property to the extent of such reduction.
26        (7) There shall be allowed an additional credit equal

 

 

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1    to 0.5% of the basis of qualified property placed in
2    service during the taxable year in a River Edge
3    Redevelopment Zone, provided such property is placed in
4    service on or after July 1, 2006, and the taxpayer's base
5    employment within Illinois has increased by 1% or more over
6    the preceding year as determined by the taxpayer's
7    employment records filed with the Illinois Department of
8    Employment Security. Taxpayers who are new to Illinois
9    shall be deemed to have met the 1% growth in base
10    employment for the first year in which they file employment
11    records with the Illinois Department of Employment
12    Security. If, in any year, the increase in base employment
13    within Illinois over the preceding year is less than 1%,
14    the additional credit shall be limited to that percentage
15    times a fraction, the numerator of which is 0.5% and the
16    denominator of which is 1%, but shall not exceed 0.5%.
17    (g) (Blank).
18    (h) Investment credit; High Impact Business.
19        (1) Subject to subsections (b) and (b-5) of Section 5.5
20    of the Illinois Enterprise Zone Act, a taxpayer shall be
21    allowed a credit against the tax imposed by subsections (a)
22    and (b) of this Section for investment in qualified
23    property which is placed in service by a Department of
24    Commerce and Economic Opportunity designated High Impact
25    Business. The credit shall be .5% of the basis for such
26    property. The credit shall not be available (i) until the

 

 

HB3522- 47 -LRB100 05678 HLH 21814 b

1    minimum investments in qualified property set forth in
2    subdivision (a)(3)(A) of Section 5.5 of the Illinois
3    Enterprise Zone Act have been satisfied or (ii) until the
4    time authorized in subsection (b-5) of the Illinois
5    Enterprise Zone Act for entities designated as High Impact
6    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
7    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
8    Act, and shall not be allowed to the extent that it would
9    reduce a taxpayer's liability for the tax imposed by
10    subsections (a) and (b) of this Section to below zero. The
11    credit applicable to such investments shall be taken in the
12    taxable year in which such investments have been completed.
13    The credit for additional investments beyond the minimum
14    investment by a designated high impact business authorized
15    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
16    Enterprise Zone Act shall be available only in the taxable
17    year in which the property is placed in service and shall
18    not be allowed to the extent that it would reduce a
19    taxpayer's liability for the tax imposed by subsections (a)
20    and (b) of this Section to below zero. For tax years ending
21    on or after December 31, 1987, the credit shall be allowed
22    for the tax year in which the property is placed in
23    service, or, if the amount of the credit exceeds the tax
24    liability for that year, whether it exceeds the original
25    liability or the liability as later amended, such excess
26    may be carried forward and applied to the tax liability of

 

 

HB3522- 48 -LRB100 05678 HLH 21814 b

1    the 5 taxable years following the excess credit year. The
2    credit shall be applied to the earliest year for which
3    there is a liability. If there is credit from more than one
4    tax year that is available to offset a liability, the
5    credit accruing first in time shall be applied first.
6        Changes made in this subdivision (h)(1) by Public Act
7    88-670 restore changes made by Public Act 85-1182 and
8    reflect existing law.
9        (2) The term qualified property means property which:
10            (A) is tangible, whether new or used, including
11        buildings and structural components of buildings;
12            (B) is depreciable pursuant to Section 167 of the
13        Internal Revenue Code, except that "3-year property"
14        as defined in Section 168(c)(2)(A) of that Code is not
15        eligible for the credit provided by this subsection
16        (h);
17            (C) is acquired by purchase as defined in Section
18        179(d) of the Internal Revenue Code; and
19            (D) is not eligible for the Enterprise Zone
20        Investment Credit provided by subsection (f) of this
21        Section.
22        (3) The basis of qualified property shall be the basis
23    used to compute the depreciation deduction for federal
24    income tax purposes.
25        (4) If the basis of the property for federal income tax
26    depreciation purposes is increased after it has been placed

 

 

HB3522- 49 -LRB100 05678 HLH 21814 b

1    in service in a federally designated Foreign Trade Zone or
2    Sub-Zone located in Illinois by the taxpayer, the amount of
3    such increase shall be deemed property placed in service on
4    the date of such increase in basis.
5        (5) The term "placed in service" shall have the same
6    meaning as under Section 46 of the Internal Revenue Code.
7        (6) If during any taxable year ending on or before
8    December 31, 1996, any property ceases to be qualified
9    property in the hands of the taxpayer within 48 months
10    after being placed in service, or the situs of any
11    qualified property is moved outside Illinois within 48
12    months after being placed in service, the tax imposed under
13    subsections (a) and (b) of this Section for such taxable
14    year shall be increased. Such increase shall be determined
15    by (i) recomputing the investment credit which would have
16    been allowed for the year in which credit for such property
17    was originally allowed by eliminating such property from
18    such computation, and (ii) subtracting such recomputed
19    credit from the amount of credit previously allowed. For
20    the purposes of this paragraph (6), a reduction of the
21    basis of qualified property resulting from a
22    redetermination of the purchase price shall be deemed a
23    disposition of qualified property to the extent of such
24    reduction.
25        (7) Beginning with tax years ending after December 31,
26    1996, if a taxpayer qualifies for the credit under this

 

 

HB3522- 50 -LRB100 05678 HLH 21814 b

1    subsection (h) and thereby is granted a tax abatement and
2    the taxpayer relocates its entire facility in violation of
3    the explicit terms and length of the contract under Section
4    18-183 of the Property Tax Code, the tax imposed under
5    subsections (a) and (b) of this Section shall be increased
6    for the taxable year in which the taxpayer relocated its
7    facility by an amount equal to the amount of credit
8    received by the taxpayer under this subsection (h).
9    (i) Credit for Personal Property Tax Replacement Income
10Tax. For tax years ending prior to December 31, 2003, a credit
11shall be allowed against the tax imposed by subsections (a) and
12(b) of this Section for the tax imposed by subsections (c) and
13(d) of this Section. This credit shall be computed by
14multiplying the tax imposed by subsections (c) and (d) of this
15Section by a fraction, the numerator of which is base income
16allocable to Illinois and the denominator of which is Illinois
17base income, and further multiplying the product by the tax
18rate imposed by subsections (a) and (b) of this Section.
19    Any credit earned on or after December 31, 1986 under this
20subsection which is unused in the year the credit is computed
21because it exceeds the tax liability imposed by subsections (a)
22and (b) for that year (whether it exceeds the original
23liability or the liability as later amended) may be carried
24forward and applied to the tax liability imposed by subsections
25(a) and (b) of the 5 taxable years following the excess credit
26year, provided that no credit may be carried forward to any

 

 

HB3522- 51 -LRB100 05678 HLH 21814 b

1year ending on or after December 31, 2003. This credit shall be
2applied first to the earliest year for which there is a
3liability. If there is a credit under this subsection from more
4than one tax year that is available to offset a liability the
5earliest credit arising under this subsection shall be applied
6first.
7    If, during any taxable year ending on or after December 31,
81986, the tax imposed by subsections (c) and (d) of this
9Section for which a taxpayer has claimed a credit under this
10subsection (i) is reduced, the amount of credit for such tax
11shall also be reduced. Such reduction shall be determined by
12recomputing the credit to take into account the reduced tax
13imposed by subsections (c) and (d). If any portion of the
14reduced amount of credit has been carried to a different
15taxable year, an amended return shall be filed for such taxable
16year to reduce the amount of credit claimed.
17    (j) Training expense credit. Beginning with tax years
18ending on or after December 31, 1986 and prior to December 31,
192003, a taxpayer shall be allowed a credit against the tax
20imposed by subsections (a) and (b) under this Section for all
21amounts paid or accrued, on behalf of all persons employed by
22the taxpayer in Illinois or Illinois residents employed outside
23of Illinois by a taxpayer, for educational or vocational
24training in semi-technical or technical fields or semi-skilled
25or skilled fields, which were deducted from gross income in the
26computation of taxable income. The credit against the tax

 

 

HB3522- 52 -LRB100 05678 HLH 21814 b

1imposed by subsections (a) and (b) shall be 1.6% of such
2training expenses. For partners, shareholders of subchapter S
3corporations, and owners of limited liability companies, if the
4liability company is treated as a partnership for purposes of
5federal and State income taxation, there shall be allowed a
6credit under this subsection (j) to be determined in accordance
7with the determination of income and distributive share of
8income under Sections 702 and 704 and subchapter S of the
9Internal Revenue Code.
10    Any credit allowed under this subsection which is unused in
11the year the credit is earned may be carried forward to each of
12the 5 taxable years following the year for which the credit is
13first computed until it is used. This credit shall be applied
14first to the earliest year for which there is a liability. If
15there is a credit under this subsection from more than one tax
16year that is available to offset a liability the earliest
17credit arising under this subsection shall be applied first. No
18carryforward credit may be claimed in any tax year ending on or
19after December 31, 2003.
20    (k) Research and development credit. For tax years ending
21after July 1, 1990 and prior to December 31, 2003, and
22beginning again for tax years ending on or after December 31,
232004, and ending prior to January 1, 2016, a taxpayer shall be
24allowed a credit against the tax imposed by subsections (a) and
25(b) of this Section for increasing research activities in this
26State. The credit allowed against the tax imposed by

 

 

HB3522- 53 -LRB100 05678 HLH 21814 b

1subsections (a) and (b) shall be equal to 6 1/2% of the
2qualifying expenditures for increasing research activities in
3this State. For partners, shareholders of subchapter S
4corporations, and owners of limited liability companies, if the
5liability company is treated as a partnership for purposes of
6federal and State income taxation, there shall be allowed a
7credit under this subsection to be determined in accordance
8with the determination of income and distributive share of
9income under Sections 702 and 704 and subchapter S of the
10Internal Revenue Code.
11    For purposes of this subsection, "qualifying expenditures"
12means the qualifying expenditures as defined for the federal
13credit for increasing research activities which would be
14allowable under Section 41 of the Internal Revenue Code and
15which are conducted in this State, "qualifying expenditures for
16increasing research activities in this State" means the excess
17of qualifying expenditures for the taxable year in which
18incurred over qualifying expenditures for the base period,
19"qualifying expenditures for the base period" means the average
20of the qualifying expenditures for each year in the base
21period, and "base period" means the 3 taxable years immediately
22preceding the taxable year for which the determination is being
23made.
24    Any credit in excess of the tax liability for the taxable
25year may be carried forward. A taxpayer may elect to have the
26unused credit shown on its final completed return carried over

 

 

HB3522- 54 -LRB100 05678 HLH 21814 b

1as a credit against the tax liability for the following 5
2taxable years or until it has been fully used, whichever occurs
3first; provided that no credit earned in a tax year ending
4prior to December 31, 2003 may be carried forward to any year
5ending on or after December 31, 2003.
6    If an unused credit is carried forward to a given year from
72 or more earlier years, that credit arising in the earliest
8year will be applied first against the tax liability for the
9given year. If a tax liability for the given year still
10remains, the credit from the next earliest year will then be
11applied, and so on, until all credits have been used or no tax
12liability for the given year remains. Any remaining unused
13credit or credits then will be carried forward to the next
14following year in which a tax liability is incurred, except
15that no credit can be carried forward to a year which is more
16than 5 years after the year in which the expense for which the
17credit is given was incurred.
18    No inference shall be drawn from this amendatory Act of the
1991st General Assembly in construing this Section for taxable
20years beginning before January 1, 1999.
21    (l) Environmental Remediation Tax Credit.
22        (i) For tax years ending after December 31, 1997 and on
23    or before December 31, 2001, a taxpayer shall be allowed a
24    credit against the tax imposed by subsections (a) and (b)
25    of this Section for certain amounts paid for unreimbursed
26    eligible remediation costs, as specified in this

 

 

HB3522- 55 -LRB100 05678 HLH 21814 b

1    subsection. For purposes of this Section, "unreimbursed
2    eligible remediation costs" means costs approved by the
3    Illinois Environmental Protection Agency ("Agency") under
4    Section 58.14 of the Environmental Protection Act that were
5    paid in performing environmental remediation at a site for
6    which a No Further Remediation Letter was issued by the
7    Agency and recorded under Section 58.10 of the
8    Environmental Protection Act. The credit must be claimed
9    for the taxable year in which Agency approval of the
10    eligible remediation costs is granted. The credit is not
11    available to any taxpayer if the taxpayer or any related
12    party caused or contributed to, in any material respect, a
13    release of regulated substances on, in, or under the site
14    that was identified and addressed by the remedial action
15    pursuant to the Site Remediation Program of the
16    Environmental Protection Act. After the Pollution Control
17    Board rules are adopted pursuant to the Illinois
18    Administrative Procedure Act for the administration and
19    enforcement of Section 58.9 of the Environmental
20    Protection Act, determinations as to credit availability
21    for purposes of this Section shall be made consistent with
22    those rules. For purposes of this Section, "taxpayer"
23    includes a person whose tax attributes the taxpayer has
24    succeeded to under Section 381 of the Internal Revenue Code
25    and "related party" includes the persons disallowed a
26    deduction for losses by paragraphs (b), (c), and (f)(1) of

 

 

HB3522- 56 -LRB100 05678 HLH 21814 b

1    Section 267 of the Internal Revenue Code by virtue of being
2    a related taxpayer, as well as any of its partners. The
3    credit allowed against the tax imposed by subsections (a)
4    and (b) shall be equal to 25% of the unreimbursed eligible
5    remediation costs in excess of $100,000 per site, except
6    that the $100,000 threshold shall not apply to any site
7    contained in an enterprise zone as determined by the
8    Department of Commerce and Community Affairs (now
9    Department of Commerce and Economic Opportunity). The
10    total credit allowed shall not exceed $40,000 per year with
11    a maximum total of $150,000 per site. For partners and
12    shareholders of subchapter S corporations, there shall be
13    allowed a credit under this subsection to be determined in
14    accordance with the determination of income and
15    distributive share of income under Sections 702 and 704 and
16    subchapter S of the Internal Revenue Code.
17        (ii) A credit allowed under this subsection that is
18    unused in the year the credit is earned may be carried
19    forward to each of the 5 taxable years following the year
20    for which the credit is first earned until it is used. The
21    term "unused credit" does not include any amounts of
22    unreimbursed eligible remediation costs in excess of the
23    maximum credit per site authorized under paragraph (i).
24    This credit shall be applied first to the earliest year for
25    which there is a liability. If there is a credit under this
26    subsection from more than one tax year that is available to

 

 

HB3522- 57 -LRB100 05678 HLH 21814 b

1    offset a liability, the earliest credit arising under this
2    subsection shall be applied first. A credit allowed under
3    this subsection may be sold to a buyer as part of a sale of
4    all or part of the remediation site for which the credit
5    was granted. The purchaser of a remediation site and the
6    tax credit shall succeed to the unused credit and remaining
7    carry-forward period of the seller. To perfect the
8    transfer, the assignor shall record the transfer in the
9    chain of title for the site and provide written notice to
10    the Director of the Illinois Department of Revenue of the
11    assignor's intent to sell the remediation site and the
12    amount of the tax credit to be transferred as a portion of
13    the sale. In no event may a credit be transferred to any
14    taxpayer if the taxpayer or a related party would not be
15    eligible under the provisions of subsection (i).
16        (iii) For purposes of this Section, the term "site"
17    shall have the same meaning as under Section 58.2 of the
18    Environmental Protection Act.
19    (m) Education expense credit. Beginning with tax years
20ending after December 31, 1999, a taxpayer who is the custodian
21of one or more qualifying pupils shall be allowed a credit
22against the tax imposed by subsections (a) and (b) of this
23Section for qualified education expenses incurred on behalf of
24the qualifying pupils. The credit shall be equal to 25% of
25qualified education expenses, but in no event may the total
26credit under this subsection claimed by a family that is the

 

 

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1custodian of qualifying pupils exceed $500. In no event shall a
2credit under this subsection reduce the taxpayer's liability
3under this Act to less than zero. This subsection is exempt
4from the provisions of Section 250 of this Act.
5    For purposes of this subsection:
6    "Qualifying pupils" means individuals who (i) are
7residents of the State of Illinois, (ii) are under the age of
821 at the close of the school year for which a credit is
9sought, and (iii) during the school year for which a credit is
10sought were full-time pupils enrolled in a kindergarten through
11twelfth grade education program at any school, as defined in
12this subsection.
13    "Qualified education expense" means the amount incurred on
14behalf of a qualifying pupil in excess of $250 for tuition,
15book fees, and lab fees at the school in which the pupil is
16enrolled during the regular school year.
17    "School" means any public or nonpublic elementary or
18secondary school in Illinois that is in compliance with Title
19VI of the Civil Rights Act of 1964 and attendance at which
20satisfies the requirements of Section 26-1 of the School Code,
21except that nothing shall be construed to require a child to
22attend any particular public or nonpublic school to qualify for
23the credit under this Section.
24    "Custodian" means, with respect to qualifying pupils, an
25Illinois resident who is a parent, the parents, a legal
26guardian, or the legal guardians of the qualifying pupils.

 

 

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1    (n) River Edge Redevelopment Zone site remediation tax
2credit.
3        (i) For tax years ending on or after December 31, 2006,
4    a taxpayer shall be allowed a credit against the tax
5    imposed by subsections (a) and (b) of this Section for
6    certain amounts paid for unreimbursed eligible remediation
7    costs, as specified in this subsection. For purposes of
8    this Section, "unreimbursed eligible remediation costs"
9    means costs approved by the Illinois Environmental
10    Protection Agency ("Agency") under Section 58.14a of the
11    Environmental Protection Act that were paid in performing
12    environmental remediation at a site within a River Edge
13    Redevelopment Zone for which a No Further Remediation
14    Letter was issued by the Agency and recorded under Section
15    58.10 of the Environmental Protection Act. The credit must
16    be claimed for the taxable year in which Agency approval of
17    the eligible remediation costs is granted. The credit is
18    not available to any taxpayer if the taxpayer or any
19    related party caused or contributed to, in any material
20    respect, a release of regulated substances on, in, or under
21    the site that was identified and addressed by the remedial
22    action pursuant to the Site Remediation Program of the
23    Environmental Protection Act. Determinations as to credit
24    availability for purposes of this Section shall be made
25    consistent with rules adopted by the Pollution Control
26    Board pursuant to the Illinois Administrative Procedure

 

 

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1    Act for the administration and enforcement of Section 58.9
2    of the Environmental Protection Act. For purposes of this
3    Section, "taxpayer" includes a person whose tax attributes
4    the taxpayer has succeeded to under Section 381 of the
5    Internal Revenue Code and "related party" includes the
6    persons disallowed a deduction for losses by paragraphs
7    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
8    Code by virtue of being a related taxpayer, as well as any
9    of its partners. The credit allowed against the tax imposed
10    by subsections (a) and (b) shall be equal to 25% of the
11    unreimbursed eligible remediation costs in excess of
12    $100,000 per site.
13        (ii) A credit allowed under this subsection that is
14    unused in the year the credit is earned may be carried
15    forward to each of the 5 taxable years following the year
16    for which the credit is first earned until it is used. This
17    credit shall be applied first to the earliest year for
18    which there is a liability. If there is a credit under this
19    subsection from more than one tax year that is available to
20    offset a liability, the earliest credit arising under this
21    subsection shall be applied first. A credit allowed under
22    this subsection may be sold to a buyer as part of a sale of
23    all or part of the remediation site for which the credit
24    was granted. The purchaser of a remediation site and the
25    tax credit shall succeed to the unused credit and remaining
26    carry-forward period of the seller. To perfect the

 

 

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1    transfer, the assignor shall record the transfer in the
2    chain of title for the site and provide written notice to
3    the Director of the Illinois Department of Revenue of the
4    assignor's intent to sell the remediation site and the
5    amount of the tax credit to be transferred as a portion of
6    the sale. In no event may a credit be transferred to any
7    taxpayer if the taxpayer or a related party would not be
8    eligible under the provisions of subsection (i).
9        (iii) For purposes of this Section, the term "site"
10    shall have the same meaning as under Section 58.2 of the
11    Environmental Protection Act.
12    (o) For each of taxable years during the Compassionate Use
13of Medical Cannabis Pilot Program, a surcharge is imposed on
14all taxpayers on income arising from the sale or exchange of
15capital assets, depreciable business property, real property
16used in the trade or business, and Section 197 intangibles of
17an organization registrant under the Compassionate Use of
18Medical Cannabis Pilot Program Act. The amount of the surcharge
19is equal to the amount of federal income tax liability for the
20taxable year attributable to those sales and exchanges. The
21surcharge imposed does not apply if:
22        (1) the medical cannabis cultivation center
23    registration, medical cannabis dispensary registration, or
24    the property of a registration is transferred as a result
25    of any of the following:
26            (A) bankruptcy, a receivership, or a debt

 

 

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1        adjustment initiated by or against the initial
2        registration or the substantial owners of the initial
3        registration;
4            (B) cancellation, revocation, or termination of
5        any registration by the Illinois Department of Public
6        Health;
7            (C) a determination by the Illinois Department of
8        Public Health that transfer of the registration is in
9        the best interests of Illinois qualifying patients as
10        defined by the Compassionate Use of Medical Cannabis
11        Pilot Program Act;
12            (D) the death of an owner of the equity interest in
13        a registrant;
14            (E) the acquisition of a controlling interest in
15        the stock or substantially all of the assets of a
16        publicly traded company;
17            (F) a transfer by a parent company to a wholly
18        owned subsidiary; or
19            (G) the transfer or sale to or by one person to
20        another person where both persons were initial owners
21        of the registration when the registration was issued;
22        or
23        (2) the cannabis cultivation center registration,
24    medical cannabis dispensary registration, or the
25    controlling interest in a registrant's property is
26    transferred in a transaction to lineal descendants in which

 

 

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1    no gain or loss is recognized or as a result of a
2    transaction in accordance with Section 351 of the Internal
3    Revenue Code in which no gain or loss is recognized.
4(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
5eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
6eff. 7-16-14.)
 
7    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
8    Sec. 901. Collection authority.
9    (a) In general.
10    The Department shall collect the taxes imposed by this Act.
11The Department shall collect certified past due child support
12amounts under Section 2505-650 of the Department of Revenue Law
13(20 ILCS 2505/2505-650). Except as provided in subsections (c),
14(e), (f), (g), and (h), (i), (j), and (k) of this Section,
15money collected pursuant to subsections (a) and (b) of Section
16201 of this Act shall be paid into the General Revenue Fund in
17the State treasury; money collected pursuant to subsections (c)
18and (d) of Section 201 of this Act shall be paid into the
19Personal Property Tax Replacement Fund, a special fund in the
20State Treasury; and money collected under Section 2505-650 of
21the Department of Revenue Law (20 ILCS 2505/2505-650) shall be
22paid into the Child Support Enforcement Trust Fund, a special
23fund outside the State Treasury, or to the State Disbursement
24Unit established under Section 10-26 of the Illinois Public Aid
25Code, as directed by the Department of Healthcare and Family

 

 

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1Services.
2    (b) Local Government Distributive Fund.
3    Beginning August 1, 1969, and continuing through June 30,
41994, the Treasurer shall transfer each month from the General
5Revenue Fund to a special fund in the State treasury, to be
6known as the "Local Government Distributive Fund", an amount
7equal to 1/12 of the net revenue realized from the tax imposed
8by subsections (a) and (b) of Section 201 of this Act during
9the preceding month. Beginning July 1, 1994, and continuing
10through June 30, 1995, the Treasurer shall transfer each month
11from the General Revenue Fund to the Local Government
12Distributive Fund an amount equal to 1/11 of the net revenue
13realized from the tax imposed by subsections (a) and (b) of
14Section 201 of this Act during the preceding month. Beginning
15July 1, 1995 and continuing through January 31, 2011, the
16Treasurer shall transfer each month from the General Revenue
17Fund to the Local Government Distributive Fund an amount equal
18to the net of (i) 1/10 of the net revenue realized from the tax
19imposed by subsections (a) and (b) of Section 201 of the
20Illinois Income Tax Act during the preceding month (ii) minus,
21beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
22and beginning July 1, 2004, zero. Beginning February 1, 2011,
23and continuing through January 31, 2015, the Treasurer shall
24transfer each month from the General Revenue Fund to the Local
25Government Distributive Fund an amount equal to the sum of (i)
266% (10% of the ratio of the 3% individual income tax rate prior

 

 

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1to 2011 to the 5% individual income tax rate after 2010) of the
2net revenue realized from the tax imposed by subsections (a)
3and (b) of Section 201 of this Act upon individuals, trusts,
4and estates during the preceding month and (ii) 6.86% (10% of
5the ratio of the 4.8% corporate income tax rate prior to 2011
6to the 7% corporate income tax rate after 2010) of the net
7revenue realized from the tax imposed by subsections (a) and
8(b) of Section 201 of this Act upon corporations during the
9preceding month. Beginning February 1, 2015 and continuing
10through January 31, 2018 January 31, 2025, the Treasurer shall
11transfer each month from the General Revenue Fund to the Local
12Government Distributive Fund an amount equal to the sum of (i)
138% (10% of the ratio of the 3% individual income tax rate prior
14to 2011 to the 3.75% individual income tax rate after 2014) of
15the net revenue realized from the tax imposed by subsections
16(a) and (b) of Section 201 of this Act upon individuals,
17trusts, and estates during the preceding month and (ii) 9.14%
18(10% of the ratio of the 4.8% corporate income tax rate prior
19to 2011 to the 5.25% corporate income tax rate after 2014) of
20the net revenue realized from the tax imposed by subsections
21(a) and (b) of Section 201 of this Act upon corporations during
22the preceding month. Beginning February 1, 2018 February 1,
232025, the Treasurer shall transfer each month from the General
24Revenue Fund to the Local Government Distributive Fund an
25amount equal to the sum of (i) 7.5% of the net revenue realized
26during the preceding month from the tax imposed upon

 

 

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1individuals, trusts, and estates at the rate of 4% by
2subsections (a) and (b) of Section 201 of this Act, (ii) 5.1%
3of the net revenue realized during the preceding month from the
4tax imposed upon individuals, trusts, and estates at the rate
5of 5.84% by subsections (a) and (b) of Section 201 of this Act,
6(iii) 4.8% of the net revenue realized during the preceding
7month from the tax imposed upon individuals, trusts, and
8estates at the rate of 6.27% by subsections (a) and (b) of
9Section 201 of this Act, (iv) 3.9% of the net revenue realized
10during the preceding month from the tax imposed upon
11individuals, trusts, and estates at the rate of 7.65% by
12subsections (a) and (b) of Section 201 of this Act, and (v)
139.23% (10% of the ratio of the 3% individual income tax rate
14prior to 2011 to the 3.25% individual income tax rate after
152024) of the net revenue realized from the tax imposed by
16subsections (a) and (b) of Section 201 of this Act upon
17individuals, trusts, and estates during the preceding month and
18(ii) 10% of the net revenue realized from the tax imposed by
19subsections (a) and (b) of Section 201 of this Act upon
20corporations during the preceding month. Net revenue realized
21for a month shall be defined as the revenue from the tax
22imposed by subsections (a) and (b) of Section 201 of this Act
23which is deposited in the General Revenue Fund, the Education
24Assistance Fund, the Income Tax Surcharge Local Government
25Distributive Fund, the Fund for the Advancement of Education,
26and the Commitment to Human Services Fund during the month

 

 

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1minus the amount paid out of the General Revenue Fund in State
2warrants during that same month as refunds to taxpayers for
3overpayment of liability under the tax imposed by subsections
4(a) and (b) of Section 201 of this Act.
5    Beginning on August 26, 2014 (the effective date of Public
6Act 98-1052), the Comptroller shall perform the transfers
7required by this subsection (b) no later than 60 days after he
8or she receives the certification from the Treasurer as
9provided in Section 1 of the State Revenue Sharing Act.
10    (c) Deposits Into Income Tax Refund Fund.
11        (1) Beginning on January 1, 1989 and thereafter, the
12    Department shall deposit a percentage of the amounts
13    collected pursuant to subsections (a) and (b)(1), (2), and
14    (3), of Section 201 of this Act into a fund in the State
15    treasury known as the Income Tax Refund Fund. The
16    Department shall deposit 6% of such amounts during the
17    period beginning January 1, 1989 and ending on June 30,
18    1989. Beginning with State fiscal year 1990 and for each
19    fiscal year thereafter, the percentage deposited into the
20    Income Tax Refund Fund during a fiscal year shall be the
21    Annual Percentage. For fiscal years 1999 through 2001, the
22    Annual Percentage shall be 7.1%. For fiscal year 2003, the
23    Annual Percentage shall be 8%. For fiscal year 2004, the
24    Annual Percentage shall be 11.7%. Upon the effective date
25    of this amendatory Act of the 93rd General Assembly, the
26    Annual Percentage shall be 10% for fiscal year 2005. For

 

 

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1    fiscal year 2006, the Annual Percentage shall be 9.75%. For
2    fiscal year 2007, the Annual Percentage shall be 9.75%. For
3    fiscal year 2008, the Annual Percentage shall be 7.75%. For
4    fiscal year 2009, the Annual Percentage shall be 9.75%. For
5    fiscal year 2010, the Annual Percentage shall be 9.75%. For
6    fiscal year 2011, the Annual Percentage shall be 8.75%. For
7    fiscal year 2012, the Annual Percentage shall be 8.75%. For
8    fiscal year 2013, the Annual Percentage shall be 9.75%. For
9    fiscal year 2014, the Annual Percentage shall be 9.5%. For
10    fiscal year 2015, the Annual Percentage shall be 10%. For
11    all other fiscal years, the Annual Percentage shall be
12    calculated as a fraction, the numerator of which shall be
13    the amount of refunds approved for payment by the
14    Department during the preceding fiscal year as a result of
15    overpayment of tax liability under subsections (a) and
16    (b)(1), (2), and (3) of Section 201 of this Act plus the
17    amount of such refunds remaining approved but unpaid at the
18    end of the preceding fiscal year, minus the amounts
19    transferred into the Income Tax Refund Fund from the
20    Tobacco Settlement Recovery Fund, and the denominator of
21    which shall be the amounts which will be collected pursuant
22    to subsections (a) and (b)(1), (2), and (3) of Section 201
23    of this Act during the preceding fiscal year; except that
24    in State fiscal year 2002, the Annual Percentage shall in
25    no event exceed 7.6%. The Director of Revenue shall certify
26    the Annual Percentage to the Comptroller on the last

 

 

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1    business day of the fiscal year immediately preceding the
2    fiscal year for which it is to be effective.
3        (2) Beginning on January 1, 1989 and thereafter, the
4    Department shall deposit a percentage of the amounts
5    collected pursuant to subsections (a) and (b)(6), (7), and
6    (8), (c) and (d) of Section 201 of this Act into a fund in
7    the State treasury known as the Income Tax Refund Fund. The
8    Department shall deposit 18% of such amounts during the
9    period beginning January 1, 1989 and ending on June 30,
10    1989. Beginning with State fiscal year 1990 and for each
11    fiscal year thereafter, the percentage deposited into the
12    Income Tax Refund Fund during a fiscal year shall be the
13    Annual Percentage. For fiscal years 1999, 2000, and 2001,
14    the Annual Percentage shall be 19%. For fiscal year 2003,
15    the Annual Percentage shall be 27%. For fiscal year 2004,
16    the Annual Percentage shall be 32%. Upon the effective date
17    of this amendatory Act of the 93rd General Assembly, the
18    Annual Percentage shall be 24% for fiscal year 2005. For
19    fiscal year 2006, the Annual Percentage shall be 20%. For
20    fiscal year 2007, the Annual Percentage shall be 17.5%. For
21    fiscal year 2008, the Annual Percentage shall be 15.5%. For
22    fiscal year 2009, the Annual Percentage shall be 17.5%. For
23    fiscal year 2010, the Annual Percentage shall be 17.5%. For
24    fiscal year 2011, the Annual Percentage shall be 17.5%. For
25    fiscal year 2012, the Annual Percentage shall be 17.5%. For
26    fiscal year 2013, the Annual Percentage shall be 14%. For

 

 

HB3522- 70 -LRB100 05678 HLH 21814 b

1    fiscal year 2014, the Annual Percentage shall be 13.4%. For
2    fiscal year 2015, the Annual Percentage shall be 14%. For
3    all other fiscal years, the Annual Percentage shall be
4    calculated as a fraction, the numerator of which shall be
5    the amount of refunds approved for payment by the
6    Department during the preceding fiscal year as a result of
7    overpayment of tax liability under subsections (a) and
8    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
9    Act plus the amount of such refunds remaining approved but
10    unpaid at the end of the preceding fiscal year, and the
11    denominator of which shall be the amounts which will be
12    collected pursuant to subsections (a) and (b)(6), (7), and
13    (8), (c) and (d) of Section 201 of this Act during the
14    preceding fiscal year; except that in State fiscal year
15    2002, the Annual Percentage shall in no event exceed 23%.
16    The Director of Revenue shall certify the Annual Percentage
17    to the Comptroller on the last business day of the fiscal
18    year immediately preceding the fiscal year for which it is
19    to be effective.
20        (3) The Comptroller shall order transferred and the
21    Treasurer shall transfer from the Tobacco Settlement
22    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
23    in January, 2001, (ii) $35,000,000 in January, 2002, and
24    (iii) $35,000,000 in January, 2003.
25    (d) Expenditures from Income Tax Refund Fund.
26        (1) Beginning January 1, 1989, money in the Income Tax

 

 

HB3522- 71 -LRB100 05678 HLH 21814 b

1    Refund Fund shall be expended exclusively for the purpose
2    of paying refunds resulting from overpayment of tax
3    liability under Section 201 of this Act, for paying rebates
4    under Section 208.1 in the event that the amounts in the
5    Homeowners' Tax Relief Fund are insufficient for that
6    purpose, and for making transfers pursuant to this
7    subsection (d).
8        (2) The Director shall order payment of refunds
9    resulting from overpayment of tax liability under Section
10    201 of this Act from the Income Tax Refund Fund only to the
11    extent that amounts collected pursuant to Section 201 of
12    this Act and transfers pursuant to this subsection (d) and
13    item (3) of subsection (c) have been deposited and retained
14    in the Fund.
15        (3) As soon as possible after the end of each fiscal
16    year, the Director shall order transferred and the State
17    Treasurer and State Comptroller shall transfer from the
18    Income Tax Refund Fund to the Personal Property Tax
19    Replacement Fund an amount, certified by the Director to
20    the Comptroller, equal to the excess of the amount
21    collected pursuant to subsections (c) and (d) of Section
22    201 of this Act deposited into the Income Tax Refund Fund
23    during the fiscal year over the amount of refunds resulting
24    from overpayment of tax liability under subsections (c) and
25    (d) of Section 201 of this Act paid from the Income Tax
26    Refund Fund during the fiscal year.

 

 

HB3522- 72 -LRB100 05678 HLH 21814 b

1        (4) As soon as possible after the end of each fiscal
2    year, the Director shall order transferred and the State
3    Treasurer and State Comptroller shall transfer from the
4    Personal Property Tax Replacement Fund to the Income Tax
5    Refund Fund an amount, certified by the Director to the
6    Comptroller, equal to the excess of the amount of refunds
7    resulting from overpayment of tax liability under
8    subsections (c) and (d) of Section 201 of this Act paid
9    from the Income Tax Refund Fund during the fiscal year over
10    the amount collected pursuant to subsections (c) and (d) of
11    Section 201 of this Act deposited into the Income Tax
12    Refund Fund during the fiscal year.
13        (4.5) As soon as possible after the end of fiscal year
14    1999 and of each fiscal year thereafter, the Director shall
15    order transferred and the State Treasurer and State
16    Comptroller shall transfer from the Income Tax Refund Fund
17    to the General Revenue Fund any surplus remaining in the
18    Income Tax Refund Fund as of the end of such fiscal year;
19    excluding for fiscal years 2000, 2001, and 2002 amounts
20    attributable to transfers under item (3) of subsection (c)
21    less refunds resulting from the earned income tax credit.
22        (5) This Act shall constitute an irrevocable and
23    continuing appropriation from the Income Tax Refund Fund
24    for the purpose of paying refunds upon the order of the
25    Director in accordance with the provisions of this Section.
26    (e) Deposits into the Education Assistance Fund and the

 

 

HB3522- 73 -LRB100 05678 HLH 21814 b

1Income Tax Surcharge Local Government Distributive Fund.
2    On July 1, 1991, and thereafter, of the amounts collected
3pursuant to subsections (a) and (b) of Section 201 of this Act,
4minus deposits into the Income Tax Refund Fund, the Department
5shall deposit 7.3% into the Education Assistance Fund in the
6State Treasury. Beginning July 1, 1991, and continuing through
7January 31, 1993, of the amounts collected pursuant to
8subsections (a) and (b) of Section 201 of the Illinois Income
9Tax Act, minus deposits into the Income Tax Refund Fund, the
10Department shall deposit 3.0% into the Income Tax Surcharge
11Local Government Distributive Fund in the State Treasury.
12Beginning February 1, 1993 and continuing through June 30,
131993, of the amounts collected pursuant to subsections (a) and
14(b) of Section 201 of the Illinois Income Tax Act, minus
15deposits into the Income Tax Refund Fund, the Department shall
16deposit 4.4% into the Income Tax Surcharge Local Government
17Distributive Fund in the State Treasury. Beginning July 1,
181993, and continuing through June 30, 1994, of the amounts
19collected under subsections (a) and (b) of Section 201 of this
20Act, minus deposits into the Income Tax Refund Fund, the
21Department shall deposit 1.475% into the Income Tax Surcharge
22Local Government Distributive Fund in the State Treasury.
23    (f) Deposits into the Fund for the Advancement of
24Education. Beginning February 1, 2015, the Department shall
25deposit the following portions of the revenue realized from the
26tax imposed upon individuals, trusts, and estates by

 

 

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1subsections (a) and (b) of Section 201 of this Act during the
2preceding month, minus deposits into the Income Tax Refund
3Fund, into the Fund for the Advancement of Education:
4        (1) beginning February 1, 2015, and prior to February
5    1, 2025, 1/30; and
6        (2) beginning February 1, 2025, 1/26.
7    If the rate of tax imposed by subsection (a) and (b) of
8Section 201 is reduced pursuant to Section 201.5 of this Act,
9the Department shall not make the deposits required by this
10subsection (f) on or after the effective date of the reduction.
11    (g) Deposits into the Commitment to Human Services Fund.
12Beginning February 1, 2015, the Department shall deposit the
13following portions of the revenue realized from the tax imposed
14upon individuals, trusts, and estates by subsections (a) and
15(b) of Section 201 of this Act during the preceding month,
16minus deposits into the Income Tax Refund Fund, into the
17Commitment to Human Services Fund:
18        (1) beginning February 1, 2015, and prior to February
19    1, 2018 2025, 1/30; and
20        (1.5) beginning February 1, 2018, and prior to February
21    1, 2025, 3/40; and
22        (2) beginning February 1, 2025, 1/12 1/26.
23    If the rate of tax imposed by subsection (a) and (b) of
24Section 201 is reduced pursuant to Section 201.5 of this Act,
25the Department shall not make the deposits required by this
26subsection (g) on or after the effective date of the reduction.

 

 

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1    (h) Deposits into the Tax Compliance and Administration
2Fund. Beginning on the first day of the first calendar month to
3occur on or after August 26, 2014 (the effective date of Public
4Act 98-1098), each month the Department shall pay into the Tax
5Compliance and Administration Fund, to be used, subject to
6appropriation, to fund additional auditors and compliance
7personnel at the Department, an amount equal to 1/12 of 5% of
8the cash receipts collected during the preceding fiscal year by
9the Audit Bureau of the Department from the tax imposed by
10subsections (a), (b), (c), and (d) of Section 201 of this Act,
11net of deposits into the Income Tax Refund Fund made from those
12cash receipts.
13    (i) Deposits into the Common School Fund. In addition to
14the other provisions in law, beginning February 1, 2018 and
15ending January 31, 2019, the Department shall deposit 6.12% of
16the revenue realized from the tax imposed upon individuals,
17trusts, and estates by subsections (a) and (b) of Section 201
18of this Act during the preceding month, minus deposits into the
19Income Tax Refund Fund, into the Common School Fund. In
20addition to the other provisions in law, beginning February 1,
212019, the Department shall deposit 15.52% of the revenue
22realized from the tax imposed upon individuals, trusts, and
23estates by subsections (a) and (b) of Section 201 of this Act
24during the preceding month, minus deposits into the Income Tax
25Refund Fund, into the Common School Fund.
26    (j) Deposits into the Pension Stabilization Fund. In

 

 

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1addition to the other provisions in law, beginning February 1,
22018, the Department shall deposit 4.4% of the revenue realized
3from the tax imposed upon individuals, trusts, and estates by
4subsections (a) and (b) of Section 201 of this Act during the
5preceding month, minus deposits into the Income Tax Refund
6Fund, into the Pension Stabilization Fund.
7    (k) Deposits into the Education Property Tax Relief Fund.
8In addition to the other provisions in law, beginning February
91, 2018 and ending January 31, 2019, the Department shall
10deposit 9.4% of the revenue realized from the tax imposed upon
11individuals, trusts, and estates by subsections (a) and (b) of
12Section 201 of this Act during the preceding month, minus
13deposits into the Income Tax Refund Fund, into the Education
14Property Tax Relief Fund.
15(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
1698-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
177-20-15.)
 
18    Section 20. The Use Tax Act is amended by changing Sections
193-6, 3-10, 3-55, 3-85, and 9 as follows:
 
20    (35 ILCS 105/3-6)
21    Sec. 3-6. Sales tax holiday items.
22    (a) The tangible personal property described in this
23subsection qualifies for the 1.25% reduced rate of tax for the
24period set forth in Section 3-10 of this Act (hereinafter

 

 

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1referred to as the Sales Tax Holiday Period). The reduced rate
2on these items shall be administered under the provisions of
3subsection (b) of this Section. The following items are subject
4to the reduced rate:
5        (1) Clothing items that each have a retail selling
6    price of less than $100.
7        "Clothing" means, unless otherwise specified in this
8    Section, all human wearing apparel suitable for general
9    use. "Clothing" does not include clothing accessories,
10    protective equipment, or sport or recreational equipment.
11    "Clothing" includes, but is not limited to: household and
12    shop aprons; athletic supporters; bathing suits and caps;
13    belts and suspenders; boots; coats and jackets; ear muffs;
14    footlets; gloves and mittens for general use; hats and
15    caps; hosiery; insoles for shoes; lab coats; neckties;
16    overshoes; pantyhose; rainwear; rubber pants; sandals;
17    scarves; shoes and shoelaces; slippers; sneakers; socks
18    and stockings; steel-toed shoes; underwear; and school
19    uniforms.
20        "Clothing accessories" means, but is not limited to:
21    briefcases; cosmetics; hair notions, including, but not
22    limited to barrettes, hair bows, and hair nets; handbags;
23    handkerchiefs; jewelry; non-prescription sunglasses;
24    umbrellas; wallets; watches; and wigs and hair pieces.
25        "Protective equipment" means, but is not limited to:
26    breathing masks; clean room apparel and equipment; ear and

 

 

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1    hearing protectors; face shields; hard hats; helmets;
2    paint or dust respirators; protective gloves; safety
3    glasses and goggles; safety belts; tool belts; and welder's
4    gloves and masks.
5        "Sport or recreational equipment" means, but is not
6    limited to: ballet and tap shoes; cleated or spiked
7    athletic shoes; gloves, including, but not limited to,
8    baseball, bowling, boxing, hockey, and golf gloves;
9    goggles; hand and elbow guards; life preservers and vests;
10    mouth guards; roller and ice skates; shin guards; shoulder
11    pads; ski boots; waders; and wetsuits and fins.
12        (2) School supplies. "School supplies" means, unless
13    otherwise specified in this Section, items used by a
14    student in a course of study. The purchase of school
15    supplies for use by persons other than students for use in
16    a course of study are not eligible for the reduced rate of
17    tax. "School supplies" do not include school art supplies;
18    school instructional materials; cameras; film and memory
19    cards; videocameras, tapes, and videotapes; computers;
20    cell phones; Personal Digital Assistants (PDAs); handheld
21    electronic schedulers; and school computer supplies.
22        "School supplies" includes, but is not limited to:
23    binders; book bags; calculators; cellophane tape;
24    blackboard chalk; compasses; composition books; crayons;
25    erasers; expandable, pocket, plastic, and manila folders;
26    glue, paste, and paste sticks; highlighters; index cards;

 

 

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1    index card boxes; legal pads; lunch boxes; markers;
2    notebooks; paper, including loose leaf ruled notebook
3    paper, copy paper, graph paper, tracing paper, manila
4    paper, colored paper, poster board, and construction
5    paper; pencils; pencil leads; pens; ink and ink refills for
6    pens; pencil boxes and other school supply boxes; pencil
7    sharpeners; protractors; rulers; scissors; and writing
8    tablets.
9        "School art supply" means an item commonly used by a
10    student in a course of study for artwork and includes only
11    the following items: clay and glazes; acrylic, tempera, and
12    oil paint; paintbrushes for artwork; sketch and drawing
13    pads; and watercolors.
14        "School instructional material" means written material
15    commonly used by a student in a course of study as a
16    reference and to learn the subject being taught and
17    includes only the following items: reference books;
18    reference maps and globes; textbooks; and workbooks.
19        "School computer supply" means an item commonly used by
20    a student in a course of study in which a computer is used
21    and applies only to the following items: flashdrives and
22    other computer data storage devices; data storage media,
23    such as diskettes and compact disks; boxes and cases for
24    disk storage; external ports or drives; computer cases;
25    computer cables; computer printers; and printer
26    cartridges, toner, and ink.

 

 

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1    (b) Administration. Notwithstanding any other provision of
2this Act, the reduced rate of tax under Section 3-10 of this
3Act for clothing and school supplies shall be administered by
4the Department under the provisions of this subsection (b).
5        (1) Bundled sales. Items that qualify for the reduced
6    rate of tax that are bundled together with items that do
7    not qualify for the reduced rate of tax and that are sold
8    for one itemized price will be subject to the reduced rate
9    of tax only if the value of the items that qualify for the
10    reduced rate of tax exceeds the value of the items that do
11    not qualify for the reduced rate of tax.
12        (2) Coupons and discounts. An unreimbursed discount by
13    the seller reduces the sales price of the property so that
14    the discounted sales price determines whether the sales
15    price is within a sales tax holiday price threshold. A
16    coupon or other reduction in the sales price is treated as
17    a discount if the seller is not reimbursed for the coupon
18    or reduction amount by a third party.
19        (3) Splitting of items normally sold together.
20    Articles that are normally sold as a single unit must
21    continue to be sold in that manner. Such articles cannot be
22    priced separately and sold as individual items in order to
23    obtain the reduced rate of tax. For example, a pair of
24    shoes cannot have each shoe sold separately so that the
25    sales price of each shoe is within a sales tax holiday
26    price threshold.

 

 

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1        (4) Rain checks. A rain check is a procedure that
2    allows a customer to purchase an item at a certain price at
3    a later time because the particular item was out of stock.
4    Eligible property that customers purchase during the Sales
5    Tax Holiday Period with the use of a rain check will
6    qualify for the reduced rate of tax regardless of when the
7    rain check was issued. Issuance of a rain check during the
8    Sales Tax Holiday Period will not qualify eligible property
9    for the reduced rate of tax if the property is actually
10    purchased after the Sales Tax Holiday Period.
11        (5) Exchanges. The procedure for an exchange in regards
12    to a sales tax holiday is as follows:
13            (A) If a customer purchases an item of eligible
14        property during the Sales Tax Holiday Period, but later
15        exchanges the item for a similar eligible item, even if
16        a different size, different color, or other feature, no
17        additional tax is due even if the exchange is made
18        after the Sales Tax Holiday Period.
19            (B) If a customer purchases an item of eligible
20        property during the Sales Tax Holiday Period, but after
21        the Sales Tax Holiday Period has ended, the customer
22        returns the item and receives credit on the purchase of
23        a different item, the 6.25% general merchandise sales
24        tax rate is due on the sale of the newly purchased
25        item.
26            (C) If a customer purchases an item of eligible

 

 

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1        property before the Sales Tax Holiday Period, but
2        during the Sales Tax Holiday Period the customer
3        returns the item and receives credit on the purchase of
4        a different item of eligible property, the reduced rate
5        of tax is due on the sale of the new item if the new
6        item is purchased during the Sales Tax Holiday Period.
7        (6) Delivery charges. Delivery charges, including
8    shipping, handling and service charges, are part of the
9    sales price of eligible property.
10        (7) Order date and back orders. For the purpose of a
11    sales tax holiday, eligible property qualifies for the
12    reduced rate of tax if: (i) the item is both delivered to
13    and paid for by the customer during the Sales Tax Holiday
14    Period or (ii) the customer orders and pays for the item
15    and the seller accepts the order during the Sales Tax
16    Holiday Period for immediate shipment, even if delivery is
17    made after the Sales Tax Holiday Period. The seller accepts
18    an order when the seller has taken action to fill the order
19    for immediate shipment. Actions to fill an order include
20    placement of an "in date" stamp on an order or assignment
21    of an "order number" to an order within the Sales Tax
22    Holiday Period. An order is for immediate shipment when the
23    customer does not request delayed shipment. An order is for
24    immediate shipment notwithstanding that the shipment may
25    be delayed because of a backlog of orders or because stock
26    is currently unavailable to, or on back order by, the

 

 

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1    seller.
2        (8) Returns. For a 60-day period immediately after the
3    Sales Tax Holiday Period, if a customer returns an item
4    that would qualify for the reduced rate of tax, credit for
5    or refund of sales tax shall be given only at the reduced
6    rate unless the customer provides a receipt or invoice that
7    shows tax was paid at the 6.25% general merchandise rate,
8    or the seller has sufficient documentation to show that tax
9    was paid at the 6.25% general merchandise rate on the
10    specific item. This 60-day period is set solely for the
11    purpose of designating a time period during which the
12    customer must provide documentation that shows that the
13    appropriate sales tax rate was paid on returned
14    merchandise. The 60-day period is not intended to change a
15    seller's policy on the time period during which the seller
16    will accept returns.
17    (c) The Department may implement the provisions of this
18Section through the use of emergency rules, along with
19permanent rules filed concurrently with such emergency rules,
20in accordance with the provisions of Section 5-45 of the
21Illinois Administrative Procedure Act. For purposes of the
22Illinois Administrative Procedure Act, the adoption of rules to
23implement the provisions of this Section shall be deemed an
24emergency and necessary for the public interest, safety, and
25welfare.
26(Source: P.A. 96-1012, eff. 7-7-10.)
 

 

 

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1    (35 ILCS 105/3-10)
2    Sec. 3-10. Rate of tax. Unless otherwise provided in this
3Section, until January 1, 2018, the tax imposed by this Act is
4at the rate of 6.25% of either the selling price or the fair
5market value, if any, of the tangible personal property. Unless
6otherwise provided in this Section, beginning on January 1,
72018, the tax imposed by this Act is at the rate of 5.75% of
8either the selling price or the fair market value, if any, of
9the tangible personal property. References to the "general
10rate" mean (i) the 6.25% rate until January 1, 2018 and (ii)
11the 5.75% rate on and after January 1, 2018. In all cases where
12property functionally used or consumed is the same as the
13property that was purchased at retail, then the tax is imposed
14on the selling price of the property. In all cases where
15property functionally used or consumed is a by-product or waste
16product that has been refined, manufactured, or produced from
17property purchased at retail, then the tax is imposed on the
18lower of the fair market value, if any, of the specific
19property so used in this State or on the selling price of the
20property purchased at retail. For purposes of this Section
21"fair market value" means the price at which property would
22change hands between a willing buyer and a willing seller,
23neither being under any compulsion to buy or sell and both
24having reasonable knowledge of the relevant facts. The fair
25market value shall be established by Illinois sales by the

 

 

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1taxpayer of the same property as that functionally used or
2consumed, or if there are no such sales by the taxpayer, then
3comparable sales or purchases of property of like kind and
4character in Illinois.
5    Beginning on July 1, 2000 and through December 31, 2000,
6with respect to motor fuel, as defined in Section 1.1 of the
7Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
8the Use Tax Act, the tax is imposed at the rate of 1.25%.
9    Beginning on August 6, 2010 through August 15, 2010, with
10respect to sales tax holiday items as defined in Section 3-6 of
11this Act, the tax is imposed at the rate of 1.25%.
12    With respect to gasohol, the tax imposed by this Act
13applies to (i) 70% of the proceeds of sales made on or after
14January 1, 1990, and before July 1, 2003, (ii) 80% of the
15proceeds of sales made on or after July 1, 2003 and on or
16before December 31, 2018, and (iii) 100% of the proceeds of
17sales made thereafter. If, at any time, however, the tax under
18this Act on sales of gasohol is imposed at the rate of 1.25%,
19then the tax imposed by this Act applies to 100% of the
20proceeds of sales of gasohol made during that time.
21    With respect to majority blended ethanol fuel, the tax
22imposed by this Act does not apply to the proceeds of sales
23made on or after July 1, 2003 and on or before December 31,
242018 but applies to 100% of the proceeds of sales made
25thereafter.
26    With respect to biodiesel blends with no less than 1% and

 

 

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1no more than 10% biodiesel, the tax imposed by this Act applies
2to (i) 80% of the proceeds of sales made on or after July 1,
32003 and on or before December 31, 2018 and (ii) 100% of the
4proceeds of sales made thereafter. If, at any time, however,
5the tax under this Act on sales of biodiesel blends with no
6less than 1% and no more than 10% biodiesel is imposed at the
7rate of 1.25%, then the tax imposed by this Act applies to 100%
8of the proceeds of sales of biodiesel blends with no less than
91% and no more than 10% biodiesel made during that time.
10    With respect to 100% biodiesel and biodiesel blends with
11more than 10% but no more than 99% biodiesel, the tax imposed
12by this Act does not apply to the proceeds of sales made on or
13after July 1, 2003 and on or before December 31, 2018 but
14applies to 100% of the proceeds of sales made thereafter.
15    With respect to food for human consumption that is to be
16consumed off the premises where it is sold (other than
17alcoholic beverages, soft drinks, and food that has been
18prepared for immediate consumption) and prescription and
19nonprescription medicines, drugs, medical appliances, products
20classified as Class III medical devices by the United States
21Food and Drug Administration that are used for cancer treatment
22pursuant to a prescription, as well as any accessories and
23components related to those devices, modifications to a motor
24vehicle for the purpose of rendering it usable by a person with
25a disability, and insulin, urine testing materials, syringes,
26and needles used by diabetics, for human use, the tax is

 

 

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1imposed at the rate of 1%. For the purposes of this Section,
2until September 1, 2009: the term "soft drinks" means any
3complete, finished, ready-to-use, non-alcoholic drink, whether
4carbonated or not, including but not limited to soda water,
5cola, fruit juice, vegetable juice, carbonated water, and all
6other preparations commonly known as soft drinks of whatever
7kind or description that are contained in any closed or sealed
8bottle, can, carton, or container, regardless of size; but
9"soft drinks" does not include coffee, tea, non-carbonated
10water, infant formula, milk or milk products as defined in the
11Grade A Pasteurized Milk and Milk Products Act, or drinks
12containing 50% or more natural fruit or vegetable juice.
13    Notwithstanding any other provisions of this Act,
14beginning September 1, 2009, "soft drinks" means non-alcoholic
15beverages that contain natural or artificial sweeteners. "Soft
16drinks" do not include beverages that contain milk or milk
17products, soy, rice or similar milk substitutes, or greater
18than 50% of vegetable or fruit juice by volume.
19    Until August 1, 2009, and notwithstanding any other
20provisions of this Act, "food for human consumption that is to
21be consumed off the premises where it is sold" includes all
22food sold through a vending machine, except soft drinks and
23food products that are dispensed hot from a vending machine,
24regardless of the location of the vending machine. Beginning
25August 1, 2009, and notwithstanding any other provisions of
26this Act, "food for human consumption that is to be consumed

 

 

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1off the premises where it is sold" includes all food sold
2through a vending machine, except soft drinks, candy, and food
3products that are dispensed hot from a vending machine,
4regardless of the location of the vending machine.
5    Notwithstanding any other provisions of this Act,
6beginning September 1, 2009, "food for human consumption that
7is to be consumed off the premises where it is sold" does not
8include candy. For purposes of this Section, "candy" means a
9preparation of sugar, honey, or other natural or artificial
10sweeteners in combination with chocolate, fruits, nuts or other
11ingredients or flavorings in the form of bars, drops, or
12pieces. "Candy" does not include any preparation that contains
13flour or requires refrigeration.
14    Notwithstanding any other provisions of this Act,
15beginning September 1, 2009, "nonprescription medicines and
16drugs" does not include grooming and hygiene products. For
17purposes of this Section, "grooming and hygiene products"
18includes, but is not limited to, soaps and cleaning solutions,
19shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
20lotions and screens, unless those products are available by
21prescription only, regardless of whether the products meet the
22definition of "over-the-counter-drugs". For the purposes of
23this paragraph, "over-the-counter-drug" means a drug for human
24use that contains a label that identifies the product as a drug
25as required by 21 C.F.R. 201.66. The "over-the-counter-drug"
26label includes:

 

 

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1        (A) A "Drug Facts" panel; or
2        (B) A statement of the "active ingredient(s)" with a
3    list of those ingredients contained in the compound,
4    substance or preparation.
5    Beginning on the effective date of this amendatory Act of
6the 98th General Assembly, "prescription and nonprescription
7medicines and drugs" includes medical cannabis purchased from a
8registered dispensing organization under the Compassionate Use
9of Medical Cannabis Pilot Program Act.
10    If the property that is purchased at retail from a retailer
11is acquired outside Illinois and used outside Illinois before
12being brought to Illinois for use here and is taxable under
13this Act, the "selling price" on which the tax is computed
14shall be reduced by an amount that represents a reasonable
15allowance for depreciation for the period of prior out-of-state
16use.
17(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
1899-858, eff. 8-19-16.)
 
19    (35 ILCS 105/3-55)  (from Ch. 120, par. 439.3-55)
20    Sec. 3-55. Multistate exemption. To prevent actual or
21likely multistate taxation, the tax imposed by this Act does
22not apply to the use of tangible personal property in this
23State under the following circumstances:
24    (a) The use, in this State, of tangible personal property
25acquired outside this State by a nonresident individual and

 

 

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1brought into this State by the individual for his or her own
2use while temporarily within this State or while passing
3through this State.
4    (b) The use, in this State, of tangible personal property
5by an interstate carrier for hire as rolling stock moving in
6interstate commerce or by lessors under a lease of one year or
7longer executed or in effect at the time of purchase of
8tangible personal property by interstate carriers for-hire for
9use as rolling stock moving in interstate commerce as long as
10so used by the interstate carriers for-hire, and equipment
11operated by a telecommunications provider, licensed as a common
12carrier by the Federal Communications Commission, which is
13permanently installed in or affixed to aircraft moving in
14interstate commerce.
15    (c) The use, in this State, by owners, lessors, or shippers
16of tangible personal property that is utilized by interstate
17carriers for hire for use as rolling stock moving in interstate
18commerce as long as so used by the interstate carriers for
19hire, and equipment operated by a telecommunications provider,
20licensed as a common carrier by the Federal Communications
21Commission, which is permanently installed in or affixed to
22aircraft moving in interstate commerce.
23    (d) The use, in this State, of tangible personal property
24that is acquired outside this State and caused to be brought
25into this State by a person who has already paid a tax in
26another State in respect to the sale, purchase, or use of that

 

 

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1property, to the extent of the amount of the tax properly due
2and paid in the other State.
3    (e) The temporary storage, in this State, of tangible
4personal property that is acquired outside this State and that,
5after being brought into this State and stored here
6temporarily, is used solely outside this State or is physically
7attached to or incorporated into other tangible personal
8property that is used solely outside this State, or is altered
9by converting, fabricating, manufacturing, printing,
10processing, or shaping, and, as altered, is used solely outside
11this State.
12    (f) The temporary storage in this State of building
13materials and fixtures that are acquired either in this State
14or outside this State by an Illinois registered combination
15retailer and construction contractor, and that the purchaser
16thereafter uses outside this State by incorporating that
17property into real estate located outside this State.
18    (g) The use or purchase of tangible personal property by a
19common carrier by rail or motor that receives the physical
20possession of the property in Illinois, and that transports the
21property, or shares with another common carrier in the
22transportation of the property, out of Illinois on a standard
23uniform bill of lading showing the seller of the property as
24the shipper or consignor of the property to a destination
25outside Illinois, for use outside Illinois.
26    (h) Except as provided in subsection (h-1), the use, in

 

 

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1this State, of a motor vehicle that was sold in this State to a
2nonresident, even though the motor vehicle is delivered to the
3nonresident in this State, if the motor vehicle is not to be
4titled in this State, and if a drive-away permit is issued to
5the motor vehicle as provided in Section 3-603 of the Illinois
6Vehicle Code or if the nonresident purchaser has vehicle
7registration plates to transfer to the motor vehicle upon
8returning to his or her home state. The issuance of the
9drive-away permit or having the out-of-state registration
10plates to be transferred shall be prima facie evidence that the
11motor vehicle will not be titled in this State.
12    (h-1) The exemption under subsection (h) does not apply if
13the state in which the motor vehicle will be titled does not
14allow a reciprocal exemption for the use in that state of a
15motor vehicle sold and delivered in that state to an Illinois
16resident but titled in Illinois. The tax collected under this
17Act on the sale of a motor vehicle in this State to a resident
18of another state that does not allow a reciprocal exemption
19shall be imposed at a rate equal to the state's rate of tax on
20taxable property in the state in which the purchaser is a
21resident, except that the tax shall not exceed the tax that
22would otherwise be imposed under this Act. At the time of the
23sale, the purchaser shall execute a statement, signed under
24penalty of perjury, of his or her intent to title the vehicle
25in the state in which the purchaser is a resident within 30
26days after the sale and of the fact of the payment to the State

 

 

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1of Illinois of tax in an amount equivalent to the state's rate
2of tax on taxable property in his or her state of residence and
3shall submit the statement to the appropriate tax collection
4agency in his or her state of residence. In addition, the
5retailer must retain a signed copy of the statement in his or
6her records. Nothing in this subsection shall be construed to
7require the removal of the vehicle from this state following
8the filing of an intent to title the vehicle in the purchaser's
9state of residence if the purchaser titles the vehicle in his
10or her state of residence within 30 days after the date of
11sale. The tax collected under this Act in accordance with this
12subsection (h-1) shall be proportionately distributed as if the
13tax were collected at the 6.25% general rate imposed under this
14Act.
15    (h-2) The following exemptions apply with respect to
16certain aircraft:
17        (1) Beginning on July 1, 2007, no tax is imposed under
18    this Act on the purchase of an aircraft, as defined in
19    Section 3 of the Illinois Aeronautics Act, if all of the
20    following conditions are met:
21            (A) the aircraft leaves this State within 15 days
22        after the later of either the issuance of the final
23        billing for the purchase of the aircraft or the
24        authorized approval for return to service, completion
25        of the maintenance record entry, and completion of the
26        test flight and ground test for inspection, as required

 

 

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1        by 14 C.F.R. 91.407;
2            (B) the aircraft is not based or registered in this
3        State after the purchase of the aircraft; and
4            (C) the purchaser provides the Department with a
5        signed and dated certification, on a form prescribed by
6        the Department, certifying that the requirements of
7        this item (1) are met. The certificate must also
8        include the name and address of the purchaser, the
9        address of the location where the aircraft is to be
10        titled or registered, the address of the primary
11        physical location of the aircraft, and other
12        information that the Department may reasonably
13        require.
14        (2) Beginning on July 1, 2007, no tax is imposed under
15    this Act on the use of an aircraft, as defined in Section 3
16    of the Illinois Aeronautics Act, that is temporarily
17    located in this State for the purpose of a prepurchase
18    evaluation if all of the following conditions are met:
19            (A) the aircraft is not based or registered in this
20        State after the prepurchase evaluation; and
21            (B) the purchaser provides the Department with a
22        signed and dated certification, on a form prescribed by
23        the Department, certifying that the requirements of
24        this item (2) are met. The certificate must also
25        include the name and address of the purchaser, the
26        address of the location where the aircraft is to be

 

 

HB3522- 95 -LRB100 05678 HLH 21814 b

1        titled or registered, the address of the primary
2        physical location of the aircraft, and other
3        information that the Department may reasonably
4        require.
5        (3) Beginning on July 1, 2007, no tax is imposed under
6    this Act on the use of an aircraft, as defined in Section 3
7    of the Illinois Aeronautics Act, that is temporarily
8    located in this State for the purpose of a post-sale
9    customization if all of the following conditions are met:
10            (A) the aircraft leaves this State within 15 days
11        after the authorized approval for return to service,
12        completion of the maintenance record entry, and
13        completion of the test flight and ground test for
14        inspection, as required by 14 C.F.R. 91.407;
15            (B) the aircraft is not based or registered in this
16        State either before or after the post-sale
17        customization; and
18            (C) the purchaser provides the Department with a
19        signed and dated certification, on a form prescribed by
20        the Department, certifying that the requirements of
21        this item (3) are met. The certificate must also
22        include the name and address of the purchaser, the
23        address of the location where the aircraft is to be
24        titled or registered, the address of the primary
25        physical location of the aircraft, and other
26        information that the Department may reasonably

 

 

HB3522- 96 -LRB100 05678 HLH 21814 b

1        require.
2    If tax becomes due under this subsection (h-2) because of
3the purchaser's use of the aircraft in this State, the
4purchaser shall file a return with the Department and pay the
5tax on the fair market value of the aircraft. This return and
6payment of the tax must be made no later than 30 days after the
7aircraft is used in a taxable manner in this State. The tax is
8based on the fair market value of the aircraft on the date that
9it is first used in a taxable manner in this State.
10    For purposes of this subsection (h-2):
11    "Based in this State" means hangared, stored, or otherwise
12used, excluding post-sale customizations as defined in this
13Section, for 10 or more days in each 12-month period
14immediately following the date of the sale of the aircraft.
15    "Post-sale customization" means any improvement,
16maintenance, or repair that is performed on an aircraft
17following a transfer of ownership of the aircraft.
18    "Prepurchase evaluation" means an examination of an
19aircraft to provide a potential purchaser with information
20relevant to the potential purchase.
21    "Registered in this State" means an aircraft registered
22with the Department of Transportation, Aeronautics Division,
23or titled or registered with the Federal Aviation
24Administration to an address located in this State.
25    This subsection (h-2) is exempt from the provisions of
26Section 3-90.

 

 

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1    (i) Beginning July 1, 1999, the use, in this State, of fuel
2acquired outside this State and brought into this State in the
3fuel supply tanks of locomotives engaged in freight hauling and
4passenger service for interstate commerce. This subsection is
5exempt from the provisions of Section 3-90.
6    (j) Beginning on January 1, 2002 and through June 30, 2016,
7the use of tangible personal property purchased from an
8Illinois retailer by a taxpayer engaged in centralized
9purchasing activities in Illinois who will, upon receipt of the
10property in Illinois, temporarily store the property in
11Illinois (i) for the purpose of subsequently transporting it
12outside this State for use or consumption thereafter solely
13outside this State or (ii) for the purpose of being processed,
14fabricated, or manufactured into, attached to, or incorporated
15into other tangible personal property to be transported outside
16this State and thereafter used or consumed solely outside this
17State. The Director of Revenue shall, pursuant to rules adopted
18in accordance with the Illinois Administrative Procedure Act,
19issue a permit to any taxpayer in good standing with the
20Department who is eligible for the exemption under this
21subsection (j). The permit issued under this subsection (j)
22shall authorize the holder, to the extent and in the manner
23specified in the rules adopted under this Act, to purchase
24tangible personal property from a retailer exempt from the
25taxes imposed by this Act. Taxpayers shall maintain all
26necessary books and records to substantiate the use and

 

 

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1consumption of all such tangible personal property outside of
2the State of Illinois.
3(Source: P.A. 97-73, eff. 6-30-11.)
 
4    (35 ILCS 105/3-85)
5    Sec. 3-85. Manufacturer's Purchase Credit. For purchases
6of machinery and equipment made on and after January 1, 1995
7through June 30, 2003, and on and after September 1, 2004
8through August 30, 2014, a purchaser of manufacturing machinery
9and equipment that qualifies for the exemption provided by
10paragraph (18) of Section 3-5 of this Act earns a credit in an
11amount equal to a fixed percentage of the tax which would have
12been incurred under this Act on those purchases. For purchases
13of graphic arts machinery and equipment made on or after July
141, 1996 and through June 30, 2003, and on and after September
151, 2004 through August 30, 2014, a purchaser of graphic arts
16machinery and equipment that qualifies for the exemption
17provided by paragraph (6) of Section 3-5 of this Act earns a
18credit in an amount equal to a fixed percentage of the tax that
19would have been incurred under this Act on those purchases. The
20credit earned for purchases of manufacturing machinery and
21equipment or graphic arts machinery and equipment shall be
22referred to as the Manufacturer's Purchase Credit. A graphic
23arts producer is a person engaged in graphic arts production as
24defined in Section 2-30 of the Retailers' Occupation Tax Act.
25Beginning July 1, 1996, all references in this Section to

 

 

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1manufacturers or manufacturing shall also be deemed to refer to
2graphic arts producers or graphic arts production.
3    The amount of credit shall be a percentage of the tax that
4would have been incurred on the purchase of manufacturing
5machinery and equipment or graphic arts machinery and equipment
6if the exemptions provided by paragraph (6) or paragraph (18)
7of Section 3-5 of this Act had not been applicable. The
8percentage shall be as follows:
9        (1) 15% for purchases made on or before June 30, 1995.
10        (2) 25% for purchases made after June 30, 1995, and on
11    or before June 30, 1996.
12        (3) 40% for purchases made after June 30, 1996, and on
13    or before June 30, 1997.
14        (4) 50% for purchases made on or after July 1, 1997.
15    (a) Manufacturer's Purchase Credit earned prior to July 1,
162003. This subsection (a) applies to Manufacturer's Purchase
17Credit earned prior to July 1, 2003. A purchaser of production
18related tangible personal property desiring to use the
19Manufacturer's Purchase Credit shall certify to the seller
20prior to October 1, 2003 that the purchaser is satisfying all
21or part of the liability under the Use Tax Act or the Service
22Use Tax Act that is due on the purchase of the production
23related tangible personal property by use of Manufacturer's
24Purchase Credit. The Manufacturer's Purchase Credit
25certification must be dated and shall include the name and
26address of the purchaser, the purchaser's registration number,

 

 

HB3522- 100 -LRB100 05678 HLH 21814 b

1if registered, the credit being applied, and a statement that
2the State Use Tax or Service Use Tax liability is being
3satisfied with the manufacturer's or graphic arts producer's
4accumulated purchase credit. Certification may be incorporated
5into the manufacturer's or graphic arts producer's purchase
6order. Manufacturer's Purchase Credit certification provided
7by the manufacturer or graphic arts producer prior to October
81, 2003 may be used to satisfy the retailer's or serviceman's
9liability under the Retailers' Occupation Tax Act or Service
10Occupation Tax Act for the credit claimed, not to exceed 6.25%
11of the receipts subject to tax from a qualifying purchase, but
12only if the retailer or serviceman reports the Manufacturer's
13Purchase Credit claimed as required by the Department. A
14Manufacturer's Purchase Credit reported on any original or
15amended return filed under this Act after October 20, 2003
16shall be disallowed. The Manufacturer's Purchase Credit earned
17by purchase of exempt manufacturing machinery and equipment or
18graphic arts machinery and equipment is a non-transferable
19credit. A manufacturer or graphic arts producer that enters
20into a contract involving the installation of tangible personal
21property into real estate within a manufacturing or graphic
22arts production facility may, prior to October 1, 2003,
23authorize a construction contractor to utilize credit
24accumulated by the manufacturer or graphic arts producer to
25purchase the tangible personal property. A manufacturer or
26graphic arts producer intending to use accumulated credit to

 

 

HB3522- 101 -LRB100 05678 HLH 21814 b

1purchase such tangible personal property shall execute a
2written contract authorizing the contractor to utilize a
3specified dollar amount of credit. The contractor shall
4furnish, prior to October 1, 2003, the supplier with the
5manufacturer's or graphic arts producer's name, registration
6or resale number, and a statement that a specific amount of the
7Use Tax or Service Use Tax liability, not to exceed 6.25% of
8the selling price, is being satisfied with the credit. The
9manufacturer or graphic arts producer shall remain liable to
10timely report all information required by the annual Report of
11Manufacturer's Purchase Credit Used for all credit utilized by
12a construction contractor.
13    No Manufacturer's Purchase Credit earned prior to July 1,
142003 may be used after October 1, 2003. The Manufacturer's
15Purchase Credit may be used to satisfy liability under the Use
16Tax Act or the Service Use Tax Act due on the purchase of
17production related tangible personal property (including
18purchases by a manufacturer, by a graphic arts producer, or by
19a lessor who rents or leases the use of the property to a
20manufacturer or graphic arts producer) that does not otherwise
21qualify for the manufacturing machinery and equipment
22exemption or the graphic arts machinery and equipment
23exemption. "Production related tangible personal property"
24means (i) all tangible personal property used or consumed by
25the purchaser in a manufacturing facility in which a
26manufacturing process described in Section 2-45 of the

 

 

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1Retailers' Occupation Tax Act takes place, including tangible
2personal property purchased for incorporation into real estate
3within a manufacturing facility and including, but not limited
4to, tangible personal property used or consumed in activities
5such as preproduction material handling, receiving, quality
6control, inventory control, storage, staging, and packaging
7for shipping and transportation purposes; (ii) all tangible
8personal property used or consumed by the purchaser in a
9graphic arts facility in which graphic arts production as
10described in Section 2-30 of the Retailers' Occupation Tax Act
11takes place, including tangible personal property purchased
12for incorporation into real estate within a graphic arts
13facility and including, but not limited to, all tangible
14personal property used or consumed in activities such as
15graphic arts preliminary or pre-press production,
16pre-production material handling, receiving, quality control,
17inventory control, storage, staging, sorting, labeling,
18mailing, tying, wrapping, and packaging; and (iii) all tangible
19personal property used or consumed by the purchaser for
20research and development. "Production related tangible
21personal property" does not include (i) tangible personal
22property used, within or without a manufacturing facility, in
23sales, purchasing, accounting, fiscal management, marketing,
24personnel recruitment or selection, or landscaping or (ii)
25tangible personal property required to be titled or registered
26with a department, agency, or unit of federal, state, or local

 

 

HB3522- 103 -LRB100 05678 HLH 21814 b

1government. The Manufacturer's Purchase Credit may be used,
2prior to October 1, 2003, to satisfy the tax arising either
3from the purchase of machinery and equipment on or after
4January 1, 1995 for which the exemption provided by paragraph
5(18) of Section 3-5 of this Act was erroneously claimed, or the
6purchase of machinery and equipment on or after July 1, 1996
7for which the exemption provided by paragraph (6) of Section
83-5 of this Act was erroneously claimed, but not in
9satisfaction of penalty, if any, and interest for failure to
10pay the tax when due. A purchaser of production related
11tangible personal property who is required to pay Illinois Use
12Tax or Service Use Tax on the purchase directly to the
13Department may, prior to October 1, 2003, utilize the
14Manufacturer's Purchase Credit in satisfaction of the tax
15arising from that purchase, but not in satisfaction of penalty
16and interest. A purchaser who uses the Manufacturer's Purchase
17Credit to purchase property which is later determined not to be
18production related tangible personal property may be liable for
19tax, penalty, and interest on the purchase of that property as
20of the date of purchase but shall be entitled to use the
21disallowed Manufacturer's Purchase Credit, so long as it has
22not expired and is used prior to October 1, 2003, on qualifying
23purchases of production related tangible personal property not
24previously subject to credit usage. The Manufacturer's
25Purchase Credit earned by a manufacturer or graphic arts
26producer expires the last day of the second calendar year

 

 

HB3522- 104 -LRB100 05678 HLH 21814 b

1following the calendar year in which the credit arose. No
2Manufacturer's Purchase Credit may be used after September 30,
32003 regardless of when that credit was earned.
4    A purchaser earning Manufacturer's Purchase Credit shall
5sign and file an annual Report of Manufacturer's Purchase
6Credit Earned for each calendar year no later than the last day
7of the sixth month following the calendar year in which a
8Manufacturer's Purchase Credit is earned. A Report of
9Manufacturer's Purchase Credit Earned shall be filed on forms
10as prescribed or approved by the Department and shall state,
11for each month of the calendar year: (i) the total purchase
12price of all purchases of exempt manufacturing or graphic arts
13machinery on which the credit was earned; (ii) the total State
14Use Tax or Service Use Tax which would have been due on those
15items; (iii) the percentage used to calculate the amount of
16credit earned; (iv) the amount of credit earned; and (v) such
17other information as the Department may reasonably require. A
18purchaser earning Manufacturer's Purchase Credit shall
19maintain records which identify, as to each purchase of
20manufacturing or graphic arts machinery and equipment on which
21the purchaser earned Manufacturer's Purchase Credit, the
22vendor (including, if applicable, either the vendor's
23registration number or Federal Employer Identification
24Number), the purchase price, and the amount of Manufacturer's
25Purchase Credit earned on each purchase.
26    A purchaser using Manufacturer's Purchase Credit shall

 

 

HB3522- 105 -LRB100 05678 HLH 21814 b

1sign and file an annual Report of Manufacturer's Purchase
2Credit Used for each calendar year no later than the last day
3of the sixth month following the calendar year in which a
4Manufacturer's Purchase Credit is used. A Report of
5Manufacturer's Purchase Credit Used shall be filed on forms as
6prescribed or approved by the Department and shall state, for
7each month of the calendar year: (i) the total purchase price
8of production related tangible personal property purchased
9from Illinois suppliers; (ii) the total purchase price of
10production related tangible personal property purchased from
11out-of-state suppliers; (iii) the total amount of credit used
12during such month; and (iv) such other information as the
13Department may reasonably require. A purchaser using
14Manufacturer's Purchase Credit shall maintain records that
15identify, as to each purchase of production related tangible
16personal property on which the purchaser used Manufacturer's
17Purchase Credit, the vendor (including, if applicable, either
18the vendor's registration number or Federal Employer
19Identification Number), the purchase price, and the amount of
20Manufacturer's Purchase Credit used on each purchase.
21    No annual report shall be filed before May 1, 1996 or after
22June 30, 2004. A purchaser that fails to file an annual Report
23of Manufacturer's Purchase Credit Earned or an annual Report of
24Manufacturer's Purchase Credit Used by the last day of the
25sixth month following the end of the calendar year shall
26forfeit all Manufacturer's Purchase Credit for that calendar

 

 

HB3522- 106 -LRB100 05678 HLH 21814 b

1year unless it establishes that its failure to file was due to
2reasonable cause. Manufacturer's Purchase Credit reports may
3be amended to report and claim credit on qualifying purchases
4not previously reported at any time before the credit would
5have expired, unless both the Department and the purchaser have
6agreed to an extension of the statute of limitations for the
7issuance of a notice of tax liability as provided in Section 4
8of the Retailers' Occupation Tax Act. If the time for
9assessment or refund has been extended, then amended reports
10for a calendar year may be filed at any time prior to the date
11to which the statute of limitations for the calendar year or
12portion thereof has been extended. No Manufacturer's Purchase
13Credit report filed with the Department for periods prior to
14January 1, 1995 shall be approved. Manufacturer's Purchase
15Credit claimed on an amended report may be used, until October
161, 2003, to satisfy tax liability under the Use Tax Act or the
17Service Use Tax Act (i) on qualifying purchases of production
18related tangible personal property made after the date the
19amended report is filed or (ii) assessed by the Department on
20qualifying purchases of production related tangible personal
21property made in the case of manufacturers on or after January
221, 1995, or in the case of graphic arts producers on or after
23July 1, 1996.
24    If the purchaser is not the manufacturer or a graphic arts
25producer, but rents or leases the use of the property to a
26manufacturer or graphic arts producer, the purchaser may earn,

 

 

HB3522- 107 -LRB100 05678 HLH 21814 b

1report, and use Manufacturer's Purchase Credit in the same
2manner as a manufacturer or graphic arts producer.
3    A purchaser shall not be entitled to any Manufacturer's
4Purchase Credit for a purchase that is required to be reported
5and is not timely reported as provided in this Section. A
6purchaser remains liable for (i) any tax that was satisfied by
7use of a Manufacturer's Purchase Credit, as of the date of
8purchase, if that use is not timely reported as required in
9this Section and (ii) for any applicable penalties and interest
10for failing to pay the tax when due. No Manufacturer's Purchase
11Credit may be used after September 30, 2003 to satisfy any tax
12liability imposed under this Act, including any audit
13liability.
14    (b) Manufacturer's Purchase Credit earned on and after
15September 1, 2004. This subsection (b) applies to
16Manufacturer's Purchase Credit earned on and after September 1,
172004. Manufacturer's Purchase Credit earned on or after
18September 1, 2004 may only be used to satisfy the Use Tax or
19Service Use Tax liability incurred on production related
20tangible personal property purchased on or after September 1,
212004. A purchaser of production related tangible personal
22property desiring to use the Manufacturer's Purchase Credit
23shall certify to the seller that the purchaser is satisfying
24all or part of the liability under the Use Tax Act or the
25Service Use Tax Act that is due on the purchase of the
26production related tangible personal property by use of

 

 

HB3522- 108 -LRB100 05678 HLH 21814 b

1Manufacturer's Purchase Credit. The Manufacturer's Purchase
2Credit certification must be dated and shall include the name
3and address of the purchaser, the purchaser's registration
4number, if registered, the credit being applied, and a
5statement that the State Use Tax or Service Use Tax liability
6is being satisfied with the manufacturer's or graphic arts
7producer's accumulated purchase credit. Certification may be
8incorporated into the manufacturer's or graphic arts
9producer's purchase order. Manufacturer's Purchase Credit
10certification provided by the manufacturer or graphic arts
11producer may be used to satisfy the retailer's or serviceman's
12liability under the Retailers' Occupation Tax Act or Service
13Occupation Tax Act for the credit claimed, not to exceed 6.25%,
14and beginning on January 1, 2018, 5.75%, of the receipts
15subject to tax from a qualifying purchase, but only if the
16retailer or serviceman reports the Manufacturer's Purchase
17Credit claimed as required by the Department. The
18Manufacturer's Purchase Credit earned by purchase of exempt
19manufacturing machinery and equipment or graphic arts
20machinery and equipment is a non-transferable credit. A
21manufacturer or graphic arts producer that enters into a
22contract involving the installation of tangible personal
23property into real estate within a manufacturing or graphic
24arts production facility may, on or after September 1, 2004,
25authorize a construction contractor to utilize credit
26accumulated by the manufacturer or graphic arts producer to

 

 

HB3522- 109 -LRB100 05678 HLH 21814 b

1purchase the tangible personal property. A manufacturer or
2graphic arts producer intending to use accumulated credit to
3purchase such tangible personal property shall execute a
4written contract authorizing the contractor to utilize a
5specified dollar amount of credit. The contractor shall furnish
6the supplier with the manufacturer's or graphic arts producer's
7name, registration or resale number, and a statement that a
8specific amount of the Use Tax or Service Use Tax liability,
9not to exceed 6.25%, and beginning on January 1, 2018, 5.75%,
10of the selling price, is being satisfied with the credit. The
11manufacturer or graphic arts producer shall remain liable to
12timely report all information required by the annual Report of
13Manufacturer's Purchase Credit Used for all credit utilized by
14a construction contractor.
15    The Manufacturer's Purchase Credit may be used to satisfy
16liability under the Use Tax Act or the Service Use Tax Act due
17on the purchase, made on or after September 1, 2004, of
18production related tangible personal property (including
19purchases by a manufacturer, by a graphic arts producer, or by
20a lessor who rents or leases the use of the property to a
21manufacturer or graphic arts producer) that does not otherwise
22qualify for the manufacturing machinery and equipment
23exemption or the graphic arts machinery and equipment
24exemption. "Production related tangible personal property"
25means (i) all tangible personal property used or consumed by
26the purchaser in a manufacturing facility in which a

 

 

HB3522- 110 -LRB100 05678 HLH 21814 b

1manufacturing process described in Section 2-45 of the
2Retailers' Occupation Tax Act takes place, including tangible
3personal property purchased for incorporation into real estate
4within a manufacturing facility and including, but not limited
5to, tangible personal property used or consumed in activities
6such as preproduction material handling, receiving, quality
7control, inventory control, storage, staging, and packaging
8for shipping and transportation purposes; (ii) all tangible
9personal property used or consumed by the purchaser in a
10graphic arts facility in which graphic arts production as
11described in Section 2-30 of the Retailers' Occupation Tax Act
12takes place, including tangible personal property purchased
13for incorporation into real estate within a graphic arts
14facility and including, but not limited to, all tangible
15personal property used or consumed in activities such as
16graphic arts preliminary or pre-press production,
17pre-production material handling, receiving, quality control,
18inventory control, storage, staging, sorting, labeling,
19mailing, tying, wrapping, and packaging; and (iii) all tangible
20personal property used or consumed by the purchaser for
21research and development. "Production related tangible
22personal property" does not include (i) tangible personal
23property used, within or without a manufacturing facility, in
24sales, purchasing, accounting, fiscal management, marketing,
25personnel recruitment or selection, or landscaping or (ii)
26tangible personal property required to be titled or registered

 

 

HB3522- 111 -LRB100 05678 HLH 21814 b

1with a department, agency, or unit of federal, state, or local
2government. The Manufacturer's Purchase Credit may be used to
3satisfy the tax arising either from the purchase of machinery
4and equipment on or after September 1, 2004 for which the
5exemption provided by paragraph (18) of Section 3-5 of this Act
6was erroneously claimed, or the purchase of machinery and
7equipment on or after September 1, 2004 for which the exemption
8provided by paragraph (6) of Section 3-5 of this Act was
9erroneously claimed, but not in satisfaction of penalty, if
10any, and interest for failure to pay the tax when due. A
11purchaser of production related tangible personal property
12that is purchased on or after September 1, 2004 who is required
13to pay Illinois Use Tax or Service Use Tax on the purchase
14directly to the Department may utilize the Manufacturer's
15Purchase Credit in satisfaction of the tax arising from that
16purchase, but not in satisfaction of penalty and interest. A
17purchaser who uses the Manufacturer's Purchase Credit to
18purchase property on and after September 1, 2004 which is later
19determined not to be production related tangible personal
20property may be liable for tax, penalty, and interest on the
21purchase of that property as of the date of purchase but shall
22be entitled to use the disallowed Manufacturer's Purchase
23Credit, so long as it has not expired and is used on qualifying
24purchases of production related tangible personal property not
25previously subject to credit usage. The Manufacturer's
26Purchase Credit earned by a manufacturer or graphic arts

 

 

HB3522- 112 -LRB100 05678 HLH 21814 b

1producer expires the last day of the second calendar year
2following the calendar year in which the credit arose. A
3purchaser earning Manufacturer's Purchase Credit shall sign
4and file an annual Report of Manufacturer's Purchase Credit
5Earned for each calendar year no later than the last day of the
6sixth month following the calendar year in which a
7Manufacturer's Purchase Credit is earned. A Report of
8Manufacturer's Purchase Credit Earned shall be filed on forms
9as prescribed or approved by the Department and shall state,
10for each month of the calendar year: (i) the total purchase
11price of all purchases of exempt manufacturing or graphic arts
12machinery on which the credit was earned; (ii) the total State
13Use Tax or Service Use Tax which would have been due on those
14items; (iii) the percentage used to calculate the amount of
15credit earned; (iv) the amount of credit earned; and (v) such
16other information as the Department may reasonably require. A
17purchaser earning Manufacturer's Purchase Credit shall
18maintain records which identify, as to each purchase of
19manufacturing or graphic arts machinery and equipment on which
20the purchaser earned Manufacturer's Purchase Credit, the
21vendor (including, if applicable, either the vendor's
22registration number or Federal Employer Identification
23Number), the purchase price, and the amount of Manufacturer's
24Purchase Credit earned on each purchase. A purchaser using
25Manufacturer's Purchase Credit shall sign and file an annual
26Report of Manufacturer's Purchase Credit Used for each calendar

 

 

HB3522- 113 -LRB100 05678 HLH 21814 b

1year no later than the last day of the sixth month following
2the calendar year in which a Manufacturer's Purchase Credit is
3used. A Report of Manufacturer's Purchase Credit Used shall be
4filed on forms as prescribed or approved by the Department and
5shall state, for each month of the calendar year: (i) the total
6purchase price of production related tangible personal
7property purchased from Illinois suppliers; (ii) the total
8purchase price of production related tangible personal
9property purchased from out-of-state suppliers; (iii) the
10total amount of credit used during such month; and (iv) such
11other information as the Department may reasonably require. A
12purchaser using Manufacturer's Purchase Credit shall maintain
13records that identify, as to each purchase of production
14related tangible personal property on which the purchaser used
15Manufacturer's Purchase Credit, the vendor (including, if
16applicable, either the vendor's registration number or Federal
17Employer Identification Number), the purchase price, and the
18amount of Manufacturer's Purchase Credit used on each purchase.
19    A purchaser that fails to file an annual Report of
20Manufacturer's Purchase Credit Earned or an annual Report of
21Manufacturer's Purchase Credit Used by the last day of the
22sixth month following the end of the calendar year shall
23forfeit all Manufacturer's Purchase Credit for that calendar
24year unless it establishes that its failure to file was due to
25reasonable cause. Manufacturer's Purchase Credit reports may
26be amended to report and claim credit on qualifying purchases

 

 

HB3522- 114 -LRB100 05678 HLH 21814 b

1not previously reported at any time before the credit would
2have expired, unless both the Department and the purchaser have
3agreed to an extension of the statute of limitations for the
4issuance of a notice of tax liability as provided in Section 4
5of the Retailers' Occupation Tax Act. If the time for
6assessment or refund has been extended, then amended reports
7for a calendar year may be filed at any time prior to the date
8to which the statute of limitations for the calendar year or
9portion thereof has been extended. Manufacturer's Purchase
10Credit claimed on an amended report may be used to satisfy tax
11liability under the Use Tax Act or the Service Use Tax Act (i)
12on qualifying purchases of production related tangible
13personal property made after the date the amended report is
14filed or (ii) assessed by the Department on qualifying
15production related tangible personal property purchased on or
16after September 1, 2004. If the purchaser is not the
17manufacturer or a graphic arts producer, but rents or leases
18the use of the property to a manufacturer or graphic arts
19producer, the purchaser may earn, report, and use
20Manufacturer's Purchase Credit in the same manner as a
21manufacturer or graphic arts producer. A purchaser shall not be
22entitled to any Manufacturer's Purchase Credit for a purchase
23that is required to be reported and is not timely reported as
24provided in this Section. A purchaser remains liable for (i)
25any tax that was satisfied by use of a Manufacturer's Purchase
26Credit, as of the date of purchase, if that use is not timely

 

 

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1reported as required in this Section and (ii) for any
2applicable penalties and interest for failing to pay the tax
3when due.
4(Source: P.A. 96-116, eff. 7-31-09.)
 
5    (35 ILCS 105/9)  (from Ch. 120, par. 439.9)
6    Sec. 9. Except as to motor vehicles, watercraft, aircraft,
7and trailers that are required to be registered with an agency
8of this State, each retailer required or authorized to collect
9the tax imposed by this Act shall pay to the Department the
10amount of such tax (except as otherwise provided) at the time
11when he is required to file his return for the period during
12which such tax was collected, less a discount of 2.1% prior to
13January 1, 1990, and 1.75% on and after January 1, 1990, or $5
14per calendar year, whichever is greater, which is allowed to
15reimburse the retailer for expenses incurred in collecting the
16tax, keeping records, preparing and filing returns, remitting
17the tax and supplying data to the Department on request. In the
18case of retailers who report and pay the tax on a transaction
19by transaction basis, as provided in this Section, such
20discount shall be taken with each such tax remittance instead
21of when such retailer files his periodic return. The Department
22may disallow the discount for retailers whose certificate of
23registration is revoked at the time the return is filed, but
24only if the Department's decision to revoke the certificate of
25registration has become final. A retailer need not remit that

 

 

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1part of any tax collected by him to the extent that he is
2required to remit and does remit the tax imposed by the
3Retailers' Occupation Tax Act, with respect to the sale of the
4same property.
5    Where such tangible personal property is sold under a
6conditional sales contract, or under any other form of sale
7wherein the payment of the principal sum, or a part thereof, is
8extended beyond the close of the period for which the return is
9filed, the retailer, in collecting the tax (except as to motor
10vehicles, watercraft, aircraft, and trailers that are required
11to be registered with an agency of this State), may collect for
12each tax return period, only the tax applicable to that part of
13the selling price actually received during such tax return
14period.
15    Except as provided in this Section, on or before the
16twentieth day of each calendar month, such retailer shall file
17a return for the preceding calendar month. Such return shall be
18filed on forms prescribed by the Department and shall furnish
19such information as the Department may reasonably require.
20    The Department may require returns to be filed on a
21quarterly basis. If so required, a return for each calendar
22quarter shall be filed on or before the twentieth day of the
23calendar month following the end of such calendar quarter. The
24taxpayer shall also file a return with the Department for each
25of the first two months of each calendar quarter, on or before
26the twentieth day of the following calendar month, stating:

 

 

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1        1. The name of the seller;
2        2. The address of the principal place of business from
3    which he engages in the business of selling tangible
4    personal property at retail in this State;
5        3. The total amount of taxable receipts received by him
6    during the preceding calendar month from sales of tangible
7    personal property by him during such preceding calendar
8    month, including receipts from charge and time sales, but
9    less all deductions allowed by law;
10        4. The amount of credit provided in Section 2d of this
11    Act;
12        5. The amount of tax due;
13        5-5. The signature of the taxpayer; and
14        6. Such other reasonable information as the Department
15    may require.
16    If a taxpayer fails to sign a return within 30 days after
17the proper notice and demand for signature by the Department,
18the return shall be considered valid and any amount shown to be
19due on the return shall be deemed assessed.
20    Beginning October 1, 1993, a taxpayer who has an average
21monthly tax liability of $150,000 or more shall make all
22payments required by rules of the Department by electronic
23funds transfer. Beginning October 1, 1994, a taxpayer who has
24an average monthly tax liability of $100,000 or more shall make
25all payments required by rules of the Department by electronic
26funds transfer. Beginning October 1, 1995, a taxpayer who has

 

 

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1an average monthly tax liability of $50,000 or more shall make
2all payments required by rules of the Department by electronic
3funds transfer. Beginning October 1, 2000, a taxpayer who has
4an annual tax liability of $200,000 or more shall make all
5payments required by rules of the Department by electronic
6funds transfer. The term "annual tax liability" shall be the
7sum of the taxpayer's liabilities under this Act, and under all
8other State and local occupation and use tax laws administered
9by the Department, for the immediately preceding calendar year.
10The term "average monthly tax liability" means the sum of the
11taxpayer's liabilities under this Act, and under all other
12State and local occupation and use tax laws administered by the
13Department, for the immediately preceding calendar year
14divided by 12. Beginning on October 1, 2002, a taxpayer who has
15a tax liability in the amount set forth in subsection (b) of
16Section 2505-210 of the Department of Revenue Law shall make
17all payments required by rules of the Department by electronic
18funds transfer.
19    Before August 1 of each year beginning in 1993, the
20Department shall notify all taxpayers required to make payments
21by electronic funds transfer. All taxpayers required to make
22payments by electronic funds transfer shall make those payments
23for a minimum of one year beginning on October 1.
24    Any taxpayer not required to make payments by electronic
25funds transfer may make payments by electronic funds transfer
26with the permission of the Department.

 

 

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1    All taxpayers required to make payment by electronic funds
2transfer and any taxpayers authorized to voluntarily make
3payments by electronic funds transfer shall make those payments
4in the manner authorized by the Department.
5    The Department shall adopt such rules as are necessary to
6effectuate a program of electronic funds transfer and the
7requirements of this Section.
8    Before October 1, 2000, if the taxpayer's average monthly
9tax liability to the Department under this Act, the Retailers'
10Occupation Tax Act, the Service Occupation Tax Act, the Service
11Use Tax Act was $10,000 or more during the preceding 4 complete
12calendar quarters, he shall file a return with the Department
13each month by the 20th day of the month next following the
14month during which such tax liability is incurred and shall
15make payments to the Department on or before the 7th, 15th,
1622nd and last day of the month during which such liability is
17incurred. On and after October 1, 2000, if the taxpayer's
18average monthly tax liability to the Department under this Act,
19the Retailers' Occupation Tax Act, the Service Occupation Tax
20Act, and the Service Use Tax Act was $20,000 or more during the
21preceding 4 complete calendar quarters, he shall file a return
22with the Department each month by the 20th day of the month
23next following the month during which such tax liability is
24incurred and shall make payment to the Department on or before
25the 7th, 15th, 22nd and last day of the month during which such
26liability is incurred. If the month during which such tax

 

 

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1liability is incurred began prior to January 1, 1985, each
2payment shall be in an amount equal to 1/4 of the taxpayer's
3actual liability for the month or an amount set by the
4Department not to exceed 1/4 of the average monthly liability
5of the taxpayer to the Department for the preceding 4 complete
6calendar quarters (excluding the month of highest liability and
7the month of lowest liability in such 4 quarter period). If the
8month during which such tax liability is incurred begins on or
9after January 1, 1985, and prior to January 1, 1987, each
10payment shall be in an amount equal to 22.5% of the taxpayer's
11actual liability for the month or 27.5% of the taxpayer's
12liability for the same calendar month of the preceding year. If
13the month during which such tax liability is incurred begins on
14or after January 1, 1987, and prior to January 1, 1988, each
15payment shall be in an amount equal to 22.5% of the taxpayer's
16actual liability for the month or 26.25% of the taxpayer's
17liability for the same calendar month of the preceding year. If
18the month during which such tax liability is incurred begins on
19or after January 1, 1988, and prior to January 1, 1989, or
20begins on or after January 1, 1996, each payment shall be in an
21amount equal to 22.5% of the taxpayer's actual liability for
22the month or 25% of the taxpayer's liability for the same
23calendar month of the preceding year. If the month during which
24such tax liability is incurred begins on or after January 1,
251989, and prior to January 1, 1996, each payment shall be in an
26amount equal to 22.5% of the taxpayer's actual liability for

 

 

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1the month or 25% of the taxpayer's liability for the same
2calendar month of the preceding year or 100% of the taxpayer's
3actual liability for the quarter monthly reporting period. The
4amount of such quarter monthly payments shall be credited
5against the final tax liability of the taxpayer's return for
6that month. Before October 1, 2000, once applicable, the
7requirement of the making of quarter monthly payments to the
8Department shall continue until such taxpayer's average
9monthly liability to the Department during the preceding 4
10complete calendar quarters (excluding the month of highest
11liability and the month of lowest liability) is less than
12$9,000, or until such taxpayer's average monthly liability to
13the Department as computed for each calendar quarter of the 4
14preceding complete calendar quarter period is less than
15$10,000. However, if a taxpayer can show the Department that a
16substantial change in the taxpayer's business has occurred
17which causes the taxpayer to anticipate that his average
18monthly tax liability for the reasonably foreseeable future
19will fall below the $10,000 threshold stated above, then such
20taxpayer may petition the Department for change in such
21taxpayer's reporting status. On and after October 1, 2000, once
22applicable, the requirement of the making of quarter monthly
23payments to the Department shall continue until such taxpayer's
24average monthly liability to the Department during the
25preceding 4 complete calendar quarters (excluding the month of
26highest liability and the month of lowest liability) is less

 

 

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1than $19,000 or until such taxpayer's average monthly liability
2to the Department as computed for each calendar quarter of the
34 preceding complete calendar quarter period is less than
4$20,000. However, if a taxpayer can show the Department that a
5substantial change in the taxpayer's business has occurred
6which causes the taxpayer to anticipate that his average
7monthly tax liability for the reasonably foreseeable future
8will fall below the $20,000 threshold stated above, then such
9taxpayer may petition the Department for a change in such
10taxpayer's reporting status. The Department shall change such
11taxpayer's reporting status unless it finds that such change is
12seasonal in nature and not likely to be long term. If any such
13quarter monthly payment is not paid at the time or in the
14amount required by this Section, then the taxpayer shall be
15liable for penalties and interest on the difference between the
16minimum amount due and the amount of such quarter monthly
17payment actually and timely paid, except insofar as the
18taxpayer has previously made payments for that month to the
19Department in excess of the minimum payments previously due as
20provided in this Section. The Department shall make reasonable
21rules and regulations to govern the quarter monthly payment
22amount and quarter monthly payment dates for taxpayers who file
23on other than a calendar monthly basis.
24    If any such payment provided for in this Section exceeds
25the taxpayer's liabilities under this Act, the Retailers'
26Occupation Tax Act, the Service Occupation Tax Act and the

 

 

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1Service Use Tax Act, as shown by an original monthly return,
2the Department shall issue to the taxpayer a credit memorandum
3no later than 30 days after the date of payment, which
4memorandum may be submitted by the taxpayer to the Department
5in payment of tax liability subsequently to be remitted by the
6taxpayer to the Department or be assigned by the taxpayer to a
7similar taxpayer under this Act, the Retailers' Occupation Tax
8Act, the Service Occupation Tax Act or the Service Use Tax Act,
9in accordance with reasonable rules and regulations to be
10prescribed by the Department, except that if such excess
11payment is shown on an original monthly return and is made
12after December 31, 1986, no credit memorandum shall be issued,
13unless requested by the taxpayer. If no such request is made,
14the taxpayer may credit such excess payment against tax
15liability subsequently to be remitted by the taxpayer to the
16Department under this Act, the Retailers' Occupation Tax Act,
17the Service Occupation Tax Act or the Service Use Tax Act, in
18accordance with reasonable rules and regulations prescribed by
19the Department. If the Department subsequently determines that
20all or any part of the credit taken was not actually due to the
21taxpayer, the taxpayer's 2.1% or 1.75% vendor's discount shall
22be reduced by 2.1% or 1.75% of the difference between the
23credit taken and that actually due, and the taxpayer shall be
24liable for penalties and interest on such difference.
25    If the retailer is otherwise required to file a monthly
26return and if the retailer's average monthly tax liability to

 

 

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1the Department does not exceed $200, the Department may
2authorize his returns to be filed on a quarter annual basis,
3with the return for January, February, and March of a given
4year being due by April 20 of such year; with the return for
5April, May and June of a given year being due by July 20 of such
6year; with the return for July, August and September of a given
7year being due by October 20 of such year, and with the return
8for October, November and December of a given year being due by
9January 20 of the following year.
10    If the retailer is otherwise required to file a monthly or
11quarterly return and if the retailer's average monthly tax
12liability to the Department does not exceed $50, the Department
13may authorize his returns to be filed on an annual basis, with
14the return for a given year being due by January 20 of the
15following year.
16    Such quarter annual and annual returns, as to form and
17substance, shall be subject to the same requirements as monthly
18returns.
19    Notwithstanding any other provision in this Act concerning
20the time within which a retailer may file his return, in the
21case of any retailer who ceases to engage in a kind of business
22which makes him responsible for filing returns under this Act,
23such retailer shall file a final return under this Act with the
24Department not more than one month after discontinuing such
25business.
26    In addition, with respect to motor vehicles, watercraft,

 

 

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1aircraft, and trailers that are required to be registered with
2an agency of this State, every retailer selling this kind of
3tangible personal property shall file, with the Department,
4upon a form to be prescribed and supplied by the Department, a
5separate return for each such item of tangible personal
6property which the retailer sells, except that if, in the same
7transaction, (i) a retailer of aircraft, watercraft, motor
8vehicles or trailers transfers more than one aircraft,
9watercraft, motor vehicle or trailer to another aircraft,
10watercraft, motor vehicle or trailer retailer for the purpose
11of resale or (ii) a retailer of aircraft, watercraft, motor
12vehicles, or trailers transfers more than one aircraft,
13watercraft, motor vehicle, or trailer to a purchaser for use as
14a qualifying rolling stock as provided in Section 3-55 of this
15Act, then that seller may report the transfer of all the
16aircraft, watercraft, motor vehicles or trailers involved in
17that transaction to the Department on the same uniform
18invoice-transaction reporting return form. For purposes of
19this Section, "watercraft" means a Class 2, Class 3, or Class 4
20watercraft as defined in Section 3-2 of the Boat Registration
21and Safety Act, a personal watercraft, or any boat equipped
22with an inboard motor.
23    The transaction reporting return in the case of motor
24vehicles or trailers that are required to be registered with an
25agency of this State, shall be the same document as the Uniform
26Invoice referred to in Section 5-402 of the Illinois Vehicle

 

 

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1Code and must show the name and address of the seller; the name
2and address of the purchaser; the amount of the selling price
3including the amount allowed by the retailer for traded-in
4property, if any; the amount allowed by the retailer for the
5traded-in tangible personal property, if any, to the extent to
6which Section 2 of this Act allows an exemption for the value
7of traded-in property; the balance payable after deducting such
8trade-in allowance from the total selling price; the amount of
9tax due from the retailer with respect to such transaction; the
10amount of tax collected from the purchaser by the retailer on
11such transaction (or satisfactory evidence that such tax is not
12due in that particular instance, if that is claimed to be the
13fact); the place and date of the sale; a sufficient
14identification of the property sold; such other information as
15is required in Section 5-402 of the Illinois Vehicle Code, and
16such other information as the Department may reasonably
17require.
18    The transaction reporting return in the case of watercraft
19and aircraft must show the name and address of the seller; the
20name and address of the purchaser; the amount of the selling
21price including the amount allowed by the retailer for
22traded-in property, if any; the amount allowed by the retailer
23for the traded-in tangible personal property, if any, to the
24extent to which Section 2 of this Act allows an exemption for
25the value of traded-in property; the balance payable after
26deducting such trade-in allowance from the total selling price;

 

 

HB3522- 127 -LRB100 05678 HLH 21814 b

1the amount of tax due from the retailer with respect to such
2transaction; the amount of tax collected from the purchaser by
3the retailer on such transaction (or satisfactory evidence that
4such tax is not due in that particular instance, if that is
5claimed to be the fact); the place and date of the sale, a
6sufficient identification of the property sold, and such other
7information as the Department may reasonably require.
8    Such transaction reporting return shall be filed not later
9than 20 days after the date of delivery of the item that is
10being sold, but may be filed by the retailer at any time sooner
11than that if he chooses to do so. The transaction reporting
12return and tax remittance or proof of exemption from the tax
13that is imposed by this Act may be transmitted to the
14Department by way of the State agency with which, or State
15officer with whom, the tangible personal property must be
16titled or registered (if titling or registration is required)
17if the Department and such agency or State officer determine
18that this procedure will expedite the processing of
19applications for title or registration.
20    With each such transaction reporting return, the retailer
21shall remit the proper amount of tax due (or shall submit
22satisfactory evidence that the sale is not taxable if that is
23the case), to the Department or its agents, whereupon the
24Department shall issue, in the purchaser's name, a tax receipt
25(or a certificate of exemption if the Department is satisfied
26that the particular sale is tax exempt) which such purchaser

 

 

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1may submit to the agency with which, or State officer with
2whom, he must title or register the tangible personal property
3that is involved (if titling or registration is required) in
4support of such purchaser's application for an Illinois
5certificate or other evidence of title or registration to such
6tangible personal property.
7    No retailer's failure or refusal to remit tax under this
8Act precludes a user, who has paid the proper tax to the
9retailer, from obtaining his certificate of title or other
10evidence of title or registration (if titling or registration
11is required) upon satisfying the Department that such user has
12paid the proper tax (if tax is due) to the retailer. The
13Department shall adopt appropriate rules to carry out the
14mandate of this paragraph.
15    If the user who would otherwise pay tax to the retailer
16wants the transaction reporting return filed and the payment of
17tax or proof of exemption made to the Department before the
18retailer is willing to take these actions and such user has not
19paid the tax to the retailer, such user may certify to the fact
20of such delay by the retailer, and may (upon the Department
21being satisfied of the truth of such certification) transmit
22the information required by the transaction reporting return
23and the remittance for tax or proof of exemption directly to
24the Department and obtain his tax receipt or exemption
25determination, in which event the transaction reporting return
26and tax remittance (if a tax payment was required) shall be

 

 

HB3522- 129 -LRB100 05678 HLH 21814 b

1credited by the Department to the proper retailer's account
2with the Department, but without the 2.1% or 1.75% discount
3provided for in this Section being allowed. When the user pays
4the tax directly to the Department, he shall pay the tax in the
5same amount and in the same form in which it would be remitted
6if the tax had been remitted to the Department by the retailer.
7    Where a retailer collects the tax with respect to the
8selling price of tangible personal property which he sells and
9the purchaser thereafter returns such tangible personal
10property and the retailer refunds the selling price thereof to
11the purchaser, such retailer shall also refund, to the
12purchaser, the tax so collected from the purchaser. When filing
13his return for the period in which he refunds such tax to the
14purchaser, the retailer may deduct the amount of the tax so
15refunded by him to the purchaser from any other use tax which
16such retailer may be required to pay or remit to the
17Department, as shown by such return, if the amount of the tax
18to be deducted was previously remitted to the Department by
19such retailer. If the retailer has not previously remitted the
20amount of such tax to the Department, he is entitled to no
21deduction under this Act upon refunding such tax to the
22purchaser.
23    Any retailer filing a return under this Section shall also
24include (for the purpose of paying tax thereon) the total tax
25covered by such return upon the selling price of tangible
26personal property purchased by him at retail from a retailer,

 

 

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1but as to which the tax imposed by this Act was not collected
2from the retailer filing such return, and such retailer shall
3remit the amount of such tax to the Department when filing such
4return.
5    If experience indicates such action to be practicable, the
6Department may prescribe and furnish a combination or joint
7return which will enable retailers, who are required to file
8returns hereunder and also under the Retailers' Occupation Tax
9Act, to furnish all the return information required by both
10Acts on the one form.
11    Where the retailer has more than one business registered
12with the Department under separate registration under this Act,
13such retailer may not file each return that is due as a single
14return covering all such registered businesses, but shall file
15separate returns for each such registered business.
16    Beginning January 1, 1990, each month the Department shall
17pay into the State and Local Sales Tax Reform Fund, a special
18fund in the State Treasury which is hereby created, the net
19revenue realized for the preceding month from the 1% tax on
20sales of food for human consumption which is to be consumed off
21the premises where it is sold (other than alcoholic beverages,
22soft drinks and food which has been prepared for immediate
23consumption) and prescription and nonprescription medicines,
24drugs, medical appliances, products classified as Class III
25medical devices by the United States Food and Drug
26Administration that are used for cancer treatment pursuant to a

 

 

HB3522- 131 -LRB100 05678 HLH 21814 b

1prescription, as well as any accessories and components related
2to those devices, and insulin, urine testing materials,
3syringes and needles used by diabetics.
4    From Beginning January 1, 1990 through January 31, 2018,
5each month the Department shall pay into the County and Mass
6Transit District Fund 4% of the net revenue realized for the
7preceding month from the 6.25% general rate on the selling
8price of tangible personal property which is purchased outside
9Illinois at retail from a retailer and which is titled or
10registered by an agency of this State's government. Beginning
11on February 1, 2018, each month the Department shall pay into
12the County and Mass Transit District Fund 4.35% of the net
13revenue realized for the preceding month from the general rate
14on the selling price of tangible personal property which is
15purchased outside Illinois at retail from a retailer and which
16is titled or registered by an agency of this State's
17government.
18    From Beginning January 1, 1990 through January 31, 2018,
19each month the Department shall pay into the State and Local
20Sales Tax Reform Fund, a special fund in the State Treasury,
2120% of the net revenue realized for the preceding month from
22the 6.25% general rate on the selling price of tangible
23personal property, other than tangible personal property which
24is purchased outside Illinois at retail from a retailer and
25which is titled or registered by an agency of this State's
26government. Beginning on February 1, 2018, each month the

 

 

HB3522- 132 -LRB100 05678 HLH 21814 b

1Department shall pay into the State and Local Sales Tax Reform
2Fund, a special fund in the State Treasury, 21.74% of the net
3revenue realized for the preceding month from the general rate
4on the selling price of tangible personal property, other than
5tangible personal property which is purchased outside Illinois
6at retail from a retailer and which is titled or registered by
7an agency of this State's government.
8    Beginning August 1, 2000, each month the Department shall
9pay into the State and Local Sales Tax Reform Fund 100% of the
10net revenue realized for the preceding month from the 1.25%
11rate on the selling price of motor fuel and gasohol. Beginning
12September 1, 2010, each month the Department shall pay into the
13State and Local Sales Tax Reform Fund 100% of the net revenue
14realized for the preceding month from the 1.25% rate on the
15selling price of sales tax holiday items.
16    From Beginning January 1, 1990 through January 31, 2018,
17each month the Department shall pay into the Local Government
18Tax Fund 16% of the net revenue realized for the preceding
19month from the 6.25% general rate on the selling price of
20tangible personal property which is purchased outside Illinois
21at retail from a retailer and which is titled or registered by
22an agency of this State's government. Beginning on February 1,
232018, each month the Department shall pay into the Local
24Government Tax Fund 17.39% of the net revenue realized for the
25preceding month from the general rate on the selling price of
26tangible personal property which is purchased outside Illinois

 

 

HB3522- 133 -LRB100 05678 HLH 21814 b

1at retail from a retailer and which is titled or registered by
2an agency of this State's government.
3    Beginning October 1, 2009 through January 1, 2018, each
4month the Department shall pay into the Capital Projects Fund
5an amount that is equal to an amount estimated by the
6Department to represent 80% of the net revenue realized for the
7preceding month from the sale of candy, grooming and hygiene
8products, and soft drinks that had been taxed at a rate of 1%
9prior to September 1, 2009 but that are now taxed at the
10general rate 6.25%. Beginning on February 1, 2018, each month
11the Department shall pay into the Capital Projects Fund an
12amount that is equal to an amount estimated by the Department
13to represent 86.96% of the net revenue realized for the
14preceding month from the sale of candy, grooming and hygiene
15products, and soft drinks that had been taxed at a rate of 1%
16prior to September 1, 2009 but that are now taxed at the
17general rate.
18    From Beginning July 1, 2011 through January 1, 2018, each
19month the Department shall pay into the Clean Air Act Permit
20Fund 80% of the net revenue realized for the preceding month
21from the 6.25% general rate on the selling price of sorbents
22used in Illinois in the process of sorbent injection as used to
23comply with the Environmental Protection Act or the federal
24Clean Air Act, but the total payment into the Clean Air Act
25Permit Fund under this Act and the Retailers' Occupation Tax
26Act shall not exceed $2,000,000 in any fiscal year. Beginning

 

 

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1on February 1, 2018, each month the Department shall pay into
2the Clean Air Act (CAA) Permit Fund 86.96% of the net revenue
3realized for the preceding month from the general rate on the
4selling price of sorbents used in Illinois in the process of
5sorbent injection as used to comply with the Environmental
6Protection Act or the federal Clean Air Act. The total payment
7into the Clean Air Act (CAA) Permit Fund under this Act and the
8Retailers' Occupation Tax Act shall not exceed $2,000,000 in
9any fiscal year.
10    Beginning July 1, 2013, each month the Department shall pay
11into the Underground Storage Tank Fund from the proceeds
12collected under this Act, the Service Use Tax Act, the Service
13Occupation Tax Act, and the Retailers' Occupation Tax Act an
14amount equal to the average monthly deficit in the Underground
15Storage Tank Fund during the prior year, as certified annually
16by the Illinois Environmental Protection Agency, but the total
17payment into the Underground Storage Tank Fund under this Act,
18the Service Use Tax Act, the Service Occupation Tax Act, and
19the Retailers' Occupation Tax Act shall not exceed $18,000,000
20in any State fiscal year. As used in this paragraph, the
21"average monthly deficit" shall be equal to the difference
22between the average monthly claims for payment by the fund and
23the average monthly revenues deposited into the fund, excluding
24payments made pursuant to this paragraph.
25    Beginning July 1, 2015, of the remainder of the moneys
26received by the Department under this Act, the Service Use Tax

 

 

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1Act, the Service Occupation Tax Act, and the Retailers'
2Occupation Tax Act, each month the Department shall deposit
3$500,000 into the State Crime Laboratory Fund.
4    Of the remainder of the moneys received by the Department
5pursuant to this Act, (a) 1.75% thereof shall be paid into the
6Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
7and after July 1, 1989, 3.8% thereof shall be paid into the
8Build Illinois Fund; provided, however, that if in any fiscal
9year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
10may be, of the moneys received by the Department and required
11to be paid into the Build Illinois Fund pursuant to Section 3
12of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
13Act, Section 9 of the Service Use Tax Act, and Section 9 of the
14Service Occupation Tax Act, such Acts being hereinafter called
15the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
16may be, of moneys being hereinafter called the "Tax Act
17Amount", and (2) the amount transferred to the Build Illinois
18Fund from the State and Local Sales Tax Reform Fund shall be
19less than the Annual Specified Amount (as defined in Section 3
20of the Retailers' Occupation Tax Act), an amount equal to the
21difference shall be immediately paid into the Build Illinois
22Fund from other moneys received by the Department pursuant to
23the Tax Acts; and further provided, that if on the last
24business day of any month the sum of (1) the Tax Act Amount
25required to be deposited into the Build Illinois Bond Account
26in the Build Illinois Fund during such month and (2) the amount

 

 

HB3522- 136 -LRB100 05678 HLH 21814 b

1transferred during such month to the Build Illinois Fund from
2the State and Local Sales Tax Reform Fund shall have been less
3than 1/12 of the Annual Specified Amount, an amount equal to
4the difference shall be immediately paid into the Build
5Illinois Fund from other moneys received by the Department
6pursuant to the Tax Acts; and, further provided, that in no
7event shall the payments required under the preceding proviso
8result in aggregate payments into the Build Illinois Fund
9pursuant to this clause (b) for any fiscal year in excess of
10the greater of (i) the Tax Act Amount or (ii) the Annual
11Specified Amount for such fiscal year; and, further provided,
12that the amounts payable into the Build Illinois Fund under
13this clause (b) shall be payable only until such time as the
14aggregate amount on deposit under each trust indenture securing
15Bonds issued and outstanding pursuant to the Build Illinois
16Bond Act is sufficient, taking into account any future
17investment income, to fully provide, in accordance with such
18indenture, for the defeasance of or the payment of the
19principal of, premium, if any, and interest on the Bonds
20secured by such indenture and on any Bonds expected to be
21issued thereafter and all fees and costs payable with respect
22thereto, all as certified by the Director of the Bureau of the
23Budget (now Governor's Office of Management and Budget). If on
24the last business day of any month in which Bonds are
25outstanding pursuant to the Build Illinois Bond Act, the
26aggregate of the moneys deposited in the Build Illinois Bond

 

 

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1Account in the Build Illinois Fund in such month shall be less
2than the amount required to be transferred in such month from
3the Build Illinois Bond Account to the Build Illinois Bond
4Retirement and Interest Fund pursuant to Section 13 of the
5Build Illinois Bond Act, an amount equal to such deficiency
6shall be immediately paid from other moneys received by the
7Department pursuant to the Tax Acts to the Build Illinois Fund;
8provided, however, that any amounts paid to the Build Illinois
9Fund in any fiscal year pursuant to this sentence shall be
10deemed to constitute payments pursuant to clause (b) of the
11preceding sentence and shall reduce the amount otherwise
12payable for such fiscal year pursuant to clause (b) of the
13preceding sentence. The moneys received by the Department
14pursuant to this Act and required to be deposited into the
15Build Illinois Fund are subject to the pledge, claim and charge
16set forth in Section 12 of the Build Illinois Bond Act.
17    Subject to payment of amounts into the Build Illinois Fund
18as provided in the preceding paragraph or in any amendment
19thereto hereafter enacted, the following specified monthly
20installment of the amount requested in the certificate of the
21Chairman of the Metropolitan Pier and Exposition Authority
22provided under Section 8.25f of the State Finance Act, but not
23in excess of the sums designated as "Total Deposit", shall be
24deposited in the aggregate from collections under Section 9 of
25the Use Tax Act, Section 9 of the Service Use Tax Act, Section
269 of the Service Occupation Tax Act, and Section 3 of the

 

 

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1Retailers' Occupation Tax Act into the McCormick Place
2Expansion Project Fund in the specified fiscal years.
3Fiscal YearTotal Deposit
41993         $0
51994 53,000,000
61995 58,000,000
71996 61,000,000
81997 64,000,000
91998 68,000,000
101999 71,000,000
112000 75,000,000
122001 80,000,000
132002 93,000,000
142003 99,000,000
152004103,000,000
162005108,000,000
172006113,000,000
182007119,000,000
192008126,000,000
202009132,000,000
212010139,000,000
222011146,000,000
232012153,000,000
242013161,000,000
252014170,000,000
262015179,000,000

 

 

HB3522- 139 -LRB100 05678 HLH 21814 b

12016189,000,000
22017199,000,000
32018210,000,000
42019221,000,000
52020233,000,000
62021246,000,000
72022260,000,000
82023275,000,000
92024 275,000,000
102025 275,000,000
112026 279,000,000
122027 292,000,000
132028 307,000,000
142029 322,000,000
152030 338,000,000
162031 350,000,000
172032 350,000,000
18and
19each fiscal year
20thereafter that bonds
21are outstanding under
22Section 13.2 of the
23Metropolitan Pier and
24Exposition Authority Act,
25but not after fiscal year 2060.
26    Beginning July 20, 1993 and in each month of each fiscal

 

 

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1year thereafter, one-eighth of the amount requested in the
2certificate of the Chairman of the Metropolitan Pier and
3Exposition Authority for that fiscal year, less the amount
4deposited into the McCormick Place Expansion Project Fund by
5the State Treasurer in the respective month under subsection
6(g) of Section 13 of the Metropolitan Pier and Exposition
7Authority Act, plus cumulative deficiencies in the deposits
8required under this Section for previous months and years,
9shall be deposited into the McCormick Place Expansion Project
10Fund, until the full amount requested for the fiscal year, but
11not in excess of the amount specified above as "Total Deposit",
12has been deposited.
13    Subject to payment of amounts into the Build Illinois Fund
14and the McCormick Place Expansion Project Fund pursuant to the
15preceding paragraphs or in any amendments thereto hereafter
16enacted, beginning July 1, 1993 and ending on September 30,
172013, the Department shall each month pay into the Illinois Tax
18Increment Fund 0.27% of 80% of the net revenue realized for the
19preceding month from the 6.25% general rate on the selling
20price of tangible personal property.
21    Subject to payment of amounts into the Build Illinois Fund
22and the McCormick Place Expansion Project Fund pursuant to the
23preceding paragraphs or in any amendments thereto hereafter
24enacted, beginning with the receipt of the first report of
25taxes paid by an eligible business and continuing for a 25-year
26period, (i) prior to January 1, 2018, the Department shall each

 

 

HB3522- 141 -LRB100 05678 HLH 21814 b

1month pay into the Energy Infrastructure Fund 80% of the net
2revenue realized from the 6.25% general rate on the selling
3price of Illinois-mined coal that was sold to an eligible
4business , and (ii) on and after January 1, 2018, the
5Department shall each month pay into the Energy Infrastructure
6Fund 86.96% of the net revenue realized from the general rate
7on the selling price of Illinois-mined coal that was sold to an
8eligible business. For purposes of this paragraph, the term
9"eligible business" means a new electric generating facility
10certified pursuant to Section 605-332 of the Department of
11Commerce and Economic Opportunity Law of the Civil
12Administrative Code of Illinois.
13    Subject to payment of amounts into the Build Illinois Fund,
14the McCormick Place Expansion Project Fund, the Illinois Tax
15Increment Fund, and the Energy Infrastructure Fund pursuant to
16the preceding paragraphs or in any amendments to this Section
17hereafter enacted, beginning on the first day of the first
18calendar month to occur on or after August 26, 2014 (the
19effective date of Public Act 98-1098) this amendatory Act of
20the 98th General Assembly, each month, from the collections
21made under Section 9 of the Use Tax Act, Section 9 of the
22Service Use Tax Act, Section 9 of the Service Occupation Tax
23Act, and Section 3 of the Retailers' Occupation Tax Act, the
24Department shall pay into the Tax Compliance and Administration
25Fund, to be used, subject to appropriation, to fund additional
26auditors and compliance personnel at the Department of Revenue,

 

 

HB3522- 142 -LRB100 05678 HLH 21814 b

1an amount equal to 1/12 of 5% of (i) prior to January 1, 2018,
280% of the cash receipts collected during the preceding fiscal
3year by the Audit Bureau of the Department under the Use Tax
4Act, the Service Use Tax Act, the Service Occupation Tax Act,
5the Retailers' Occupation Tax Act, and associated local
6occupation and use taxes administered by the Department, and
7(ii) on and after January 1, 2018, 86.96% of the cash receipts
8collected during the preceding fiscal year by the Audit Bureau
9of the Department under the Use Tax Act, the Service Use Tax
10Act, the Service Occupation Tax Act, the Retailers' Occupation
11Tax Act, and associated local occupation and use taxes
12administered by the Department.
13    Of the remainder of the moneys received by the Department
14pursuant to this Act, until January 1, 2018, 75%, and,
15beginning January 1, 2018, 72.83% thereof shall be paid into
16the State Treasury and, until January 1, 2018, 25%, and
17beginning January 1, 2018, 27.17% shall be reserved in a
18special account and used only for the transfer to the Common
19School Fund as part of the monthly transfer from the General
20Revenue Fund in accordance with Section 8a of the State Finance
21Act.
22    As soon as possible after the first day of each month, upon
23certification of the Department of Revenue, the Comptroller
24shall order transferred and the Treasurer shall transfer from
25the General Revenue Fund to the Motor Fuel Tax Fund an amount
26equal to 1.7% of 80% of the net revenue realized under this Act

 

 

HB3522- 143 -LRB100 05678 HLH 21814 b

1for the second preceding month. Beginning April 1, 2000, this
2transfer is no longer required and shall not be made.
3    Net revenue realized for a month shall be the revenue
4collected by the State pursuant to this Act, less the amount
5paid out during that month as refunds to taxpayers for
6overpayment of liability.
7    For greater simplicity of administration, manufacturers,
8importers and wholesalers whose products are sold at retail in
9Illinois by numerous retailers, and who wish to do so, may
10assume the responsibility for accounting and paying to the
11Department all tax accruing under this Act with respect to such
12sales, if the retailers who are affected do not make written
13objection to the Department to this arrangement.
14(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
1598-496, eff. 1-1-14; 98-756, eff. 7-16-14; 98-1098, eff.
168-26-14; 99-352, eff. 8-12-15; 99-858, eff. 8-19-16; 99-933,
17eff. 1-27-17; revised 2-3-17.)
 
18    Section 25. The Service Use Tax Act is amended by changing
19Sections 3-10, 3-70, and 9 as follows:
 
20    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
21    Sec. 3-10. Rate of tax. Unless otherwise provided in this
22Section, until January 1, 2018, the tax imposed by this Act is
23at the rate of 6.25% of the selling price of tangible personal
24property transferred as an incident to the sale of service,

 

 

HB3522- 144 -LRB100 05678 HLH 21814 b

1but, for the purpose of computing this tax, in no event shall
2the selling price be less than the cost price of the property
3to the serviceman. Unless otherwise provided in this Section,
4beginning on January 1, 2018, the tax imposed by this Act is at
5the rate of 5.75% of the selling price of tangible personal
6property transferred as an incident to the sale of service,
7but, for the purpose of computing this tax, in no event shall
8the selling price be less than the cost price of the property
9to the serviceman. References to the "general rate" mean (i)
10the 6.25% rate until January 1, 2018 and (ii) the 5.75% rate on
11and after January 1, 2018.
12    Beginning on July 1, 2000 and through December 31, 2000,
13with respect to motor fuel, as defined in Section 1.1 of the
14Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
15the Use Tax Act, the tax is imposed at the rate of 1.25%.
16    With respect to gasohol, as defined in the Use Tax Act, the
17tax imposed by this Act applies to (i) 70% of the selling price
18of property transferred as an incident to the sale of service
19on or after January 1, 1990, and before July 1, 2003, (ii) 80%
20of the selling price of property transferred as an incident to
21the sale of service on or after July 1, 2003 and on or before
22December 31, 2018, and (iii) 100% of the selling price
23thereafter. If, at any time, however, the tax under this Act on
24sales of gasohol, as defined in the Use Tax Act, is imposed at
25the rate of 1.25%, then the tax imposed by this Act applies to
26100% of the proceeds of sales of gasohol made during that time.

 

 

HB3522- 145 -LRB100 05678 HLH 21814 b

1    With respect to majority blended ethanol fuel, as defined
2in the Use Tax Act, the tax imposed by this Act does not apply
3to the selling price of property transferred as an incident to
4the sale of service on or after July 1, 2003 and on or before
5December 31, 2018 but applies to 100% of the selling price
6thereafter.
7    With respect to biodiesel blends, as defined in the Use Tax
8Act, with no less than 1% and no more than 10% biodiesel, the
9tax imposed by this Act applies to (i) 80% of the selling price
10of property transferred as an incident to the sale of service
11on or after July 1, 2003 and on or before December 31, 2018 and
12(ii) 100% of the proceeds of the selling price thereafter. If,
13at any time, however, the tax under this Act on sales of
14biodiesel blends, as defined in the Use Tax Act, with no less
15than 1% and no more than 10% biodiesel is imposed at the rate
16of 1.25%, then the tax imposed by this Act applies to 100% of
17the proceeds of sales of biodiesel blends with no less than 1%
18and no more than 10% biodiesel made during that time.
19    With respect to 100% biodiesel, as defined in the Use Tax
20Act, and biodiesel blends, as defined in the Use Tax Act, with
21more than 10% but no more than 99% biodiesel, the tax imposed
22by this Act does not apply to the proceeds of the selling price
23of property transferred as an incident to the sale of service
24on or after July 1, 2003 and on or before December 31, 2018 but
25applies to 100% of the selling price thereafter.
26    At the election of any registered serviceman made for each

 

 

HB3522- 146 -LRB100 05678 HLH 21814 b

1fiscal year, sales of service in which the aggregate annual
2cost price of tangible personal property transferred as an
3incident to the sales of service is less than 35%, or 75% in
4the case of servicemen transferring prescription drugs or
5servicemen engaged in graphic arts production, of the aggregate
6annual total gross receipts from all sales of service, the tax
7imposed by this Act shall be based on the serviceman's cost
8price of the tangible personal property transferred as an
9incident to the sale of those services.
10    The tax shall be imposed at the rate of 1% on food prepared
11for immediate consumption and transferred incident to a sale of
12service subject to this Act or the Service Occupation Tax Act
13by an entity licensed under the Hospital Licensing Act, the
14Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD
15Act, the Specialized Mental Health Rehabilitation Act of 2013,
16or the Child Care Act of 1969. The tax shall also be imposed at
17the rate of 1% on food for human consumption that is to be
18consumed off the premises where it is sold (other than
19alcoholic beverages, soft drinks, and food that has been
20prepared for immediate consumption and is not otherwise
21included in this paragraph) and prescription and
22nonprescription medicines, drugs, medical appliances, products
23classified as Class III medical devices by the United States
24Food and Drug Administration that are used for cancer treatment
25pursuant to a prescription, as well as any accessories and
26components related to those devices, modifications to a motor

 

 

HB3522- 147 -LRB100 05678 HLH 21814 b

1vehicle for the purpose of rendering it usable by a person with
2a disability, and insulin, urine testing materials, syringes,
3and needles used by diabetics, for human use. For the purposes
4of this Section, until September 1, 2009: the term "soft
5drinks" means any complete, finished, ready-to-use,
6non-alcoholic drink, whether carbonated or not, including but
7not limited to soda water, cola, fruit juice, vegetable juice,
8carbonated water, and all other preparations commonly known as
9soft drinks of whatever kind or description that are contained
10in any closed or sealed bottle, can, carton, or container,
11regardless of size; but "soft drinks" does not include coffee,
12tea, non-carbonated water, infant formula, milk or milk
13products as defined in the Grade A Pasteurized Milk and Milk
14Products Act, or drinks containing 50% or more natural fruit or
15vegetable juice.
16    Notwithstanding any other provisions of this Act,
17beginning September 1, 2009, "soft drinks" means non-alcoholic
18beverages that contain natural or artificial sweeteners. "Soft
19drinks" do not include beverages that contain milk or milk
20products, soy, rice or similar milk substitutes, or greater
21than 50% of vegetable or fruit juice by volume.
22    Until August 1, 2009, and notwithstanding any other
23provisions of this Act, "food for human consumption that is to
24be consumed off the premises where it is sold" includes all
25food sold through a vending machine, except soft drinks and
26food products that are dispensed hot from a vending machine,

 

 

HB3522- 148 -LRB100 05678 HLH 21814 b

1regardless of the location of the vending machine. Beginning
2August 1, 2009, and notwithstanding any other provisions of
3this Act, "food for human consumption that is to be consumed
4off the premises where it is sold" includes all food sold
5through a vending machine, except soft drinks, candy, and food
6products that are dispensed hot from a vending machine,
7regardless of the location of the vending machine.
8    Notwithstanding any other provisions of this Act,
9beginning September 1, 2009, "food for human consumption that
10is to be consumed off the premises where it is sold" does not
11include candy. For purposes of this Section, "candy" means a
12preparation of sugar, honey, or other natural or artificial
13sweeteners in combination with chocolate, fruits, nuts or other
14ingredients or flavorings in the form of bars, drops, or
15pieces. "Candy" does not include any preparation that contains
16flour or requires refrigeration.
17    Notwithstanding any other provisions of this Act,
18beginning September 1, 2009, "nonprescription medicines and
19drugs" does not include grooming and hygiene products. For
20purposes of this Section, "grooming and hygiene products"
21includes, but is not limited to, soaps and cleaning solutions,
22shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
23lotions and screens, unless those products are available by
24prescription only, regardless of whether the products meet the
25definition of "over-the-counter-drugs". For the purposes of
26this paragraph, "over-the-counter-drug" means a drug for human

 

 

HB3522- 149 -LRB100 05678 HLH 21814 b

1use that contains a label that identifies the product as a drug
2as required by 21 C.F.R. 201.66. The "over-the-counter-drug"
3label includes:
4        (A) A "Drug Facts" panel; or
5        (B) A statement of the "active ingredient(s)" with a
6    list of those ingredients contained in the compound,
7    substance or preparation.
8    Beginning on January 1, 2014 (the effective date of Public
9Act 98-122), "prescription and nonprescription medicines and
10drugs" includes medical cannabis purchased from a registered
11dispensing organization under the Compassionate Use of Medical
12Cannabis Pilot Program Act.
13    If the property that is acquired from a serviceman is
14acquired outside Illinois and used outside Illinois before
15being brought to Illinois for use here and is taxable under
16this Act, the "selling price" on which the tax is computed
17shall be reduced by an amount that represents a reasonable
18allowance for depreciation for the period of prior out-of-state
19use.
20(Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;
2198-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.
227-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16.)
 
23    (35 ILCS 110/3-70)
24    Sec. 3-70. Manufacturer's Purchase Credit. For purchases
25of machinery and equipment made on and after January 1, 1995

 

 

HB3522- 150 -LRB100 05678 HLH 21814 b

1and through June 30, 2003, and on and after September 1, 2004
2through August 30, 2014, a purchaser of manufacturing machinery
3and equipment that qualifies for the exemption provided by
4Section 2 of this Act earns a credit in an amount equal to a
5fixed percentage of the tax which would have been incurred
6under this Act on those purchases. For purchases of graphic
7arts machinery and equipment made on or after July 1, 1996
8through June 30, 2003, and on and after September 1, 2004
9through August 30, 2014, a purchase of graphic arts machinery
10and equipment that qualifies for the exemption provided by
11paragraph (5) of Section 3-5 of this Act earns a credit in an
12amount equal to a fixed percentage of the tax that would have
13been incurred under this Act on those purchases. The credit
14earned for the purchase of manufacturing machinery and
15equipment and graphic arts machinery and equipment shall be
16referred to as the Manufacturer's Purchase Credit. A graphic
17arts producer is a person engaged in graphic arts production as
18defined in Section 3-30 of the Service Occupation Tax Act.
19Beginning July 1, 1996, all references in this Section to
20manufacturers or manufacturing shall also refer to graphic arts
21producers or graphic arts production.
22    The amount of credit shall be a percentage of the tax that
23would have been incurred on the purchase of the manufacturing
24machinery and equipment or graphic arts machinery and equipment
25if the exemptions provided by Section 2 or paragraph (5) of
26Section 3-5 of this Act had not been applicable.

 

 

HB3522- 151 -LRB100 05678 HLH 21814 b

1    All purchases prior to October 1, 2003 of manufacturing
2machinery and equipment and graphic arts machinery and
3equipment that qualify for the exemptions provided by paragraph
4(5) of Section 2 or paragraph (5) of Section 3-5 of this Act
5qualify for the credit without regard to whether the serviceman
6elected, or could have elected, under paragraph (7) of Section
72 of this Act to exclude the transaction from this Act. If the
8serviceman's billing to the service customer separately states
9a selling price for the exempt manufacturing machinery or
10equipment or the exempt graphic arts machinery and equipment,
11the credit shall be calculated, as otherwise provided herein,
12based on that selling price. If the serviceman's billing does
13not separately state a selling price for the exempt
14manufacturing machinery and equipment or the exempt graphic
15arts machinery and equipment, the credit shall be calculated,
16as otherwise provided herein, based on 50% of the entire
17billing. If the serviceman contracts to design, develop, and
18produce special order manufacturing machinery and equipment or
19special order graphic arts machinery and equipment, and the
20billing does not separately state a selling price for such
21special order machinery and equipment, the credit shall be
22calculated, as otherwise provided herein, based on 50% of the
23entire billing. The provisions of this paragraph are effective
24for purchases made on or after January 1, 1995.
25    The percentage shall be as follows:
26        (1) 15% for purchases made on or before June 30, 1995.

 

 

HB3522- 152 -LRB100 05678 HLH 21814 b

1        (2) 25% for purchases made after June 30, 1995, and on
2    or before June 30, 1996.
3        (3) 40% for purchases made after June 30, 1996, and on
4    or before June 30, 1997.
5        (4) 50% for purchases made on or after July 1, 1997.
6    (a) Manufacturer's Purchase Credit earned prior to July 1,
72003. This subsection (a) applies to Manufacturer's Purchase
8Credit earned prior to July 1, 2003. A purchaser of production
9related tangible personal property desiring to use the
10Manufacturer's Purchase Credit shall certify to the seller
11prior to October 1, 2003 that the purchaser is satisfying all
12or part of the liability under the Use Tax Act or the Service
13Use Tax Act that is due on the purchase of the production
14related tangible personal property by use of a Manufacturer's
15Purchase Credit. The Manufacturer's Purchase Credit
16certification must be dated and shall include the name and
17address of the purchaser, the purchaser's registration number,
18if registered, the credit being applied, and a statement that
19the State Use Tax or Service Use Tax liability is being
20satisfied with the manufacturer's or graphic arts producer's
21accumulated purchase credit. Certification may be incorporated
22into the manufacturer's or graphic arts producer's purchase
23order. Manufacturer's Purchase Credit certification provided
24by the manufacturer or graphic arts producer prior to October
251, 2003 may be used to satisfy the retailer's or serviceman's
26liability under the Retailers' Occupation Tax Act or Service

 

 

HB3522- 153 -LRB100 05678 HLH 21814 b

1Occupation Tax Act for the credit claimed, not to exceed 6.25%
2of the receipts subject to tax from a qualifying purchase, but
3only if the retailer or serviceman reports the Manufacturer's
4Purchase Credit claimed as required by the Department. A
5Manufacturer's Purchase Credit reported on any original or
6amended return filed under this Act after October 20, 2003
7shall be disallowed. The Manufacturer's Purchase Credit earned
8by purchase of exempt manufacturing machinery and equipment or
9graphic arts machinery and equipment is a non-transferable
10credit. A manufacturer or graphic arts producer that enters
11into a contract involving the installation of tangible personal
12property into real estate within a manufacturing or graphic
13arts production facility, prior to October 1, 2003, may
14authorize a construction contractor to utilize credit
15accumulated by the manufacturer or graphic arts producer to
16purchase the tangible personal property. A manufacturer or
17graphic arts producer intending to use accumulated credit to
18purchase such tangible personal property shall execute a
19written contract authorizing the contractor to utilize a
20specified dollar amount of credit. The contractor shall
21furnish, prior to October 1, 2003, the supplier with the
22manufacturer's or graphic arts producer's name, registration
23or resale number, and a statement that a specific amount of the
24Use Tax or Service Use Tax liability, not to exceed 6.25% of
25the selling price, is being satisfied with the credit. The
26manufacturer or graphic arts producer shall remain liable to

 

 

HB3522- 154 -LRB100 05678 HLH 21814 b

1timely report all information required by the annual Report of
2Manufacturer's Purchase Credit Used for credit utilized by a
3construction contractor.
4    No Manufacturer's Purchase Credit earned prior to July 1,
52003 may be used after October 1, 2003. The Manufacturer's
6Purchase Credit may be used to satisfy liability under the Use
7Tax Act or the Service Use Tax Act due on the purchase of
8production related tangible personal property (including
9purchases by a manufacturer, by a graphic arts producer, or a
10lessor who rents or leases the use of the property to a
11manufacturer or graphic arts producer) that does not otherwise
12qualify for the manufacturing machinery and equipment
13exemption or the graphic arts machinery and equipment
14exemption. "Production related tangible personal property"
15means (i) all tangible personal property used or consumed by
16the purchaser in a manufacturing facility in which a
17manufacturing process described in Section 2-45 of the
18Retailers' Occupation Tax Act takes place, including tangible
19personal property purchased for incorporation into real estate
20within a manufacturing facility and including, but not limited
21to, tangible personal property used or consumed in activities
22such as pre-production material handling, receiving, quality
23control, inventory control, storage, staging, and packaging
24for shipping and transportation purposes; (ii) all tangible
25personal property used or consumed by the purchaser in a
26graphic arts facility in which graphic arts production as

 

 

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1described in Section 2-30 of the Retailers' Occupation Tax Act
2takes place, including tangible personal property purchased
3for incorporation into real estate within a graphic arts
4facility and including, but not limited to, all tangible
5personal property used or consumed in activities such as
6graphic arts preliminary or pre-press production,
7pre-production material handling, receiving, quality control,
8inventory control, storage, staging, sorting, labeling,
9mailing, tying, wrapping, and packaging; and (iii) all tangible
10personal property used or consumed by the purchaser for
11research and development. "Production related tangible
12personal property" does not include (i) tangible personal
13property used, within or without a manufacturing or graphic
14arts facility, in sales, purchasing, accounting, fiscal
15management, marketing, personnel recruitment or selection, or
16landscaping or (ii) tangible personal property required to be
17titled or registered with a department, agency, or unit of
18federal, state, or local government. The Manufacturer's
19Purchase Credit may be used, prior to October 1, 2003, to
20satisfy the tax arising either from the purchase of machinery
21and equipment on or after January 1, 1995 for which the
22manufacturing machinery and equipment exemption provided by
23Section 2 of this Act was erroneously claimed, or the purchase
24of machinery and equipment on or after July 1, 1996 for which
25the exemption provided by paragraph (5) of Section 3-5 of this
26Act was erroneously claimed, but not in satisfaction of

 

 

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1penalty, if any, and interest for failure to pay the tax when
2due. A purchaser of production related tangible personal
3property who is required to pay Illinois Use Tax or Service Use
4Tax on the purchase directly to the Department may, prior to
5October 1, 2003, utilize the Manufacturer's Purchase Credit in
6satisfaction of the tax arising from that purchase, but not in
7satisfaction of penalty and interest. A purchaser who uses the
8Manufacturer's Purchase Credit to purchase property which is
9later determined not to be production related tangible personal
10property may be liable for tax, penalty, and interest on the
11purchase of that property as of the date of purchase but shall
12be entitled to use the disallowed Manufacturer's Purchase
13Credit, so long as it has not expired and is used prior to
14October 1, 2003, on qualifying purchases of production related
15tangible personal property not previously subject to credit
16usage. The Manufacturer's Purchase Credit earned by a
17manufacturer or graphic arts producer expires the last day of
18the second calendar year following the calendar year in which
19the credit arose. No Manufacturer's Purchase Credit may be used
20after September 30, 2003 regardless of when that credit was
21earned.
22    A purchaser earning Manufacturer's Purchase Credit shall
23sign and file an annual Report of Manufacturer's Purchase
24Credit Earned for each calendar year no later than the last day
25of the sixth month following the calendar year in which a
26Manufacturer's Purchase Credit is earned. A Report of

 

 

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1Manufacturer's Purchase Credit Earned shall be filed on forms
2as prescribed or approved by the Department and shall state,
3for each month of the calendar year: (i) the total purchase
4price of all purchases of exempt manufacturing or graphic arts
5machinery on which the credit was earned; (ii) the total State
6Use Tax or Service Use Tax which would have been due on those
7items; (iii) the percentage used to calculate the amount of
8credit earned; (iv) the amount of credit earned; and (v) such
9other information as the Department may reasonably require. A
10purchaser earning Manufacturer's Purchase Credit shall
11maintain records which identify, as to each purchase of
12manufacturing or graphic arts machinery and equipment on which
13the purchaser earned Manufacturer's Purchase Credit, the
14vendor (including, if applicable, either the vendor's
15registration number or Federal Employer Identification
16Number), the purchase price, and the amount of Manufacturer's
17Purchase Credit earned on each purchase.
18    A purchaser using Manufacturer's Purchase Credit shall
19sign and file an annual Report of Manufacturer's Purchase
20Credit Used for each calendar year no later than the last day
21of the sixth month following the calendar year in which a
22Manufacturer's Purchase Credit is used. A Report of
23Manufacturer's Purchase Credit Used shall be filed on forms as
24prescribed or approved by the Department and shall state, for
25each month of the calendar year: (i) the total purchase price
26of production related tangible personal property purchased

 

 

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1from Illinois suppliers; (ii) the total purchase price of
2production related tangible personal property purchased from
3out-of-state suppliers; (iii) the total amount of credit used
4during such month; and (iv) such other information as the
5Department may reasonably require. A purchaser using
6Manufacturer's Purchase Credit shall maintain records that
7identify, as to each purchase of production related tangible
8personal property on which the purchaser used Manufacturer's
9Purchase Credit, the vendor (including, if applicable, either
10the vendor's registration number or Federal Employer
11Identification Number), the purchase price, and the amount of
12Manufacturer's Purchase Credit used on each purchase.
13    No annual report shall be filed before May 1, 1996 or after
14June 30, 2004. A purchaser that fails to file an annual Report
15of Manufacturer's Purchase Credit Earned or an annual Report of
16Manufacturer's Purchase Credit Used by the last day of the
17sixth month following the end of the calendar year shall
18forfeit all Manufacturer's Purchase Credit for that calendar
19year unless it establishes that its failure to file was due to
20reasonable cause. Manufacturer's Purchase Credit reports may
21be amended to report and claim credit on qualifying purchases
22not previously reported at any time before the credit would
23have expired, unless both the Department and the purchaser have
24agreed to an extension of the statute of limitations for the
25issuance of a notice of tax liability as provided in Section 4
26of the Retailers' Occupation Tax Act. If the time for

 

 

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1assessment or refund has been extended, then amended reports
2for a calendar year may be filed at any time prior to the date
3to which the statute of limitations for the calendar year or
4portion thereof has been extended. No Manufacturer's Purchase
5Credit report filed with the Department for periods prior to
6January 1, 1995 shall be approved. Manufacturer's Purchase
7Credit claimed on an amended report may be used, prior to
8October 1, 2003, to satisfy tax liability under the Use Tax Act
9or the Service Use Tax Act (i) on qualifying purchases of
10production related tangible personal property made after the
11date the amended report is filed or (ii) assessed by the
12Department on qualifying purchases of production related
13tangible personal property made in the case of manufacturers on
14or after January 1, 1995, or in the case of graphic arts
15producers on or after July 1, 1996.
16    If the purchaser is not the manufacturer or a graphic arts
17producer, but rents or leases the use of the property to a
18manufacturer or a graphic arts producer, the purchaser may
19earn, report, and use Manufacturer's Purchase Credit in the
20same manner as a manufacturer or graphic arts producer.
21    A purchaser shall not be entitled to any Manufacturer's
22Purchase Credit for a purchase that is required to be reported
23and is not timely reported as provided in this Section. A
24purchaser remains liable for (i) any tax that was satisfied by
25use of a Manufacturer's Purchase Credit, as of the date of
26purchase, if that use is not timely reported as required in

 

 

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1this Section and (ii) for any applicable penalties and interest
2for failing to pay the tax when due. No Manufacturer's Purchase
3Credit may be used after September 30, 2003 to satisfy any tax
4liability imposed under this Act, including any audit
5liability.
6    (b) Manufacturer's Purchase Credit earned on and after
7September 1, 2004. This subsection (b) applies to
8Manufacturer's Purchase Credit earned on or after September 1,
92004. Manufacturer's Purchase Credit earned on or after
10September 1, 2004 may only be used to satisfy the Use Tax or
11Service Use Tax liability incurred on production related
12tangible personal property purchased on or after September 1,
132004. A purchaser of production related tangible personal
14property desiring to use the Manufacturer's Purchase Credit
15shall certify to the seller that the purchaser is satisfying
16all or part of the liability under the Use Tax Act or the
17Service Use Tax Act that is due on the purchase of the
18production related tangible personal property by use of a
19Manufacturer's Purchase Credit. The Manufacturer's Purchase
20Credit certification must be dated and shall include the name
21and address of the purchaser, the purchaser's registration
22number, if registered, the credit being applied, and a
23statement that the State Use Tax or Service Use Tax liability
24is being satisfied with the manufacturer's or graphic arts
25producer's accumulated purchase credit. Certification may be
26incorporated into the manufacturer's or graphic arts

 

 

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1producer's purchase order. Manufacturer's Purchase Credit
2certification provided by the manufacturer or graphic arts
3producer may be used to satisfy the retailer's or serviceman's
4liability under the Retailers' Occupation Tax Act or Service
5Occupation Tax Act for the credit claimed, not to exceed 6.25%,
6and beginning January 1, 2018, 5.75% of the receipts subject to
7tax from a qualifying purchase, but only if the retailer or
8serviceman reports the Manufacturer's Purchase Credit claimed
9as required by the Department. The Manufacturer's Purchase
10Credit earned by purchase of exempt manufacturing machinery and
11equipment or graphic arts machinery and equipment is a
12non-transferable credit. A manufacturer or graphic arts
13producer that enters into a contract involving the installation
14of tangible personal property into real estate within a
15manufacturing or graphic arts production facility may, on or
16after September 1, 2004, authorize a construction contractor to
17utilize credit accumulated by the manufacturer or graphic arts
18producer to purchase the tangible personal property. A
19manufacturer or graphic arts producer intending to use
20accumulated credit to purchase such tangible personal property
21shall execute a written contract authorizing the contractor to
22utilize a specified dollar amount of credit. The contractor
23shall furnish the supplier with the manufacturer's or graphic
24arts producer's name, registration or resale number, and a
25statement that a specific amount of the Use Tax or Service Use
26Tax liability, not to exceed 6.25%, and beginning January 1,

 

 

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12018, 5.75% of the selling price, is being satisfied with the
2credit. The manufacturer or graphic arts producer shall remain
3liable to timely report all information required by the annual
4Report of Manufacturer's Purchase Credit Used for credit
5utilized by a construction contractor.
6    The Manufacturer's Purchase Credit may be used to satisfy
7liability under the Use Tax Act or the Service Use Tax Act due
8on the purchase, made on or after September 1, 2004, of
9production related tangible personal property (including
10purchases by a manufacturer, by a graphic arts producer, or a
11lessor who rents or leases the use of the property to a
12manufacturer or graphic arts producer) that does not otherwise
13qualify for the manufacturing machinery and equipment
14exemption or the graphic arts machinery and equipment
15exemption. "Production related tangible personal property"
16means (i) all tangible personal property used or consumed by
17the purchaser in a manufacturing facility in which a
18manufacturing process described in Section 2-45 of the
19Retailers' Occupation Tax Act takes place, including tangible
20personal property purchased for incorporation into real estate
21within a manufacturing facility and including, but not limited
22to, tangible personal property used or consumed in activities
23such as pre-production material handling, receiving, quality
24control, inventory control, storage, staging, and packaging
25for shipping and transportation purposes; (ii) all tangible
26personal property used or consumed by the purchaser in a

 

 

HB3522- 163 -LRB100 05678 HLH 21814 b

1graphic arts facility in which graphic arts production as
2described in Section 2-30 of the Retailers' Occupation Tax Act
3takes place, including tangible personal property purchased
4for incorporation into real estate within a graphic arts
5facility and including, but not limited to, all tangible
6personal property used or consumed in activities such as
7graphic arts preliminary or pre-press production,
8pre-production material handling, receiving, quality control,
9inventory control, storage, staging, sorting, labeling,
10mailing, tying, wrapping, and packaging; and (iii) all tangible
11personal property used or consumed by the purchaser for
12research and development. "Production related tangible
13personal property" does not include (i) tangible personal
14property used, within or without a manufacturing or graphic
15arts facility, in sales, purchasing, accounting, fiscal
16management, marketing, personnel recruitment or selection, or
17landscaping or (ii) tangible personal property required to be
18titled or registered with a department, agency, or unit of
19federal, state, or local government. The Manufacturer's
20Purchase Credit may be used to satisfy the tax arising either
21from the purchase of machinery and equipment on or after
22September 1, 2004 for which the manufacturing machinery and
23equipment exemption provided by Section 2 of this Act was
24erroneously claimed, or the purchase of machinery and equipment
25on or after September 1, 2004 for which the exemption provided
26by paragraph (5) of Section 3-5 of this Act was erroneously

 

 

HB3522- 164 -LRB100 05678 HLH 21814 b

1claimed, but not in satisfaction of penalty, if any, and
2interest for failure to pay the tax when due. A purchaser of
3production related tangible personal property that is
4purchased on or after September 1, 2004 who is required to pay
5Illinois Use Tax or Service Use Tax on the purchase directly to
6the Department may utilize the Manufacturer's Purchase Credit
7in satisfaction of the tax arising from that purchase, but not
8in satisfaction of penalty and interest. A purchaser who uses
9the Manufacturer's Purchase Credit to purchase property on and
10after September 1, 2004 which is later determined not to be
11production related tangible personal property may be liable for
12tax, penalty, and interest on the purchase of that property as
13of the date of purchase but shall be entitled to use the
14disallowed Manufacturer's Purchase Credit, so long as it has
15not expired, on qualifying purchases of production related
16tangible personal property not previously subject to credit
17usage. The Manufacturer's Purchase Credit earned by a
18manufacturer or graphic arts producer expires the last day of
19the second calendar year following the calendar year in which
20the credit arose.
21    A purchaser earning Manufacturer's Purchase Credit shall
22sign and file an annual Report of Manufacturer's Purchase
23Credit Earned for each calendar year no later than the last day
24of the sixth month following the calendar year in which a
25Manufacturer's Purchase Credit is earned. A Report of
26Manufacturer's Purchase Credit Earned shall be filed on forms

 

 

HB3522- 165 -LRB100 05678 HLH 21814 b

1as prescribed or approved by the Department and shall state,
2for each month of the calendar year: (i) the total purchase
3price of all purchases of exempt manufacturing or graphic arts
4machinery on which the credit was earned; (ii) the total State
5Use Tax or Service Use Tax which would have been due on those
6items; (iii) the percentage used to calculate the amount of
7credit earned; (iv) the amount of credit earned; and (v) such
8other information as the Department may reasonably require. A
9purchaser earning Manufacturer's Purchase Credit shall
10maintain records which identify, as to each purchase of
11manufacturing or graphic arts machinery and equipment on which
12the purchaser earned Manufacturer's Purchase Credit, the
13vendor (including, if applicable, either the vendor's
14registration number or Federal Employer Identification
15Number), the purchase price, and the amount of Manufacturer's
16Purchase Credit earned on each purchase.
17    A purchaser using Manufacturer's Purchase Credit shall
18sign and file an annual Report of Manufacturer's Purchase
19Credit Used for each calendar year no later than the last day
20of the sixth month following the calendar year in which a
21Manufacturer's Purchase Credit is used. A Report of
22Manufacturer's Purchase Credit Used shall be filed on forms as
23prescribed or approved by the Department and shall state, for
24each month of the calendar year: (i) the total purchase price
25of production related tangible personal property purchased
26from Illinois suppliers; (ii) the total purchase price of

 

 

HB3522- 166 -LRB100 05678 HLH 21814 b

1production related tangible personal property purchased from
2out-of-state suppliers; (iii) the total amount of credit used
3during such month; and (iv) such other information as the
4Department may reasonably require. A purchaser using
5Manufacturer's Purchase Credit shall maintain records that
6identify, as to each purchase of production related tangible
7personal property on which the purchaser used Manufacturer's
8Purchase Credit, the vendor (including, if applicable, either
9the vendor's registration number or Federal Employer
10Identification Number), the purchase price, and the amount of
11Manufacturer's Purchase Credit used on each purchase.
12    A purchaser that fails to file an annual Report of
13Manufacturer's Purchase Credit Earned or an annual Report of
14Manufacturer's Purchase Credit Used by the last day of the
15sixth month following the end of the calendar year shall
16forfeit all Manufacturer's Purchase Credit for that calendar
17year unless it establishes that its failure to file was due to
18reasonable cause. Manufacturer's Purchase Credit reports may
19be amended to report and claim credit on qualifying purchases
20not previously reported at any time before the credit would
21have expired, unless both the Department and the purchaser have
22agreed to an extension of the statute of limitations for the
23issuance of a notice of tax liability as provided in Section 4
24of the Retailers' Occupation Tax Act. If the time for
25assessment or refund has been extended, then amended reports
26for a calendar year may be filed at any time prior to the date

 

 

HB3522- 167 -LRB100 05678 HLH 21814 b

1to which the statute of limitations for the calendar year or
2portion thereof has been extended. Manufacturer's Purchase
3Credit claimed on an amended report may be used to satisfy tax
4liability under the Use Tax Act or the Service Use Tax Act (i)
5on qualifying purchases of production related tangible
6personal property made after the date the amended report is
7filed or (ii) assessed by the Department on qualifying
8production related tangible personal property purchased on or
9after September 1, 2004.
10    If the purchaser is not the manufacturer or a graphic arts
11producer, but rents or leases the use of the property to a
12manufacturer or a graphic arts producer, the purchaser may
13earn, report, and use Manufacturer's Purchase Credit in the
14same manner as a manufacturer or graphic arts producer. A
15purchaser shall not be entitled to any Manufacturer's Purchase
16Credit for a purchase that is required to be reported and is
17not timely reported as provided in this Section. A purchaser
18remains liable for (i) any tax that was satisfied by use of a
19Manufacturer's Purchase Credit, as of the date of purchase, if
20that use is not timely reported as required in this Section and
21(ii) for any applicable penalties and interest for failing to
22pay the tax when due.
23(Source: P.A. 96-116, eff. 7-31-09.)
 
24    (35 ILCS 110/9)  (from Ch. 120, par. 439.39)
25    Sec. 9. Each serviceman required or authorized to collect

 

 

HB3522- 168 -LRB100 05678 HLH 21814 b

1the tax herein imposed shall pay to the Department the amount
2of such tax (except as otherwise provided) at the time when he
3is required to file his return for the period during which such
4tax was collected, less a discount of 2.1% prior to January 1,
51990 and 1.75% on and after January 1, 1990, or $5 per calendar
6year, whichever is greater, which is allowed to reimburse the
7serviceman for expenses incurred in collecting the tax, keeping
8records, preparing and filing returns, remitting the tax and
9supplying data to the Department on request. The Department may
10disallow the discount for servicemen whose certificate of
11registration is revoked at the time the return is filed, but
12only if the Department's decision to revoke the certificate of
13registration has become final. A serviceman need not remit that
14part of any tax collected by him to the extent that he is
15required to pay and does pay the tax imposed by the Service
16Occupation Tax Act with respect to his sale of service
17involving the incidental transfer by him of the same property.
18    Except as provided hereinafter in this Section, on or
19before the twentieth day of each calendar month, such
20serviceman shall file a return for the preceding calendar month
21in accordance with reasonable Rules and Regulations to be
22promulgated by the Department. Such return shall be filed on a
23form prescribed by the Department and shall contain such
24information as the Department may reasonably require.
25    The Department may require returns to be filed on a
26quarterly basis. If so required, a return for each calendar

 

 

HB3522- 169 -LRB100 05678 HLH 21814 b

1quarter shall be filed on or before the twentieth day of the
2calendar month following the end of such calendar quarter. The
3taxpayer shall also file a return with the Department for each
4of the first two months of each calendar quarter, on or before
5the twentieth day of the following calendar month, stating:
6        1. The name of the seller;
7        2. The address of the principal place of business from
8    which he engages in business as a serviceman in this State;
9        3. The total amount of taxable receipts received by him
10    during the preceding calendar month, including receipts
11    from charge and time sales, but less all deductions allowed
12    by law;
13        4. The amount of credit provided in Section 2d of this
14    Act;
15        5. The amount of tax due;
16        5-5. The signature of the taxpayer; and
17        6. Such other reasonable information as the Department
18    may require.
19    If a taxpayer fails to sign a return within 30 days after
20the proper notice and demand for signature by the Department,
21the return shall be considered valid and any amount shown to be
22due on the return shall be deemed assessed.
23    Beginning October 1, 1993, a taxpayer who has an average
24monthly tax liability of $150,000 or more shall make all
25payments required by rules of the Department by electronic
26funds transfer. Beginning October 1, 1994, a taxpayer who has

 

 

HB3522- 170 -LRB100 05678 HLH 21814 b

1an average monthly tax liability of $100,000 or more shall make
2all payments required by rules of the Department by electronic
3funds transfer. Beginning October 1, 1995, a taxpayer who has
4an average monthly tax liability of $50,000 or more shall make
5all payments required by rules of the Department by electronic
6funds transfer. Beginning October 1, 2000, a taxpayer who has
7an annual tax liability of $200,000 or more shall make all
8payments required by rules of the Department by electronic
9funds transfer. The term "annual tax liability" shall be the
10sum of the taxpayer's liabilities under this Act, and under all
11other State and local occupation and use tax laws administered
12by the Department, for the immediately preceding calendar year.
13The term "average monthly tax liability" means the sum of the
14taxpayer's liabilities under this Act, and under all other
15State and local occupation and use tax laws administered by the
16Department, for the immediately preceding calendar year
17divided by 12. Beginning on October 1, 2002, a taxpayer who has
18a tax liability in the amount set forth in subsection (b) of
19Section 2505-210 of the Department of Revenue Law shall make
20all payments required by rules of the Department by electronic
21funds transfer.
22    Before August 1 of each year beginning in 1993, the
23Department shall notify all taxpayers required to make payments
24by electronic funds transfer. All taxpayers required to make
25payments by electronic funds transfer shall make those payments
26for a minimum of one year beginning on October 1.

 

 

HB3522- 171 -LRB100 05678 HLH 21814 b

1    Any taxpayer not required to make payments by electronic
2funds transfer may make payments by electronic funds transfer
3with the permission of the Department.
4    All taxpayers required to make payment by electronic funds
5transfer and any taxpayers authorized to voluntarily make
6payments by electronic funds transfer shall make those payments
7in the manner authorized by the Department.
8    The Department shall adopt such rules as are necessary to
9effectuate a program of electronic funds transfer and the
10requirements of this Section.
11    If the serviceman is otherwise required to file a monthly
12return and if the serviceman's average monthly tax liability to
13the Department does not exceed $200, the Department may
14authorize his returns to be filed on a quarter annual basis,
15with the return for January, February and March of a given year
16being due by April 20 of such year; with the return for April,
17May and June of a given year being due by July 20 of such year;
18with the return for July, August and September of a given year
19being due by October 20 of such year, and with the return for
20October, November and December of a given year being due by
21January 20 of the following year.
22    If the serviceman is otherwise required to file a monthly
23or quarterly return and if the serviceman's average monthly tax
24liability to the Department does not exceed $50, the Department
25may authorize his returns to be filed on an annual basis, with
26the return for a given year being due by January 20 of the

 

 

HB3522- 172 -LRB100 05678 HLH 21814 b

1following year.
2    Such quarter annual and annual returns, as to form and
3substance, shall be subject to the same requirements as monthly
4returns.
5    Notwithstanding any other provision in this Act concerning
6the time within which a serviceman may file his return, in the
7case of any serviceman who ceases to engage in a kind of
8business which makes him responsible for filing returns under
9this Act, such serviceman shall file a final return under this
10Act with the Department not more than 1 month after
11discontinuing such business.
12    Where a serviceman collects the tax with respect to the
13selling price of property which he sells and the purchaser
14thereafter returns such property and the serviceman refunds the
15selling price thereof to the purchaser, such serviceman shall
16also refund, to the purchaser, the tax so collected from the
17purchaser. When filing his return for the period in which he
18refunds such tax to the purchaser, the serviceman may deduct
19the amount of the tax so refunded by him to the purchaser from
20any other Service Use Tax, Service Occupation Tax, retailers'
21occupation tax or use tax which such serviceman may be required
22to pay or remit to the Department, as shown by such return,
23provided that the amount of the tax to be deducted shall
24previously have been remitted to the Department by such
25serviceman. If the serviceman shall not previously have
26remitted the amount of such tax to the Department, he shall be

 

 

HB3522- 173 -LRB100 05678 HLH 21814 b

1entitled to no deduction hereunder upon refunding such tax to
2the purchaser.
3    Any serviceman filing a return hereunder shall also include
4the total tax upon the selling price of tangible personal
5property purchased for use by him as an incident to a sale of
6service, and such serviceman shall remit the amount of such tax
7to the Department when filing such return.
8    If experience indicates such action to be practicable, the
9Department may prescribe and furnish a combination or joint
10return which will enable servicemen, who are required to file
11returns hereunder and also under the Service Occupation Tax
12Act, to furnish all the return information required by both
13Acts on the one form.
14    Where the serviceman has more than one business registered
15with the Department under separate registration hereunder,
16such serviceman shall not file each return that is due as a
17single return covering all such registered businesses, but
18shall file separate returns for each such registered business.
19    Beginning January 1, 1990, each month the Department shall
20pay into the State and Local Tax Reform Fund, a special fund in
21the State Treasury, the net revenue realized for the preceding
22month from the 1% tax on sales of food for human consumption
23which is to be consumed off the premises where it is sold
24(other than alcoholic beverages, soft drinks and food which has
25been prepared for immediate consumption) and prescription and
26nonprescription medicines, drugs, medical appliances, products

 

 

HB3522- 174 -LRB100 05678 HLH 21814 b

1classified as Class III medical devices, by the United States
2Food and Drug Administration that are used for cancer treatment
3pursuant to a prescription, as well as any accessories and
4components related to those devices, and insulin, urine testing
5materials, syringes and needles used by diabetics.
6    From Beginning January 1, 1990, through January 31, 2018,
7each month the Department shall pay into the State and Local
8Sales Tax Reform Fund 20% of the net revenue realized for the
9preceding month from the 6.25% general rate on transfers of
10tangible personal property, other than tangible personal
11property which is purchased outside Illinois at retail from a
12retailer and which is titled or registered by an agency of this
13State's government. Beginning February 1, 2018, each month the
14Department shall pay into the State and Local Sales Tax Reform
15Fund 21.74% of the net revenue realized for the preceding month
16from the general rate on transfers of tangible personal
17property, other than tangible personal property which is
18purchased outside Illinois at retail from a retailer and which
19is titled or registered by an agency of this State's
20government.
21    Beginning August 1, 2000, each month the Department shall
22pay into the State and Local Sales Tax Reform Fund 100% of the
23net revenue realized for the preceding month from the 1.25%
24rate on the selling price of motor fuel and gasohol.
25    From Beginning October 1, 2009 through January 31, 2018,
26each month the Department shall pay into the Capital Projects

 

 

HB3522- 175 -LRB100 05678 HLH 21814 b

1Fund an amount that is equal to an amount estimated by the
2Department to represent 80% of the net revenue realized for the
3preceding month from the sale of candy, grooming and hygiene
4products, and soft drinks that had been taxed at a rate of 1%
5prior to September 1, 2009 but that are now taxed at the
6general rate 6.25%. Beginning on February 1, 2018, each month
7the Department shall pay into the Capital Projects Fund an
8amount that is equal to an amount estimated by the Department
9to represent 86.96% of the net revenue realized for the
10preceding month from the sale of candy, grooming and hygiene
11products, and soft drinks that had been taxed at a rate of 1%
12prior to September 1, 2009 but that are now taxed at the
13general rate.
14    Beginning July 1, 2013, each month the Department shall pay
15into the Underground Storage Tank Fund from the proceeds
16collected under this Act, the Use Tax Act, the Service
17Occupation Tax Act, and the Retailers' Occupation Tax Act an
18amount equal to the average monthly deficit in the Underground
19Storage Tank Fund during the prior year, as certified annually
20by the Illinois Environmental Protection Agency, but the total
21payment into the Underground Storage Tank Fund under this Act,
22the Use Tax Act, the Service Occupation Tax Act, and the
23Retailers' Occupation Tax Act shall not exceed $18,000,000 in
24any State fiscal year. As used in this paragraph, the "average
25monthly deficit" shall be equal to the difference between the
26average monthly claims for payment by the fund and the average

 

 

HB3522- 176 -LRB100 05678 HLH 21814 b

1monthly revenues deposited into the fund, excluding payments
2made pursuant to this paragraph.
3    Beginning July 1, 2015, of the remainder of the moneys
4received by the Department under the Use Tax Act, this Act, the
5Service Occupation Tax Act, and the Retailers' Occupation Tax
6Act, each month the Department shall deposit $500,000 into the
7State Crime Laboratory Fund.
8    Of the remainder of the moneys received by the Department
9pursuant to this Act, (a) 1.75% thereof shall be paid into the
10Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
11and after July 1, 1989, 3.8% thereof shall be paid into the
12Build Illinois Fund; provided, however, that if in any fiscal
13year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
14may be, of the moneys received by the Department and required
15to be paid into the Build Illinois Fund pursuant to Section 3
16of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
17Act, Section 9 of the Service Use Tax Act, and Section 9 of the
18Service Occupation Tax Act, such Acts being hereinafter called
19the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
20may be, of moneys being hereinafter called the "Tax Act
21Amount", and (2) the amount transferred to the Build Illinois
22Fund from the State and Local Sales Tax Reform Fund shall be
23less than the Annual Specified Amount (as defined in Section 3
24of the Retailers' Occupation Tax Act), an amount equal to the
25difference shall be immediately paid into the Build Illinois
26Fund from other moneys received by the Department pursuant to

 

 

HB3522- 177 -LRB100 05678 HLH 21814 b

1the Tax Acts; and further provided, that if on the last
2business day of any month the sum of (1) the Tax Act Amount
3required to be deposited into the Build Illinois Bond Account
4in the Build Illinois Fund during such month and (2) the amount
5transferred during such month to the Build Illinois Fund from
6the State and Local Sales Tax Reform Fund shall have been less
7than 1/12 of the Annual Specified Amount, an amount equal to
8the difference shall be immediately paid into the Build
9Illinois Fund from other moneys received by the Department
10pursuant to the Tax Acts; and, further provided, that in no
11event shall the payments required under the preceding proviso
12result in aggregate payments into the Build Illinois Fund
13pursuant to this clause (b) for any fiscal year in excess of
14the greater of (i) the Tax Act Amount or (ii) the Annual
15Specified Amount for such fiscal year; and, further provided,
16that the amounts payable into the Build Illinois Fund under
17this clause (b) shall be payable only until such time as the
18aggregate amount on deposit under each trust indenture securing
19Bonds issued and outstanding pursuant to the Build Illinois
20Bond Act is sufficient, taking into account any future
21investment income, to fully provide, in accordance with such
22indenture, for the defeasance of or the payment of the
23principal of, premium, if any, and interest on the Bonds
24secured by such indenture and on any Bonds expected to be
25issued thereafter and all fees and costs payable with respect
26thereto, all as certified by the Director of the Bureau of the

 

 

HB3522- 178 -LRB100 05678 HLH 21814 b

1Budget (now Governor's Office of Management and Budget). If on
2the last business day of any month in which Bonds are
3outstanding pursuant to the Build Illinois Bond Act, the
4aggregate of the moneys deposited in the Build Illinois Bond
5Account in the Build Illinois Fund in such month shall be less
6than the amount required to be transferred in such month from
7the Build Illinois Bond Account to the Build Illinois Bond
8Retirement and Interest Fund pursuant to Section 13 of the
9Build Illinois Bond Act, an amount equal to such deficiency
10shall be immediately paid from other moneys received by the
11Department pursuant to the Tax Acts to the Build Illinois Fund;
12provided, however, that any amounts paid to the Build Illinois
13Fund in any fiscal year pursuant to this sentence shall be
14deemed to constitute payments pursuant to clause (b) of the
15preceding sentence and shall reduce the amount otherwise
16payable for such fiscal year pursuant to clause (b) of the
17preceding sentence. The moneys received by the Department
18pursuant to this Act and required to be deposited into the
19Build Illinois Fund are subject to the pledge, claim and charge
20set forth in Section 12 of the Build Illinois Bond Act.
21    Subject to payment of amounts into the Build Illinois Fund
22as provided in the preceding paragraph or in any amendment
23thereto hereafter enacted, the following specified monthly
24installment of the amount requested in the certificate of the
25Chairman of the Metropolitan Pier and Exposition Authority
26provided under Section 8.25f of the State Finance Act, but not

 

 

HB3522- 179 -LRB100 05678 HLH 21814 b

1in excess of the sums designated as "Total Deposit", shall be
2deposited in the aggregate from collections under Section 9 of
3the Use Tax Act, Section 9 of the Service Use Tax Act, Section
49 of the Service Occupation Tax Act, and Section 3 of the
5Retailers' Occupation Tax Act into the McCormick Place
6Expansion Project Fund in the specified fiscal years.
7Fiscal YearTotal Deposit
81993         $0
91994 53,000,000
101995 58,000,000
111996 61,000,000
121997 64,000,000
131998 68,000,000
141999 71,000,000
152000 75,000,000
162001 80,000,000
172002 93,000,000
182003 99,000,000
192004103,000,000
202005108,000,000
212006113,000,000
222007119,000,000
232008126,000,000
242009132,000,000
252010139,000,000

 

 

HB3522- 180 -LRB100 05678 HLH 21814 b

12011146,000,000
22012153,000,000
32013161,000,000
42014170,000,000
52015179,000,000
62016189,000,000
72017199,000,000
82018210,000,000
92019221,000,000
102020233,000,000
112021246,000,000
122022260,000,000
132023275,000,000
142024 275,000,000
152025 275,000,000
162026 279,000,000
172027 292,000,000
182028 307,000,000
192029 322,000,000
202030 338,000,000
212031 350,000,000
222032 350,000,000
23and
24each fiscal year
25thereafter that bonds
26are outstanding under

 

 

HB3522- 181 -LRB100 05678 HLH 21814 b

1Section 13.2 of the
2Metropolitan Pier and
3Exposition Authority Act,
4but not after fiscal year 2060.
5    Beginning July 20, 1993 and in each month of each fiscal
6year thereafter, one-eighth of the amount requested in the
7certificate of the Chairman of the Metropolitan Pier and
8Exposition Authority for that fiscal year, less the amount
9deposited into the McCormick Place Expansion Project Fund by
10the State Treasurer in the respective month under subsection
11(g) of Section 13 of the Metropolitan Pier and Exposition
12Authority Act, plus cumulative deficiencies in the deposits
13required under this Section for previous months and years,
14shall be deposited into the McCormick Place Expansion Project
15Fund, until the full amount requested for the fiscal year, but
16not in excess of the amount specified above as "Total Deposit",
17has been deposited.
18    Subject to payment of amounts into the Build Illinois Fund
19and the McCormick Place Expansion Project Fund pursuant to the
20preceding paragraphs or in any amendments thereto hereafter
21enacted, beginning July 1, 1993 and ending on September 30,
222013, the Department shall each month pay into the Illinois Tax
23Increment Fund 0.27% of 80% of the net revenue realized for the
24preceding month from the 6.25% general rate on the selling
25price of tangible personal property.
26    Subject to payment of amounts into the Build Illinois Fund

 

 

HB3522- 182 -LRB100 05678 HLH 21814 b

1and the McCormick Place Expansion Project Fund pursuant to the
2preceding paragraphs or in any amendments thereto hereafter
3enacted, beginning with the receipt of the first report of
4taxes paid by an eligible business and continuing for a 25-year
5period, (i) until January 1, 2018, the Department shall each
6month pay into the Energy Infrastructure Fund 80% of the net
7revenue realized from the 6.25% general rate on the selling
8price of Illinois-mined coal that was sold to an eligible
9business, and (ii) beginning on January 1, 2018, the Department
10shall each month pay into the Energy Infrastructure Fund 86.96%
11of the net revenue realized from the general rate on the
12selling price of Illinois-mined coal that was sold to an
13eligible business. For purposes of this paragraph, the term
14"eligible business" means a new electric generating facility
15certified pursuant to Section 605-332 of the Department of
16Commerce and Economic Opportunity Law of the Civil
17Administrative Code of Illinois.
18    Subject to payment of amounts into the Build Illinois Fund,
19the McCormick Place Expansion Project Fund, the Illinois Tax
20Increment Fund, and the Energy Infrastructure Fund pursuant to
21the preceding paragraphs or in any amendments to this Section
22hereafter enacted, beginning on the first day of the first
23calendar month to occur on or after the effective date of this
24amendatory Act of the 98th General Assembly, each month, from
25the collections made under Section 9 of the Use Tax Act,
26Section 9 of the Service Use Tax Act, Section 9 of the Service

 

 

HB3522- 183 -LRB100 05678 HLH 21814 b

1Occupation Tax Act, and Section 3 of the Retailers' Occupation
2Tax Act, the Department shall pay into the Tax Compliance and
3Administration Fund, to be used, subject to appropriation, to
4fund additional auditors and compliance personnel at the
5Department of Revenue, an amount equal to 1/12 of 5% of (i)
6until January 1, 2018, 80% of the cash receipts collected
7during the preceding fiscal year by the Audit Bureau of the
8Department under the Use Tax Act, the Service Use Tax Act, the
9Service Occupation Tax Act, the Retailers' Occupation Tax Act,
10and associated local occupation and use taxes administered by
11the Department, and (ii) on and after January 1, 2018, 86.96%
12of the cash receipts collected during the preceding fiscal year
13by the Audit Bureau of the Department under the Use Tax Act,
14the Service Use Tax Act, the Service Occupation Tax Act, the
15Retailers' Occupation Tax Act, and associated local occupation
16and use taxes administered by the Department.
17    Of the remainder of the moneys received by the Department
18pursuant to this Act, until January 1, 2018, 75%, and beginning
19January 1, 2018, 72.83% thereof shall be paid into the General
20Revenue Fund of the State Treasury and, until January 1, 2018,
2125%, and beginning January 1, 2018, 27.17% shall be reserved in
22a special account and used only for the transfer to the Common
23School Fund as part of the monthly transfer from the General
24Revenue Fund in accordance with Section 8a of the State Finance
25Act.
26    As soon as possible after the first day of each month, upon

 

 

HB3522- 184 -LRB100 05678 HLH 21814 b

1certification of the Department of Revenue, the Comptroller
2shall order transferred and the Treasurer shall transfer from
3the General Revenue Fund to the Motor Fuel Tax Fund an amount
4equal to 1.7% of 80% of the net revenue realized under this Act
5for the second preceding month. Beginning April 1, 2000, this
6transfer is no longer required and shall not be made.
7    Net revenue realized for a month shall be the revenue
8collected by the State pursuant to this Act, less the amount
9paid out during that month as refunds to taxpayers for
10overpayment of liability.
11(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
1298-298, eff. 8-9-13; 98-496, eff. 1-1-14; 98-756, eff. 7-16-14;
1398-1098, eff. 8-26-14; 99-352, eff. 8-12-15; 99-858, eff.
148-19-16.)
 
15    Section 30. The Service Occupation Tax Act is amended by
16changing Sections 3-10 and 9 as follows:
 
17    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
18    Sec. 3-10. Rate of tax. Unless otherwise provided in this
19Section, until January 1, 2018, the tax imposed by this Act is
20at the rate of 6.25% of the "selling price", as defined in
21Section 2 of the Service Use Tax Act, of the tangible personal
22property. Unless otherwise provided in this Section, beginning
23on January 1, 2018, the tax imposed by this Act is at the rate
24of 5.75% of the "selling price", as defined in Section 2 of the

 

 

HB3522- 185 -LRB100 05678 HLH 21814 b

1Service Use Tax Act, of the tangible personal property.
2References to the "general rate" mean (i) the 6.25% rate until
3January 1, 2018 and (ii) the 5.75% rate on and after January 1,
42018. For the purpose of computing this tax, in no event shall
5the "selling price" be less than the cost price to the
6serviceman of the tangible personal property transferred. The
7selling price of each item of tangible personal property
8transferred as an incident of a sale of service may be shown as
9a distinct and separate item on the serviceman's billing to the
10service customer. If the selling price is not so shown, the
11selling price of the tangible personal property is deemed to be
1250% of the serviceman's entire billing to the service customer.
13When, however, a serviceman contracts to design, develop, and
14produce special order machinery or equipment, the tax imposed
15by this Act shall be based on the serviceman's cost price of
16the tangible personal property transferred incident to the
17completion of the contract.
18    Beginning on July 1, 2000 and through December 31, 2000,
19with respect to motor fuel, as defined in Section 1.1 of the
20Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
21the Use Tax Act, the tax is imposed at the rate of 1.25%.
22    With respect to gasohol, as defined in the Use Tax Act, the
23tax imposed by this Act shall apply to (i) 70% of the cost
24price of property transferred as an incident to the sale of
25service on or after January 1, 1990, and before July 1, 2003,
26(ii) 80% of the selling price of property transferred as an

 

 

HB3522- 186 -LRB100 05678 HLH 21814 b

1incident to the sale of service on or after July 1, 2003 and on
2or before December 31, 2018, and (iii) 100% of the cost price
3thereafter. If, at any time, however, the tax under this Act on
4sales of gasohol, as defined in the Use Tax Act, is imposed at
5the rate of 1.25%, then the tax imposed by this Act applies to
6100% of the proceeds of sales of gasohol made during that time.
7    With respect to majority blended ethanol fuel, as defined
8in the Use Tax Act, the tax imposed by this Act does not apply
9to the selling price of property transferred as an incident to
10the sale of service on or after July 1, 2003 and on or before
11December 31, 2018 but applies to 100% of the selling price
12thereafter.
13    With respect to biodiesel blends, as defined in the Use Tax
14Act, with no less than 1% and no more than 10% biodiesel, the
15tax imposed by this Act applies to (i) 80% of the selling price
16of property transferred as an incident to the sale of service
17on or after July 1, 2003 and on or before December 31, 2018 and
18(ii) 100% of the proceeds of the selling price thereafter. If,
19at any time, however, the tax under this Act on sales of
20biodiesel blends, as defined in the Use Tax Act, with no less
21than 1% and no more than 10% biodiesel is imposed at the rate
22of 1.25%, then the tax imposed by this Act applies to 100% of
23the proceeds of sales of biodiesel blends with no less than 1%
24and no more than 10% biodiesel made during that time.
25    With respect to 100% biodiesel, as defined in the Use Tax
26Act, and biodiesel blends, as defined in the Use Tax Act, with

 

 

HB3522- 187 -LRB100 05678 HLH 21814 b

1more than 10% but no more than 99% biodiesel material, the tax
2imposed by this Act does not apply to the proceeds of the
3selling price of property transferred as an incident to the
4sale of service on or after July 1, 2003 and on or before
5December 31, 2018 but applies to 100% of the selling price
6thereafter.
7    At the election of any registered serviceman made for each
8fiscal year, sales of service in which the aggregate annual
9cost price of tangible personal property transferred as an
10incident to the sales of service is less than 35%, or 75% in
11the case of servicemen transferring prescription drugs or
12servicemen engaged in graphic arts production, of the aggregate
13annual total gross receipts from all sales of service, the tax
14imposed by this Act shall be based on the serviceman's cost
15price of the tangible personal property transferred incident to
16the sale of those services.
17    The tax shall be imposed at the rate of 1% on food prepared
18for immediate consumption and transferred incident to a sale of
19service subject to this Act or the Service Occupation Tax Act
20by an entity licensed under the Hospital Licensing Act, the
21Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD
22Act, the Specialized Mental Health Rehabilitation Act of 2013,
23or the Child Care Act of 1969. The tax shall also be imposed at
24the rate of 1% on food for human consumption that is to be
25consumed off the premises where it is sold (other than
26alcoholic beverages, soft drinks, and food that has been

 

 

HB3522- 188 -LRB100 05678 HLH 21814 b

1prepared for immediate consumption and is not otherwise
2included in this paragraph) and prescription and
3nonprescription medicines, drugs, medical appliances, products
4classified as Class III medical devices by the United States
5Food and Drug Administration that are used for cancer treatment
6pursuant to a prescription, as well as any accessories and
7components related to those devices, modifications to a motor
8vehicle for the purpose of rendering it usable by a person with
9a disability, and insulin, urine testing materials, syringes,
10and needles used by diabetics, for human use. For the purposes
11of this Section, until September 1, 2009: the term "soft
12drinks" means any complete, finished, ready-to-use,
13non-alcoholic drink, whether carbonated or not, including but
14not limited to soda water, cola, fruit juice, vegetable juice,
15carbonated water, and all other preparations commonly known as
16soft drinks of whatever kind or description that are contained
17in any closed or sealed can, carton, or container, regardless
18of size; but "soft drinks" does not include coffee, tea,
19non-carbonated water, infant formula, milk or milk products as
20defined in the Grade A Pasteurized Milk and Milk Products Act,
21or drinks containing 50% or more natural fruit or vegetable
22juice.
23    Notwithstanding any other provisions of this Act,
24beginning September 1, 2009, "soft drinks" means non-alcoholic
25beverages that contain natural or artificial sweeteners. "Soft
26drinks" do not include beverages that contain milk or milk

 

 

HB3522- 189 -LRB100 05678 HLH 21814 b

1products, soy, rice or similar milk substitutes, or greater
2than 50% of vegetable or fruit juice by volume.
3    Until August 1, 2009, and notwithstanding any other
4provisions of this Act, "food for human consumption that is to
5be consumed off the premises where it is sold" includes all
6food sold through a vending machine, except soft drinks and
7food products that are dispensed hot from a vending machine,
8regardless of the location of the vending machine. Beginning
9August 1, 2009, and notwithstanding any other provisions of
10this Act, "food for human consumption that is to be consumed
11off the premises where it is sold" includes all food sold
12through a vending machine, except soft drinks, candy, and food
13products that are dispensed hot from a vending machine,
14regardless of the location of the vending machine.
15    Notwithstanding any other provisions of this Act,
16beginning September 1, 2009, "food for human consumption that
17is to be consumed off the premises where it is sold" does not
18include candy. For purposes of this Section, "candy" means a
19preparation of sugar, honey, or other natural or artificial
20sweeteners in combination with chocolate, fruits, nuts or other
21ingredients or flavorings in the form of bars, drops, or
22pieces. "Candy" does not include any preparation that contains
23flour or requires refrigeration.
24    Notwithstanding any other provisions of this Act,
25beginning September 1, 2009, "nonprescription medicines and
26drugs" does not include grooming and hygiene products. For

 

 

HB3522- 190 -LRB100 05678 HLH 21814 b

1purposes of this Section, "grooming and hygiene products"
2includes, but is not limited to, soaps and cleaning solutions,
3shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
4lotions and screens, unless those products are available by
5prescription only, regardless of whether the products meet the
6definition of "over-the-counter-drugs". For the purposes of
7this paragraph, "over-the-counter-drug" means a drug for human
8use that contains a label that identifies the product as a drug
9as required by 21 C.F.R. 201.66. The "over-the-counter-drug"
10label includes:
11        (A) A "Drug Facts" panel; or
12        (B) A statement of the "active ingredient(s)" with a
13    list of those ingredients contained in the compound,
14    substance or preparation.
15    Beginning on January 1, 2014 (the effective date of Public
16Act 98-122), "prescription and nonprescription medicines and
17drugs" includes medical cannabis purchased from a registered
18dispensing organization under the Compassionate Use of Medical
19Cannabis Pilot Program Act.
20(Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;
2198-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.
227-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16.)
 
23    (35 ILCS 115/9)  (from Ch. 120, par. 439.109)
24    Sec. 9. Each serviceman required or authorized to collect
25the tax herein imposed shall pay to the Department the amount

 

 

HB3522- 191 -LRB100 05678 HLH 21814 b

1of such tax at the time when he is required to file his return
2for the period during which such tax was collectible, less a
3discount of 2.1% prior to January 1, 1990, and 1.75% on and
4after January 1, 1990, or $5 per calendar year, whichever is
5greater, which is allowed to reimburse the serviceman for
6expenses incurred in collecting the tax, keeping records,
7preparing and filing returns, remitting the tax and supplying
8data to the Department on request. The Department may disallow
9the discount for servicemen whose certificate of registration
10is revoked at the time the return is filed, but only if the
11Department's decision to revoke the certificate of
12registration has become final.
13    Where such tangible personal property is sold under a
14conditional sales contract, or under any other form of sale
15wherein the payment of the principal sum, or a part thereof, is
16extended beyond the close of the period for which the return is
17filed, the serviceman, in collecting the tax may collect, for
18each tax return period, only the tax applicable to the part of
19the selling price actually received during such tax return
20period.
21    Except as provided hereinafter in this Section, on or
22before the twentieth day of each calendar month, such
23serviceman shall file a return for the preceding calendar month
24in accordance with reasonable rules and regulations to be
25promulgated by the Department of Revenue. Such return shall be
26filed on a form prescribed by the Department and shall contain

 

 

HB3522- 192 -LRB100 05678 HLH 21814 b

1such information as the Department may reasonably require.
2    The Department may require returns to be filed on a
3quarterly basis. If so required, a return for each calendar
4quarter shall be filed on or before the twentieth day of the
5calendar month following the end of such calendar quarter. The
6taxpayer shall also file a return with the Department for each
7of the first two months of each calendar quarter, on or before
8the twentieth day of the following calendar month, stating:
9        1. The name of the seller;
10        2. The address of the principal place of business from
11    which he engages in business as a serviceman in this State;
12        3. The total amount of taxable receipts received by him
13    during the preceding calendar month, including receipts
14    from charge and time sales, but less all deductions allowed
15    by law;
16        4. The amount of credit provided in Section 2d of this
17    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 Department
21    may require.
22    If a taxpayer fails to sign a return within 30 days after
23the proper notice and demand for signature by the Department,
24the return shall be considered valid and any amount shown to be
25due on the return shall be deemed assessed.
26    Prior to October 1, 2003, and on and after September 1,

 

 

HB3522- 193 -LRB100 05678 HLH 21814 b

12004 a serviceman may accept a Manufacturer's Purchase Credit
2certification from a purchaser in satisfaction of Service Use
3Tax as provided in Section 3-70 of the Service Use Tax Act if
4the purchaser provides the appropriate documentation as
5required by Section 3-70 of the Service Use Tax Act. A
6Manufacturer's Purchase Credit certification, accepted prior
7to October 1, 2003 or on or after September 1, 2004 by a
8serviceman as provided in Section 3-70 of the Service Use Tax
9Act, may be used by that serviceman to satisfy Service
10Occupation Tax liability in the amount claimed in the
11certification, not to exceed 6.25% of the receipts subject to
12tax from a qualifying purchase. A Manufacturer's Purchase
13Credit reported on any original or amended return filed under
14this Act after October 20, 2003 for reporting periods prior to
15September 1, 2004 shall be disallowed. Manufacturer's Purchase
16Credit reported on annual returns due on or after January 1,
172005 will be disallowed for periods prior to September 1, 2004.
18No Manufacturer's Purchase Credit may be used after September
1930, 2003 through August 31, 2004 to satisfy any tax liability
20imposed under this Act, including any audit liability.
21    If the serviceman's average monthly tax liability to the
22Department does not exceed $200, the Department may authorize
23his returns to be filed on a quarter annual basis, with the
24return for January, February and March of a given year being
25due by April 20 of such year; with the return for April, May
26and June of a given year being due by July 20 of such year; with

 

 

HB3522- 194 -LRB100 05678 HLH 21814 b

1the return for July, August and September of a given year being
2due by October 20 of such year, and with the return for
3October, November and December of a given year being due by
4January 20 of the following year.
5    If the serviceman's average monthly tax liability to the
6Department does not exceed $50, the Department may authorize
7his returns to be filed on an annual basis, with the return for
8a given year being due by January 20 of the following year.
9    Such quarter annual and annual returns, as to form and
10substance, shall be subject to the same requirements as monthly
11returns.
12    Notwithstanding any other provision in this Act concerning
13the time within which a serviceman may file his return, in the
14case of any serviceman who ceases to engage in a kind of
15business which makes him responsible for filing returns under
16this Act, such serviceman shall file a final return under this
17Act with the Department not more than 1 month after
18discontinuing such business.
19    Beginning October 1, 1993, a taxpayer who has an average
20monthly tax liability of $150,000 or more shall make all
21payments required by rules of the Department by electronic
22funds transfer. Beginning October 1, 1994, a taxpayer who has
23an average monthly tax liability of $100,000 or more shall make
24all payments required by rules of the Department by electronic
25funds transfer. Beginning October 1, 1995, a taxpayer who has
26an average monthly tax liability of $50,000 or more shall make

 

 

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1all payments required by rules of the Department by electronic
2funds transfer. Beginning October 1, 2000, a taxpayer who has
3an annual tax liability of $200,000 or more shall make all
4payments required by rules of the Department by electronic
5funds transfer. The term "annual tax liability" shall be the
6sum of the taxpayer's liabilities under this Act, and under all
7other State and local occupation and use tax laws administered
8by the Department, for the immediately preceding calendar year.
9The term "average monthly tax liability" means the sum of the
10taxpayer's liabilities under this Act, and under all other
11State and local occupation and use tax laws administered by the
12Department, for the immediately preceding calendar year
13divided by 12. Beginning on October 1, 2002, a taxpayer who has
14a tax liability in the amount set forth in subsection (b) of
15Section 2505-210 of the Department of Revenue Law shall make
16all payments required by rules of the Department by electronic
17funds transfer.
18    Before August 1 of each year beginning in 1993, the
19Department shall notify all taxpayers required to make payments
20by electronic funds transfer. All taxpayers required to make
21payments by electronic funds transfer shall make those payments
22for a minimum of one year beginning on October 1.
23    Any taxpayer not required to make payments by electronic
24funds transfer may make payments by electronic funds transfer
25with the permission of the Department.
26    All taxpayers required to make payment by electronic funds

 

 

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1transfer and any taxpayers authorized to voluntarily make
2payments by electronic funds transfer shall make those payments
3in the manner authorized by the Department.
4    The Department shall adopt such rules as are necessary to
5effectuate a program of electronic funds transfer and the
6requirements of this Section.
7    Where a serviceman collects the tax with respect to the
8selling price of tangible personal property which he sells and
9the purchaser thereafter returns such tangible personal
10property and the serviceman refunds the selling price thereof
11to the purchaser, such serviceman shall also refund, to the
12purchaser, the tax so collected from the purchaser. When filing
13his return for the period in which he refunds such tax to the
14purchaser, the serviceman may deduct the amount of the tax so
15refunded by him to the purchaser from any other Service
16Occupation Tax, Service Use Tax, Retailers' Occupation Tax or
17Use Tax which such serviceman may be required to pay or remit
18to the Department, as shown by such return, provided that the
19amount of the tax to be deducted shall previously have been
20remitted to the Department by such serviceman. If the
21serviceman shall not previously have remitted the amount of
22such tax to the Department, he shall be entitled to no
23deduction hereunder upon refunding such tax to the purchaser.
24    If experience indicates such action to be practicable, the
25Department may prescribe and furnish a combination or joint
26return which will enable servicemen, who are required to file

 

 

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1returns hereunder and also under the Retailers' Occupation Tax
2Act, the Use Tax Act or the Service Use Tax Act, to furnish all
3the return information required by all said Acts on the one
4form.
5    Where the serviceman has more than one business registered
6with the Department under separate registrations hereunder,
7such serviceman shall file separate returns for each registered
8business.
9    Beginning January 1, 1990, each month the Department shall
10pay into the Local Government Tax Fund the revenue realized for
11the preceding month from the 1% tax on sales of food for human
12consumption which is to be consumed off the premises where it
13is sold (other than alcoholic beverages, soft drinks and food
14which has been prepared for immediate consumption) and
15prescription and nonprescription medicines, drugs, medical
16appliances, products classified as Class III medical devices by
17the United States Food and Drug Administration that are used
18for cancer treatment pursuant to a prescription, as well as any
19accessories and components related to those devices, and
20insulin, urine testing materials, syringes and needles used by
21diabetics.
22    From Beginning January 1, 1990, through January 31, 2018,
23each month the Department shall pay into the County and Mass
24Transit District Fund 4% of the revenue realized for the
25preceding month from the 6.25% general rate. Beginning February
261, 2018, each month the Department shall pay into the County

 

 

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1and Mass Transit District Fund 4.35% of the revenue realized
2for the preceding month from the general rate.
3    Beginning August 1, 2000, each month the Department shall
4pay into the County and Mass Transit District Fund 20% of the
5net revenue realized for the preceding month from the 1.25%
6rate on the selling price of motor fuel and gasohol.
7    From Beginning January 1, 1990, through January 31, 2018,
8each month the Department shall pay into the Local Government
9Tax Fund 16% of the revenue realized for the preceding month
10from the 6.25% general rate on transfers of tangible personal
11property. Beginning on February 1, 2018, each month the
12Department shall pay into the Local Government Tax Fund 17.39%
13of the revenue realized for the preceding month from the
14general rate on transfers of tangible personal property.
15    Beginning August 1, 2000, each month the Department shall
16pay into the Local Government Tax Fund 80% of the net revenue
17realized for the preceding month from the 1.25% rate on the
18selling price of motor fuel and gasohol.
19    From Beginning October 1, 2009, through January 31, 2018,
20each month the Department shall pay into the Capital Projects
21Fund an amount that is equal to an amount estimated by the
22Department to represent 80% of the net revenue realized for the
23preceding month from the sale of candy, grooming and hygiene
24products, and soft drinks that had been taxed at a rate of 1%
25prior to September 1, 2009 but that are now taxed at the
26general rate 6.25%. Beginning on February 1, 2018, each month

 

 

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1the Department shall pay into the Capital Projects Fund an
2amount that is equal to an amount estimated by the Department
3to represent 86.96% of the net revenue realized for the
4preceding month from the sale of candy, grooming and hygiene
5products, and soft drinks that had been taxed at a rate of 1%
6prior to September 1, 2009 but that are now taxed at the
7general rate.
8    Beginning July 1, 2013, each month the Department shall pay
9into the Underground Storage Tank Fund from the proceeds
10collected under this Act, the Use Tax Act, the Service Use Tax
11Act, and the Retailers' Occupation Tax Act an amount equal to
12the average monthly deficit in the Underground Storage Tank
13Fund during the prior year, as certified annually by the
14Illinois Environmental Protection Agency, but the total
15payment into the Underground Storage Tank Fund under this Act,
16the Use Tax Act, the Service Use Tax Act, and the Retailers'
17Occupation Tax Act shall not exceed $18,000,000 in any State
18fiscal year. As used in this paragraph, the "average monthly
19deficit" shall be equal to the difference between the average
20monthly claims for payment by the fund and the average monthly
21revenues deposited into the fund, excluding payments made
22pursuant to this paragraph.
23    Beginning July 1, 2015, of the remainder of the moneys
24received by the Department under the Use Tax Act, the Service
25Use Tax Act, this Act, and the Retailers' Occupation Tax Act,
26each month the Department shall deposit $500,000 into the State

 

 

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1Crime Laboratory Fund.
2    Of the remainder of the moneys received by the Department
3pursuant to this Act, (a) 1.75% thereof shall be paid into the
4Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
5and after July 1, 1989, 3.8% thereof shall be paid into the
6Build Illinois Fund; provided, however, that if in any fiscal
7year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
8may be, of the moneys received by the Department and required
9to be paid into the Build Illinois Fund pursuant to Section 3
10of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
11Act, Section 9 of the Service Use Tax Act, and Section 9 of the
12Service Occupation Tax Act, such Acts being hereinafter called
13the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
14may be, of moneys being hereinafter called the "Tax Act
15Amount", and (2) the amount transferred to the Build Illinois
16Fund from the State and Local Sales Tax Reform Fund shall be
17less than the Annual Specified Amount (as defined in Section 3
18of the Retailers' Occupation Tax Act), an amount equal to the
19difference shall be immediately paid into the Build Illinois
20Fund from other moneys received by the Department pursuant to
21the Tax Acts; and further provided, that if on the last
22business day of any month the sum of (1) the Tax Act Amount
23required to be deposited into the Build Illinois Account in the
24Build Illinois Fund during such month and (2) the amount
25transferred during such month to the Build Illinois Fund from
26the State and Local Sales Tax Reform Fund shall have been less

 

 

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1than 1/12 of the Annual Specified Amount, an amount equal to
2the difference shall be immediately paid into the Build
3Illinois Fund from other moneys received by the Department
4pursuant to the Tax Acts; and, further provided, that in no
5event shall the payments required under the preceding proviso
6result in aggregate payments into the Build Illinois Fund
7pursuant to this clause (b) for any fiscal year in excess of
8the greater of (i) the Tax Act Amount or (ii) the Annual
9Specified Amount for such fiscal year; and, further provided,
10that the amounts payable into the Build Illinois Fund under
11this clause (b) shall be payable only until such time as the
12aggregate amount on deposit under each trust indenture securing
13Bonds issued and outstanding pursuant to the Build Illinois
14Bond Act is sufficient, taking into account any future
15investment income, to fully provide, in accordance with such
16indenture, for the defeasance of or the payment of the
17principal of, premium, if any, and interest on the Bonds
18secured by such indenture and on any Bonds expected to be
19issued thereafter and all fees and costs payable with respect
20thereto, all as certified by the Director of the Bureau of the
21Budget (now Governor's Office of Management and Budget). If on
22the last business day of any month in which Bonds are
23outstanding pursuant to the Build Illinois Bond Act, the
24aggregate of the moneys deposited in the Build Illinois Bond
25Account in the Build Illinois Fund in such month shall be less
26than the amount required to be transferred in such month from

 

 

HB3522- 202 -LRB100 05678 HLH 21814 b

1the Build Illinois Bond Account to the Build Illinois Bond
2Retirement and Interest Fund pursuant to Section 13 of the
3Build Illinois Bond Act, an amount equal to such deficiency
4shall be immediately paid from other moneys received by the
5Department pursuant to the Tax Acts to the Build Illinois Fund;
6provided, however, that any amounts paid to the Build Illinois
7Fund in any fiscal year pursuant to this sentence shall be
8deemed to constitute payments pursuant to clause (b) of the
9preceding sentence and shall reduce the amount otherwise
10payable for such fiscal year pursuant to clause (b) of the
11preceding sentence. The moneys received by the Department
12pursuant to this Act and required to be deposited into the
13Build Illinois Fund are subject to the pledge, claim and charge
14set forth in Section 12 of the Build Illinois Bond Act.
15    Subject to payment of amounts into the Build Illinois Fund
16as provided in the preceding paragraph or in any amendment
17thereto hereafter enacted, the following specified monthly
18installment of the amount requested in the certificate of the
19Chairman of the Metropolitan Pier and Exposition Authority
20provided under Section 8.25f of the State Finance Act, but not
21in excess of the sums designated as "Total Deposit", shall be
22deposited in the aggregate from collections under Section 9 of
23the Use Tax Act, Section 9 of the Service Use Tax Act, Section
249 of the Service Occupation Tax Act, and Section 3 of the
25Retailers' Occupation Tax Act into the McCormick Place
26Expansion Project Fund in the specified fiscal years.

 

 

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1Fiscal YearTotal Deposit
21993         $0
31994 53,000,000
41995 58,000,000
51996 61,000,000
61997 64,000,000
71998 68,000,000
81999 71,000,000
92000 75,000,000
102001 80,000,000
112002 93,000,000
122003 99,000,000
132004103,000,000
142005108,000,000
152006113,000,000
162007119,000,000
172008126,000,000
182009132,000,000
192010139,000,000
202011146,000,000
212012153,000,000
222013161,000,000
232014170,000,000
242015179,000,000
252016189,000,000

 

 

HB3522- 204 -LRB100 05678 HLH 21814 b

12017199,000,000
22018210,000,000
32019221,000,000
42020233,000,000
52021246,000,000
62022260,000,000
72023275,000,000
82024 275,000,000
92025 275,000,000
102026 279,000,000
112027 292,000,000
122028 307,000,000
132029 322,000,000
142030 338,000,000
152031 350,000,000
162032 350,000,000
17and
18each fiscal year
19thereafter that bonds
20are outstanding under
21Section 13.2 of the
22Metropolitan Pier and
23Exposition Authority Act,
24but not after fiscal year 2060.
25    Beginning July 20, 1993 and in each month of each fiscal
26year thereafter, one-eighth of the amount requested in the

 

 

HB3522- 205 -LRB100 05678 HLH 21814 b

1certificate of the Chairman of the Metropolitan Pier and
2Exposition Authority for that fiscal year, less the amount
3deposited into the McCormick Place Expansion Project Fund by
4the State Treasurer in the respective month under subsection
5(g) of Section 13 of the Metropolitan Pier and Exposition
6Authority Act, plus cumulative deficiencies in the deposits
7required under this Section for previous months and years,
8shall be deposited into the McCormick Place Expansion Project
9Fund, until the full amount requested for the fiscal year, but
10not in excess of the amount specified above as "Total Deposit",
11has been deposited.
12    Subject to payment of amounts into the Build Illinois Fund
13and the McCormick Place Expansion Project Fund pursuant to the
14preceding paragraphs or in any amendments thereto hereafter
15enacted, beginning July 1, 1993 and ending on September 30,
162013, the Department shall each month pay into the Illinois Tax
17Increment Fund 0.27% of 80% of the net revenue realized for the
18preceding month from the 6.25% general rate on the selling
19price of tangible personal property.
20    Subject to payment of amounts into the Build Illinois Fund
21and the McCormick Place Expansion Project Fund pursuant to the
22preceding paragraphs or in any amendments thereto hereafter
23enacted, beginning with the receipt of the first report of
24taxes paid by an eligible business and continuing for a 25-year
25period, (i) prior to January 1, 2018, the Department shall each
26month pay into the Energy Infrastructure Fund 80% of the net

 

 

HB3522- 206 -LRB100 05678 HLH 21814 b

1revenue realized from the 6.25% general rate on the selling
2price of Illinois-mined coal that was sold to an eligible
3business, and (ii) on and after January 1, 2018, the Department
4shall each month pay into the Energy Infrastructure Fund 86.96%
5of the net revenue realized from the general rate on the
6selling price of Illinois-mined coal that was sold to an
7eligible business. For purposes of this paragraph, the term
8"eligible business" means a new electric generating facility
9certified pursuant to Section 605-332 of the Department of
10Commerce and Economic Opportunity Law of the Civil
11Administrative Code of Illinois.
12    Subject to payment of amounts into the Build Illinois Fund,
13the McCormick Place Expansion Project Fund, the Illinois Tax
14Increment Fund, and the Energy Infrastructure Fund pursuant to
15the preceding paragraphs or in any amendments to this Section
16hereafter enacted, beginning on the first day of the first
17calendar month to occur on or after the effective date of this
18amendatory Act of the 98th General Assembly, each month, from
19the collections made under Section 9 of the Use Tax Act,
20Section 9 of the Service Use Tax Act, Section 9 of the Service
21Occupation Tax Act, and Section 3 of the Retailers' Occupation
22Tax Act, the Department shall pay into the Tax Compliance and
23Administration Fund, to be used, subject to appropriation, to
24fund additional auditors and compliance personnel at the
25Department of Revenue, an amount equal to 1/12 of 5% of (i)
26until January 1, 2018, 80% of the cash receipts collected

 

 

HB3522- 207 -LRB100 05678 HLH 21814 b

1during the preceding fiscal year by the Audit Bureau of the
2Department under the Use Tax Act, the Service Use Tax Act, the
3Service Occupation Tax Act, the Retailers' Occupation Tax Act,
4and associated local occupation and use taxes administered by
5the Department, and (ii) on and after January 1, 2018, 86.96%
6of the cash receipts collected during the preceding fiscal year
7by the Audit Bureau of the Department under the Use Tax Act,
8the Service Use Tax Act, the Service Occupation Tax Act, the
9Retailers' Occupation Tax Act, and associated local occupation
10and use taxes administered by the Department.
11    Of the remainder of the moneys received by the Department
12pursuant to this Act, until January 1, 2018, 75%, and beginning
13January 1, 2018, 72.83% shall be paid into the General Revenue
14Fund of the State Treasury and, until January 1, 2018, 25%, and
15beginning January 1, 2018, 27.17% shall be reserved in a
16special account and used only for the transfer to the Common
17School Fund as part of the monthly transfer from the General
18Revenue Fund in accordance with Section 8a of the State Finance
19Act.
20    The Department may, upon separate written notice to a
21taxpayer, require the taxpayer to prepare and file with the
22Department on a form prescribed by the Department within not
23less than 60 days after receipt of the notice an annual
24information return for the tax year specified in the notice.
25Such annual return to the Department shall include a statement
26of gross receipts as shown by the taxpayer's last Federal

 

 

HB3522- 208 -LRB100 05678 HLH 21814 b

1income tax return. If the total receipts of the business as
2reported in the Federal income tax return do not agree with the
3gross receipts reported to the Department of Revenue for the
4same period, the taxpayer shall attach to his annual return a
5schedule showing a reconciliation of the 2 amounts and the
6reasons for the difference. The taxpayer's annual return to the
7Department shall also disclose the cost of goods sold by the
8taxpayer during the year covered by such return, opening and
9closing inventories of such goods for such year, cost of goods
10used from stock or taken from stock and given away by the
11taxpayer during such year, pay roll information of the
12taxpayer's business during such year and any additional
13reasonable information which the Department deems would be
14helpful in determining the accuracy of the monthly, quarterly
15or annual returns filed by such taxpayer as hereinbefore
16provided for in this Section.
17    If the annual information return required by this Section
18is not filed when and as required, the taxpayer shall be liable
19as follows:
20        (i) Until January 1, 1994, the taxpayer shall be liable
21    for a penalty equal to 1/6 of 1% of the tax due from such
22    taxpayer under this Act during the period to be covered by
23    the annual return for each month or fraction of a month
24    until such return is filed as required, the penalty to be
25    assessed and collected in the same manner as any other
26    penalty provided for in this Act.

 

 

HB3522- 209 -LRB100 05678 HLH 21814 b

1        (ii) On and after January 1, 1994, the taxpayer shall
2    be liable for a penalty as described in Section 3-4 of the
3    Uniform Penalty and Interest Act.
4    The chief executive officer, proprietor, owner or highest
5ranking manager shall sign the annual return to certify the
6accuracy of the information contained therein. Any person who
7willfully signs the annual return containing false or
8inaccurate information shall be guilty of perjury and punished
9accordingly. The annual return form prescribed by the
10Department shall include a warning that the person signing the
11return may be liable for perjury.
12    The foregoing portion of this Section concerning the filing
13of an annual information return shall not apply to a serviceman
14who is not required to file an income tax return with the
15United States Government.
16    As soon as possible after the first day of each month, upon
17certification of the Department of Revenue, the Comptroller
18shall order transferred and the Treasurer shall transfer from
19the General Revenue Fund to the Motor Fuel Tax Fund an amount
20equal to 1.7% of 80% of the net revenue realized under this Act
21for the second preceding month. Beginning April 1, 2000, this
22transfer is no longer required and shall not be made.
23    Net revenue realized for a month shall be the revenue
24collected by the State pursuant to this Act, less the amount
25paid out during that month as refunds to taxpayers for
26overpayment of liability.

 

 

HB3522- 210 -LRB100 05678 HLH 21814 b

1    For greater simplicity of administration, it shall be
2permissible for manufacturers, importers and wholesalers whose
3products are sold by numerous servicemen in Illinois, and who
4wish to do so, to assume the responsibility for accounting and
5paying to the Department all tax accruing under this Act with
6respect to such sales, if the servicemen who are affected do
7not make written objection to the Department to this
8arrangement.
9(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
1098-298, eff. 8-9-13; 98-496, eff. 1-1-14; 98-756, eff. 7-16-14;
1198-1098, eff. 8-26-14; 99-352, eff. 8-12-15; 99-858, eff.
128-19-16.)
 
13    Section 35. The Retailers' Occupation Tax Act is amended by
14changing Sections 2-5, 2-8, 2-10, 2d, and 3 as follows:
 
15    (35 ILCS 120/2-5)
16    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
17sale of the following tangible personal property are exempt
18from the tax imposed by this Act:
19    (1) Farm chemicals.
20    (2) Farm machinery and equipment, both new and used,
21including that manufactured on special order, certified by the
22purchaser to be used primarily for production agriculture or
23State or federal agricultural programs, including individual
24replacement parts for the machinery and equipment, including

 

 

HB3522- 211 -LRB100 05678 HLH 21814 b

1machinery and equipment purchased for lease, and including
2implements of husbandry defined in Section 1-130 of the
3Illinois Vehicle Code, farm machinery and agricultural
4chemical and fertilizer spreaders, and nurse wagons required to
5be registered under Section 3-809 of the Illinois Vehicle Code,
6but excluding other motor vehicles required to be registered
7under the Illinois Vehicle Code. Horticultural polyhouses or
8hoop houses used for propagating, growing, or overwintering
9plants shall be considered farm machinery and equipment under
10this item (2). Agricultural chemical tender tanks and dry boxes
11shall include units sold separately from a motor vehicle
12required to be licensed and units sold mounted on a motor
13vehicle required to be licensed, if the selling price of the
14tender is separately stated.
15    Farm machinery and equipment shall include precision
16farming equipment that is installed or purchased to be
17installed on farm machinery and equipment including, but not
18limited to, tractors, harvesters, sprayers, planters, seeders,
19or spreaders. Precision farming equipment includes, but is not
20limited to, soil testing sensors, computers, monitors,
21software, global positioning and mapping systems, and other
22such equipment.
23    Farm machinery and equipment also includes computers,
24sensors, software, and related equipment used primarily in the
25computer-assisted operation of production agriculture
26facilities, equipment, and activities such as, but not limited

 

 

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1to, the collection, monitoring, and correlation of animal and
2crop data for the purpose of formulating animal diets and
3agricultural chemicals. This item (2) is exempt from the
4provisions of Section 2-70.
5    (3) Until July 1, 2003, distillation machinery and
6equipment, sold as a unit or kit, assembled or installed by the
7retailer, certified by the user to be used only for the
8production of ethyl alcohol that will be used for consumption
9as motor fuel or as a component of motor fuel for the personal
10use of the user, and not subject to sale or resale.
11    (4) Until July 1, 2003 and beginning again September 1,
122004 through August 30, 2014, graphic arts machinery and
13equipment, including repair and replacement parts, both new and
14used, and including that manufactured on special order or
15purchased for lease, certified by the purchaser to be used
16primarily for graphic arts production. Equipment includes
17chemicals or chemicals acting as catalysts but only if the
18chemicals or chemicals acting as catalysts effect a direct and
19immediate change upon a graphic arts product.
20    (5) A motor vehicle that is used for automobile renting, as
21defined in the Automobile Renting Occupation and Use Tax Act.
22This paragraph is exempt from the provisions of Section 2-70.
23    (6) Personal property sold by a teacher-sponsored student
24organization affiliated with an elementary or secondary school
25located in Illinois.
26    (7) Until July 1, 2003, proceeds of that portion of the

 

 

HB3522- 213 -LRB100 05678 HLH 21814 b

1selling price of a passenger car the sale of which is subject
2to the Replacement Vehicle Tax.
3    (8) Personal property sold to an Illinois county fair
4association for use in conducting, operating, or promoting the
5county fair.
6    (9) Personal property sold to a not-for-profit arts or
7cultural organization that establishes, by proof required by
8the Department by rule, that it has received an exemption under
9Section 501(c)(3) of the Internal Revenue Code and that is
10organized and operated primarily for the presentation or
11support of arts or cultural programming, activities, or
12services. These organizations include, but are not limited to,
13music and dramatic arts organizations such as symphony
14orchestras and theatrical groups, arts and cultural service
15organizations, local arts councils, visual arts organizations,
16and media arts organizations. On and after the effective date
17of this amendatory Act of the 92nd General Assembly, however,
18an entity otherwise eligible for this exemption shall not make
19tax-free purchases unless it has an active identification
20number issued by the Department.
21    (10) Personal property sold by a corporation, society,
22association, foundation, institution, or organization, other
23than a limited liability company, that is organized and
24operated as a not-for-profit service enterprise for the benefit
25of persons 65 years of age or older if the personal property
26was not purchased by the enterprise for the purpose of resale

 

 

HB3522- 214 -LRB100 05678 HLH 21814 b

1by the enterprise.
2    (11) Personal property sold to a governmental body, to a
3corporation, society, association, foundation, or institution
4organized and operated exclusively for charitable, religious,
5or educational purposes, or to a not-for-profit corporation,
6society, association, foundation, institution, or organization
7that has no compensated officers or employees and that is
8organized and operated primarily for the recreation of persons
955 years of age or older. A limited liability company may
10qualify for the exemption under this paragraph only if the
11limited liability company is organized and operated
12exclusively for educational purposes. On and after July 1,
131987, however, no entity otherwise eligible for this exemption
14shall make tax-free purchases unless it has an active
15identification number issued by the Department.
16    (12) Tangible personal property sold to interstate
17carriers for hire for use as rolling stock moving in interstate
18commerce or to lessors under leases of one year or longer
19executed or in effect at the time of purchase by interstate
20carriers for hire for use as rolling stock moving in interstate
21commerce and equipment operated by a telecommunications
22provider, licensed as a common carrier by the Federal
23Communications Commission, which is permanently installed in
24or affixed to aircraft moving in interstate commerce.
25    (12-5) On and after July 1, 2003 and through June 30, 2004,
26motor vehicles of the second division with a gross vehicle

 

 

HB3522- 215 -LRB100 05678 HLH 21814 b

1weight in excess of 8,000 pounds that are subject to the
2commercial distribution fee imposed under Section 3-815.1 of
3the Illinois Vehicle Code. Beginning on July 1, 2004 and
4through June 30, 2005, the use in this State of motor vehicles
5of the second division: (i) with a gross vehicle weight rating
6in excess of 8,000 pounds; (ii) that are subject to the
7commercial distribution fee imposed under Section 3-815.1 of
8the Illinois Vehicle Code; and (iii) that are primarily used
9for commercial purposes. Through June 30, 2005, this exemption
10applies to repair and replacement parts added after the initial
11purchase of such a motor vehicle if that motor vehicle is used
12in a manner that would qualify for the rolling stock exemption
13otherwise provided for in this Act. For purposes of this
14paragraph, "used for commercial purposes" means the
15transportation of persons or property in furtherance of any
16commercial or industrial enterprise whether for-hire or not.
17    (13) Proceeds from sales to owners, lessors, or shippers of
18tangible personal property that is utilized by interstate
19carriers for hire for use as rolling stock moving in interstate
20commerce and equipment operated by a telecommunications
21provider, licensed as a common carrier by the Federal
22Communications Commission, which is permanently installed in
23or affixed to aircraft moving in interstate commerce.
24    (14) Machinery and equipment that will be used by the
25purchaser, or a lessee of the purchaser, primarily in the
26process of manufacturing or assembling tangible personal

 

 

HB3522- 216 -LRB100 05678 HLH 21814 b

1property for wholesale or retail sale or lease, whether the
2sale or lease is made directly by the manufacturer or by some
3other person, whether the materials used in the process are
4owned by the manufacturer or some other person, or whether the
5sale or lease is made apart from or as an incident to the
6seller's engaging in the service occupation of producing
7machines, tools, dies, jigs, patterns, gauges, or other similar
8items of no commercial value on special order for a particular
9purchaser. The exemption provided by this paragraph (14) does
10not include machinery and equipment used in (i) the generation
11