Sen. Toi W. Hutchinson

Filed: 1/24/2017

 

 


 

 


 
10000SB0009sam001LRB100 06347 HLH 18430 a

1
AMENDMENT TO SENATE BILL 9

2    AMENDMENT NO. ______. Amend Senate Bill 9 by replacing
3everything after the enacting clause with the following:
 
4
"ARTICLE 1. BUSINESS OPPORTUNITY TAX ACT

 
5    Section 1-1. Short title. This Act may be cited as the
6Business Opportunity Tax Act.
 
7    Section 1-5. Definitions. As used in this Act:
8    "Compensation" means wages, salaries, commissions, and any
9other form of remuneration paid to employees or independent
10contractors for personal services.
11    "Department" means the Department of Revenue.
12    "Illinois payroll" means compensation paid by a qualified
13business to residents of the State during the taxpayer's
14taxable year.
15    "Qualified business" means an individual, trust, estate,

 

 

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1partnership, association, firm, company, corporation, or
2limited liability company that issues a Form W-2 or a Form 1099
3to a resident of the State.
4    "Resident" has the meaning given to that term in Section
51501 of the Illinois Income Tax Act.
6    "Taxable year" has the meaning given to that term in
7Section 1501 of the Illinois Income Tax Act.
 
8    Section 1-10. Tax imposed.
9    (a) Beginning on July 1, 2017, a tax is hereby imposed upon
10each qualified business for the privilege of doing business in
11the State.
12    (b) The tax under subsection (a) shall be imposed in the
13following amounts:
14        (1) if the taxpayer's total Illinois payroll for the
15    taxable year is less than $100,000, then then annual tax is
16    $225;
17        (2) if the taxpayer's total Illinois payroll for the
18    taxable year is $100,000 or more but less than $250,000,
19    then the annual tax is $750;
20        (3) if the taxpayer's total Illinois payroll for the
21    taxable year is $250,000 or more but less than $500,000,
22    then the annual tax is $3,750;
23        (4) if the taxpayer's total Illinois payroll for the
24    taxable year is $500,000 or more but less than $1,500,000,
25    then the annual tax is $7,500; and

 

 

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1        (5) if the taxpayer's total Illinois payroll for the
2    taxable year is $1,500,000 or more, then the annual tax is
3    $15,000.
 
4    Section 1-15. Exemptions. The following are exempt from
5taxation under this Act:
6        (1) governmental employers described in Section 707 of
7    the Illinois Income Tax Act; and
8        (2) not-for-profit corporations that are exempt from
9    taxation under Sections 501(c) or 501(d) of the Internal
10    Revenue Code or organized under the General Not For Profit
11    Corporation Act of 1986.
 
12    Section 1-20. Annual return. Taxpayers who are liable for
13the payment of the tax imposed under this Act may comply with
14the requirements of this Act by filing an annual return, in the
15form and manner required by the Department, and paying the
16taxes required to be paid on or before the 15th day of the
17fourth month following the close of the taxable year with
18respect to which the tax under this Act is being paid.
 
19    Section 1-25. Collection authority. The Department shall
20collect the taxes imposed by this Act. Money collected pursuant
21to this Act shall be paid into the General Revenue Fund in the
22State treasury.
 

 

 

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1    Section 1-30. Applicability of the Illinois Income Tax Act.
2The provisions of Articles 9, 10, 11, and 12 of the Illinois
3Income Tax Act (other than Section 901 of the Illinois Income
4Tax Act) which are not inconsistent with this Act shall apply
5to the subject matter of this Act to the same extent as if
6those provisions were included in this Act.
 
7    Section 1-35. Rulemaking. The Department may adopt, in
8accordance with the requirements of the Illinois
9Administrative Procedure Act, any rule that is necessary to
10implement this Act.
 
11
ARTICLE 5. STORAGE EXCISE TAX

 
12    Section 5-1. Short title. This Act may be cited as the
13Storage Excise Tax Act.
 
14    Section 5-5. Definitions.
15    "Business" means any person engaged in activities with the
16object of profit or gain, either directly or indirectly, to the
17person.
18    "Cost price" means the consideration paid by a provider to
19a supplier for a purchase of tangible personal property valued
20in money, whether paid in money or otherwise, including cash,
21credits and services, and shall be determined without any
22deduction on account of taxes paid by the provider for the

 

 

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1purchase of tangible personal property or on account of any
2expenses that are part of the selling price of the tangible
3personal property taxable under the Retailers' Occupation Tax
4Act and the Use Tax Act that are charged to the provider by a
5supplier. When a provider contracts out part or all of the
6services required in his sale of service subject to tax under
7this Act, it shall be presumed that the cost price to the
8provider of the tangible personal property transferred to him
9or her by his or her subcontractor is equal to 50% of the
10subcontractor's charges to the provider in the absence of proof
11of the consideration paid for the tangible personal property by
12the provider to the subcontractor.
13    "Department" means the Department of Revenue.
14    "Director" means the Director of Revenue.
15    "Person" means any natural individual, firm, trust,
16estate, partnership, association, joint stock company, joint
17venture, corporation, limited liability company, or a
18receiver, trustee, guardian, or other representative appointed
19by order of any court.
20    "Provider" means any person engaged in the business of
21providing, furnishing or supplying space for storage to persons
22for use and not for resale.
23    "Provider maintaining a place of business in this State",
24or any like term, means and includes any of the following:
25        (1) A provider having or maintaining within this State,
26    directly or by a subsidiary, an office, distribution house,

 

 

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1    sales house, warehouse or other place of business, or any
2    agent or other representative operating within this State
3    under the authority of the provider or its subsidiary,
4    irrespective of whether such place of business or agent or
5    other representative is located here permanently or
6    temporarily, or whether such provider or subsidiary is
7    licensed to do business in this State.
8        (2) A provider having a contract with a person located
9    in this State under which the person, for a commission or
10    other consideration based upon the sale of services subject
11    to tax under this Act by the provider, directly or
12    indirectly refers potential customers to the provider by
13    providing to the potential customers a promotional code or
14    other mechanism that allows the provider to track purchases
15    referred by such persons. Examples of mechanisms that allow
16    the provider to track purchases referred by such persons
17    include but are not limited to the use of a link on the
18    person's Internet website, promotional codes distributed
19    through the person's hand-delivered or mailed material,
20    and promotional codes distributed by the person through
21    radio or other broadcast media. The provisions of this
22    paragraph (2) shall apply only if the cumulative purchase
23    prices from sales of services subject to tax under this Act
24    by the provider to purchasers who are referred to the
25    provider by all persons in this State under such contracts
26    exceed $10,000 during the preceding 4 quarterly periods

 

 

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1    ending on the last day of March, June, September, and
2    December. A provider meeting the requirements of this
3    paragraph (2) shall be presumed to be maintaining a place
4    of business in this State but may rebut this presumption by
5    submitting proof that the referrals or other activities
6    pursued within this State by such persons were not
7    sufficient to meet the nexus standards of the United States
8    Constitution during the preceding 4 quarterly periods.
9        (3) A provider having a contract with a person located
10    in this State under which:
11            (A) the provider sells the same or substantially
12        similar service subject to tax under this Act as the
13        person located in this State and does so using an
14        identical or substantially similar name, trade name,
15        or trademark as the person located in this State; and
16            (B) the provider provides a commission or other
17        consideration to the person located in this State based
18        upon the sale of services subject to tax under this Act
19        by the provider.
20        The provisions of this paragraph (3) shall apply only
21    if the cumulative purchase prices from sales of services
22    subject to tax under this Act by the provider to purchasers
23    in this State under all such contracts exceed $10,000
24    during the preceding 4 quarterly periods ending on the last
25    day of March, June, September, and December.
26    "Purchase of service" means the acquisition, for a valuable

 

 

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1consideration, of space for storage.
2    "Purchase price" means the consideration paid for a
3purchase of service, all services directly related to the
4purchase of service, and all tangible personal property
5transferred incident to the purchase of service, valued in
6money, whether received in money or otherwise, including cash,
7gift cards, reward points, credits, and property and shall be
8determined without any deduction on account of the cost of
9materials used, labor or service costs, or any other expense
10whatsoever. However, "purchase price" shall not include
11consideration paid for:
12        (1) any charge for a dishonored check;
13        (2) any finance or credit charge, penalty or charge for
14    delayed payment, or discount for prompt payment;
15        (3) any purchase by a purchaser if the provider is
16    prohibited by federal or State constitution, treaty,
17    convention, statute or court decision from collecting the
18    tax from such purchaser;
19        (4) the isolated or occasional sale of services subject
20    to tax under this Act by a person who does not hold himself
21    out as being engaged (or who does not habitually engage) in
22    selling such service; and
23        (5) any amounts added to a purchaser's bills because of
24    charges made pursuant to the tax imposed by this Act.
25    In case credit is extended, the amount thereof shall be
26included only as and when payments are made.

 

 

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1    "Purchaser" means any person who, for a valuable
2consideration, acquires storage space for use and not for
3resale.
4    "Storage" means the retaining or keeping of tangible
5personal property in this State for any purpose.
6    "Space for storage" means (i) secure areas, such as rooms,
7units, compartments or containers, whether accessible from
8outside or from within a building, that are designated for the
9use of a purchaser, where the purchaser can store and retrieve
10property, including self-storage units, mini-storage units,
11and areas by any other name; (ii) any parking lot, ramp, or
12parking garage for a vehicle, whether the vehicle is parked by
13the operator of the vehicle or by an attendant; (iii) any
14aircraft parking area, ramp, or hanger; (iv) any boat slip,
15dock, or dry dock; (v) any recreational vehicle parking area or
16garage; and (vi) any other areas for storage or parking of
17tangible personal property.
18    "Self-storage or "mini-storage" includes storage lockers
19or storage units in apartment complexes (if the locker or unit
20is utilized at the tenant's option and includes payment of a
21fee in addition to apartment rental), and in amusement parks,
22water parks, recreational facilities, and other locations
23where lockers are rented for self-storage.
24    "Supplier" means any person who makes sales of tangible
25personal property to providers for subsequent transfer
26incident to a sale of service subject to tax under this Act.

 

 

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1    "Use" means the exercise by any person of any right or
2power over, or the enjoyment of, the services subject to tax
3under this Act.
 
4    Section 5-10. Imposition of tax; calculation of tax.
5    (a) Effective January 1, 2018, except as otherwise provided
6in this Section, a tax is imposed on the privilege of using in
7this State space for storage purchased for use and not for
8resale at the rate of 5% of the purchase price for the space
9for storage.
10    (b) Except as otherwise provided in subsection (e), if
11tangible personal property is transferred incident to a
12purchase of service, and if the provider separately states on
13the invoice the cost price of the tangible personal property
14transferred incident to the purchase of service, the tax is
15imposed on the difference between the total purchase price and
16the provider's cost price of the tangible personal property
17transferred.
18    (c) Except as otherwise provided in subsection (e), if
19tangible personal property is transferred incident to a
20purchase of service, and if the provider does not separately
21state on the invoice the cost price of the tangible personal
22property transferred incident to the purchase of service, tax
23is imposed on 80% of the purchase price.
24    (d) Except as otherwise provided in subsection (e), a
25provider that transfers tangible personal property incident to

 

 

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1a sale of service subject to tax under this Act shall make an
2annual election prior to December 31 of each year to pay the
3tax imposed by this Act under either subsection (b) or
4subsection (c) for the following calendar year. A provider may
5not make an election regarding the method of calculating tax on
6a transaction-by-transaction basis. For a provider that fails
7to make an election pursuant to this subsection, the tax is
8imposed on 80% of the purchase price.
9    (e) A provider making sales of services subject to tax
10under this Act in which the aggregate annual cost price of
11tangible personal property transferred incident to all sales of
12services subject to tax under this Act is less than 3% of the
13aggregate annual total purchase prices from all sales of
14services subject to tax under this Act, may annually elect to
15calculate tax on 100% of the total purchase price for each
16purchase of service. A provider that does not elect to
17calculate tax as provided in this subsection must separately
18state on the invoice the cost price of the tangible personal
19property transferred incident to a purchase of service and
20calculate tax pursuant to subsection (b).
21    A provider making an election to calculate tax under this
22subsection may provide resale certificates under Section 2c of
23the Retailers' Occupation Tax Act to his or her suppliers of
24tangible personal property that will be transferred incident to
25a sale of service subject to tax under this Act only if the
26provider also makes sales of that tangible personal property at

 

 

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1retail. A provider that provides resale certificates to his or
2her supplier must pay retailers' occupation tax on the portion
3of the tangible personal property that is sold at retail.
4    Providers who do not also make sales of that tangible
5personal property at retail may not provide suppliers with
6certificates of resale, and their purchases of tangible
7personal property are subject to tax under the Use Tax Act.
8    (f) If any provider erroneously collects tax or collects
9more from the purchaser than the purchaser's liability for the
10transaction, the purchaser shall have a legal right to claim a
11refund of such amount from such provider. However, if such
12amount is not refunded to the purchaser for any reason, the
13provider is liable to pay such amount to the Department.
14    (g) The tax imposed by this Section is not imposed with
15respect to any transaction in interstate commerce, to the
16extent such transaction may not, under the Constitution and
17statutes of the United States, be made the subject of taxation
18by this State.
 
19    Section 5-15. Transactions involving subcontractors.
20Providers making purchases of service from a subcontractor are
21exempt from tax under this Act in accordance with paragraph (1)
22of subsection (a) of Section 5-25. However, this exemption does
23not apply to use tax due on the tangible personal property
24transferred incident to the service. If a provider subcontracts
25a service subject to tax under this Act in which tangible

 

 

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1personal property is transferred, the provider does not incur a
2use tax liability on the cost price of any tangible personal
3property transferred to the provider by the subcontractor if
4the subcontractor (i) has paid or will pay a use tax on his or
5her cost price of any tangible personal property transferred to
6the provider and (ii) certifies that fact in writing to the
7provider.
 
8    Section 5-20. Multi-state exemption. To prevent actual
9multi-state taxation of services that are subject to taxation
10under this Act, any purchaser or provider, upon proof that the
11purchaser or provider has paid a tax in another state on such
12service, shall be allowed a credit against the tax imposed by
13this Act, to the extent of the amount of the tax properly due
14and paid in the other state.
 
15    Section 5-25. Exemptions.
16    (a) The following purchasers are exempt from the tax
17imposed by this Act:
18        (1) Businesses making purchases of service for the
19    benefit of or in furtherance of the business. This
20    paragraph is exempt from the provisions of Section 5-60.
21        (2) Corporations, societies, associations,
22    foundations, or institutions organized and operated
23    exclusively for charitable, religious or educational
24    purposes that have been issued an active tax exemption

 

 

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1    number by the Department under Section 1g of the Retailers'
2    Occupation Tax Act. This paragraph is exempt from the
3    provisions of Section 5-60.
4        (3) The federal government and its instrumentalities
5    that have been issued an active tax exemption number by the
6    Department under Section 1g of the Retailers' Occupation
7    Tax Act. This paragraph is exempt from the provisions of
8    Section 5-60.
9        (4) Government bodies that have been issued an active
10    tax exemption number by the Department under Section 1g of
11    the Retailers' Occupation Tax Act. This paragraph is exempt
12    from the provisions of Section 5-60.
13    (b) The purchase of the following services is exempt from
14the tax imposed by this Act:
15        (1) Services performed on tangible personal property
16    exempt under the Retailers' Occupation Tax Act, Use Tax
17    Act, Service Occupation Tax Act, or Service Use Tax Act.
18    This paragraph is exempt from the provisions of Section
19    5-60.
20        (2) Repair and maintenance services, to the extent that
21    those services are subject to a separate tax imposed by the
22    State. This paragraph is exempt from the provisions of
23    Section 5-60.
 
24    Section 5-30. Collection of tax.
25    (a) Beginning with bills issued or charges collected for a

 

 

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1purchase of service on and after January 1, 2018, the tax
2imposed by this Act shall be collected from the purchaser by
3any provider maintaining a place of business in this State at
4the rate stated in Section 5-10 with respect to the service
5subject to tax under this Act sold by such provider to or for
6the purchaser, and shall be remitted to the Department as
7provided in Section 5-50 of this Act. All sales of services
8subject to tax under this Act to a purchaser for use and not
9for resale are presumed subject to tax collection. Providers
10shall collect the tax from purchasers by adding the tax to the
11amount of the purchase price received from the purchaser for
12selling a service subject to tax under this Act to or for the
13purchaser. The tax imposed by the Act shall, when collected, be
14stated as a distinct item separate and apart from the purchase
15price of the service subject to tax under this Act. However, if
16it is not possible to state the tax separately, the Department
17may, by rule, exempt the purchase from this requirement if
18purchasers are notified by language on the invoice or other
19written notification or notified by a sign that the tax is
20included in the purchase price.
21    (b) Any person purchasing a service subject to tax under
22this Act for use and not for resale as to which there has been
23no charge made to him of the tax imposed by Section 5-10 shall
24make payment of the tax imposed by Section 5-10 of this Act in
25the form and manner provided by the Department not later than
26the 20th day of the month following the month of purchase of

 

 

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1the service.
 
2    Section 5-35. Registration of providers.
3    (a) A person who engages in business as a provider in this
4State shall register with the Department. Application for a
5certificate of registration shall be made to the Department, by
6electronic means, in the form and manner prescribed by the
7Department and shall contain any reasonable information the
8Department may require. Upon receipt of the application for a
9certificate of registration in proper form and manner, the
10Department shall issue to the applicant a certificate of
11registration.
12    The annual fee payable to the Department for each
13certificate of registration shall be $75. The fee shall be
14deposited into the Tax Compliance and Administration Fund. Each
15applicant for a certificate of registration shall pay the fee
16to the Department at the time of submitting its application for
17certificate registration to the Department. The Department
18shall require an applicant for a certificate of registration
19under this Section to electronically pay the fee. A separate
20annual fee shall be paid for each place of business at which a
21person who is required to procure a certificate of registration
22under this Section proposes to sell a service in Illinois
23subject to tax under this Act.
24    (b) The Department may refuse to issue or reissue a
25certificate of registration to any applicant for the reasons

 

 

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1set forth in Section 2505-380 of the Department of Revenue Law
2of the Civil Administrative Code of Illinois.
3    (c) Any person aggrieved by any decision of the Department
4under this Section may, within 20 days after notice of such
5decision, protest and request a hearing, whereupon the
6Department shall give notice to such person of the time and
7place fixed for such hearing and shall hold a hearing in
8conformity with the provisions of this Act and then issue its
9final administrative decision in the matter to such person. In
10the absence of such a protest within 20 days, the Department's
11decision shall become final without any further determination
12being made or notice given.
 
13    Section 5-40. Revocation of certificate of registration.
14    (a) The Department may, after notice and a hearing as
15provided herein, revoke the certificate of registration of any
16person who violates any of the provisions of this Act or rule
17adopted pursuant to this Act. Before revocation of a
18certificate of registration, the Department shall, within 90
19days after non-compliance and at least 7 days prior to the date
20of the hearing, give the person so accused notice in writing of
21the charge against him or her, and on the date designated shall
22conduct a hearing upon this matter. The lapse of such 90-day
23period shall not preclude the Department from conducting
24revocation proceedings at a later date if necessary. Any
25hearing held under this Section shall be conducted by the

 

 

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1Director or by any officer or employee of the Department
2designated in writing by the Director.
3    (b) The Department may revoke a certificate of registration
4for the reasons set forth in Section 2505-380 of the Department
5of Revenue Law of the Civil Administrative Code of Illinois.
6    (c) Upon the hearing of any such proceeding, the Director,
7or any officer or employee of the Department designated in
8writing by the Director, may administer oaths, and the
9Department may procure by its subpoena the attendance of
10witnesses and, by its subpoena duces tecum, the production of
11relevant books and papers. Any circuit court, upon application
12either of the accused or of the Department, may, by order duly
13entered, require the attendance of witnesses and the production
14of relevant books and papers before the Department in any
15hearing relating to the revocation of certificates of
16registration. Upon refusal or neglect to obey the order of the
17court, the court may compel obedience thereof by proceedings
18for contempt.
19    (d) The Department may, by application to any circuit
20court, obtain an injunction requiring any person who engages in
21business as a provider under this Act to obtain a certificate
22of registration. Upon refusal or neglect to obey the order of
23the court, the court may compel obedience by proceedings for
24contempt.
 
25    Section 5-45. Tax collected as debt owed to State. The tax

 

 

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1herein required to be collected by any provider maintaining a
2place of business in this State, and any such tax collected by
3that person, shall constitute a debt owed by that person to
4this State.
 
5    Section 5-50. Return and payment of tax by provider.
6    (a) Each provider who is required or authorized to collect
7the tax imposed by this Act shall make a return to the
8Department on or before the 20th day of each month for the
9preceding calendar month stating the following:
10        (1) the provider's name;
11        (2) the address of the provider's principal place of
12    business and the address of the principal place of business
13    (if that is a different address) from which the provider
14    engaged in the business of selling a service subject to tax
15    under this Act;
16        (3) total purchase price received by the provider for
17    all services subject to tax under this Act;
18        (4) amount of tax;
19        (5) the signature of the provider; and
20        (6) such other information as the Department
21    reasonably may require.
22    Any amount that is required to be shown or reported on any
23return or other document under this Act shall, if that amount
24is not a whole-dollar amount, be increased to the nearest
25whole-dollar amount if the fractional part of a dollar is $0.50

 

 

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1or more and decreased to the nearest whole-dollar amount if the
2fractional part of a dollar is less than $0.50. If a total
3amount of less than $1 is payable, refundable, or creditable,
4such amount shall be disregarded if it is less than $0.50 and
5shall be increased to $1 if it is $0.50 or more.
6    The provider making the return provided for in this Section
7shall, at the time of making such return, pay to the Department
8the amount of tax imposed by this Act, less a discount of 1.75%
9which is allowed to reimburse the provider for the expenses
10incurred in keeping records, billing the purchaser, preparing
11and filing returns, remitting the tax, and supplying data to
12the Department upon request. No discount may be claimed by a
13provider on returns not timely filed and for taxes not timely
14remitted.
15    (b) If the average monthly tax liability to the Department
16of the provider does not exceed $200, the Department may
17authorize the provider's returns to be filed on a
18quarter-annual basis, with the return for January, February,
19and March of a given year being due by April 20 of such year;
20with the return for April, May, and June of a given year being
21due by July 20 of such year; with the return for July, August,
22and September of a given year being due by October 20 of such
23year; and with the return for October, November, and December
24of a given year being due by January 20 of the following year.
25    If the average monthly tax liability to the Department of
26the provider does not exceed $50, the Department may authorize

 

 

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1the provider's returns to be filed on an annual basis, with the
2return for a given year being due by January 20 of the
3following year.
4    Such quarter-annual and annual returns, as to form and
5substance, shall be subject to the same requirements as monthly
6returns.
7    Notwithstanding any other provision in this Act concerning
8the time within which a provider may file a return, any such
9provider who ceases to engage in a kind of business which makes
10the person responsible for filing returns under this Act shall
11file a final return under this Act with the Department not more
12than one month after discontinuing such business.
13    Each provider whose average monthly liability to the
14Department under this Act was $10,000 or more during the
15preceding calendar year, excluding the month of highest
16liability and the month of lowest liability in such calendar
17year, shall make estimated payments to the Department on or
18before the 7th, 15th, 22nd, and last day of the month during
19which tax liability to the Department is incurred in an amount
20not less than the lower of either 22.5% of such provider's
21actual tax liability for the month or 25% of such provider's
22actual tax liability for the same calendar month of the
23preceding year. The amount of such quarter-monthly payments
24shall be credited against the final tax liability of such
25provider's return for that month. Once applicable, the
26requirement of the making of quarter-monthly payments to the

 

 

10000SB0009sam001- 22 -LRB100 06347 HLH 18430 a

1Department by taxpayers having an average monthly tax liability
2of $10,000 or more as determined in the manner provided in this
3paragraph shall continue until such taxpayer's average monthly
4liability to the Department during the preceding 4 complete
5calendar quarters (excluding the month of highest liability and
6the month of lowest liability) is less than $9,000 or until the
7taxpayer's average monthly liability to the Department as
8computed for each of the 4 preceding complete calendar quarters
9is less than $10,000. However, if a taxpayer can show the
10Department that a substantial change in the taxpayer's business
11has occurred which causes the taxpayer to anticipate that his
12average monthly tax liability for the reasonably foreseeable
13future will fall below the $10,000 threshold stated above, then
14the taxpayer may petition the Department for a change in the
15taxpayer's reporting status. The Department shall change the
16taxpayer's reporting status unless it finds that such change is
17seasonal in nature and not likely to be long term. If any such
18quarter-monthly payment is not paid at the time or in the
19amount required by this Section, then the taxpayer shall be
20liable for penalties and interest on the difference between the
21minimum amount due as a payment and the amount of such
22quarter-monthly payment actually and timely paid, except
23insofar as the taxpayer has previously made payments for that
24month to the Department in excess of the minimum payments
25previously due as provided in this Section. The Department
26shall adopt rules to govern the quarter-monthly payment amount

 

 

10000SB0009sam001- 23 -LRB100 06347 HLH 18430 a

1and quarter-monthly payment dates for taxpayers who file on
2other than a calendar monthly basis.
3    If any payment provided for in this Section exceeds the
4taxpayer's liabilities under this Act, as shown on an original
5monthly return, the Department shall, if requested by the
6taxpayer, issue to the taxpayer a credit memorandum no later
7than 30 days after the date of payment. The credit evidenced by
8such credit memorandum may be assigned by the taxpayer to a
9similar taxpayer under this Act, in accordance with reasonable
10rules and regulations to be prescribed by the Department. If no
11such request is made, the taxpayer may credit such excess
12payment against tax liability subsequently to be remitted to
13the Department under this Act, in accordance with reasonable
14rules adopted by the Department. If the Department subsequently
15determines that all or any part of the credit taken was not
16actually due to the taxpayer, the taxpayer's 1.75% discount
17shall be reduced by 1.75% of the difference between the credit
18taken and that actually due, and that taxpayer shall be liable
19for penalties and interest on such difference.
20    (c) A provider who has a tax liability in the amount set
21forth in subsection (b) of Section 2505-210 of the Department
22of Revenue Law of the Civil Administrative Code of Illinois
23shall make all payments required by rules of the Department by
24electronic funds transfer. Any provider not required to make
25payments by electronic funds transfer may make payments by
26electronic funds transfer with the permission of the

 

 

10000SB0009sam001- 24 -LRB100 06347 HLH 18430 a

1Department. All providers required to make payments by
2electronic funds transfer and any providers authorized to
3voluntarily make payments by electronic funds transfer shall
4make those payments in the manner authorized by the Department.
5    (d) If a provider fails to sign a return within 30 days
6after the proper notice and demand for signature by the
7Department is received by the provider, the return shall be
8considered valid and any amount shown to be due on the return
9shall be deemed assessed.
 
10    Section 5-55. Claims; credit memorandum or refunds. If it
11appears, after claim therefore filed with the Department, that
12an amount of tax or penalty has been paid to the Department by
13the taxpayer which was not due under this Act, whether as the
14result of a mistake of fact or an error of law, except as
15hereinafter provided, then the Department shall issue a credit
16memorandum or refund to the person who made the erroneous
17payment or, if that person has died or become a person under
18legal disability, to his or her legal representative, as such.
19    If it is determined that the Department should issue a
20credit or refund under this Act, the Department may first apply
21the amount thereof against any amount of tax or penalty due
22under this Act, or any other Act administered by the
23Department, from the person entitled to such credit or refund.
24For this purpose, if proceedings are pending to determine
25whether or not any tax or penalty is due under this Act, or any

 

 

10000SB0009sam001- 25 -LRB100 06347 HLH 18430 a

1other Act administered by the Department, from such person, the
2Department may withhold issuance of the credit or refund
3pending the final disposition of such proceedings and may apply
4such credit or refund against any amount found to be due to the
5Department under this Act, or any other Act administered by the
6Department, as a result of such proceedings. The balance, if
7any, of the credit or refund shall be issued to the person
8entitled thereto.
9    If no tax or penalty is due and no proceeding is pending to
10determine whether such taxpayer is indebted to the Department
11for tax or penalty, the credit memorandum or refund shall be
12issued to the claimant; or (in the case of a credit memorandum)
13the credit memorandum may be assigned and set over by the
14lawful holder thereof, subject to reasonable rules of the
15Department, to any other person who is subject to this Act, and
16the amount thereof shall be applied by the Department against
17any tax or penalty due or to become due under this Act from
18such assignee.
19    As to any claim filed hereunder with the Department on and
20after each January 1 and July 1, no amount of tax or penalty
21erroneously paid (either in total or partial liquidation of a
22tax or penalty under this Act) more than 3 years prior to such
23January 1 and July 1, respectively, shall be credited or
24refunded, except that if both the Department and the taxpayer
25have agreed to an extension of time to issue a notice of tax
26liability under this Act, the claim may be filed at any time

 

 

10000SB0009sam001- 26 -LRB100 06347 HLH 18430 a

1prior to the expiration of the period agreed upon.
2    No claim may be allowed for any amount paid to the
3Department, whether paid voluntarily or involuntarily, if paid
4in total or partial liquidation of an assessment which had
5become final before the claim for credit or refund to recover
6the amount so paid is filed with the Department, or if paid in
7total or partial liquidation of a judgment or order of court.
8No claim may be allowed or refund made for any amount paid by
9or collected from any purchaser unless it appears that the
10claimant has unconditionally repaid to the purchaser any amount
11collected from the purchaser and retained by the claimant with
12respect to the same transaction under the Act.
13    Any credit or refund that is allowed under this Act shall
14bear interest at the rate and in the manner set forth in the
15Uniform Penalty and Interest Act.
16    In case the Department determines that the claimant is
17entitled to a refund, such refund shall be made only from such
18appropriation as may be available for that purpose. If it
19appears unlikely that the amount appropriated would permit
20everyone having a claim allowed during the period covered by
21such appropriation to elect to receive a cash refund, the
22Department, by rule or regulation, shall provide for the
23payment of refunds in hardship cases and shall define what
24types of cases qualify as hardship cases.
 
25    Section 5-60. Sunset of exemptions, credits, and

 

 

10000SB0009sam001- 27 -LRB100 06347 HLH 18430 a

1deductions. The application of every exemption, credit, and
2deduction against tax imposed by this Act that becomes law
3after the effective date of this Act shall be limited by a
4reasonable and appropriate sunset date. A taxpayer is not
5entitled to take the exemption, credit, or deduction beginning
6on the sunset date and thereafter. If a reasonable and
7appropriate sunset date is not specified in the Public Act that
8creates the exemption, credit, or deduction, a taxpayer shall
9not be entitled to take the exemption, credit, or deduction
10beginning 5 years after the effective date of the Public Act
11creating the exemption, credit, or deduction and thereafter.
 
12    Section 5-65. Distribution of proceeds. All moneys
13received by the Department under this Act shall be paid into
14the General Revenue Fund in the State Treasury.
 
15    Section 5-70. Rulemaking. The Department may adopt rules in
16accordance with the Illinois Administrative Procedure Act and
17prescribe forms relating to the administration and enforcement
18of this Act as it deems appropriate.
 
19    Section 5-75. Incorporation by reference. All of the
20provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f,
215g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of
22the Retailers' Occupation Tax Act and all of the provisions of
23the Uniform Penalty and Interest Act, that are not inconsistent

 

 

10000SB0009sam001- 28 -LRB100 06347 HLH 18430 a

1with this Act, apply to providers to the same extent as if
2those provisions were included in this Act. References in the
3incorporated Sections of the Retailers' Occupation Tax Act to
4retailers, to sellers, or to persons engaged in the business of
5selling tangible personal property mean providers when used in
6this Act. References in the incorporated Sections to sales of
7tangible personal property mean sales of services subject to
8tax under this Act when used in this Act.
 
9
ARTICLE 10. AMUSEMENT EXCISE TAX

 
10    Section 10-1. Short title. This Act may be cited as the
11Amusement Excise Tax Act.
 
12    Section 10-5. Definitions.
13    "Amusement device" means any machine, which, upon the
14insertion of a coin, slug, token, card, or similar object, or
15upon any other payment method, may be operated by the public
16generally for use as a game, entertainment, or amusement,
17whether or not registering a score, and includes but is not
18limited to such devices as jukeboxes, marble machines, pinball
19machines, movie and video booths or stands, and all games,
20operations or transactions similar thereto under whatever name
21by which they may be indicated. If a machine consists of more
22than one game monitor which permits individuals to play
23separate games simultaneously, each separate game monitor

 

 

10000SB0009sam001- 29 -LRB100 06347 HLH 18430 a

1shall be deemed an automatic amusement device.
2    "Amusement" means the following categories, for which any
3charge is made, including, but not limited to, gate charges,
4seat charges, ticket charges, dues, and entrance fees: (i) any
5exhibition, performance, presentation or show for amusement,
6athletic, entertainment, or recreational purposes, including,
7but not limited to, animal acts and shows, antique shows,
8automobile shows, ballets, baseball games, basketball games,
9carnivals, circuses, flower shows, football games, live adult
10entertainment, live performances (including but not limited
11to, theatrical, dramatic, or musical performances), movies,
12professional sporting events, races (including, but not
13limited to, automobile, dog, horse races); (ii) access to or
14use of a membership in clubs, whether open to the public or for
15members only, including, but not limited to, athletic clubs,
16country clubs, golf clubs, gun clubs, fishing clubs, flying
17clubs, hunting clubs, swimming clubs, tennis clubs, and
18yachting clubs; (iii) access to or use of amusement, athletic,
19entertainment, or recreational equipment or facilities,
20including, but not limited to, amusement park rides and games,
21billiards and pool halls, bowling alleys, campgrounds, dance
22halls, fishing ponds or lakes, golf courses, horseback riding
23facilities, shooting galleries, swimming pools, and tennis
24courts; and (iv) use of an amusement device.
25    "Cost price" means the consideration paid by a provider to
26a supplier for a purchase of tangible personal property valued

 

 

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1in money, whether paid in money or otherwise, including cash,
2credits, and services, and shall be determined without any
3deduction on account of taxes paid by the provider for the
4purchase of tangible personal property or on account of any
5expenses that are part of the selling price of the tangible
6personal property taxable under the Retailers' Occupation Tax
7Act and the Use Tax Act that are charged to the provider by a
8supplier. When a provider contracts out part or all of the
9services required in his sale of service subject to tax under
10this Act, it shall be presumed that the cost price to the
11provider of the tangible personal property transferred to him
12or her by his or her subcontractor is equal to 50% of the
13subcontractor's charges to the provider in the absence of proof
14of the consideration paid for the tangible personal property by
15the provider to the subcontractor.
16    "Department" means the Department of Revenue.
17    "Director" means the Director of Revenue.
18    "Person" means any natural individual, firm, trust,
19estate, partnership, association, joint stock company, joint
20venture, corporation, limited liability company, or a
21receiver, trustee, guardian, or other representative appointed
22by order of any court.
23    "Provider" means any person engaged in the business of
24providing, furnishing, selling or supplying an amusement or
25amusement device. Entrepreneurs, promoters, sponsors, or
26managers of an amusement shall be regarded as providers for the

 

 

10000SB0009sam001- 31 -LRB100 06347 HLH 18430 a

1purposes of this Act, if the entrepreneurs, promoters,
2sponsors, or managers have control and direction of the
3amusement, including activities such as controlling the sale of
4admissions or admission tickets; controlling or regulating the
5admittance of all persons to the event or place; determining
6the nature of the amusement to be offered; deciding the scale
7of the prices to be charged for admission; receiving the
8proceeds from ticket sales, including amounts from ticket
9agents or brokers; and deciding, or having the right to decide,
10the disposition of the net profits, if any, realized from the
11event. "Provider" also means persons that purchase amusement or
12amusement devices for resale.
13    "Provider maintaining a place of business in this State",
14or any like term, means and includes any of the following:
15        (1) A provider having or maintaining within this State,
16    directly or by a subsidiary, an office, distribution house,
17    sales house, warehouse or other place of business, or any
18    agent or other representative operating within this State
19    under the authority of the provider or its subsidiary,
20    irrespective of whether such place of business or agent or
21    other representative is located here permanently or
22    temporarily, or whether such provider or subsidiary is
23    licensed to do business in this State.
24        (2) A provider having a contract with a person located
25    in this State under which the person, for a commission or
26    other consideration based upon the sale of services subject

 

 

10000SB0009sam001- 32 -LRB100 06347 HLH 18430 a

1    to tax under this Act by the provider, directly or
2    indirectly refers potential customers to the provider by
3    providing to the potential customers a promotional code or
4    other mechanism that allows the provider to track purchases
5    referred by such persons. Examples of mechanisms that allow
6    the provider to track purchases referred by such persons
7    include but are not limited to the use of a link on the
8    person's Internet website, promotional codes distributed
9    through the person's hand-delivered or mailed material,
10    and promotional codes distributed by the person through
11    radio or other broadcast media. The provisions of this
12    paragraph (2) shall apply only if the cumulative purchase
13    prices from sales of services subject to tax under this Act
14    by the provider to purchasers who are referred to the
15    provider by all persons in this State under such contracts
16    exceed $10,000 during the preceding 4 quarterly periods
17    ending on the last day of March, June, September, and
18    December. A provider meeting the requirements of this
19    paragraph (2) shall be presumed to be maintaining a place
20    of business in this State but may rebut this presumption by
21    submitting proof that the referrals or other activities
22    pursued within this State by such persons were not
23    sufficient to meet the nexus standards of the United States
24    Constitution during the preceding 4 quarterly periods.
25        (3) A provider having a contract with a person located
26    in this State under which:

 

 

10000SB0009sam001- 33 -LRB100 06347 HLH 18430 a

1            (A) the provider sells the same or substantially
2        similar service subject to tax under this Act as the
3        person located in this State and does so using an
4        identical or substantially similar name, trade name,
5        or trademark as the person located in this State; and
6            (B) the provider provides a commission or other
7        consideration to the person located in this State based
8        upon the sale of services subject to tax under this Act
9        by the provider.
10        The provisions of this paragraph (3) shall apply only
11    if the cumulative purchase prices from sales of services
12    subject to tax under this Act by the provider to purchasers
13    in this State under all such contracts exceed $10,000
14    during the preceding 4 quarterly periods ending on the last
15    day of March, June, September, and December.
16    "Purchase of service" means the acquisition of an amusement
17or use of an amusement device for a valuable consideration.
18    "Purchase price" means the consideration paid for a
19purchase of service, all services directly related to the
20purchase of service, and all tangible personal property
21transferred incident to the purchase of service, valued in
22money, whether received in money or otherwise, including cash,
23gift cards, reward points, credits, and property and shall be
24determined without any deduction on account of the cost of
25materials used, labor or service costs, or any other expense
26whatsoever. However, "purchase price" shall not include

 

 

10000SB0009sam001- 34 -LRB100 06347 HLH 18430 a

1consideration paid for:
2        (1) any charge for a dishonored check;
3        (2) any finance or credit charge, penalty or charge for
4    delayed payment, or discount for prompt payment;
5        (3) any purchase by a purchaser if the provider is
6    prohibited by federal or State constitution, treaty,
7    convention, statute or court decision from collecting the
8    tax from such purchaser;
9        (4) the isolated or occasional sale of services subject
10    to tax under this Act by a person who does not hold himself
11    out as being engaged (or who does not habitually engage) in
12    selling such service; and
13        (5) any amounts added to a purchaser's bills because of
14    charges made pursuant to the tax imposed by this Act.
15    In case credit is extended, the amount thereof shall be
16included only as and when payments are made.
17    "Purchaser" means any person who, for a valuable
18consideration, acquires an amusement or uses an amusement
19device.
20    "Supplier" means any person who makes sales of tangible
21personal property to providers for subsequent transfer
22incident to a sale of service subject to tax under this Act.
23    "Use" means the exercise by any person of any right or
24power over, or the enjoyment of, the services subject to the
25tax under this Act.
 

 

 

10000SB0009sam001- 35 -LRB100 06347 HLH 18430 a

1    Section 10-10. Imposition of tax; calculation of tax.
2    (a) Effective January 1, 2018, except as otherwise provided
3in this Section, a tax is imposed at the rate of 5% of the
4purchase price upon purchasers of: (i) amusements; (ii) the
5privilege of access to clubs; (iii) the privilege of having
6access to or use of amusement, athletic, entertainment and
7recreational equipment and facilities; and (iv) the privilege
8of using amusement devices.
9    (b) Except as otherwise provided in subsection (e), if
10tangible personal property is transferred incident to a
11purchase of service, and if the provider separately states on
12the invoice the cost price of the tangible personal property
13transferred incident to the purchase of service, the tax is
14imposed on the difference between the total purchase price and
15the provider's cost price of the tangible personal property
16transferred.
17    (c) Except as otherwise provided in subsection (e), if
18tangible personal property is transferred incident to a
19purchase of service, and if the provider does not separately
20state on the invoice the cost price of the tangible personal
21property transferred incident to the purchase of service, tax
22is imposed on 80% of the purchase price.
23    (d) Except as otherwise provided in subsection (e), a
24provider that transfers tangible personal property incident to
25a sale of service subject to tax under this Act shall make an
26annual election prior to December 31 of each year to pay the

 

 

10000SB0009sam001- 36 -LRB100 06347 HLH 18430 a

1tax imposed by this Act under either subsection (b) or
2subsection (c) for the following calendar year. A provider may
3not make an election regarding the method of calculating tax on
4a transaction-by-transaction basis. For a provider that fails
5to make an election pursuant to this subsection, the tax is
6imposed on 80% of the purchase price.
7    (e) A provider making sales of services subject to tax
8under this Act in which the aggregate annual cost price of
9tangible personal property transferred incident to all sales of
10services subject to tax under this Act is less than 3% of the
11aggregate annual total purchase prices from all sales of
12services subject to tax under this Act, may annually elect to
13calculate tax on 100% of the total purchase price for each
14purchase of service. A provider that does not elect to
15calculate tax as provided in this subsection must separately
16state on the invoice the cost price of the tangible personal
17property transferred incident to a purchase of service and
18calculate tax pursuant to subsection (b).
19    A provider making an election to calculate tax under this
20subsection may provide resale certificates under Section 2c of
21the Retailers' Occupation Tax Act to his or her suppliers of
22tangible personal property that will be transferred incident to
23sales of services subject to tax under this Act only if the
24provider also makes sales of that tangible personal property at
25retail. A provider that provides resale certificates to his or
26her supplier must pay Retailers' Occupation Tax on the portion

 

 

10000SB0009sam001- 37 -LRB100 06347 HLH 18430 a

1of the tangible personal property that is sold at retail.
2    Providers who do not also make sales of that tangible
3personal property at retail may not provide suppliers with
4certificates of resale, and their purchases of tangible
5personal property are subject to tax under the Use Tax Act.
6    (f) If any provider erroneously collects tax or collects
7more from the purchaser than the purchaser's liability for the
8transaction, the purchaser shall have a legal right to claim a
9refund of such amount from such provider. However, if such
10amount is not refunded to the purchaser for any reason, the
11provider is liable to pay such amount to the Department.
12    (g) The tax imposed by this Section is not imposed with
13respect to any transaction in interstate commerce, to the
14extent such transaction may not, under the Constitution and
15statutes of the United States, be made the subject of taxation
16by this State.
 
17    Section 10-15. Transactions involving subcontractors. If a
18provider subcontracts a service subject to tax under this Act
19in which tangible personal property is transferred, the
20provider does not incur a use tax liability on the cost price
21of any tangible personal property transferred to the provider
22by the subcontractor if the subcontractor (i) has paid or will
23pay use tax on his or her cost price of any tangible personal
24property transferred to the provider and (ii) certifies that
25fact in writing to the provider.
 

 

 

10000SB0009sam001- 38 -LRB100 06347 HLH 18430 a

1    Section 10-20. Multi-state exemption. To prevent actual
2multi-state taxation of the services that are subject to
3taxation under this Act, any purchaser or provider, upon proof
4that the purchaser or provider has paid a tax in another state
5on such service, shall be allowed a credit against the tax
6imposed by this Act, to the extent of the amount of the tax
7properly due and paid in the other state.
 
8    Section 10-25. Exemptions.
9    (a) The following purchasers are exempt from the tax
10imposed by this Act:
11        (1) corporations, societies, associations,
12    foundations, or institutions organized and operated
13    exclusively for charitable, religious or educational
14    purposes that have been issued an active tax exemption
15    number by the Department under Section 1g of the Retailers'
16    Occupation Tax Act; this paragraph is exempt from the
17    provisions of Section 10-60;
18        (2) the federal government and its instrumentalities
19    that have been issued an active tax exemption number by the
20    Department under Section 1g of the Retailers' Occupation
21    Tax Act; this paragraph is exempt from the provisions of
22    Section 10-60; and
23        (3) government bodies that have been issued an active
24    tax exemption number by the Department under Section 1g of

 

 

10000SB0009sam001- 39 -LRB100 06347 HLH 18430 a

1    the Retailers' Occupation Tax Act; this paragraph is exempt
2    from the provisions of Section 10-60.
3    (b) The purchase of services performed on tangible personal
4property that is exempt under the Retailers' Occupation Tax
5Act, the Use Tax Act, the Service Occupation Tax Act, or the
6Service Use Tax Act is exempt under this Act. This subsection
7(b) is exempt from the provisions of Section 10-60.
 
8    Section 10-30. Collection of tax.
9    (a) Beginning with bills issued or charges collected for a
10purchase of service on and after January 1, 2018, the tax
11imposed by this Act shall be collected from the purchaser by
12any provider maintaining a place of business in this State at
13the rate stated in Section 10-10 with respect to the service
14subject to tax under this Act sold by such provider to or for
15the purchaser, and shall be remitted to the Department as
16provided in Section 10-50 of this Act. All sales of services
17subject to tax under this Act to a purchaser for use and not
18for resale are presumed subject to tax collection. Providers
19shall collect the tax from purchasers by adding the tax to the
20amount of the purchase price received from the purchaser for
21selling a service subject to tax under this Act to or for the
22purchaser. The tax imposed by the Act shall when collected be
23stated as a distinct item separate and apart from the purchase
24price of the service subject to tax under this Act. However, if
25it is not possible to state the tax separately, the Department

 

 

10000SB0009sam001- 40 -LRB100 06347 HLH 18430 a

1may, by rule, exempt the purchase from this requirement if
2purchasers are notified by language on the invoice or other
3written notification or notified by a sign that the tax is
4included in the purchase price.
5    (b) Any person purchasing a service subject to tax under
6this Act for use and not for resale as to which there has been
7no charge made to him of the tax imposed by Section 10-10 shall
8make payment of the tax imposed by Section 10-10 of this Act in
9the form and manner provided by the Department not later than
10the 20th day of the month following the month of purchase of
11the service.
 
12    Section 10-35. Registration of providers.
13    (a) A person who engages in business as a provider in this
14State shall register with the Department. Application for a
15certificate of registration shall be made to the Department, by
16electronic means, in the form and manner prescribed by the
17Department and shall contain any reasonable information the
18Department may require. Upon receipt of the application for a
19certificate of registration in proper form and manner, the
20Department shall issue to the applicant a certificate of
21registration.
22    The annual fee payable to the Department for each
23certificate of registration shall be $75. The fee shall be
24deposited into the Tax Compliance and Administration Fund. Each
25applicant for a certificate of registration shall pay the fee

 

 

10000SB0009sam001- 41 -LRB100 06347 HLH 18430 a

1to the Department at the time of submitting its application for
2certificate registration to the Department. The Department
3shall require an applicant for a certificate of registration
4under this Section to electronically pay the fee. A separate
5annual fee shall be paid for each place of business at which a
6person who is required to procure a certificate of registration
7under this Section proposes to sell a service in Illinois
8subject to tax under this Act.
9    (b) The Department may refuse to issue or reissue a
10certificate of registration to any applicant for the reasons
11set forth in Section 2505-380 of the Department of Revenue Law
12of the Civil Administrative Code of Illinois.
13    (c) Any person aggrieved by any decision of the Department
14under this Section may, within 20 days after notice of such
15decision, protest and request a hearing, whereupon the
16Department shall give notice to such person of the time and
17place fixed for such hearing and shall hold a hearing in
18conformity with the provisions of this Act and then issue its
19final administrative decision in the matter to such person. In
20the absence of such a protest within 20 days, the Department's
21decision shall become final without any further determination
22being made or notice given. The term "administrative decision"
23is as defined in Section 3-101 of the Code of Civil Procedure.
 
24    Section 10-40. Revocation of certificate of registration.
25    (a) The Department may, after notice and a hearing as

 

 

10000SB0009sam001- 42 -LRB100 06347 HLH 18430 a

1provided herein, revoke the certificate of registration of any
2person who violates any of the provisions of this Act or
3regulation promulgated pursuant to this Act. Before revocation
4of a certificate of registration, the Department shall, within
590 days after non-compliance and at least 7 days prior to the
6date of the hearing, give the person so accused notice in
7writing of the charge against him or her, and on the date
8designated shall conduct a hearing upon this matter. The lapse
9of such 90 day period shall not preclude the Department from
10conducting revocation proceedings at a later date if necessary.
11Any hearing held under this Section shall be conducted by the
12Director or by any officer or employee of the Department
13designated in writing by the Director.
14    (b) The Department may revoke a certificate of registration
15for the reasons set forth in Section 2505-380 of the Department
16of Revenue Law of the Civil Administrative Code of Illinois.
17    (c) Upon the hearing of any such proceeding, the Director
18or any officer or employee of the Department designated in
19writing by the Director may administer oaths, and the
20Department may procure by its subpoena the attendance of
21witnesses and, by its subpoena duces tecum, the production of
22relevant books and papers. Any circuit court, upon application
23either of the accused or of the Department, may, by order duly
24entered, require the attendance of witnesses and the production
25of relevant books and papers before the Department in any
26hearing relating to the revocation of certificates of

 

 

10000SB0009sam001- 43 -LRB100 06347 HLH 18430 a

1registration. Upon refusal or neglect to obey the order of the
2court, the court may compel obedience thereof by proceedings
3for contempt.
4    (d) The Department may, by application to any circuit
5court, obtain an injunction requiring any person who engages in
6business as a provider under this Act to obtain a certificate
7of registration. Upon refusal or neglect to obey the order of
8the court, the court may compel obedience by proceedings for
9contempt.
 
10    Section 10-45. Tax collected as debt owed to State. The tax
11herein required to be collected by any provider maintaining a
12place of business in this State, and any such tax collected by
13that person, shall constitute a debt owed by that person to
14this State.
 
15    Section 10-50. Return and payment of tax by provider.
16    (a) Each provider who is required or authorized to collect
17the tax imposed by this Act shall make a return to the
18Department on or before the 20th day of each month for the
19preceding calendar month stating the following:
20        (1) the provider's name;
21        (2) the address of the provider's principal place of
22    business and the address of the principal place of business
23    (if that is a different address) from which the provider
24    engaged in the business of selling a service subject to tax

 

 

10000SB0009sam001- 44 -LRB100 06347 HLH 18430 a

1    under this Act;
2        (3) the total purchase price received by the provider
3    for all services subject to tax under this Act;
4        (4) the amount of tax, computed upon item (3) at the
5    rate stated in Section 10-10;
6        (5) the signature of the provider; and
7        (6) such other information as the Department may
8    reasonably require.
9    Any amount that is required to be shown or reported on any
10return or other document under this Act shall, if such amount
11is not a whole-dollar amount, be increased to the nearest
12whole-dollar amount if the fractional part of a dollar is $0.50
13or more and decreased to the nearest whole-dollar amount if the
14fractional part of a dollar is less than $0.50. If a total
15amount of less than $1 is payable, refundable, or creditable,
16such amount shall be disregarded if it is less than $0.50 and
17shall be increased to $1 if it is $0.50 or more.
18    The provider making the return provided for in this Section
19shall, at the time of making such return, pay to the Department
20the amount of tax imposed by this Act, less a discount of 1.75%
21which is allowed to reimburse the provider for the expenses
22incurred in keeping records, billing the purchaser, preparing
23and filing returns, remitting the tax, and supplying data to
24the Department upon request. No discount may be claimed by a
25provider on returns not timely filed and for taxes not timely
26remitted.

 

 

10000SB0009sam001- 45 -LRB100 06347 HLH 18430 a

1    (b) If the average monthly tax liability to the Department
2of the provider does not exceed $200, the Department may
3authorize the provider's returns to be filed on a
4quarter-annual basis, with the return for January, February,
5and March of a given year being due by April 20 of such year;
6with the return for April, May, and June of a given year being
7due by July 20 of such year; with the return for July, August,
8and September of a given year being due by October 20 of such
9year; and with the return for October, November, and December
10of a given year being due by January 20 of the following year.
11    If the average monthly tax liability to the Department of
12the provider does not exceed $50, the Department may authorize
13the provider's returns to be filed on an annual basis, with the
14return 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 provider may file a return, any such
21provider who ceases to engage in a kind of business which makes
22the person responsible for filing returns under this Act shall
23file a final return under this Act with the Department not more
24than one month after discontinuing such business.
25    Each provider whose average monthly liability to the
26Department under this Act was $10,000 or more during the

 

 

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1preceding calendar year, excluding the month of highest
2liability and the month of lowest liability in such calendar
3year, shall make estimated payments to the Department on or
4before the 7th, 15th, 22nd, and last day of the month during
5which tax liability to the Department is incurred in an amount
6not less than the lower of either 22.5% of such provider's
7actual tax liability for the month or 25% of such provider's
8actual tax liability for the same calendar month of the
9preceding year. The amount of such quarter-monthly payments
10shall be credited against the final tax liability of such
11provider's return for that month. Once applicable, the
12requirement of the making of quarter-monthly payments to the
13Department by taxpayers having an average monthly tax liability
14of $10,000 or more as determined in the manner provided in this
15paragraph shall continue until that taxpayer's average monthly
16liability to the Department during the preceding 4 complete
17calendar quarters (excluding the month of highest liability and
18the month of lowest liability) is less than $9,000 or until
19such taxpayer's average monthly liability to the Department as
20computed for each of the 4 preceding complete calendar quarters
21is less than $10,000. However, if a taxpayer can show the
22Department that a substantial change in the taxpayer's business
23has occurred which causes the taxpayer to anticipate that his
24average monthly tax liability for the reasonably foreseeable
25future will fall below the $10,000 threshold stated above, then
26the taxpayer may petition the Department for a change in the

 

 

10000SB0009sam001- 47 -LRB100 06347 HLH 18430 a

1taxpayer's reporting status. The Department shall change that
2taxpayer's reporting status unless it finds that such change is
3seasonal in nature and not likely to be long term. If any such
4quarter-monthly payment is not paid at the time or in the
5amount required by this Section, then the taxpayer shall be
6liable for penalties and interest on the difference between the
7minimum amount due as a payment and the amount of such
8quarter-monthly payments actually and timely paid, except
9insofar as the taxpayer has previously made payments for that
10month to the Department in excess of the minimum payments
11previously due as provided in this Section. The Department
12shall adopt rules to govern the quarter-monthly payment amount
13and quarter-monthly payment dates for taxpayers who file on
14other than a calendar monthly basis.
15    If any payment provided for in this Section exceeds the
16taxpayer's liabilities under this Act, as shown on an original
17monthly return, the Department shall, if requested by the
18taxpayer, issue to the taxpayer a credit memorandum no later
19than 30 days after the date of payment. The credit evidenced by
20such credit memorandum may be assigned by the taxpayer to a
21similar taxpayer under this Act, in accordance with reasonable
22rules and regulations to be prescribed by the Department. If no
23such request is made, the taxpayer may credit such excess
24payment against tax liability subsequently to be remitted to
25the Department under this Act, in accordance with reasonable
26rules and regulations prescribed by the Department. If the

 

 

10000SB0009sam001- 48 -LRB100 06347 HLH 18430 a

1Department subsequently determines that all or any part of the
2credit taken was not actually due to the taxpayer, the
3taxpayer's 1.75% discount shall be reduced by 1.75% of the
4difference between the credit taken and that actually due, and
5that taxpayer shall be liable for penalties and interest on
6such difference.
7    (c) A provider who has a tax liability in the amount set
8forth in subsection (b) of Section 2505-210 of the Department
9of Revenue Law of the Civil Administrative Code of Illinois
10shall make all payments required by rules of the Department by
11electronic funds transfer. Any provider not required to make
12payments by electronic funds transfer may make payments by
13electronic funds transfer with the permission of the
14Department. All providers required to make payments by
15electronic funds transfer and any providers authorized to
16voluntarily make payments by electronic funds transfer shall
17make those payments in the manner authorized by the Department.
18    (d) If a provider fails to sign a return within 30 days
19after the proper notice and demand for signature by the
20Department is received by the provider, the return shall be
21considered valid and any amount shown to be due on the return
22shall be deemed assessed.
23    (e) Any person engaged in business as a provider at the
24Illinois State Fair, the DuQuoin State Fair, a county fair, an
25art show, a flea market, or a similar exhibition or event may
26be required to make a daily report to the Department setting

 

 

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1forth the amount of purchases of service and make a daily
2payment of the full amount of tax due. The Department shall
3impose this requirement when it finds that there is a
4significant risk of loss of revenue to the State at such an
5exhibition or event. Such a finding shall be based on evidence
6that a substantial number of providers who are not residents of
7Illinois will be engaging in business at the exhibition or
8event, or other evidence of a significant risk of loss of
9revenue to the State. The Department shall notify providers
10affected by the imposition of this requirement. In the absence
11of notification by the Department, the providers shall file
12their returns as otherwise required in this Section.
 
13    Section 10-55. Claims; credit memorandum or refunds. If it
14appears, after claim therefore filed with the Department, that
15an amount of tax or penalty has been paid to the Department by
16the taxpayer which was not due under this Act, whether as the
17result of a mistake of fact or an error of law, except as
18hereinafter provided, then the Department shall issue a credit
19memorandum or refund to the person who made the erroneous
20payment or, if that person has died or become a person under
21legal disability, to his or her legal representative, as such.
22    If it is determined that the Department should issue a
23credit or refund under this Act, the Department may first apply
24the amount thereof against any amount of tax or penalty due
25under this Act, or any other Act administered by the

 

 

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1Department, from the person entitled to such credit or refund.
2For this purpose, if proceedings are pending to determine
3whether or not any tax or penalty is due under this Act, or any
4other Act administered by the Department, from such person, the
5Department may withhold issuance of the credit or refund
6pending the final disposition of such proceedings and may apply
7such credit or refund against any amount found to be due to the
8Department under this Act, or any other Act administered by the
9Department, as a result of such proceedings. The balance, if
10any, of the credit or refund shall be issued to the person
11entitled thereto.
12    If no tax or penalty is due and no proceeding is pending to
13determine whether such taxpayer is indebted to the Department
14for tax or penalty, the credit memorandum or refund shall be
15issued to the claimant; or (in the case of a credit memorandum)
16the credit memorandum may be assigned and set over by the
17lawful holder thereof, subject to reasonable rules of the
18Department, to any other person who is subject to this Act, and
19the amount thereof shall be applied by the Department against
20any tax or penalty due or to become due under this Act from
21such assignee.
22    As to any claim filed hereunder with the Department on and
23after each January 1 and July 1, no amount of tax or penalty
24erroneously paid (either in total or partial liquidation of a
25tax or penalty under this Act) more than 3 years prior to such
26January 1 and July 1, respectively, shall be credited or

 

 

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1refunded, except that if both the Department and the taxpayer
2have agreed to an extension of time to issue a notice of tax
3liability under this Act, the claim may be filed at any time
4prior to the expiration of the period agreed upon.
5    No claim may be allowed for any amount paid to the
6Department, whether paid voluntarily or involuntarily, if paid
7in total or partial liquidation of an assessment which had
8become final before the claim for credit or refund to recover
9the amount so paid is filed with the Department, or if paid in
10total or partial liquidation of a judgment or order of court.
11No claim may be allowed or refund made for any amount paid by
12or collected from any purchaser unless it appears that the
13claimant has unconditionally repaid to the purchaser any amount
14collected from the purchaser and retained by the claimant with
15respect to the same transaction under the Act.
16    Any credit or refund that is allowed under this Act shall
17bear interest at the rate and in the manner set forth in the
18Uniform Penalty and Interest Act.
19    In case the Department determines that the claimant is
20entitled to a refund, such refund shall be made only from such
21appropriation as may be available for that purpose. If it
22appears unlikely that the amount appropriated would permit
23everyone having a claim allowed during the period covered by
24such appropriation to elect to receive a cash refund, the
25Department, by rule or regulation, shall provide for the
26payment of refunds in hardship cases and shall define what

 

 

10000SB0009sam001- 52 -LRB100 06347 HLH 18430 a

1types of cases qualify as hardship cases.
 
2    Section 10-60. Sunset of exemptions, credits, and
3deductions. The application of every exemption, credit, and
4deduction against tax imposed by this Act that becomes law
5after the effective date of this Act shall be limited by a
6reasonable and appropriate sunset date. A taxpayer is not
7entitled to take the exemption, credit, or deduction beginning
8on the sunset date and thereafter. If a reasonable and
9appropriate sunset date is not specified in the Public Act that
10creates the exemption, credit, or deduction, a taxpayer shall
11not be entitled to take the exemption, credit, or deduction
12beginning 5 years after the effective date of the Public Act
13creating the exemption, credit, or deduction and thereafter.
 
14    Section 10-65. Deposit of proceeds. Except as otherwise
15provided in this Section, all moneys received by the Department
16under this Act shall be paid into the General Revenue Fund.
17Each month, from the moneys received by the Department under
18this Act for the preceding month, the Department shall pay
19$50,000 monthly into the Sexual Assault Services Prevention
20Fund, a special fund in the State treasury, increased annually
21on July 1 by the percentage increase in the Consumer Price
22Index during the 12-month calendar year preceding that July 1.
23For purposes of this Section "Consumer Price Index" means the
24Consumer Price Index for All Urban Consumers for all items

 

 

10000SB0009sam001- 53 -LRB100 06347 HLH 18430 a

1published by the United States Department of Labor.
 
2    Section 10-70. Rulemaking. The Department may adopt rules
3under the Illinois Administrative Procedure Act and prescribe
4forms relating to the administration and enforcement of this
5Act as it deems appropriate.
 
6    Section 10-75. Incorporation by reference. All of the
7provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f,
85g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of
9the Retailers' Occupation Tax Act and all of the provisions of
10the Uniform Penalty and Interest Act, that are not inconsistent
11with this Act, apply to providers to the same extent as if
12those provisions were included in this Act. References in the
13incorporated Sections of the Retailers' Occupation Tax Act to
14retailers, to sellers, or to persons engaged in the business of
15selling tangible personal property mean providers when used in
16this Act. References in the incorporated Sections to sales of
17tangible personal property mean sales of services subject to
18tax under this Act when used in this Act.
 
19
ARTICLE 15. REPAIR AND MAINTENANCE EXCISE TAX ACT

 
20    Section 15-1. Short title. This Act may be cited as the
21Repair and Maintenance Excise Tax Act.
 

 

 

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1    Section 15-5. Definitions.
2    "Business" means any person engaged in activities with the
3object of profit or gain, either directly or indirectly, to the
4person.
5    "Cost price" means the consideration paid by a provider to
6a supplier for a purchase of tangible personal property valued
7in money, whether paid in money or otherwise, including cash,
8credits and services, and shall be determined without any
9deduction on account of taxes paid by the provider for the
10purchase of tangible personal property or on account of any
11expenses that are part of the selling price of the tangible
12personal property taxable under the Retailers' Occupation Tax
13Act and the Use Tax Act that are charged to the provider by a
14supplier. When a provider contracts out part or all of the
15services required in his sale of service subject to tax under
16this Act, it shall be presumed that the cost price to the
17provider of the tangible personal property transferred to him
18or her by his or her subcontractor is equal to 50% of the
19subcontractor's charges to the provider in the absence of proof
20of the consideration paid for the tangible personal property by
21the provider to the subcontractor.
22    "Department" means the Department of Revenue.
23    "Director" means the Director of Revenue.
24    "Person" means any natural individual, firm, trust,
25estate, partnership, association, joint stock company, joint
26venture, corporation, limited liability company, or a

 

 

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1receiver, trustee, guardian, or other representative appointed
2by order of any court.
3    "Provider" means any person engaged in the business of
4repairing, servicing, altering, fitting, cleaning, painting,
5coating, towing, inspecting, or maintaining tangible personal
6property or tangible personal property that has been affixed to
7real estate.
8    "Provider maintaining a place of business in this State",
9or any like term, means and includes any of the following:
10        (1) A provider having or maintaining within this State,
11    directly or by a subsidiary, an office, distribution house,
12    sales house, warehouse or other place of business, or any
13    agent or other representative operating within this State
14    under the authority of the provider or its subsidiary,
15    irrespective of whether such place of business or agent or
16    other representative is located here permanently or
17    temporarily, or whether such provider or subsidiary is
18    licensed to do business in this State.
19        (2) A provider having a contract with a person located
20    in this State under which the person, for a commission or
21    other consideration based upon the sale of services subject
22    to tax under this Act by the provider, directly or
23    indirectly refers potential customers to the provider by
24    providing to the potential customers a promotional code or
25    other mechanism that allows the provider to track purchases
26    referred by such persons. Examples of mechanisms that allow

 

 

10000SB0009sam001- 56 -LRB100 06347 HLH 18430 a

1    the provider to track purchases referred by such persons
2    include but are not limited to the use of a link on the
3    person's Internet website, promotional codes distributed
4    through the person's hand-delivered or mailed material,
5    and promotional codes distributed by the person through
6    radio or other broadcast media. The provisions of this
7    paragraph (2) shall apply only if the cumulative purchase
8    prices from sales of services subject to tax under this Act
9    by the provider to purchasers who are referred to the
10    provider by all persons in this State under such contracts
11    exceed $10,000 during the preceding 4 quarterly periods
12    ending on the last day of March, June, September, and
13    December. A provider meeting the requirements of this
14    paragraph (2) shall be presumed to be maintaining a place
15    of business in this State but may rebut this presumption by
16    submitting proof that the referrals or other activities
17    pursued within this State by such persons were not
18    sufficient to meet the nexus standards of the United States
19    Constitution during the preceding 4 quarterly periods.
20        (3) A provider having a contract with a person located
21    in this State under which:
22            (A) the provider sells the same or substantially
23        similar service subject to tax under this Act as the
24        person located in this State and does so using an
25        identical or substantially similar name, trade name,
26        or trademark as the person located in this State; and

 

 

10000SB0009sam001- 57 -LRB100 06347 HLH 18430 a

1            (B) the provider provides a commission or other
2        consideration to the person located in this State based
3        upon the sale of services subject to tax under this Act
4        by the provider.
5        The provisions of this paragraph (3) shall apply only
6    if the cumulative purchase prices from sales of services
7    subject to tax under this Act by the provider to purchasers
8    in this State under all such contracts exceed $10,000
9    during the preceding 4 quarterly periods ending on the last
10    day of March, June, September, and December.
11    "Purchase of service" means the acquisition of the repair,
12service, alteration, fitting, cleaning, painting, coating,
13towing, inspection, or maintenance of tangible personal
14property or tangible personal property that has been affixed to
15real estate, for a valuable consideration.
16    "Purchase price" means the consideration paid for a
17purchase of service, all services directly related to the
18purchase of service, and all tangible personal property
19transferred incident to the purchase of service, valued in
20money, whether received in money or otherwise, including cash,
21gift cards, reward points, credits, and property and shall be
22determined without any deduction on account of the cost of
23materials used, labor or service costs, or any other expense
24whatsoever. However, "purchase price" shall not include
25consideration paid for:
26        (1) any charge for a dishonored check;

 

 

10000SB0009sam001- 58 -LRB100 06347 HLH 18430 a

1        (2) any finance or credit charge, penalty or charge for
2    delayed payment, or discount for prompt payment;
3        (3) any purchase by a purchaser if the provider is
4    prohibited by federal or State constitution, treaty,
5    convention, statute or court decision from collecting the
6    tax from such purchaser;
7        (4) the isolated or occasional sale of services subject
8    to tax under this Act by a person who does not hold himself
9    out as being engaged (or who does not habitually engage) in
10    selling such service;
11        (5) any amounts added to a purchaser's bills because of
12    charges made pursuant to the tax imposed by this Act; and
13        (6) new construction, reconstruction, or expansion of
14    a building or structure.
15    In case credit is extended, the amount thereof shall be
16included only as and when payments are made.
17    "Purchaser" means any person who acquires the repair,
18service, alteration, fitting, cleaning, painting, coating,
19towing, inspection, or maintenance of tangible personal
20property or tangible personal property that has been affixed to
21real estate, for a valuable consideration.
22    "Supplier" means any person who makes sales of tangible
23personal property to providers for subsequent transfer
24incident to a sale of service subject to tax under this Act.
25    "Use" means the exercise by any person of any right or
26power over, or the enjoyment of, the services subject to tax

 

 

10000SB0009sam001- 59 -LRB100 06347 HLH 18430 a

1under this Act.
 
2    Section 15-10. Imposition of tax; calculation of tax.
3    (a) Effective January 1, 2018, except as otherwise provided
4in this Section, a tax is imposed upon the purchase, for use
5and not for resale, of the repair, servicing, alteration,
6fitting, cleaning, painting, coating, towing, inspection, or
7maintenance of tangible personal property or tangible personal
8property that has been affixed to real estate at the rate of 5%
9of the purchase price.
10    (b) Except as otherwise provided in subsection (e), if
11tangible personal property is transferred incident to a
12purchase of service, and if the provider separately states on
13the invoice the cost price of the tangible personal property
14transferred incident to the purchase of service, the tax is
15imposed on the difference between the total purchase price and
16the provider's cost price of the tangible personal property
17transferred.
18    (c) Except as otherwise provided in subsection (e), if
19tangible personal property is transferred incident to a
20purchase of service, and if the provider does not separately
21state on the invoice the cost price of the tangible personal
22property transferred incident to the purchase of service, tax
23is imposed on 80% of the purchase price.
24    (d) Except as otherwise provided in subsection (e), a
25provider that transfers tangible personal property incident to

 

 

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1sales of service subject to tax under this Act shall make an
2annual election prior to December 31 of each year to pay the
3tax imposed by this Act under either subsection (b) or
4subsection (c) for the following calendar year. A provider may
5not make an election regarding the method of calculating tax on
6a transaction-by-transaction basis. For a provider that fails
7to make an election pursuant to this subsection, the tax is
8imposed on 80% of the purchase price.
9    (e) A provider making sales of services subject to tax
10under this Act in which the aggregate annual cost price of
11tangible personal property transferred incident to all sales of
12services subject to tax under this Act is less than 3% of the
13aggregate annual total purchase prices from all sales of
14services subject to tax under this Act, may annually elect to
15calculate tax on 100% of the total purchase price for each
16purchase of service. A provider that does not elect to
17calculate tax as provided in this subsection must separately
18state on the invoice the cost price of the tangible personal
19property transferred incident to a purchase of service and
20calculate tax pursuant to subsection (b).
21    A provider making an election to calculate tax under this
22subsection may provide resale certificates under Section 2c of
23the Retailers' Occupation Tax Act to his or her suppliers of
24tangible personal property that will be transferred incident to
25sales of services subject to tax under this Act only if the
26provider also makes sales of that tangible personal property at

 

 

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1retail. A provider that provides resale certificates to his or
2her supplier must pay Retailers' Occupation Tax on the portion
3of the tangible personal property that is sold at retail.
4    Providers who do not also make sales of that tangible
5personal property at retail may not provide suppliers with
6certificates of resale, and their purchases of tangible
7personal property are subject to tax under the Use Tax Act.
8    (f) If any provider erroneously collects tax or collects
9more from the purchaser than the purchaser's liability for the
10transaction, the purchaser shall have a legal right to claim a
11refund of such amount from such provider. However, if such
12amount is not refunded to the purchaser for any reason, the
13provider is liable to pay such amount to the Department.
14    (g) The tax imposed by this Section 15-10 is not imposed
15with respect to any transaction in interstate commerce, to the
16extent such transaction may not, under the Constitution and
17statutes of the United States, be made the subject of taxation
18by this State.
 
19    Section 15-15. Transactions involving subcontractors.
20Providers making purchases of service from a subcontractor are
21exempt from tax under this Act in accordance with paragraph (1)
22of subsection (a) of Section 15-25. However, this exemption
23does not apply to use tax due on the tangible personal property
24transferred incident to the service. If a provider subcontracts
25a service subject to tax under this Act in which tangible

 

 

10000SB0009sam001- 62 -LRB100 06347 HLH 18430 a

1personal property is transferred, the provider does not incur a
2use tax liability on the cost price of any tangible personal
3property transferred to the provider by the subcontractor if
4the subcontractor (i) has paid or will pay use tax on his or
5her cost price of any tangible personal property transferred to
6the provider and (ii) certifies that fact in writing to the
7provider.
 
8    Section 15-20. Multi-state exemption. To prevent actual
9multi-state taxation of services that are subject to taxation
10under this Act, any purchaser or provider, upon proof that the
11purchaser or provider has paid a tax in another state on such
12service, shall be allowed a credit against the tax imposed by
13this Act, to the extent of the amount of the tax properly due
14and paid in the other state.
 
15    Section 15-25. Exemptions.
16    (a) The following purchasers are exempt from the tax
17imposed by this Act:
18        (1) Businesses making purchases of service for the
19    benefit of or in furtherance of the business. This
20    paragraph is exempt from the provisions of Section 15-60.
21        (2) Corporations, societies, associations,
22    foundations, or institutions organized and operated
23    exclusively for charitable, religious, or educational
24    purposes that have been issued an active tax exemption

 

 

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1    number by the Department under Section 1g of the Retailers'
2    Occupation Tax Act. This paragraph is exempt from the
3    provisions of Section 15-60.
4        (3) The federal government and its instrumentalities
5    that have been issued an active tax exemption number by the
6    Department under Section 1g of the Retailers' Occupation
7    Tax Act. This paragraph is exempt from the provisions of
8    Section 15-60.
9        (4) Government bodies that have been issued an active
10    tax exemption number by the Department under Section 1g of
11    the Retailers' Occupation Tax Act. This paragraph is exempt
12    from the provisions of Section 15-60.
13    (b) The purchase of the following services is exempt from
14the tax imposed by this Act:
15        (1) Laundry, dry cleaning, cloth pressing, dyeing, and
16    linen services, to the extent that those services are
17    subject to a separate tax imposed by the State. This
18    paragraph is exempt from the provisions of Section 15-60.
19        (2) Landscaping services, to the extent that those
20    services are subject to a separate tax imposed by the
21    State. This paragraph is exempt from the provisions of
22    Section 15-60.
23        (3) Services performed on tangible personal property
24    exempt under the Retailers' Occupation Tax Act, Use Tax
25    Act, Service Occupation Tax Act, or Service Use Tax Act.
26    This paragraph is exempt from the provisions of Section

 

 

10000SB0009sam001- 64 -LRB100 06347 HLH 18430 a

1    15-60.
 
2    Section 15-30. Collection of tax.
3    (a) Beginning with bills issued or charges collected for a
4purchase of service on and after January 1, 2018, the tax
5imposed by this Act shall be collected from the purchaser by
6any provider maintaining a place of business in this State at
7the rate stated in Section 15-10 with respect to the service
8subject to tax under this Act sold by such provider to or for
9the purchaser, and shall be remitted to the Department as
10provided in Section 15-50 of this Act. All sales of services
11subject to tax under this Act to a purchaser for use and not
12for resale are presumed subject to tax collection. Providers
13shall collect the tax from purchasers by adding the tax to the
14amount of the purchase price received from the purchaser for
15selling a service subject to tax under this Act to or for the
16purchaser. The tax imposed by the Act shall, when collected, be
17stated as a distinct item separate and apart from the purchase
18price of the service subject to tax under this Act. However, if
19it is not possible to state the tax separately, the Department
20may by rule exempt the purchase from this requirement if
21purchasers are notified by language on the invoice or other
22written notification or notified by a sign that the tax is
23included in the purchase price.
24    (b) Any person purchasing a service subject to tax under
25this Act for use and not for resale as to which there has been

 

 

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1no charge made to him of the tax imposed by Section 15-10 shall
2make payment of the tax imposed by Section 15-10 of this Act in
3the form and manner provided by the Department not later than
4the 20th day of the month following the month of purchase of
5the service.
 
6    Section 15-35. Registration of providers.
7    (a) A person who engages in business as a provider in this
8State shall register with the Department. Application for a
9certificate of registration shall be made to the Department, by
10electronic means, in the form and manner prescribed by the
11Department and shall contain any reasonable information the
12Department may require. Upon receipt of the application for a
13certificate of registration in proper form and manner, the
14Department shall issue to the applicant a certificate of
15registration.
16    The annual fee payable to the Department for each
17certificate of registration shall be $75. The fee shall be
18deposited into the Tax Compliance and Administration Fund. Each
19applicant for a certificate of registration shall pay the fee
20to the Department at the time of submitting its application for
21certificate registration to the Department. The Department
22shall require an applicant for a certificate of registration
23under this Section to electronically pay the fee. A separate
24annual fee shall be paid for each place of business at which a
25person who is required to procure a certificate of registration

 

 

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1under this Section proposes to sell a service in Illinois
2subject to tax under this Act.
3    (b) The Department may refuse to issue or reissue a
4certificate of registration to any applicant for the reasons
5set forth in Section 2505-380 of the Department of Revenue Law
6of the Civil Administrative Code of Illinois.
7    (c) Any person aggrieved by any decision of the Department
8under this Section may, within 20 days after notice of such
9decision, protest and request a hearing, whereupon the
10Department shall give notice to such person of the time and
11place fixed for such hearing and shall hold a hearing in
12conformity with the provisions of this Act and then issue its
13final administrative decision in the matter to such person. In
14the absence of such a protest within 20 days, the Department's
15decision shall become final without any further determination
16being made or notice given.
 
17    Section 15-40. Revocation of certificate of registration.
18    (a) The Department may, after notice and a hearing as
19provided herein, revoke the certificate of registration of any
20person who violates any of the provisions of this Act or
21regulation promulgated pursuant to this Act. Before revocation
22of a certificate of registration, the Department shall, within
2390 days after non-compliance and at least 7 days prior to the
24date of the hearing, give the person so accused notice in
25writing of the charge against him or her, and on the date

 

 

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1designated shall conduct a hearing upon this matter. The lapse
2of such 90-day period shall not preclude the Department from
3conducting revocation proceedings at a later date if necessary.
4Any hearing held under this Section shall be conducted by the
5Director or by any officer or employee of the Department
6designated in writing by the Director.
7    (b) The Department may revoke a certificate of registration
8for the reasons set forth in Section 2505-380 of the Department
9of Revenue Law of the Civil Administrative Code of Illinois.
10    (c) Upon the hearing of any such proceeding, the Director
11or any officer or employee of the Department designated in
12writing by the Director may administer oaths, and the
13Department may procure by its subpoena the attendance of
14witnesses and, by its subpoena duces tecum, the production of
15relevant books and papers. Any circuit court, upon application
16either of the accused or of the Department, may, by order duly
17entered, require the attendance of witnesses and the production
18of relevant books and papers before the Department in any
19hearing relating to the revocation of certificates of
20registration. Upon refusal or neglect to obey the order of the
21court, the court may compel obedience thereof by proceedings
22for contempt.
23    (d) The Department may, by application to any circuit
24court, obtain an injunction requiring any person who engages in
25business as a provider under this Act to obtain a certificate
26of registration. Upon refusal or neglect to obey the order of

 

 

10000SB0009sam001- 68 -LRB100 06347 HLH 18430 a

1the court, the court may compel obedience by proceedings for
2contempt.
 
3    Section 15-45. Tax collected as debt owed to State. The tax
4herein required to be collected by any provider maintaining a
5place of business in this State, and any such tax collected by
6that person, shall constitute a debt owed by that person to
7this State.
 
8    Section 15-50. Return and payment of tax by provider.
9    (a) Each provider who is required or authorized to collect
10the tax imposed by this Act shall make a return to the
11Department on or before the 20th day of each month for the
12preceding calendar month stating the following:
13        (1) the provider's name;
14        (2) the address of the provider's principal place of
15    business and the address of the principal place of business
16    (if that is a different address) from which the provider
17    engaged in the business of selling a service subject to tax
18    under this Act;
19        (3) total purchase price received by the provider for
20    all services subject to tax under this Act;
21        (4) amount of tax;
22        (5) the signature of the provider; and
23        (6) such other information as the Department
24    reasonably may require.

 

 

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1    Any amount which is required to be shown or reported on any
2return or other document under this Act shall, if such amount
3is not a whole-dollar amount, be increased to the nearest
4whole-dollar amount if the fractional part of a dollar is $0.50
5or more and decreased to the nearest whole-dollar amount if the
6fractional part of a dollar is less than $0.50. If a total
7amount of less than $1 is payable, refundable, or creditable,
8such amount shall be disregarded if it is less than $0.50 and
9shall be increased to $1 if it is $0.50 or more.
10    The provider making the return provided for in this Section
11shall, at the time of making such return, pay to the Department
12the amount of tax imposed by this Act, less a discount of 1.75%
13which is allowed to reimburse the provider for the expenses
14incurred in keeping records, billing the purchaser, preparing
15and filing returns, remitting the tax, and supplying data to
16the Department upon request. No discount may be claimed by a
17provider on returns not timely filed and for taxes not timely
18remitted.
19    (b) If the average monthly tax liability to the Department
20of the provider does not exceed $200, the Department may
21authorize the provider's returns to be filed on a
22quarter-annual basis, with the return for January, February,
23and March of a given year being due by April 20 of such year;
24with the return for April, May, and June of a given year being
25due by July 20 of such year; with the return for July, August,
26and September of a given year being due by October 20 of such

 

 

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1year; and with the return for October, November, and December
2of a given year being due by January 20 of the following year.
3    If the average monthly tax liability to the Department of
4the provider does not exceed $50, the Department may authorize
5the provider's returns to be filed on an annual basis, with the
6return for a given year being due by January 20 of the
7following year.
8    Such quarter-annual and annual returns, as to form and
9substance, shall be subject to the same requirements as monthly
10returns.
11    Notwithstanding any other provision in this Act concerning
12the time within which a provider may file a return, any such
13provider who ceases to engage in a kind of business which makes
14the person responsible for filing returns under this Act shall
15file a final return under this Act with the Department not more
16than one month after discontinuing such business.
17    Each provider whose average monthly liability to the
18Department under this Act was $10,000 or more during the
19preceding calendar year, excluding the month of highest
20liability and the month of lowest liability in such calendar
21year, shall make estimated payments to the Department on or
22before the 7th, 15th, 22nd, and last day of the month during
23which tax liability to the Department is incurred in an amount
24not less than the lower of either 22.5% of such provider's
25actual tax liability for the month or 25% of such provider's
26actual tax liability for the same calendar month of the

 

 

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1preceding year. The amount of such quarter-monthly payments
2shall be credited against the final tax liability of such
3provider's return for that month. Once applicable, the
4requirement of the making of quarter-monthly payments to the
5Department by taxpayers having an average monthly tax liability
6of $10,000 or more as determined in the manner provided in this
7paragraph shall continue until the taxpayer's average monthly
8liability to the Department during the preceding 4 complete
9calendar quarters (excluding the month of highest liability and
10the month of lowest liability) is less than $9,000 or until the
11taxpayer's average monthly liability to the Department as
12computed for each of the 4 preceding complete calendar quarters
13is less than $10,000. However, if a taxpayer can show the
14Department that a substantial change in the taxpayer's business
15has occurred which causes the taxpayer to anticipate that his
16average monthly tax liability for the reasonably foreseeable
17future will fall below the $10,000 threshold stated above, then
18such taxpayer may petition the Department for a change in the
19taxpayer's reporting status. The Department shall change the
20taxpayer's reporting status unless it finds that the change is
21seasonal in nature and not likely to be long term. If any such
22quarter-monthly payment is not paid at the time or in the
23amount required by this Section, then the taxpayer shall be
24liable for penalties and interest on the difference between the
25minimum amount due as a payment and the amount of such
26quarter-monthly payment actually and timely paid, except

 

 

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1insofar as the taxpayer has previously made payments for that
2month to the Department in excess of the minimum payments
3previously due as provided in this Section. The Department
4shall adopt rules to govern the quarter-monthly payment amount
5and quarter-monthly payment dates for taxpayers who file on
6other than a calendar monthly basis.
7    If any payment provided for in this Section exceeds the
8taxpayer's liabilities under this Act, as shown on an original
9monthly return, the Department shall, if requested by the
10taxpayer, issue to the taxpayer a credit memorandum no later
11than 30 days after the date of payment. The credit evidenced by
12such credit memorandum may be assigned by the taxpayer to a
13similar taxpayer under this Act, in accordance with reasonable
14rules and regulations to be prescribed by the Department. If no
15such request is made, the taxpayer may credit such excess
16payment against tax liability subsequently to be remitted to
17the Department under this Act, in accordance with reasonable
18rules and regulations prescribed by the Department. If the
19Department subsequently determines that all or any part of the
20credit taken was not actually due to the taxpayer, the
21taxpayer's 1.75% discount shall be reduced by 1.75% of the
22difference between the credit taken and that actually due, and
23that taxpayer shall be liable for penalties and interest on
24such difference.
25    (c) A provider who has a tax liability in the amount set
26forth in subsection (b) of Section 2505-210 of the Department

 

 

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1of Revenue Law of the Civil Administrative Code of Illinois
2shall make all payments required by rules of the Department by
3electronic funds transfer. Any provider not required to make
4payments by electronic funds transfer may make payments by
5electronic funds transfer with the permission of the
6Department. All providers required to make payments by
7electronic funds transfer and any providers authorized to
8voluntarily make payments by electronic funds transfer shall
9make those payments in the manner authorized by the Department.
10    (d) If a provider fails to sign a return within 30 days
11after the proper notice and demand for signature by the
12Department is received by the provider, the return shall be
13considered valid and any amount shown to be due on the return
14shall be deemed assessed.
 
15    Section 15-55. Claims; credit memorandum or refunds. If it
16appears, after claim therefore filed with the Department, that
17an amount of tax or penalty has been paid to the Department by
18the taxpayer which was not due under this Act, whether as the
19result of a mistake of fact or an error of law, except as
20hereinafter provided, then the Department shall issue a credit
21memorandum or refund to the person who made the erroneous
22payment or, if that person has died or become a person under
23legal disability, to his or her legal representative, as such.
24    If it is determined that the Department should issue a
25credit or refund under this Act, the Department may first apply

 

 

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1the amount thereof against any amount of tax or penalty due
2under this Act, or any other Act administered by the
3Department, from the person entitled to such credit or refund.
4For this purpose, if proceedings are pending to determine
5whether or not any tax or penalty is due under this Act, or any
6other Act administered by the Department, from such person, the
7Department may withhold issuance of the credit or refund
8pending the final disposition of such proceedings and may apply
9such credit or refund against any amount found to be due to the
10Department under this Act, or any other Act administered by the
11Department, as a result of such proceedings. The balance, if
12any, of the credit or refund shall be issued to the person
13entitled thereto.
14    If no tax or penalty is due and no proceeding is pending to
15determine whether such taxpayer is indebted to the Department
16for tax or penalty, the credit memorandum or refund shall be
17issued to the claimant; or (in the case of a credit memorandum)
18the credit memorandum may be assigned and set over by the
19lawful holder thereof, subject to reasonable rules of the
20Department, to any other person who is subject to this Act, and
21the amount thereof shall be applied by the Department against
22any tax or penalty due or to become due under this Act from
23such assignee.
24    As to any claim filed hereunder with the Department on and
25after each January 1 and July 1, no amount of tax or penalty
26erroneously paid (either in total or partial liquidation of a

 

 

10000SB0009sam001- 75 -LRB100 06347 HLH 18430 a

1tax or penalty under this Act) more than 3 years prior to such
2January 1 and July 1, respectively, shall be credited or
3refunded, except that if both the Department and the taxpayer
4have agreed to an extension of time to issue a notice of tax
5liability under this Act, the claim may be filed at any time
6prior to the expiration of the period agreed upon. No claim may
7be allowed for any amount paid to the Department, whether paid
8voluntarily or involuntarily, if paid in total or partial
9liquidation of an assessment which had become final before the
10claim for credit or refund to recover the amount so paid is
11filed with the Department, or if paid in total or partial
12liquidation of a judgment or order of court.
13    No claim may be allowed or refund made for any amount paid
14by or collected from any purchaser unless it appears that the
15claimant has unconditionally repaid to the purchaser any amount
16collected from the purchaser and retained by the claimant with
17respect to the same transaction under the Act.
18    Any credit or refund that is allowed under this Act shall
19bear interest at the rate and in the manner set forth in the
20Uniform Penalty and Interest Act.
21    In case the Department determines that the claimant is
22entitled to a refund, such refund shall be made only from such
23appropriation as may be available for that purpose. If it
24appears unlikely that the amount appropriated would permit
25everyone having a claim allowed during the period covered by
26such appropriation to elect to receive a cash refund, the

 

 

10000SB0009sam001- 76 -LRB100 06347 HLH 18430 a

1Department, by rule or regulation, shall provide for the
2payment of refunds in hardship cases and shall define what
3types of cases qualify as hardship cases.
 
4    Section 15-60. Sunset of exemptions, credits, and
5deductions. The application of every exemption, credit, and
6deduction against tax imposed by this Act that becomes law
7after the effective date of this Act shall be limited by a
8reasonable and appropriate sunset date. A taxpayer is not
9entitled to take the exemption, credit, or deduction beginning
10on the sunset date and thereafter. If a reasonable and
11appropriate sunset date is not specified in the Public Act that
12creates the exemption, credit, or deduction, a taxpayer shall
13not be entitled to take the exemption, credit, or deduction
14beginning 5 years after the effective date of the Public Act
15creating the exemption, credit, or deduction and thereafter.
 
16    Section 15-65. Distribution of proceeds. All moneys
17received by the Department under this Act shall be paid into
18the General Revenue Fund in the State Treasury.
 
19    Section 15-70. Rulemaking. The Department may adopt rules
20in accordance with the Illinois Administrative Procedure Act
21and prescribe forms relating to the administration and
22enforcement of this Act as it deems appropriate.
 

 

 

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1    Section 15-75. Incorporation by reference. All of the
2provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f,
35g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of
4the Retailers' Occupation Tax Act and all of the provisions of
5the Uniform Penalty and Interest Act, that are not inconsistent
6with this Act, apply to providers to the same extent as if
7those provisions were included in this Act. References in the
8incorporated Sections of the Retailers' Occupation Tax Act to
9retailers, to sellers, or to persons engaged in the business of
10selling tangible personal property mean providers when used in
11this Act. References in the incorporated Sections to sales of
12tangible personal property mean sales of services subject to
13tax under this Act when used in this Act.
 
14
ARTICLE 20. LANDSCAPING EXCISE TAX ACT

 
15    Section 20-1. Short title. This Act may be cited as the
16Landscaping Excise Tax Act.
 
17    Section 20-5. Definitions.
18    "Cost price" means the consideration paid by a provider to
19a supplier for a purchase of tangible personal property valued
20in money, whether paid in money or otherwise, including cash,
21credits and services, and shall be determined without any
22deduction on account of taxes paid by the provider for the
23purchase of tangible personal property or on account of any

 

 

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1expenses that are part of the selling price of the tangible
2personal property taxable under the Retailers' Occupation Tax
3Act and the Use Tax Act that are charged to the provider by a
4supplier. When a provider contracts out part or all of the
5services required in his sale of service subject to tax under
6this Act, it shall be presumed that the cost price to the
7provider of the tangible personal property transferred to him
8or her by his or her subcontractor is equal to 50% of the
9subcontractor's charges to the provider in the absence of proof
10of the consideration paid for the tangible personal property by
11the provider to the subcontractor.
12    "Department" means the Department of Revenue.
13    "Director" means the Director of Revenue.
14    "Landscaping services" means services performed by a
15person who arranges and modifies the natural condition of a
16given parcel or tract of land so as to render the land suitable
17for public or private use or enjoyment. Landscaping services
18include, but are not limited to, mowing, watering, and aerating
19lawns; weeding; mulching; raking leaves; tree and shrub
20trimming and removal; planting of trees, shrubs, flowering and
21non-flowering plants, and sod; spraying; fertilizing; applying
22chemicals; lawn and garden installation; constructing,
23remodeling, or repairing irrigation or lawn sprinkler systems,
24patios (other than asphalt, tar, macadam, or poured concrete),
25walkways (other than asphalt, tar, macadam, or poured
26concrete), fences, trellises, and retaining walls; grading

 

 

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1(such as the filling or leveling of topsoil for lawns and
2gardens), and snow plowing and removal.
3    "Person" means any natural individual, firm, trust,
4estate, partnership, association, joint stock company, joint
5venture, corporation, limited liability company, or a
6receiver, trustee, guardian, or other representative appointed
7by order of any court.
8    "Provider" means any person engaged in the business of
9providing landscaping services.
10    "Provider maintaining a place of business in this State",
11or any like term, means any of the following:
12        (1) A provider having or maintaining within this State,
13    directly or by a subsidiary, an office, distribution house,
14    sales house, warehouse, or other place of business, or any
15    agent or other representative operating within this State
16    under the authority of the provider or its subsidiary,
17    irrespective of whether such place of business or agent or
18    other representative is located here permanently or
19    temporarily, or whether such provider or subsidiary is
20    licensed to do business in this State.
21        (2) A provider having a contract with a person located
22    in this State under which the person, for a commission or
23    other consideration based upon the sale of services subject
24    to tax under this Act by the provider, directly or
25    indirectly refers potential customers to the provider by
26    providing to the potential customers a promotional code or

 

 

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1    other mechanism that allows the provider to track purchases
2    referred by such persons. Examples of mechanisms that allow
3    the provider to track purchases referred by such persons
4    include, but are not limited to, the use of a link on the
5    person's Internet website, promotional codes distributed
6    through the person's hand-delivered or mailed material,
7    and promotional codes distributed by the person through
8    radio or other broadcast media. The provisions of this
9    paragraph (2) shall apply only if the cumulative purchase
10    prices from sales of services subject to tax under this Act
11    by the provider to purchasers who are referred to the
12    provider by all persons in this State under such contracts
13    exceed $10,000 during the preceding 4 quarterly periods
14    ending on the last day of March, June, September, and
15    December. A provider meeting the requirements of this
16    paragraph (2) shall be presumed to be maintaining a place
17    of business in this State but may rebut this presumption by
18    submitting proof that the referrals or other activities
19    pursued within this State by such persons were not
20    sufficient to meet the nexus standards of the United States
21    Constitution during the preceding 4 quarterly periods.
22        (3) A provider having a contract with a person located
23    in this State under which:
24            (A) the provider sells the same or substantially
25        similar service subject to tax under this Act as the
26        person located in this State and does so using an

 

 

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1        identical or substantially similar name, trade name,
2        or trademark as the person located in this State; and
3            (B) the provider provides a commission or other
4        consideration to the person located in this State based
5        upon the sale of services subject to tax under this Act
6        by the provider.
7    The provisions of this paragraph (3) shall apply only if
8the cumulative purchase prices from sales of services subject
9to tax under this Act by the provider to purchasers in this
10State under all such contracts exceed $10,000 during the
11preceding 4 quarterly periods ending on the last day of March,
12June, September, and December.
13    "Purchase of service" means the acquisition of landscaping
14services for a valuable consideration.
15    "Purchase price" means the consideration paid for a
16purchase of service, all services directly related to the
17purchase of service, and all tangible personal property
18transferred incident to the purchase of service, valued in
19money, whether received in money or otherwise, including cash,
20gift cards, reward points, credits, and property and shall be
21determined without any deduction on account of the cost of
22materials used, labor or service costs, or any other expense
23whatsoever. "Purchase price" shall not include consideration
24paid for:
25            (1) any charge for a dishonored check;
26            (2) any finance or credit charge, penalty or charge

 

 

10000SB0009sam001- 82 -LRB100 06347 HLH 18430 a

1    for delayed payment, or discount for prompt payment;
2            (3) any purchase by a purchaser if the provider is
3    prohibited by federal or State constitution, treaty,
4    convention, statute, or court decision from collecting the
5    tax from such purchaser;
6            (4) the isolated or occasional sale of services
7    subject to tax under this Act by a person who does not hold
8    himself out as being engaged (or who does not habitually
9    engage) in selling such service; and
10            (5) any amounts added to a purchaser's bills
11    because of charges made pursuant to the tax imposed by this
12    Act.
13    In case credit is extended, the amount thereof shall be
14included only as and when payments are made.
15    "Purchaser" means any person who acquires landscaping
16services for a valuable consideration.
17    "Supplier" means any person who makes sales of tangible
18personal property to providers for subsequent transfer
19incident to a sale of service subject to tax under this Act.
20    "Use" means the exercise by any person of any right or
21power over, or the enjoyment of, the services subject to tax
22under this Act.
 
23    Section 20-10. Imposition of tax; calculation of tax.
24    (a) Effective January 1, 2018, except as otherwise provided
25in this Section, a tax is imposed upon the purchase, for use

 

 

10000SB0009sam001- 83 -LRB100 06347 HLH 18430 a

1and not for resale, of landscaping services at the rate of 5%
2of the purchase price.
3    (b) Except as otherwise provided in subsection (e), if
4tangible personal property is transferred incident to a
5purchase of service, and if the provider separately states on
6the invoice the cost price of the tangible personal property
7transferred incident to the purchase of service, the tax is
8imposed on the difference between the total purchase price and
9the provider's cost price of the tangible personal property
10transferred.
11    (c) Except as otherwise provided in subsection (e), if
12tangible personal property is transferred incident to a
13purchase of service, and if the provider does not separately
14state on the invoice the cost price of the tangible personal
15property transferred incident to the purchase of service, tax
16is imposed on 80% of the purchase price.
17    (d) Except as otherwise provided in subsection (e), a
18provider that transfers tangible personal property incident to
19sales of service subject to tax under this Act shall make an
20annual election prior to December 31 of each year to pay the
21tax imposed by this Act under either subsection (b) or
22subsection (c) for the following calendar year. A provider may
23not make an election regarding the method of calculating tax on
24a transaction-by-transaction basis. For a provider that fails
25to make an election under this subsection (d), the tax is
26imposed on 80% of the purchase price.

 

 

10000SB0009sam001- 84 -LRB100 06347 HLH 18430 a

1    (e) A provider making sales of services subject to tax
2under this Act in which the aggregate annual cost price of
3tangible personal property transferred incident to all sales of
4services subject to tax under this Act is less than 3% of the
5aggregate annual total purchase prices from all sales of
6services subject to tax under this Act, may annually elect to
7calculate tax on 100% of the total purchase price for each
8purchase of service. A provider that does not elect to
9calculate tax under this subsection (e) must separately state
10on the invoice the cost price of the tangible personal property
11transferred incident to a purchase of service and calculate tax
12under subsection (b).
13    A provider making an election to calculate tax under this
14subsection (e) may provide resale certificates under Section 2c
15of the Retailers' Occupation Tax Act to his or her suppliers of
16tangible personal property that will be transferred incident to
17sales of services subject to tax under this Act only if the
18provider also makes sales of that tangible personal property at
19retail. A provider that provides resale certificates to his or
20her supplier must pay Retailers' Occupation Tax on the portion
21of the tangible personal property that is sold at retail.
22    Providers who do not also make sales of that tangible
23personal property at retail may not provide suppliers with
24certificates of resale, and their purchases of tangible
25personal property are subject to tax under the Use Tax Act.
26    (f) If any provider erroneously collects tax or collects

 

 

10000SB0009sam001- 85 -LRB100 06347 HLH 18430 a

1more from the purchaser than the purchaser's liability for the
2transaction, the purchaser shall have a legal right to claim a
3refund of such amount from such provider. However, if such
4amount is not refunded to the purchaser for any reason, the
5provider is liable to pay such amount to the Department.
6    (g) The tax imposed by this Section is not imposed with
7respect to any transaction in interstate commerce, to the
8extent such transaction may not, under the Constitution and
9statutes of the United States, be made the subject of taxation
10by this State.
 
11    Section 20-15. Transactions involving subcontractors. If a
12provider subcontracts a service subject to tax under this Act
13in which tangible personal property is transferred, the
14provider does not incur a use tax liability on the cost price
15of any tangible personal property transferred to the provider
16by the subcontractor if the subcontractor (i) has paid or will
17pay use tax on his or her cost price of any tangible personal
18property transferred to the provider and (ii) certifies that
19fact in writing to the provider.
 
20    Section 20-20. Multi-state exemption. To prevent actual
21multi-state taxation of services that are subject to taxation
22under this Act, any purchaser or provider, upon proof that the
23purchaser or provider has paid a tax in another state on such
24service, shall be allowed a credit against the tax imposed by

 

 

10000SB0009sam001- 86 -LRB100 06347 HLH 18430 a

1this Act, to the extent of the amount of the tax properly due
2and paid in the other state.
 
3    Section 20-25. Exemptions.
4    (a) The following purchasers are exempt from the tax
5imposed by this Act:
6        (1) Corporations, societies, associations,
7    foundations, or institutions organized and operated
8    exclusively for charitable, religious, or educational
9    purposes that have been issued an active tax exemption
10    number by the Department under Section 1g of the Retailers'
11    Occupation Tax Act. This paragraph is exempt from the
12    provisions of Section 20-60 of this Act.
13        (2) The federal government and its instrumentalities
14    that have been issued an active tax exemption number by the
15    Department under Section 1g of the Retailers' Occupation
16    Tax Act. This paragraph is exempt from the provisions of
17    Section 20-60 of this Act.
18        (3) Government bodies that have been issued an active
19    tax exemption number by the Department under Section 1g of
20    the Retailers' Occupation Tax Act. This paragraph is exempt
21    from the provisions of Section 20-60 of this Act.
22    (b) The purchase of the following services is exempt from
23the tax imposed by this Act:
24        (1) Repair and maintenance services, to the extent that
25    those services are subject to a separate tax imposed by the

 

 

10000SB0009sam001- 87 -LRB100 06347 HLH 18430 a

1    State. This paragraph is exempt from the provisions of
2    Section 20-60 of this Act.
3        (2) Services performed on tangible personal property
4    exempt under the Retailers' Occupation Tax Act, Use Tax
5    Act, Service Occupation Tax Act, or Service Use Tax Act.
6    This paragraph is exempt from the provisions of Section
7    20-60 of this Act.
8        (3) Landscaping services that qualify as production
9    agriculture as defined in Section 2-35 of the Retailers'
10    Occupation Tax Act. This paragraph is exempt from the
11    provisions of Section 20-60 of this Act.
 
12    Section 20-30. Collection of tax.
13    (a) Beginning with bills issued or charges collected for a
14purchase of service on and after January 1, 2018, the tax
15imposed by this Act shall be collected from the purchaser by
16any provider maintaining a place of business in this State at
17the rate under Section 20-10 of this Act with respect to the
18service subject to tax under this Act sold by such provider to
19or for the purchaser, and shall be remitted to the Department
20as provided in Section 20-50 of this Act. All sales of services
21subject to tax under this Act to a purchaser for use and not
22for resale are presumed subject to tax collection. Providers
23shall collect the tax from purchasers by adding the tax to the
24amount of the purchase price received from the purchaser for
25selling a service subject to tax under this Act to or for the

 

 

10000SB0009sam001- 88 -LRB100 06347 HLH 18430 a

1purchaser. The tax imposed by the Act shall, when collected, be
2stated as a distinct item separate and apart from the purchase
3price of the service subject to tax under this Act. Where it is
4not possible to state the tax separately, the Department may by
5rule exempt such purchases from this requirement if purchasers
6are notified by language on the invoice or other written
7notification or notified by a sign that the tax is included in
8the purchase price.
9    (b) Any person purchasing a service subject to tax under
10this Act for use and not for resale as to which there has been
11no charge made to him of the tax imposed by Section 20-10 shall
12make payment of the tax imposed by Section 20-10 of this Act in
13the form and manner provided by the Department not later than
14the 20th day of the month following the month of purchase of
15the service.
 
16    Section 20-35. Registration of providers.
17    (a) A person who engages in business as a provider in this
18State shall register with the Department. Application for a
19certificate of registration shall be made to the Department, by
20electronic means, in the form and manner prescribed by the
21Department and shall contain any reasonable information the
22Department may require. Upon receipt of the application for a
23certificate of registration in proper form and manner, the
24Department shall issue to the applicant a certificate of
25registration.

 

 

10000SB0009sam001- 89 -LRB100 06347 HLH 18430 a

1    The annual fee payable to the Department for each
2certificate of registration shall be $75. The fee shall be
3deposited into the Tax Compliance and Administration Fund. Each
4applicant for a certificate of registration shall pay the fee
5to the Department at the time of submitting the application.
6The Department shall require an applicant for a certificate of
7registration under this Section to electronically pay the fee.
8A separate annual fee shall be paid for each place of business
9at which a person who is required to procure a certificate of
10registration under this Section proposes to sell a service in
11this State subject to tax under this Act.
12    (b) The Department may refuse to issue or reissue a
13certificate of registration to any applicant for the reasons
14set forth in Section 2505-380 of the Department of Revenue Law
15of the Civil Administrative Code of Illinois.
16    (c) Any person aggrieved by any decision of the Department
17under this Section may, within 20 days after notice of such
18decision, protest and request a hearing, whereupon the
19Department shall give notice to such person of the time and
20place fixed for such hearing and shall hold a hearing in
21conformity with the provisions of this Act and then issue its
22final administrative decision in the matter to such person. In
23the absence of such a protest within 20 days, the Department's
24decision shall become final without any further determination
25being made or notice given.
 

 

 

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1    Section 20-40. Revocation of certificate of registration.
2    (a) The Department may, after notice and a hearing as
3provided in Section 20-30, revoke the certificate of
4registration of any person who violates any of the provisions
5of this Act or regulation promulgated pursuant to this Act.
6Before revocation of a certificate of registration, the
7Department shall, within 90 days after non-compliance and at
8least 7 days prior to the date of the hearing, give the person
9so accused notice in writing of the charge against him or her,
10and on the date designated shall conduct a hearing upon this
11matter. The lapse of the 90 day period shall not preclude the
12Department from conducting revocation proceedings at a later
13date if necessary. Any hearing held under this Section shall be
14conducted by the Director or by any officer or employee of the
15Department designated in writing by the Director.
16    (b) The Department may revoke a certificate of registration
17for the reasons set forth in Section 2505-380 of the Department
18of Revenue Law of the Civil Administrative Code of Illinois.
19    (c) Upon the hearing of any such proceeding, the Director
20or any officer or employee of the Department designated in
21writing by the Director may administer oaths, and the
22Department may procure by its subpoena the attendance of
23witnesses and, by its subpoena duces tecum, the production of
24relevant books and papers. Any circuit court, upon application
25either of the accused or of the Department, may, by order duly
26entered, require the attendance of witnesses and the production

 

 

10000SB0009sam001- 91 -LRB100 06347 HLH 18430 a

1of relevant books and papers before the Department in any
2hearing relating to the revocation of certificates of
3registration. Upon refusal or neglect to obey the order of the
4court, the court may compel obedience thereof by proceedings
5for contempt.
6    (d) The Department may, by application to any circuit
7court, obtain an injunction requiring any person who engages in
8business as a provider under this Act to obtain a certificate
9of registration. Upon refusal or neglect to obey the order of
10the court, the court may compel obedience by proceedings for
11contempt.
 
12    Section 20-45. Tax collected as debt owed to State. The tax
13required to be collected under this Act by any provider
14maintaining a place of business in this State, and any such tax
15collected by that person, shall constitute a debt owed by that
16person to this State.
 
17    Section 20-50. Return and payment of tax by provider.
18    (a) Each provider who is required or authorized to collect
19the tax imposed by this Act shall make a return to the
20Department on or before the 20th day of each month for the
21preceding calendar month stating the following:
22        (1) the provider's name;
23        (2) the address of the provider's principal place of
24    business and the address of the principal place of business

 

 

10000SB0009sam001- 92 -LRB100 06347 HLH 18430 a

1    (if that is a different address) from which the provider
2    engaged in the business of selling a service subject to tax
3    under this Act;
4        (3) total purchase price received by the provider for
5    all services subject to tax under this Act;
6        (4) amount of tax, computed upon item (3) at the rate
7    stated in Section 20-10;
8        (5) the signature of the provider; and
9        (6) such other information as the Department
10    reasonably may require.
11    Any amount which is required to be shown or reported on any
12return or other document under this Act shall, if such amount
13is not a whole-dollar amount, be increased to the nearest
14whole-dollar amount if the fractional part of a dollar is $0.50
15or more and decreased to the nearest whole-dollar amount if the
16fractional part of the dollar is less than $0.50. If a total
17amount of less than $1 is payable, refundable, or creditable,
18such amount shall be disregarded if it is less than $0.50 and
19shall be increased to $1 if it is $0.50 or more.
20    The provider making the return provided for in this Section
21shall, at the time of making such return, pay to the Department
22the amount of tax imposed by this Act, less a discount of 1.75%
23which is allowed to reimburse the provider for the expenses
24incurred in keeping records, billing the purchaser, preparing
25and filing returns, remitting the tax, and supplying data to
26the Department upon request. No discount may be claimed by a

 

 

10000SB0009sam001- 93 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 94 -LRB100 06347 HLH 18430 a

1    Each provider whose average monthly liability to the
2Department under this Act was $10,000 or more during the
3preceding calendar year, excluding the month of highest
4liability and the month of lowest liability in such calendar
5year, shall make estimated payments to the Department on or
6before the 7th, 15th, 22nd, and last day of the month during
7which tax liability to the Department is incurred in an amount
8not less than the lower of either 22.5% of such provider's
9actual tax liability for the month or 25% of such provider's
10actual tax liability for the same calendar month of the
11preceding year. The amount of the quarter-monthly payments
12shall be credited against the final tax liability of the
13provider's return for that month. Once applicable, the
14requirement of the making of quarter-monthly payments to the
15Department by taxpayers having an average monthly tax liability
16of $10,000 or more as determined in a manner provided in this
17paragraph shall continue until such taxpayer's average monthly
18liability to the Department during the preceding 4 complete
19calendar quarters (excluding the month of highest liability and
20the month of lowest liability) is less than $9,000 or until
21such taxpayer's average monthly liability to the Department as
22computed for each of the 4 preceding complete calendar quarters
23is less than $10,000. However, if a taxpayer can show the
24Department that a substantial change in the taxpayer's business
25has occurred which causes the taxpayer to anticipate that his
26average monthly tax liability for the reasonably foreseeable

 

 

10000SB0009sam001- 95 -LRB100 06347 HLH 18430 a

1future will fall below the $10,000 threshold stated above, then
2such taxpayer may petition the Department for a change in such
3taxpayer's reporting status unless it finds that such change is
4seasonal in nature and not likely to be long term. If any such
5quarter-monthly payment is not paid at the time or in the
6amount required by this Section, then the taxpayer shall be
7liable for penalties and interest on the difference between the
8minimum amount due as a payment and the amount of such
9quarter-monthly payment actually and timely paid, except
10insofar as the taxpayer has previously made payments for that
11month to the Department in excess of the minimum payments
12previously due as provided in this Section. The Department
13shall adopt rules to govern the quarter-monthly payment amount
14and quarter-monthly payment dates for taxpayers who file on
15other than a calendar monthly basis.
16    If any payment provided for in this Section exceeds the
17taxpayer's liabilities under this Act, as shown on an original
18monthly return, the Department shall, if requested by the
19taxpayer, issue to the taxpayer a credit memorandum no later
20than 30 days after the date of payment. The credit evidenced by
21such credit memorandum may be assigned by the taxpayer to a
22similar taxpayer under this Act, in accordance with reasonable
23rules and regulations to be prescribed by the Department. If no
24such request is made, the taxpayer may credit such excess
25payment against tax liability subsequently to be remitted to
26the Department under this Act, in accordance with reasonable

 

 

10000SB0009sam001- 96 -LRB100 06347 HLH 18430 a

1rules and regulations prescribed by the Department. If the
2Department subsequently determines that all or any part of the
3credit taken was not actually due to the taxpayer, the
4taxpayer's 1.75% discount shall be reduced by 1.75% of the
5difference between the credit taken and that actually due, and
6that taxpayer shall be liable for penalties and interest on
7such difference.
8    (c) A provider who has a tax liability in the amount set
9forth in subsection (b) of Section 2505-210 of the Department
10of Revenue Law of the Civil Administrative Code of Illinois
11shall make all payments required by rules of the Department by
12electronic funds transfer. Any provider not required to make
13payments by electronic funds transfer may make payments by
14electronic funds transfer with the permission of the
15Department. All providers required to make payments by
16electronic funds transfer and any providers authorized to
17voluntarily make payments by electronic funds transfer shall
18make those payments in the manner authorized by the Department.
19    (d) If a provider fails to sign a return within 30 days
20after the proper notice and demand for signature by the
21Department is received by the provider, the return shall be
22considered valid and any amount shown to be due on the return
23shall be deemed assessed.
 
24    Section 20-55. Claims; credit memorandum or refunds.
25    If it appears, after claim therefore filed with the

 

 

10000SB0009sam001- 97 -LRB100 06347 HLH 18430 a

1Department, that an amount of tax or penalty has been paid to
2the Department by the taxpayer which was not due under this
3Act, whether as the result of a mistake of fact or an error of
4law, except as hereinafter provided, then the Department shall
5issue a credit memorandum or refund to the person who made the
6erroneous payment or, if that person has died or become a
7person under legal disability, to his or her legal
8representative, as such.
9    If it is determined that the Department should issue a
10credit or refund under this Act, the Department may first apply
11the amount thereof against any amount of tax or penalty due
12under this Act, or any other Act administered by the
13Department, from the person entitled to such credit or refund.
14For this purpose, if proceedings are pending to determine
15whether or not any tax or penalty is due under this Act, or any
16other Act administered by the Department, from such person, the
17Department may withhold issuance of the credit or refund
18pending the final disposition of such proceedings and may apply
19such credit or refund against any amount found to be due to the
20Department under this Act, or any other Act administered by the
21Department, as a result of such proceedings. The balance, if
22any, of the credit or refund shall be issued to the person
23entitled thereto.
24    If no tax or penalty is due and no proceeding is pending to
25determine whether such taxpayer is indebted to the Department
26for tax or penalty, the credit memorandum or refund shall be

 

 

10000SB0009sam001- 98 -LRB100 06347 HLH 18430 a

1issued to the claimant; or (in the case of a credit memorandum)
2the credit memorandum may be assigned and set over by the
3lawful holder thereof, subject to reasonable rules of the
4Department, to any other person who is subject to this Act, and
5the amount thereof shall be applied by the Department against
6any tax or penalty due or to become due under this Act from
7such assignee.
8    As to any claim filed hereunder with the Department on and
9after each January 1 and July 1, no amount of tax or penalty
10erroneously paid (either in total or partial liquidation of a
11tax or penalty under this Act) more than 3 years prior to such
12January 1 and July 1, respectively, shall be credited or
13refunded, except that if both the Department and the taxpayer
14have agreed to an extension of time to issue a notice of tax
15liability under this Act, the claim may be filed at any time
16prior to the expiration of the period agreed upon.
17    No claim may be allowed for any amount paid to the
18Department, whether paid voluntarily or involuntarily, if paid
19in total or partial liquidation of an assessment which had
20become final before the claim for credit or refund to recover
21the amount so paid is filed with the Department, or if paid in
22total or partial liquidation of a judgment or order of court.
23No claim may be allowed or refund made for any amount paid by
24or collected from any purchaser unless it appears that the
25claimant has unconditionally repaid to the purchaser any amount
26collected from the purchaser and retained by the claimant with

 

 

10000SB0009sam001- 99 -LRB100 06347 HLH 18430 a

1respect to the same transaction under the Act.
2    Any credit or refund that is allowed under this Act shall
3bear interest at the rate and in the manner set forth in the
4Uniform Penalty and Interest Act.
5    In case the Department determines that the claimant is
6entitled to a refund, such refund shall be made only from such
7appropriation as may be available for that purpose. If it
8appears unlikely that the amount appropriated would permit
9everyone having a claim allowed during the period covered by
10such appropriation to elect to receive a cash refund, the
11Department, by rule or regulation, shall provide for the
12payment of refunds in hardship cases and shall define what
13types of cases qualify as hardship cases.
 
14    Section 20-60. Sunset of exemptions, credits, and
15deductions.
16    The application of every exemption, credit, and deduction
17against tax imposed by this Act that becomes law after the
18effective date of this Act shall be limited by a reasonable and
19appropriate sunset date. A taxpayer is not entitled to take the
20exemption, credit, or deduction beginning on the sunset date
21and thereafter. If a reasonable and appropriate sunset date is
22not specified in the Public Act that creates the exemption,
23credit, or deduction, a taxpayer shall not be entitled to take
24the exemption, credit, or deduction beginning 5 years after the
25effective date of the Public Act creating the exemption,

 

 

10000SB0009sam001- 100 -LRB100 06347 HLH 18430 a

1credit, or deduction and thereafter.
 
2    Section 20-65. Distribution of proceeds. All moneys
3received by the Department under this Act shall be paid into
4the General Revenue Fund in the State Treasury.
 
5    Section 20-70. Department's authority to adopt rules. The
6Department is authorized to adopt and enforce reasonable rules
7under the Illinois Administrative Procedure Act, and to
8prescribe forms relating to the administration and enforcement
9of this Act, as it may deem appropriate.
 
10    Section 20-75. Incorporation by reference. All of the
11provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f,
125g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of
13the Retailers' Occupation Tax Act and all of the provisions of
14the Uniform Penalty and Interest Act, that are not inconsistent
15with this Act, apply to providers to the same extent as if
16those provisions were included in this Act. References in the
17incorporated Sections of the Retailers' Occupation Tax Act to
18retailers, to sellers, or to persons engaged in the business of
19selling tangible personal property mean providers when used in
20this Act. References in the incorporated Sections to sales of
21tangible personal property mean sales of services subject to
22tax under this Act when used in this Act.
 

 

 

10000SB0009sam001- 101 -LRB100 06347 HLH 18430 a

1    Section 20-80. Sourcing. The purchase of landscaping
2services shall be sourced to the location of the parcel or
3tract of land where the benefit of the landscaping services is
4realized.
 
5
ARTICLE 25. LAUNDRY AND DRYCLEANING EXCISE TAX ACT

 
6    Section 25-1. Short title. This Act may be cited as the
7Laundry and Drycleaning Excise Tax Act.
 
8    Section 25-5. Definitions.
9    "Cost price" means the consideration paid by a provider to
10a supplier for a purchase of tangible personal property valued
11in money, whether paid in money or otherwise, including cash,
12credits and services, and shall be determined without any
13deduction on account of taxes paid by the provider for the
14purchase of tangible personal property or on account of any
15expenses that are part of the selling price of the tangible
16personal property taxable under the Retailers' Occupation Tax
17Act and the Use Tax Act that are charged to the provider by a
18supplier. When a provider contracts out part or all of the
19services required in his sale of service subject to tax under
20this Act, it shall be presumed that the cost price to the
21provider of the tangible personal property transferred to him
22or her by his or her subcontractor is equal to 50% of the
23subcontractor's charges to the provider in the absence of proof

 

 

10000SB0009sam001- 102 -LRB100 06347 HLH 18430 a

1of the consideration paid for the tangible personal property by
2the provider to the subcontractor.
3    "Department" means the Department of Revenue.
4    "Director" means the Director of Revenue.
5    "Person" means any natural individual, firm, trust,
6estate, partnership, association, joint stock company, joint
7venture, corporation, limited liability company, or a
8receiver, trustee, guardian, or other representative appointed
9by order of any court.
10    "Provider" means any person engaged in the business of
11providing, furnishing, selling, or supplying laundry,
12drycleaning, cloth pressing, dyeing, or linen service.
13    "Provider maintaining a place of business in this State",
14or any like term, means and includes any of the following:
15        (1) A provider having or maintaining within this State,
16    directly or by a subsidiary, an office, distribution house,
17    sales house, warehouse or other place of business, or any
18    agent or other representative operating within this State
19    under the authority of the provider or its subsidiary,
20    irrespective of whether such place of business or agent or
21    other representative is located here permanently or
22    temporarily, or whether such provider or subsidiary is
23    licensed to do business in this State.
24        (2) A provider having a contract with a person located
25    in this State under which the person, for a commission or
26    other consideration based upon the sale of services subject

 

 

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1    to tax under this Act by the provider, directly or
2    indirectly refers potential customers to the provider by
3    providing to the potential customers a promotional code or
4    other mechanism that allows the provider to track purchases
5    referred by such persons. Examples of mechanisms that allow
6    the provider to track purchases referred by such persons
7    include but are not limited to the use of a link on the
8    person's Internet website, promotional codes distributed
9    through the person's hand-delivered or mailed material,
10    and promotional codes distributed by the person through
11    radio or other broadcast media. The provisions of this
12    paragraph (2) shall apply only if the cumulative purchase
13    prices from sales of services subject to tax under this Act
14    by the provider to purchasers who are referred to the
15    provider by all persons in this State under such contracts
16    exceed $10,000 during the preceding 4 quarterly periods
17    ending on the last day of March, June, September, and
18    December. A provider meeting the requirements of this
19    paragraph (2) shall be presumed to be maintaining a place
20    of business in this State but may rebut this presumption by
21    submitting proof that the referrals or other activities
22    pursued within this State by such persons were not
23    sufficient to meet the nexus standards of the United States
24    Constitution during the preceding 4 quarterly periods.
25        (3) A provider having a contract with a person located
26    in this State under which:

 

 

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1            (A) the provider sells the same or substantially
2        similar service subject to tax under this Act as the
3        person located in this State and does so using an
4        identical or substantially similar name, trade name,
5        or trademark as the person located in this State; and
6            (B) the provider provides a commission or other
7        consideration to the person located in this State based
8        upon the sale of services subject to tax under this Act
9        by the provider.
10        The provisions of this paragraph (3) shall apply only
11    if the cumulative purchase prices from sales of services
12    subject to tax under this Act by the provider to purchasers
13    in this State under all such contracts exceed $10,000
14    during the preceding 4 quarterly periods ending on the last
15    day of March, June, September, and December.
16    "Purchase of service" means the acquisition of laundry,
17drycleaning, cloth pressing, dyeing, or linen service for a
18valuable consideration.
19    "Purchase price" means the consideration paid for a
20purchase of service, all services directly related to the
21purchase of service, and all tangible personal property
22transferred incident to the purchase of service, valued in
23money, whether received in money or otherwise, including cash,
24gift cards, reward points, credits, and property and shall be
25determined without any deduction on account of the cost of
26materials used, labor or service costs, or any other expense

 

 

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1whatsoever. However, "purchase price" shall not include
2consideration paid for:
3        (1) any charge for a dishonored check;
4        (2) any finance or credit charge, penalty or charge for
5    delayed payment, or discount for prompt payment;
6        (3) any purchase by a purchaser if the provider is
7    prohibited by federal or State constitution, treaty,
8    convention, statute or court decision from collecting the
9    tax from such purchaser;
10        (4) the isolated or occasional sale of services subject
11    to tax under this Act by a person who does not hold himself
12    out as being engaged (or who does not habitually engage) in
13    selling such service; and
14        (5) any amounts added to a purchaser's bills because of
15    charges made pursuant to the tax imposed by this Act.
16    In case credit is extended, the amount thereof shall be
17included only as and when payments are made.
18    "Purchaser" means any person who, for a valuable
19consideration, acquires laundry, drycleaning, cloth pressing,
20dyeing, or linen service.
21    "Supplier" means any person who makes sales of tangible
22personal property to providers for subsequent transfer
23incident to a sale of service subject to tax under this Act.
24    "Use" means the exercise by any person of any right or
25power over, or the enjoyment of, the services subject to tax
26under this Act.
 

 

 

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1    Section 25-10. Imposition of tax; calculation of tax.
2    (a) Effective January 1, 2018, except as otherwise provided
3in this Section, a tax is imposed upon the purchase, for use
4and not for resale, of laundry, drycleaning, cloth pressing,
5dyeing, or linen service at the rate of 5% of the purchase
6price.
7    (b) Except as otherwise provided in subsection (e), if
8tangible personal property is transferred incident to a
9purchase of service, and if the provider separately states on
10the invoice the cost price of the tangible personal property
11transferred incident to the purchase of service, the tax is
12imposed on the difference between the total purchase price and
13the provider's cost price of the tangible personal property
14transferred.
15    (c) Except as otherwise provided in subsection (e), if
16tangible personal property is transferred incident to a
17purchase of service, and if the provider does not separately
18state on the invoice the cost price of the tangible personal
19property transferred incident to the purchase of service, tax
20is imposed on 80% of the purchase price.
21    (d) Except as otherwise provided in subsection (e), a
22provider that transfers tangible personal property incident to
23sales of service subject to tax under this Act shall make an
24annual election prior to December 31 of each year to pay the
25tax imposed by this Act under either subsection (b) or

 

 

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1subsection (c) for the following calendar year. A provider may
2not make an election regarding the method of calculating tax on
3a transaction-by-transaction basis. For a provider that fails
4to make an election pursuant to this subsection, the tax is
5imposed on 80% of the purchase price.
6    (e) A provider making sales of services subject to tax
7under this Act in which the aggregate annual cost price of
8tangible personal property transferred incident to all sales of
9services subject to tax under this Act is less than 3% of the
10aggregate annual total purchase prices from all sales of
11services subject to tax under this Act, may annually elect to
12calculate tax on 100% of the total purchase price for each
13purchase of service. A provider that does not elect to
14calculate tax as provided in this subsection must separately
15state on the invoice the cost price of the tangible personal
16property transferred incident to a purchase of service and
17calculate tax pursuant to subsection (b).
18    A provider making an election to calculate tax under this
19subsection may provide resale certificates under Section 2c of
20the Retailers' Occupation Tax Act to his or her suppliers of
21tangible personal property that will be transferred incident to
22sales of services subject to tax under this Act only if the
23provider also makes sales of that tangible personal property at
24retail. A provider that provides resale certificates to his or
25her supplier must pay Retailers' Occupation Tax on the portion
26of the tangible personal property that is sold at retail.

 

 

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1    Providers who do not also make sales of that tangible
2personal property at retail may not provide suppliers with
3certificates of resale, and their purchases of tangible
4personal property are subject to tax under the Use Tax Act.
5    (f) If any provider erroneously collects tax or collects
6more from the purchaser than the purchaser's liability for the
7transaction, the purchaser shall have a legal right to claim a
8refund of such amount from such provider. However, if such
9amount is not refunded to the purchaser for any reason, the
10provider is liable to pay such amount to the Department.
11    (g) The tax imposed by this Section 25-10 is not imposed
12with respect to any transaction in interstate commerce, to the
13extent such transaction may not, under the Constitution and
14statutes of the United States, be made the subject of taxation
15by this State.
 
16    Section 25-15. Transactions involving subcontractors. If a
17provider subcontracts a service subject to tax under this Act
18in which tangible personal property is transferred, the
19provider does not incur a use tax liability on the cost price
20of any tangible personal property transferred to the provider
21by the subcontractor if the subcontractor (i) has paid or will
22pay a use tax on his or her cost price of any tangible personal
23property transferred to the provider and (ii) certifies that
24fact in writing to the provider.
 

 

 

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1    Section 25-20. Multi-state exemption. To prevent actual
2multi-state taxation of services that are subject to taxation
3under this Act, any purchaser or provider, upon proof that the
4purchaser or provider has paid a tax in another state on such
5service, shall be allowed a credit against the tax imposed by
6this Act, to the extent of the amount of the tax properly due
7and paid in the other state.
 
8    Section 25-25. Exemptions.
9    (a) The following purchasers are exempt from the tax
10imposed by this Act:
11        (1) Corporations, societies, associations,
12    foundations, or institutions organized and operated
13    exclusively for charitable, religious or educational
14    purposes that have been issued an active tax exemption
15    number by the Department under Section 1g of the Retailers'
16    Occupation Tax Act. This paragraph is exempt from the
17    provisions of Section 25-60.
18        (2) The federal government and its instrumentalities
19    that have been issued an active tax exemption number by the
20    Department under Section 1g of the Retailers' Occupation
21    Tax Act. This paragraph is exempt from the provisions of
22    Section 25-60.
23        (3) Government bodies that have been issued an active
24    tax exemption number by the Department under Section 1g of
25    the Retailers' Occupation Tax Act. This paragraph is exempt

 

 

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1    from the provisions of Section 25-60.
2    (b) The purchase of the following services is exempt from
3the tax imposed by this Act:
4        (1) Repair and maintenance services, to the extent that
5    those services are subject to a separate tax imposed by the
6    State. This paragraph is exempt from the provisions of
7    Section 25-60.
8        (2) Services performed on tangible personal property
9    exempt under the Retailers' Occupation Tax Act, Use Tax
10    Act, Service Occupation Tax Act, or Service Use Tax Act.
11    This paragraph is exempt from the provisions of Section
12    25-60.
 
13    Section 25-30. Collection of tax.
14    (a) Beginning with bills issued or charges collected for a
15purchase of service on and after January 1, 2018, the tax
16imposed by this Act shall be collected from the purchaser by
17any provider maintaining a place of business in this State at
18the rate stated in Section 25-10 with respect to the service
19subject to tax under this Act sold by such provider to or for
20the purchaser, and shall be remitted to the Department as
21provided in Section 25-50 of this Act. All sales of services
22subject to tax under this Act to a purchaser for use and not
23for resale are presumed subject to tax collection. Providers
24shall collect the tax from purchasers by adding the tax to the
25amount of the purchase price received from the purchaser for

 

 

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1selling a service subject to tax under this Act to or for the
2purchaser. The tax imposed by the Act shall when collected be
3stated as a distinct item separate and apart from the purchase
4price of the service subject to tax under this Act. However,
5where it is not possible to state the tax separately, the
6Department may by rule exempt such purchases from this
7requirement if purchasers are notified by language on the
8invoice or other written notification or notified by a sign
9that the tax is included in the purchase price.
10    (b) Any person purchasing a service subject to tax under
11this Act for use and not for resale as to which there has been
12no charge made to him of the tax imposed by Section 25-10 shall
13make payment of the tax imposed by Section 25-10 of this Act in
14the form and manner provided by the Department not later than
15the 20th day of the month following the month of purchase of
16the service.
 
17    Section 25-35. Registration of providers.
18    (a) A person who engages in business as a provider in this
19State shall register with the Department. Application for a
20certificate of registration shall be made to the Department, by
21electronic means, in the form and manner prescribed by the
22Department, and shall contain any reasonable information the
23Department may require. Upon receipt of the application for a
24certificate of registration in proper form and manner, the
25Department shall issue to the applicant a certificate of

 

 

10000SB0009sam001- 112 -LRB100 06347 HLH 18430 a

1registration.
2    The annual fee payable to the Department for each
3certificate of registration shall be $75. The fee shall be
4deposited into the Tax Compliance and Administration Fund. Each
5applicant for a certificate of registration shall pay the fee
6to the Department at the time of submitting its application for
7certificate registration to the Department. The Department
8shall require an applicant for a certificate of registration
9under this Section to electronically pay the fee. A separate
10annual fee shall be paid for each place of business at which a
11person who is required to procure a certificate of registration
12under this Section proposes to sell a service in Illinois
13subject to tax under this Act.
14    (b) The Department may refuse to issue or reissue a
15certificate of registration to any applicant for the reasons
16set forth in Section 2505-380 of the Department of Revenue Law
17of the Civil Administrative Code of Illinois.
18    (c) Any person aggrieved by any decision of the Department
19under this Section may, within 20 days after notice of such
20decision, protest and request a hearing, whereupon the
21Department shall give notice to such person of the time and
22place fixed for such hearing and shall hold a hearing in
23conformity with the provisions of this Act and then issue its
24final administrative decision in the matter to such person. In
25the absence of such a protest within 20 days, the Department's
26decision shall become final without any further determination

 

 

10000SB0009sam001- 113 -LRB100 06347 HLH 18430 a

1being made or notice given.
 
2    Section 25-40. Revocation of certificate of registration.
3    (a) The Department may, after notice and a hearing as
4provided herein, revoke the certificate of registration of any
5person who violates any of the provisions of this Act or
6regulation promulgated pursuant to this Act. Before revocation
7of a certificate of registration, the Department shall, within
890 days after non-compliance and at least 7 days prior to the
9date of the hearing, give the person so accused notice in
10writing of the charge against him or her, and on the date
11designated shall conduct a hearing upon this matter. The lapse
12of such 90-day period shall not preclude the Department from
13conducting revocation proceedings at a later date if necessary.
14Any hearing held under this Section shall be conducted by the
15Director or by any officer or employee of the Department
16designated in writing by the Director.
17    (b) The Department may revoke a certificate of registration
18for the reasons set forth in Section 2505-380 of the Department
19of Revenue Law of the Civil Administrative Code of Illinois.
20    (c) Upon the hearing of any such proceeding, the Director
21or any officer or employee of the Department designated in
22writing by the Director may administer oaths, and the
23Department may procure by its subpoena the attendance of
24witnesses and, by its subpoena duces tecum, the production of
25relevant books and papers. Any circuit court, upon application

 

 

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1either of the accused or of the Department, may, by order duly
2entered, require the attendance of witnesses and the production
3of relevant books and papers before the Department in any
4hearing relating to the revocation of certificates of
5registration. Upon refusal or neglect to obey the order of the
6court, the court may compel obedience thereof by proceedings
7for contempt.
8    (d) The Department may, by application to any circuit
9court, obtain an injunction requiring any person who engages in
10business as a provider under this Act to obtain a certificate
11of registration. Upon refusal or neglect to obey the order of
12the court, the court may compel obedience by proceedings for
13contempt.
 
14    Section 25-45. Tax collected as debt owed to State. The tax
15herein required to be collected by any provider maintaining a
16place of business in this State, and any such tax collected by
17that person, shall constitute a debt owed by that person to
18this State.
 
19    Section 25-50. Return and payment of tax by provider.
20    (a) Each provider who is required or authorized to collect
21the tax imposed by this Act shall make a return to the
22Department on or before the 20th day of each month for the
23preceding calendar month stating the following:
24        (1) the provider's name;

 

 

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1        (2) the address of the provider's principal place of
2    business and the address of the principal place of business
3    (if that is a different address) from which the provider
4    engaged in the business of selling a service subject to tax
5    under this Act;
6        (3) total purchase price received by the provider for
7    all services subject to tax under this Act;
8        (4) amount of tax, computed upon item (3) at the rate
9    stated in Section 25-10;
10        (5) the signature of the provider; and
11        (6) such other information as the Department
12    reasonably may require.
13    Any amount which is required to be shown or reported on any
14return or other document under this Act shall, if such amount
15is not a whole-dollar amount, be increased to the nearest
16whole-dollar amount if the fractional part of a dollar is $0.50
17or more and decreased to the nearest whole-dollar amount if the
18fractional part of a dollar is less than $0.50. If a total
19amount of less than $1 is payable, refundable, or creditable,
20that amount shall be disregarded if it is less than $0.50 and
21shall be increased to $1 if it is $0.50 or more.
22    The provider making the return provided for in this Section
23shall, at the time of making such return, pay to the Department
24the amount of tax imposed by this Act, less a discount of 1.75%
25which is allowed to reimburse the provider for the expenses
26incurred in keeping records, billing the purchaser, preparing

 

 

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1and filing returns, remitting the tax, and supplying data to
2the Department upon request. No discount may be claimed by a
3provider on returns not timely filed and for taxes not timely
4remitted.
5    (b) If the average monthly tax liability to the Department
6of the provider does not exceed $200, the Department may
7authorize the provider's returns to be filed on a
8quarter-annual basis, with the return for January, February,
9and March of a given year being due by April 20 of such year;
10with the return for April, May and June of a given year being
11due by July 20 of such year; with the return for July, August,
12and September of a given year being due by October 20 of such
13year; and with the return for October, November, and December
14of a given year being due by January 20 of the following year.
15    If the average monthly tax liability to the Department of
16the provider does not exceed $50, the Department may authorize
17the provider's returns to be filed on an annual basis, with the
18return for a given year being due by January 20 of the
19following year.
20    Such quarter-annual and annual returns, as to form and
21substance, shall be subject to the same requirements as monthly
22returns.
23    Notwithstanding any other provision in this Act concerning
24the time within which a provider may file a return, any such
25provider who ceases to engage in a kind of business which makes
26the person responsible for filing returns under this Act shall

 

 

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1file a final return under this Act with the Department not more
2than one month after discontinuing such business.
3    Each provider whose average monthly liability to the
4Department under this Act was $10,000 or more during the
5preceding calendar year, excluding the month of highest
6liability and the month of lowest liability in such calendar
7year, shall make estimated payments to the Department on or
8before the 7th, 15th, 22nd, and last day of the month during
9which tax liability to the Department is incurred in an amount
10not less than the lower of either 22.5% of such provider's
11actual tax liability for the month or 25% of such provider's
12actual tax liability for the same calendar month of the
13preceding year. The amount of such quarter-monthly payments
14shall be credited against the final tax liability of such
15provider's return for that month. Once applicable, the
16requirement of the making of quarter-monthly payments to the
17Department by taxpayers having an average monthly tax liability
18of $10,000 or more as determined in the manner provided in this
19paragraph shall continue until the taxpayer's average monthly
20liability to the Department during the preceding 4 complete
21calendar quarters (excluding the month of highest liability and
22the month of lowest liability) is less than $9,000 or until the
23taxpayer's average monthly liability to the Department as
24computed for each of the 4 preceding complete calendar quarters
25is less than $10,000. However, if a taxpayer can show the
26Department that a substantial change in the taxpayer's business

 

 

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1has occurred that causes the taxpayer to anticipate that his
2average monthly tax liability for the reasonably foreseeable
3future will fall below the $10,000 threshold stated above, then
4the taxpayer may petition the Department for a change in the
5taxpayer's reporting status. The Department shall change the
6taxpayer's reporting status unless it finds that the change is
7seasonal in nature and not likely to be long term. If any such
8quarter-monthly payment is not paid at the time or in the
9amount required by this Section, then the taxpayer shall be
10liable for penalties and interest on the difference between the
11minimum amount due as a payment and the amount of such
12quarter-monthly payments actually and timely paid, except
13insofar as the taxpayer has previously made payments for that
14month to the Department in excess of the minimum payments
15previously due as provided in this Section. The Department
16shall adopt rules to govern the quarter-monthly payment amount
17and quarter-monthly payment dates for taxpayers who file on
18other than a calendar monthly basis.
19    If any payment provided for in this Section exceeds the
20taxpayer's liabilities under this Act, as shown on an original
21monthly return, the Department shall, if requested by the
22taxpayer, issue to the taxpayer a credit memorandum no later
23than 30 days after the date of payment. The credit evidenced by
24such credit memorandum may be assigned by the taxpayer to a
25similar taxpayer under this Act, in accordance with reasonable
26rules and regulations to be prescribed by the Department. If no

 

 

10000SB0009sam001- 119 -LRB100 06347 HLH 18430 a

1such request is made, the taxpayer may credit such excess
2payment against tax liability subsequently to be remitted to
3the Department under this Act, in accordance with reasonable
4rules and regulations prescribed by the Department. If the
5Department subsequently determines that all or any part of the
6credit taken was not actually due to the taxpayer, the
7taxpayer's 1.75% discount shall be reduced by 1.75% of the
8difference between the credit taken and that actually due, and
9that taxpayer shall be liable for penalties and interest on
10such difference.
11    (c) A provider who has a tax liability in the amount set
12forth in subsection (b) of Section 2505-210 of the Department
13of Revenue Law of the Civil Administrative Code of Illinois
14shall make all payments required by rules of the Department by
15electronic funds transfer. Any provider not required to make
16payments by electronic funds transfer may make payments by
17electronic funds transfer with the permission of the
18Department. All providers required to make payments by
19electronic funds transfer and any providers authorized to
20voluntarily make payments by electronic funds transfer shall
21make those payments in the manner authorized by the Department.
22    (d) If a provider fails to sign a return within 30 days
23after the proper notice and demand for signature by the
24Department is received by the provider, the return shall be
25considered valid and any amount shown to be due on the return
26shall be deemed assessed.
 

 

 

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1    Section 25-55. Claims; credit memorandum or refunds. If it
2appears, after claim therefore filed with the Department, that
3an amount of tax or penalty has been paid to the Department by
4the taxpayer which was not due under this Act, whether as the
5result of a mistake of fact or an error of law, except as
6hereinafter provided, then the Department shall issue a credit
7memorandum or refund to the person who made the erroneous
8payment or, if that person has died or become a person under
9legal disability, to his or her legal representative, as such.
10    If it is determined that the Department should issue a
11credit or refund under this Act, the Department may first apply
12the amount thereof against any amount of tax or penalty due
13under this Act, or any other Act administered by the
14Department, from the person entitled to such credit or refund.
15For this purpose, if proceedings are pending to determine
16whether or not any tax or penalty is due under this Act, or any
17other Act administered by the Department, from such person, the
18Department may withhold issuance of the credit or refund
19pending the final disposition of such proceedings and may apply
20such credit or refund against any amount found to be due to the
21Department under this Act, or any other Act administered by the
22Department, as a result of such proceedings. The balance, if
23any, of the credit or refund shall be issued to the person
24entitled thereto.
25    If no tax or penalty is due and no proceeding is pending to

 

 

10000SB0009sam001- 121 -LRB100 06347 HLH 18430 a

1determine whether such taxpayer is indebted to the Department
2for tax or penalty, the credit memorandum or refund shall be
3issued to the claimant; or (in the case of a credit memorandum)
4the credit memorandum may be assigned and set over by the
5lawful holder thereof, subject to reasonable rules of the
6Department, to any other person who is subject to this Act, and
7the amount thereof shall be applied by the Department against
8any tax or penalty due or to become due under this Act from
9such assignee.
10    As to any claim filed hereunder with the Department on and
11after each January 1 and July 1, no amount of tax or penalty
12erroneously paid (either in total or partial liquidation of a
13tax or penalty under this Act) more than 3 years prior to such
14January 1 and July 1, respectively, shall be credited or
15refunded, except that if both the Department and the taxpayer
16have agreed to an extension of time to issue a notice of tax
17liability under this Act, the claim may be filed at any time
18prior to the expiration of the period agreed upon.
19    No claim may be allowed for any amount paid to the
20Department, whether paid voluntarily or involuntarily, if paid
21in total or partial liquidation of an assessment which had
22become final before the claim for credit or refund to recover
23the amount so paid is filed with the Department, or if paid in
24total or partial liquidation of a judgment or order of court.
25No claim may be allowed or refund made for any amount paid by
26or collected from any purchaser unless it appears that the

 

 

10000SB0009sam001- 122 -LRB100 06347 HLH 18430 a

1claimant has unconditionally repaid to the purchaser any amount
2collected from the purchaser and retained by the claimant with
3respect to the same transaction under the Act.
4    Any credit or refund that is allowed under this Act shall
5bear interest at the rate and in the manner set forth in the
6Uniform Penalty and Interest Act.
7    In case the Department determines that the claimant is
8entitled to a refund, such refund shall be made only from such
9appropriation as may be available for that purpose. If it
10appears unlikely that the amount appropriated would permit
11everyone having a claim allowed during the period covered by
12such appropriation to elect to receive a cash refund, the
13Department, by rule or regulation, shall provide for the
14payment of refunds in hardship cases and shall define what
15types of cases qualify as hardship cases.
 
16    Section 25-60. Sunset of exemptions, credits, and
17deductions. The application of every exemption, credit, and
18deduction against tax imposed by this Act that becomes law
19after the effective date of this Act shall be limited by a
20reasonable and appropriate sunset date. A taxpayer is not
21entitled to take the exemption, credit, or deduction beginning
22on the sunset date and thereafter. If a reasonable and
23appropriate sunset date is not specified in the Public Act that
24creates the exemption, credit, or deduction, a taxpayer shall
25not be entitled to take the exemption, credit, or deduction

 

 

10000SB0009sam001- 123 -LRB100 06347 HLH 18430 a

1beginning 5 years after the effective date of the Public Act
2creating the exemption, credit, or deduction and thereafter.
 
3    Section 25-65. Distribution of proceeds. All moneys
4received by the Department under this Act shall be paid into
5the General Revenue Fund in the State Treasury.
 
6    Section 25-70. Rulemaking. The Department may adopt rules
7in accordance with the Illinois Administrative Procedure Act
8and prescribe such forms relating to the administration and
9enforcement of this Act as it deems appropriate.
 
10    Section 25-75. Incorporation by reference. All of the
11provisions of Sections 2a, 2b, 4, 5, 5a, 5b, 5c, 5d, 5e, 5f,
125g, 5i, 5j, 6a, 6b, 6c, 6d, 7, 8, 9, 10, 11, 11a, 12, and 13 of
13the Retailers' Occupation Tax Act and all of the provisions of
14the Uniform Penalty and Interest Act, that are not inconsistent
15with this Act, apply to providers to the same extent as if
16those provisions were included in this Act. References in the
17incorporated Sections of the Retailers' Occupation Tax Act to
18retailers, to sellers, or to persons engaged in the business of
19selling tangible personal property mean providers when used in
20this Act. References in the incorporated Sections to sales of
21tangible personal property mean sales of services subject to
22tax under this Act when used in this Act.
 

 

 

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1
ARTICLE 30. AMENDATORY PROVISIONS

 
2    Section 30-5. The State Finance Act is amended by changing
3Sections 6z-43 and 6z-51 as follows:
 
4    (30 ILCS 105/6z-43)
5    Sec. 6z-43. Tobacco Settlement Recovery Fund.
6    (a) There is created in the State Treasury a special fund
7to be known as the Tobacco Settlement Recovery Fund, which
8shall contain 3 accounts: (i) the General Account, (ii) the
9Tobacco Settlement Bond Proceeds Account and (iii) the Tobacco
10Settlement Residual Account. There shall be deposited into the
11several accounts of the Tobacco Settlement Recovery Fund and
12the Attorney General Tobacco Fund all monies paid to the State
13pursuant to (1) the Master Settlement Agreement entered in the
14case of People of the State of Illinois v. Philip Morris, et
15al. (Circuit Court of Cook County, No. 96-L13146) and (2) any
16settlement with or judgment against any tobacco product
17manufacturer other than one participating in the Master
18Settlement Agreement in satisfaction of any released claim as
19defined in the Master Settlement Agreement, as well as any
20other monies as provided by law. Moneys shall be deposited into
21the Tobacco Settlement Bond Proceeds Account and the Tobacco
22Settlement Residual Account as provided by the terms of the
23Railsplitter Tobacco Settlement Authority Act, provided that
24an annual amount not less than $2,500,000, subject to

 

 

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1appropriation, shall be deposited into the Attorney General
2Tobacco Fund for use only by the Attorney General's office. The
3scheduled $2,500,000 deposit into the Tobacco Settlement
4Residual Account for fiscal year 2011 should be transferred to
5the Attorney General Tobacco Fund in fiscal year 2012 as soon
6as this fund has been established. All other moneys available
7to be deposited into the Tobacco Settlement Recovery Fund shall
8be deposited into the General Account. An investment made from
9moneys credited to a specific account constitutes part of that
10account and such account shall be credited with all income from
11the investment of such moneys. The Treasurer may invest the
12moneys in the several accounts the Fund in the same manner, in
13the same types of investments, and subject to the same
14limitations provided in the Illinois Pension Code for the
15investment of pension funds other than those established under
16Article 3 or 4 of the Code. Notwithstanding the foregoing, to
17the extent necessary to preserve the tax-exempt status of any
18bonds issued pursuant to the Railsplitter Tobacco Settlement
19Authority Act, the interest on which is intended to be
20excludable from the gross income of the owners for federal
21income tax purposes, moneys on deposit in the Tobacco
22Settlement Bond Proceeds Account and the Tobacco Settlement
23Residual Account may be invested in obligations the interest
24upon which is tax-exempt under the provisions of Section 103 of
25the Internal Revenue Code of 1986, as now or hereafter amended,
26or any successor code or provision.

 

 

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1    (b) Moneys on deposit in the Tobacco Settlement Bond
2Proceeds Account and the Tobacco Settlement Residual Account
3may be expended, subject to appropriation, for the purposes
4authorized in subsection (g) of Section 3-6 of the Railsplitter
5Tobacco Settlement Authority Act.
6    (c) As soon as may be practical after June 30, 2001 and
7until an initial transfer has been made to the Budget
8Stabilization Fund under subsection (b) of Section 15 of the
9Budget Stabilization Act as amended by this amendatory Act of
10the 100th General Assembly, upon notification from and at the
11direction of the Governor, the State Comptroller shall direct
12and the State Treasurer shall transfer the unencumbered balance
13in the Tobacco Settlement Recovery Fund as of June 30, 2001, as
14determined by the Governor, into the Budget Stabilization Fund.
15The Treasurer may invest the moneys in the Budget Stabilization
16Fund in the same manner, in the same types of investments, and
17subject to the same limitations provided in the Illinois
18Pension Code for the investment of pension funds other than
19those established under Article 3 or 4 of the Code.
20    (d) All federal financial participation moneys received
21pursuant to expenditures from the Fund shall be deposited into
22the General Account.
23(Source: P.A. 99-78, eff. 7-20-15.)
 
24    (30 ILCS 105/6z-51)
25    Sec. 6z-51. Budget Stabilization Fund.

 

 

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1    (a) The Budget Stabilization Fund, a special fund in the
2State Treasury, shall consist of moneys appropriated or
3transferred to that Fund, as provided in Section 6z-43 and as
4otherwise provided by law. All earnings on Budget Stabilization
5Fund investments shall be deposited into that Fund.
6    (b) Until an initial transfer has been made to the Budget
7Stabilization Fund under subsection (b) of Section 15 of the
8Budget Stabilization Act as amended by this amendatory Act of
9the 100th General Assembly, the The State Comptroller may
10direct the State Treasurer to transfer moneys from the Budget
11Stabilization Fund to the General Revenue Fund in order to meet
12cash flow deficits resulting from timing variations between
13disbursements and the receipt of funds within a fiscal year.
14Any moneys so borrowed in any fiscal year other than Fiscal
15Year 2011 shall be repaid by June 30 of the fiscal year in
16which they were borrowed. Any moneys so borrowed in Fiscal Year
172011 shall be repaid no later than July 15, 2011.
18    (c) During Fiscal Year 2017 only, amounts may be expended
19from the Budget Stabilization Fund only pursuant to specific
20authorization by appropriation. Any moneys expended pursuant
21to appropriation shall not be subject to repayment.
22(Source: P.A. 99-523, eff. 6-30-16.)
 
23    Section 30-10. The Budget Stabilization Act is amended by
24changing Sections 15 and 20 as follows:
 

 

 

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1    (30 ILCS 122/15)
2    Sec. 15. Transfers to Budget Stabilization Fund. In
3furtherance of the State's objective for the Budget
4Stabilization Fund to have resources representing 5% of the
5State's annual general funds revenues:
6    (a) On January 10, 2018 and each January 10 thereafter, the
7Department on Aging, the Department of Healthcare and Family
8Services, and the Department of Human Services shall certify to
9the Comptroller the amount of invoices that may be paid from
10appropriations in future fiscal years resulting from
11insufficient appropriations in the current fiscal year. In
12addition, the Department of Central Management Services shall
13certify the amount of invoices that may be paid from
14appropriations in future fiscal years due to insufficient
15resources in the Health Insurance Reserve Fund, and the
16Department of Revenue shall certify an estimate of the amount
17of individual and corporate income tax overpayments that will
18not be refunded before the close of the current fiscal year
19resulting from insufficient deposits into the Income Tax Refund
20Fund. On January 15, 2018 and each January 15 thereafter, the
21Comptroller shall issue a report to the Governor and the
22General Assembly detailing the total value of the amounts
23certified by the Department on Aging and the Departments of
24Central Management Services, Healthcare and Family Services,
25Human Services, and Revenue. The report shall also include the
26accounts payable with the Comptroller at the close of business

 

 

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1on December 31, 2017 and each December 31 thereafter. For each
2fiscal year when the General Assembly's appropriations and
3transfers or diversions as required by law from general funds
4do not exceed 99% of the estimated general funds revenues
5pursuant to subsection (a) of Section 10, the Comptroller shall
6transfer from the General Revenue Fund as provided by this
7Section a total amount equal to 0.5% of the estimated general
8funds revenues to the Budget Stabilization Fund.
9    (b) If the amount of accounts payable reported by the
10Comptroller is an amount less than $3,400,000,000, on the last
11day of each month of the next fiscal year or as soon thereafter
12as possible, the Comptroller shall order transferred and the
13Treasurer shall transfer from the General Revenue Fund to the
14Budget Stabilization Fund the lesser of (i) $400,000,000 or
15(ii) the amount necessary to maintain resources in the Budget
16Stabilization Fund that is equal to 5% of the total general
17funds revenues of the prior fiscal year, in equal monthly
18installments. Nothing in this Act prohibits the General
19Assembly from appropriating additional moneys into the Budget
20Stabilization Fund; however, transfers or appropriations shall
21only be made from the Budget Stabilization Fund under
22subsection (d) of this Section. For each fiscal year when the
23General Assembly's appropriations and transfers or diversions
24as required by law from general funds do not exceed 98% of the
25estimated general funds revenues pursuant to subsection (b) of
26Section 10, the Comptroller shall transfer from the General

 

 

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

 

 

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1Term Borrowing Act, the Comptroller may cease the order of any
2further transfers to the Budget Stabilization Fund and may
3order the transfer and the Treasurer shall transfer from the
4Budget Stabilization Fund to the General Revenue Fund an amount
5deemed necessary to maintain the State's accounts payable to an
6amount below $3,400,000,000. In the event that such written
7notice has been provided, the General Assembly may make
8transfers or appropriations from the Budget Stabilization Fund
9for the upcoming fiscal year as necessary to provide for the
10health, safety, and welfare of the people of the State of
11Illinois. If the balance of the Budget Stabilization Fund
12exceeds 5% of the total general funds revenues estimated for
13that fiscal year, the additional transfers are not required
14unless there are outstanding liabilities under Section 25 of
15the State Finance Act from prior fiscal years. If there are
16such outstanding Section 25 liabilities, then the Comptroller
17shall continue to transfer 1/12 of the total amount identified
18for transfer to the Budget Stabilization Fund on the first day
19of each month of that fiscal year or as soon thereafter as
20possible to be reserved for those Section 25 liabilities.
21Nothing in this Act prohibits the General Assembly from
22appropriating additional moneys into the Budget Stabilization
23Fund.
24    (e) On or before August 31 of each fiscal year, the amount
25determined to be transferred to the Budget Stabilization Fund
26shall be reconciled to actual general funds revenues for that

 

 

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1fiscal year. The final transfer for each fiscal year shall be
2adjusted so that the total amount transferred under this
3Section is equal to the amount percentage specified in
4subsection (a) or (b) of this Section, as applicable, based on
5actual general funds revenues calculated consistently with
6subsection (c) of Section 10 of this Act for each fiscal year.
7    (f) For the fiscal year beginning July 1, 2006 and for each
8fiscal year thereafter, the budget proposal to the General
9Assembly shall identify liabilities incurred in a prior fiscal
10year under Section 25 of the State Finance Act and the budget
11proposal shall provide funding as allowable pursuant to
12subsection (d) of this Section, if applicable.
13(Source: P.A. 93-660, eff. 7-1-04; 94-839, eff. 6-6-06.)
 
14    (30 ILCS 122/20)
15    (Text of Section WITH the changes made by P.A. 98-599,
16which has been held unconstitutional)
17    Sec. 20. Pension Stabilization Fund.
18    (a) The Pension Stabilization Fund is hereby created as a
19special fund in the State treasury. Moneys in the fund shall be
20used for the sole purpose of making payments to the designated
21retirement systems as provided in Section 25.
22    (b) For each fiscal year through State fiscal year 2014,
23when the General Assembly's appropriations and transfers or
24diversions as required by law from general funds do not exceed
2599% of the estimated general funds revenues pursuant to

 

 

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1subsection (a) of Section 10, the Comptroller shall transfer
2from the General Revenue Fund as provided by this Section a
3total amount equal to 1% 0.5% of the estimated general funds
4revenues to the Pension Stabilization Fund.
5    (c) For each fiscal year through State fiscal year 2014,
6when the General Assembly's appropriations and transfers or
7diversions as required by law from general funds do not exceed
898% of the estimated general funds revenues pursuant to
9subsection (b) of Section 10, the Comptroller shall transfer
10from the General Revenue Fund as provided by this Section a
11total amount equal to 2% 1.0% of the estimated general funds
12revenues to the Pension Stabilization Fund.
13    (c-5) In addition to any other amounts required to be
14transferred under this Section, in State fiscal year 2016 and
15each fiscal year thereafter through State fiscal year 2045, or
16when each of the designated retirement systems, as defined in
17Section 25, has achieved 100% funding, whichever occurs first,
18the State Comptroller shall order transferred and the State
19Treasurer shall transfer from the General Revenue Fund to the
20Pension Stabilization Fund an amount equal to 10% of (1) the
21sum of the amounts certified by the designated retirement
22systems under subsection (a-5) of Section 2-134, subsection
23(a-10) of Section 14-135.08, subsection (a-10) of Section
2415-165, and subsection (a-10) of Section 16-158 of this Code
25for that fiscal year minus (2) the sum of (i) the transfer
26required under subsection (c-10) of this Section for that

 

 

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1fiscal year and (ii) the sum of the required State
2contributions certified by the retirement systems under
3subsection (a) of Section 2-134, subsection (a-5) of Section
414-135.08, subsection (a-5) of Section 15-165, and subsection
5(a-5) of Section 16-158 of this Code for that fiscal year. The
6transferred amount is intended to represent one-tenth of the
7annual savings to the State resulting from the enactment of
8this amendatory Act of the 98th General Assembly.
9    (c-10) In State fiscal year 2019, the State Comptroller
10shall order transferred and the State Treasurer shall transfer
11$364,000,000 from the General Revenue Fund to the Pension
12Stabilization Fund. In State fiscal year 2020 and each fiscal
13year thereafter until terminated under subsection (c-15), the
14State Comptroller shall order transferred and the State
15Treasurer shall transfer $1,000,000,000 from the General
16Revenue Fund to the Pension Stabilization Fund.
17    (c-15) The transfers made beginning in State fiscal year
182020 pursuant to subsection (c-10) of this Section shall
19terminate at the end of State fiscal year 2045 or when each of
20the designated retirement systems, as defined in Section 25,
21has achieved 100% funding, whichever occurs first.
22    (d) The Comptroller shall transfer 1/12 of the total amount
23to be transferred each fiscal year under this Section into the
24Pension Stabilization Fund on the first day of each month of
25that fiscal year or as soon thereafter as possible; except that
26the final transfer of the fiscal year shall be made as soon as

 

 

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1practical after the August 31 following the end of the fiscal
2year.
3    Before Until State fiscal year 2015, before the final
4transfer for a fiscal year is made, the Comptroller shall
5reconcile the estimated general funds revenues used in
6calculating the other transfers under this Section for that
7fiscal year with the actual general funds revenues for that
8fiscal year. The final transfer for the fiscal year shall be
9adjusted so that the total amount transferred under this
10Section for that fiscal year is equal to the percentage
11specified in subsection (b) or (c) of this Section, whichever
12is applicable, of the actual general funds revenues for that
13fiscal year. The actual general funds revenues for the fiscal
14year shall be calculated in a manner consistent with subsection
15(c) of Section 10 of this Act.
16(Source: P.A. 98-599, eff. 6-1-14.)
 
17    (Text of Section WITHOUT the changes made by P.A. 98-599,
18which has been held unconstitutional)
19    Sec. 20. Pension Stabilization Fund.
20    (a) The Pension Stabilization Fund is hereby created as a
21special fund in the State treasury. Moneys in the fund shall be
22used for the sole purpose of making payments to the designated
23retirement systems as provided in Section 25.
24    (b) For each fiscal year when the General Assembly's
25appropriations and transfers or diversions as required by law

 

 

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1from general funds do not exceed 99% of the estimated general
2funds revenues pursuant to subsection (a) of Section 10, the
3Comptroller shall transfer from the General Revenue Fund as
4provided by this Section a total amount equal to 1% 0.5% of the
5estimated general funds revenues to the Pension Stabilization
6Fund.
7    (c) For each fiscal year when the General Assembly's
8appropriations and transfers or diversions as required by law
9from general funds do not exceed 98% of the estimated general
10funds revenues pursuant to subsection (b) of Section 10, the
11Comptroller shall transfer from the General Revenue Fund as
12provided by this Section a total amount equal to 2% 1.0% of the
13estimated general funds revenues to the Pension Stabilization
14Fund.
15    (d) The Comptroller shall transfer 1/12 of the total amount
16to be transferred each fiscal year under this Section into the
17Pension Stabilization Fund on the first day of each month of
18that fiscal year or as soon thereafter as possible; except that
19the final transfer of the fiscal year shall be made as soon as
20practical after the August 31 following the end of the fiscal
21year.
22    Before the final transfer for a fiscal year is made, the
23Comptroller shall reconcile the estimated general funds
24revenues used in calculating the other transfers under this
25Section for that fiscal year with the actual general funds
26revenues for that fiscal year. The final transfer for the

 

 

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1fiscal year shall be adjusted so that the total amount
2transferred under this Section for that fiscal year is equal to
3the percentage specified in subsection (b) or (c) of this
4Section, whichever is applicable, of the actual general funds
5revenues for that fiscal year. The actual general funds
6revenues for the fiscal year shall be calculated in a manner
7consistent with subsection (c) of Section 10 of this Act.
8(Source: P.A. 94-839, eff. 6-6-06.)
 
9    Section 30-15. The Illinois Income Tax Act is amended by
10changing Sections 201, 203, 212, 804, 901, and 1501 and by
11adding Sections 201.7 and 225 as follows:
 
12    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
13    Sec. 201. Tax Imposed.
14    (a) In general. A tax measured by net income is hereby
15imposed on every individual, corporation, trust and estate for
16each taxable year ending after July 31, 1969 on the privilege
17of earning or receiving income in or as a resident of this
18State. Such tax shall be in addition to all other occupation or
19privilege taxes imposed by this State or by any municipal
20corporation or political subdivision thereof.
21    (b) Rates. The tax imposed by subsection (a) of this
22Section shall be determined as follows, except as adjusted by
23subsection (d-1):
24        (1) In the case of an individual, trust or estate, for

 

 

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

 

 

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1    for taxable years beginning prior to January 1, 2015, and
2    ending after December 31, 2014, an amount equal to the sum
3    of (i) 5% of the taxpayer's net income for the period prior
4    to January 1, 2015, as calculated under Section 202.5, and
5    (ii) 3.75% of the taxpayer's net income for the period
6    after December 31, 2014, as calculated under Section 202.5.
7        (5.2) In the case of an individual, trust, or estate,
8    for taxable years beginning on or after January 1, 2015,
9    and ending prior to January 1, 2017 January 1, 2025, an
10    amount equal to 3.75% of the taxpayer's net income for the
11    taxable year.
12        (5.3) In the case of an individual, trust, or estate,
13    for taxable years beginning prior to January 1, 2017
14    January 1, 2025, and ending after December 31, 2016
15    December 31, 2024, an amount equal to the sum of (i) 3.75%
16    of the taxpayer's net income for the period prior to
17    January 1, 2017 January 1, 2025, as calculated under
18    Section 202.5, and (ii) 4.99% 3.25% of the taxpayer's net
19    income for the period after December 31, 2016 December 31,
20    2024, as calculated under Section 202.5.
21        (5.4) In the case of an individual, trust, or estate,
22    for taxable years beginning on or after January 1, 2017
23    January 1, 2025, an amount equal to 4.99% 3.25% of the
24    taxpayer's net income for the taxable year.
25        (6) In the case of a corporation, for taxable years
26    ending prior to July 1, 1989, an amount equal to 4% of the

 

 

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

 

 

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1    the taxpayer's net income for the period prior to January
2    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
3    of the taxpayer's net income for the period after December
4    31, 2014, as calculated under Section 202.5.
5        (12) In the case of a corporation, for taxable years
6    beginning on or after January 1, 2015, and ending prior to
7    January 1, 2017 January 1, 2025, an amount equal to 5.25%
8    of the taxpayer's net income for the taxable year.
9        (13) In the case of a corporation, for taxable years
10    beginning prior to January 1, 2017 January 1, 2025, and
11    ending after December 31, 2016 December 31, 2024, an amount
12    equal to the sum of (i) 5.25% of the taxpayer's net income
13    for the period prior to January 1, 2017 January 1, 2025, as
14    calculated under Section 202.5, and (ii) 7% 4.8% of the
15    taxpayer's net income for the period after December 31,
16    2016 December 31, 2024, as calculated under Section 202.5.
17        (14) In the case of a corporation, for taxable years
18    beginning on or after January 1, 2017 January 1, 2025, an
19    amount equal to 7% 4.8% of the taxpayer's net income for
20    the taxable year.
21    The rates under this subsection (b) are subject to the
22provisions of Section 201.5.
23    (c) Personal Property Tax Replacement Income Tax.
24Beginning on July 1, 1979 and thereafter, in addition to such
25income tax, there is also hereby imposed the Personal Property
26Tax Replacement Income Tax measured by net income on every

 

 

10000SB0009sam001- 142 -LRB100 06347 HLH 18430 a

1corporation (including Subchapter S corporations), partnership
2and trust, for each taxable year ending after June 30, 1979.
3Such taxes are imposed on the privilege of earning or receiving
4income in or as a resident of this State. The Personal Property
5Tax Replacement Income Tax shall be in addition to the income
6tax imposed by subsections (a) and (b) of this Section and in
7addition to all other occupation or privilege taxes imposed by
8this State or by any municipal corporation or political
9subdivision thereof.
10    (d) Additional Personal Property Tax Replacement Income
11Tax Rates. The personal property tax replacement income tax
12imposed by this subsection and subsection (c) of this Section
13in the case of a corporation, other than a Subchapter S
14corporation and except as adjusted by subsection (d-1), shall
15be an additional amount equal to 2.85% of such taxpayer's net
16income for the taxable year, except that beginning on January
171, 1981, and thereafter, the rate of 2.85% specified in this
18subsection shall be reduced to 2.5%, and in the case of a
19partnership, trust or a Subchapter S corporation shall be an
20additional amount equal to 1.5% of such taxpayer's net income
21for the taxable year.
22    (d-1) Rate reduction for certain foreign insurers. In the
23case of a foreign insurer, as defined by Section 35A-5 of the
24Illinois Insurance Code, whose state or country of domicile
25imposes on insurers domiciled in Illinois a retaliatory tax
26(excluding any insurer whose premiums from reinsurance assumed

 

 

10000SB0009sam001- 143 -LRB100 06347 HLH 18430 a

1are 50% or more of its total insurance premiums as determined
2under paragraph (2) of subsection (b) of Section 304, except
3that for purposes of this determination premiums from
4reinsurance do not include premiums from inter-affiliate
5reinsurance arrangements), beginning with taxable years ending
6on or after December 31, 1999, the sum of the rates of tax
7imposed by subsections (b) and (d) shall be reduced (but not
8increased) to the rate at which the total amount of tax imposed
9under this Act, net of all credits allowed under this Act,
10shall equal (i) the total amount of tax that would be imposed
11on the foreign insurer's net income allocable to Illinois for
12the taxable year by such foreign insurer's state or country of
13domicile if that net income were subject to all income taxes
14and taxes measured by net income imposed by such foreign
15insurer's state or country of domicile, net of all credits
16allowed or (ii) a rate of zero if no such tax is imposed on such
17income by the foreign insurer's state of domicile. For the
18purposes of this subsection (d-1), an inter-affiliate includes
19a mutual insurer under common management.
20        (1) For the purposes of subsection (d-1), in no event
21    shall the sum of the rates of tax imposed by subsections
22    (b) and (d) be reduced below the rate at which the sum of:
23            (A) the total amount of tax imposed on such foreign
24        insurer under this Act for a taxable year, net of all
25        credits allowed under this Act, plus
26            (B) the privilege tax imposed by Section 409 of the

 

 

10000SB0009sam001- 144 -LRB100 06347 HLH 18430 a

1        Illinois Insurance Code, the fire insurance company
2        tax imposed by Section 12 of the Fire Investigation
3        Act, and the fire department taxes imposed under
4        Section 11-10-1 of the Illinois Municipal Code,
5    equals 1.25% for taxable years ending prior to December 31,
6    2003, or 1.75% for taxable years ending on or after
7    December 31, 2003, of the net taxable premiums written for
8    the taxable year, as described by subsection (1) of Section
9    409 of the Illinois Insurance Code. This paragraph will in
10    no event increase the rates imposed under subsections (b)
11    and (d).
12        (2) Any reduction in the rates of tax imposed by this
13    subsection shall be applied first against the rates imposed
14    by subsection (b) and only after the tax imposed by
15    subsection (a) net of all credits allowed under this
16    Section other than the credit allowed under subsection (i)
17    has been reduced to zero, against the rates imposed by
18    subsection (d).
19    This subsection (d-1) is exempt from the provisions of
20Section 250.
21    (e) Investment credit. A taxpayer shall be allowed a credit
22against the Personal Property Tax Replacement Income Tax for
23investment in qualified property.
24        (1) A taxpayer shall be allowed a credit equal to .5%
25    of the basis of qualified property placed in service during
26    the taxable year, provided such property is placed in

 

 

10000SB0009sam001- 145 -LRB100 06347 HLH 18430 a

1    service on or after July 1, 1984. There shall be allowed an
2    additional credit equal to .5% of the basis of qualified
3    property placed in service during the taxable year,
4    provided such property is placed in service on or after
5    July 1, 1986, and the taxpayer's base employment within
6    Illinois has increased by 1% or more over the preceding
7    year as determined by the taxpayer's employment records
8    filed with the Illinois Department of Employment Security.
9    Taxpayers who are new to Illinois shall be deemed to have
10    met the 1% growth in base employment for the first year in
11    which they file employment records with the Illinois
12    Department of Employment Security. The provisions added to
13    this Section by Public Act 85-1200 (and restored by Public
14    Act 87-895) shall be construed as declaratory of existing
15    law and not as a new enactment. If, in any year, the
16    increase in base employment within Illinois over the
17    preceding year is less than 1%, the additional credit shall
18    be limited to that percentage times a fraction, the
19    numerator of which is .5% and the denominator of which is
20    1%, but shall not exceed .5%. The investment credit shall
21    not be allowed to the extent that it would reduce a
22    taxpayer's liability in any tax year below zero, nor may
23    any credit for qualified property be allowed for any year
24    other than the year in which the property was placed in
25    service in Illinois. For tax years ending on or after
26    December 31, 1987, and on or before December 31, 1988, the

 

 

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

 

 

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1    liability. If there is credit from more than one tax year
2    that is available to offset a liability, earlier credit
3    shall be applied first.
4        (2) The term "qualified property" means property
5    which:
6            (A) is tangible, whether new or used, including
7        buildings and structural components of buildings and
8        signs that are real property, but not including land or
9        improvements to real property that are not a structural
10        component of a building such as landscaping, sewer
11        lines, local access roads, fencing, parking lots, and
12        other appurtenances;
13            (B) is depreciable pursuant to Section 167 of the
14        Internal Revenue Code, except that "3-year property"
15        as defined in Section 168(c)(2)(A) of that Code is not
16        eligible for the credit provided by this subsection
17        (e);
18            (C) is acquired by purchase as defined in Section
19        179(d) of the Internal Revenue Code;
20            (D) is used in Illinois by a taxpayer who is
21        primarily engaged in manufacturing, or in mining coal
22        or fluorite, or in retailing, or was placed in service
23        on or after July 1, 2006 in a River Edge Redevelopment
24        Zone established pursuant to the River Edge
25        Redevelopment Zone Act; and
26            (E) has not previously been used in Illinois in

 

 

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1        such a manner and by such a person as would qualify for
2        the credit provided by this subsection (e) or
3        subsection (f).
4        (3) For purposes of this subsection (e),
5    "manufacturing" means the material staging and production
6    of tangible personal property by procedures commonly
7    regarded as manufacturing, processing, fabrication, or
8    assembling which changes some existing material into new
9    shapes, new qualities, or new combinations. For purposes of
10    this subsection (e) the term "mining" shall have the same
11    meaning as the term "mining" in Section 613(c) of the
12    Internal Revenue Code. For purposes of this subsection (e),
13    the term "retailing" means the sale of tangible personal
14    property for use or consumption and not for resale, or
15    services rendered in conjunction with the sale of tangible
16    personal property for use or consumption and not for
17    resale. For purposes of this subsection (e), "tangible
18    personal property" has the same meaning as when that term
19    is used in the Retailers' Occupation Tax Act, and, for
20    taxable years ending after December 31, 2008, does not
21    include the generation, transmission, or distribution of
22    electricity.
23        (4) The basis of qualified property shall be the basis
24    used to compute the depreciation deduction for federal
25    income tax purposes.
26        (5) If the basis of the property for federal income tax

 

 

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1    depreciation purposes is increased after it has been placed
2    in service in Illinois by the taxpayer, the amount of such
3    increase shall be deemed property placed in service on the
4    date of such increase in basis.
5        (6) The term "placed in service" shall have the same
6    meaning as under Section 46 of the Internal Revenue Code.
7        (7) If during any taxable year, any property ceases to
8    be qualified property in the hands of the taxpayer within
9    48 months after being placed in service, or the situs of
10    any qualified property is moved outside Illinois within 48
11    months after being placed in service, the Personal Property
12    Tax Replacement Income Tax for such taxable year shall be
13    increased. Such increase shall be determined by (i)
14    recomputing the investment credit which would have been
15    allowed for the year in which credit for such property was
16    originally allowed by eliminating such property from such
17    computation and, (ii) subtracting such recomputed credit
18    from the amount of credit previously allowed. For the
19    purposes of this paragraph (7), a reduction of the basis of
20    qualified property resulting from a redetermination of the
21    purchase price shall be deemed a disposition of qualified
22    property to the extent of such reduction.
23        (8) Unless the investment credit is extended by law,
24    the basis of qualified property shall not include costs
25    incurred after December 31, 2018, except for costs incurred
26    pursuant to a binding contract entered into on or before

 

 

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1    December 31, 2018.
2        (9) Each taxable year ending before December 31, 2000,
3    a partnership may elect to pass through to its partners the
4    credits to which the partnership is entitled under this
5    subsection (e) for the taxable year. A partner may use the
6    credit allocated to him or her under this paragraph only
7    against the tax imposed in subsections (c) and (d) of this
8    Section. If the partnership makes that election, those
9    credits shall be allocated among the partners in the
10    partnership in accordance with the rules set forth in
11    Section 704(b) of the Internal Revenue Code, and the rules
12    promulgated under that Section, and the allocated amount of
13    the credits shall be allowed to the partners for that
14    taxable year. The partnership shall make this election on
15    its Personal Property Tax Replacement Income Tax return for
16    that taxable year. The election to pass through the credits
17    shall be irrevocable.
18        For taxable years ending on or after December 31, 2000,
19    a partner that qualifies its partnership for a subtraction
20    under subparagraph (I) of paragraph (2) of subsection (d)
21    of Section 203 or a shareholder that qualifies a Subchapter
22    S corporation for a subtraction under subparagraph (S) of
23    paragraph (2) of subsection (b) of Section 203 shall be
24    allowed a credit under this subsection (e) equal to its
25    share of the credit earned under this subsection (e) during
26    the taxable year by the partnership or Subchapter S

 

 

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1    corporation, determined in accordance with the
2    determination of income and distributive share of income
3    under Sections 702 and 704 and Subchapter S of the Internal
4    Revenue Code. This paragraph is exempt from the provisions
5    of Section 250.
6    (f) Investment credit; Enterprise Zone; River Edge
7Redevelopment Zone.
8        (1) A taxpayer shall be allowed a credit against the
9    tax imposed by subsections (a) and (b) of this Section for
10    investment in qualified property which is placed in service
11    in an Enterprise Zone created pursuant to the Illinois
12    Enterprise Zone Act or, for property placed in service on
13    or after July 1, 2006, a River Edge Redevelopment Zone
14    established pursuant to the River Edge Redevelopment Zone
15    Act. For partners, shareholders of Subchapter S
16    corporations, and owners of limited liability companies,
17    if the liability company is treated as a partnership for
18    purposes of federal and State income taxation, there shall
19    be allowed a credit under this subsection (f) to be
20    determined in accordance with the determination of income
21    and distributive share of income under Sections 702 and 704
22    and Subchapter S of the Internal Revenue Code. The credit
23    shall be .5% of the basis for such property. The credit
24    shall be available only in the taxable year in which the
25    property is placed in service in the Enterprise Zone or
26    River Edge Redevelopment Zone and shall not be allowed to

 

 

10000SB0009sam001- 152 -LRB100 06347 HLH 18430 a

1    the extent that it would reduce a taxpayer's liability for
2    the tax imposed by subsections (a) and (b) of this Section
3    to below zero. For tax years ending on or after December
4    31, 1985, the credit shall be allowed for the tax year in
5    which the property is placed in service, or, if the amount
6    of the credit exceeds the tax liability for that year,
7    whether it exceeds the original liability or the liability
8    as later amended, such excess may be carried forward and
9    applied to the tax liability of the 5 taxable years
10    following the excess credit year. The credit shall be
11    applied to the earliest year for which there is a
12    liability. If there is credit from more than one tax year
13    that is available to offset a liability, the credit
14    accruing first in time shall be applied first.
15        (2) The term qualified property means property which:
16            (A) is tangible, whether new or used, including
17        buildings and structural components of buildings;
18            (B) is depreciable pursuant to Section 167 of the
19        Internal Revenue Code, except that "3-year property"
20        as defined in Section 168(c)(2)(A) of that Code is not
21        eligible for the credit provided by this subsection
22        (f);
23            (C) is acquired by purchase as defined in Section
24        179(d) of the Internal Revenue Code;
25            (D) is used in the Enterprise Zone or River Edge
26        Redevelopment Zone by the taxpayer; and

 

 

10000SB0009sam001- 153 -LRB100 06347 HLH 18430 a

1            (E) has not been previously used in Illinois in
2        such a manner and by such a person as would qualify for
3        the credit provided by this subsection (f) or
4        subsection (e).
5        (3) The basis of qualified property shall be the basis
6    used to compute the depreciation deduction for federal
7    income tax purposes.
8        (4) If the basis of the property for federal income tax
9    depreciation purposes is increased after it has been placed
10    in service in the Enterprise Zone or River Edge
11    Redevelopment Zone by the taxpayer, the amount of such
12    increase shall be deemed property placed in service on the
13    date of such increase in basis.
14        (5) The term "placed in service" shall have the same
15    meaning as under Section 46 of the Internal Revenue Code.
16        (6) If during any taxable year, any property ceases to
17    be qualified property in the hands of the taxpayer within
18    48 months after being placed in service, or the situs of
19    any qualified property is moved outside the Enterprise Zone
20    or River Edge Redevelopment Zone within 48 months after
21    being placed in service, the tax imposed under subsections
22    (a) and (b) of this Section for such taxable year shall be
23    increased. Such increase shall be determined by (i)
24    recomputing the investment credit which would have been
25    allowed for the year in which credit for such property was
26    originally allowed by eliminating such property from such

 

 

10000SB0009sam001- 154 -LRB100 06347 HLH 18430 a

1    computation, and (ii) subtracting such recomputed credit
2    from the amount of credit previously allowed. For the
3    purposes of this paragraph (6), a reduction of the basis of
4    qualified property resulting from a redetermination of the
5    purchase price shall be deemed a disposition of qualified
6    property to the extent of such reduction.
7        (7) There shall be allowed an additional credit equal
8    to 0.5% of the basis of qualified property placed in
9    service during the taxable year in a River Edge
10    Redevelopment Zone, provided such property is placed in
11    service on or after July 1, 2006, and the taxpayer's base
12    employment within Illinois has increased by 1% or more over
13    the preceding year as determined by the taxpayer's
14    employment records filed with the Illinois Department of
15    Employment Security. Taxpayers who are new to Illinois
16    shall be deemed to have met the 1% growth in base
17    employment for the first year in which they file employment
18    records with the Illinois Department of Employment
19    Security. If, in any year, the increase in base employment
20    within Illinois over the preceding year is less than 1%,
21    the additional credit shall be limited to that percentage
22    times a fraction, the numerator of which is 0.5% and the
23    denominator of which is 1%, but shall not exceed 0.5%.
24    (g) (Blank).
25    (h) Investment credit; High Impact Business.
26        (1) Subject to subsections (b) and (b-5) of Section 5.5

 

 

10000SB0009sam001- 155 -LRB100 06347 HLH 18430 a

1    of the Illinois Enterprise Zone Act, a taxpayer shall be
2    allowed a credit against the tax imposed by subsections (a)
3    and (b) of this Section for investment in qualified
4    property which is placed in service by a Department of
5    Commerce and Economic Opportunity designated High Impact
6    Business. The credit shall be .5% of the basis for such
7    property. The credit shall not be available (i) until the
8    minimum investments in qualified property set forth in
9    subdivision (a)(3)(A) of Section 5.5 of the Illinois
10    Enterprise Zone Act have been satisfied or (ii) until the
11    time authorized in subsection (b-5) of the Illinois
12    Enterprise Zone Act for entities designated as High Impact
13    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
14    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
15    Act, and shall not be allowed to the extent that it would
16    reduce a taxpayer's liability for the tax imposed by
17    subsections (a) and (b) of this Section to below zero. The
18    credit applicable to such investments shall be taken in the
19    taxable year in which such investments have been completed.
20    The credit for additional investments beyond the minimum
21    investment by a designated high impact business authorized
22    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
23    Enterprise Zone Act shall be available only in the taxable
24    year in which the property is placed in service and shall
25    not be allowed to the extent that it would reduce a
26    taxpayer's liability for the tax imposed by subsections (a)

 

 

10000SB0009sam001- 156 -LRB100 06347 HLH 18430 a

1    and (b) of this Section to below zero. For tax years ending
2    on or after December 31, 1987, the credit shall be allowed
3    for the tax year in which the property is placed in
4    service, or, if the amount of the credit exceeds the tax
5    liability for that year, whether it exceeds the original
6    liability or the liability as later amended, such excess
7    may be carried forward and applied to the tax liability of
8    the 5 taxable years following the excess credit year. The
9    credit shall be applied to the earliest year for which
10    there is a liability. If there is credit from more than one
11    tax year that is available to offset a liability, the
12    credit accruing first in time shall be applied first.
13        Changes made in this subdivision (h)(1) by Public Act
14    88-670 restore changes made by Public Act 85-1182 and
15    reflect existing law.
16        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (h);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code; and
26            (D) is not eligible for the Enterprise Zone

 

 

10000SB0009sam001- 157 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 158 -LRB100 06347 HLH 18430 a

1    the purposes of this paragraph (6), a reduction of the
2    basis of qualified property resulting from a
3    redetermination of the purchase price shall be deemed a
4    disposition of qualified property to the extent of such
5    reduction.
6        (7) Beginning with tax years ending after December 31,
7    1996, if a taxpayer qualifies for the credit under this
8    subsection (h) and thereby is granted a tax abatement and
9    the taxpayer relocates its entire facility in violation of
10    the explicit terms and length of the contract under Section
11    18-183 of the Property Tax Code, the tax imposed under
12    subsections (a) and (b) of this Section shall be increased
13    for the taxable year in which the taxpayer relocated its
14    facility by an amount equal to the amount of credit
15    received by the taxpayer under this subsection (h).
16    (i) Credit for Personal Property Tax Replacement Income
17Tax. For tax years ending prior to December 31, 2003, a credit
18shall be allowed against the tax imposed by subsections (a) and
19(b) of this Section for the tax imposed by subsections (c) and
20(d) of this Section. This credit shall be computed by
21multiplying the tax imposed by subsections (c) and (d) of this
22Section by a fraction, the numerator of which is base income
23allocable to Illinois and the denominator of which is Illinois
24base income, and further multiplying the product by the tax
25rate imposed by subsections (a) and (b) of this Section.
26    Any credit earned on or after December 31, 1986 under this

 

 

10000SB0009sam001- 159 -LRB100 06347 HLH 18430 a

1subsection which is unused in the year the credit is computed
2because it exceeds the tax liability imposed by subsections (a)
3and (b) for that year (whether it exceeds the original
4liability or the liability as later amended) may be carried
5forward and applied to the tax liability imposed by subsections
6(a) and (b) of the 5 taxable years following the excess credit
7year, provided that no credit may be carried forward to any
8year ending on or after December 31, 2003. This credit shall be
9applied first to the earliest year for which there is a
10liability. If there is a credit under this subsection from more
11than one tax year that is available to offset a liability the
12earliest credit arising under this subsection shall be applied
13first.
14    If, during any taxable year ending on or after December 31,
151986, the tax imposed by subsections (c) and (d) of this
16Section for which a taxpayer has claimed a credit under this
17subsection (i) is reduced, the amount of credit for such tax
18shall also be reduced. Such reduction shall be determined by
19recomputing the credit to take into account the reduced tax
20imposed by subsections (c) and (d). If any portion of the
21reduced amount of credit has been carried to a different
22taxable year, an amended return shall be filed for such taxable
23year to reduce the amount of credit claimed.
24    (j) Training expense credit. Beginning with tax years
25ending on or after December 31, 1986 and prior to December 31,
262003, a taxpayer shall be allowed a credit against the tax

 

 

10000SB0009sam001- 160 -LRB100 06347 HLH 18430 a

1imposed by subsections (a) and (b) under this Section for all
2amounts paid or accrued, on behalf of all persons employed by
3the taxpayer in Illinois or Illinois residents employed outside
4of Illinois by a taxpayer, for educational or vocational
5training in semi-technical or technical fields or semi-skilled
6or skilled fields, which were deducted from gross income in the
7computation of taxable income. The credit against the tax
8imposed by subsections (a) and (b) shall be 1.6% of such
9training expenses. For partners, shareholders of subchapter S
10corporations, and owners of limited liability companies, if the
11liability company is treated as a partnership for purposes of
12federal and State income taxation, there shall be allowed a
13credit under this subsection (j) to be determined in accordance
14with the determination of income and distributive share of
15income under Sections 702 and 704 and subchapter S of the
16Internal Revenue Code.
17    Any credit allowed under this subsection which is unused in
18the year the credit is earned may be carried forward to each of
19the 5 taxable years following the year for which the credit is
20first computed until it is used. This credit shall be applied
21first to the earliest year for which there is a liability. If
22there is a credit under this subsection from more than one tax
23year that is available to offset a liability the earliest
24credit arising under this subsection shall be applied first. No
25carryforward credit may be claimed in any tax year ending on or
26after December 31, 2003.

 

 

10000SB0009sam001- 161 -LRB100 06347 HLH 18430 a

1    (k) Research and development credit. For tax years ending
2after July 1, 1990 and prior to December 31, 2003, and
3beginning again for tax years ending on or after December 31,
42004, and ending prior to January 1, 2016, a taxpayer shall be
5allowed a credit against the tax imposed by subsections (a) and
6(b) of this Section for increasing research activities in this
7State. The credit allowed against the tax imposed by
8subsections (a) and (b) shall be equal to 6 1/2% of the
9qualifying expenditures for increasing research activities in
10this State. For partners, shareholders of subchapter S
11corporations, and owners of limited liability companies, if the
12liability company is treated as a partnership for purposes of
13federal and State income taxation, there shall be allowed a
14credit under this subsection to be determined in accordance
15with the determination of income and distributive share of
16income under Sections 702 and 704 and subchapter S of the
17Internal Revenue Code.
18    For purposes of this subsection, "qualifying expenditures"
19means the qualifying expenditures as defined for the federal
20credit for increasing research activities which would be
21allowable under Section 41 of the Internal Revenue Code and
22which are conducted in this State, "qualifying expenditures for
23increasing research activities in this State" means the excess
24of qualifying expenditures for the taxable year in which
25incurred over qualifying expenditures for the base period,
26"qualifying expenditures for the base period" means (i) for tax

 

 

10000SB0009sam001- 162 -LRB100 06347 HLH 18430 a

1years ending prior to December 31, 2017, the average of the
2qualifying expenditures for each year in the base period; and
3(2) for tax years ending on or after December 31, 2017, 50% of
4the average of the qualifying expenditures for each year in the
5base period, and "base period" means the 3 taxable years
6immediately preceding the taxable year for which the
7determination is being made.
8    Any credit in excess of the tax liability for the taxable
9year may be carried forward. A taxpayer may elect to have the
10unused credit shown on its final completed return carried over
11as a credit against the tax liability for the following 5
12taxable years or until it has been fully used, whichever occurs
13first; provided that no credit earned in a tax year ending
14prior to December 31, 2003 may be carried forward to any year
15ending on or after December 31, 2003.
16    If an unused credit is carried forward to a given year from
172 or more earlier years, that credit arising in the earliest
18year will be applied first against the tax liability for the
19given year. If a tax liability for the given year still
20remains, the credit from the next earliest year will then be
21applied, and so on, until all credits have been used or no tax
22liability for the given year remains. Any remaining unused
23credit or credits then will be carried forward to the next
24following year in which a tax liability is incurred, except
25that no credit can be carried forward to a year which is more
26than 5 years after the year in which the expense for which the

 

 

10000SB0009sam001- 163 -LRB100 06347 HLH 18430 a

1credit is given was incurred.
2    No inference shall be drawn from this amendatory Act of the
391st General Assembly in construing this Section for taxable
4years beginning before January 1, 1999.
5    This subsection (k) is exempt from the provisions of
6Section 250.
7    It is the intent of the General Assembly that the research
8and development credit under this subsection (k) shall apply
9continuously for all tax years ending on or after December 31,
102004, including, but not limited to, the period beginning on
11January 1, 2016 and ending on the effective date of this
12amendatory Act of the 100th General Assembly. All actions taken
13in reliance on the continuation of the credit under this
14subsection (k) by any taxpayer are hereby validated.
15    (l) Environmental Remediation Tax Credit.
16        (i) For tax years ending after December 31, 1997 and on
17    or before December 31, 2001, a taxpayer shall be allowed a
18    credit against the tax imposed by subsections (a) and (b)
19    of this Section for certain amounts paid for unreimbursed
20    eligible remediation costs, as specified in this
21    subsection. For purposes of this Section, "unreimbursed
22    eligible remediation costs" means costs approved by the
23    Illinois Environmental Protection Agency ("Agency") under
24    Section 58.14 of the Environmental Protection Act that were
25    paid in performing environmental remediation at a site for
26    which a No Further Remediation Letter was issued by the

 

 

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1    Agency and recorded under Section 58.10 of the
2    Environmental Protection Act. The credit must be claimed
3    for the taxable year in which Agency approval of the
4    eligible remediation costs is granted. The credit is not
5    available to any taxpayer if the taxpayer or any related
6    party caused or contributed to, in any material respect, a
7    release of regulated substances on, in, or under the site
8    that was identified and addressed by the remedial action
9    pursuant to the Site Remediation Program of the
10    Environmental Protection Act. After the Pollution Control
11    Board rules are adopted pursuant to the Illinois
12    Administrative Procedure Act for the administration and
13    enforcement of Section 58.9 of the Environmental
14    Protection Act, determinations as to credit availability
15    for purposes of this Section shall be made consistent with
16    those rules. For purposes of this Section, "taxpayer"
17    includes a person whose tax attributes the taxpayer has
18    succeeded to under Section 381 of the Internal Revenue Code
19    and "related party" includes the persons disallowed a
20    deduction for losses by paragraphs (b), (c), and (f)(1) of
21    Section 267 of the Internal Revenue Code by virtue of being
22    a related taxpayer, as well as any of its partners. The
23    credit allowed against the tax imposed by subsections (a)
24    and (b) shall be equal to 25% of the unreimbursed eligible
25    remediation costs in excess of $100,000 per site, except
26    that the $100,000 threshold shall not apply to any site

 

 

10000SB0009sam001- 165 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 166 -LRB100 06347 HLH 18430 a

1    carry-forward period of the seller. To perfect the
2    transfer, the assignor shall record the transfer in the
3    chain of title for the site and provide written notice to
4    the Director of the Illinois Department of Revenue of the
5    assignor's intent to sell the remediation site and the
6    amount of the tax credit to be transferred as a portion of
7    the sale. In no event may a credit be transferred to any
8    taxpayer if the taxpayer or a related party would not be
9    eligible under the provisions of subsection (i).
10        (iii) For purposes of this Section, the term "site"
11    shall have the same meaning as under Section 58.2 of the
12    Environmental Protection Act.
13    (m) Education expense credit. Beginning with tax years
14ending after December 31, 1999, a taxpayer who is the custodian
15of one or more qualifying pupils shall be allowed a credit
16against the tax imposed by subsections (a) and (b) of this
17Section for qualified education expenses incurred on behalf of
18the qualifying pupils. The credit shall be equal to 25% of
19qualified education expenses, but in no event may the total
20credit under this subsection claimed by a family that is the
21custodian of qualifying pupils exceed (i) $500 for tax years
22ending prior to December 31, 2017, and (ii) $750 for tax years
23ending on or after December 31, 2017. In no event shall a
24credit under this subsection reduce the taxpayer's liability
25under this Act to less than zero. This subsection is exempt
26from the provisions of Section 250 of this Act.

 

 

10000SB0009sam001- 167 -LRB100 06347 HLH 18430 a

1    For purposes of this subsection:
2    "Qualifying pupils" means individuals who (i) are
3residents of the State of Illinois, (ii) are under the age of
421 at the close of the school year for which a credit is
5sought, and (iii) during the school year for which a credit is
6sought were full-time pupils enrolled in a kindergarten through
7twelfth grade education program at any school, as defined in
8this subsection.
9    "Qualified education expense" means the amount incurred on
10behalf of a qualifying pupil in excess of $250 for tuition,
11book fees, and lab fees at the school in which the pupil is
12enrolled during the regular school year.
13    "School" means any public or nonpublic elementary or
14secondary school in Illinois that is in compliance with Title
15VI of the Civil Rights Act of 1964 and attendance at which
16satisfies the requirements of Section 26-1 of the School Code,
17except that nothing shall be construed to require a child to
18attend any particular public or nonpublic school to qualify for
19the credit under this Section.
20    "Custodian" means, with respect to qualifying pupils, an
21Illinois resident who is a parent, the parents, a legal
22guardian, or the legal guardians of the qualifying pupils.
23    (n) River Edge Redevelopment Zone site remediation tax
24credit.
25        (i) For tax years ending on or after December 31, 2006,
26    a taxpayer shall be allowed a credit against the tax

 

 

10000SB0009sam001- 168 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 169 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 170 -LRB100 06347 HLH 18430 a

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

 

 

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1        any registration by the Illinois Department of Public
2        Health;
3            (C) a determination by the Illinois Department of
4        Public Health that transfer of the registration is in
5        the best interests of Illinois qualifying patients as
6        defined by the Compassionate Use of Medical Cannabis
7        Pilot Program Act;
8            (D) the death of an owner of the equity interest in
9        a registrant;
10            (E) the acquisition of a controlling interest in
11        the stock or substantially all of the assets of a
12        publicly traded company;
13            (F) a transfer by a parent company to a wholly
14        owned subsidiary; or
15            (G) the transfer or sale to or by one person to
16        another person where both persons were initial owners
17        of the registration when the registration was issued;
18        or
19        (2) the cannabis cultivation center registration,
20    medical cannabis dispensary registration, or the
21    controlling interest in a registrant's property is
22    transferred in a transaction to lineal descendants in which
23    no gain or loss is recognized or as a result of a
24    transaction in accordance with Section 351 of the Internal
25    Revenue Code in which no gain or loss is recognized.
26(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,

 

 

10000SB0009sam001- 172 -LRB100 06347 HLH 18430 a

1eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
2eff. 7-16-14.)
 
3    (35 ILCS 5/201.7 new)
4    Sec. 201.7. Fiscal Year 2018 spending limitation and tax
5reduction.
6    (a) If, in State fiscal year 2018, State spending exceeds
7the State spending limitation set forth in subsection (b) of
8this Section, then the tax rates set forth in subsection (b) of
9Section 201 of this Act shall be reduced, according to the
10procedures set forth in this Section, to 3.75% of the
11taxpayer's net income for individuals, trusts, and estates and
12to 5.25% of the taxpayer's net income for corporations. For all
13taxable years following the taxable year in which the rate has
14been reduced pursuant to this Section, the tax rate set forth
15in subsection (b) of Section 201 of this Act shall be 3.75% of
16the taxpayer's net income for individuals, trusts, and estates
17and 5.25% of the taxpayer's net income for corporations.
18    (b) The State spending limitation for fiscal years 2018
19shall be $38,450,000,000.
20    (c) Notwithstanding any other provision of law to the
21contrary, the Auditor General shall examine each Public Act
22authorizing State spending from State general funds and prepare
23a report no later than 30 days after receiving notification of
24the Public Act from the Secretary of State or 60 days after the
25effective date of the Public Act, whichever is earlier. The

 

 

10000SB0009sam001- 173 -LRB100 06347 HLH 18430 a

1Auditor General shall file the report with the Secretary of
2State and copies with the Governor, the State Treasurer, the
3State Comptroller, the Senate, and the House of
4Representatives. The report shall indicate: (i) the amount of
5State spending set forth in the applicable Public Act; (ii) the
6total amount of State spending authorized by law for the
7applicable fiscal year as of the date of the report; and (iii)
8whether State spending exceeds the State spending limitation
9set forth in subsection (b). The Auditor General may examine
10multiple Public Acts in one consolidated report, provided that
11each Public Act is examined within the time period mandated by
12this subsection (c). The Auditor General shall issue reports in
13accordance with this Section through June 30, 2018, or the
14effective date of a reduction in the rate of tax imposed by
15subsections (a) and (b) of Section 201 of this Act pursuant to
16this Section, whichever is earlier.
17    At the request of the Auditor General, each State agency
18shall, without delay, make available to the Auditor General or
19his or her designated representative any record or information
20requested and shall provide for examination or copying all
21records, accounts, papers, reports, vouchers, correspondence,
22books and other documentation in the custody of that agency,
23including information stored in electronic data processing
24systems, which is related to or within the scope of a report
25prepared under this Section. The Auditor General shall report
26to the Governor each instance in which a State agency fails to

 

 

10000SB0009sam001- 174 -LRB100 06347 HLH 18430 a

1cooperate promptly and fully with his or her office as required
2by this Section.
3    The Auditor General's report shall not be in the nature of
4a post-audit or examination and shall not lead to the issuance
5of an opinion as that term is defined in generally accepted
6government auditing standards.
7    (d) If the Auditor General reports that State spending has
8exceeded the State spending limitation set forth in subsection
9(b) and if the Governor has not been presented with a bill or
10bills passed by the General Assembly to reduce State spending
11to a level that does not exceed the State spending limitation
12within 45 calendar days of receipt of the Auditor General's
13report, then the Governor may, for the purpose of reducing
14State spending to a level that does not exceed the State
15spending limitation set forth in subsection (b), designate
16amounts to be set aside as a reserve from the amounts
17appropriated from the State general funds for all boards,
18commissions, agencies, institutions, authorities, colleges,
19universities, and bodies politic and corporate of the State,
20but not other constitutional officers, the legislative or
21judicial branch, the office of the Executive Inspector General,
22or the Executive Ethics Commission. Such a designation must be
23made within 15 calendar days after the end of that 45-day
24period. If the Governor designates amounts to be set aside as a
25reserve, the Governor shall give notice of the designation to
26the Auditor General, the State Treasurer, the State

 

 

10000SB0009sam001- 175 -LRB100 06347 HLH 18430 a

1Comptroller, the Senate, and the House of Representatives. The
2amounts placed in reserves shall not be transferred, obligated,
3encumbered, expended, or otherwise committed unless so
4authorized by law. Any amount placed in reserves is not State
5spending and shall not be considered when calculating the total
6amount of State spending. Any Public Act authorizing the use of
7amounts placed in reserve by the Governor is considered State
8spending, unless such Public Act authorizes the use of amounts
9placed in reserves in response to a fiscal emergency under
10subsection (g).
11    (e) If the Auditor General reports under subsection (c)
12that State spending has exceeded the State spending limitation
13set forth in subsection (b), then the Auditor General shall
14issue a supplemental report no sooner than the 61st day and no
15later than the 65th day after issuing the report pursuant to
16subsection (c). The supplemental report shall: (i) summarize
17details of actions taken by the General Assembly and the
18Governor after the issuance of the initial report to reduce
19State spending, if any, (ii) indicate whether the level of
20State spending has changed since the initial report, and (iii)
21indicate whether State spending exceeds the State spending
22limitation. The Auditor General shall file the report with the
23Secretary of State and copies with the Governor, the State
24Treasurer, the State Comptroller, the Senate, and the House of
25Representatives. If the supplemental report of the Auditor
26General provides that State spending exceeds the State spending

 

 

10000SB0009sam001- 176 -LRB100 06347 HLH 18430 a

1limitation, then the rate of tax imposed by subsections (a) and
2(b) of Section 201 is reduced as provided in this Section
3beginning on the first day of the first month to occur not less
4than 30 days after issuance of the supplemental report.
5    (f) Should the rates of tax be reduced under this Section,
6the tax imposed by subsections (a) and (b) of Section 201 shall
7be determined as follows:
8        (1) In the case of an individual, trust, or estate, the
9    tax shall be imposed in an amount equal to the sum of (i)
10    the rate applicable to the taxpayer under subsection (b) of
11    Section 201 (without regard to the provisions of this
12    Section) times the taxpayer's net income for any portion of
13    the taxable year prior to the effective date of the
14    reduction and (ii) 3.75% of the taxpayer's net income for
15    any portion of the taxable year on or after the effective
16    date of the reduction.
17        (2) In the case of a corporation, the tax shall be
18    imposed in an amount equal to the sum of (i) the rate
19    applicable to the taxpayer under subsection (b) of Section
20    201 (without regard to the provisions of this Section)
21    times the taxpayer's net income for any portion of the
22    taxable year prior to the effective date of the reduction
23    and (ii) 5.25% of the taxpayer's net income for any portion
24    of the taxable year on or after the effective date of the
25    reduction.
26        (3) For any taxpayer for whom the rate has been reduced

 

 

10000SB0009sam001- 177 -LRB100 06347 HLH 18430 a

1    under this Section for a portion of a taxable year, the
2    taxpayer shall determine the net income for each portion of
3    the taxable year following the rules set forth in Section
4    202.5 of this Act, using the effective date of the rate
5    reduction rather than the January 1 dates found in that
6    Section, and the day before the effective date of the rate
7    reduction rather than the December 31 dates found in that
8    Section.
9        (4) If the rate applicable to the taxpayer under
10    subsection (b) of Section 201 (without regard to the
11    provisions of this Section) changes during a portion of the
12    taxable year to which that rate is applied under paragraphs
13    (1) or (2) of this subsection (f), the tax for that portion
14    of the taxable year for purposes of paragraph (1) or (2) of
15    this subsection (f) shall be determined as if that portion
16    of the taxable year were a separate taxable year, following
17    the rules set forth in Section 202.5 of this Act. If the
18    taxpayer elects to follow the rules set forth in subsection
19    (b) of Section 202.5, the taxpayer shall follow the rules
20    set forth in subsection (b) of Section 202.5 for all
21    purposes of this Section for that taxable year.
22    (g) Notwithstanding the State spending limitation set
23forth in subsection (b) of this Section, the Governor may
24declare a fiscal emergency by filing a declaration with the
25Secretary of State and copies with the State Treasurer, the
26State Comptroller, the Senate, and the House of

 

 

10000SB0009sam001- 178 -LRB100 06347 HLH 18430 a

1Representatives. The declaration must be limited to only one
2State fiscal year, set forth compelling reasons for declaring a
3fiscal emergency, and request a specific dollar amount. Unless,
4within 10 calendar days of receipt of the Governor's
5declaration, the State Comptroller or State Treasurer notifies
6the Senate and the House of Representatives that he or she does
7not concur in the Governor's declaration, State spending
8authorized by law to address the fiscal emergency in an amount
9no greater than the dollar amount specified in the declaration
10shall not be considered "State spending" for purposes of the
11State spending limitation.
12    (h) As used in this Section:
13    "State general funds" means the General Revenue Fund, the
14Common School Fund, the General Revenue Common School Special
15Account Fund, the Education Assistance Fund, and the Budget
16Stabilization Fund.
17    "State spending" means (i) the total amount authorized for
18spending by appropriation or statutory transfer from the State
19general funds in the applicable fiscal year, and (ii) any
20amounts the Governor places in reserves in accordance with
21subsection (d) that are subsequently released from reserves
22following authorization by a Public Act. For the purpose of
23this definition, "appropriation" means authority to spend
24money from a State general fund for a specific amount, purpose,
25and time period, including any supplemental appropriation or
26continuing appropriation, but does not include

 

 

10000SB0009sam001- 179 -LRB100 06347 HLH 18430 a

1reappropriations from a previous fiscal year. For the purpose
2of this definition, "statutory transfer" means authority to
3transfer funds from one State general fund to any other fund in
4the State treasury, but does not include transfers made from
5one State general fund to another State general fund.
6    "State spending limitation" means the amount described in
7subsection (b) of this Section for the applicable fiscal year.
 
8    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
9    Sec. 203. Base income defined.
10    (a) Individuals.
11        (1) In general. In the case of an individual, base
12    income means an amount equal to the taxpayer's adjusted
13    gross income for the taxable year as modified by paragraph
14    (2).
15        (2) Modifications. The adjusted gross income referred
16    to in paragraph (1) shall be modified by adding thereto the
17    sum of the following amounts:
18            (A) An amount equal to all amounts paid or accrued
19        to the taxpayer as interest or dividends during the
20        taxable year to the extent excluded from gross income
21        in the computation of adjusted gross income, except
22        stock dividends of qualified public utilities
23        described in Section 305(e) of the Internal Revenue
24        Code;
25            (B) An amount equal to the amount of tax imposed by

 

 

10000SB0009sam001- 180 -LRB100 06347 HLH 18430 a

1        this Act to the extent deducted from gross income in
2        the computation of adjusted gross income for the
3        taxable year;
4            (C) An amount equal to the amount received during
5        the taxable year as a recovery or refund of real
6        property taxes paid with respect to the taxpayer's
7        principal residence under the Revenue Act of 1939 and
8        for which a deduction was previously taken under
9        subparagraph (L) of this paragraph (2) prior to July 1,
10        1991, the retrospective application date of Article 4
11        of Public Act 87-17. In the case of multi-unit or
12        multi-use structures and farm dwellings, the taxes on
13        the taxpayer's principal residence shall be that
14        portion of the total taxes for the entire property
15        which is attributable to such principal residence;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of adjusted gross income;
20            (D-5) An amount, to the extent not included in
21        adjusted gross income, equal to the amount of money
22        withdrawn by the taxpayer in the taxable year from a
23        medical care savings account and the interest earned on
24        the account in the taxable year of a withdrawal
25        pursuant to subsection (b) of Section 20 of the Medical
26        Care Savings Account Act or subsection (b) of Section

 

 

10000SB0009sam001- 181 -LRB100 06347 HLH 18430 a

1        20 of the Medical Care Savings Account Act of 2000;
2            (D-10) For taxable years ending after December 31,
3        1997, an amount equal to any eligible remediation costs
4        that the individual deducted in computing adjusted
5        gross income and for which the individual claims a
6        credit under subsection (l) of Section 201;
7            (D-15) For taxable years 2001 and thereafter, an
8        amount equal to the bonus depreciation deduction taken
9        on the taxpayer's federal income tax return for the
10        taxable year under subsection (k) of Section 168 of the
11        Internal Revenue Code;
12            (D-16) If the taxpayer sells, transfers, abandons,
13        or otherwise disposes of property for which the
14        taxpayer was required in any taxable year to make an
15        addition modification under subparagraph (D-15), then
16        an amount equal to the aggregate amount of the
17        deductions taken in all taxable years under
18        subparagraph (Z) with respect to that property.
19            If the taxpayer continues to own property through
20        the last day of the last tax year for which the
21        taxpayer may claim a depreciation deduction for
22        federal income tax purposes and for which the taxpayer
23        was allowed in any taxable year to make a subtraction
24        modification under subparagraph (Z), then an amount
25        equal to that subtraction modification.
26            The taxpayer is required to make the addition

 

 

10000SB0009sam001- 182 -LRB100 06347 HLH 18430 a

1        modification under this subparagraph only once with
2        respect to any one piece of property;
3            (D-17) An amount equal to the amount otherwise
4        allowed as a deduction in computing base income for
5        interest paid, accrued, or incurred, directly or
6        indirectly, (i) for taxable years ending on or after
7        December 31, 2004, to a foreign person who would be a
8        member of the same unitary business group but for the
9        fact that foreign person's business activity outside
10        the United States is 80% or more of the foreign
11        person's total business activity and (ii) for taxable
12        years ending on or after December 31, 2008, to a person
13        who would be a member of the same unitary business
14        group but for the fact that the person is prohibited
15        under Section 1501(a)(27) from being included in the
16        unitary business group because he or she is ordinarily
17        required to apportion business income under different
18        subsections of Section 304. The addition modification
19        required by this subparagraph shall be reduced to the
20        extent that dividends were included in base income of
21        the unitary group for the same taxable year and
22        received by the taxpayer or by a member of the
23        taxpayer's unitary business group (including amounts
24        included in gross income under Sections 951 through 964
25        of the Internal Revenue Code and amounts included in
26        gross income under Section 78 of the Internal Revenue

 

 

10000SB0009sam001- 183 -LRB100 06347 HLH 18430 a

1        Code) with respect to the stock of the same person to
2        whom the interest was paid, accrued, or incurred.
3            This paragraph shall not apply to the following:
4                (i) an item of interest paid, accrued, or
5            incurred, directly or indirectly, to a person who
6            is subject in a foreign country or state, other
7            than a state which requires mandatory unitary
8            reporting, to a tax on or measured by net income
9            with respect to such interest; or
10                (ii) an item of interest paid, accrued, or
11            incurred, directly or indirectly, to a person if
12            the taxpayer can establish, based on a
13            preponderance of the evidence, both of the
14            following:
15                    (a) the person, during the same taxable
16                year, paid, accrued, or incurred, the interest
17                to a person that is not a related member, and
18                    (b) the transaction giving rise to the
19                interest expense between the taxpayer and the
20                person did not have as a principal purpose the
21                avoidance of Illinois income tax, and is paid
22                pursuant to a contract or agreement that
23                reflects an arm's-length interest rate and
24                terms; or
25                (iii) the taxpayer can establish, based on
26            clear and convincing evidence, that the interest

 

 

10000SB0009sam001- 184 -LRB100 06347 HLH 18430 a

1            paid, accrued, or incurred relates to a contract or
2            agreement entered into at arm's-length rates and
3            terms and the principal purpose for the payment is
4            not federal or Illinois tax avoidance; or
5                (iv) an item of interest paid, accrued, or
6            incurred, directly or indirectly, to a person if
7            the taxpayer establishes by clear and convincing
8            evidence that the adjustments are unreasonable; or
9            if the taxpayer and the Director agree in writing
10            to the application or use of an alternative method
11            of apportionment under Section 304(f).
12                Nothing in this subsection shall preclude the
13            Director from making any other adjustment
14            otherwise allowed under Section 404 of this Act for
15            any tax year beginning after the effective date of
16            this amendment provided such adjustment is made
17            pursuant to regulation adopted by the Department
18            and such regulations provide methods and standards
19            by which the Department will utilize its authority
20            under Section 404 of this Act;
21            (D-18) An amount equal to the amount of intangible
22        expenses and costs otherwise allowed as a deduction in
23        computing base income, and that were paid, accrued, or
24        incurred, directly or indirectly, (i) for taxable
25        years ending on or after December 31, 2004, to a
26        foreign person who would be a member of the same

 

 

10000SB0009sam001- 185 -LRB100 06347 HLH 18430 a

1        unitary business group but for the fact that the
2        foreign person's business activity outside the United
3        States is 80% or more of that person's total business
4        activity and (ii) for taxable years ending on or after
5        December 31, 2008, to a person who would be a member of
6        the same unitary business group but for the fact that
7        the person is prohibited under Section 1501(a)(27)
8        from being included in the unitary business group
9        because he or she is ordinarily required to apportion
10        business income under different subsections of Section
11        304. The addition modification required by this
12        subparagraph shall be reduced to the extent that
13        dividends were included in base income of the unitary
14        group for the same taxable year and received by the
15        taxpayer or by a member of the taxpayer's unitary
16        business group (including amounts included in gross
17        income under Sections 951 through 964 of the Internal
18        Revenue Code and amounts included in gross income under
19        Section 78 of the Internal Revenue Code) with respect
20        to the stock of the same person to whom the intangible
21        expenses and costs were directly or indirectly paid,
22        incurred, or accrued. The preceding sentence does not
23        apply to the extent that the same dividends caused a
24        reduction to the addition modification required under
25        Section 203(a)(2)(D-17) of this Act. As used in this
26        subparagraph, the term "intangible expenses and costs"

 

 

10000SB0009sam001- 186 -LRB100 06347 HLH 18430 a

1        includes (1) expenses, losses, and costs for, or
2        related to, the direct or indirect acquisition, use,
3        maintenance or management, ownership, sale, exchange,
4        or any other disposition of intangible property; (2)
5        losses incurred, directly or indirectly, from
6        factoring transactions or discounting transactions;
7        (3) royalty, patent, technical, and copyright fees;
8        (4) licensing fees; and (5) other similar expenses and
9        costs. For purposes of this subparagraph, "intangible
10        property" includes patents, patent applications, trade
11        names, trademarks, service marks, copyrights, mask
12        works, trade secrets, and similar types of intangible
13        assets.
14            This paragraph shall not apply to the following:
15                (i) any item of intangible expenses or costs
16            paid, accrued, or incurred, directly or
17            indirectly, from a transaction with a person who is
18            subject in a foreign country or state, other than a
19            state which requires mandatory unitary reporting,
20            to a tax on or measured by net income with respect
21            to such item; or
22                (ii) any item of intangible expense or cost
23            paid, accrued, or incurred, directly or
24            indirectly, if the taxpayer can establish, based
25            on a preponderance of the evidence, both of the
26            following:

 

 

10000SB0009sam001- 187 -LRB100 06347 HLH 18430 a

1                    (a) the person during the same taxable
2                year paid, accrued, or incurred, the
3                intangible expense or cost to a person that is
4                not a related member, and
5                    (b) the transaction giving rise to the
6                intangible expense or cost between the
7                taxpayer and the person did not have as a
8                principal purpose the avoidance of Illinois
9                income tax, and is paid pursuant to a contract
10                or agreement that reflects arm's-length terms;
11                or
12                (iii) any item of intangible expense or cost
13            paid, accrued, or incurred, directly or
14            indirectly, from a transaction with a person if the
15            taxpayer establishes by clear and convincing
16            evidence, that the adjustments are unreasonable;
17            or if the taxpayer and the Director agree in
18            writing to the application or use of an alternative
19            method of apportionment under Section 304(f);
20                Nothing in this subsection shall preclude the
21            Director from making any other adjustment
22            otherwise allowed under Section 404 of this Act for
23            any tax year beginning after the effective date of
24            this amendment provided such adjustment is made
25            pursuant to regulation adopted by the Department
26            and such regulations provide methods and standards

 

 

10000SB0009sam001- 188 -LRB100 06347 HLH 18430 a

1            by which the Department will utilize its authority
2            under Section 404 of this Act;
3            (D-19) For taxable years ending on or after
4        December 31, 2008, an amount equal to the amount of
5        insurance premium expenses and costs otherwise allowed
6        as a deduction in computing base income, and that were
7        paid, accrued, or incurred, directly or indirectly, to
8        a person who would be a member of the same unitary
9        business group but for the fact that the person is
10        prohibited under Section 1501(a)(27) from being
11        included in the unitary business group because he or
12        she is ordinarily required to apportion business
13        income under different subsections of Section 304. The
14        addition modification required by this subparagraph
15        shall be reduced to the extent that dividends were
16        included in base income of the unitary group for the
17        same taxable year and received by the taxpayer or by a
18        member of the taxpayer's unitary business group
19        (including amounts included in gross income under
20        Sections 951 through 964 of the Internal Revenue Code
21        and amounts included in gross income under Section 78
22        of the Internal Revenue Code) with respect to the stock
23        of the same person to whom the premiums and costs were
24        directly or indirectly paid, incurred, or accrued. The
25        preceding sentence does not apply to the extent that
26        the same dividends caused a reduction to the addition

 

 

10000SB0009sam001- 189 -LRB100 06347 HLH 18430 a

1        modification required under Section 203(a)(2)(D-17) or
2        Section 203(a)(2)(D-18) of this Act.
3            (D-20) For taxable years beginning on or after
4        January 1, 2002 and ending on or before December 31,
5        2006, in the case of a distribution from a qualified
6        tuition program under Section 529 of the Internal
7        Revenue Code, other than (i) a distribution from a
8        College Savings Pool created under Section 16.5 of the
9        State Treasurer Act or (ii) a distribution from the
10        Illinois Prepaid Tuition Trust Fund, an amount equal to
11        the amount excluded from gross income under Section
12        529(c)(3)(B). For taxable years beginning on or after
13        January 1, 2007, in the case of a distribution from a
14        qualified tuition program under Section 529 of the
15        Internal Revenue Code, other than (i) a distribution
16        from a College Savings Pool created under Section 16.5
17        of the State Treasurer Act, (ii) a distribution from
18        the Illinois Prepaid Tuition Trust Fund, or (iii) a
19        distribution from a qualified tuition program under
20        Section 529 of the Internal Revenue Code that (I)
21        adopts and determines that its offering materials
22        comply with the College Savings Plans Network's
23        disclosure principles and (II) has made reasonable
24        efforts to inform in-state residents of the existence
25        of in-state qualified tuition programs by informing
26        Illinois residents directly and, where applicable, to

 

 

10000SB0009sam001- 190 -LRB100 06347 HLH 18430 a

1        inform financial intermediaries distributing the
2        program to inform in-state residents of the existence
3        of in-state qualified tuition programs at least
4        annually, an amount equal to the amount excluded from
5        gross income under Section 529(c)(3)(B).
6            For the purposes of this subparagraph (D-20), a
7        qualified tuition program has made reasonable efforts
8        if it makes disclosures (which may use the term
9        "in-state program" or "in-state plan" and need not
10        specifically refer to Illinois or its qualified
11        programs by name) (i) directly to prospective
12        participants in its offering materials or makes a
13        public disclosure, such as a website posting; and (ii)
14        where applicable, to intermediaries selling the
15        out-of-state program in the same manner that the
16        out-of-state program distributes its offering
17        materials;
18            (D-21) For taxable years beginning on or after
19        January 1, 2007, in the case of transfer of moneys from
20        a qualified tuition program under Section 529 of the
21        Internal Revenue Code that is administered by the State
22        to an out-of-state program, an amount equal to the
23        amount of moneys previously deducted from base income
24        under subsection (a)(2)(Y) of this Section;
25            (D-22) For taxable years beginning on or after
26        January 1, 2009, in the case of a nonqualified

 

 

10000SB0009sam001- 191 -LRB100 06347 HLH 18430 a

1        withdrawal or refund of moneys from a qualified tuition
2        program under Section 529 of the Internal Revenue Code
3        administered by the State that is not used for
4        qualified expenses at an eligible education
5        institution, an amount equal to the contribution
6        component of the nonqualified withdrawal or refund
7        that was previously deducted from base income under
8        subsection (a)(2)(y) of this Section, provided that
9        the withdrawal or refund did not result from the
10        beneficiary's death or disability;
11            (D-23) An amount equal to the credit allowable to
12        the taxpayer under Section 218(a) of this Act,
13        determined without regard to Section 218(c) of this
14        Act;
15            (D-24) For taxable years beginning on or after
16        January 1, 2017, an amount equal to the deduction
17        allowed under Section 199 of the Internal Revenue Code
18        for the taxable year;
19    and by deducting from the total so obtained the sum of the
20    following amounts:
21            (E) For taxable years ending before December 31,
22        2001, any amount included in such total in respect of
23        any compensation (including but not limited to any
24        compensation paid or accrued to a serviceman while a
25        prisoner of war or missing in action) paid to a
26        resident by reason of being on active duty in the Armed

 

 

10000SB0009sam001- 192 -LRB100 06347 HLH 18430 a

1        Forces of the United States and in respect of any
2        compensation paid or accrued to a resident who as a
3        governmental employee was a prisoner of war or missing
4        in action, and in respect of any compensation paid to a
5        resident in 1971 or thereafter for annual training
6        performed pursuant to Sections 502 and 503, Title 32,
7        United States Code as a member of the Illinois National
8        Guard or, beginning with taxable years ending on or
9        after December 31, 2007, the National Guard of any
10        other state. For taxable years ending on or after
11        December 31, 2001, any amount included in such total in
12        respect of any compensation (including but not limited
13        to any compensation paid or accrued to a serviceman
14        while a prisoner of war or missing in action) paid to a
15        resident by reason of being a member of any component
16        of the Armed Forces of the United States and in respect
17        of any compensation paid or accrued to a resident who
18        as a governmental employee was a prisoner of war or
19        missing in action, and in respect of any compensation
20        paid to a resident in 2001 or thereafter by reason of
21        being a member of the Illinois National Guard or,
22        beginning with taxable years ending on or after
23        December 31, 2007, the National Guard of any other
24        state. The provisions of this subparagraph (E) are
25        exempt from the provisions of Section 250;
26            (F) An amount equal to all amounts included in such

 

 

10000SB0009sam001- 193 -LRB100 06347 HLH 18430 a

1        total pursuant to the provisions of Sections 402(a),
2        402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
3        Internal Revenue Code, or included in such total as
4        distributions under the provisions of any retirement
5        or disability plan for employees of any governmental
6        agency or unit, or retirement payments to retired
7        partners, which payments are excluded in computing net
8        earnings from self employment by Section 1402 of the
9        Internal Revenue Code and regulations adopted pursuant
10        thereto;
11            (G) The valuation limitation amount;
12            (H) An amount equal to the amount of any tax
13        imposed by this Act which was refunded to the taxpayer
14        and included in such total for the taxable year;
15            (I) An amount equal to all amounts included in such
16        total pursuant to the provisions of Section 111 of the
17        Internal Revenue Code as a recovery of items previously
18        deducted from adjusted gross income in the computation
19        of taxable income;
20            (J) An amount equal to those dividends included in
21        such total which were paid by a corporation which
22        conducts business operations in a River Edge
23        Redevelopment Zone or zones created under the River
24        Edge Redevelopment Zone Act, and conducts
25        substantially all of its operations in a River Edge
26        Redevelopment Zone or zones. This subparagraph (J) is

 

 

10000SB0009sam001- 194 -LRB100 06347 HLH 18430 a

1        exempt from the provisions of Section 250;
2            (K) An amount equal to those dividends included in
3        such total that were paid by a corporation that
4        conducts business operations in a federally designated
5        Foreign Trade Zone or Sub-Zone and that is designated a
6        High Impact Business located in Illinois; provided
7        that dividends eligible for the deduction provided in
8        subparagraph (J) of paragraph (2) of this subsection
9        shall not be eligible for the deduction provided under
10        this subparagraph (K);
11            (L) For taxable years ending after December 31,
12        1983, an amount equal to all social security benefits
13        and railroad retirement benefits included in such
14        total pursuant to Sections 72(r) and 86 of the Internal
15        Revenue Code;
16            (M) With the exception of any amounts subtracted
17        under subparagraph (N), an amount equal to the sum of
18        all amounts disallowed as deductions by (i) Sections
19        171(a) (2), and 265(2) of the Internal Revenue Code,
20        and all amounts of expenses allocable to interest and
21        disallowed as deductions by Section 265(1) of the
22        Internal Revenue Code; and (ii) for taxable years
23        ending on or after August 13, 1999, Sections 171(a)(2),
24        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
25        Code, plus, for taxable years ending on or after
26        December 31, 2011, Section 45G(e)(3) of the Internal

 

 

10000SB0009sam001- 195 -LRB100 06347 HLH 18430 a

1        Revenue Code and, for taxable years ending on or after
2        December 31, 2008, any amount included in gross income
3        under Section 87 of the Internal Revenue Code; the
4        provisions of this subparagraph are exempt from the
5        provisions of Section 250;
6            (N) An amount equal to all amounts included in such
7        total which are exempt from taxation by this State
8        either by reason of its statutes or Constitution or by
9        reason of the Constitution, treaties or statutes of the
10        United States; provided that, in the case of any
11        statute of this State that exempts income derived from
12        bonds or other obligations from the tax imposed under
13        this Act, the amount exempted shall be the interest net
14        of bond premium amortization;
15            (O) An amount equal to any contribution made to a
16        job training project established pursuant to the Tax
17        Increment Allocation Redevelopment Act;
18            (P) An amount equal to the amount of the deduction
19        used to compute the federal income tax credit for
20        restoration of substantial amounts held under claim of
21        right for the taxable year pursuant to Section 1341 of
22        the Internal Revenue Code or of any itemized deduction
23        taken from adjusted gross income in the computation of
24        taxable income for restoration of substantial amounts
25        held under claim of right for the taxable year;
26            (Q) An amount equal to any amounts included in such

 

 

10000SB0009sam001- 196 -LRB100 06347 HLH 18430 a

1        total, received by the taxpayer as an acceleration in
2        the payment of life, endowment or annuity benefits in
3        advance of the time they would otherwise be payable as
4        an indemnity for a terminal illness;
5            (R) An amount equal to the amount of any federal or
6        State bonus paid to veterans of the Persian Gulf War;
7            (S) An amount, to the extent included in adjusted
8        gross income, equal to the amount of a contribution
9        made in the taxable year on behalf of the taxpayer to a
10        medical care savings account established under the
11        Medical Care Savings Account Act or the Medical Care
12        Savings Account Act of 2000 to the extent the
13        contribution is accepted by the account administrator
14        as provided in that Act;
15            (T) An amount, to the extent included in adjusted
16        gross income, equal to the amount of interest earned in
17        the taxable year on a medical care savings account
18        established under the Medical Care Savings Account Act
19        or the Medical Care Savings Account Act of 2000 on
20        behalf of the taxpayer, other than interest added
21        pursuant to item (D-5) of this paragraph (2);
22            (U) For one taxable year beginning on or after
23        January 1, 1994, an amount equal to the total amount of
24        tax imposed and paid under subsections (a) and (b) of
25        Section 201 of this Act on grant amounts received by
26        the taxpayer under the Nursing Home Grant Assistance

 

 

10000SB0009sam001- 197 -LRB100 06347 HLH 18430 a

1        Act during the taxpayer's taxable years 1992 and 1993;
2            (V) Beginning with tax years ending on or after
3        December 31, 1995 and ending with tax years ending on
4        or before December 31, 2004, an amount equal to the
5        amount paid by a taxpayer who is a self-employed
6        taxpayer, a partner of a partnership, or a shareholder
7        in a Subchapter S corporation for health insurance or
8        long-term care insurance for that taxpayer or that
9        taxpayer's spouse or dependents, to the extent that the
10        amount paid for that health insurance or long-term care
11        insurance may be deducted under Section 213 of the
12        Internal Revenue Code, has not been deducted on the
13        federal income tax return of the taxpayer, and does not
14        exceed the taxable income attributable to that
15        taxpayer's income, self-employment income, or
16        Subchapter S corporation income; except that no
17        deduction shall be allowed under this item (V) if the
18        taxpayer is eligible to participate in any health
19        insurance or long-term care insurance plan of an
20        employer of the taxpayer or the taxpayer's spouse. The
21        amount of the health insurance and long-term care
22        insurance subtracted under this item (V) shall be
23        determined by multiplying total health insurance and
24        long-term care insurance premiums paid by the taxpayer
25        times a number that represents the fractional
26        percentage of eligible medical expenses under Section

 

 

10000SB0009sam001- 198 -LRB100 06347 HLH 18430 a

1        213 of the Internal Revenue Code of 1986 not actually
2        deducted on the taxpayer's federal income tax return;
3            (W) For taxable years beginning on or after January
4        1, 1998, all amounts included in the taxpayer's federal
5        gross income in the taxable year from amounts converted
6        from a regular IRA to a Roth IRA. This paragraph is
7        exempt from the provisions of Section 250;
8            (X) For taxable year 1999 and thereafter, an amount
9        equal to the amount of any (i) distributions, to the
10        extent includible in gross income for federal income
11        tax purposes, made to the taxpayer because of his or
12        her status as a victim of persecution for racial or
13        religious reasons by Nazi Germany or any other Axis
14        regime or as an heir of the victim and (ii) items of
15        income, to the extent includible in gross income for
16        federal income tax purposes, attributable to, derived
17        from or in any way related to assets stolen from,
18        hidden from, or otherwise lost to a victim of
19        persecution for racial or religious reasons by Nazi
20        Germany or any other Axis regime immediately prior to,
21        during, and immediately after World War II, including,
22        but not limited to, interest on the proceeds receivable
23        as insurance under policies issued to a victim of
24        persecution for racial or religious reasons by Nazi
25        Germany or any other Axis regime by European insurance
26        companies immediately prior to and during World War II;

 

 

10000SB0009sam001- 199 -LRB100 06347 HLH 18430 a

1        provided, however, this subtraction from federal
2        adjusted gross income does not apply to assets acquired
3        with such assets or with the proceeds from the sale of
4        such assets; provided, further, this paragraph shall
5        only apply to a taxpayer who was the first recipient of
6        such assets after their recovery and who is a victim of
7        persecution for racial or religious reasons by Nazi
8        Germany or any other Axis regime or as an heir of the
9        victim. The amount of and the eligibility for any
10        public assistance, benefit, or similar entitlement is
11        not affected by the inclusion of items (i) and (ii) of
12        this paragraph in gross income for federal income tax
13        purposes. This paragraph is exempt from the provisions
14        of Section 250;
15            (Y) For taxable years beginning on or after January
16        1, 2002 and ending on or before December 31, 2004,
17        moneys contributed in the taxable year to a College
18        Savings Pool account under Section 16.5 of the State
19        Treasurer Act, except that amounts excluded from gross
20        income under Section 529(c)(3)(C)(i) of the Internal
21        Revenue Code shall not be considered moneys
22        contributed under this subparagraph (Y). For taxable
23        years beginning on or after January 1, 2005, a maximum
24        of $10,000 contributed in the taxable year to (i) a
25        College Savings Pool account under Section 16.5 of the
26        State Treasurer Act or (ii) the Illinois Prepaid

 

 

10000SB0009sam001- 200 -LRB100 06347 HLH 18430 a

1        Tuition Trust Fund, except that amounts excluded from
2        gross income under Section 529(c)(3)(C)(i) of the
3        Internal Revenue Code shall not be considered moneys
4        contributed under this subparagraph (Y). For purposes
5        of this subparagraph, contributions made by an
6        employer on behalf of an employee, or matching
7        contributions made by an employee, shall be treated as
8        made by the employee. This subparagraph (Y) is exempt
9        from the provisions of Section 250;
10            (Z) For taxable years 2001 and thereafter, for the
11        taxable year in which the bonus depreciation deduction
12        is taken on the taxpayer's federal income tax return
13        under subsection (k) of Section 168 of the Internal
14        Revenue Code and for each applicable taxable year
15        thereafter, an amount equal to "x", where:
16                (1) "y" equals the amount of the depreciation
17            deduction taken for the taxable year on the
18            taxpayer's federal income tax return on property
19            for which the bonus depreciation deduction was
20            taken in any year under subsection (k) of Section
21            168 of the Internal Revenue Code, but not including
22            the bonus depreciation deduction;
23                (2) for taxable years ending on or before
24            December 31, 2005, "x" equals "y" multiplied by 30
25            and then divided by 70 (or "y" multiplied by
26            0.429); and

 

 

10000SB0009sam001- 201 -LRB100 06347 HLH 18430 a

1                (3) for taxable years ending after December
2            31, 2005:
3                    (i) for property on which a bonus
4                depreciation deduction of 30% of the adjusted
5                basis was taken, "x" equals "y" multiplied by
6                30 and then divided by 70 (or "y" multiplied by
7                0.429); and
8                    (ii) for property on which a bonus
9                depreciation deduction of 50% of the adjusted
10                basis was taken, "x" equals "y" multiplied by
11                1.0.
12            The aggregate amount deducted under this
13        subparagraph in all taxable years for any one piece of
14        property may not exceed the amount of the bonus
15        depreciation deduction taken on that property on the
16        taxpayer's federal income tax return under subsection
17        (k) of Section 168 of the Internal Revenue Code. This
18        subparagraph (Z) is exempt from the provisions of
19        Section 250;
20            (AA) If the taxpayer sells, transfers, abandons,
21        or otherwise disposes of property for which the
22        taxpayer was required in any taxable year to make an
23        addition modification under subparagraph (D-15), then
24        an amount equal to that addition modification.
25            If the taxpayer continues to own property through
26        the last day of the last tax year for which the

 

 

10000SB0009sam001- 202 -LRB100 06347 HLH 18430 a

1        taxpayer may claim a depreciation deduction for
2        federal income tax purposes and for which the taxpayer
3        was required in any taxable year to make an addition
4        modification under subparagraph (D-15), then an amount
5        equal to that addition modification.
6            The taxpayer is allowed to take the deduction under
7        this subparagraph only once with respect to any one
8        piece of property.
9            This subparagraph (AA) is exempt from the
10        provisions of Section 250;
11            (BB) Any amount included in adjusted gross income,
12        other than salary, received by a driver in a
13        ridesharing arrangement using a motor vehicle;
14            (CC) The amount of (i) any interest income (net of
15        the deductions allocable thereto) taken into account
16        for the taxable year with respect to a transaction with
17        a taxpayer that is required to make an addition
18        modification with respect to such transaction under
19        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
20        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
21        the amount of that addition modification, and (ii) any
22        income from intangible property (net of the deductions
23        allocable thereto) taken into account for the taxable
24        year with respect to a transaction with a taxpayer that
25        is required to make an addition modification with
26        respect to such transaction under Section

 

 

10000SB0009sam001- 203 -LRB100 06347 HLH 18430 a

1        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
2        203(d)(2)(D-8), but not to exceed the amount of that
3        addition modification. This subparagraph (CC) is
4        exempt from the provisions of Section 250;
5            (DD) An amount equal to the interest income taken
6        into account for the taxable year (net of the
7        deductions allocable thereto) with respect to
8        transactions with (i) a foreign person who would be a
9        member of the taxpayer's unitary business group but for
10        the fact that the foreign person's business activity
11        outside the United States is 80% or more of that
12        person's total business activity and (ii) for taxable
13        years ending on or after December 31, 2008, to a person
14        who would be a member of the same unitary business
15        group but for the fact that the person is prohibited
16        under Section 1501(a)(27) from being included in the
17        unitary business group because he or she is ordinarily
18        required to apportion business income under different
19        subsections of Section 304, but not to exceed the
20        addition modification required to be made for the same
21        taxable year under Section 203(a)(2)(D-17) for
22        interest paid, accrued, or incurred, directly or
23        indirectly, to the same person. This subparagraph (DD)
24        is exempt from the provisions of Section 250;
25            (EE) An amount equal to the income from intangible
26        property taken into account for the taxable year (net

 

 

10000SB0009sam001- 204 -LRB100 06347 HLH 18430 a

1        of the deductions allocable thereto) with respect to
2        transactions with (i) a foreign person who would be a
3        member of the taxpayer's unitary business group but for
4        the fact that the foreign person's business activity
5        outside the United States is 80% or more of that
6        person's total business activity and (ii) for taxable
7        years ending on or after December 31, 2008, to a person
8        who would be a member of the same unitary business
9        group but for the fact that the person is prohibited
10        under Section 1501(a)(27) from being included in the
11        unitary business group because he or she is ordinarily
12        required to apportion business income under different
13        subsections of Section 304, but not to exceed the
14        addition modification required to be made for the same
15        taxable year under Section 203(a)(2)(D-18) for
16        intangible expenses and costs paid, accrued, or
17        incurred, directly or indirectly, to the same foreign
18        person. This subparagraph (EE) is exempt from the
19        provisions of Section 250;
20            (FF) An amount equal to any amount awarded to the
21        taxpayer during the taxable year by the Court of Claims
22        under subsection (c) of Section 8 of the Court of
23        Claims Act for time unjustly served in a State prison.
24        This subparagraph (FF) is exempt from the provisions of
25        Section 250; and
26            (GG) For taxable years ending on or after December

 

 

10000SB0009sam001- 205 -LRB100 06347 HLH 18430 a

1        31, 2011, in the case of a taxpayer who was required to
2        add back any insurance premiums under Section
3        203(a)(2)(D-19), such taxpayer may elect to subtract
4        that part of a reimbursement received from the
5        insurance company equal to the amount of the expense or
6        loss (including expenses incurred by the insurance
7        company) that would have been taken into account as a
8        deduction for federal income tax purposes if the
9        expense or loss had been uninsured. If a taxpayer makes
10        the election provided for by this subparagraph (GG),
11        the insurer to which the premiums were paid must add
12        back to income the amount subtracted by the taxpayer
13        pursuant to this subparagraph (GG). This subparagraph
14        (GG) is exempt from the provisions of Section 250.
 
15    (b) Corporations.
16        (1) In general. In the case of a corporation, base
17    income means an amount equal to the taxpayer's taxable
18    income for the taxable year as modified by paragraph (2).
19        (2) Modifications. The taxable income referred to in
20    paragraph (1) shall be modified by adding thereto the sum
21    of the following amounts:
22            (A) An amount equal to all amounts paid or accrued
23        to the taxpayer as interest and all distributions
24        received from regulated investment companies during
25        the taxable year to the extent excluded from gross

 

 

10000SB0009sam001- 206 -LRB100 06347 HLH 18430 a

1        income in the computation of taxable income;
2            (B) An amount equal to the amount of tax imposed by
3        this Act to the extent deducted from gross income in
4        the computation of taxable income for the taxable year;
5            (C) In the case of a regulated investment company,
6        an amount equal to the excess of (i) the net long-term
7        capital gain for the taxable year, over (ii) the amount
8        of the capital gain dividends designated as such in
9        accordance with Section 852(b)(3)(C) of the Internal
10        Revenue Code and any amount designated under Section
11        852(b)(3)(D) of the Internal Revenue Code,
12        attributable to the taxable year (this amendatory Act
13        of 1995 (Public Act 89-89) is declarative of existing
14        law and is not a new enactment);
15            (D) The amount of any net operating loss deduction
16        taken in arriving at taxable income, other than a net
17        operating loss carried forward from a taxable year
18        ending prior to December 31, 1986;
19            (E) For taxable years in which a net operating loss
20        carryback or carryforward from a taxable year ending
21        prior to December 31, 1986 is an element of taxable
22        income under paragraph (1) of subsection (e) or
23        subparagraph (E) of paragraph (2) of subsection (e),
24        the amount by which addition modifications other than
25        those provided by this subparagraph (E) exceeded
26        subtraction modifications in such earlier taxable

 

 

10000SB0009sam001- 207 -LRB100 06347 HLH 18430 a

1        year, with the following limitations applied in the
2        order that they are listed:
3                (i) the addition modification relating to the
4            net operating loss carried back or forward to the
5            taxable year from any taxable year ending prior to
6            December 31, 1986 shall be reduced by the amount of
7            addition modification under this subparagraph (E)
8            which related to that net operating loss and which
9            was taken into account in calculating the base
10            income of an earlier taxable year, and
11                (ii) the addition modification relating to the
12            net operating loss carried back or forward to the
13            taxable year from any taxable year ending prior to
14            December 31, 1986 shall not exceed the amount of
15            such carryback or carryforward;
16            For taxable years in which there is a net operating
17        loss carryback or carryforward from more than one other
18        taxable year ending prior to December 31, 1986, the
19        addition modification provided in this subparagraph
20        (E) shall be the sum of the amounts computed
21        independently under the preceding provisions of this
22        subparagraph (E) for each such taxable year;
23            (E-5) For taxable years ending after December 31,
24        1997, an amount equal to any eligible remediation costs
25        that the corporation deducted in computing adjusted
26        gross income and for which the corporation claims a

 

 

10000SB0009sam001- 208 -LRB100 06347 HLH 18430 a

1        credit under subsection (l) of Section 201;
2            (E-10) For taxable years 2001 and thereafter, an
3        amount equal to the bonus depreciation deduction taken
4        on the taxpayer's federal income tax return for the
5        taxable year under subsection (k) of Section 168 of the
6        Internal Revenue Code;
7            (E-11) If the taxpayer sells, transfers, abandons,
8        or otherwise disposes of property for which the
9        taxpayer was required in any taxable year to make an
10        addition modification under subparagraph (E-10), then
11        an amount equal to the aggregate amount of the
12        deductions taken in all taxable years under
13        subparagraph (T) with respect to that property.
14            If the taxpayer continues to own property through
15        the last day of the last tax year for which the
16        taxpayer may claim a depreciation deduction for
17        federal income tax purposes and for which the taxpayer
18        was allowed in any taxable year to make a subtraction
19        modification under subparagraph (T), then an amount
20        equal to that subtraction modification.
21            The taxpayer is required to make the addition
22        modification under this subparagraph only once with
23        respect to any one piece of property;
24            (E-12) An amount equal to the amount otherwise
25        allowed as a deduction in computing base income for
26        interest paid, accrued, or incurred, directly or

 

 

10000SB0009sam001- 209 -LRB100 06347 HLH 18430 a

1        indirectly, (i) for taxable years ending on or after
2        December 31, 2004, to a foreign person who would be a
3        member of the same unitary business group but for the
4        fact the foreign person's business activity outside
5        the United States is 80% or more of the foreign
6        person's total business activity and (ii) for taxable
7        years ending on or after December 31, 2008, to a person
8        who would be a member of the same unitary business
9        group but for the fact that the person is prohibited
10        under Section 1501(a)(27) from being included in the
11        unitary business group because he or she is ordinarily
12        required to apportion business income under different
13        subsections of Section 304. The addition modification
14        required by this subparagraph shall be reduced to the
15        extent that dividends were included in base income of
16        the unitary group for the same taxable year and
17        received by the taxpayer or by a member of the
18        taxpayer's unitary business group (including amounts
19        included in gross income pursuant to Sections 951
20        through 964 of the Internal Revenue Code and amounts
21        included in gross income under Section 78 of the
22        Internal Revenue Code) with respect to the stock of the
23        same person to whom the interest was paid, accrued, or
24        incurred.
25            This paragraph shall not apply to the following:
26                (i) an item of interest paid, accrued, or

 

 

10000SB0009sam001- 210 -LRB100 06347 HLH 18430 a

1            incurred, directly or indirectly, to a person who
2            is subject in a foreign country or state, other
3            than a state which requires mandatory unitary
4            reporting, to a tax on or measured by net income
5            with respect to such interest; or
6                (ii) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person if
8            the taxpayer can establish, based on a
9            preponderance of the evidence, both of the
10            following:
11                    (a) the person, during the same taxable
12                year, paid, accrued, or incurred, the interest
13                to a person that is not a related member, and
14                    (b) the transaction giving rise to the
15                interest expense between the taxpayer and the
16                person did not have as a principal purpose the
17                avoidance of Illinois income tax, and is paid
18                pursuant to a contract or agreement that
19                reflects an arm's-length interest rate and
20                terms; or
21                (iii) the taxpayer can establish, based on
22            clear and convincing evidence, that the interest
23            paid, accrued, or incurred relates to a contract or
24            agreement entered into at arm's-length rates and
25            terms and the principal purpose for the payment is
26            not federal or Illinois tax avoidance; or

 

 

10000SB0009sam001- 211 -LRB100 06347 HLH 18430 a

1                (iv) an item of interest paid, accrued, or
2            incurred, directly or indirectly, to a person if
3            the taxpayer establishes by clear and convincing
4            evidence that the adjustments are unreasonable; or
5            if the taxpayer and the Director agree in writing
6            to the application or use of an alternative method
7            of apportionment under Section 304(f).
8                Nothing in this subsection shall preclude the
9            Director from making any other adjustment
10            otherwise allowed under Section 404 of this Act for
11            any tax year beginning after the effective date of
12            this amendment provided such adjustment is made
13            pursuant to regulation adopted by the Department
14            and such regulations provide methods and standards
15            by which the Department will utilize its authority
16            under Section 404 of this Act;
17            (E-13) An amount equal to the amount of intangible
18        expenses and costs otherwise allowed as a deduction in
19        computing base income, and that were paid, accrued, or
20        incurred, directly or indirectly, (i) for taxable
21        years ending on or after December 31, 2004, to a
22        foreign person who would be a member of the same
23        unitary business group but for the fact that the
24        foreign person's business activity outside the United
25        States is 80% or more of that person's total business
26        activity and (ii) for taxable years ending on or after

 

 

10000SB0009sam001- 212 -LRB100 06347 HLH 18430 a

1        December 31, 2008, to a person who would be a member of
2        the same unitary business group but for the fact that
3        the person is prohibited under Section 1501(a)(27)
4        from being included in the unitary business group
5        because he or she is ordinarily required to apportion
6        business income under different subsections of Section
7        304. The addition modification required by this
8        subparagraph shall be reduced to the extent that
9        dividends were included in base income of the unitary
10        group for the same taxable year and received by the
11        taxpayer or by a member of the taxpayer's unitary
12        business group (including amounts included in gross
13        income pursuant to Sections 951 through 964 of the
14        Internal Revenue Code and amounts included in gross
15        income under Section 78 of the Internal Revenue Code)
16        with respect to the stock of the same person to whom
17        the intangible expenses and costs were directly or
18        indirectly paid, incurred, or accrued. The preceding
19        sentence shall not apply to the extent that the same
20        dividends caused a reduction to the addition
21        modification required under Section 203(b)(2)(E-12) of
22        this Act. As used in this subparagraph, the term
23        "intangible expenses and costs" includes (1) expenses,
24        losses, and costs for, or related to, the direct or
25        indirect acquisition, use, maintenance or management,
26        ownership, sale, exchange, or any other disposition of

 

 

10000SB0009sam001- 213 -LRB100 06347 HLH 18430 a

1        intangible property; (2) losses incurred, directly or
2        indirectly, from factoring transactions or discounting
3        transactions; (3) royalty, patent, technical, and
4        copyright fees; (4) licensing fees; and (5) other
5        similar expenses and costs. For purposes of this
6        subparagraph, "intangible property" includes patents,
7        patent applications, trade names, trademarks, service
8        marks, copyrights, mask works, trade secrets, and
9        similar types of intangible assets.
10            This paragraph shall not apply to the following:
11                (i) any item of intangible expenses or costs
12            paid, accrued, or incurred, directly or
13            indirectly, from a transaction with a person who is
14            subject in a foreign country or state, other than a
15            state which requires mandatory unitary reporting,
16            to a tax on or measured by net income with respect
17            to such item; or
18                (ii) any item of intangible expense or cost
19            paid, accrued, or incurred, directly or
20            indirectly, if the taxpayer can establish, based
21            on a preponderance of the evidence, both of the
22            following:
23                    (a) the person during the same taxable
24                year paid, accrued, or incurred, the
25                intangible expense or cost to a person that is
26                not a related member, and

 

 

10000SB0009sam001- 214 -LRB100 06347 HLH 18430 a

1                    (b) the transaction giving rise to the
2                intangible expense or cost between the
3                taxpayer and the person did not have as a
4                principal purpose the avoidance of Illinois
5                income tax, and is paid pursuant to a contract
6                or agreement that reflects arm's-length terms;
7                or
8                (iii) any item of intangible expense or cost
9            paid, accrued, or incurred, directly or
10            indirectly, from a transaction with a person if the
11            taxpayer establishes by clear and convincing
12            evidence, that the adjustments are unreasonable;
13            or if the taxpayer and the Director agree in
14            writing to the application or use of an alternative
15            method of apportionment under Section 304(f);
16                Nothing in this subsection shall preclude the
17            Director from making any other adjustment
18            otherwise allowed under Section 404 of this Act for
19            any tax year beginning after the effective date of
20            this amendment provided such adjustment is made
21            pursuant to regulation adopted by the Department
22            and such regulations provide methods and standards
23            by which the Department will utilize its authority
24            under Section 404 of this Act;
25            (E-14) For taxable years ending on or after
26        December 31, 2008, an amount equal to the amount of

 

 

10000SB0009sam001- 215 -LRB100 06347 HLH 18430 a

1        insurance premium expenses and costs otherwise allowed
2        as a deduction in computing base income, and that were
3        paid, accrued, or incurred, directly or indirectly, to
4        a person who would be a member of the same unitary
5        business group but for the fact that the person is
6        prohibited under Section 1501(a)(27) from being
7        included in the unitary business group because he or
8        she is ordinarily required to apportion business
9        income under different subsections of Section 304. The
10        addition modification required by this subparagraph
11        shall be reduced to the extent that dividends were
12        included in base income of the unitary group for the
13        same taxable year and received by the taxpayer or by a
14        member of the taxpayer's unitary business group
15        (including amounts included in gross income under
16        Sections 951 through 964 of the Internal Revenue Code
17        and amounts included in gross income under Section 78
18        of the Internal Revenue Code) with respect to the stock
19        of the same person to whom the premiums and costs were
20        directly or indirectly paid, incurred, or accrued. The
21        preceding sentence does not apply to the extent that
22        the same dividends caused a reduction to the addition
23        modification required under Section 203(b)(2)(E-12) or
24        Section 203(b)(2)(E-13) of this Act;
25            (E-15) For taxable years beginning after December
26        31, 2008, any deduction for dividends paid by a captive

 

 

10000SB0009sam001- 216 -LRB100 06347 HLH 18430 a

1        real estate investment trust that is allowed to a real
2        estate investment trust under Section 857(b)(2)(B) of
3        the Internal Revenue Code for dividends paid;
4            (E-16) An amount equal to the credit allowable to
5        the taxpayer under Section 218(a) of this Act,
6        determined without regard to Section 218(c) of this
7        Act;
8            (E-17) For taxable years beginning on or after
9        January 1, 2017, an amount equal to the deduction
10        allowed under Section 199 of the Internal Revenue Code
11        for the taxable year;
12    and by deducting from the total so obtained the sum of the
13    following amounts:
14            (F) An amount equal to the amount of any tax
15        imposed by this Act which was refunded to the taxpayer
16        and included in such total for the taxable year;
17            (G) An amount equal to any amount included in such
18        total under Section 78 of the Internal Revenue Code;
19            (H) In the case of a regulated investment company,
20        an amount equal to the amount of exempt interest
21        dividends as defined in subsection (b) (5) of Section
22        852 of the Internal Revenue Code, paid to shareholders
23        for the taxable year;
24            (I) With the exception of any amounts subtracted
25        under subparagraph (J), an amount equal to the sum of
26        all amounts disallowed as deductions by (i) Sections

 

 

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1        171(a) (2), and 265(a)(2) and amounts disallowed as
2        interest expense by Section 291(a)(3) of the Internal
3        Revenue Code, and all amounts of expenses allocable to
4        interest and disallowed as deductions by Section
5        265(a)(1) of the Internal Revenue Code; and (ii) for
6        taxable years ending on or after August 13, 1999,
7        Sections 171(a)(2), 265, 280C, 291(a)(3), and
8        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
9        for tax years ending on or after December 31, 2011,
10        amounts disallowed as deductions by Section 45G(e)(3)
11        of the Internal Revenue Code and, for taxable years
12        ending on or after December 31, 2008, any amount
13        included in gross income under Section 87 of the
14        Internal Revenue Code and the policyholders' share of
15        tax-exempt interest of a life insurance company under
16        Section 807(a)(2)(B) of the Internal Revenue Code (in
17        the case of a life insurance company with gross income
18        from a decrease in reserves for the tax year) or
19        Section 807(b)(1)(B) of the Internal Revenue Code (in
20        the case of a life insurance company allowed a
21        deduction for an increase in reserves for the tax
22        year); the provisions of this subparagraph are exempt
23        from the provisions of Section 250;
24            (J) An amount equal to all amounts included in such
25        total which are exempt from taxation by this State
26        either by reason of its statutes or Constitution or by

 

 

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1        reason of the Constitution, treaties or statutes of the
2        United States; provided that, in the case of any
3        statute of this State that exempts income derived from
4        bonds or other obligations from the tax imposed under
5        this Act, the amount exempted shall be the interest net
6        of bond premium amortization;
7            (K) An amount equal to those dividends included in
8        such total which were paid by a corporation which
9        conducts business operations in a River Edge
10        Redevelopment Zone or zones created under the River
11        Edge Redevelopment Zone Act and conducts substantially
12        all of its operations in a River Edge Redevelopment
13        Zone or zones. This subparagraph (K) is exempt from the
14        provisions of Section 250;
15            (L) An amount equal to those dividends included in
16        such total that were paid by a corporation that
17        conducts business operations in a federally designated
18        Foreign Trade Zone or Sub-Zone and that is designated a
19        High Impact Business located in Illinois; provided
20        that dividends eligible for the deduction provided in
21        subparagraph (K) of paragraph 2 of this subsection
22        shall not be eligible for the deduction provided under
23        this subparagraph (L);
24            (M) For any taxpayer that is a financial
25        organization within the meaning of Section 304(c) of
26        this Act, an amount included in such total as interest

 

 

10000SB0009sam001- 219 -LRB100 06347 HLH 18430 a

1        income from a loan or loans made by such taxpayer to a
2        borrower, to the extent that such a loan is secured by
3        property which is eligible for the River Edge
4        Redevelopment Zone Investment Credit. To determine the
5        portion of a loan or loans that is secured by property
6        eligible for a Section 201(f) investment credit to the
7        borrower, the entire principal amount of the loan or
8        loans between the taxpayer and the borrower should be
9        divided into the basis of the Section 201(f) investment
10        credit property which secures the loan or loans, using
11        for this purpose the original basis of such property on
12        the date that it was placed in service in the River
13        Edge Redevelopment Zone. The subtraction modification
14        available to taxpayer in any year under this subsection
15        shall be that portion of the total interest paid by the
16        borrower with respect to such loan attributable to the
17        eligible property as calculated under the previous
18        sentence. This subparagraph (M) is exempt from the
19        provisions of Section 250;
20            (M-1) For any taxpayer that is a financial
21        organization within the meaning of Section 304(c) of
22        this Act, an amount included in such total as interest
23        income from a loan or loans made by such taxpayer to a
24        borrower, to the extent that such a loan is secured by
25        property which is eligible for the High Impact Business
26        Investment Credit. To determine the portion of a loan

 

 

10000SB0009sam001- 220 -LRB100 06347 HLH 18430 a

1        or loans that is secured by property eligible for a
2        Section 201(h) investment credit to the borrower, the
3        entire principal amount of the loan or loans between
4        the taxpayer and the borrower should be divided into
5        the basis of the Section 201(h) investment credit
6        property which secures the loan or loans, using for
7        this purpose the original basis of such property on the
8        date that it was placed in service in a federally
9        designated Foreign Trade Zone or Sub-Zone located in
10        Illinois. No taxpayer that is eligible for the
11        deduction provided in subparagraph (M) of paragraph
12        (2) of this subsection shall be eligible for the
13        deduction provided under this subparagraph (M-1). The
14        subtraction modification available to taxpayers in any
15        year under this subsection shall be that portion of the
16        total interest paid by the borrower with respect to
17        such loan attributable to the eligible property as
18        calculated under the previous sentence;
19            (N) Two times any contribution made during the
20        taxable year to a designated zone organization to the
21        extent that the contribution (i) qualifies as a
22        charitable contribution under subsection (c) of
23        Section 170 of the Internal Revenue Code and (ii) must,
24        by its terms, be used for a project approved by the
25        Department of Commerce and Economic Opportunity under
26        Section 11 of the Illinois Enterprise Zone Act or under

 

 

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1        Section 10-10 of the River Edge Redevelopment Zone Act.
2        This subparagraph (N) is exempt from the provisions of
3        Section 250;
4            (O) An amount equal to: (i) 85% for taxable years
5        ending on or before December 31, 1992, or, a percentage
6        equal to the percentage allowable under Section
7        243(a)(1) of the Internal Revenue Code of 1986 for
8        taxable years ending after December 31, 1992, of the
9        amount by which dividends included in taxable income
10        and received from a corporation that is not created or
11        organized under the laws of the United States or any
12        state or political subdivision thereof, including, for
13        taxable years ending on or after December 31, 1988,
14        dividends received or deemed received or paid or deemed
15        paid under Sections 951 through 965 of the Internal
16        Revenue Code, exceed the amount of the modification
17        provided under subparagraph (G) of paragraph (2) of
18        this subsection (b) which is related to such dividends,
19        and including, for taxable years ending on or after
20        December 31, 2008, dividends received from a captive
21        real estate investment trust; plus (ii) 100% of the
22        amount by which dividends, included in taxable income
23        and received, including, for taxable years ending on or
24        after December 31, 1988, dividends received or deemed
25        received or paid or deemed paid under Sections 951
26        through 964 of the Internal Revenue Code and including,

 

 

10000SB0009sam001- 222 -LRB100 06347 HLH 18430 a

1        for taxable years ending on or after December 31, 2008,
2        dividends received from a captive real estate
3        investment trust, from any such corporation specified
4        in clause (i) that would but for the provisions of
5        Section 1504 (b) (3) of the Internal Revenue Code be
6        treated as a member of the affiliated group which
7        includes the dividend recipient, exceed the amount of
8        the modification provided under subparagraph (G) of
9        paragraph (2) of this subsection (b) which is related
10        to such dividends. This subparagraph (O) is exempt from
11        the provisions of Section 250 of this Act;
12            (P) An amount equal to any contribution made to a
13        job training project established pursuant to the Tax
14        Increment Allocation Redevelopment Act;
15            (Q) An amount equal to the amount of the deduction
16        used to compute the federal income tax credit for
17        restoration of substantial amounts held under claim of
18        right for the taxable year pursuant to Section 1341 of
19        the Internal Revenue Code;
20            (R) On and after July 20, 1999, in the case of an
21        attorney-in-fact with respect to whom an interinsurer
22        or a reciprocal insurer has made the election under
23        Section 835 of the Internal Revenue Code, 26 U.S.C.
24        835, an amount equal to the excess, if any, of the
25        amounts paid or incurred by that interinsurer or
26        reciprocal insurer in the taxable year to the

 

 

10000SB0009sam001- 223 -LRB100 06347 HLH 18430 a

1        attorney-in-fact over the deduction allowed to that
2        interinsurer or reciprocal insurer with respect to the
3        attorney-in-fact under Section 835(b) of the Internal
4        Revenue Code for the taxable year; the provisions of
5        this subparagraph are exempt from the provisions of
6        Section 250;
7            (S) For taxable years ending on or after December
8        31, 1997, in the case of a Subchapter S corporation, an
9        amount equal to all amounts of income allocable to a
10        shareholder subject to the Personal Property Tax
11        Replacement Income Tax imposed by subsections (c) and
12        (d) of Section 201 of this Act, including amounts
13        allocable to organizations exempt from federal income
14        tax by reason of Section 501(a) of the Internal Revenue
15        Code. This subparagraph (S) is exempt from the
16        provisions of Section 250;
17            (T) For taxable years 2001 and thereafter, for the
18        taxable year in which the bonus depreciation deduction
19        is taken on the taxpayer's federal income tax return
20        under subsection (k) of Section 168 of the Internal
21        Revenue Code and for each applicable taxable year
22        thereafter, an amount equal to "x", where:
23                (1) "y" equals the amount of the depreciation
24            deduction taken for the taxable year on the
25            taxpayer's federal income tax return on property
26            for which the bonus depreciation deduction was

 

 

10000SB0009sam001- 224 -LRB100 06347 HLH 18430 a

1            taken in any year under subsection (k) of Section
2            168 of the Internal Revenue Code, but not including
3            the bonus depreciation deduction;
4                (2) for taxable years ending on or before
5            December 31, 2005, "x" equals "y" multiplied by 30
6            and then divided by 70 (or "y" multiplied by
7            0.429); and
8                (3) for taxable years ending after December
9            31, 2005:
10                    (i) for property on which a bonus
11                depreciation deduction of 30% of the adjusted
12                basis was taken, "x" equals "y" multiplied by
13                30 and then divided by 70 (or "y" multiplied by
14                0.429); and
15                    (ii) for property on which a bonus
16                depreciation deduction of 50% of the adjusted
17                basis was taken, "x" equals "y" multiplied by
18                1.0.
19            The aggregate amount deducted under this
20        subparagraph in all taxable years for any one piece of
21        property may not exceed the amount of the bonus
22        depreciation deduction taken on that property on the
23        taxpayer's federal income tax return under subsection
24        (k) of Section 168 of the Internal Revenue Code. This
25        subparagraph (T) is exempt from the provisions of
26        Section 250;

 

 

10000SB0009sam001- 225 -LRB100 06347 HLH 18430 a

1            (U) If the taxpayer sells, transfers, abandons, or
2        otherwise disposes of property for which the taxpayer
3        was required in any taxable year to make an addition
4        modification under subparagraph (E-10), then an amount
5        equal to that addition modification.
6            If the taxpayer continues to own property through
7        the last day of the last tax year for which the
8        taxpayer may claim a depreciation deduction for
9        federal income tax purposes and for which the taxpayer
10        was required in any taxable year to make an addition
11        modification under subparagraph (E-10), then an amount
12        equal to that addition modification.
13            The taxpayer is allowed to take the deduction under
14        this subparagraph only once with respect to any one
15        piece of property.
16            This subparagraph (U) is exempt from the
17        provisions of Section 250;
18            (V) The amount of: (i) any interest income (net of
19        the deductions allocable thereto) taken into account
20        for the taxable year with respect to a transaction with
21        a taxpayer that is required to make an addition
22        modification with respect to such transaction under
23        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
24        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
25        the amount of such addition modification, (ii) any
26        income from intangible property (net of the deductions

 

 

10000SB0009sam001- 226 -LRB100 06347 HLH 18430 a

1        allocable thereto) taken into account for the taxable
2        year with respect to a transaction with a taxpayer that
3        is required to make an addition modification with
4        respect to such transaction under Section
5        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
6        203(d)(2)(D-8), but not to exceed the amount of such
7        addition modification, and (iii) any insurance premium
8        income (net of deductions allocable thereto) taken
9        into account for the taxable year with respect to a
10        transaction with a taxpayer that is required to make an
11        addition modification with respect to such transaction
12        under Section 203(a)(2)(D-19), Section
13        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
14        203(d)(2)(D-9), but not to exceed the amount of that
15        addition modification. This subparagraph (V) is exempt
16        from the provisions of Section 250;
17            (W) An amount equal to the interest income taken
18        into account for the taxable year (net of the
19        deductions allocable thereto) with respect to
20        transactions with (i) a foreign person who would be a
21        member of the taxpayer's unitary business group but for
22        the fact that the foreign person's business activity
23        outside the United States is 80% or more of that
24        person's total business activity and (ii) for taxable
25        years ending on or after December 31, 2008, to a person
26        who would be a member of the same unitary business

 

 

10000SB0009sam001- 227 -LRB100 06347 HLH 18430 a

1        group but for the fact that the person is prohibited
2        under Section 1501(a)(27) from being included in the
3        unitary business group because he or she is ordinarily
4        required to apportion business income under different
5        subsections of Section 304, but not to exceed the
6        addition modification required to be made for the same
7        taxable year under Section 203(b)(2)(E-12) for
8        interest paid, accrued, or incurred, directly or
9        indirectly, to the same person. This subparagraph (W)
10        is exempt from the provisions of Section 250;
11            (X) An amount equal to the income from intangible
12        property taken into account for the taxable year (net
13        of the deductions allocable thereto) with respect to
14        transactions with (i) a foreign person who would be a
15        member of the taxpayer's unitary business group but for
16        the fact that the foreign person's business activity
17        outside the United States is 80% or more of that
18        person's total business activity and (ii) for taxable
19        years ending on or after December 31, 2008, to a person
20        who would be a member of the same unitary business
21        group but for the fact that the person is prohibited
22        under Section 1501(a)(27) from being included in the
23        unitary business group because he or she is ordinarily
24        required to apportion business income under different
25        subsections of Section 304, but not to exceed the
26        addition modification required to be made for the same

 

 

10000SB0009sam001- 228 -LRB100 06347 HLH 18430 a

1        taxable year under Section 203(b)(2)(E-13) for
2        intangible expenses and costs paid, accrued, or
3        incurred, directly or indirectly, to the same foreign
4        person. This subparagraph (X) is exempt from the
5        provisions of Section 250;
6            (Y) For taxable years ending on or after December
7        31, 2011, in the case of a taxpayer who was required to
8        add back any insurance premiums under Section
9        203(b)(2)(E-14), such taxpayer may elect to subtract
10        that part of a reimbursement received from the
11        insurance company equal to the amount of the expense or
12        loss (including expenses incurred by the insurance
13        company) that would have been taken into account as a
14        deduction for federal income tax purposes if the
15        expense or loss had been uninsured. If a taxpayer makes
16        the election provided for by this subparagraph (Y), the
17        insurer to which the premiums were paid must add back
18        to income the amount subtracted by the taxpayer
19        pursuant to this subparagraph (Y). This subparagraph
20        (Y) is exempt from the provisions of Section 250; and
21            (Z) The difference between the nondeductible
22        controlled foreign corporation dividends under Section
23        965(e)(3) of the Internal Revenue Code over the taxable
24        income of the taxpayer, computed without regard to
25        Section 965(e)(2)(A) of the Internal Revenue Code, and
26        without regard to any net operating loss deduction.

 

 

10000SB0009sam001- 229 -LRB100 06347 HLH 18430 a

1        This subparagraph (Z) is exempt from the provisions of
2        Section 250.
3        (3) Special rule. For purposes of paragraph (2) (A),
4    "gross income" in the case of a life insurance company, for
5    tax years ending on and after December 31, 1994, and prior
6    to December 31, 2011, shall mean the gross investment
7    income for the taxable year and, for tax years ending on or
8    after December 31, 2011, shall mean all amounts included in
9    life insurance gross income under Section 803(a)(3) of the
10    Internal Revenue Code.
 
11    (c) Trusts and estates.
12        (1) In general. In the case of a trust or estate, base
13    income means an amount equal to the taxpayer's taxable
14    income for the taxable year as modified by paragraph (2).
15        (2) Modifications. Subject to the provisions of
16    paragraph (3), the taxable income referred to in paragraph
17    (1) shall be modified by adding thereto the sum of the
18    following amounts:
19            (A) An amount equal to all amounts paid or accrued
20        to the taxpayer as interest or dividends during the
21        taxable year to the extent excluded from gross income
22        in the computation of taxable income;
23            (B) In the case of (i) an estate, $600; (ii) a
24        trust which, under its governing instrument, is
25        required to distribute all of its income currently,

 

 

10000SB0009sam001- 230 -LRB100 06347 HLH 18430 a

1        $300; and (iii) any other trust, $100, but in each such
2        case, only to the extent such amount was deducted in
3        the computation of taxable income;
4            (C) An amount equal to the amount of tax imposed by
5        this Act to the extent deducted from gross income in
6        the computation of taxable income for the taxable year;
7            (D) The amount of any net operating loss deduction
8        taken in arriving at taxable income, other than a net
9        operating loss carried forward from a taxable year
10        ending prior to December 31, 1986;
11            (E) For taxable years in which a net operating loss
12        carryback or carryforward from a taxable year ending
13        prior to December 31, 1986 is an element of taxable
14        income under paragraph (1) of subsection (e) or
15        subparagraph (E) of paragraph (2) of subsection (e),
16        the amount by which addition modifications other than
17        those provided by this subparagraph (E) exceeded
18        subtraction modifications in such taxable year, with
19        the following limitations applied in the order that
20        they are listed:
21                (i) the addition modification relating to the
22            net operating loss carried back or forward to the
23            taxable year from any taxable year ending prior to
24            December 31, 1986 shall be reduced by the amount of
25            addition modification under this subparagraph (E)
26            which related to that net operating loss and which

 

 

10000SB0009sam001- 231 -LRB100 06347 HLH 18430 a

1            was taken into account in calculating the base
2            income of an earlier taxable year, and
3                (ii) the addition modification relating to the
4            net operating loss carried back or forward to the
5            taxable year from any taxable year ending prior to
6            December 31, 1986 shall not exceed the amount of
7            such carryback or carryforward;
8            For taxable years in which there is a net operating
9        loss carryback or carryforward from more than one other
10        taxable year ending prior to December 31, 1986, the
11        addition modification provided in this subparagraph
12        (E) shall be the sum of the amounts computed
13        independently under the preceding provisions of this
14        subparagraph (E) for each such taxable year;
15            (F) For taxable years ending on or after January 1,
16        1989, an amount equal to the tax deducted pursuant to
17        Section 164 of the Internal Revenue Code if the trust
18        or estate is claiming the same tax for purposes of the
19        Illinois foreign tax credit under Section 601 of this
20        Act;
21            (G) An amount equal to the amount of the capital
22        gain deduction allowable under the Internal Revenue
23        Code, to the extent deducted from gross income in the
24        computation of taxable income;
25            (G-5) For taxable years ending after December 31,
26        1997, an amount equal to any eligible remediation costs

 

 

10000SB0009sam001- 232 -LRB100 06347 HLH 18430 a

1        that the trust or estate deducted in computing adjusted
2        gross income and for which the trust or estate claims a
3        credit under subsection (l) of Section 201;
4            (G-10) For taxable years 2001 and thereafter, an
5        amount equal to the bonus depreciation deduction taken
6        on the taxpayer's federal income tax return for the
7        taxable year under subsection (k) of Section 168 of the
8        Internal Revenue Code; and
9            (G-11) If the taxpayer sells, transfers, abandons,
10        or otherwise disposes of property for which the
11        taxpayer was required in any taxable year to make an
12        addition modification under subparagraph (G-10), then
13        an amount equal to the aggregate amount of the
14        deductions taken in all taxable years under
15        subparagraph (R) with respect to that property.
16            If the taxpayer continues to own property through
17        the last day of the last tax year for which the
18        taxpayer may claim a depreciation deduction for
19        federal income tax purposes and for which the taxpayer
20        was allowed in any taxable year to make a subtraction
21        modification under subparagraph (R), then an amount
22        equal to that subtraction modification.
23            The taxpayer is required to make the addition
24        modification under this subparagraph only once with
25        respect to any one piece of property;
26            (G-12) An amount equal to the amount otherwise

 

 

10000SB0009sam001- 233 -LRB100 06347 HLH 18430 a

1        allowed as a deduction in computing base income for
2        interest paid, accrued, or incurred, directly or
3        indirectly, (i) for taxable years ending on or after
4        December 31, 2004, to a foreign person who would be a
5        member of the same unitary business group but for the
6        fact that the foreign person's business activity
7        outside the United States is 80% or more of the foreign
8        person's total business activity and (ii) for taxable
9        years ending on or after December 31, 2008, to a person
10        who would be a member of the same unitary business
11        group but for the fact that the person is prohibited
12        under Section 1501(a)(27) from being included in the
13        unitary business group because he or she is ordinarily
14        required to apportion business income under different
15        subsections of Section 304. The addition modification
16        required by this subparagraph shall be reduced to the
17        extent that dividends were included in base income of
18        the unitary group for the same taxable year and
19        received by the taxpayer or by a member of the
20        taxpayer's unitary business group (including amounts
21        included in gross income pursuant to Sections 951
22        through 964 of the Internal Revenue Code and amounts
23        included in gross income under Section 78 of the
24        Internal Revenue Code) with respect to the stock of the
25        same person to whom the interest was paid, accrued, or
26        incurred.

 

 

10000SB0009sam001- 234 -LRB100 06347 HLH 18430 a

1            This paragraph shall not apply to the following:
2                (i) an item of interest paid, accrued, or
3            incurred, directly or indirectly, to a person who
4            is subject in a foreign country or state, other
5            than a state which requires mandatory unitary
6            reporting, to a tax on or measured by net income
7            with respect to such interest; or
8                (ii) an item of interest paid, accrued, or
9            incurred, directly or indirectly, to a person if
10            the taxpayer can establish, based on a
11            preponderance of the evidence, both of the
12            following:
13                    (a) the person, during the same taxable
14                year, paid, accrued, or incurred, the interest
15                to a person that is not a related member, and
16                    (b) the transaction giving rise to the
17                interest expense between the taxpayer and the
18                person did not have as a principal purpose the
19                avoidance of Illinois income tax, and is paid
20                pursuant to a contract or agreement that
21                reflects an arm's-length interest rate and
22                terms; or
23                (iii) the taxpayer can establish, based on
24            clear and convincing evidence, that the interest
25            paid, accrued, or incurred relates to a contract or
26            agreement entered into at arm's-length rates and

 

 

10000SB0009sam001- 235 -LRB100 06347 HLH 18430 a

1            terms and the principal purpose for the payment is
2            not federal or Illinois tax avoidance; or
3                (iv) an item of interest paid, accrued, or
4            incurred, directly or indirectly, to a person if
5            the taxpayer establishes by clear and convincing
6            evidence that the adjustments are unreasonable; or
7            if the taxpayer and the Director agree in writing
8            to the application or use of an alternative method
9            of apportionment under Section 304(f).
10                Nothing in this subsection shall preclude the
11            Director from making any other adjustment
12            otherwise allowed under Section 404 of this Act for
13            any tax year beginning after the effective date of
14            this amendment provided such adjustment is made
15            pursuant to regulation adopted by the Department
16            and such regulations provide methods and standards
17            by which the Department will utilize its authority
18            under Section 404 of this Act;
19            (G-13) An amount equal to the amount of intangible
20        expenses and costs otherwise allowed as a deduction in
21        computing base income, and that were paid, accrued, or
22        incurred, directly or indirectly, (i) for taxable
23        years ending on or after December 31, 2004, to a
24        foreign person who would be a member of the same
25        unitary business group but for the fact that the
26        foreign person's business activity outside the United

 

 

10000SB0009sam001- 236 -LRB100 06347 HLH 18430 a

1        States is 80% or more of that person's total business
2        activity and (ii) for taxable years ending on or after
3        December 31, 2008, to a person who would be a member of
4        the same unitary business group but for the fact that
5        the person is prohibited under Section 1501(a)(27)
6        from being included in the unitary business group
7        because he or she is ordinarily required to apportion
8        business income under different subsections of Section
9        304. The addition modification required by this
10        subparagraph shall be reduced to the extent that
11        dividends were included in base income of the unitary
12        group for the same taxable year and received by the
13        taxpayer or by a member of the taxpayer's unitary
14        business group (including amounts included in gross
15        income pursuant to Sections 951 through 964 of the
16        Internal Revenue Code and amounts included in gross
17        income under Section 78 of the Internal Revenue Code)
18        with respect to the stock of the same person to whom
19        the intangible expenses and costs were directly or
20        indirectly paid, incurred, or accrued. The preceding
21        sentence shall not apply to the extent that the same
22        dividends caused a reduction to the addition
23        modification required under Section 203(c)(2)(G-12) of
24        this Act. As used in this subparagraph, the term
25        "intangible expenses and costs" includes: (1)
26        expenses, losses, and costs for or related to the

 

 

10000SB0009sam001- 237 -LRB100 06347 HLH 18430 a

1        direct or indirect acquisition, use, maintenance or
2        management, ownership, sale, exchange, or any other
3        disposition of intangible property; (2) losses
4        incurred, directly or indirectly, from factoring
5        transactions or discounting transactions; (3) royalty,
6        patent, technical, and copyright fees; (4) licensing
7        fees; and (5) other similar expenses and costs. For
8        purposes of this subparagraph, "intangible property"
9        includes patents, patent applications, trade names,
10        trademarks, service marks, copyrights, mask works,
11        trade secrets, and similar types of intangible assets.
12            This paragraph shall not apply to the following:
13                (i) any item of intangible expenses or costs
14            paid, accrued, or incurred, directly or
15            indirectly, from a transaction with a person who is
16            subject in a foreign country or state, other than a
17            state which requires mandatory unitary reporting,
18            to a tax on or measured by net income with respect
19            to such item; or
20                (ii) any item of intangible expense or cost
21            paid, accrued, or incurred, directly or
22            indirectly, if the taxpayer can establish, based
23            on a preponderance of the evidence, both of the
24            following:
25                    (a) the person during the same taxable
26                year paid, accrued, or incurred, the

 

 

10000SB0009sam001- 238 -LRB100 06347 HLH 18430 a

1                intangible expense or cost to a person that is
2                not a related member, and
3                    (b) the transaction giving rise to the
4                intangible expense or cost between the
5                taxpayer and the person did not have as a
6                principal purpose the avoidance of Illinois
7                income tax, and is paid pursuant to a contract
8                or agreement that reflects arm's-length terms;
9                or
10                (iii) any item of intangible expense or cost
11            paid, accrued, or incurred, directly or
12            indirectly, from a transaction with a person if the
13            taxpayer establishes by clear and convincing
14            evidence, that the adjustments are unreasonable;
15            or if the taxpayer and the Director agree in
16            writing to the application or use of an alternative
17            method of apportionment under Section 304(f);
18                Nothing in this subsection shall preclude the
19            Director from making any other adjustment
20            otherwise allowed under Section 404 of this Act for
21            any tax year beginning after the effective date of
22            this amendment provided such adjustment is made
23            pursuant to regulation adopted by the Department
24            and such regulations provide methods and standards
25            by which the Department will utilize its authority
26            under Section 404 of this Act;

 

 

10000SB0009sam001- 239 -LRB100 06347 HLH 18430 a

1            (G-14) For taxable years ending on or after
2        December 31, 2008, an amount equal to the amount of
3        insurance premium expenses and costs otherwise allowed
4        as a deduction in computing base income, and that were
5        paid, accrued, or incurred, directly or indirectly, to
6        a person who would be a member of the same unitary
7        business group but for the fact that the person is
8        prohibited under Section 1501(a)(27) from being
9        included in the unitary business group because he or
10        she is ordinarily required to apportion business
11        income under different subsections of Section 304. The
12        addition modification required by this subparagraph
13        shall be reduced to the extent that dividends were
14        included in base income of the unitary group for the
15        same taxable year and received by the taxpayer or by a
16        member of the taxpayer's unitary business group
17        (including amounts included in gross income under
18        Sections 951 through 964 of the Internal Revenue Code
19        and amounts included in gross income under Section 78
20        of the Internal Revenue Code) with respect to the stock
21        of the same person to whom the premiums and costs were
22        directly or indirectly paid, incurred, or accrued. The
23        preceding sentence does not apply to the extent that
24        the same dividends caused a reduction to the addition
25        modification required under Section 203(c)(2)(G-12) or
26        Section 203(c)(2)(G-13) of this Act;

 

 

10000SB0009sam001- 240 -LRB100 06347 HLH 18430 a

1            (G-15) An amount equal to the credit allowable to
2        the taxpayer under Section 218(a) of this Act,
3        determined without regard to Section 218(c) of this
4        Act;
5            (G-16) For taxable years beginning on or after
6        January 1, 2017, an amount equal to the deduction
7        allowed under Section 199 of the Internal Revenue Code
8        for the taxable year;
9    and by deducting from the total so obtained the sum of the
10    following amounts:
11            (H) An amount equal to all amounts included in such
12        total pursuant to the provisions of Sections 402(a),
13        402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
14        Internal Revenue Code or included in such total as
15        distributions under the provisions of any retirement
16        or disability plan for employees of any governmental
17        agency or unit, or retirement payments to retired
18        partners, which payments are excluded in computing net
19        earnings from self employment by Section 1402 of the
20        Internal Revenue Code and regulations adopted pursuant
21        thereto;
22            (I) The valuation limitation amount;
23            (J) An amount equal to the amount of any tax
24        imposed by this Act which was refunded to the taxpayer
25        and included in such total for the taxable year;
26            (K) An amount equal to all amounts included in

 

 

10000SB0009sam001- 241 -LRB100 06347 HLH 18430 a

1        taxable income as modified by subparagraphs (A), (B),
2        (C), (D), (E), (F) and (G) which are exempt from
3        taxation by this State either by reason of its statutes
4        or Constitution or by reason of the Constitution,
5        treaties or statutes of the United States; provided
6        that, in the case of any statute of this State that
7        exempts income derived from bonds or other obligations
8        from the tax imposed under this Act, the amount
9        exempted shall be the interest net of bond premium
10        amortization;
11            (L) With the exception of any amounts subtracted
12        under subparagraph (K), an amount equal to the sum of
13        all amounts disallowed as deductions by (i) Sections
14        171(a) (2) and 265(a)(2) of the Internal Revenue Code,
15        and all amounts of expenses allocable to interest and
16        disallowed as deductions by Section 265(1) of the
17        Internal Revenue Code; and (ii) for taxable years
18        ending on or after August 13, 1999, Sections 171(a)(2),
19        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
20        Code, plus, (iii) for taxable years ending on or after
21        December 31, 2011, Section 45G(e)(3) of the Internal
22        Revenue Code and, for taxable years ending on or after
23        December 31, 2008, any amount included in gross income
24        under Section 87 of the Internal Revenue Code; the
25        provisions of this subparagraph are exempt from the
26        provisions of Section 250;

 

 

10000SB0009sam001- 242 -LRB100 06347 HLH 18430 a

1            (M) An amount equal to those dividends included in
2        such total which were paid by a corporation which
3        conducts business operations in a River Edge
4        Redevelopment Zone or zones created under the River
5        Edge Redevelopment Zone Act and conducts substantially
6        all of its operations in a River Edge Redevelopment
7        Zone or zones. This subparagraph (M) is exempt from the
8        provisions of Section 250;
9            (N) An amount equal to any contribution made to a
10        job training project established pursuant to the Tax
11        Increment Allocation Redevelopment Act;
12            (O) An amount equal to those dividends included in
13        such total that were paid by a corporation that
14        conducts business operations in a federally designated
15        Foreign Trade Zone or Sub-Zone and that is designated a
16        High Impact Business located in Illinois; provided
17        that dividends eligible for the deduction provided in
18        subparagraph (M) of paragraph (2) of this subsection
19        shall not be eligible for the deduction provided under
20        this subparagraph (O);
21            (P) An amount equal to the amount of the deduction
22        used to compute the federal income tax credit for
23        restoration of substantial amounts held under claim of
24        right for the taxable year pursuant to Section 1341 of
25        the Internal Revenue Code;
26            (Q) For taxable year 1999 and thereafter, an amount

 

 

10000SB0009sam001- 243 -LRB100 06347 HLH 18430 a

1        equal to the amount of any (i) distributions, to the
2        extent includible in gross income for federal income
3        tax purposes, made to the taxpayer because of his or
4        her status as a victim of persecution for racial or
5        religious reasons by Nazi Germany or any other Axis
6        regime or as an heir of the victim and (ii) items of
7        income, to the extent includible in gross income for
8        federal income tax purposes, attributable to, derived
9        from or in any way related to assets stolen from,
10        hidden from, or otherwise lost to a victim of
11        persecution for racial or religious reasons by Nazi
12        Germany or any other Axis regime immediately prior to,
13        during, and immediately after World War II, including,
14        but not limited to, interest on the proceeds receivable
15        as insurance under policies issued to a victim of
16        persecution for racial or religious reasons by Nazi
17        Germany or any other Axis regime by European insurance
18        companies immediately prior to and during World War II;
19        provided, however, this subtraction from federal
20        adjusted gross income does not apply to assets acquired
21        with such assets or with the proceeds from the sale of
22        such assets; provided, further, this paragraph shall
23        only apply to a taxpayer who was the first recipient of
24        such assets after their recovery and who is a victim of
25        persecution for racial or religious reasons by Nazi
26        Germany or any other Axis regime or as an heir of the

 

 

10000SB0009sam001- 244 -LRB100 06347 HLH 18430 a

1        victim. The amount of and the eligibility for any
2        public assistance, benefit, or similar entitlement is
3        not affected by the inclusion of items (i) and (ii) of
4        this paragraph in gross income for federal income tax
5        purposes. This paragraph is exempt from the provisions
6        of Section 250;
7            (R) For taxable years 2001 and thereafter, for the
8        taxable year in which the bonus depreciation deduction
9        is taken on the taxpayer's federal income tax return
10        under subsection (k) of Section 168 of the Internal
11        Revenue Code and for each applicable taxable year
12        thereafter, an amount equal to "x", where:
13                (1) "y" equals the amount of the depreciation
14            deduction taken for the taxable year on the
15            taxpayer's federal income tax return on property
16            for which the bonus depreciation deduction was
17            taken in any year under subsection (k) of Section
18            168 of the Internal Revenue Code, but not including
19            the bonus depreciation deduction;
20                (2) for taxable years ending on or before
21            December 31, 2005, "x" equals "y" multiplied by 30
22            and then divided by 70 (or "y" multiplied by
23            0.429); and
24                (3) for taxable years ending after December
25            31, 2005:
26                    (i) for property on which a bonus

 

 

10000SB0009sam001- 245 -LRB100 06347 HLH 18430 a

1                depreciation deduction of 30% of the adjusted
2                basis was taken, "x" equals "y" multiplied by
3                30 and then divided by 70 (or "y" multiplied by
4                0.429); and
5                    (ii) for property on which a bonus
6                depreciation deduction of 50% of the adjusted
7                basis was taken, "x" equals "y" multiplied by
8                1.0.
9            The aggregate amount deducted under this
10        subparagraph in all taxable years for any one piece of
11        property may not exceed the amount of the bonus
12        depreciation deduction taken on that property on the
13        taxpayer's federal income tax return under subsection
14        (k) of Section 168 of the Internal Revenue Code. This
15        subparagraph (R) is exempt from the provisions of
16        Section 250;
17            (S) If the taxpayer sells, transfers, abandons, or
18        otherwise disposes of property for which the taxpayer
19        was required in any taxable year to make an addition
20        modification under subparagraph (G-10), then an amount
21        equal to that addition modification.
22            If the taxpayer continues to own property through
23        the last day of the last tax year for which the
24        taxpayer may claim a depreciation deduction for
25        federal income tax purposes and for which the taxpayer
26        was required in any taxable year to make an addition

 

 

10000SB0009sam001- 246 -LRB100 06347 HLH 18430 a

1        modification under subparagraph (G-10), then an amount
2        equal to that addition modification.
3            The taxpayer is allowed to take the deduction under
4        this subparagraph only once with respect to any one
5        piece of property.
6            This subparagraph (S) is exempt from the
7        provisions of Section 250;
8            (T) The amount of (i) any interest income (net of
9        the deductions allocable thereto) taken into account
10        for the taxable year with respect to a transaction with
11        a taxpayer that is required to make an addition
12        modification with respect to such transaction under
13        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
14        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
15        the amount of such addition modification and (ii) any
16        income from intangible property (net of the deductions
17        allocable thereto) taken into account for the taxable
18        year with respect to a transaction with a taxpayer that
19        is required to make an addition modification with
20        respect to such transaction under Section
21        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
22        203(d)(2)(D-8), but not to exceed the amount of such
23        addition modification. This subparagraph (T) is exempt
24        from the provisions of Section 250;
25            (U) An amount equal to the interest income taken
26        into account for the taxable year (net of the

 

 

10000SB0009sam001- 247 -LRB100 06347 HLH 18430 a

1        deductions allocable thereto) with respect to
2        transactions with (i) a foreign person who would be a
3        member of the taxpayer's unitary business group but for
4        the fact the foreign person's business activity
5        outside the United States is 80% or more of that
6        person's total business activity and (ii) for taxable
7        years ending on or after December 31, 2008, to a person
8        who would be a member of the same unitary business
9        group but for the fact that the person is prohibited
10        under Section 1501(a)(27) from being included in the
11        unitary business group because he or she is ordinarily
12        required to apportion business income under different
13        subsections of Section 304, but not to exceed the
14        addition modification required to be made for the same
15        taxable year under Section 203(c)(2)(G-12) for
16        interest paid, accrued, or incurred, directly or
17        indirectly, to the same person. This subparagraph (U)
18        is exempt from the provisions of Section 250;
19            (V) An amount equal to the income from intangible
20        property taken into account for the taxable year (net
21        of the deductions allocable thereto) with respect to
22        transactions with (i) a foreign person who would be a
23        member of the taxpayer's unitary business group but for
24        the fact that the foreign person's business activity
25        outside the United States is 80% or more of that
26        person's total business activity and (ii) for taxable

 

 

10000SB0009sam001- 248 -LRB100 06347 HLH 18430 a

1        years ending on or after December 31, 2008, to a person
2        who would be a member of the same unitary business
3        group but for the fact that the person is prohibited
4        under Section 1501(a)(27) from being included in the
5        unitary business group because he or she is ordinarily
6        required to apportion business income under different
7        subsections of Section 304, but not to exceed the
8        addition modification required to be made for the same
9        taxable year under Section 203(c)(2)(G-13) for
10        intangible expenses and costs paid, accrued, or
11        incurred, directly or indirectly, to the same foreign
12        person. This subparagraph (V) is exempt from the
13        provisions of Section 250;
14            (W) in the case of an estate, an amount equal to
15        all amounts included in such total pursuant to the
16        provisions of Section 111 of the Internal Revenue Code
17        as a recovery of items previously deducted by the
18        decedent from adjusted gross income in the computation
19        of taxable income. This subparagraph (W) is exempt from
20        Section 250;
21            (X) an amount equal to the refund included in such
22        total of any tax deducted for federal income tax
23        purposes, to the extent that deduction was added back
24        under subparagraph (F). This subparagraph (X) is
25        exempt from the provisions of Section 250; and
26            (Y) For taxable years ending on or after December

 

 

10000SB0009sam001- 249 -LRB100 06347 HLH 18430 a

1        31, 2011, in the case of a taxpayer who was required to
2        add back any insurance premiums under Section
3        203(c)(2)(G-14), such taxpayer may elect to subtract
4        that part of a reimbursement received from the
5        insurance company equal to the amount of the expense or
6        loss (including expenses incurred by the insurance
7        company) that would have been taken into account as a
8        deduction for federal income tax purposes if the
9        expense or loss had been uninsured. If a taxpayer makes
10        the election provided for by this subparagraph (Y), the
11        insurer to which the premiums were paid must add back
12        to income the amount subtracted by the taxpayer
13        pursuant to this subparagraph (Y). This subparagraph
14        (Y) is exempt from the provisions of Section 250.
15        (3) Limitation. The amount of any modification
16    otherwise required under this subsection shall, under
17    regulations prescribed by the Department, be adjusted by
18    any amounts included therein which were properly paid,
19    credited, or required to be distributed, or permanently set
20    aside for charitable purposes pursuant to Internal Revenue
21    Code Section 642(c) during the taxable year.
 
22    (d) Partnerships.
23        (1) In general. In the case of a partnership, base
24    income means an amount equal to the taxpayer's taxable
25    income for the taxable year as modified by paragraph (2).

 

 

10000SB0009sam001- 250 -LRB100 06347 HLH 18430 a

1        (2) Modifications. The taxable income referred to in
2    paragraph (1) shall be modified by adding thereto the sum
3    of the following amounts:
4            (A) An amount equal to all amounts paid or accrued
5        to the taxpayer as interest or dividends during the
6        taxable year to the extent excluded from gross income
7        in the computation of taxable income;
8            (B) An amount equal to the amount of tax imposed by
9        this Act to the extent deducted from gross income for
10        the taxable year;
11            (C) The amount of deductions allowed to the
12        partnership pursuant to Section 707 (c) of the Internal
13        Revenue Code in calculating its taxable income;
14            (D) An amount equal to the amount of the capital
15        gain deduction allowable under the Internal Revenue
16        Code, to the extent deducted from gross income in the
17        computation of taxable income;
18            (D-5) For taxable years 2001 and thereafter, an
19        amount equal to the bonus depreciation deduction taken
20        on the taxpayer's federal income tax return for the
21        taxable year under subsection (k) of Section 168 of the
22        Internal Revenue Code;
23            (D-6) If the taxpayer sells, transfers, abandons,
24        or otherwise disposes of property for which the
25        taxpayer was required in any taxable year to make an
26        addition modification under subparagraph (D-5), then

 

 

10000SB0009sam001- 251 -LRB100 06347 HLH 18430 a

1        an amount equal to the aggregate amount of the
2        deductions taken in all taxable years under
3        subparagraph (O) with respect to that property.
4            If the taxpayer continues to own property through
5        the last day of the last tax year for which the
6        taxpayer may claim a depreciation deduction for
7        federal income tax purposes and for which the taxpayer
8        was allowed in any taxable year to make a subtraction
9        modification under subparagraph (O), then an amount
10        equal to that subtraction modification.
11            The taxpayer is required to make the addition
12        modification under this subparagraph only once with
13        respect to any one piece of property;
14            (D-7) An amount equal to the amount otherwise
15        allowed as a deduction in computing base income for
16        interest paid, accrued, or incurred, directly or
17        indirectly, (i) for taxable years ending on or after
18        December 31, 2004, to a foreign person who would be a
19        member of the same unitary business group but for the
20        fact the foreign person's business activity outside
21        the United States is 80% or more of the foreign
22        person's total business activity and (ii) for taxable
23        years ending on or after December 31, 2008, to a person
24        who would be a member of the same unitary business
25        group but for the fact that the person is prohibited
26        under Section 1501(a)(27) from being included in the

 

 

10000SB0009sam001- 252 -LRB100 06347 HLH 18430 a

1        unitary business group because he or she is ordinarily
2        required to apportion business income under different
3        subsections of Section 304. The addition modification
4        required by this subparagraph shall be reduced to the
5        extent that dividends were included in base income of
6        the unitary group for the same taxable year and
7        received by the taxpayer or by a member of the
8        taxpayer's unitary business group (including amounts
9        included in gross income pursuant to Sections 951
10        through 964 of the Internal Revenue Code and amounts
11        included in gross income under Section 78 of the
12        Internal Revenue Code) with respect to the stock of the
13        same person to whom the interest was paid, accrued, or
14        incurred.
15            This paragraph shall not apply to the following:
16                (i) an item of interest paid, accrued, or
17            incurred, directly or indirectly, to a person who
18            is subject in a foreign country or state, other
19            than a state which requires mandatory unitary
20            reporting, to a tax on or measured by net income
21            with respect to such interest; or
22                (ii) an item of interest paid, accrued, or
23            incurred, directly or indirectly, to a person if
24            the taxpayer can establish, based on a
25            preponderance of the evidence, both of the
26            following:

 

 

10000SB0009sam001- 253 -LRB100 06347 HLH 18430 a

1                    (a) the person, during the same taxable
2                year, paid, accrued, or incurred, the interest
3                to a person that is not a related member, and
4                    (b) the transaction giving rise to the
5                interest expense between the taxpayer and the
6                person did not have as a principal purpose the
7                avoidance of Illinois income tax, and is paid
8                pursuant to a contract or agreement that
9                reflects an arm's-length interest rate and
10                terms; or
11                (iii) the taxpayer can establish, based on
12            clear and convincing evidence, that the interest
13            paid, accrued, or incurred relates to a contract or
14            agreement entered into at arm's-length rates and
15            terms and the principal purpose for the payment is
16            not federal or Illinois tax avoidance; or
17                (iv) an item of interest paid, accrued, or
18            incurred, directly or indirectly, to a person if
19            the taxpayer establishes by clear and convincing
20            evidence that the adjustments are unreasonable; or
21            if the taxpayer and the Director agree in writing
22            to the application or use of an alternative method
23            of apportionment under Section 304(f).
24                Nothing in this subsection shall preclude the
25            Director from making any other adjustment
26            otherwise allowed under Section 404 of this Act for

 

 

10000SB0009sam001- 254 -LRB100 06347 HLH 18430 a

1            any tax year beginning after the effective date of
2            this amendment provided such adjustment is made
3            pursuant to regulation adopted by the Department
4            and such regulations provide methods and standards
5            by which the Department will utilize its authority
6            under Section 404 of this Act; and
7            (D-8) An amount equal to the amount of intangible
8        expenses and costs otherwise allowed as a deduction in
9        computing base income, and that were paid, accrued, or
10        incurred, directly or indirectly, (i) for taxable
11        years ending on or after December 31, 2004, to a
12        foreign person who would be a member of the same
13        unitary business group but for the fact that the
14        foreign person's business activity outside the United
15        States is 80% or more of that person's total business
16        activity and (ii) for taxable years ending on or after
17        December 31, 2008, to a person who would be a member of
18        the same unitary business group but for the fact that
19        the person is prohibited under Section 1501(a)(27)
20        from being included in the unitary business group
21        because he or she is ordinarily required to apportion
22        business income under different subsections of Section
23        304. The addition modification required by this
24        subparagraph shall be reduced to the extent that
25        dividends were included in base income of the unitary
26        group for the same taxable year and received by the

 

 

10000SB0009sam001- 255 -LRB100 06347 HLH 18430 a

1        taxpayer or by a member of the taxpayer's unitary
2        business group (including amounts included in gross
3        income pursuant to Sections 951 through 964 of the
4        Internal Revenue Code and amounts included in gross
5        income under Section 78 of the Internal Revenue Code)
6        with respect to the stock of the same person to whom
7        the intangible expenses and costs were directly or
8        indirectly paid, incurred or accrued. The preceding
9        sentence shall not apply to the extent that the same
10        dividends caused a reduction to the addition
11        modification required under Section 203(d)(2)(D-7) of
12        this Act. As used in this subparagraph, the term
13        "intangible expenses and costs" includes (1) expenses,
14        losses, and costs for, or related to, the direct or
15        indirect acquisition, use, maintenance or management,
16        ownership, sale, exchange, or any other disposition of
17        intangible property; (2) losses incurred, directly or
18        indirectly, from factoring transactions or discounting
19        transactions; (3) royalty, patent, technical, and
20        copyright fees; (4) licensing fees; and (5) other
21        similar expenses and costs. For purposes of this
22        subparagraph, "intangible property" includes patents,
23        patent applications, trade names, trademarks, service
24        marks, copyrights, mask works, trade secrets, and
25        similar types of intangible assets;
26            This paragraph shall not apply to the following:

 

 

10000SB0009sam001- 256 -LRB100 06347 HLH 18430 a

1                (i) any item of intangible expenses or costs
2            paid, accrued, or incurred, directly or
3            indirectly, from a transaction with a person who is
4            subject in a foreign country or state, other than a
5            state which requires mandatory unitary reporting,
6            to a tax on or measured by net income with respect
7            to such item; or
8                (ii) any item of intangible expense or cost
9            paid, accrued, or incurred, directly or
10            indirectly, if the taxpayer can establish, based
11            on a preponderance of the evidence, both of the
12            following:
13                    (a) the person during the same taxable
14                year paid, accrued, or incurred, the
15                intangible expense or cost to a person that is
16                not a related member, and
17                    (b) the transaction giving rise to the
18                intangible expense or cost between the
19                taxpayer and the person did not have as a
20                principal purpose the avoidance of Illinois
21                income tax, and is paid pursuant to a contract
22                or agreement that reflects arm's-length terms;
23                or
24                (iii) any item of intangible expense or cost
25            paid, accrued, or incurred, directly or
26            indirectly, from a transaction with a person if the

 

 

10000SB0009sam001- 257 -LRB100 06347 HLH 18430 a

1            taxpayer establishes by clear and convincing
2            evidence, that the adjustments are unreasonable;
3            or if the taxpayer and the Director agree in
4            writing to the application or use of an alternative
5            method of apportionment under Section 304(f);
6                Nothing in this subsection shall preclude the
7            Director from making any other adjustment
8            otherwise allowed under Section 404 of this Act for
9            any tax year beginning after the effective date of
10            this amendment provided such adjustment is made
11            pursuant to regulation adopted by the Department
12            and such regulations provide methods and standards
13            by which the Department will utilize its authority
14            under Section 404 of this Act;
15            (D-9) For taxable years ending on or after December
16        31, 2008, an amount equal to the amount of insurance
17        premium expenses and costs otherwise allowed as a
18        deduction in computing base income, and that were paid,
19        accrued, or incurred, directly or indirectly, to a
20        person who would be a member of the same unitary
21        business group but for the fact that the person is
22        prohibited under Section 1501(a)(27) from being
23        included in the unitary business group because he or
24        she is ordinarily required to apportion business
25        income under different subsections of Section 304. The
26        addition modification required by this subparagraph

 

 

10000SB0009sam001- 258 -LRB100 06347 HLH 18430 a

1        shall be reduced to the extent that dividends were
2        included in base income of the unitary group for the
3        same taxable year and received by the taxpayer or by a
4        member of the taxpayer's unitary business group
5        (including amounts included in gross income under
6        Sections 951 through 964 of the Internal Revenue Code
7        and amounts included in gross income under Section 78
8        of the Internal Revenue Code) with respect to the stock
9        of the same person to whom the premiums and costs were
10        directly or indirectly paid, incurred, or accrued. The
11        preceding sentence does not apply to the extent that
12        the same dividends caused a reduction to the addition
13        modification required under Section 203(d)(2)(D-7) or
14        Section 203(d)(2)(D-8) of this Act;
15            (D-10) An amount equal to the credit allowable to
16        the taxpayer under Section 218(a) of this Act,
17        determined without regard to Section 218(c) of this
18        Act;
19            (D-11) For taxable years beginning on or after
20        January 1, 2017, an amount equal to the deduction
21        allowed under Section 199 of the Internal Revenue Code
22        for the taxable year;
23    and by deducting from the total so obtained the following
24    amounts:
25            (E) The valuation limitation amount;
26            (F) An amount equal to the amount of any tax

 

 

10000SB0009sam001- 259 -LRB100 06347 HLH 18430 a

1        imposed by this Act which was refunded to the taxpayer
2        and included in such total for the taxable year;
3            (G) An amount equal to all amounts included in
4        taxable income as modified by subparagraphs (A), (B),
5        (C) and (D) which are exempt from taxation by this
6        State either by reason of its statutes or Constitution
7        or by reason of the Constitution, treaties or statutes
8        of the United States; provided that, in the case of any
9        statute of this State that exempts income derived from
10        bonds or other obligations from the tax imposed under
11        this Act, the amount exempted shall be the interest net
12        of bond premium amortization;
13            (H) Any income of the partnership which
14        constitutes personal service income as defined in
15        Section 1348 (b) (1) of the Internal Revenue Code (as
16        in effect December 31, 1981) or a reasonable allowance
17        for compensation paid or accrued for services rendered
18        by partners to the partnership, whichever is greater;
19        this subparagraph (H) is exempt from the provisions of
20        Section 250;
21            (I) An amount equal to all amounts of income
22        distributable to an entity subject to the Personal
23        Property Tax Replacement Income Tax imposed by
24        subsections (c) and (d) of Section 201 of this Act
25        including amounts distributable to organizations
26        exempt from federal income tax by reason of Section

 

 

10000SB0009sam001- 260 -LRB100 06347 HLH 18430 a

1        501(a) of the Internal Revenue Code; this subparagraph
2        (I) is exempt from the provisions of Section 250;
3            (J) With the exception of any amounts subtracted
4        under subparagraph (G), an amount equal to the sum of
5        all amounts disallowed as deductions by (i) Sections
6        171(a) (2), and 265(2) of the Internal Revenue Code,
7        and all amounts of expenses allocable to interest and
8        disallowed as deductions by Section 265(1) of the
9        Internal Revenue Code; and (ii) for taxable years
10        ending on or after August 13, 1999, Sections 171(a)(2),
11        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
12        Code, plus, (iii) for taxable years ending on or after
13        December 31, 2011, Section 45G(e)(3) of the Internal
14        Revenue Code and, for taxable years ending on or after
15        December 31, 2008, any amount included in gross income
16        under Section 87 of the Internal Revenue Code; the
17        provisions of this subparagraph are exempt from the
18        provisions of Section 250;
19            (K) An amount equal to those dividends included in
20        such total which were paid by a corporation which
21        conducts business operations in a River Edge
22        Redevelopment Zone or zones created under the River
23        Edge Redevelopment Zone Act and conducts substantially
24        all of its operations from a River Edge Redevelopment
25        Zone or zones. This subparagraph (K) is exempt from the
26        provisions of Section 250;

 

 

10000SB0009sam001- 261 -LRB100 06347 HLH 18430 a

1            (L) An amount equal to any contribution made to a
2        job training project established pursuant to the Real
3        Property Tax Increment Allocation Redevelopment Act;
4            (M) An amount equal to those dividends included in
5        such total that were paid by a corporation that
6        conducts business operations in a federally designated
7        Foreign Trade Zone or Sub-Zone and that is designated a
8        High Impact Business located in Illinois; provided
9        that dividends eligible for the deduction provided in
10        subparagraph (K) of paragraph (2) of this subsection
11        shall not be eligible for the deduction provided under
12        this subparagraph (M);
13            (N) An amount equal to the amount of the deduction
14        used to compute the federal income tax credit for
15        restoration of substantial amounts held under claim of
16        right for the taxable year pursuant to Section 1341 of
17        the Internal Revenue Code;
18            (O) For taxable years 2001 and thereafter, for the
19        taxable year in which the bonus depreciation deduction
20        is taken on the taxpayer's federal income tax return
21        under subsection (k) of Section 168 of the Internal
22        Revenue Code and for each applicable taxable year
23        thereafter, an amount equal to "x", where:
24                (1) "y" equals the amount of the depreciation
25            deduction taken for the taxable year on the
26            taxpayer's federal income tax return on property

 

 

10000SB0009sam001- 262 -LRB100 06347 HLH 18430 a

1            for which the bonus depreciation deduction was
2            taken in any year under subsection (k) of Section
3            168 of the Internal Revenue Code, but not including
4            the bonus depreciation deduction;
5                (2) for taxable years ending on or before
6            December 31, 2005, "x" equals "y" multiplied by 30
7            and then divided by 70 (or "y" multiplied by
8            0.429); and
9                (3) for taxable years ending after December
10            31, 2005:
11                    (i) for property on which a bonus
12                depreciation deduction of 30% of the adjusted
13                basis was taken, "x" equals "y" multiplied by
14                30 and then divided by 70 (or "y" multiplied by
15                0.429); and
16                    (ii) for property on which a bonus
17                depreciation deduction of 50% of the adjusted
18                basis was taken, "x" equals "y" multiplied by
19                1.0.
20            The aggregate amount deducted under this
21        subparagraph in all taxable years for any one piece of
22        property may not exceed the amount of the bonus
23        depreciation deduction taken on that property on the
24        taxpayer's federal income tax return under subsection
25        (k) of Section 168 of the Internal Revenue Code. This
26        subparagraph (O) is exempt from the provisions of

 

 

10000SB0009sam001- 263 -LRB100 06347 HLH 18430 a

1        Section 250;
2            (P) If the taxpayer sells, transfers, abandons, or
3        otherwise disposes of property for which the taxpayer
4        was required in any taxable year to make an addition
5        modification under subparagraph (D-5), then an amount
6        equal to that addition modification.
7            If the taxpayer continues to own property through
8        the last day of the last tax year for which the
9        taxpayer may claim a depreciation deduction for
10        federal income tax purposes and for which the taxpayer
11        was required in any taxable year to make an addition
12        modification under subparagraph (D-5), then an amount
13        equal to that addition modification.
14            The taxpayer is allowed to take the deduction under
15        this subparagraph only once with respect to any one
16        piece of property.
17            This subparagraph (P) is exempt from the
18        provisions of Section 250;
19            (Q) The amount of (i) any interest income (net of
20        the deductions allocable thereto) taken into account
21        for the taxable year with respect to a transaction with
22        a taxpayer that is required to make an addition
23        modification with respect to such transaction under
24        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
25        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
26        the amount of such addition modification and (ii) any

 

 

10000SB0009sam001- 264 -LRB100 06347 HLH 18430 a

1        income from intangible property (net of the deductions
2        allocable thereto) taken into account for the taxable
3        year with respect to a transaction with a taxpayer that
4        is required to make an addition modification with
5        respect to such transaction under Section
6        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
7        203(d)(2)(D-8), but not to exceed the amount of such
8        addition modification. This subparagraph (Q) is exempt
9        from Section 250;
10            (R) An amount equal to the interest income taken
11        into account for the taxable year (net of the
12        deductions allocable thereto) with respect to
13        transactions with (i) a foreign person who would be a
14        member of the taxpayer's unitary business group but for
15        the fact that the foreign person's business activity
16        outside the United States is 80% or more of that
17        person's total business activity and (ii) for taxable
18        years ending on or after December 31, 2008, to a person
19        who would be a member of the same unitary business
20        group but for the fact that the person is prohibited
21        under Section 1501(a)(27) from being included in the
22        unitary business group because he or she is ordinarily
23        required to apportion business income under different
24        subsections of Section 304, but not to exceed the
25        addition modification required to be made for the same
26        taxable year under Section 203(d)(2)(D-7) for interest

 

 

10000SB0009sam001- 265 -LRB100 06347 HLH 18430 a

1        paid, accrued, or incurred, directly or indirectly, to
2        the same person. This subparagraph (R) is exempt from
3        Section 250;
4            (S) An amount equal to the income from intangible
5        property taken into account for the taxable year (net
6        of the deductions allocable thereto) with respect to
7        transactions with (i) a foreign person who would be a
8        member of the taxpayer's unitary business group but for
9        the fact that the foreign person's business activity
10        outside the United States is 80% or more of that
11        person's total business activity and (ii) for taxable
12        years ending on or after December 31, 2008, to a person
13        who would be a member of the same unitary business
14        group but for the fact that the person is prohibited
15        under Section 1501(a)(27) from being included in the
16        unitary business group because he or she is ordinarily
17        required to apportion business income under different
18        subsections of Section 304, but not to exceed the
19        addition modification required to be made for the same
20        taxable year under Section 203(d)(2)(D-8) for
21        intangible expenses and costs paid, accrued, or
22        incurred, directly or indirectly, to the same person.
23        This subparagraph (S) is exempt from Section 250; and
24            (T) For taxable years ending on or after December
25        31, 2011, in the case of a taxpayer who was required to
26        add back any insurance premiums under Section

 

 

10000SB0009sam001- 266 -LRB100 06347 HLH 18430 a

1        203(d)(2)(D-9), such taxpayer may elect to subtract
2        that part of a reimbursement received from the
3        insurance company equal to the amount of the expense or
4        loss (including expenses incurred by the insurance
5        company) that would have been taken into account as a
6        deduction for federal income tax purposes if the
7        expense or loss had been uninsured. If a taxpayer makes
8        the election provided for by this subparagraph (T), the
9        insurer to which the premiums were paid must add back
10        to income the amount subtracted by the taxpayer
11        pursuant to this subparagraph (T). This subparagraph
12        (T) is exempt from the provisions of Section 250.
 
13    (e) Gross income; adjusted gross income; taxable income.
14        (1) In general. Subject to the provisions of paragraph
15    (2) and subsection (b) (3), for purposes of this Section
16    and Section 803(e), a taxpayer's gross income, adjusted
17    gross income, or taxable income for the taxable year shall
18    mean the amount of gross income, adjusted gross income or
19    taxable income properly reportable for federal income tax
20    purposes for the taxable year under the provisions of the
21    Internal Revenue Code. Taxable income may be less than
22    zero. However, for taxable years ending on or after
23    December 31, 1986, net operating loss carryforwards from
24    taxable years ending prior to December 31, 1986, may not
25    exceed the sum of federal taxable income for the taxable

 

 

10000SB0009sam001- 267 -LRB100 06347 HLH 18430 a

1    year before net operating loss deduction, plus the excess
2    of addition modifications over subtraction modifications
3    for the taxable year. For taxable years ending prior to
4    December 31, 1986, taxable income may never be an amount in
5    excess of the net operating loss for the taxable year as
6    defined in subsections (c) and (d) of Section 172 of the
7    Internal Revenue Code, provided that when taxable income of
8    a corporation (other than a Subchapter S corporation),
9    trust, or estate is less than zero and addition
10    modifications, other than those provided by subparagraph
11    (E) of paragraph (2) of subsection (b) for corporations or
12    subparagraph (E) of paragraph (2) of subsection (c) for
13    trusts and estates, exceed subtraction modifications, an
14    addition modification must be made under those
15    subparagraphs for any other taxable year to which the
16    taxable income less than zero (net operating loss) is
17    applied under Section 172 of the Internal Revenue Code or
18    under subparagraph (E) of paragraph (2) of this subsection
19    (e) applied in conjunction with Section 172 of the Internal
20    Revenue Code.
21        (2) Special rule. For purposes of paragraph (1) of this
22    subsection, the taxable income properly reportable for
23    federal income tax purposes shall mean:
24            (A) Certain life insurance companies. In the case
25        of a life insurance company subject to the tax imposed
26        by Section 801 of the Internal Revenue Code, life

 

 

10000SB0009sam001- 268 -LRB100 06347 HLH 18430 a

1        insurance company taxable income, plus the amount of
2        distribution from pre-1984 policyholder surplus
3        accounts as calculated under Section 815a of the
4        Internal Revenue Code;
5            (B) Certain other insurance companies. In the case
6        of mutual insurance companies subject to the tax
7        imposed by Section 831 of the Internal Revenue Code,
8        insurance company taxable income;
9            (C) Regulated investment companies. In the case of
10        a regulated investment company subject to the tax
11        imposed by Section 852 of the Internal Revenue Code,
12        investment company taxable income;
13            (D) Real estate investment trusts. In the case of a
14        real estate investment trust subject to the tax imposed
15        by Section 857 of the Internal Revenue Code, real
16        estate investment trust taxable income;
17            (E) Consolidated corporations. In the case of a
18        corporation which is a member of an affiliated group of
19        corporations filing a consolidated income tax return
20        for the taxable year for federal income tax purposes,
21        taxable income determined as if such corporation had
22        filed a separate return for federal income tax purposes
23        for the taxable year and each preceding taxable year
24        for which it was a member of an affiliated group. For
25        purposes of this subparagraph, the taxpayer's separate
26        taxable income shall be determined as if the election

 

 

10000SB0009sam001- 269 -LRB100 06347 HLH 18430 a

1        provided by Section 243(b) (2) of the Internal Revenue
2        Code had been in effect for all such years;
3            (F) Cooperatives. In the case of a cooperative
4        corporation or association, the taxable income of such
5        organization determined in accordance with the
6        provisions of Section 1381 through 1388 of the Internal
7        Revenue Code, but without regard to the prohibition
8        against offsetting losses from patronage activities
9        against income from nonpatronage activities; except
10        that a cooperative corporation or association may make
11        an election to follow its federal income tax treatment
12        of patronage losses and nonpatronage losses. In the
13        event such election is made, such losses shall be
14        computed and carried over in a manner consistent with
15        subsection (a) of Section 207 of this Act and
16        apportioned by the apportionment factor reported by
17        the cooperative on its Illinois income tax return filed
18        for the taxable year in which the losses are incurred.
19        The election shall be effective for all taxable years
20        with original returns due on or after the date of the
21        election. In addition, the cooperative may file an
22        amended return or returns, as allowed under this Act,
23        to provide that the election shall be effective for
24        losses incurred or carried forward for taxable years
25        occurring prior to the date of the election. Once made,
26        the election may only be revoked upon approval of the

 

 

10000SB0009sam001- 270 -LRB100 06347 HLH 18430 a

1        Director. The Department shall adopt rules setting
2        forth requirements for documenting the elections and
3        any resulting Illinois net loss and the standards to be
4        used by the Director in evaluating requests to revoke
5        elections. Public Act 96-932 is declaratory of
6        existing law;
7            (G) Subchapter S corporations. In the case of: (i)
8        a Subchapter S corporation for which there is in effect
9        an election for the taxable year under Section 1362 of
10        the Internal Revenue Code, the taxable income of such
11        corporation determined in accordance with Section
12        1363(b) of the Internal Revenue Code, except that
13        taxable income shall take into account those items
14        which are required by Section 1363(b)(1) of the
15        Internal Revenue Code to be separately stated; and (ii)
16        a Subchapter S corporation for which there is in effect
17        a federal election to opt out of the provisions of the
18        Subchapter S Revision Act of 1982 and have applied
19        instead the prior federal Subchapter S rules as in
20        effect on July 1, 1982, the taxable income of such
21        corporation determined in accordance with the federal
22        Subchapter S rules as in effect on July 1, 1982; and
23            (H) Partnerships. In the case of a partnership,
24        taxable income determined in accordance with Section
25        703 of the Internal Revenue Code, except that taxable
26        income shall take into account those items which are

 

 

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1        required by Section 703(a)(1) to be separately stated
2        but which would be taken into account by an individual
3        in calculating his taxable income.
4        (3) Recapture of business expenses on disposition of
5    asset or business. Notwithstanding any other law to the
6    contrary, if in prior years income from an asset or
7    business has been classified as business income and in a
8    later year is demonstrated to be non-business income, then
9    all expenses, without limitation, deducted in such later
10    year and in the 2 immediately preceding taxable years
11    related to that asset or business that generated the
12    non-business income shall be added back and recaptured as
13    business income in the year of the disposition of the asset
14    or business. Such amount shall be apportioned to Illinois
15    using the greater of the apportionment fraction computed
16    for the business under Section 304 of this Act for the
17    taxable year or the average of the apportionment fractions
18    computed for the business under Section 304 of this Act for
19    the taxable year and for the 2 immediately preceding
20    taxable years.
 
21    (f) Valuation limitation amount.
22        (1) In general. The valuation limitation amount
23    referred to in subsections (a) (2) (G), (c) (2) (I) and
24    (d)(2) (E) is an amount equal to:
25            (A) The sum of the pre-August 1, 1969 appreciation

 

 

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1        amounts (to the extent consisting of gain reportable
2        under the provisions of Section 1245 or 1250 of the
3        Internal Revenue Code) for all property in respect of
4        which such gain was reported for the taxable year; plus
5            (B) The lesser of (i) the sum of the pre-August 1,
6        1969 appreciation amounts (to the extent consisting of
7        capital gain) for all property in respect of which such
8        gain was reported for federal income tax purposes for
9        the taxable year, or (ii) the net capital gain for the
10        taxable year, reduced in either case by any amount of
11        such gain included in the amount determined under
12        subsection (a) (2) (F) or (c) (2) (H).
13        (2) Pre-August 1, 1969 appreciation amount.
14            (A) If the fair market value of property referred
15        to in paragraph (1) was readily ascertainable on August
16        1, 1969, the pre-August 1, 1969 appreciation amount for
17        such property is the lesser of (i) the excess of such
18        fair market value over the taxpayer's basis (for
19        determining gain) for such property on that date
20        (determined under the Internal Revenue Code as in
21        effect on that date), or (ii) the total gain realized
22        and reportable for federal income tax purposes in
23        respect of the sale, exchange or other disposition of
24        such property.
25            (B) If the fair market value of property referred
26        to in paragraph (1) was not readily ascertainable on

 

 

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1        August 1, 1969, the pre-August 1, 1969 appreciation
2        amount for such property is that amount which bears the
3        same ratio to the total gain reported in respect of the
4        property for federal income tax purposes for the
5        taxable year, as the number of full calendar months in
6        that part of the taxpayer's holding period for the
7        property ending July 31, 1969 bears to the number of
8        full calendar months in the taxpayer's entire holding
9        period for the property.
10            (C) The Department shall prescribe such
11        regulations as may be necessary to carry out the
12        purposes of this paragraph.
 
13    (g) Double deductions. Unless specifically provided
14otherwise, nothing in this Section shall permit the same item
15to be deducted more than once.
 
16    (h) Legislative intention. Except as expressly provided by
17this Section there shall be no modifications or limitations on
18the amounts of income, gain, loss or deduction taken into
19account in determining gross income, adjusted gross income or
20taxable income for federal income tax purposes for the taxable
21year, or in the amount of such items entering into the
22computation of base income and net income under this Act for
23such taxable year, whether in respect of property values as of
24August 1, 1969 or otherwise.

 

 

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1(Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,
2eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;
396-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.
46-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,
5eff. 8-23-11; 97-905, eff. 8-7-12.)
 
6    (35 ILCS 5/212)
7    Sec. 212. Earned income tax credit.
8    (a) With respect to the federal earned income tax credit
9allowed for the taxable year under Section 32 of the federal
10Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer
11is entitled to a credit against the tax imposed by subsections
12(a) and (b) of Section 201 in an amount equal to (i) 5% of the
13federal tax credit for each taxable year beginning on or after
14January 1, 2000 and ending prior to December 31, 2012, (ii)
157.5% of the federal tax credit for each taxable year beginning
16on or after January 1, 2012 and ending prior to December 31,
172013, and (iii) 10% of the federal tax credit for each taxable
18year beginning on or after January 1, 2013 and beginning prior
19to January 1, 2017, and (iv) 15% of the federal tax credit for
20each taxable year beginning on or after January 1, 2017.
21    For a non-resident or part-year resident, the amount of the
22credit under this Section shall be in proportion to the amount
23of income attributable to this State.
24    (b) For taxable years beginning before January 1, 2003, in
25no event shall a credit under this Section reduce the

 

 

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1taxpayer's liability to less than zero. For each taxable year
2beginning on or after January 1, 2003, if the amount of the
3credit exceeds the income tax liability for the applicable tax
4year, then the excess credit shall be refunded to the taxpayer.
5The amount of a refund shall not be included in the taxpayer's
6income or resources for the purposes of determining eligibility
7or benefit level in any means-tested benefit program
8administered by a governmental entity unless required by
9federal law.
10    (c) This Section is exempt from the provisions of Section
11250.
12(Source: P.A. 97-652, eff. 6-1-12.)
 
13    (35 ILCS 5/225 new)
14    Sec. 225. Credit for instructional materials and supplies.
15For taxable years beginning on and after January 1, 2017, a
16taxpayer shall be allowed a credit in the amount paid by the
17taxpayer during the taxable year for instructional materials
18and supplies with respect to classroom based instruction in a
19qualified school, or $250, whichever is less, provided that the
20taxpayer is a teacher, instructor, counselor, principal, or
21aide in a qualified school for at least 900 hours during a
22school year.
23    The credit may not be carried back and may not reduce the
24taxpayer's liability to less than zero. If the amount of the
25credit exceeds the tax liability for the year, the excess may

 

 

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1be carried forward and applied to the tax liability of the 5
2taxable years following the excess credit year. The tax credit
3shall be applied to the earliest year for which there is a tax
4liability. If there are credits for more than one year that are
5available to offset a liability, the earlier credit shall be
6applied first.
7    For purposes of this Section, the term "materials and
8supplies" means amounts paid for instructional materials or
9supplies that are designated for classroom use in any qualified
10school. For purposes of this Section, the term "qualified
11school" means a public school or non-public school located in
12Illinois.
13    This Section is exempt from the provisions of Section 250.
 
14    (35 ILCS 5/804)  (from Ch. 120, par. 8-804)
15    Sec. 804. Failure to Pay Estimated Tax.
16    (a) In general. In case of any underpayment of estimated
17tax by a taxpayer, except as provided in subsection (d) or (e),
18the taxpayer shall be liable to a penalty in an amount
19determined at the rate prescribed by Section 3-3 of the Uniform
20Penalty and Interest Act upon the amount of the underpayment
21(determined under subsection (b)) for each required
22installment.
23    (b) Amount of underpayment. For purposes of subsection (a),
24the amount of the underpayment shall be the excess of:
25        (1) the amount of the installment which would be

 

 

10000SB0009sam001- 277 -LRB100 06347 HLH 18430 a

1    required to be paid under subsection (c), over
2        (2) the amount, if any, of the installment paid on or
3    before the last date prescribed for payment.
4    (c) Amount of Required Installments.
5        (1) Amount.
6            (A) In General. Except as provided in paragraphs
7        (2) and (3), the amount of any required installment
8        shall be 25% of the required annual payment.
9            (B) Required Annual Payment. For purposes of
10        subparagraph (A), the term "required annual payment"
11        means the lesser of:
12                (i) 90% of the tax shown on the return for the
13            taxable year, or if no return is filed, 90% of the
14            tax for such year;
15                (ii) for installments due prior to February 1,
16            2011, and after January 31, 2012, 100% of the tax
17            shown on the return of the taxpayer for the
18            preceding taxable year if a return showing a
19            liability for tax was filed by the taxpayer for the
20            preceding taxable year and such preceding year was
21            a taxable year of 12 months; or
22                (iii) for installments due after January 31,
23            2011, and prior to February 1, 2012, 150% of the
24            tax shown on the return of the taxpayer for the
25            preceding taxable year if a return showing a
26            liability for tax was filed by the taxpayer for the

 

 

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1            preceding taxable year and such preceding year was
2            a taxable year of 12 months.
3        (2) Lower Required Installment where Annualized Income
4    Installment is Less Than Amount Determined Under Paragraph
5    (1).
6            (A) In General. In the case of any required
7        installment if a taxpayer establishes that the
8        annualized income installment is less than the amount
9        determined under paragraph (1),
10                (i) the amount of such required installment
11            shall be the annualized income installment, and
12                (ii) any reduction in a required installment
13            resulting from the application of this
14            subparagraph shall be recaptured by increasing the
15            amount of the next required installment determined
16            under paragraph (1) by the amount of such
17            reduction, and by increasing subsequent required
18            installments to the extent that the reduction has
19            not previously been recaptured under this clause.
20            (B) Determination of Annualized Income
21        Installment. In the case of any required installment,
22        the annualized income installment is the excess, if
23        any, of:
24                (i) an amount equal to the applicable
25            percentage of the tax for the taxable year computed
26            by placing on an annualized basis the net income

 

 

10000SB0009sam001- 279 -LRB100 06347 HLH 18430 a

1            for months in the taxable year ending before the
2            due date for the installment, over
3                (ii) the aggregate amount of any prior
4            required installments for the taxable year.
5            (C) Applicable Percentage.
6        In the case of the followingThe applicable
7        required installments:percentage is:
8        1st ...............................22.5%
9        2nd ...............................45%
10        3rd ...............................67.5%
11        4th ...............................90%
12            (D) Annualized Net Income; Individuals. For
13        individuals, net income shall be placed on an
14        annualized basis by:
15                (i) multiplying by 12, or in the case of a
16            taxable year of less than 12 months, by the number
17            of months in the taxable year, the net income
18            computed without regard to the standard exemption
19            for the months in the taxable year ending before
20            the month in which the installment is required to
21            be paid;
22                (ii) dividing the resulting amount by the
23            number of months in the taxable year ending before
24            the month in which such installment date falls; and
25                (iii) deducting from such amount the standard
26            exemption allowable for the taxable year, such

 

 

10000SB0009sam001- 280 -LRB100 06347 HLH 18430 a

1            standard exemption being determined as of the last
2            date prescribed for payment of the installment.
3            (E) Annualized Net Income; Corporations. For
4        corporations, net income shall be placed on an
5        annualized basis by multiplying by 12 the taxable
6        income
7                (i) for the first 3 months of the taxable year,
8            in the case of the installment required to be paid
9            in the 4th month,
10                (ii) for the first 3 months or for the first 5
11            months of the taxable year, in the case of the
12            installment required to be paid in the 6th month,
13                (iii) for the first 6 months or for the first 8
14            months of the taxable year, in the case of the
15            installment required to be paid in the 9th month,
16            and
17                (iv) for the first 9 months or for the first 11
18            months of the taxable year, in the case of the
19            installment required to be paid in the 12th month
20            of the taxable year,
21        then dividing the resulting amount by the number of
22        months in the taxable year (3, 5, 6, 8, 9, or 11 as the
23        case may be).
24        (3) Notwithstanding any other provision of this
25    subsection (c), in the case of a federally regulated
26    exchange that elects to apportion its income under Section

 

 

10000SB0009sam001- 281 -LRB100 06347 HLH 18430 a

1    304(c-1) of this Act, the amount of each required
2    installment due prior to June 30 of the first taxable year
3    to which the election applies shall be 25% of the tax that
4    would have been shown on the return for that taxable year
5    if the taxpayer had not made such election.
6    (d) Exceptions. Notwithstanding the provisions of the
7preceding subsections, the penalty imposed by subsection (a)
8shall not be imposed if the taxpayer was not required to file
9an Illinois income tax return for the preceding taxable year,
10or, for individuals, if the taxpayer had no tax liability for
11the preceding taxable year and such year was a taxable year of
1212 months. The penalty imposed by subsection (a) shall also not
13be imposed on any underpayments of estimated tax due before the
14effective date of this amendatory Act of 1998 which
15underpayments are solely attributable to the change in
16apportionment from subsection (a) to subsection (h) of Section
17304. The provisions of this amendatory Act of 1998 apply to tax
18years ending on or after December 31, 1998.
19    (e) The penalty imposed for underpayment of estimated tax
20by subsection (a) of this Section shall not be imposed to the
21extent that the Director or his or her designate determines,
22pursuant to Section 3-8 of the Uniform Penalty and Interest Act
23that the penalty should not be imposed.
24    (f) Definition of tax. For purposes of subsections (b) and
25(c), the term "tax" means the excess of the tax imposed under
26Article 2 of this Act, over the amounts credited against such

 

 

10000SB0009sam001- 282 -LRB100 06347 HLH 18430 a

1tax under Sections 601(b) (3) and (4).
2    (g) Application of Section in case of tax withheld under
3Article 7. For purposes of applying this Section:
4        (1) tax withheld from compensation for the taxable year
5    shall be deemed a payment of estimated tax, and an equal
6    part of such amount shall be deemed paid on each
7    installment date for such taxable year, unless the taxpayer
8    establishes the dates on which all amounts were actually
9    withheld, in which case the amounts so withheld shall be
10    deemed payments of estimated tax on the dates on which such
11    amounts were actually withheld;
12        (2) amounts timely paid by a partnership, Subchapter S
13    corporation, or trust on behalf of a partner, shareholder,
14    or beneficiary pursuant to subsection (f) of Section 502 or
15    Section 709.5 and claimed as a payment of estimated tax
16    shall be deemed a payment of estimated tax made on the last
17    day of the taxable year of the partnership, Subchapter S
18    corporation, or trust for which the income from the
19    withholding is made was computed; and
20        (3) all other amounts pursuant to Article 7 shall be
21    deemed a payment of estimated tax on the date the payment
22    is made to the taxpayer of the amount from which the tax is
23    withheld.
24    (g-5) Amounts withheld under the State Salary and Annuity
25Withholding Act. An individual who has amounts withheld under
26paragraph (10) of Section 4 of the State Salary and Annuity

 

 

10000SB0009sam001- 283 -LRB100 06347 HLH 18430 a

1Withholding Act may elect to have those amounts treated as
2payments of estimated tax made on the dates on which those
3amounts are actually withheld.
4    (g-10) Notwithstanding any other provision of law, no
5penalty shall apply with respect to an underpayment of
6estimated tax for the first, second, or third quarter of any
7taxable year beginning on or after January 1, 2017 and
8beginning prior to January 1, 2018 if (i) the underpayment was
9due to the changes made by this amendatory Act of the 100th
10General Assembly, (ii) the payment was otherwise timely made,
11and (iii) the balance due is included with the taxpayer's
12estimated tax payment for the fourth quarter.
13    (i) Short taxable year. The application of this Section to
14taxable years of less than 12 months shall be in accordance
15with regulations prescribed by the Department.
16    The changes in this Section made by Public Act 84-127 shall
17apply to taxable years ending on or after January 1, 1986.
18(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11;
1997-636, eff. 6-1-12.)
 
20    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
21    Sec. 901. Collection authority.
22    (a) In general.
23    The Department shall collect the taxes imposed by this Act.
24The Department shall collect certified past due child support
25amounts under Section 2505-650 of the Department of Revenue Law

 

 

10000SB0009sam001- 284 -LRB100 06347 HLH 18430 a

1(20 ILCS 2505/2505-650). Except as provided in subsections (c),
2(e), (f), (g), and (h) of this Section, money collected
3pursuant to subsections (a) and (b) of Section 201 of this Act
4shall be paid into the General Revenue Fund in the State
5treasury; money collected pursuant to subsections (c) and (d)
6of Section 201 of this Act shall be paid into the Personal
7Property Tax Replacement Fund, a special fund in the State
8Treasury; and money collected under Section 2505-650 of the
9Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
10into the Child Support Enforcement Trust Fund, a special fund
11outside the State Treasury, or to the State Disbursement Unit
12established under Section 10-26 of the Illinois Public Aid
13Code, as directed by the Department of Healthcare and Family
14Services.
15    (b) Local Government Distributive Fund.
16    Beginning August 1, 1969, and continuing through June 30,
171994, the Treasurer shall transfer each month from the General
18Revenue Fund to a special fund in the State treasury, to be
19known as the "Local Government Distributive Fund", an amount
20equal to 1/12 of the net revenue realized from the tax imposed
21by subsections (a) and (b) of Section 201 of this Act during
22the preceding month. Beginning July 1, 1994, and continuing
23through June 30, 1995, the Treasurer shall transfer each month
24from the General Revenue Fund to the Local Government
25Distributive Fund an amount equal to 1/11 of the net revenue
26realized from the tax imposed by subsections (a) and (b) of

 

 

10000SB0009sam001- 285 -LRB100 06347 HLH 18430 a

1Section 201 of this Act during the preceding month. Beginning
2July 1, 1995 and continuing through January 31, 2011, the
3Treasurer shall transfer each month from the General Revenue
4Fund to the Local Government Distributive Fund an amount equal
5to the net of (i) 1/10 of the net revenue realized from the tax
6imposed by subsections (a) and (b) of Section 201 of the
7Illinois Income Tax Act during the preceding month (ii) minus,
8beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
9and beginning July 1, 2004, zero. Beginning February 1, 2011,
10and continuing through January 31, 2015, 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)
136% (10% of the ratio of the 3% individual income tax rate prior
14to 2011 to the 5% individual income tax rate after 2010) of the
15net revenue realized from the tax imposed by subsections (a)
16and (b) of Section 201 of this Act upon individuals, trusts,
17and estates during the preceding month and (ii) 6.86% (10% of
18the ratio of the 4.8% corporate income tax rate prior to 2011
19to the 7% corporate income tax rate after 2010) of the net
20revenue realized from the tax imposed by subsections (a) and
21(b) of Section 201 of this Act upon corporations during the
22preceding month. Beginning February 1, 2015 and continuing
23through January 31, 2017 January 31, 2025, 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)
268% (10% of the ratio of the 3% individual income tax rate prior

 

 

10000SB0009sam001- 286 -LRB100 06347 HLH 18430 a

1to 2011 to the 3.75% individual income tax rate after 2014) of
2the net revenue realized from the tax imposed by subsections
3(a) and (b) of Section 201 of this Act upon individuals,
4trusts, and estates during the preceding month and (ii) 9.14%
5(10% of the ratio of the 4.8% corporate income tax rate prior
6to 2011 to the 5.25% corporate income tax rate after 2014) of
7the net revenue realized from the tax imposed by subsections
8(a) and (b) of Section 201 of this Act upon corporations during
9the preceding month. Beginning February 1, 2017 February 1,
102025, the Treasurer shall transfer each month from the General
11Revenue Fund to the Local Government Distributive Fund an
12amount equal to the sum of (i) 6.02% 9.23% (10% of the ratio of
13the 3% individual income tax rate prior to 2011 to the 4.99%
143.25% individual income tax rate beginning in 2017 after 2024)
15of the 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) 6.86%
18(10% of the ratio of the 4.8% corporate income tax rate prior
19to 2011 to the 7% corporate income tax rate beginning in 2017)
2010% of the net revenue realized from the tax imposed by
21subsections (a) and (b) of Section 201 of this Act upon
22corporations during the preceding month. Net revenue realized
23for a month shall be defined as the revenue from the tax
24imposed by subsections (a) and (b) of Section 201 of this Act
25which is deposited in the General Revenue Fund, the Education
26Assistance Fund, the Income Tax Surcharge Local Government

 

 

10000SB0009sam001- 287 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 288 -LRB100 06347 HLH 18430 a

1    of this amendatory Act of the 93rd General Assembly, the
2    Annual Percentage shall be 10% for fiscal year 2005. For
3    fiscal year 2006, the Annual Percentage shall be 9.75%. For
4    fiscal year 2007, the Annual Percentage shall be 9.75%. For
5    fiscal year 2008, the Annual Percentage shall be 7.75%. For
6    fiscal year 2009, the Annual Percentage shall be 9.75%. For
7    fiscal year 2010, the Annual Percentage shall be 9.75%. For
8    fiscal year 2011, the Annual Percentage shall be 8.75%. For
9    fiscal year 2012, the Annual Percentage shall be 8.75%. For
10    fiscal year 2013, the Annual Percentage shall be 9.75%. For
11    fiscal year 2014, the Annual Percentage shall be 9.5%. For
12    fiscal year 2015, the Annual Percentage shall be 10%. For
13    all other fiscal years, the Annual Percentage shall be
14    calculated as a fraction, the numerator of which shall be
15    the amount of refunds approved for payment by the
16    Department during the preceding fiscal year as a result of
17    overpayment of tax liability under subsections (a) and
18    (b)(1), (2), and (3) of Section 201 of this Act plus the
19    amount of such refunds remaining approved but unpaid at the
20    end of the preceding fiscal year, minus the amounts
21    transferred into the Income Tax Refund Fund from the
22    Tobacco Settlement Recovery Fund, and the denominator of
23    which shall be the amounts which will be collected pursuant
24    to subsections (a) and (b)(1), (2), and (3) of Section 201
25    of this Act during the preceding fiscal year; except that
26    in State fiscal year 2002, the Annual Percentage shall in

 

 

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1    no event exceed 7.6%. The Director of Revenue shall certify
2    the Annual Percentage to the Comptroller on the last
3    business day of the fiscal year immediately preceding the
4    fiscal year for which it is to be effective.
5        (2) Beginning on January 1, 1989 and thereafter, the
6    Department shall deposit a percentage of the amounts
7    collected pursuant to subsections (a) and (b)(6), (7), and
8    (8), (c) and (d) of Section 201 of this Act into a fund in
9    the State treasury known as the Income Tax Refund Fund. The
10    Department shall deposit 18% of such amounts during the
11    period beginning January 1, 1989 and ending on June 30,
12    1989. Beginning with State fiscal year 1990 and for each
13    fiscal year thereafter, the percentage deposited into the
14    Income Tax Refund Fund during a fiscal year shall be the
15    Annual Percentage. For fiscal years 1999, 2000, and 2001,
16    the Annual Percentage shall be 19%. For fiscal year 2003,
17    the Annual Percentage shall be 27%. For fiscal year 2004,
18    the Annual Percentage shall be 32%. Upon the effective date
19    of this amendatory Act of the 93rd General Assembly, the
20    Annual Percentage shall be 24% for fiscal year 2005. For
21    fiscal year 2006, the Annual Percentage shall be 20%. For
22    fiscal year 2007, the Annual Percentage shall be 17.5%. For
23    fiscal year 2008, the Annual Percentage shall be 15.5%. For
24    fiscal year 2009, the Annual Percentage shall be 17.5%. For
25    fiscal year 2010, the Annual Percentage shall be 17.5%. For
26    fiscal year 2011, the Annual Percentage shall be 17.5%. For

 

 

10000SB0009sam001- 290 -LRB100 06347 HLH 18430 a

1    fiscal year 2012, the Annual Percentage shall be 17.5%. For
2    fiscal year 2013, the Annual Percentage shall be 14%. For
3    fiscal year 2014, the Annual Percentage shall be 13.4%. For
4    fiscal year 2015, the Annual Percentage shall be 14%. For
5    all other fiscal years, the Annual Percentage shall be
6    calculated as a fraction, the numerator of which shall be
7    the amount of refunds approved for payment by the
8    Department during the preceding fiscal year as a result of
9    overpayment of tax liability under subsections (a) and
10    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
11    Act plus the amount of such refunds remaining approved but
12    unpaid at the end of the preceding fiscal year, and the
13    denominator of which shall be the amounts which will be
14    collected pursuant to subsections (a) and (b)(6), (7), and
15    (8), (c) and (d) of Section 201 of this Act during the
16    preceding fiscal year; except that in State fiscal year
17    2002, the Annual Percentage shall in no event exceed 23%.
18    The Director of Revenue shall certify the Annual Percentage
19    to the Comptroller on the last business day of the fiscal
20    year immediately preceding the fiscal year for which it is
21    to be effective.
22        (3) The Comptroller shall order transferred and the
23    Treasurer shall transfer from the Tobacco Settlement
24    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
25    in January, 2001, (ii) $35,000,000 in January, 2002, and
26    (iii) $35,000,000 in January, 2003.

 

 

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1    (d) Expenditures from Income Tax Refund Fund.
2        (1) Beginning January 1, 1989, money in the Income Tax
3    Refund Fund shall be expended exclusively for the purpose
4    of paying refunds resulting from overpayment of tax
5    liability under Section 201 of this Act, for paying rebates
6    under Section 208.1 in the event that the amounts in the
7    Homeowners' Tax Relief Fund are insufficient for that
8    purpose, and for making transfers pursuant to this
9    subsection (d).
10        (2) The Director shall order payment of refunds
11    resulting from overpayment of tax liability under Section
12    201 of this Act from the Income Tax Refund Fund only to the
13    extent that amounts collected pursuant to Section 201 of
14    this Act and transfers pursuant to this subsection (d) and
15    item (3) of subsection (c) have been deposited and retained
16    in the Fund.
17        (3) As soon as possible after the end of each fiscal
18    year, the Director shall order transferred and the State
19    Treasurer and State Comptroller shall transfer from the
20    Income Tax Refund Fund to the Personal Property Tax
21    Replacement Fund an amount, certified by the Director to
22    the Comptroller, equal to the excess of the amount
23    collected pursuant to subsections (c) and (d) of Section
24    201 of this Act deposited into the Income Tax Refund Fund
25    during the fiscal year over the amount of refunds resulting
26    from overpayment of tax liability under subsections (c) and

 

 

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

 

 

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1    Director in accordance with the provisions of this Section.
2    (e) Deposits into the Education Assistance Fund and the
3Income Tax Surcharge Local Government Distributive Fund.
4    On July 1, 1991, and thereafter, of the amounts collected
5pursuant to subsections (a) and (b) of Section 201 of this Act,
6minus deposits into the Income Tax Refund Fund, the Department
7shall deposit 7.3% into the Education Assistance Fund in the
8State Treasury. Beginning July 1, 1991, and continuing through
9January 31, 1993, of the amounts collected pursuant to
10subsections (a) and (b) of Section 201 of the Illinois Income
11Tax Act, minus deposits into the Income Tax Refund Fund, the
12Department shall deposit 3.0% into the Income Tax Surcharge
13Local Government Distributive Fund in the State Treasury.
14Beginning February 1, 1993 and continuing through June 30,
151993, of the amounts collected pursuant to subsections (a) and
16(b) of Section 201 of the Illinois Income Tax Act, minus
17deposits into the Income Tax Refund Fund, the Department shall
18deposit 4.4% into the Income Tax Surcharge Local Government
19Distributive Fund in the State Treasury. Beginning July 1,
201993, and continuing through June 30, 1994, of the amounts
21collected under subsections (a) and (b) of Section 201 of this
22Act, minus deposits into the Income Tax Refund Fund, the
23Department shall deposit 1.475% into the Income Tax Surcharge
24Local Government Distributive Fund in the State Treasury.
25    (f) Deposits into the Fund for the Advancement of
26Education. Beginning February 1, 2015, the Department shall

 

 

10000SB0009sam001- 294 -LRB100 06347 HLH 18430 a

1deposit the following portions of the revenue realized from the
2tax imposed upon individuals, trusts, and estates by
3subsections (a) and (b) of Section 201 of this Act during the
4preceding month, minus deposits into the Income Tax Refund
5Fund, into the Fund for the Advancement of Education:
6        (1) beginning February 1, 2015, and prior to February
7    1, 2025, 1/30; and
8        (2) beginning February 1, 2025, 1/26.
9    If the rate of tax imposed by subsection (a) and (b) of
10Section 201 is reduced pursuant to Section 201.5 of this Act,
11the Department shall not make the deposits required by this
12subsection (f) on or after the effective date of the reduction.
13    (g) Deposits into the Commitment to Human Services Fund.
14Beginning February 1, 2015, the Department shall deposit the
15following portions of the revenue realized from the tax imposed
16upon individuals, trusts, and estates by subsections (a) and
17(b) of Section 201 of this Act during the preceding month,
18minus deposits into the Income Tax Refund Fund, into the
19Commitment to Human Services Fund:
20        (1) beginning February 1, 2015, and prior to February
21    1, 2025, 1/30; and
22        (2) beginning February 1, 2025, 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(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
1498-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
157-20-15.)
 
16    (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)
17    Sec. 1501. Definitions.
18    (a) In general. When used in this Act, where not otherwise
19distinctly expressed or manifestly incompatible with the
20intent thereof:
21        (1) Business income. The term "business income" means
22    all income that may be treated as apportionable business
23    income under the Constitution of the United States.
24    Business income is net of the deductions allocable thereto.
25    Such term does not include compensation or the deductions

 

 

10000SB0009sam001- 296 -LRB100 06347 HLH 18430 a

1    allocable thereto. For each taxable year beginning on or
2    after January 1, 2003, a taxpayer may elect to treat all
3    income other than compensation as business income. This
4    election shall be made in accordance with rules adopted by
5    the Department and, once made, shall be irrevocable.
6        (1.5) Captive real estate investment trust:
7            (A) The term "captive real estate investment
8        trust" means a corporation, trust, or association:
9                (i) that is considered a real estate
10            investment trust for the taxable year under
11            Section 856 of the Internal Revenue Code;
12                (ii) the certificates of beneficial interest
13            or shares of which are not regularly traded on an
14            established securities market; and
15                (iii) of which more than 50% of the voting
16            power or value of the beneficial interest or
17            shares, at any time during the last half of the
18            taxable year, is owned or controlled, directly,
19            indirectly, or constructively, by a single
20            corporation.
21            (B) The term "captive real estate investment
22        trust" does not include:
23                (i) a real estate investment trust of which
24            more than 50% of the voting power or value of the
25            beneficial interest or shares is owned or
26            controlled, directly, indirectly, or

 

 

10000SB0009sam001- 297 -LRB100 06347 HLH 18430 a

1            constructively, by:
2                    (a) a real estate investment trust, other
3                than a captive real estate investment trust;
4                    (b) a person who is exempt from taxation
5                under Section 501 of the Internal Revenue Code,
6                and who is not required to treat income
7                received from the real estate investment trust
8                as unrelated business taxable income under
9                Section 512 of the Internal Revenue Code;
10                    (c) a listed Australian property trust, if
11                no more than 50% of the voting power or value
12                of the beneficial interest or shares of that
13                trust, at any time during the last half of the
14                taxable year, is owned or controlled, directly
15                or indirectly, by a single person;
16                    (d) an entity organized as a trust,
17                provided a listed Australian property trust
18                described in subparagraph (c) owns or
19                controls, directly or indirectly, or
20                constructively, 75% or more of the voting power
21                or value of the beneficial interests or shares
22                of such entity; or
23                    (e) an entity that is organized outside of
24                the laws of the United States and that
25                satisfies all of the following criteria:
26                        (1) at least 75% of the entity's total

 

 

10000SB0009sam001- 298 -LRB100 06347 HLH 18430 a

1                    asset value at the close of its taxable
2                    year is represented by real estate assets
3                    (as defined in Section 856(c)(5)(B) of the
4                    Internal Revenue Code, thereby including
5                    shares or certificates of beneficial
6                    interest in any real estate investment
7                    trust), cash and cash equivalents, and
8                    U.S. Government securities;
9                        (2) the entity is not subject to tax on
10                    amounts that are distributed to its
11                    beneficial owners or is exempt from
12                    entity-level taxation;
13                        (3) the entity distributes at least
14                    85% of its taxable income (as computed in
15                    the jurisdiction in which it is organized)
16                    to the holders of its shares or
17                    certificates of beneficial interest on an
18                    annual basis;
19                        (4) either (i) the shares or
20                    beneficial interests of the entity are
21                    regularly traded on an established
22                    securities market or (ii) not more than 10%
23                    of the voting power or value in the entity
24                    is held, directly, indirectly, or
25                    constructively, by a single entity or
26                    individual; and

 

 

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1                        (5) the entity is organized in a
2                    country that has entered into a tax treaty
3                    with the United States; or
4                (ii) during its first taxable year for which it
5            elects to be treated as a real estate investment
6            trust under Section 856(c)(1) of the Internal
7            Revenue Code, a real estate investment trust the
8            certificates of beneficial interest or shares of
9            which are not regularly traded on an established
10            securities market, but only if the certificates of
11            beneficial interest or shares of the real estate
12            investment trust are regularly traded on an
13            established securities market prior to the earlier
14            of the due date (including extensions) for filing
15            its return under this Act for that first taxable
16            year or the date it actually files that return.
17            (C) For the purposes of this subsection (1.5), the
18        constructive ownership rules prescribed under Section
19        318(a) of the Internal Revenue Code, as modified by
20        Section 856(d)(5) of the Internal Revenue Code, apply
21        in determining the ownership of stock, assets, or net
22        profits of any person.
23            (D) For the purposes of this item (1.5), for
24        taxable years ending on or after August 16, 2007, the
25        voting power or value of the beneficial interest or
26        shares of a real estate investment trust does not

 

 

10000SB0009sam001- 300 -LRB100 06347 HLH 18430 a

1        include any voting power or value of beneficial
2        interest or shares in a real estate investment trust
3        held directly or indirectly in a segregated asset
4        account by a life insurance company (as described in
5        Section 817 of the Internal Revenue Code) to the extent
6        such voting power or value is for the benefit of
7        entities or persons who are either immune from taxation
8        or exempt from taxation under subtitle A of the
9        Internal Revenue Code.
10        (2) Commercial domicile. The term "commercial
11    domicile" means the principal place from which the trade or
12    business of the taxpayer is directed or managed.
13        (3) Compensation. The term "compensation" means wages,
14    salaries, commissions and any other form of remuneration
15    paid to employees for personal services.
16        (4) Corporation. The term "corporation" includes
17    associations, joint-stock companies, insurance companies
18    and cooperatives. Any entity, including a limited
19    liability company formed under the Illinois Limited
20    Liability Company Act, shall be treated as a corporation if
21    it is so classified for federal income tax purposes.
22        (5) Department. The term "Department" means the
23    Department of Revenue of this State.
24        (6) Director. The term "Director" means the Director of
25    Revenue of this State.
26        (7) Fiduciary. The term "fiduciary" means a guardian,

 

 

10000SB0009sam001- 301 -LRB100 06347 HLH 18430 a

1    trustee, executor, administrator, receiver, or any person
2    acting in any fiduciary capacity for any person.
3        (8) Financial organization.
4            (A) The term "financial organization" means any
5        bank, bank holding company, trust company, savings
6        bank, industrial bank, land bank, safe deposit
7        company, private banker, savings and loan association,
8        building and loan association, credit union, currency
9        exchange, cooperative bank, small loan company, sales
10        finance company, investment company, or any person
11        which is owned by a bank or bank holding company. For
12        the purpose of this Section a "person" will include
13        only those persons which a bank holding company may
14        acquire and hold an interest in, directly or
15        indirectly, under the provisions of the Bank Holding
16        Company Act of 1956 (12 U.S.C. 1841, et seq.), except
17        where interests in any person must be disposed of
18        within certain required time limits under the Bank
19        Holding Company Act of 1956.
20            (B) For purposes of subparagraph (A) of this
21        paragraph, the term "bank" includes (i) any entity that
22        is regulated by the Comptroller of the Currency under
23        the National Bank Act, or by the Federal Reserve Board,
24        or by the Federal Deposit Insurance Corporation and
25        (ii) any federally or State chartered bank operating as
26        a credit card bank.

 

 

10000SB0009sam001- 302 -LRB100 06347 HLH 18430 a

1            (C) For purposes of subparagraph (A) of this
2        paragraph, the term "sales finance company" has the
3        meaning provided in the following item (i) or (ii):
4                (i) A person primarily engaged in one or more
5            of the following businesses: the business of
6            purchasing customer receivables, the business of
7            making loans upon the security of customer
8            receivables, the business of making loans for the
9            express purpose of funding purchases of tangible
10            personal property or services by the borrower, or
11            the business of finance leasing. For purposes of
12            this item (i), "customer receivable" means:
13                    (a) a retail installment contract or
14                retail charge agreement within the meaning of
15                the Sales Finance Agency Act, the Retail
16                Installment Sales Act, or the Motor Vehicle
17                Retail Installment Sales Act;
18                    (b) an installment, charge, credit, or
19                similar contract or agreement arising from the
20                sale of tangible personal property or services
21                in a transaction involving a deferred payment
22                price payable in one or more installments
23                subsequent to the sale; or
24                    (c) the outstanding balance of a contract
25                or agreement described in provisions (a) or (b)
26                of this item (i).

 

 

10000SB0009sam001- 303 -LRB100 06347 HLH 18430 a

1                A customer receivable need not provide for
2            payment of interest on deferred payments. A sales
3            finance company may purchase a customer receivable
4            from, or make a loan secured by a customer
5            receivable to, the seller in the original
6            transaction or to a person who purchased the
7            customer receivable directly or indirectly from
8            that seller.
9                (ii) A corporation meeting each of the
10            following criteria:
11                    (a) the corporation must be a member of an
12                "affiliated group" within the meaning of
13                Section 1504(a) of the Internal Revenue Code,
14                determined without regard to Section 1504(b)
15                of the Internal Revenue Code;
16                    (b) more than 50% of the gross income of
17                the corporation for the taxable year must be
18                interest income derived from qualifying loans.
19                A "qualifying loan" is a loan made to a member
20                of the corporation's affiliated group that
21                originates customer receivables (within the
22                meaning of item (i)) or to whom customer
23                receivables originated by a member of the
24                affiliated group have been transferred, to the
25                extent the average outstanding balance of
26                loans from that corporation to members of its

 

 

10000SB0009sam001- 304 -LRB100 06347 HLH 18430 a

1                affiliated group during the taxable year do not
2                exceed the limitation amount for that
3                corporation. The "limitation amount" for a
4                corporation is the average outstanding
5                balances during the taxable year of customer
6                receivables (within the meaning of item (i))
7                originated by all members of the affiliated
8                group. If the average outstanding balances of
9                the loans made by a corporation to members of
10                its affiliated group exceed the limitation
11                amount, the interest income of that
12                corporation from qualifying loans shall be
13                equal to its interest income from loans to
14                members of its affiliated groups times a
15                fraction equal to the limitation amount
16                divided by the average outstanding balances of
17                the loans made by that corporation to members
18                of its affiliated group;
19                    (c) the total of all shareholder's equity
20                (including, without limitation, paid-in
21                capital on common and preferred stock and
22                retained earnings) of the corporation plus the
23                total of all of its loans, advances, and other
24                obligations payable or owed to members of its
25                affiliated group may not exceed 20% of the
26                total assets of the corporation at any time

 

 

10000SB0009sam001- 305 -LRB100 06347 HLH 18430 a

1                during the tax year; and
2                    (d) more than 50% of all interest-bearing
3                obligations of the affiliated group payable to
4                persons outside the group determined in
5                accordance with generally accepted accounting
6                principles must be obligations of the
7                corporation.
8            This amendatory Act of the 91st General Assembly is
9        declaratory of existing law.
10            (D) Subparagraphs (B) and (C) of this paragraph are
11        declaratory of existing law and apply retroactively,
12        for all tax years beginning on or before December 31,
13        1996, to all original returns, to all amended returns
14        filed no later than 30 days after the effective date of
15        this amendatory Act of 1996, and to all notices issued
16        on or before the effective date of this amendatory Act
17        of 1996 under subsection (a) of Section 903, subsection
18        (a) of Section 904, subsection (e) of Section 909, or
19        Section 912. A taxpayer that is a "financial
20        organization" that engages in any transaction with an
21        affiliate shall be a "financial organization" for all
22        purposes of this Act.
23            (E) For all tax years beginning on or before
24        December 31, 1996, a taxpayer that falls within the
25        definition of a "financial organization" under
26        subparagraphs (B) or (C) of this paragraph, but who

 

 

10000SB0009sam001- 306 -LRB100 06347 HLH 18430 a

1        does not fall within the definition of a "financial
2        organization" under the Proposed Regulations issued by
3        the Department of Revenue on July 19, 1996, may
4        irrevocably elect to apply the Proposed Regulations
5        for all of those years as though the Proposed
6        Regulations had been lawfully promulgated, adopted,
7        and in effect for all of those years. For purposes of
8        applying subparagraphs (B) or (C) of this paragraph to
9        all of those years, the election allowed by this
10        subparagraph applies only to the taxpayer making the
11        election and to those members of the taxpayer's unitary
12        business group who are ordinarily required to
13        apportion business income under the same subsection of
14        Section 304 of this Act as the taxpayer making the
15        election. No election allowed by this subparagraph
16        shall be made under a claim filed under subsection (d)
17        of Section 909 more than 30 days after the effective
18        date of this amendatory Act of 1996.
19            (F) Finance Leases. For purposes of this
20        subsection, a finance lease shall be treated as a loan
21        or other extension of credit, rather than as a lease,
22        regardless of how the transaction is characterized for
23        any other purpose, including the purposes of any
24        regulatory agency to which the lessor is subject. A
25        finance lease is any transaction in the form of a lease
26        in which the lessee is treated as the owner of the

 

 

10000SB0009sam001- 307 -LRB100 06347 HLH 18430 a

1        leased asset entitled to any deduction for
2        depreciation allowed under Section 167 of the Internal
3        Revenue Code.
4        (9) Fiscal year. The term "fiscal year" means an
5    accounting period of 12 months ending on the last day of
6    any month other than December.
7        (9.5) Fixed place of business. The term "fixed place of
8    business" has the same meaning as that term is given in
9    Section 864 of the Internal Revenue Code and the related
10    Treasury regulations.
11        (10) Includes and including. The terms "includes" and
12    "including" when used in a definition contained in this Act
13    shall not be deemed to exclude other things otherwise
14    within the meaning of the term defined.
15        (11) Internal Revenue Code. The term "Internal Revenue
16    Code" means the United States Internal Revenue Code of 1954
17    or any successor law or laws relating to federal income
18    taxes in effect for the taxable year.
19        (11.5) Investment partnership.
20            (A) The term "investment partnership" means any
21        entity that is treated as a partnership for federal
22        income tax purposes that meets the following
23        requirements:
24                (i) no less than 90% of the partnership's cost
25            of its total assets consists of qualifying
26            investment securities, deposits at banks or other

 

 

10000SB0009sam001- 308 -LRB100 06347 HLH 18430 a

1            financial institutions, and office space and
2            equipment reasonably necessary to carry on its
3            activities as an investment partnership;
4                (ii) no less than 90% of its gross income
5            consists of interest, dividends, and gains from
6            the sale or exchange of qualifying investment
7            securities; and
8                (iii) the partnership is not a dealer in
9            qualifying investment securities.
10            (B) For purposes of this paragraph (11.5), the term
11        "qualifying investment securities" includes all of the
12        following:
13                (i) common stock, including preferred or debt
14            securities convertible into common stock, and
15            preferred stock;
16                (ii) bonds, debentures, and other debt
17            securities;
18                (iii) foreign and domestic currency deposits
19            secured by federal, state, or local governmental
20            agencies;
21                (iv) mortgage or asset-backed securities
22            secured by federal, state, or local governmental
23            agencies;
24                (v) repurchase agreements and loan
25            participations;
26                (vi) foreign currency exchange contracts and

 

 

10000SB0009sam001- 309 -LRB100 06347 HLH 18430 a

1            forward and futures contracts on foreign
2            currencies;
3                (vii) stock and bond index securities and
4            futures contracts and other similar financial
5            securities and futures contracts on those
6            securities;
7                (viii) options for the purchase or sale of any
8            of the securities, currencies, contracts, or
9            financial instruments described in items (i) to
10            (vii), inclusive;
11                (ix) regulated futures contracts;
12                (x) commodities (not described in Section
13            1221(a)(1) of the Internal Revenue Code) or
14            futures, forwards, and options with respect to
15            such commodities, provided, however, that any item
16            of a physical commodity to which title is actually
17            acquired in the partnership's capacity as a dealer
18            in such commodity shall not be a qualifying
19            investment security;
20                (xi) derivatives; and
21                (xii) a partnership interest in another
22            partnership that is an investment partnership.
23        (12) Mathematical error. The term "mathematical error"
24    includes the following types of errors, omissions, or
25    defects in a return filed by a taxpayer which prevents
26    acceptance of the return as filed for processing:

 

 

10000SB0009sam001- 310 -LRB100 06347 HLH 18430 a

1            (A) arithmetic errors or incorrect computations on
2        the return or supporting schedules;
3            (B) entries on the wrong lines;
4            (C) omission of required supporting forms or
5        schedules or the omission of the information in whole
6        or in part called for thereon; and
7            (D) an attempt to claim, exclude, deduct, or
8        improperly report, in a manner directly contrary to the
9        provisions of the Act and regulations thereunder any
10        item of income, exemption, deduction, or credit.
11        (13) Nonbusiness income. The term "nonbusiness income"
12    means all income other than business income or
13    compensation.
14        (14) Nonresident. The term "nonresident" means a
15    person who is not a resident.
16        (15) Paid, incurred and accrued. The terms "paid",
17    "incurred" and "accrued" shall be construed according to
18    the method of accounting upon the basis of which the
19    person's base income is computed under this Act.
20        (16) Partnership and partner. The term "partnership"
21    includes a syndicate, group, pool, joint venture or other
22    unincorporated organization, through or by means of which
23    any business, financial operation, or venture is carried
24    on, and which is not, within the meaning of this Act, a
25    trust or estate or a corporation; and the term "partner"
26    includes a member in such syndicate, group, pool, joint

 

 

10000SB0009sam001- 311 -LRB100 06347 HLH 18430 a

1    venture or organization.
2        The term "partnership" includes any entity, including
3    a limited liability company formed under the Illinois
4    Limited Liability Company Act, classified as a partnership
5    for federal income tax purposes.
6        The term "partnership" does not include a syndicate,
7    group, pool, joint venture, or other unincorporated
8    organization established for the sole purpose of playing
9    the Illinois State Lottery.
10        (17) Part-year resident. The term "part-year resident"
11    means an individual who became a resident during the
12    taxable year or ceased to be a resident during the taxable
13    year. Under Section 1501(a)(20)(A)(i) residence commences
14    with presence in this State for other than a temporary or
15    transitory purpose and ceases with absence from this State
16    for other than a temporary or transitory purpose. Under
17    Section 1501(a)(20)(A)(ii) residence commences with the
18    establishment of domicile in this State and ceases with the
19    establishment of domicile in another State.
20        (18) Person. The term "person" shall be construed to
21    mean and include an individual, a trust, estate,
22    partnership, association, firm, company, corporation,
23    limited liability company, or fiduciary. For purposes of
24    Section 1301 and 1302 of this Act, a "person" means (i) an
25    individual, (ii) a corporation, (iii) an officer, agent, or
26    employee of a corporation, (iv) a member, agent or employee

 

 

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1    of a partnership, or (v) a member, manager, employee,
2    officer, director, or agent of a limited liability company
3    who in such capacity commits an offense specified in
4    Section 1301 and 1302.
5        (18A) Records. The term "records" includes all data
6    maintained by the taxpayer, whether on paper, microfilm,
7    microfiche, or any type of machine-sensible data
8    compilation.
9        (19) Regulations. The term "regulations" includes
10    rules promulgated and forms prescribed by the Department.
11        (20) Resident. The term "resident" means:
12            (A) an individual (i) who is in this State for
13        other than a temporary or transitory purpose during the
14        taxable year; or (ii) who is domiciled in this State
15        but is absent from the State for a temporary or
16        transitory purpose during the taxable year;
17            (B) The estate of a decedent who at his or her
18        death was domiciled in this State;
19            (C) A trust created by a will of a decedent who at
20        his death was domiciled in this State; and
21            (D) An irrevocable trust, the grantor of which was
22        domiciled in this State at the time such trust became
23        irrevocable. For purpose of this subparagraph, a trust
24        shall be considered irrevocable to the extent that the
25        grantor is not treated as the owner thereof under
26        Sections 671 through 678 of the Internal Revenue Code.

 

 

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1        (21) Sales. The term "sales" means all gross receipts
2    of the taxpayer not allocated under Sections 301, 302 and
3    303.
4        (22) State. The term "state" when applied to a
5    jurisdiction other than this State means any state of the
6    United States, the District of Columbia, the Commonwealth
7    of Puerto Rico, any Territory or Possession of the United
8    States, and any foreign country, or any political
9    subdivision of any of the foregoing. For purposes of the
10    foreign tax credit under Section 601, the term "state"
11    means any state of the United States, the District of
12    Columbia, the Commonwealth of Puerto Rico, and any
13    territory or possession of the United States, or any
14    political subdivision of any of the foregoing, effective
15    for tax years ending on or after December 31, 1989.
16        (23) Taxable year. The term "taxable year" means the
17    calendar year, or the fiscal year ending during such
18    calendar year, upon the basis of which the base income is
19    computed under this Act. "Taxable year" means, in the case
20    of a return made for a fractional part of a year under the
21    provisions of this Act, the period for which such return is
22    made.
23        (24) Taxpayer. The term "taxpayer" means any person
24    subject to the tax imposed by this Act.
25        (25) International banking facility. The term
26    international banking facility shall have the same meaning

 

 

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1    as is set forth in the Illinois Banking Act or as is set
2    forth in the laws of the United States or regulations of
3    the Board of Governors of the Federal Reserve System.
4        (26) Income Tax Return Preparer.
5            (A) The term "income tax return preparer" means any
6        person who prepares for compensation, or who employs
7        one or more persons to prepare for compensation, any
8        return of tax imposed by this Act or any claim for
9        refund of tax imposed by this Act. The preparation of a
10        substantial portion of a return or claim for refund
11        shall be treated as the preparation of that return or
12        claim for refund.
13            (B) A person is not an income tax return preparer
14        if all he or she does is
15                (i) furnish typing, reproducing, or other
16            mechanical assistance;
17                (ii) prepare returns or claims for refunds for
18            the employer by whom he or she is regularly and
19            continuously employed;
20                (iii) prepare as a fiduciary returns or claims
21            for refunds for any person; or
22                (iv) prepare claims for refunds for a taxpayer
23            in response to any notice of deficiency issued to
24            that taxpayer or in response to any waiver of
25            restriction after the commencement of an audit of
26            that taxpayer or of another taxpayer if a

 

 

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1            determination in the audit of the other taxpayer
2            directly or indirectly affects the tax liability
3            of the taxpayer whose claims he or she is
4            preparing.
5        (27) Unitary business group.
6            (A) The term "unitary business group" means a group
7        of persons related through common ownership whose
8        business activities are integrated with, dependent
9        upon and contribute to each other. The group will not
10        include those members whose business activity outside
11        the United States is 80% or more of any such member's
12        total business activity; for purposes of this
13        paragraph and clause (a)(3)(B)(ii) of Section 304,
14        business activity within the United States shall be
15        measured by means of the factors ordinarily applicable
16        under subsections (a), (b), (c), (d), or (h) of Section
17        304 except that, in the case of members ordinarily
18        required to apportion business income by means of the 3
19        factor formula of property, payroll and sales
20        specified in subsection (a) of Section 304, including
21        the formula as weighted in subsection (h) of Section
22        304, such members shall not use the sales factor in the
23        computation and the results of the property and payroll
24        factor computations of subsection (a) of Section 304
25        shall be divided by 2 (by one if either the property or
26        payroll factor has a denominator of zero). The

 

 

10000SB0009sam001- 316 -LRB100 06347 HLH 18430 a

1        computation required by the preceding sentence shall,
2        in each case, involve the division of the member's
3        property, payroll, or revenue miles in the United
4        States, insurance premiums on property or risk in the
5        United States, or financial organization business
6        income from sources within the United States, as the
7        case may be, by the respective worldwide figures for
8        such items. Common ownership in the case of
9        corporations is the direct or indirect control or
10        ownership of more than 50% of the outstanding voting
11        stock of the persons carrying on unitary business
12        activity. Unitary business activity can ordinarily be
13        illustrated where the activities of the members are:
14        (1) in the same general line (such as manufacturing,
15        wholesaling, retailing of tangible personal property,
16        insurance, transportation or finance); or (2) are
17        steps in a vertically structured enterprise or process
18        (such as the steps involved in the production of
19        natural resources, which might include exploration,
20        mining, refining, and marketing); and, in either
21        instance, the members are functionally integrated
22        through the exercise of strong centralized management
23        (where, for example, authority over such matters as
24        purchasing, financing, tax compliance, product line,
25        personnel, marketing and capital investment is not
26        left to each member).

 

 

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1            (B) In no event, for taxable years beginning prior
2        to January 1, 2017, shall any unitary business group
3        include members which are ordinarily required to
4        apportion business income under different subsections
5        of Section 304 except that for tax years ending on or
6        after December 31, 1987 this prohibition shall not
7        apply to a holding company that would otherwise be a
8        member of a unitary business group with taxpayers that
9        apportion business income under any of subsections
10        (b), (c), (c-1), or (d) of Section 304. If a unitary
11        business group would, but for the preceding sentence,
12        include members that are ordinarily required to
13        apportion business income under different subsections
14        of Section 304, then for each subsection of Section 304
15        for which there are two or more members, there shall be
16        a separate unitary business group composed of such
17        members. For purposes of the preceding two sentences, a
18        member is "ordinarily required to apportion business
19        income" under a particular subsection of Section 304 if
20        it would be required to use the apportionment method
21        prescribed by such subsection except for the fact that
22        it derives business income solely from Illinois. As
23        used in this paragraph, the phrase "United States"
24        means only the 50 states and the District of Columbia
25        and , but does not include any territory or possession
26        of the United States, but, for taxable years ending on

 

 

10000SB0009sam001- 318 -LRB100 06347 HLH 18430 a

1        or after December 31, 2017, does include or any area
2        over which the United States has asserted jurisdiction
3        or claimed exclusive rights with respect to the
4        exploration for or exploitation of natural resources.
5            (C) Holding companies.
6                (i) For purposes of this subparagraph, a
7            "holding company" is a corporation (other than a
8            corporation that is a financial organization under
9            paragraph (8) of this subsection (a) of Section
10            1501 because it is a bank holding company under the
11            provisions of the Bank Holding Company Act of 1956
12            (12 U.S.C. 1841, et seq.) or because it is owned by
13            a bank or a bank holding company) that owns a
14            controlling interest in one or more other
15            taxpayers ("controlled taxpayers"); that, during
16            the period that includes the taxable year and the 2
17            immediately preceding taxable years or, if the
18            corporation was formed during the current or
19            immediately preceding taxable year, the taxable
20            years in which the corporation has been in
21            existence, derived substantially all its gross
22            income from dividends, interest, rents, royalties,
23            fees or other charges received from controlled
24            taxpayers for the provision of services, and gains
25            on the sale or other disposition of interests in
26            controlled taxpayers or in property leased or

 

 

10000SB0009sam001- 319 -LRB100 06347 HLH 18430 a

1            licensed to controlled taxpayers or used by the
2            taxpayer in providing services to controlled
3            taxpayers; and that incurs no substantial expenses
4            other than expenses (including interest and other
5            costs of borrowing) incurred in connection with
6            the acquisition and holding of interests in
7            controlled taxpayers and in the provision of
8            services to controlled taxpayers or in the leasing
9            or licensing of property to controlled taxpayers.
10                (ii) The income of a holding company which is a
11            member of more than one unitary business group
12            shall be included in each unitary business group of
13            which it is a member on a pro rata basis, by
14            including in each unitary business group that
15            portion of the base income of the holding company
16            that bears the same proportion to the total base
17            income of the holding company as the gross receipts
18            of the unitary business group bears to the combined
19            gross receipts of all unitary business groups (in
20            both cases without regard to the holding company)
21            or on any other reasonable basis, consistently
22            applied.
23                (iii) A holding company shall apportion its
24            business income under the subsection of Section
25            304 used by the other members of its unitary
26            business group. The apportionment factors of a

 

 

10000SB0009sam001- 320 -LRB100 06347 HLH 18430 a

1            holding company which would be a member of more
2            than one unitary business group shall be included
3            with the apportionment factors of each unitary
4            business group of which it is a member on a pro
5            rata basis using the same method used in clause
6            (ii).
7                (iv) The provisions of this subparagraph (C)
8            are intended to clarify existing law.
9            (D) If including the base income and factors of a
10        holding company in more than one unitary business group
11        under subparagraph (C) does not fairly reflect the
12        degree of integration between the holding company and
13        one or more of the unitary business groups, the
14        dependence of the holding company and one or more of
15        the unitary business groups upon each other, or the
16        contributions between the holding company and one or
17        more of the unitary business groups, the holding
18        company may petition the Director, under the
19        procedures provided under Section 304(f), for
20        permission to include all base income and factors of
21        the holding company only with members of a unitary
22        business group apportioning their business income
23        under one subsection of subsections (a), (b), (c), or
24        (d) of Section 304. If the petition is granted, the
25        holding company shall be included in a unitary business
26        group only with persons apportioning their business

 

 

10000SB0009sam001- 321 -LRB100 06347 HLH 18430 a

1        income under the selected subsection of Section 304
2        until the Director grants a petition of the holding
3        company either to be included in more than one unitary
4        business group under subparagraph (C) or to include its
5        base income and factors only with members of a unitary
6        business group apportioning their business income
7        under a different subsection of Section 304.
8            (E) If the unitary business group members'
9        accounting periods differ, the common parent's
10        accounting period or, if there is no common parent, the
11        accounting period of the member that is expected to
12        have, on a recurring basis, the greatest Illinois
13        income tax liability must be used to determine whether
14        to use the apportionment method provided in subsection
15        (a) or subsection (h) of Section 304. The prohibition
16        against membership in a unitary business group for
17        taxpayers ordinarily required to apportion income
18        under different subsections of Section 304 does not
19        apply to taxpayers required to apportion income under
20        subsection (a) and subsection (h) of Section 304. The
21        provisions of this amendatory Act of 1998 apply to tax
22        years ending on or after December 31, 1998.
23        (28) Subchapter S corporation. The term "Subchapter S
24    corporation" means a corporation for which there is in
25    effect an election under Section 1362 of the Internal
26    Revenue Code, or for which there is a federal election to

 

 

10000SB0009sam001- 322 -LRB100 06347 HLH 18430 a

1    opt out of the provisions of the Subchapter S Revision Act
2    of 1982 and have applied instead the prior federal
3    Subchapter S rules as in effect on July 1, 1982.
4        (30) Foreign person. The term "foreign person" means
5    any person who is a nonresident alien individual and any
6    nonindividual entity, regardless of where created or
7    organized, whose business activity outside the United
8    States is 80% or more of the entity's total business
9    activity.
 
10    (b) Other definitions.
11        (1) Words denoting number, gender, and so forth, when
12    used in this Act, where not otherwise distinctly expressed
13    or manifestly incompatible with the intent thereof:
14            (A) Words importing the singular include and apply
15        to several persons, parties or things;
16            (B) Words importing the plural include the
17        singular; and
18            (C) Words importing the masculine gender include
19        the feminine as well.
20        (2) "Company" or "association" as including successors
21    and assigns. The word "company" or "association", when used
22    in reference to a corporation, shall be deemed to embrace
23    the words "successors and assigns of such company or
24    association", and in like manner as if these last-named
25    words, or words of similar import, were expressed.

 

 

10000SB0009sam001- 323 -LRB100 06347 HLH 18430 a

1        (3) Other terms. Any term used in any Section of this
2    Act with respect to the application of, or in connection
3    with, the provisions of any other Section of this Act shall
4    have the same meaning as in such other Section.
5(Source: P.A. 99-213, eff. 7-31-15.)
 
6    Section 30-20. The Film Production Services Tax Credit Act
7of 2008 is amended by changing Section 42 as follows:
 
8    (35 ILCS 16/42)
9    Sec. 42. Sunset of credits. The application of credits
10awarded pursuant to this Act shall be limited by a reasonable
11and appropriate sunset date. A taxpayer shall not be entitled
12to take a credit awarded pursuant to this Act for tax years
13beginning on or after January 1, 2027 10 years after the
14effective date of this amendatory Act of the 97th General
15Assembly. After the initial 10-year sunset, the General
16Assembly may extend the sunset date by 5-year intervals.
17(Source: P.A. 97-2, eff. 5-6-11; 97-3, eff. 5-6-11.)
 
18    Section 30-25. The Use Tax Act is amended by changing
19Sections 3-5, 3-50, and 10 and by adding Sections 3-6.5, 3-6.6,
203-6.7, 3-6.8, and 3-6.9 as follows:
 
21    (35 ILCS 105/3-5)
22    Sec. 3-5. Exemptions. Use of the following tangible

 

 

10000SB0009sam001- 324 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 325 -LRB100 06347 HLH 18430 a

1    (4) Personal property purchased by a governmental body, by
2a corporation, society, association, foundation, or
3institution organized and operated exclusively for charitable,
4religious, or educational purposes, or by a not-for-profit
5corporation, society, association, foundation, institution, or
6organization that has no compensated officers or employees and
7that is organized and operated primarily for the recreation of
8persons 55 years of age or older. A limited liability company
9may qualify for the exemption under this paragraph only if the
10limited liability company is organized and operated
11exclusively for educational purposes. On and after July 1,
121987, however, no entity otherwise eligible for this exemption
13shall make tax-free purchases unless it has an active exemption
14identification number issued by the Department.
15    (5) Until July 1, 2003, a passenger car that is a
16replacement vehicle to the extent that the purchase price of
17the car is subject to the Replacement Vehicle Tax.
18    (6) Until July 1, 2003 and beginning again on September 1,
192004 through August 30, 2014, graphic arts machinery and
20equipment, including repair and replacement parts, both new and
21used, and including that manufactured on special order,
22certified by the purchaser to be used primarily for graphic
23arts production, and including machinery and equipment
24purchased for lease. Equipment includes chemicals or chemicals
25acting as catalysts but only if the chemicals or chemicals
26acting as catalysts effect a direct and immediate change upon a

 

 

10000SB0009sam001- 326 -LRB100 06347 HLH 18430 a

1graphic arts product. Beginning on July 1, 2017, graphic arts
2machinery and equipment is included in the manufacturing and
3assembling machinery and equipment exemption under paragraph
4(18).
5    (7) Farm chemicals.
6    (8) Legal tender, currency, medallions, or gold or silver
7coinage issued by the State of Illinois, the government of the
8United States of America, or the government of any foreign
9country, and bullion.
10    (9) Personal property purchased from a teacher-sponsored
11student organization affiliated with an elementary or
12secondary school located in Illinois.
13    (10) A motor vehicle that is used for automobile renting,
14as defined in the Automobile Renting Occupation and Use Tax
15Act.
16    (11) Farm machinery and equipment, both new and used,
17including that manufactured on special order, certified by the
18purchaser to be used primarily for production agriculture or
19State or federal agricultural programs, including individual
20replacement parts for the machinery and equipment, including
21machinery and equipment purchased for lease, and including
22implements of husbandry defined in Section 1-130 of the
23Illinois Vehicle Code, farm machinery and agricultural
24chemical and fertilizer spreaders, and nurse wagons required to
25be registered under Section 3-809 of the Illinois Vehicle Code,
26but excluding other motor vehicles required to be registered

 

 

10000SB0009sam001- 327 -LRB100 06347 HLH 18430 a

1under the Illinois Vehicle Code. Horticultural polyhouses or
2hoop houses used for propagating, growing, or overwintering
3plants shall be considered farm machinery and equipment under
4this item (11). Agricultural chemical tender tanks and dry
5boxes shall include units sold separately from a motor vehicle
6required to be licensed and units sold mounted on a motor
7vehicle required to be licensed if the selling price of the
8tender is separately stated.
9    Farm machinery and equipment shall include precision
10farming equipment that is installed or purchased to be
11installed on farm machinery and equipment including, but not
12limited to, tractors, harvesters, sprayers, planters, seeders,
13or spreaders. Precision farming equipment includes, but is not
14limited to, soil testing sensors, computers, monitors,
15software, global positioning and mapping systems, and other
16such equipment.
17    Farm machinery and equipment also includes computers,
18sensors, software, and related equipment used primarily in the
19computer-assisted operation of production agriculture
20facilities, equipment, and activities such as, but not limited
21to, the collection, monitoring, and correlation of animal and
22crop data for the purpose of formulating animal diets and
23agricultural chemicals. This item (11) is exempt from the
24provisions of Section 3-90.
25    (12) Until June 30, 2013, fuel and petroleum products sold
26to or used by an air common carrier, certified by the carrier

 

 

10000SB0009sam001- 328 -LRB100 06347 HLH 18430 a

1to be used for consumption, shipment, or storage in the conduct
2of its business as an air common carrier, for a flight destined
3for or returning from a location or locations outside the
4United States without regard to previous or subsequent domestic
5stopovers.
6    Beginning July 1, 2013, fuel and petroleum products sold to
7or used by an air carrier, certified by the carrier to be used
8for consumption, shipment, or storage in the conduct of its
9business as an air common carrier, for a flight that (i) is
10engaged in foreign trade or is engaged in trade between the
11United States and any of its possessions and (ii) transports at
12least one individual or package for hire from the city of
13origination to the city of final destination on the same
14aircraft, without regard to a change in the flight number of
15that aircraft.
16    (13) Proceeds of mandatory service charges separately
17stated on customers' bills for the purchase and consumption of
18food and beverages purchased at retail from a retailer, to the
19extent that the proceeds of the service charge are in fact
20turned over as tips or as a substitute for tips to the
21employees who participate directly in preparing, serving,
22hosting or cleaning up the food or beverage function with
23respect to which the service charge is imposed.
24    (14) Until July 1, 2003, oil field exploration, drilling,
25and production equipment, including (i) rigs and parts of rigs,
26rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

 

 

10000SB0009sam001- 329 -LRB100 06347 HLH 18430 a

1tubular goods, including casing and drill strings, (iii) pumps
2and pump-jack units, (iv) storage tanks and flow lines, (v) any
3individual replacement part for oil field exploration,
4drilling, and production equipment, and (vi) machinery and
5equipment purchased for lease; but excluding motor vehicles
6required to be registered under the Illinois Vehicle Code.
7    (15) Photoprocessing machinery and equipment, including
8repair and replacement parts, both new and used, including that
9manufactured on special order, certified by the purchaser to be
10used primarily for photoprocessing, and including
11photoprocessing machinery and equipment purchased for lease.
12    (16) Coal and aggregate exploration, mining, off-highway
13hauling, processing, maintenance, and reclamation equipment,
14including replacement parts and equipment, and including
15equipment purchased for lease, but excluding motor vehicles
16required to be registered under the Illinois Vehicle Code. The
17changes made to this Section by Public Act 97-767 apply on and
18after July 1, 2003, but no claim for credit or refund is
19allowed on or after August 16, 2013 (the effective date of
20Public Act 98-456) for such taxes paid during the period
21beginning July 1, 2003 and ending on August 16, 2013 (the
22effective date of Public Act 98-456).
23    (17) Until July 1, 2003, distillation machinery and
24equipment, sold as a unit or kit, assembled or installed by the
25retailer, certified by the user to be used only for the
26production of ethyl alcohol that will be used for consumption

 

 

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1as motor fuel or as a component of motor fuel for the personal
2use of the user, and not subject to sale or resale.
3    (18) Manufacturing and assembling machinery and equipment
4used primarily in the process of manufacturing or assembling
5tangible personal property for wholesale or retail sale or
6lease, whether that sale or lease is made directly by the
7manufacturer or by some other person, whether the materials
8used in the process are owned by the manufacturer or some other
9person, or whether that sale or lease is made apart from or as
10an incident to the seller's engaging in the service occupation
11of producing machines, tools, dies, jigs, patterns, gauges, or
12other similar items of no commercial value on special order for
13a particular purchaser. The exemption provided by this
14paragraph (18) does not include machinery and equipment used in
15(i) the generation of electricity for wholesale or retail sale;
16(ii) the generation or treatment of natural or artificial gas
17for wholesale or retail sale that is delivered to customers
18through pipes, pipelines, or mains; or (iii) the treatment of
19water for wholesale or retail sale that is delivered to
20customers through pipes, pipelines, or mains. The provisions of
21Public Act 98-583 are declaratory of existing law as to the
22meaning and scope of this exemption. Beginning on July 1, 2017,
23the exemption provided by this paragraph (18) includes, but is
24not limited to, graphic arts machinery and equipment, as
25defined in paragraph (6) of this Section. Beginning on July 1,
262017, the exemption provided by this paragraph (18) includes,

 

 

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1but is not limited to, production related tangible personal
2property, as defined in Section 3-50 of this Act. The exemption
3provided by this paragraph (18) is exempt from the provisions
4of Section 3-90.
5    (19) Personal property delivered to a purchaser or
6purchaser's donee inside Illinois when the purchase order for
7that personal property was received by a florist located
8outside Illinois who has a florist located inside Illinois
9deliver the personal property.
10    (20) Semen used for artificial insemination of livestock
11for direct agricultural production.
12    (21) Horses, or interests in horses, registered with and
13meeting the requirements of any of the Arabian Horse Club
14Registry of America, Appaloosa Horse Club, American Quarter
15Horse Association, United States Trotting Association, or
16Jockey Club, as appropriate, used for purposes of breeding or
17racing for prizes. This item (21) is exempt from the provisions
18of Section 3-90, and the exemption provided for under this item
19(21) applies for all periods beginning May 30, 1995, but no
20claim for credit or refund is allowed on or after January 1,
212008 for such taxes paid during the period beginning May 30,
222000 and ending on January 1, 2008.
23    (22) Computers and communications equipment utilized for
24any hospital purpose and equipment used in the diagnosis,
25analysis, or treatment of hospital patients purchased by a
26lessor who leases the equipment, under a lease of one year or

 

 

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1longer executed or in effect at the time the lessor would
2otherwise be subject to the tax imposed by this Act, to a
3hospital that has been issued an active tax exemption
4identification number by the Department under Section 1g of the
5Retailers' Occupation Tax Act. If the equipment is leased in a
6manner that does not qualify for this exemption or is used in
7any other non-exempt manner, the lessor shall be liable for the
8tax imposed under this Act or the Service Use Tax Act, as the
9case may be, based on the fair market value of the property at
10the time the non-qualifying use occurs. No lessor shall collect
11or attempt to collect an amount (however designated) that
12purports to reimburse that lessor for the tax imposed by this
13Act or the Service Use Tax Act, as the case may be, if the tax
14has not been paid by the lessor. If a lessor improperly
15collects any such amount from the lessee, the lessee shall have
16a legal right to claim a refund of that amount from the lessor.
17If, however, that amount is not refunded to the lessee for any
18reason, the lessor is liable to pay that amount to the
19Department.
20    (23) Personal property purchased by a lessor who leases the
21property, under a lease of one year or longer executed or in
22effect at the time the lessor would otherwise be subject to the
23tax imposed by this Act, to a governmental body that has been
24issued an active sales tax exemption identification number by
25the Department under Section 1g of the Retailers' Occupation
26Tax Act. If the property is leased in a manner that does not

 

 

10000SB0009sam001- 333 -LRB100 06347 HLH 18430 a

1qualify for this exemption or used in any other non-exempt
2manner, the lessor shall be liable for the tax imposed under
3this Act or the Service Use Tax Act, as the case may be, based
4on the fair market value of the property at the time the
5non-qualifying use occurs. No lessor shall collect or attempt
6to collect an amount (however designated) that purports to
7reimburse that lessor for the tax imposed by this Act or the
8Service Use Tax Act, as the case may be, if the tax has not been
9paid by the lessor. If a lessor improperly collects any such
10amount from the lessee, the lessee shall have a legal right to
11claim a refund of that amount from the lessor. If, however,
12that amount is not refunded to the lessee for any reason, the
13lessor is liable to pay that amount to the Department.
14    (24) Beginning with taxable years ending on or after
15December 31, 1995 and ending with taxable years ending on or
16before December 31, 2004, personal property that is donated for
17disaster relief to be used in a State or federally declared
18disaster area in Illinois or bordering Illinois by a
19manufacturer or retailer that is registered in this State to a
20corporation, society, association, foundation, or institution
21that has been issued a sales tax exemption identification
22number by the Department that assists victims of the disaster
23who reside within the declared disaster area.
24    (25) Beginning with taxable years ending on or after
25December 31, 1995 and ending with taxable years ending on or
26before December 31, 2004, personal property that is used in the

 

 

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1performance of infrastructure repairs in this State, including
2but not limited to municipal roads and streets, access roads,
3bridges, sidewalks, waste disposal systems, water and sewer
4line extensions, water distribution and purification
5facilities, storm water drainage and retention facilities, and
6sewage treatment facilities, resulting from a State or
7federally declared disaster in Illinois or bordering Illinois
8when such repairs are initiated on facilities located in the
9declared disaster area within 6 months after the disaster.
10    (26) Beginning July 1, 1999, game or game birds purchased
11at a "game breeding and hunting preserve area" as that term is
12used in the Wildlife Code. This paragraph is exempt from the
13provisions of Section 3-90.
14    (27) A motor vehicle, as that term is defined in Section
151-146 of the Illinois Vehicle Code, that is donated to a
16corporation, limited liability company, society, association,
17foundation, or institution that is determined by the Department
18to be organized and operated exclusively for educational
19purposes. For purposes of this exemption, "a corporation,
20limited liability company, society, association, foundation,
21or institution organized and operated exclusively for
22educational purposes" means all tax-supported public schools,
23private schools that offer systematic instruction in useful
24branches of learning by methods common to public schools and
25that compare favorably in their scope and intensity with the
26course of study presented in tax-supported schools, and

 

 

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1vocational or technical schools or institutes organized and
2operated exclusively to provide a course of study of not less
3than 6 weeks duration and designed to prepare individuals to
4follow a trade or to pursue a manual, technical, mechanical,
5industrial, business, or commercial occupation.
6    (28) Beginning January 1, 2000, personal property,
7including food, purchased through fundraising events for the
8benefit of a public or private elementary or secondary school,
9a group of those schools, or one or more school districts if
10the events are sponsored by an entity recognized by the school
11district that consists primarily of volunteers and includes
12parents and teachers of the school children. This paragraph
13does not apply to fundraising events (i) for the benefit of
14private home instruction or (ii) for which the fundraising
15entity purchases the personal property sold at the events from
16another individual or entity that sold the property for the
17purpose of resale by the fundraising entity and that profits
18from the sale to the fundraising entity. This paragraph is
19exempt from the provisions of Section 3-90.
20    (29) Beginning January 1, 2000 and through December 31,
212001, new or used automatic vending machines that prepare and
22serve hot food and beverages, including coffee, soup, and other
23items, and replacement parts for these machines. Beginning
24January 1, 2002 and through June 30, 2003, machines and parts
25for machines used in commercial, coin-operated amusement and
26vending business if a use or occupation tax is paid on the

 

 

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1gross receipts derived from the use of the commercial,
2coin-operated amusement and vending machines. This paragraph
3is exempt from the provisions of Section 3-90.
4    (30) Beginning January 1, 2001 and through June 30, 2016,
5food for human consumption that is to be consumed off the
6premises where it is sold (other than alcoholic beverages, soft
7drinks, and food that has been prepared for immediate
8consumption) and prescription and nonprescription medicines,
9drugs, medical appliances, and insulin, urine testing
10materials, syringes, and needles used by diabetics, for human
11use, when purchased for use by a person receiving medical
12assistance under Article V of the Illinois Public Aid Code who
13resides in a licensed long-term care facility, as defined in
14the Nursing Home Care Act, or in a licensed facility as defined
15in the ID/DD Community Care Act, the MC/DD Act, or the
16Specialized Mental Health Rehabilitation Act of 2013.
17    (31) Beginning on the effective date of this amendatory Act
18of the 92nd General Assembly, computers and communications
19equipment utilized for any hospital purpose and equipment used
20in the diagnosis, analysis, or treatment of hospital patients
21purchased by a lessor who leases the equipment, under a lease
22of one year or longer executed or in effect at the time the
23lessor would otherwise be subject to the tax imposed by this
24Act, to a hospital that has been issued an active tax exemption
25identification number by the Department under Section 1g of the
26Retailers' Occupation Tax Act. If the equipment is leased in a

 

 

10000SB0009sam001- 337 -LRB100 06347 HLH 18430 a

1manner that does not qualify for this exemption or is used in
2any other nonexempt manner, the lessor shall be liable for the
3tax imposed under this Act or the Service Use Tax Act, as the
4case may be, based on the fair market value of the property at
5the time the nonqualifying use occurs. No lessor shall collect
6or attempt to collect an amount (however designated) that
7purports to reimburse that lessor for the tax imposed by this
8Act or the Service Use Tax Act, as the case may be, if the tax
9has not been paid by the lessor. If a lessor improperly
10collects any such amount from the lessee, the lessee shall have
11a legal right to claim a refund of that amount from the lessor.
12If, however, that amount is not refunded to the lessee for any
13reason, the lessor is liable to pay that amount to the
14Department. This paragraph is exempt from the provisions of
15Section 3-90.
16    (32) Beginning on the effective date of this amendatory Act
17of the 92nd General Assembly, personal property purchased by a
18lessor who leases the property, under a lease of one year or
19longer executed or in effect at the time the lessor would
20otherwise be subject to the tax imposed by this Act, to a
21governmental body that has been issued an active sales tax
22exemption identification number by the Department under
23Section 1g of the Retailers' Occupation Tax Act. If the
24property is leased in a manner that does not qualify for this
25exemption or used in any other nonexempt manner, the lessor
26shall be liable for the tax imposed under this Act or the

 

 

10000SB0009sam001- 338 -LRB100 06347 HLH 18430 a

1Service Use Tax Act, as the case may be, based on the fair
2market value of the property at the time the nonqualifying use
3occurs. No lessor shall collect or attempt to collect an amount
4(however designated) that purports to reimburse that lessor for
5the tax imposed by this Act or the Service Use Tax Act, as the
6case may be, if the tax has not been paid by the lessor. If a
7lessor improperly collects any such amount from the lessee, the
8lessee shall have a legal right to claim a refund of that
9amount from the lessor. If, however, that amount is not
10refunded to the lessee for any reason, the lessor is liable to
11pay that amount to the Department. This paragraph is exempt
12from the provisions of Section 3-90.
13    (33) On and after July 1, 2003 and through June 30, 2004,
14the use in this State of motor vehicles of the second division
15with a gross vehicle weight in excess of 8,000 pounds and that
16are subject to the commercial distribution fee imposed under
17Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
181, 2004 and through June 30, 2005, the use in this State of
19motor vehicles of the second division: (i) with a gross vehicle
20weight rating in excess of 8,000 pounds; (ii) that are subject
21to the commercial distribution fee imposed under Section
223-815.1 of the Illinois Vehicle Code; and (iii) that are
23primarily used for commercial purposes. Through June 30, 2005,
24this exemption applies to repair and replacement parts added
25after the initial purchase of such a motor vehicle if that
26motor vehicle is used in a manner that would qualify for the

 

 

10000SB0009sam001- 339 -LRB100 06347 HLH 18430 a

1rolling stock exemption otherwise provided for in this Act. For
2purposes of this paragraph, the term "used for commercial
3purposes" means the transportation of persons or property in
4furtherance of any commercial or industrial enterprise,
5whether for-hire or not.
6    (34) Beginning January 1, 2008, tangible personal property
7used in the construction or maintenance of a community water
8supply, as defined under Section 3.145 of the Environmental
9Protection Act, that is operated by a not-for-profit
10corporation that holds a valid water supply permit issued under
11Title IV of the Environmental Protection Act. This paragraph is
12exempt from the provisions of Section 3-90.
13    (35) Beginning January 1, 2010, materials, parts,
14equipment, components, and furnishings incorporated into or
15upon an aircraft as part of the modification, refurbishment,
16completion, replacement, repair, or maintenance of the
17aircraft. This exemption includes consumable supplies used in
18the modification, refurbishment, completion, replacement,
19repair, and maintenance of aircraft, but excludes any
20materials, parts, equipment, components, and consumable
21supplies used in the modification, replacement, repair, and
22maintenance of aircraft engines or power plants, whether such
23engines or power plants are installed or uninstalled upon any
24such aircraft. "Consumable supplies" include, but are not
25limited to, adhesive, tape, sandpaper, general purpose
26lubricants, cleaning solution, latex gloves, and protective

 

 

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1films. This exemption applies only to the use of qualifying
2tangible personal property by persons who modify, refurbish,
3complete, repair, replace, or maintain aircraft and who (i)
4hold an Air Agency Certificate and are empowered to operate an
5approved repair station by the Federal Aviation
6Administration, (ii) have a Class IV Rating, and (iii) conduct
7operations in accordance with Part 145 of the Federal Aviation
8Regulations. The exemption does not include aircraft operated
9by a commercial air carrier providing scheduled passenger air
10service pursuant to authority issued under Part 121 or Part 129
11of the Federal Aviation Regulations. The changes made to this
12paragraph (35) by Public Act 98-534 are declarative of existing
13law.
14    (36) Tangible personal property purchased by a
15public-facilities corporation, as described in Section
1611-65-10 of the Illinois Municipal Code, for purposes of
17constructing or furnishing a municipal convention hall, but
18only if the legal title to the municipal convention hall is
19transferred to the municipality without any further
20consideration by or on behalf of the municipality at the time
21of the completion of the municipal convention hall or upon the
22retirement or redemption of any bonds or other debt instruments
23issued by the public-facilities corporation in connection with
24the development of the municipal convention hall. This
25exemption includes existing public-facilities corporations as
26provided in Section 11-65-25 of the Illinois Municipal Code.

 

 

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1This paragraph is exempt from the provisions of Section 3-90.
2    (37) Beginning January 1, 2017, menstrual pads, tampons,
3and menstrual cups.
4(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
598-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
61-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
77-29-15; 99-855, eff. 8-19-16.)
 
8    (35 ILCS 105/3-6.5 new)
9    Sec. 3-6.5. Storage Excise Tax exemption. Providers, as
10defined in the Storage Excise Tax Act, may make exempt
11purchases of tangible personal property that will be
12transferred to purchasers as part of a sale of service subject
13to tax under the Storage Excise Tax Act if those purchasers
14could claim an exemption, other than resale, for the tangible
15personal property under any provision of this Act.
 
16    (35 ILCS 105/3-6.6 new)
17    Sec. 3-6.6. Amusement Excise Tax exemption. Providers, as
18defined in the Amusement Excise Tax Act, may make exempt
19purchases of tangible personal property that will be
20transferred to purchasers as part of a sale of service subject
21to tax under the Amusement Excise Tax Act if those purchasers
22could claim an exemption, other than resale, for the tangible
23personal property under any provision of this Act.
 

 

 

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1    (35 ILCS 105/3-6.7 new)
2    Sec. 3-6.7. Repair and Maintenance Excise Tax exemption.
3Providers, as defined in the Repair and Maintenance Excise Tax
4Act, may make exempt purchases of tangible personal property
5that will be transferred to purchasers as part of a sale of
6service subject to tax under the Repair and Maintenance Excise
7Tax Act if those purchasers could claim an exemption, other
8than resale, for the tangible personal property under any
9provision of this Act.
 
10    (35 ILCS 105/3-6.8 new)
11    Sec. 3-6.8. Landscaping Excise Tax exemption. Providers,
12as defined in the Landscaping Excise Tax Act, may make exempt
13purchases of tangible personal property that will be
14transferred to purchasers as part of a sale of service subject
15to tax under the Landscaping Excise Tax Act if those purchasers
16could claim an exemption, other than resale, for the tangible
17personal property under any provision of this Act.
 
18    (35 ILCS 105/3-6.9 new)
19    Sec. 3-6.9. Laundry and Drycleaning Excise Tax exemption.
20Providers, as defined in the Laundry and Drycleaning Excise Tax
21Act, may make exempt purchases of tangible personal property
22that will be transferred to purchasers as part of a sale of
23service subject to tax under the Laundry and Drycleaning Excise
24Tax Act if those purchasers could claim an exemption, other

 

 

10000SB0009sam001- 343 -LRB100 06347 HLH 18430 a

1than for resale, for the tangible personal property under any
2provision of this Act.
 
3    (35 ILCS 105/3-50)  (from Ch. 120, par. 439.3-50)
4    Sec. 3-50. Manufacturing and assembly exemption. The
5manufacturing and assembling machinery and equipment exemption
6includes machinery and equipment that replaces machinery and
7equipment in an existing manufacturing facility as well as
8machinery and equipment that are for use in an expanded or new
9manufacturing facility. The machinery and equipment exemption
10also includes machinery and equipment used in the general
11maintenance or repair of exempt machinery and equipment or for
12in-house manufacture of exempt machinery and equipment.
13Beginning on July 1, 2017, the manufacturing and assembling
14machinery and equipment exemption also includes graphic arts
15machinery and equipment, as defined in paragraph (6) of Section
163-5. Beginning on July 1, 2017, the manufacturing and
17assembling machinery and equipment exemption also includes
18production related tangible personal property, as defined in
19this Section. The machinery and equipment exemption does not
20include machinery and equipment used in (i) the generation of
21electricity for wholesale or retail sale; (ii) the generation
22or treatment of natural or artificial gas for wholesale or
23retail sale that is delivered to customers through pipes,
24pipelines, or mains; or (iii) the treatment of water for
25wholesale or retail sale that is delivered to customers through

 

 

10000SB0009sam001- 344 -LRB100 06347 HLH 18430 a

1pipes, pipelines, or mains. The provisions of this amendatory
2Act of the 98th General Assembly are declaratory of existing
3law as to the meaning and scope of this exemption. For the
4purposes of this exemption, terms have the following meanings:
5        (1) "Manufacturing process" means the production of an
6    article of tangible personal property, whether the article
7    is a finished product or an article for use in the process
8    of manufacturing or assembling a different article of
9    tangible personal property, by a procedure commonly
10    regarded as manufacturing, processing, fabricating, or
11    refining that changes some existing material into a
12    material with a different form, use, or name. In relation
13    to a recognized integrated business composed of a series of
14    operations that collectively constitute manufacturing, or
15    individually constitute manufacturing operations, the
16    manufacturing process commences with the first operation
17    or stage of production in the series and does not end until
18    the completion of the final product in the last operation
19    or stage of production in the series. For purposes of this
20    exemption, photoprocessing is a manufacturing process of
21    tangible personal property for wholesale or retail sale.
22        (2) "Assembling process" means the production of an
23    article of tangible personal property, whether the article
24    is a finished product or an article for use in the process
25    of manufacturing or assembling a different article of
26    tangible personal property, by the combination of existing

 

 

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1    materials in a manner commonly regarded as assembling that
2    results in an article or material of a different form, use,
3    or name.
4        (3) "Machinery" means major mechanical machines or
5    major components of those machines contributing to a
6    manufacturing or assembling process.
7        (4) "Equipment" includes an independent device or tool
8    separate from machinery but essential to an integrated
9    manufacturing or assembly process; including computers
10    used primarily in a manufacturer's computer assisted
11    design, computer assisted manufacturing (CAD/CAM) system;
12    any subunit or assembly comprising a component of any
13    machinery or auxiliary, adjunct, or attachment parts of
14    machinery, such as tools, dies, jigs, fixtures, patterns,
15    and molds; and any parts that require periodic replacement
16    in the course of normal operation; but does not include
17    hand tools. Equipment includes chemicals or chemicals
18    acting as catalysts but only if the chemicals or chemicals
19    acting as catalysts effect a direct and immediate change
20    upon a product being manufactured or assembled for
21    wholesale or retail sale or lease.
22        (5) "Production related tangible personal property"
23    means all tangible personal property that is used or
24    consumed by the purchaser in a manufacturing facility in
25    which a manufacturing process takes place and includes,
26    without limitation, tangible personal property that is

 

 

10000SB0009sam001- 346 -LRB100 06347 HLH 18430 a

1    purchased for incorporation into real estate within a
2    manufacturing facility and tangible personal property that
3    is used or consumed in activities such as research and
4    development, preproduction material handling, receiving,
5    quality control, inventory control, storage, staging, and
6    packaging for shipping and transportation purposes.
7    "Production related tangible personal property" does not
8    include (i) tangible personal property that is used, within
9    or without a manufacturing facility, in sales, purchasing,
10    accounting, fiscal management, marketing, personnel
11    recruitment or selection, or landscaping or (ii) tangible
12    personal property that is required to be titled or
13    registered with a department, agency, or unit of federal,
14    State, or local government.
15    The manufacturing and assembling machinery and equipment
16exemption includes production related tangible personal
17property that is purchased (i) on or after July 1, 2007 and on
18or before June 30, 2008 or (ii) on and after July 1, 2017. The
19exemption for production related tangible personal property
20purchased on or after July 1, 2007 and on or before June 30,
212008 is subject to both of the following limitations:
22        (1) The maximum amount of the exemption for any one
23    taxpayer may not exceed 5% of the purchase price of
24    production related tangible personal property that is
25    purchased on or after July 1, 2007 and on or before June
26    30, 2008. A credit under Section 3-85 of this Act may not

 

 

10000SB0009sam001- 347 -LRB100 06347 HLH 18430 a

1    be earned by the purchase of production related tangible
2    personal property for which an exemption is received under
3    this Section.
4        (2) The maximum aggregate amount of the exemptions for
5    production related tangible personal property awarded
6    under this Act and the Retailers' Occupation Tax Act to all
7    taxpayers may not exceed $10,000,000. If the claims for the
8    exemption exceed $10,000,000, then the Department shall
9    reduce the amount of the exemption to each taxpayer on a
10    pro rata basis.
11The Department may adopt rules to implement and administer the
12exemption for production related tangible personal property.
13    The manufacturing and assembling machinery and equipment
14exemption includes the sale of materials to a purchaser who
15produces exempted types of machinery, equipment, or tools and
16who rents or leases that machinery, equipment, or tools to a
17manufacturer of tangible personal property. This exemption
18also includes the sale of materials to a purchaser who
19manufactures those materials into an exempted type of
20machinery, equipment, or tools that the purchaser uses himself
21or herself in the manufacturing of tangible personal property.
22This exemption includes the sale of exempted types of machinery
23or equipment to a purchaser who is not the manufacturer, but
24who rents or leases the use of the property to a manufacturer.
25The purchaser of the machinery and equipment who has an active
26resale registration number shall furnish that number to the

 

 

10000SB0009sam001- 348 -LRB100 06347 HLH 18430 a

1seller at the time of purchase. A user of the machinery,
2equipment, or tools without an active resale registration
3number shall prepare a certificate of exemption for each
4transaction stating facts establishing the exemption for that
5transaction, and that certificate shall be available to the
6Department for inspection or audit. The Department shall
7prescribe the form of the certificate. Informal rulings,
8opinions, or letters issued by the Department in response to an
9inquiry or request for an opinion from any person regarding the
10coverage and applicability of this exemption to specific
11devices shall be published, maintained as a public record, and
12made available for public inspection and copying. If the
13informal ruling, opinion, or letter contains trade secrets or
14other confidential information, where possible, the Department
15shall delete that information before publication. Whenever
16informal rulings, opinions, or letters contain a policy of
17general applicability, the Department shall formulate and
18adopt that policy as a rule in accordance with the Illinois
19Administrative Procedure Act.
20    The manufacturing and assembling machinery and equipment
21exemption, including the addition of production related
22tangible personal property, is exempt from the provisions of
23Section 3-90.
24(Source: P.A. 98-583, eff. 1-1-14.)
 
25    (35 ILCS 105/10)  (from Ch. 120, par. 439.10)

 

 

10000SB0009sam001- 349 -LRB100 06347 HLH 18430 a

1    Sec. 10. Except as to motor vehicles, aircraft, watercraft,
2and trailers, and except as to cigarettes as defined in the
3Cigarette Use Tax Act, when tangible personal property is
4purchased from a retailer for use in this State by a purchaser
5who did not pay the tax imposed by this Act to the retailer,
6and who does not file returns with the Department as a retailer
7under Section 9 of this Act, such purchaser (by the last day of
8the month following the calendar month in which such purchaser
9makes any payment upon the selling price of such property)
10shall, except as otherwise provided in this Section, file a
11return with the Department and pay the tax upon that portion of
12the selling price so paid by the purchaser during the preceding
13calendar month. When tangible personal property, including but
14not limited to motor vehicles and aircraft, is purchased by a
15lessor, under a lease for one year or longer, executed or in
16effect at the time of purchase to an interstate carrier for
17hire, who did not pay the tax imposed by this Act to the
18retailer, such lessor (by the last day of the month following
19the calendar month in which such property reverts to the use of
20such lessor) shall file a return with the Department and pay
21the tax upon the fair market value of such property on the date
22of such reversion. However, in determining the fair market
23value at the time of reversion, the fair market value of such
24property shall not exceed the original purchase price of the
25property that was paid by the lessor at the time of purchase.
26Such return shall be filed on a form prescribed by the

 

 

10000SB0009sam001- 350 -LRB100 06347 HLH 18430 a

1Department and shall contain such information as the Department
2may reasonably require. Such return and payment from the
3purchaser shall be submitted to the Department sooner than the
4last day of the month after the month in which the purchase is
5made to the extent that that may be necessary in order to
6secure the title to a motor vehicle or the certificate of
7registration for an aircraft. However, except as to motor
8vehicles and aircraft, and except as to cigarettes as defined
9in the Cigarette Use Tax Act, if the purchaser's annual use tax
10liability does not exceed $600, the purchaser may file the
11return on an annual basis on or before April 15th of the year
12following the year use tax liability was incurred. Individual
13purchasers with an annual use tax liability that does not
14exceed $600 may, in lieu of the filing and payment requirements
15in this Section, file and pay in compliance with Section 502.1
16of the Illinois Income Tax Act.
17    If cigarettes, as defined in the Cigarette Use Tax Act, are
18purchased from a retailer for use in this State by a purchaser
19who did not pay the tax imposed by this Act to the retailer,
20and who does not file returns with the Department as a retailer
21under Section 9 of this Act, such purchaser must, within 30
22days after acquiring the cigarettes, file a return with the
23Department and pay the tax upon that portion of the selling
24price so paid by the purchaser for the cigarettes.
25    In addition with respect to motor vehicles, aircraft,
26watercraft, and trailers, a purchaser of such tangible personal

 

 

10000SB0009sam001- 351 -LRB100 06347 HLH 18430 a

1property for use in this State, who purchases such tangible
2personal property from an out-of-state retailer, shall file
3with the Department, upon a form to be prescribed and supplied
4by the Department, a return for each such item of tangible
5personal property purchased, except that if, in the same
6transaction, (i) a purchaser of motor vehicles, aircraft,
7watercraft, or trailers who is a retailer of motor vehicles,
8aircraft, watercraft, or trailers purchases more than one motor
9vehicle, aircraft, watercraft, or trailer for the purpose of
10resale or (ii) a purchaser of motor vehicles, aircraft,
11watercraft, or trailers purchases more than one motor vehicle,
12aircraft, watercraft, or trailer for use as qualifying rolling
13stock as provided in Section 3-55 of this Act, then the
14purchaser may report the purchase of all motor vehicles,
15aircraft, watercraft, or trailers involved in that transaction
16to the Department on a single return prescribed by the
17Department. Such return in the case of motor vehicles and
18aircraft must show the name and address of the seller, the
19name, address of purchaser, the amount of the selling price
20including the amount allowed by the retailer for traded in
21property, if any; the amount allowed by the retailer for the
22traded-in tangible personal property, if any, to the extent to
23which Section 2 of this Act allows an exemption for the value
24of traded-in property; the balance payable after deducting such
25trade-in allowance from the total selling price; the amount of
26tax due from the purchaser with respect to such transaction;

 

 

10000SB0009sam001- 352 -LRB100 06347 HLH 18430 a

1the amount of tax collected from the purchaser by the retailer
2on such transaction (or satisfactory evidence that such tax is
3not due in that particular instance if that is claimed to be
4the fact); the place and date of the sale, a sufficient
5identification of the property sold, and such other information
6as the Department may reasonably require.
7    Such return shall be filed not later than 30 days after
8such motor vehicle or aircraft is brought into this State for
9use.
10    For purposes of this Section, "watercraft" means a Class 2,
11Class 3, or Class 4 watercraft as defined in Section 3-2 of the
12Boat Registration and Safety Act, a personal watercraft, or any
13boat equipped with an inboard motor.
14    The return and tax remittance or proof of exemption from
15the tax that is imposed by this Act may be transmitted to the
16Department by way of the State agency with which, or State
17officer with whom, the tangible personal property must be
18titled or registered (if titling or registration is required)
19if the Department and such agency or State officer determine
20that this procedure will expedite the processing of
21applications for title or registration.
22    With each such return, the purchaser shall remit the proper
23amount of tax due (or shall submit satisfactory evidence that
24the sale is not taxable if that is the case), to the Department
25or its agents, whereupon the Department shall issue, in the
26purchaser's name, a tax receipt (or a certificate of exemption

 

 

10000SB0009sam001- 353 -LRB100 06347 HLH 18430 a

1if the Department is satisfied that the particular sale is tax
2exempt) which such purchaser may submit to the agency with
3which, or State officer with whom, he must title or register
4the tangible personal property that is involved (if titling or
5registration is required) in support of such purchaser's
6application for an Illinois certificate or other evidence of
7title or registration to such tangible personal property.
8    When a purchaser pays a tax imposed by this Act directly to
9the Department, the Department (upon request therefor from such
10purchaser) shall issue an appropriate receipt to such purchaser
11showing that he has paid such tax to the Department. Such
12receipt shall be sufficient to relieve the purchaser from
13further liability for the tax to which such receipt may refer.
14    A user who is liable to pay use tax directly to the
15Department only occasionally and not on a frequently recurring
16basis, and who is not required to file returns with the
17Department as a retailer under Section 9 of this Act, or under
18the "Retailers' Occupation Tax Act", or as a registrant with
19the Department under the "Service Occupation Tax Act" or the
20"Service Use Tax Act", need not register with the Department.
21However, if such a user has a frequently recurring direct use
22tax liability to pay to the Department, such user shall be
23required to register with the Department on forms prescribed by
24the Department and to obtain and display a certificate of
25registration from the Department. In that event, all of the
26provisions of Section 9 of this Act concerning the filing of

 

 

10000SB0009sam001- 354 -LRB100 06347 HLH 18430 a

1regular monthly, quarterly or annual tax returns and all of the
2provisions of Section 2a of the "Retailers' Occupation Tax Act"
3concerning the requirements for registrants to post bond or
4other security with the Department, as the provisions of such
5sections now exist or may hereafter be amended, shall apply to
6such users to the same extent as if such provisions were
7included herein.
8    A person purchasing a service subject to tax under the
9Storage Excise Tax Act incident to which tangible personal
10property is transferred and as to which there has been no
11charge made to him of the tax imposed by Section 5-10 of the
12Storage Excise Tax Act, incurs and must remit use tax to the
13Department on his or her cost price of the tangible personal
14property transferred incident to the purchase of service under
15the Storage Excise Tax Act in the form and manner required by
16the Department under this Section. It shall be presumed that
17the cost price to the purchaser under the Storage Excise Tax
18Act of the tangible personal property transferred to him or her
19by his or her provider is equal to 50% of the provider's
20charges to the purchaser in the absence of proof of the
21consideration paid for the tangible personal property by the
22purchaser to the provider.
23    A person purchasing a service subject to tax under the
24Amusement Excise Tax Act incident to which tangible personal
25property is transferred and as to which there has been no
26charge made to him of the tax imposed by Section 10-10 of the

 

 

10000SB0009sam001- 355 -LRB100 06347 HLH 18430 a

1Amusement Excise Tax Act, incurs and must remit use tax to the
2Department on his or her cost price of the tangible personal
3property transferred incident to the purchase of service under
4the Amusement Excise Tax Act in the form and manner required by
5the Department under this Section. It shall be presumed that
6the cost price to the purchaser under the Amusement Excise Tax
7Act of the tangible personal property transferred to him or her
8by his or her provider is equal to 50% of the provider's
9charges to the purchaser in the absence of proof of the
10consideration paid for the tangible personal property by the
11purchaser to the provider.
12    A person purchasing a service subject to tax under the
13Repair and Maintenance Excise Tax Act incident to which
14tangible personal property is transferred and as to which there
15has been no charge made to him of the tax imposed by Section
1615-10 of the Repair and Maintenance Excise Tax Act, incurs and
17must remit use tax to the Department on his or her cost price
18of the tangible personal property transferred incident to the
19purchase of service under the Repair and Maintenance Excise Tax
20Act in the form and manner required by the Department under
21this Section. It shall be presumed that the cost price to the
22purchaser under the Repair and Maintenance Excise Tax Act of
23the tangible personal property transferred to him or her by his
24or her provider is equal to 50% of the provider's charges to
25the purchaser in the absence of proof of the consideration paid
26for the tangible personal property by the purchaser to the

 

 

10000SB0009sam001- 356 -LRB100 06347 HLH 18430 a

1provider.
2    A person purchasing a service subject to tax under the
3Landscaping Excise Tax Act incident to which tangible personal
4property is transferred and as to which there has been no
5charge made to him of the tax imposed by Section 20-10 of the
6Landscaping Excise Tax Act, incurs and must remit use tax to
7the Department on his or her cost price of the tangible
8personal property transferred incident to the purchase of
9service under the Landscaping Excise Tax Act in the form and
10manner required by the Department under this Section. It shall
11be presumed that the cost price to the purchaser under the
12Landscaping Excise Tax Act of the tangible personal property
13transferred to him or her by his or her provider is equal to
1450% of the provider's charges to the purchaser in the absence
15of proof of the consideration paid for the tangible personal
16property by the purchaser to the provider.
17    A person purchasing a service subject to tax under the
18Laundry and Drycleaning Excise Tax Act incident to which
19tangible personal property is transferred and as to which there
20has been no charge made to him of the tax imposed by Section
2125-10 of the Laundry and Drycleaning Excise Tax Act, incurs and
22must remit use tax to the Department on his or her cost price
23of the tangible personal property transferred incident to the
24purchase of service under the Laundry and Drycleaning Excise
25Tax Act in the form and manner required by the Department under
26this Section. It shall be presumed that the cost price to the

 

 

10000SB0009sam001- 357 -LRB100 06347 HLH 18430 a

1purchaser under the Laundry and Drycleaning Excise Tax Act of
2the tangible personal property transferred to him or her by his
3or her provider is equal to 50% of the provider's charges to
4the purchaser in the absence of proof of the consideration paid
5for the tangible personal property by the purchaser to the
6provider.
7(Source: P.A. 96-520, eff. 8-14-09; 96-1000, eff. 7-2-10;
896-1388, eff. 7-29-10.)
 
9    Section 30-30. The Service Use Tax Act is amended by
10changing Sections 2 and 3-5 and by adding Section 1.1 as
11follows:
 
12    (35 ILCS 110/1.1 new)
13    Sec. 1.1. Applicability. This Act is not applicable to
14transactions that are subject to the Storage Excise Tax Act,
15the Amusement Excise Tax Act, the Repair and Maintenance Excise
16Tax Act, the Landscaping Excise Tax Act, or the Laundry and
17Drycleaning Excise Tax Act that occur on or after January 1,
182018. This amendatory Act of the 100th General Assembly does
19not affect tax liability that arose before January 1, 2018.
 
20    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
21    Sec. 2. Definitions.
22    "Use" means the exercise by any person of any right or
23power over tangible personal property incident to the ownership

 

 

10000SB0009sam001- 358 -LRB100 06347 HLH 18430 a

1of that property, but does not include the sale or use for
2demonstration by him of that property in any form as tangible
3personal property in the regular course of business. "Use" does
4not mean the interim use of tangible personal property nor the
5physical incorporation of tangible personal property, as an
6ingredient or constituent, into other tangible personal
7property, (a) which is sold in the regular course of business
8or (b) which the person incorporating such ingredient or
9constituent therein has undertaken at the time of such purchase
10to cause to be transported in interstate commerce to
11destinations outside the State of Illinois.
12    "Purchased from a serviceman" means the acquisition of the
13ownership of, or title to, tangible personal property through a
14sale of service.
15    "Purchaser" means any person who, through a sale of
16service, acquires the ownership of, or title to, any tangible
17personal property.
18    "Cost price" means the consideration paid by the serviceman
19for a purchase valued in money, whether paid in money or
20otherwise, including cash, credits and services, and shall be
21determined without any deduction on account of the supplier's
22cost of the property sold or on account of any other expense
23incurred by the supplier. When a serviceman contracts out part
24or all of the services required in his sale of service, it
25shall be presumed that the cost price to the serviceman of the
26property transferred to him or her by his or her subcontractor

 

 

10000SB0009sam001- 359 -LRB100 06347 HLH 18430 a

1is equal to 50% of the subcontractor's charges to the
2serviceman in the absence of proof of the consideration paid by
3the subcontractor for the purchase of such property.
4    "Selling price" means the consideration for a sale valued
5in money whether received in money or otherwise, including
6cash, credits and service, and shall be determined without any
7deduction on account of the serviceman's cost of the property
8sold, the cost of materials used, labor or service cost or any
9other expense whatsoever, but does not include interest or
10finance charges which appear as separate items on the bill of
11sale or sales contract nor charges that are added to prices by
12sellers on account of the seller's duty to collect, from the
13purchaser, the tax that is imposed by this Act.
14    "Department" means the Department of Revenue.
15    "Person" means any natural individual, firm, partnership,
16association, joint stock company, joint venture, public or
17private corporation, limited liability company, and any
18receiver, executor, trustee, guardian or other representative
19appointed by order of any court.
20    "Sale of service" means any transaction except:
21        (1) a retail sale of tangible personal property taxable
22    under the Retailers' Occupation Tax Act or under the Use
23    Tax Act.
24        (2) a sale of tangible personal property for the
25    purpose of resale made in compliance with Section 2c of the
26    Retailers' Occupation Tax Act.

 

 

10000SB0009sam001- 360 -LRB100 06347 HLH 18430 a

1        (3) except as hereinafter provided, a sale or transfer
2    of tangible personal property as an incident to the
3    rendering of service for or by any governmental body, or
4    for or by any corporation, society, association,
5    foundation or institution organized and operated
6    exclusively for charitable, religious or educational
7    purposes or any not-for-profit corporation, society,
8    association, foundation, institution or organization which
9    has no compensated officers or employees and which is
10    organized and operated primarily for the recreation of
11    persons 55 years of age or older. A limited liability
12    company may qualify for the exemption under this paragraph
13    only if the limited liability company is organized and
14    operated exclusively for educational purposes.
15        (4) a sale or transfer of tangible personal property as
16    an incident to the rendering of service for interstate
17    carriers for hire for use as rolling stock moving in
18    interstate commerce or by lessors under a lease of one year
19    or longer, executed or in effect at the time of purchase of
20    personal property, to interstate carriers for hire for use
21    as rolling stock moving in interstate commerce so long as
22    so used by such interstate carriers for hire, and equipment
23    operated by a telecommunications provider, licensed as a
24    common carrier by the Federal Communications Commission,
25    which is permanently installed in or affixed to aircraft
26    moving in interstate commerce.

 

 

10000SB0009sam001- 361 -LRB100 06347 HLH 18430 a

1        (4a) a sale or transfer of tangible personal property
2    as an incident to the rendering of service for owners,
3    lessors, or shippers of tangible personal property which is
4    utilized by interstate carriers for hire for use as rolling
5    stock moving in interstate commerce so long as so used by
6    interstate carriers for hire, and equipment operated by a
7    telecommunications provider, licensed as a common carrier
8    by the Federal Communications Commission, which is
9    permanently installed in or affixed to aircraft moving in
10    interstate commerce.
11        (4a-5) on and after July 1, 2003 and through June 30,
12    2004, a sale or transfer of a motor vehicle of the second
13    division with a gross vehicle weight in excess of 8,000
14    pounds as an incident to the rendering of service if that
15    motor vehicle is subject to the commercial distribution fee
16    imposed under Section 3-815.1 of the Illinois Vehicle Code.
17    Beginning on July 1, 2004 and through June 30, 2005, the
18    use in this State of motor vehicles of the second division:
19    (i) with a gross vehicle weight rating in excess of 8,000
20    pounds; (ii) that are subject to the commercial
21    distribution fee imposed under Section 3-815.1 of the
22    Illinois Vehicle Code; and (iii) that are primarily used
23    for commercial purposes. Through June 30, 2005, this
24    exemption applies to repair and replacement parts added
25    after the initial purchase of such a motor vehicle if that
26    motor vehicle is used in a manner that would qualify for

 

 

10000SB0009sam001- 362 -LRB100 06347 HLH 18430 a

1    the rolling stock exemption otherwise provided for in this
2    Act. For purposes of this paragraph, "used for commercial
3    purposes" means the transportation of persons or property
4    in furtherance of any commercial or industrial enterprise
5    whether for-hire or not.
6        (5) a sale or transfer of machinery and equipment used
7    primarily in the process of the manufacturing or
8    assembling, either in an existing, an expanded or a new
9    manufacturing facility, of tangible personal property for
10    wholesale or retail sale or lease, whether such sale or
11    lease is made directly by the manufacturer or by some other
12    person, whether the materials used in the process are owned
13    by the manufacturer or some other person, or whether such
14    sale or lease is made apart from or as an incident to the
15    seller's engaging in a service occupation and the
16    applicable tax is a Service Use Tax or Service Occupation
17    Tax, rather than Use Tax or Retailers' Occupation Tax. The
18    exemption provided by this paragraph (5) does not include
19    machinery and equipment used in (i) the generation of
20    electricity for wholesale or retail sale; (ii) the
21    generation or treatment of natural or artificial gas for
22    wholesale or retail sale that is delivered to customers
23    through pipes, pipelines, or mains; or (iii) the treatment
24    of water for wholesale or retail sale that is delivered to
25    customers through pipes, pipelines, or mains. The
26    provisions of this amendatory Act of the 98th General

 

 

10000SB0009sam001- 363 -LRB100 06347 HLH 18430 a

1    Assembly are declaratory of existing law as to the meaning
2    and scope of this exemption. The exemption under this
3    paragraph (5) is exempt from the provisions of Section
4    3-75.
5        (5a) the repairing, reconditioning or remodeling, for
6    a common carrier by rail, of tangible personal property
7    which belongs to such carrier for hire, and as to which
8    such carrier receives the physical possession of the
9    repaired, reconditioned or remodeled item of tangible
10    personal property in Illinois, and which such carrier
11    transports, or shares with another common carrier in the
12    transportation of such property, out of Illinois on a
13    standard uniform bill of lading showing the person who
14    repaired, reconditioned or remodeled the property to a
15    destination outside Illinois, for use outside Illinois.
16        (5b) a sale or transfer of tangible personal property
17    which is produced by the seller thereof on special order in
18    such a way as to have made the applicable tax the Service
19    Occupation Tax or the Service Use Tax, rather than the
20    Retailers' Occupation Tax or the Use Tax, for an interstate
21    carrier by rail which receives the physical possession of
22    such property in Illinois, and which transports such
23    property, or shares with another common carrier in the
24    transportation of such property, out of Illinois on a
25    standard uniform bill of lading showing the seller of the
26    property as the shipper or consignor of such property to a

 

 

10000SB0009sam001- 364 -LRB100 06347 HLH 18430 a

1    destination outside Illinois, for use outside Illinois.
2        (6) until July 1, 2003, a sale or transfer of
3    distillation machinery and equipment, sold as a unit or kit
4    and assembled or installed by the retailer, which machinery
5    and equipment is certified by the user to be used only for
6    the production of ethyl alcohol that will be used for
7    consumption as motor fuel or as a component of motor fuel
8    for the personal use of such user and not subject to sale
9    or resale.
10        (7) at the election of any serviceman not required to
11    be otherwise registered as a retailer under Section 2a of
12    the Retailers' Occupation Tax Act, made for each fiscal
13    year sales of service in which the aggregate annual cost
14    price of tangible personal property transferred as an
15    incident to the sales of service is less than 35%, or 75%
16    in the case of servicemen transferring prescription drugs
17    or servicemen engaged in graphic arts production, of the
18    aggregate annual total gross receipts from all sales of
19    service. The purchase of such tangible personal property by
20    the serviceman shall be subject to tax under the Retailers'
21    Occupation Tax Act and the Use Tax Act. However, if a
22    primary serviceman who has made the election described in
23    this paragraph subcontracts service work to a secondary
24    serviceman who has also made the election described in this
25    paragraph, the primary serviceman does not incur a Use Tax
26    liability if the secondary serviceman (i) has paid or will

 

 

10000SB0009sam001- 365 -LRB100 06347 HLH 18430 a

1    pay Use Tax on his or her cost price of any tangible
2    personal property transferred to the primary serviceman
3    and (ii) certifies that fact in writing to the primary
4    serviceman.
5    Tangible personal property transferred incident to the
6completion of a maintenance agreement is exempt from the tax
7imposed pursuant to this Act.
8    Exemption (5) also includes machinery and equipment used in
9the general maintenance or repair of such exempt machinery and
10equipment or for in-house manufacture of exempt machinery and
11equipment. On and after July 1, 2017, exemption (5) also
12includes production related tangible personal property, as
13defined in Section 3-50 of the Use Tax Act. On and after July
141, 2017, exemption (5) also includes graphic arts machinery and
15equipment, as defined in paragraph (5) of Section 3-5. The
16machinery and equipment exemption does not include machinery
17and equipment used in (i) the generation of electricity for
18wholesale or retail sale; (ii) the generation or treatment of
19natural or artificial gas for wholesale or retail sale that is
20delivered to customers through pipes, pipelines, or mains; or
21(iii) the treatment of water for wholesale or retail sale that
22is delivered to customers through pipes, pipelines, or mains.
23The provisions of this amendatory Act of the 98th General
24Assembly are declaratory of existing law as to the meaning and
25scope of this exemption. For the purposes of exemption (5),
26each of these terms shall have the following meanings: (1)

 

 

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1"manufacturing process" shall mean the production of any
2article of tangible personal property, whether such article is
3a finished product or an article for use in the process of
4manufacturing or assembling a different article of tangible
5personal property, by procedures commonly regarded as
6manufacturing, processing, fabricating, or refining which
7changes some existing material or materials into a material
8with a different form, use or name. In relation to a recognized
9integrated business composed of a series of operations which
10collectively constitute manufacturing, or individually
11constitute manufacturing operations, the manufacturing process
12shall be deemed to commence with the first operation or stage
13of production in the series, and shall not be deemed to end
14until the completion of the final product in the last operation
15or stage of production in the series; and further, for purposes
16of exemption (5), photoprocessing is deemed to be a
17manufacturing process of tangible personal property for
18wholesale or retail sale; (2) "assembling process" shall mean
19the production of any article of tangible personal property,
20whether such article is a finished product or an article for
21use in the process of manufacturing or assembling a different
22article of tangible personal property, by the combination of
23existing materials in a manner commonly regarded as assembling
24which results in a material of a different form, use or name;
25(3) "machinery" shall mean major mechanical machines or major
26components of such machines contributing to a manufacturing or

 

 

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1assembling process; and (4) "equipment" shall include any
2independent device or tool separate from any machinery but
3essential to an integrated manufacturing or assembly process;
4including computers used primarily in a manufacturer's
5computer assisted design, computer assisted manufacturing
6(CAD/CAM) system; or any subunit or assembly comprising a
7component of any machinery or auxiliary, adjunct or attachment
8parts of machinery, such as tools, dies, jigs, fixtures,
9patterns and molds; or any parts which require periodic
10replacement in the course of normal operation; but shall not
11include hand tools. Equipment includes chemicals or chemicals
12acting as catalysts but only if the chemicals or chemicals
13acting as catalysts effect a direct and immediate change upon a
14product being manufactured or assembled for wholesale or retail
15sale or lease. The purchaser of such machinery and equipment
16who has an active resale registration number shall furnish such
17number to the seller at the time of purchase. The user of such
18machinery and equipment and tools without an active resale
19registration number shall prepare a certificate of exemption
20for each transaction stating facts establishing the exemption
21for that transaction, which certificate shall be available to
22the Department for inspection or audit. The Department shall
23prescribe the form of the certificate.
24    Any informal rulings, opinions or letters issued by the
25Department in response to an inquiry or request for any opinion
26from any person regarding the coverage and applicability of

 

 

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1exemption (5) to specific devices shall be published,
2maintained as a public record, and made available for public
3inspection and copying. If the informal ruling, opinion or
4letter contains trade secrets or other confidential
5information, where possible the Department shall delete such
6information prior to publication. Whenever such informal
7rulings, opinions, or letters contain any policy of general
8applicability, the Department shall formulate and adopt such
9policy as a rule in accordance with the provisions of the
10Illinois Administrative Procedure Act.
11    On and after July 1, 1987, no entity otherwise eligible
12under exemption (3) of this Section shall make tax free
13purchases unless it has an active exemption identification
14number issued by the Department.
15    The purchase, employment and transfer of such tangible
16personal property as newsprint and ink for the primary purpose
17of conveying news (with or without other information) is not a
18purchase, use or sale of service or of tangible personal
19property within the meaning of this Act.
20    "Serviceman" means any person who is engaged in the
21occupation of making sales of service.
22    "Sale at retail" means "sale at retail" as defined in the
23Retailers' Occupation Tax Act.
24    "Supplier" means any person who makes sales of tangible
25personal property to servicemen for the purpose of resale as an
26incident to a sale of service.

 

 

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1    "Serviceman maintaining a place of business in this State",
2or any like term, means and includes any serviceman:
3        1. having or maintaining within this State, directly or
4    by a subsidiary, an office, distribution house, sales
5    house, warehouse or other place of business, or any agent
6    or other representative operating within this State under
7    the authority of the serviceman or its subsidiary,
8    irrespective of whether such place of business or agent or
9    other representative is located here permanently or
10    temporarily, or whether such serviceman or subsidiary is
11    licensed to do business in this State;
12        1.1. having a contract with a person located in this
13    State under which the person, for a commission or other
14    consideration based on the sale of service by the
15    serviceman, directly or indirectly refers potential
16    customers to the serviceman by providing to the potential
17    customers a promotional code or other mechanism that allows
18    the serviceman to track purchases referred by such persons.
19    Examples of mechanisms that allow the serviceman to track
20    purchases referred by such persons include but are not
21    limited to the use of a link on the person's Internet
22    website, promotional codes distributed through the
23    person's hand-delivered or mailed material, and
24    promotional codes distributed by the person through radio
25    or other broadcast media. The provisions of this paragraph
26    1.1 shall apply only if the cumulative gross receipts from

 

 

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1    sales of service by the serviceman to customers who are
2    referred to the serviceman by all persons in this State
3    under such contracts exceed $10,000 during the preceding 4
4    quarterly periods ending on the last day of March, June,
5    September, and December; a serviceman meeting the
6    requirements of this paragraph 1.1 shall be presumed to be
7    maintaining a place of business in this State but may rebut
8    this presumption by submitting proof that the referrals or
9    other activities pursued within this State by such persons
10    were not sufficient to meet the nexus standards of the
11    United States Constitution during the preceding 4
12    quarterly periods;
13        1.2. beginning July 1, 2011, having a contract with a
14    person located in this State under which:
15            A. the serviceman sells the same or substantially
16        similar line of services as the person located in this
17        State and does so using an identical or substantially
18        similar name, trade name, or trademark as the person
19        located in this State; and
20            B. the serviceman provides a commission or other
21        consideration to the person located in this State based
22        upon the sale of services by the serviceman.
23    The provisions of this paragraph 1.2 shall apply only if
24    the cumulative gross receipts from sales of service by the
25    serviceman to customers in this State under all such
26    contracts exceed $10,000 during the preceding 4 quarterly

 

 

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1    periods ending on the last day of March, June, September,
2    and December;
3        2. soliciting orders for tangible personal property by
4    means of a telecommunication or television shopping system
5    (which utilizes toll free numbers) which is intended by the
6    retailer to be broadcast by cable television or other means
7    of broadcasting, to consumers located in this State;
8        3. pursuant to a contract with a broadcaster or
9    publisher located in this State, soliciting orders for
10    tangible personal property by means of advertising which is
11    disseminated primarily to consumers located in this State
12    and only secondarily to bordering jurisdictions;
13        4. soliciting orders for tangible personal property by
14    mail if the solicitations are substantial and recurring and
15    if the retailer benefits from any banking, financing, debt
16    collection, telecommunication, or marketing activities
17    occurring in this State or benefits from the location in
18    this State of authorized installation, servicing, or
19    repair facilities;
20        5. being owned or controlled by the same interests
21    which own or control any retailer engaging in business in
22    the same or similar line of business in this State;
23        6. having a franchisee or licensee operating under its
24    trade name if the franchisee or licensee is required to
25    collect the tax under this Section;
26        7. pursuant to a contract with a cable television

 

 

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1    operator located in this State, soliciting orders for
2    tangible personal property by means of advertising which is
3    transmitted or distributed over a cable television system
4    in this State; or
5        8. engaging in activities in Illinois, which
6    activities in the state in which the supply business
7    engaging in such activities is located would constitute
8    maintaining a place of business in that state.
9(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
 
10    (35 ILCS 110/3-5)
11    Sec. 3-5. Exemptions. Use of the following tangible
12personal property is exempt from the tax imposed by this Act:
13    (1) Personal property purchased from a corporation,
14society, association, foundation, institution, or
15organization, other than a limited liability company, that is
16organized and operated as a not-for-profit service enterprise
17for the benefit of persons 65 years of age or older if the
18personal property was not purchased by the enterprise for the
19purpose of resale by the enterprise.
20    (2) Personal property purchased by a non-profit Illinois
21county fair association for use in conducting, operating, or
22promoting the county fair.
23    (3) Personal property purchased by a not-for-profit arts or
24cultural organization that establishes, by proof required by
25the Department by rule, that it has received an exemption under

 

 

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1Section 501(c)(3) of the Internal Revenue Code and that is
2organized and operated primarily for the presentation or
3support of arts or cultural programming, activities, or
4services. These organizations include, but are not limited to,
5music and dramatic arts organizations such as symphony
6orchestras and theatrical groups, arts and cultural service
7organizations, local arts councils, visual arts organizations,
8and media arts organizations. On and after the effective date
9of this amendatory Act of the 92nd General Assembly, however,
10an entity otherwise eligible for this exemption shall not make
11tax-free purchases unless it has an active identification
12number issued by the Department.
13    (4) Legal tender, currency, medallions, or gold or silver
14coinage issued by the State of Illinois, the government of the
15United States of America, or the government of any foreign
16country, and bullion.
17    (5) Until July 1, 2003 and beginning again on September 1,
182004 through August 30, 2014, graphic arts machinery and
19equipment, including repair and replacement parts, both new and
20used, and including that manufactured on special order or
21purchased for lease, certified by the purchaser to be used
22primarily for graphic arts production. Equipment includes
23chemicals or chemicals acting as catalysts but only if the
24chemicals or chemicals acting as catalysts effect a direct and
25immediate change upon a graphic arts product. Beginning on July
261, 2017, graphic arts machinery and equipment is included in

 

 

10000SB0009sam001- 374 -LRB100 06347 HLH 18430 a

1the manufacturing and assembling machinery and equipment
2exemption under Section 2 of this Act.
3    (6) Personal property purchased from a teacher-sponsored
4student organization affiliated with an elementary or
5secondary school located in Illinois.
6    (7) Farm machinery and equipment, both new and used,
7including that manufactured on special order, certified by the
8purchaser to be used primarily for production agriculture or
9State or federal agricultural programs, including individual
10replacement parts for the machinery and equipment, including
11machinery and equipment purchased for lease, and including
12implements of husbandry defined in Section 1-130 of the
13Illinois Vehicle Code, farm machinery and agricultural
14chemical and fertilizer spreaders, and nurse wagons required to
15be registered under Section 3-809 of the Illinois Vehicle Code,
16but excluding other motor vehicles required to be registered
17under the Illinois Vehicle Code. Horticultural polyhouses or
18hoop houses used for propagating, growing, or overwintering
19plants shall be considered farm machinery and equipment under
20this item (7). Agricultural chemical tender tanks and dry boxes
21shall include units sold separately from a motor vehicle
22required to be licensed and units sold mounted on a motor
23vehicle required to be licensed if the selling price of the
24tender is separately stated.
25    Farm machinery and equipment shall include precision
26farming equipment that is installed or purchased to be

 

 

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1installed on farm machinery and equipment including, but not
2limited to, tractors, harvesters, sprayers, planters, seeders,
3or spreaders. Precision farming equipment includes, but is not
4limited to, soil testing sensors, computers, monitors,
5software, global positioning and mapping systems, and other
6such equipment.
7    Farm machinery and equipment also includes computers,
8sensors, software, and related equipment used primarily in the
9computer-assisted operation of production agriculture
10facilities, equipment, and activities such as, but not limited
11to, the collection, monitoring, and correlation of animal and
12crop data for the purpose of formulating animal diets and
13agricultural chemicals. This item (7) is exempt from the
14provisions of Section 3-75.
15    (8) Until June 30, 2013, fuel and petroleum products sold
16to or used by an air common carrier, certified by the carrier
17to be used for consumption, shipment, or storage in the conduct
18of its business as an air common carrier, for a flight destined
19for or returning from a location or locations outside the
20United States without regard to previous or subsequent domestic
21stopovers.
22    Beginning July 1, 2013, fuel and petroleum products sold to
23or used by an air carrier, certified by the carrier to be used
24for consumption, shipment, or storage in the conduct of its
25business as an air common carrier, for a flight that (i) is
26engaged in foreign trade or is engaged in trade between the

 

 

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1United States and any of its possessions and (ii) transports at
2least one individual or package for hire from the city of
3origination to the city of final destination on the same
4aircraft, without regard to a change in the flight number of
5that aircraft.
6    (9) Proceeds of mandatory service charges separately
7stated on customers' bills for the purchase and consumption of
8food and beverages acquired as an incident to the purchase of a
9service from a serviceman, to the extent that the proceeds of
10the service charge are in fact turned over as tips or as a
11substitute for tips to the employees who participate directly
12in preparing, serving, hosting or cleaning up the food or
13beverage function with respect to which the service charge is
14imposed.
15    (10) Until July 1, 2003, oil field exploration, drilling,
16and production equipment, including (i) rigs and parts of rigs,
17rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
18tubular goods, including casing and drill strings, (iii) pumps
19and pump-jack units, (iv) storage tanks and flow lines, (v) any
20individual replacement part for oil field exploration,
21drilling, and production equipment, and (vi) machinery and
22equipment purchased for lease; but excluding motor vehicles
23required to be registered under the Illinois Vehicle Code.
24    (11) Proceeds from the sale of photoprocessing machinery
25and equipment, including repair and replacement parts, both new
26and used, including that manufactured on special order,

 

 

10000SB0009sam001- 377 -LRB100 06347 HLH 18430 a

1certified by the purchaser to be used primarily for
2photoprocessing, and including photoprocessing machinery and
3equipment purchased for lease.
4    (12) Coal and aggregate exploration, mining, off-highway
5hauling, processing, maintenance, and reclamation equipment,
6including replacement parts and equipment, and including
7equipment purchased for lease, but excluding motor vehicles
8required to be registered under the Illinois Vehicle Code. The
9changes made to this Section by Public Act 97-767 apply on and
10after July 1, 2003, but no claim for credit or refund is
11allowed on or after August 16, 2013 (the effective date of
12Public Act 98-456) for such taxes paid during the period
13beginning July 1, 2003 and ending on August 16, 2013 (the
14effective date of Public Act 98-456).
15    (13) Semen used for artificial insemination of livestock
16for direct agricultural production.
17    (14) Horses, or interests in horses, registered with and
18meeting the requirements of any of the Arabian Horse Club
19Registry of America, Appaloosa Horse Club, American Quarter
20Horse Association, United States Trotting Association, or
21Jockey Club, as appropriate, used for purposes of breeding or
22racing for prizes. This item (14) is exempt from the provisions
23of Section 3-75, and the exemption provided for under this item
24(14) applies for all periods beginning May 30, 1995, but no
25claim for credit or refund is allowed on or after the effective
26date of this amendatory Act of the 95th General Assembly for

 

 

10000SB0009sam001- 378 -LRB100 06347 HLH 18430 a

1such taxes paid during the period beginning May 30, 2000 and
2ending on the effective date of this amendatory Act of the 95th
3General Assembly.
4    (15) Computers and communications equipment utilized for
5any hospital purpose and equipment used in the diagnosis,
6analysis, or treatment of hospital patients purchased by a
7lessor who leases the equipment, under a lease of one year or
8longer executed or in effect at the time the lessor would
9otherwise be subject to the tax imposed by this Act, to a
10hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of the
12Retailers' Occupation Tax Act. If the equipment is leased in a
13manner that does not qualify for this exemption or is used in
14any other non-exempt manner, the lessor shall be liable for the
15tax imposed under this Act or the Use Tax Act, as the case may
16be, based on the fair market value of the property at the time
17the non-qualifying use occurs. No lessor shall collect or
18attempt to collect an amount (however designated) that purports
19to reimburse that lessor for the tax imposed by this Act or the
20Use Tax Act, as the case may be, if the tax has not been paid by
21the lessor. If a lessor improperly collects any such amount
22from the lessee, the lessee shall have a legal right to claim a
23refund of that amount from the lessor. If, however, that amount
24is not refunded to the lessee for any reason, the lessor is
25liable to pay that amount to the Department.
26    (16) Personal property purchased by a lessor who leases the

 

 

10000SB0009sam001- 379 -LRB100 06347 HLH 18430 a

1property, under a lease of one year or longer executed or in
2effect at the time the lessor would otherwise be subject to the
3tax imposed by this Act, to a governmental body that has been
4issued an active tax exemption identification number by the
5Department under Section 1g of the Retailers' Occupation Tax
6Act. If the property is leased in a manner that does not
7qualify for this exemption or is used in any other non-exempt
8manner, the lessor shall be liable for the tax imposed under
9this Act or the Use Tax Act, as the case may be, based on the
10fair market value of the property at the time the
11non-qualifying use occurs. No lessor shall collect or attempt
12to collect an amount (however designated) that purports to
13reimburse that lessor for the tax imposed by this Act or the
14Use Tax Act, as the case may be, if the tax has not been paid by
15the lessor. If a lessor improperly collects any such amount
16from the lessee, the lessee shall have a legal right to claim a
17refund of that amount from the lessor. If, however, that amount
18is not refunded to the lessee for any reason, the lessor is
19liable to pay that amount to the Department.
20    (17) Beginning with taxable years ending on or after
21December 31, 1995 and ending with taxable years ending on or
22before December 31, 2004, personal property that is donated for
23disaster relief to be used in a State or federally declared
24disaster area in Illinois or bordering Illinois by a
25manufacturer or retailer that is registered in this State to a
26corporation, society, association, foundation, or institution

 

 

10000SB0009sam001- 380 -LRB100 06347 HLH 18430 a

1that has been issued a sales tax exemption identification
2number by the Department that assists victims of the disaster
3who reside within the declared disaster area.
4    (18) Beginning with taxable years ending on or after
5December 31, 1995 and ending with taxable years ending on or
6before December 31, 2004, personal property that is used in the
7performance of infrastructure repairs in this State, including
8but not limited to municipal roads and streets, access roads,
9bridges, sidewalks, waste disposal systems, water and sewer
10line extensions, water distribution and purification
11facilities, storm water drainage and retention facilities, and
12sewage treatment facilities, resulting from a State or
13federally declared disaster in Illinois or bordering Illinois
14when such repairs are initiated on facilities located in the
15declared disaster area within 6 months after the disaster.
16    (19) Beginning July 1, 1999, game or game birds purchased
17at a "game breeding and hunting preserve area" as that term is
18used in the Wildlife Code. This paragraph is exempt from the
19provisions of Section 3-75.
20    (20) A motor vehicle, as that term is defined in Section
211-146 of the Illinois Vehicle Code, that is donated to a
22corporation, limited liability company, society, association,
23foundation, or institution that is determined by the Department
24to be organized and operated exclusively for educational
25purposes. For purposes of this exemption, "a corporation,
26limited liability company, society, association, foundation,

 

 

10000SB0009sam001- 381 -LRB100 06347 HLH 18430 a

1or institution organized and operated exclusively for
2educational purposes" means all tax-supported public schools,
3private schools that offer systematic instruction in useful
4branches of learning by methods common to public schools and
5that compare favorably in their scope and intensity with the
6course of study presented in tax-supported schools, and
7vocational or technical schools or institutes organized and
8operated exclusively to provide a course of study of not less
9than 6 weeks duration and designed to prepare individuals to
10follow a trade or to pursue a manual, technical, mechanical,
11industrial, business, or commercial occupation.
12    (21) Beginning January 1, 2000, personal property,
13including food, purchased through fundraising events for the
14benefit of a public or private elementary or secondary school,
15a group of those schools, or one or more school districts if
16the events are sponsored by an entity recognized by the school
17district that consists primarily of volunteers and includes
18parents and teachers of the school children. This paragraph
19does not apply to fundraising events (i) for the benefit of
20private home instruction or (ii) for which the fundraising
21entity purchases the personal property sold at the events from
22another individual or entity that sold the property for the
23purpose of resale by the fundraising entity and that profits
24from the sale to the fundraising entity. This paragraph is
25exempt from the provisions of Section 3-75.
26    (22) Beginning January 1, 2000 and through December 31,

 

 

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12001, new or used automatic vending machines that prepare and
2serve hot food and beverages, including coffee, soup, and other
3items, and replacement parts for these machines. Beginning
4January 1, 2002 and through June 30, 2003, machines and parts
5for machines used in commercial, coin-operated amusement and
6vending business if a use or occupation tax is paid on the
7gross receipts derived from the use of the commercial,
8coin-operated amusement and vending machines. This paragraph
9is exempt from the provisions of Section 3-75.
10    (23) Beginning August 23, 2001 and through June 30, 2016,
11food for human consumption that is to be consumed off the
12premises where it is sold (other than alcoholic beverages, soft
13drinks, and food that has been prepared for immediate
14consumption) and prescription and nonprescription medicines,
15drugs, medical appliances, and insulin, urine testing
16materials, syringes, and needles used by diabetics, for human
17use, when purchased for use by a person receiving medical
18assistance under Article V of the Illinois Public Aid Code who
19resides in a licensed long-term care facility, as defined in
20the Nursing Home Care Act, or in a licensed facility as defined
21in the ID/DD Community Care Act, the MC/DD Act, or the
22Specialized Mental Health Rehabilitation Act of 2013.
23    (24) Beginning on the effective date of this amendatory Act
24of the 92nd General Assembly, computers and communications
25equipment utilized for any hospital purpose and equipment used
26in the diagnosis, analysis, or treatment of hospital patients

 

 

10000SB0009sam001- 383 -LRB100 06347 HLH 18430 a

1purchased by a lessor who leases the equipment, under a lease
2of one year or longer executed or in effect at the time the
3lessor would otherwise be subject to the tax imposed by this
4Act, to a hospital that has been issued an active tax exemption
5identification number by the Department under Section 1g of the
6Retailers' Occupation Tax Act. If the equipment is leased in a
7manner that does not qualify for this exemption or is used in
8any other nonexempt manner, the lessor shall be liable for the
9tax imposed under this Act or the Use Tax Act, as the case may
10be, based on the fair market value of the property at the time
11the nonqualifying use occurs. No lessor shall collect or
12attempt to collect an amount (however designated) that purports
13to reimburse that lessor for the tax imposed by this Act or the
14Use Tax Act, as the case may be, if the tax has not been paid by
15the lessor. If a lessor improperly collects any such amount
16from the lessee, the lessee shall have a legal right to claim a
17refund of that amount from the lessor. If, however, that amount
18is not refunded to the lessee for any reason, the lessor is
19liable to pay that amount to the Department. This paragraph is
20exempt from the provisions of Section 3-75.
21    (25) Beginning on the effective date of this amendatory Act
22of the 92nd General Assembly, personal property purchased by a
23lessor who leases the property, under a lease of one year or
24longer executed or in effect at the time the lessor would
25otherwise be subject to the tax imposed by this Act, to a
26governmental body that has been issued an active tax exemption

 

 

10000SB0009sam001- 384 -LRB100 06347 HLH 18430 a

1identification number by the Department under Section 1g of the
2Retailers' Occupation Tax Act. If the property is leased in a
3manner that does not qualify for this exemption or is used in
4any other nonexempt manner, the lessor shall be liable for the
5tax imposed under this Act or the Use Tax Act, as the case may
6be, based on the fair market value of the property at the time
7the nonqualifying use occurs. No lessor shall collect or
8attempt to collect an amount (however designated) that purports
9to reimburse that lessor for the tax imposed by this Act or the
10Use Tax Act, as the case may be, if the tax has not been paid by
11the lessor. If a lessor improperly collects any such amount
12from the lessee, the lessee shall have a legal right to claim a
13refund of that amount from the lessor. If, however, that amount
14is not refunded to the lessee for any reason, the lessor is
15liable to pay that amount to the Department. This paragraph is
16exempt from the provisions of Section 3-75.
17    (26) Beginning January 1, 2008, tangible personal property
18used in the construction or maintenance of a community water
19supply, as defined under Section 3.145 of the Environmental
20Protection Act, that is operated by a not-for-profit
21corporation that holds a valid water supply permit issued under
22Title IV of the Environmental Protection Act. This paragraph is
23exempt from the provisions of Section 3-75.
24    (27) Beginning January 1, 2010, materials, parts,
25equipment, components, and furnishings incorporated into or
26upon an aircraft as part of the modification, refurbishment,

 

 

10000SB0009sam001- 385 -LRB100 06347 HLH 18430 a

1completion, replacement, repair, or maintenance of the
2aircraft. This exemption includes consumable supplies used in
3the modification, refurbishment, completion, replacement,
4repair, and maintenance of aircraft, but excludes any
5materials, parts, equipment, components, and consumable
6supplies used in the modification, replacement, repair, and
7maintenance of aircraft engines or power plants, whether such
8engines or power plants are installed or uninstalled upon any
9such aircraft. "Consumable supplies" include, but are not
10limited to, adhesive, tape, sandpaper, general purpose
11lubricants, cleaning solution, latex gloves, and protective
12films. This exemption applies only to the use of qualifying
13tangible personal property transferred incident to the
14modification, refurbishment, completion, replacement, repair,
15or maintenance of aircraft by persons who (i) hold an Air
16Agency Certificate and are empowered to operate an approved
17repair station by the Federal Aviation Administration, (ii)
18have a Class IV Rating, and (iii) conduct operations in
19accordance with Part 145 of the Federal Aviation Regulations.
20The exemption does not include aircraft operated by a
21commercial air carrier providing scheduled passenger air
22service pursuant to authority issued under Part 121 or Part 129
23of the Federal Aviation Regulations. The changes made to this
24paragraph (27) by Public Act 98-534 are declarative of existing
25law.
26    (28) Tangible personal property purchased by a

 

 

10000SB0009sam001- 386 -LRB100 06347 HLH 18430 a

1public-facilities corporation, as described in Section
211-65-10 of the Illinois Municipal Code, for purposes of
3constructing or furnishing a municipal convention hall, but
4only if the legal title to the municipal convention hall is
5transferred to the municipality without any further
6consideration by or on behalf of the municipality at the time
7of the completion of the municipal convention hall or upon the
8retirement or redemption of any bonds or other debt instruments
9issued by the public-facilities corporation in connection with
10the development of the municipal convention hall. This
11exemption includes existing public-facilities corporations as
12provided in Section 11-65-25 of the Illinois Municipal Code.
13This paragraph is exempt from the provisions of Section 3-75.
14    (29) Beginning January 1, 2017, menstrual pads, tampons,
15and menstrual cups.
16(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1798-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
187-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)
 
19    Section 30-35. The Service Occupation Tax Act is amended by
20changing Sections 2 and 3-5 and by adding Section 1.1 as
21follows:
 
22    (35 ILCS 115/1.1 new)
23    Sec. 1.1. Applicability. This Act is not applicable to
24transactions that are subject to the Storage Excise Tax Act,

 

 

10000SB0009sam001- 387 -LRB100 06347 HLH 18430 a

1the Amusement Excise Tax Act, the Repair and Maintenance Excise
2Tax Act, the Landscaping Excise Tax Act, or the Laundry and
3Drycleaning Excise Tax Act that occur on or after January 1,
42018. This amendatory Act of the 100th General Assembly does
5not affect tax liability that arose before January 1, 2018.
 
6    (35 ILCS 115/2)  (from Ch. 120, par. 439.102)
7    Sec. 2. "Transfer" means any transfer of the title to
8property or of the ownership of property whether or not the
9transferor retains title as security for the payment of amounts
10due him from the transferee.
11    "Cost Price" means the consideration paid by the serviceman
12for a purchase valued in money, whether paid in money or
13otherwise, including cash, credits and services, and shall be
14determined without any deduction on account of the supplier's
15cost of the property sold or on account of any other expense
16incurred by the supplier. When a serviceman contracts out part
17or all of the services required in his sale of service, it
18shall be presumed that the cost price to the serviceman of the
19property transferred to him by his or her subcontractor is
20equal to 50% of the subcontractor's charges to the serviceman
21in the absence of proof of the consideration paid by the
22subcontractor for the purchase of such property.
23    "Department" means the Department of Revenue.
24    "Person" means any natural individual, firm, partnership,
25association, joint stock company, joint venture, public or

 

 

10000SB0009sam001- 388 -LRB100 06347 HLH 18430 a

1private corporation, limited liability company, and any
2receiver, executor, trustee, guardian or other representative
3appointed by order of any court.
4    "Sale of Service" means any transaction except:
5    (a) A retail sale of tangible personal property taxable
6under the Retailers' Occupation Tax Act or under the Use Tax
7Act.
8    (b) A sale of tangible personal property for the purpose of
9resale made in compliance with Section 2c of the Retailers'
10Occupation Tax Act.
11    (c) Except as hereinafter provided, a sale or transfer of
12tangible personal property as an incident to the rendering of
13service for or by any governmental body or for or by any
14corporation, society, association, foundation or institution
15organized and operated exclusively for charitable, religious
16or educational purposes or any not-for-profit corporation,
17society, association, foundation, institution or organization
18which has no compensated officers or employees and which is
19organized and operated primarily for the recreation of persons
2055 years of age or older. A limited liability company may
21qualify for the exemption under this paragraph only if the
22limited liability company is organized and operated
23exclusively for educational purposes.
24    (d) A sale or transfer of tangible personal property as an
25incident to the rendering of service for interstate carriers
26for hire for use as rolling stock moving in interstate commerce

 

 

10000SB0009sam001- 389 -LRB100 06347 HLH 18430 a

1or lessors under leases of one year or longer, executed or in
2effect at the time of purchase, to interstate carriers for hire
3for use as rolling stock moving in interstate commerce, and
4equipment operated by a telecommunications provider, licensed
5as a common carrier by the Federal Communications Commission,
6which is permanently installed in or affixed to aircraft moving
7in interstate commerce.
8    (d-1) A sale or transfer of tangible personal property as
9an incident to the rendering of service for owners, lessors or
10shippers of tangible personal property which is utilized by
11interstate carriers for hire for use as rolling stock moving in
12interstate commerce, and equipment operated by a
13telecommunications provider, licensed as a common carrier by
14the Federal Communications Commission, which is permanently
15installed in or affixed to aircraft moving in interstate
16commerce.
17    (d-1.1) On and after July 1, 2003 and through June 30,
182004, a sale or transfer of a motor vehicle of the second
19division with a gross vehicle weight in excess of 8,000 pounds
20as an incident to the rendering of service if that motor
21vehicle is subject to the commercial distribution fee imposed
22under Section 3-815.1 of the Illinois Vehicle Code. Beginning
23on July 1, 2004 and through June 30, 2005, the use in this
24State of motor vehicles of the second division: (i) with a
25gross vehicle weight rating in excess of 8,000 pounds; (ii)
26that are subject to the commercial distribution fee imposed

 

 

10000SB0009sam001- 390 -LRB100 06347 HLH 18430 a

1under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
2that are primarily used for commercial purposes. Through June
330, 2005, this exemption applies to repair and replacement
4parts added after the initial purchase of such a motor vehicle
5if that motor vehicle is used in a manner that would qualify
6for the rolling stock exemption otherwise provided for in this
7Act. For purposes of this paragraph, "used for commercial
8purposes" means the transportation of persons or property in
9furtherance of any commercial or industrial enterprise whether
10for-hire or not.
11    (d-2) The repairing, reconditioning or remodeling, for a
12common carrier by rail, of tangible personal property which
13belongs to such carrier for hire, and as to which such carrier
14receives the physical possession of the repaired,
15reconditioned or remodeled item of tangible personal property
16in Illinois, and which such carrier transports, or shares with
17another common carrier in the transportation of such property,
18out of Illinois on a standard uniform bill of lading showing
19the person who repaired, reconditioned or remodeled the
20property as the shipper or consignor of such property to a
21destination outside Illinois, for use outside Illinois.
22    (d-3) A sale or transfer of tangible personal property
23which is produced by the seller thereof on special order in
24such a way as to have made the applicable tax the Service
25Occupation Tax or the Service Use Tax, rather than the
26Retailers' Occupation Tax or the Use Tax, for an interstate

 

 

10000SB0009sam001- 391 -LRB100 06347 HLH 18430 a

1carrier by rail which receives the physical possession of such
2property in Illinois, and which transports such property, or
3shares with another common carrier in the transportation of
4such property, out of Illinois on a standard uniform bill of
5lading showing the seller of the property as the shipper or
6consignor of such property to a destination outside Illinois,
7for use outside Illinois.
8    (d-4) Until January 1, 1997, a sale, by a registered
9serviceman paying tax under this Act to the Department, of
10special order printed materials delivered outside Illinois and
11which are not returned to this State, if delivery is made by
12the seller or agent of the seller, including an agent who
13causes the product to be delivered outside Illinois by a common
14carrier or the U.S. postal service.
15    (e) A sale or transfer of machinery and equipment used
16primarily in the process of the manufacturing or assembling,
17either in an existing, an expanded or a new manufacturing
18facility, of tangible personal property for wholesale or retail
19sale or lease, whether such sale or lease is made directly by
20the manufacturer or by some other person, whether the materials
21used in the process are owned by the manufacturer or some other
22person, or whether such sale or lease is made apart from or as
23an incident to the seller's engaging in a service occupation
24and the applicable tax is a Service Occupation Tax or Service
25Use Tax, rather than Retailers' Occupation Tax or Use Tax. The
26exemption provided by this paragraph (e) does not include

 

 

10000SB0009sam001- 392 -LRB100 06347 HLH 18430 a

1machinery and equipment used in (i) the generation of
2electricity for wholesale or retail sale; (ii) the generation
3or treatment of natural or artificial gas for wholesale or
4retail sale that is delivered to customers through pipes,
5pipelines, or mains; or (iii) the treatment of water for
6wholesale or retail sale that is delivered to customers through
7pipes, pipelines, or mains. The provisions of this amendatory
8Act of the 98th General Assembly are declaratory of existing
9law as to the meaning and scope of this exemption. The
10exemption under this subsection (e) is exempt from the
11provisions of Section 3-75.
12    (f) Until July 1, 2003, the sale or transfer of
13distillation machinery and equipment, sold as a unit or kit and
14assembled or installed by the retailer, which machinery and
15equipment is certified by the user to be used only for the
16production of ethyl alcohol that will be used for consumption
17as motor fuel or as a component of motor fuel for the personal
18use of such user and not subject to sale or resale.
19    (g) At the election of any serviceman not required to be
20otherwise registered as a retailer under Section 2a of the
21Retailers' Occupation Tax Act, made for each fiscal year sales
22of service in which the aggregate annual cost price of tangible
23personal property transferred as an incident to the sales of
24service is less than 35% (75% in the case of servicemen
25transferring prescription drugs or servicemen engaged in
26graphic arts production) of the aggregate annual total gross

 

 

10000SB0009sam001- 393 -LRB100 06347 HLH 18430 a

1receipts from all sales of service. The purchase of such
2tangible personal property by the serviceman shall be subject
3to tax under the Retailers' Occupation Tax Act and the Use Tax
4Act. However, if a primary serviceman who has made the election
5described in this paragraph subcontracts service work to a
6secondary serviceman who has also made the election described
7in this paragraph, the primary serviceman does not incur a Use
8Tax liability if the secondary serviceman (i) has paid or will
9pay Use Tax on his or her cost price of any tangible personal
10property transferred to the primary serviceman and (ii)
11certifies that fact in writing to the primary serviceman.
12    Tangible personal property transferred incident to the
13completion of a maintenance agreement is exempt from the tax
14imposed pursuant to this Act.
15    Exemption (e) also includes machinery and equipment used in
16the general maintenance or repair of such exempt machinery and
17equipment or for in-house manufacture of exempt machinery and
18equipment. On and after July 1, 2017, exemption (e) also
19includes production related tangible personal property, as
20defined in Section 2-45 of the Retailers' Occupation Tax Act.
21On and after July 1, 2017, exemption (e) also includes graphic
22arts machinery and equipment, as defined in paragraph (5) of
23Section 3-5. The machinery and equipment exemption does not
24include machinery and equipment used in (i) the generation of
25electricity for wholesale or retail sale; (ii) the generation
26or treatment of natural or artificial gas for wholesale or

 

 

10000SB0009sam001- 394 -LRB100 06347 HLH 18430 a

1retail sale that is delivered to customers through pipes,
2pipelines, or mains; or (iii) the treatment of water for
3wholesale or retail sale that is delivered to customers through
4pipes, pipelines, or mains. The provisions of this amendatory
5Act of the 98th General Assembly are declaratory of existing
6law as to the meaning and scope of this exemption. For the
7purposes of exemption (e), each of these terms shall have the
8following meanings: (1) "manufacturing process" shall mean the
9production of any article of tangible personal property,
10whether such article is a finished product or an article for
11use in the process of manufacturing or assembling a different
12article of tangible personal property, by procedures commonly
13regarded as manufacturing, processing, fabricating, or
14refining which changes some existing material or materials into
15a material with a different form, use or name. In relation to a
16recognized integrated business composed of a series of
17operations which collectively constitute manufacturing, or
18individually constitute manufacturing operations, the
19manufacturing process shall be deemed to commence with the
20first operation or stage of production in the series, and shall
21not be deemed to end until the completion of the final product
22in the last operation or stage of production in the series; and
23further for purposes of exemption (e), photoprocessing is
24deemed to be a manufacturing process of tangible personal
25property for wholesale or retail sale; (2) "assembling process"
26shall mean the production of any article of tangible personal

 

 

10000SB0009sam001- 395 -LRB100 06347 HLH 18430 a

1property, whether such article is a finished product or an
2article for use in the process of manufacturing or assembling a
3different article of tangible personal property, by the
4combination of existing materials in a manner commonly regarded
5as assembling which results in a material of a different form,
6use or name; (3) "machinery" shall mean major mechanical
7machines or major components of such machines contributing to a
8manufacturing or assembling process; and (4) "equipment" shall
9include any independent device or tool separate from any
10machinery but essential to an integrated manufacturing or
11assembly process; including computers used primarily in a
12manufacturer's computer assisted design, computer assisted
13manufacturing (CAD/CAM) system; or any subunit or assembly
14comprising a component of any machinery or auxiliary, adjunct
15or attachment parts of machinery, such as tools, dies, jigs,
16fixtures, patterns and molds; or any parts which require
17periodic replacement in the course of normal operation; but
18shall not include hand tools. Equipment includes chemicals or
19chemicals acting as catalysts but only if the chemicals or
20chemicals acting as catalysts effect a direct and immediate
21change upon a product being manufactured or assembled for
22wholesale or retail sale or lease. The purchaser of such
23machinery and equipment who has an active resale registration
24number shall furnish such number to the seller at the time of
25purchase. The purchaser of such machinery and equipment and
26tools without an active resale registration number shall

 

 

10000SB0009sam001- 396 -LRB100 06347 HLH 18430 a

1furnish to the seller a certificate of exemption for each
2transaction stating facts establishing the exemption for that
3transaction, which certificate shall be available to the
4Department for inspection or audit.
5    Except as provided in Section 2d of this Act, the rolling
6stock exemption applies to rolling stock used by an interstate
7carrier for hire, even just between points in Illinois, if such
8rolling stock transports, for hire, persons whose journeys or
9property whose shipments originate or terminate outside
10Illinois.
11    Any informal rulings, opinions or letters issued by the
12Department in response to an inquiry or request for any opinion
13from any person regarding the coverage and applicability of
14exemption (e) to specific devices shall be published,
15maintained as a public record, and made available for public
16inspection and copying. If the informal ruling, opinion or
17letter contains trade secrets or other confidential
18information, where possible the Department shall delete such
19information prior to publication. Whenever such informal
20rulings, opinions, or letters contain any policy of general
21applicability, the Department shall formulate and adopt such
22policy as a rule in accordance with the provisions of the
23Illinois Administrative Procedure Act.
24    On and after July 1, 1987, no entity otherwise eligible
25under exemption (c) of this Section shall make tax free
26purchases unless it has an active exemption identification

 

 

10000SB0009sam001- 397 -LRB100 06347 HLH 18430 a

1number issued by the Department.
2    "Serviceman" means any person who is engaged in the
3occupation of making sales of service.
4    "Sale at Retail" means "sale at retail" as defined in the
5Retailers' Occupation Tax Act.
6    "Supplier" means any person who makes sales of tangible
7personal property to servicemen for the purpose of resale as an
8incident to a sale of service.
9(Source: P.A. 98-583, eff. 1-1-14.)
 
10    (35 ILCS 115/3-5)
11    Sec. 3-5. Exemptions. The following tangible personal
12property is exempt from the tax imposed by this Act:
13    (1) Personal property sold by a corporation, society,
14association, foundation, institution, or organization, other
15than a limited liability company, that is organized and
16operated as a not-for-profit service enterprise for the benefit
17of persons 65 years of age or older if the personal property
18was not purchased by the enterprise for the purpose of resale
19by the enterprise.
20    (2) Personal property purchased by a not-for-profit
21Illinois county fair association for use in conducting,
22operating, or promoting the county fair.
23    (3) Personal property purchased by any not-for-profit arts
24or cultural organization that establishes, by proof required by
25the Department by rule, that it has received an exemption under

 

 

10000SB0009sam001- 398 -LRB100 06347 HLH 18430 a

1Section 501(c)(3) of the Internal Revenue Code and that is
2organized and operated primarily for the presentation or
3support of arts or cultural programming, activities, or
4services. These organizations include, but are not limited to,
5music and dramatic arts organizations such as symphony
6orchestras and theatrical groups, arts and cultural service
7organizations, local arts councils, visual arts organizations,
8and media arts organizations. On and after the effective date
9of this amendatory Act of the 92nd General Assembly, however,
10an entity otherwise eligible for this exemption shall not make
11tax-free purchases unless it has an active identification
12number issued by the Department.
13    (4) Legal tender, currency, medallions, or gold or silver
14coinage issued by the State of Illinois, the government of the
15United States of America, or the government of any foreign
16country, and bullion.
17    (5) Until July 1, 2003 and beginning again on September 1,
182004 through August 30, 2014, graphic arts machinery and
19equipment, including repair and replacement parts, both new and
20used, and including that manufactured on special order or
21purchased for lease, certified by the purchaser to be used
22primarily for graphic arts production. Equipment includes
23chemicals or chemicals acting as catalysts but only if the
24chemicals or chemicals acting as catalysts effect a direct and
25immediate change upon a graphic arts product. Beginning on July
261, 2017, graphic arts machinery and equipment is included in

 

 

10000SB0009sam001- 399 -LRB100 06347 HLH 18430 a

1the manufacturing and assembling machinery and equipment
2exemption under Section 2 of this Act.
3    (6) Personal property sold by a teacher-sponsored student
4organization affiliated with an elementary or secondary school
5located in Illinois.
6    (7) Farm machinery and equipment, both new and used,
7including that manufactured on special order, certified by the
8purchaser to be used primarily for production agriculture or
9State or federal agricultural programs, including individual
10replacement parts for the machinery and equipment, including
11machinery and equipment purchased for lease, and including
12implements of husbandry defined in Section 1-130 of the
13Illinois Vehicle Code, farm machinery and agricultural
14chemical and fertilizer spreaders, and nurse wagons required to
15be registered under Section 3-809 of the Illinois Vehicle Code,
16but excluding other motor vehicles required to be registered
17under the Illinois Vehicle Code. Horticultural polyhouses or
18hoop houses used for propagating, growing, or overwintering
19plants shall be considered farm machinery and equipment under
20this item (7). Agricultural chemical tender tanks and dry boxes
21shall include units sold separately from a motor vehicle
22required to be licensed and units sold mounted on a motor
23vehicle required to be licensed if the selling price of the
24tender is separately stated.
25    Farm machinery and equipment shall include precision
26farming equipment that is installed or purchased to be

 

 

10000SB0009sam001- 400 -LRB100 06347 HLH 18430 a

1installed on farm machinery and equipment including, but not
2limited to, tractors, harvesters, sprayers, planters, seeders,
3or spreaders. Precision farming equipment includes, but is not
4limited to, soil testing sensors, computers, monitors,
5software, global positioning and mapping systems, and other
6such equipment.
7    Farm machinery and equipment also includes computers,
8sensors, software, and related equipment used primarily in the
9computer-assisted operation of production agriculture
10facilities, equipment, and activities such as, but not limited
11to, the collection, monitoring, and correlation of animal and
12crop data for the purpose of formulating animal diets and
13agricultural chemicals. This item (7) is exempt from the
14provisions of Section 3-55.
15    (8) Until June 30, 2013, fuel and petroleum products sold
16to or used by an air common carrier, certified by the carrier
17to be used for consumption, shipment, or storage in the conduct
18of its business as an air common carrier, for a flight destined
19for or returning from a location or locations outside the
20United States without regard to previous or subsequent domestic
21stopovers.
22    Beginning July 1, 2013, fuel and petroleum products sold to
23or used by an air carrier, certified by the carrier to be used
24for consumption, shipment, or storage in the conduct of its
25business as an air common carrier, for a flight that (i) is
26engaged in foreign trade or is engaged in trade between the

 

 

10000SB0009sam001- 401 -LRB100 06347 HLH 18430 a

1United States and any of its possessions and (ii) transports at
2least one individual or package for hire from the city of
3origination to the city of final destination on the same
4aircraft, without regard to a change in the flight number of
5that aircraft.
6    (9) Proceeds of mandatory service charges separately
7stated on customers' bills for the purchase and consumption of
8food and beverages, to the extent that the proceeds of the
9service charge are in fact turned over as tips or as a
10substitute for tips to the employees who participate directly
11in preparing, serving, hosting or cleaning up the food or
12beverage function with respect to which the service charge is
13imposed.
14    (10) Until July 1, 2003, oil field exploration, drilling,
15and production equipment, including (i) rigs and parts of rigs,
16rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
17tubular goods, including casing and drill strings, (iii) pumps
18and pump-jack units, (iv) storage tanks and flow lines, (v) any
19individual replacement part for oil field exploration,
20drilling, and production equipment, and (vi) machinery and
21equipment purchased for lease; but excluding motor vehicles
22required to be registered under the Illinois Vehicle Code.
23    (11) Photoprocessing machinery and equipment, including
24repair and replacement parts, both new and used, including that
25manufactured on special order, certified by the purchaser to be
26used primarily for photoprocessing, and including

 

 

10000SB0009sam001- 402 -LRB100 06347 HLH 18430 a

1photoprocessing machinery and equipment purchased for lease.
2    (12) Coal and aggregate exploration, mining, off-highway
3hauling, processing, maintenance, and reclamation equipment,
4including replacement parts and equipment, and including
5equipment purchased for lease, but excluding motor vehicles
6required to be registered under the Illinois Vehicle Code. The
7changes made to this Section by Public Act 97-767 apply on and
8after July 1, 2003, but no claim for credit or refund is
9allowed on or after August 16, 2013 (the effective date of
10Public Act 98-456) for such taxes paid during the period
11beginning July 1, 2003 and ending on August 16, 2013 (the
12effective date of Public Act 98-456).
13    (13) Beginning January 1, 1992 and through June 30, 2016,
14food for human consumption that is to be consumed off the
15premises where it is sold (other than alcoholic beverages, soft
16drinks and food that has been prepared for immediate
17consumption) and prescription and non-prescription medicines,
18drugs, medical appliances, and insulin, urine testing
19materials, syringes, and needles used by diabetics, for human
20use, when purchased for use by a person receiving medical
21assistance under Article V of the Illinois Public Aid Code who
22resides in a licensed long-term care facility, as defined in
23the Nursing Home Care Act, or in a licensed facility as defined
24in the ID/DD Community Care Act, the MC/DD Act, or the
25Specialized Mental Health Rehabilitation Act of 2013.
26    (14) Semen used for artificial insemination of livestock

 

 

10000SB0009sam001- 403 -LRB100 06347 HLH 18430 a

1for direct agricultural production.
2    (15) Horses, or interests in horses, registered with and
3meeting the requirements of any of the Arabian Horse Club
4Registry of America, Appaloosa Horse Club, American Quarter
5Horse Association, United States Trotting Association, or
6Jockey Club, as appropriate, used for purposes of breeding or
7racing for prizes. This item (15) is exempt from the provisions
8of Section 3-55, and the exemption provided for under this item
9(15) applies for all periods beginning May 30, 1995, but no
10claim for credit or refund is allowed on or after January 1,
112008 (the effective date of Public Act 95-88) for such taxes
12paid during the period beginning May 30, 2000 and ending on
13January 1, 2008 (the effective date of Public Act 95-88).
14    (16) Computers and communications equipment utilized for
15any hospital purpose and equipment used in the diagnosis,
16analysis, or treatment of hospital patients sold to a lessor
17who leases the equipment, under a lease of one year or longer
18executed or in effect at the time of the purchase, to a
19hospital that has been issued an active tax exemption
20identification number by the Department under Section 1g of the
21Retailers' Occupation Tax Act.
22    (17) Personal property sold to a lessor who leases the
23property, under a lease of one year or longer executed or in
24effect at the time of the purchase, to a governmental body that
25has been issued an active tax exemption identification number
26by the Department under Section 1g of the Retailers' Occupation

 

 

10000SB0009sam001- 404 -LRB100 06347 HLH 18430 a

1Tax Act.
2    (18) Beginning with taxable years ending on or after
3December 31, 1995 and ending with taxable years ending on or
4before December 31, 2004, personal property that is donated for
5disaster relief to be used in a State or federally declared
6disaster area in Illinois or bordering Illinois by a
7manufacturer or retailer that is registered in this State to a
8corporation, society, association, foundation, or institution
9that has been issued a sales tax exemption identification
10number by the Department that assists victims of the disaster
11who reside within the declared disaster area.
12    (19) Beginning with taxable years ending on or after
13December 31, 1995 and ending with taxable years ending on or
14before December 31, 2004, personal property that is used in the
15performance of infrastructure repairs in this State, including
16but not limited to municipal roads and streets, access roads,
17bridges, sidewalks, waste disposal systems, water and sewer
18line extensions, water distribution and purification
19facilities, storm water drainage and retention facilities, and
20sewage treatment facilities, resulting from a State or
21federally declared disaster in Illinois or bordering Illinois
22when such repairs are initiated on facilities located in the
23declared disaster area within 6 months after the disaster.
24    (20) Beginning July 1, 1999, game or game birds sold at a
25"game breeding and hunting preserve area" as that term is used
26in the Wildlife Code. This paragraph is exempt from the

 

 

10000SB0009sam001- 405 -LRB100 06347 HLH 18430 a

1provisions of Section 3-55.
2    (21) A motor vehicle, as that term is defined in Section
31-146 of the Illinois Vehicle Code, that is donated to a
4corporation, limited liability company, society, association,
5foundation, or institution that is determined by the Department
6to be organized and operated exclusively for educational
7purposes. For purposes of this exemption, "a corporation,
8limited liability company, society, association, foundation,
9or institution organized and operated exclusively for
10educational purposes" means all tax-supported public schools,
11private schools that offer systematic instruction in useful
12branches of learning by methods common to public schools and
13that compare favorably in their scope and intensity with the
14course of study presented in tax-supported schools, and
15vocational or technical schools or institutes organized and
16operated exclusively to provide a course of study of not less
17than 6 weeks duration and designed to prepare individuals to
18follow a trade or to pursue a manual, technical, mechanical,
19industrial, business, or commercial occupation.
20    (22) Beginning January 1, 2000, personal property,
21including food, purchased through fundraising events for the
22benefit of a public or private elementary or secondary school,
23a group of those schools, or one or more school districts if
24the events are sponsored by an entity recognized by the school
25district that consists primarily of volunteers and includes
26parents and teachers of the school children. This paragraph

 

 

10000SB0009sam001- 406 -LRB100 06347 HLH 18430 a

1does not apply to fundraising events (i) for the benefit of
2private home instruction or (ii) for which the fundraising
3entity purchases the personal property sold at the events from
4another individual or entity that sold the property for the
5purpose of resale by the fundraising entity and that profits
6from the sale to the fundraising entity. This paragraph is
7exempt from the provisions of Section 3-55.
8    (23) Beginning January 1, 2000 and through December 31,
92001, new or used automatic vending machines that prepare and
10serve hot food and beverages, including coffee, soup, and other
11items, and replacement parts for these machines. Beginning
12January 1, 2002 and through June 30, 2003, machines and parts
13for machines used in commercial, coin-operated amusement and
14vending business if a use or occupation tax is paid on the
15gross receipts derived from the use of the commercial,
16coin-operated amusement and vending machines. This paragraph
17is exempt from the provisions of Section 3-55.
18    (24) Beginning on the effective date of this amendatory Act
19of the 92nd General Assembly, computers and communications
20equipment utilized for any hospital purpose and equipment used
21in the diagnosis, analysis, or treatment of hospital patients
22sold to a lessor who leases the equipment, under a lease of one
23year or longer executed or in effect at the time of the
24purchase, to a hospital that has been issued an active tax
25exemption identification number by the Department under
26Section 1g of the Retailers' Occupation Tax Act. This paragraph

 

 

10000SB0009sam001- 407 -LRB100 06347 HLH 18430 a

1is exempt from the provisions of Section 3-55.
2    (25) Beginning on the effective date of this amendatory Act
3of the 92nd General Assembly, personal property sold to a
4lessor who leases the property, under a lease of one year or
5longer executed or in effect at the time of the purchase, to a
6governmental body that has been issued an active tax exemption
7identification number by the Department under Section 1g of the
8Retailers' Occupation Tax Act. This paragraph is exempt from
9the provisions of Section 3-55.
10    (26) Beginning on January 1, 2002 and through June 30,
112016, tangible personal property purchased from an Illinois
12retailer by a taxpayer engaged in centralized purchasing
13activities in Illinois who will, upon receipt of the property
14in Illinois, temporarily store the property in Illinois (i) for
15the purpose of subsequently transporting it outside this State
16for use or consumption thereafter solely outside this State or
17(ii) for the purpose of being processed, fabricated, or
18manufactured into, attached to, or incorporated into other
19tangible personal property to be transported outside this State
20and thereafter used or consumed solely outside this State. The
21Director of Revenue shall, pursuant to rules adopted in
22accordance with the Illinois Administrative Procedure Act,
23issue a permit to any taxpayer in good standing with the
24Department who is eligible for the exemption under this
25paragraph (26). The permit issued under this paragraph (26)
26shall authorize the holder, to the extent and in the manner

 

 

10000SB0009sam001- 408 -LRB100 06347 HLH 18430 a

1specified in the rules adopted under this Act, to purchase
2tangible personal property from a retailer exempt from the
3taxes imposed by this Act. Taxpayers shall maintain all
4necessary books and records to substantiate the use and
5consumption of all such tangible personal property outside of
6the State of Illinois.
7    (27) Beginning January 1, 2008, tangible personal property
8used in the construction or maintenance of a community water
9supply, as defined under Section 3.145 of the Environmental
10Protection Act, that is operated by a not-for-profit
11corporation that holds a valid water supply permit issued under
12Title IV of the Environmental Protection Act. This paragraph is
13exempt from the provisions of Section 3-55.
14    (28) Tangible personal property sold to a
15public-facilities corporation, as described in Section
1611-65-10 of the Illinois Municipal Code, for purposes of
17constructing or furnishing a municipal convention hall, but
18only if the legal title to the municipal convention hall is
19transferred to the municipality without any further
20consideration by or on behalf of the municipality at the time
21of the completion of the municipal convention hall or upon the
22retirement or redemption of any bonds or other debt instruments
23issued by the public-facilities corporation in connection with
24the development of the municipal convention hall. This
25exemption includes existing public-facilities corporations as
26provided in Section 11-65-25 of the Illinois Municipal Code.

 

 

10000SB0009sam001- 409 -LRB100 06347 HLH 18430 a

1This paragraph is exempt from the provisions of Section 3-55.
2    (29) Beginning January 1, 2010, materials, parts,
3equipment, components, and furnishings incorporated into or
4upon an aircraft as part of the modification, refurbishment,
5completion, replacement, repair, or maintenance of the
6aircraft. This exemption includes consumable supplies used in
7the modification, refurbishment, completion, replacement,
8repair, and maintenance of aircraft, but excludes any
9materials, parts, equipment, components, and consumable
10supplies used in the modification, replacement, repair, and
11maintenance of aircraft engines or power plants, whether such
12engines or power plants are installed or uninstalled upon any
13such aircraft. "Consumable supplies" include, but are not
14limited to, adhesive, tape, sandpaper, general purpose
15lubricants, cleaning solution, latex gloves, and protective
16films. This exemption applies only to the transfer of
17qualifying tangible personal property incident to the
18modification, refurbishment, completion, replacement, repair,
19or maintenance of an aircraft by persons who (i) hold an Air
20Agency Certificate and are empowered to operate an approved
21repair station by the Federal Aviation Administration, (ii)
22have a Class IV Rating, and (iii) conduct operations in
23accordance with Part 145 of the Federal Aviation Regulations.
24The exemption does not include aircraft operated by a
25commercial air carrier providing scheduled passenger air
26service pursuant to authority issued under Part 121 or Part 129

 

 

10000SB0009sam001- 410 -LRB100 06347 HLH 18430 a

1of the Federal Aviation Regulations. The changes made to this
2paragraph (29) by Public Act 98-534 are declarative of existing
3law.
4    (30) Beginning January 1, 2017, menstrual pads, tampons,
5and menstrual cups.
6(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
798-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
87-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)
 
9    Section 30-40. The Retailers' Occupation Tax Act is amended
10by changing Sections 2-5, 2-45, and 2c and by adding Sections
112-6.5, 2-6.6, 2-6.7, 2-6.8, and 2-6.9 as follows:
 
12    (35 ILCS 120/2-5)
13    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
14sale of the following tangible personal property are exempt
15from the tax imposed by this Act:
16    (1) Farm chemicals.
17    (2) Farm machinery and equipment, both new and used,
18including that manufactured on special order, certified by the
19purchaser to be used primarily for production agriculture or
20State or federal agricultural programs, including individual
21replacement parts for the machinery and equipment, including
22machinery and equipment purchased for lease, and including
23implements of husbandry defined in Section 1-130 of the
24Illinois Vehicle Code, farm machinery and agricultural

 

 

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

 

 

10000SB0009sam001- 412 -LRB100 06347 HLH 18430 a

1provisions of Section 2-70.
2    (3) Until July 1, 2003, distillation machinery and
3equipment, sold as a unit or kit, assembled or installed by the
4retailer, certified by the user to be used only for the
5production of ethyl alcohol that will be used for consumption
6as motor fuel or as a component of motor fuel for the personal
7use of the user, and not subject to sale or resale.
8    (4) Until July 1, 2003 and beginning again September 1,
92004 through August 30, 2014, graphic arts machinery and
10equipment, including repair and replacement parts, both new and
11used, and including that manufactured on special order or
12purchased for lease, certified by the purchaser to be used
13primarily for graphic arts production. Equipment includes
14chemicals or chemicals acting as catalysts but only if the
15chemicals or chemicals acting as catalysts effect a direct and
16immediate change upon a graphic arts product. Beginning on July
171, 2017, graphic arts machinery and equipment is included in
18the manufacturing and assembling machinery and equipment
19exemption under paragraph (14).
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

 

 

10000SB0009sam001- 413 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 414 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 415 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 416 -LRB100 06347 HLH 18430 a

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
11of electricity for wholesale or retail sale; (ii) the
12generation or treatment of natural or artificial gas for
13wholesale or retail sale that is delivered to customers through
14pipes, pipelines, or mains; or (iii) the treatment of water for
15wholesale or retail sale that is delivered to customers through
16pipes, pipelines, or mains. The provisions of Public Act 98-583
17are declaratory of existing law as to the meaning and scope of
18this exemption. Beginning on July 1, 2017, the exemption
19provided by this paragraph (14) includes, but is not limited
20to, graphic arts machinery and equipment, as defined in
21paragraph (4) of this Section. Beginning on July 1, 2017, the
22exemption provided by this paragraph (14) includes, but is not
23limited to, production related tangible personal property, as
24defined in Section 2-45 of this Act. The exemption provided by
25this paragraph (14) is exempt from the provisions of Section
262-70.

 

 

10000SB0009sam001- 417 -LRB100 06347 HLH 18430 a

1    (15) Proceeds of mandatory service charges separately
2stated on customers' bills for purchase and consumption of food
3and beverages, to the extent that the proceeds of the service
4charge are in fact turned over as tips or as a substitute for
5tips to the employees who participate directly in preparing,
6serving, hosting or cleaning up the food or beverage function
7with respect to which the service charge is imposed.
8    (16) Petroleum products sold to a purchaser if the seller
9is prohibited by federal law from charging tax to the
10purchaser.
11    (17) Tangible personal property sold to a common carrier by
12rail or motor that receives the physical possession of the
13property in Illinois and that transports the property, or
14shares with another common carrier in the transportation of the
15property, out of Illinois on a standard uniform bill of lading
16showing the seller of the property as the shipper or consignor
17of the property to a destination outside Illinois, for use
18outside Illinois.
19    (18) Legal tender, currency, medallions, or gold or silver
20coinage issued by the State of Illinois, the government of the
21United States of America, or the government of any foreign
22country, and bullion.
23    (19) Until July 1 2003, oil field exploration, drilling,
24and production equipment, including (i) rigs and parts of rigs,
25rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
26tubular goods, including casing and drill strings, (iii) pumps

 

 

10000SB0009sam001- 418 -LRB100 06347 HLH 18430 a

1and pump-jack units, (iv) storage tanks and flow lines, (v) any
2individual replacement part for oil field exploration,
3drilling, and production equipment, and (vi) machinery and
4equipment purchased for lease; but excluding motor vehicles
5required to be registered under the Illinois Vehicle Code.
6    (20) Photoprocessing machinery and equipment, including
7repair and replacement parts, both new and used, including that
8manufactured on special order, certified by the purchaser to be
9used primarily for photoprocessing, and including
10photoprocessing machinery and equipment purchased for lease.
11    (21) Coal and aggregate exploration, mining, off-highway
12hauling, processing, maintenance, and reclamation equipment,
13including replacement parts and equipment, and including
14equipment purchased for lease, but excluding motor vehicles
15required to be registered under the Illinois Vehicle Code. The
16changes made to this Section by Public Act 97-767 apply on and
17after July 1, 2003, but no claim for credit or refund is
18allowed on or after August 16, 2013 (the effective date of
19Public Act 98-456) for such taxes paid during the period
20beginning July 1, 2003 and ending on August 16, 2013 (the
21effective date of Public Act 98-456).
22    (22) Until June 30, 2013, fuel and petroleum products sold
23to or used by an air carrier, certified by the carrier to be
24used for consumption, shipment, or storage in the conduct of
25its business as an air common carrier, for a flight destined
26for or returning from a location or locations outside the

 

 

10000SB0009sam001- 419 -LRB100 06347 HLH 18430 a

1United States without regard to previous or subsequent domestic
2stopovers.
3    Beginning July 1, 2013, fuel and petroleum products sold to
4or used by an air carrier, certified by the carrier to be used
5for consumption, shipment, or storage in the conduct of its
6business as an air common carrier, for a flight that (i) is
7engaged in foreign trade or is engaged in trade between the
8United States and any of its possessions and (ii) transports at
9least one individual or package for hire from the city of
10origination to the city of final destination on the same
11aircraft, without regard to a change in the flight number of
12that aircraft.
13    (23) A transaction in which the purchase order is received
14by a florist who is located outside Illinois, but who has a
15florist located in Illinois deliver the property to the
16purchaser or the purchaser's donee in Illinois.
17    (24) Fuel consumed or used in the operation of ships,
18barges, or vessels that are used primarily in or for the
19transportation of property or the conveyance of persons for
20hire on rivers bordering on this State if the fuel is delivered
21by the seller to the purchaser's barge, ship, or vessel while
22it is afloat upon that bordering river.
23    (25) Except as provided in item (25-5) of this Section, a
24motor vehicle sold in this State to a nonresident even though
25the motor vehicle is delivered to the nonresident in this
26State, if the motor vehicle is not to be titled in this State,

 

 

10000SB0009sam001- 420 -LRB100 06347 HLH 18430 a

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

 

 

10000SB0009sam001- 421 -LRB100 06347 HLH 18430 a

1residence. In addition, the retailer must retain a signed copy
2of the statement in his or her records. Nothing in this item
3shall be construed to require the removal of the vehicle from
4this state following the filing of an intent to title the
5vehicle in the purchaser's state of residence if the purchaser
6titles the vehicle in his or her state of residence within 30
7days after the date of sale. The tax collected under this Act
8in accordance with this item (25-5) shall be proportionately
9distributed as if the tax were collected at the 6.25% general
10rate imposed under this Act.
11    (25-7) Beginning on July 1, 2007, no tax is imposed under
12this Act on the sale of an aircraft, as defined in Section 3 of
13the Illinois Aeronautics Act, if all of the following
14conditions are met:
15        (1) the aircraft leaves this State within 15 days after
16    the later of either the issuance of the final billing for
17    the sale of the aircraft, or the authorized approval for
18    return to service, completion of the maintenance record
19    entry, and completion of the test flight and ground test
20    for inspection, as required by 14 C.F.R. 91.407;
21        (2) the aircraft is not based or registered in this
22    State after the sale of the aircraft; and
23        (3) the seller retains in his or her books and records
24    and provides to the Department a signed and dated
25    certification from the purchaser, on a form prescribed by
26    the Department, certifying that the requirements of this

 

 

10000SB0009sam001- 422 -LRB100 06347 HLH 18430 a

1    item (25-7) are met. The certificate must also include the
2    name and address of the purchaser, the address of the
3    location where the aircraft is to be titled or registered,
4    the address of the primary physical location of the
5    aircraft, and other information that the Department may
6    reasonably require.
7    For purposes of this item (25-7):
8    "Based in this State" means hangared, stored, or otherwise
9used, excluding post-sale customizations as defined in this
10Section, for 10 or more days in each 12-month period
11immediately following the date of the sale of the aircraft.
12    "Registered in this State" means an aircraft registered
13with the Department of Transportation, Aeronautics Division,
14or titled or registered with the Federal Aviation
15Administration to an address located in this State.
16    This paragraph (25-7) is exempt from the provisions of
17Section 2-70.
18    (26) Semen used for artificial insemination of livestock
19for direct agricultural production.
20    (27) Horses, or interests in horses, registered with and
21meeting the requirements of any of the Arabian Horse Club
22Registry of America, Appaloosa Horse Club, American Quarter
23Horse Association, United States Trotting Association, or
24Jockey Club, as appropriate, used for purposes of breeding or
25racing for prizes. This item (27) is exempt from the provisions
26of Section 2-70, and the exemption provided for under this item

 

 

10000SB0009sam001- 423 -LRB100 06347 HLH 18430 a

1(27) applies for all periods beginning May 30, 1995, but no
2claim for credit or refund is allowed on or after January 1,
32008 (the effective date of Public Act 95-88) for such taxes
4paid during the period beginning May 30, 2000 and ending on
5January 1, 2008 (the effective date of Public Act 95-88).
6    (28) Computers and communications equipment utilized for
7any hospital purpose and equipment used in the diagnosis,
8analysis, or treatment of hospital patients sold to a lessor
9who leases the equipment, under a lease of one year or longer
10executed or in effect at the time of the purchase, to a
11hospital that has been issued an active tax exemption
12identification number by the Department under Section 1g of
13this Act.
14    (29) Personal property sold to a lessor who leases the
15property, under a lease of one year or longer executed or in
16effect at the time of the purchase, to a governmental body that
17has been issued an active tax exemption identification number
18by the Department under Section 1g of this Act.
19    (30) Beginning with taxable years ending on or after
20December 31, 1995 and ending with taxable years ending on or
21before December 31, 2004, personal property that is donated for
22disaster relief to be used in a State or federally declared
23disaster area in Illinois or bordering Illinois by a
24manufacturer or retailer that is registered in this State to a
25corporation, society, association, foundation, or institution
26that has been issued a sales tax exemption identification

 

 

10000SB0009sam001- 424 -LRB100 06347 HLH 18430 a

1number by the Department that assists victims of the disaster
2who reside within the declared disaster area.
3    (31) Beginning with taxable years ending on or after
4December 31, 1995 and ending with taxable years ending on or
5before December 31, 2004, personal property that is used in the
6performance of infrastructure repairs in this State, including
7but not limited to municipal roads and streets, access roads,
8bridges, sidewalks, waste disposal systems, water and sewer
9line extensions, water distribution and purification
10facilities, storm water drainage and retention facilities, and
11sewage treatment facilities, resulting from a State or
12federally declared disaster in Illinois or bordering Illinois
13when such repairs are initiated on facilities located in the
14declared disaster area within 6 months after the disaster.
15    (32) Beginning July 1, 1999, game or game birds sold at a
16"game breeding and hunting preserve area" as that term is used
17in the Wildlife Code. This paragraph is exempt from the
18provisions of Section 2-70.
19    (33) A motor vehicle, as that term is defined in Section
201-146 of the Illinois Vehicle Code, that is donated to a
21corporation, limited liability company, society, association,
22foundation, or institution that is determined by the Department
23to be organized and operated exclusively for educational
24purposes. For purposes of this exemption, "a corporation,
25limited liability company, society, association, foundation,
26or institution organized and operated exclusively for

 

 

10000SB0009sam001- 425 -LRB100 06347 HLH 18430 a

1educational purposes" means all tax-supported public schools,
2private schools that offer systematic instruction in useful
3branches of learning by methods common to public schools and
4that compare favorably in their scope and intensity with the
5course of study presented in tax-supported schools, and
6vocational or technical schools or institutes organized and
7operated exclusively to provide a course of study of not less
8than 6 weeks duration and designed to prepare individuals to
9follow a trade or to pursue a manual, technical, mechanical,
10industrial, business, or commercial occupation.
11    (34) Beginning January 1, 2000, personal property,
12including food, purchased through fundraising events for the
13benefit of a public or private elementary or secondary school,
14a group of those schools, or one or more school districts if
15the events are sponsored by an entity recognized by the school
16district that consists primarily of volunteers and includes
17parents and teachers of the school children. This paragraph
18does not apply to fundraising events (i) for the benefit of
19private home instruction or (ii) for which the fundraising
20entity purchases the personal property sold at the events from
21another individual or entity that sold the property for the
22purpose of resale by the fundraising entity and that profits
23from the sale to the fundraising entity. This paragraph is
24exempt from the provisions of Section 2-70.
25    (35) Beginning January 1, 2000 and through December 31,
262001, new or used automatic vending machines that prepare and

 

 

10000SB0009sam001- 426 -LRB100 06347 HLH 18430 a

1serve hot food and beverages, including coffee, soup, and other
2items, and replacement parts for these machines. Beginning
3January 1, 2002 and through June 30, 2003, machines and parts
4for machines used in commercial, coin-operated amusement and
5vending business if a use or occupation tax is paid on the
6gross receipts derived from the use of the commercial,
7coin-operated amusement and vending machines. This paragraph
8is exempt from the provisions of Section 2-70.
9    (35-5) Beginning August 23, 2001 and through June 30, 2016,
10food for human consumption that is to be consumed off the
11premises where it is sold (other than alcoholic beverages, soft
12drinks, and food that has been prepared for immediate
13consumption) and prescription and nonprescription medicines,
14drugs, medical appliances, and insulin, urine testing
15materials, syringes, and needles used by diabetics, for human
16use, when purchased for use by a person receiving medical
17assistance under Article V of the Illinois Public Aid Code who
18resides in a licensed long-term care facility, as defined in
19the Nursing Home Care Act, or a licensed facility as defined in
20the ID/DD Community Care Act, the MC/DD Act, or the Specialized
21Mental Health Rehabilitation Act of 2013.
22    (36) Beginning August 2, 2001, computers and
23communications equipment utilized for any hospital purpose and
24equipment used in the diagnosis, analysis, or treatment of
25hospital patients sold to a lessor who leases the equipment,
26under a lease of one year or longer executed or in effect at

 

 

10000SB0009sam001- 427 -LRB100 06347 HLH 18430 a

1the time of the purchase, to a hospital that has been issued an
2active tax exemption identification number by the Department
3under Section 1g of this Act. This paragraph is exempt from the
4provisions of Section 2-70.
5    (37) Beginning August 2, 2001, personal property sold to a
6lessor who leases the property, under a lease of one year or
7longer executed or in effect at the time of the purchase, to a
8governmental body that has been issued an active tax exemption
9identification number by the Department under Section 1g of
10this Act. This paragraph is exempt from the provisions of
11Section 2-70.
12    (38) Beginning on January 1, 2002 and through June 30,
132016, tangible personal property purchased from an Illinois
14retailer by a taxpayer engaged in centralized purchasing
15activities in Illinois who will, upon receipt of the property
16in Illinois, temporarily store the property in Illinois (i) for
17the purpose of subsequently transporting it outside this State
18for use or consumption thereafter solely outside this State or
19(ii) for the purpose of being processed, fabricated, or
20manufactured into, attached to, or incorporated into other
21tangible personal property to be transported outside this State
22and thereafter used or consumed solely outside this State. The
23Director of Revenue shall, pursuant to rules adopted in
24accordance with the Illinois Administrative Procedure Act,
25issue a permit to any taxpayer in good standing with the
26Department who is eligible for the exemption under this

 

 

10000SB0009sam001- 428 -LRB100 06347 HLH 18430 a

1paragraph (38). The permit issued under this paragraph (38)
2shall authorize the holder, to the extent and in the manner
3specified in the rules adopted under this Act, to purchase
4tangible personal property from a retailer exempt from the
5taxes imposed by this Act. Taxpayers shall maintain all
6necessary books and records to substantiate the use and
7consumption of all such tangible personal property outside of
8the State of Illinois.
9    (39) Beginning January 1, 2008, tangible personal property
10used in the construction or maintenance of a community water
11supply, as defined under Section 3.145 of the Environmental
12Protection Act, that is operated by a not-for-profit
13corporation that holds a valid water supply permit issued under
14Title IV of the Environmental Protection Act. This paragraph is
15exempt from the provisions of Section 2-70.
16    (40) Beginning January 1, 2010, materials, parts,
17equipment, components, and furnishings incorporated into or
18upon an aircraft as part of the modification, refurbishment,
19completion, replacement, repair, or maintenance of the
20aircraft. This exemption includes consumable supplies used in
21the modification, refurbishment, completion, replacement,
22repair, and maintenance of aircraft, but excludes any
23materials, parts, equipment, components, and consumable
24supplies used in the modification, replacement, repair, and
25maintenance of aircraft engines or power plants, whether such
26engines or power plants are installed or uninstalled upon any

 

 

10000SB0009sam001- 429 -LRB100 06347 HLH 18430 a

1such aircraft. "Consumable supplies" include, but are not
2limited to, adhesive, tape, sandpaper, general purpose
3lubricants, cleaning solution, latex gloves, and protective
4films. This exemption applies only to the sale of qualifying
5tangible personal property to persons who modify, refurbish,
6complete, replace, or maintain an aircraft and who (i) hold an
7Air Agency Certificate and are empowered to operate an approved
8repair station by the Federal Aviation Administration, (ii)
9have a Class IV Rating, and (iii) conduct operations in
10accordance with Part 145 of the Federal Aviation Regulations.
11The exemption does not include aircraft operated by a
12commercial air carrier providing scheduled passenger air
13service pursuant to authority issued under Part 121 or Part 129
14of the Federal Aviation Regulations. The changes made to this
15paragraph (40) by Public Act 98-534 are declarative of existing
16law.
17    (41) Tangible personal property sold to a
18public-facilities corporation, as described in Section
1911-65-10 of the Illinois Municipal Code, for purposes of
20constructing or furnishing a municipal convention hall, but
21only if the legal title to the municipal convention hall is
22transferred to the municipality without any further
23consideration by or on behalf of the municipality at the time
24of the completion of the municipal convention hall or upon the
25retirement or redemption of any bonds or other debt instruments
26issued by the public-facilities corporation in connection with

 

 

10000SB0009sam001- 430 -LRB100 06347 HLH 18430 a

1the development of the municipal convention hall. This
2exemption includes existing public-facilities corporations as
3provided in Section 11-65-25 of the Illinois Municipal Code.
4This paragraph is exempt from the provisions of Section 2-70.
5    (42) Beginning January 1, 2017, menstrual pads, tampons,
6and menstrual cups.
7(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
898-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
91-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
107-29-15; 99-855, eff. 8-19-16.)
 
11    (35 ILCS 120/2-6.5 new)
12    Sec. 2-6.5. Storage Excise Tax exemption. Retailers may
13make exempt sales to providers, as defined in the Storage
14Excise Tax Act, of tangible personal property that will be
15transferred to purchasers as part of a sale of service subject
16to tax under the Storage Excise Tax Act if the retailer could
17make an exempt sale, other than resale, of that tangible
18personal property to those purchasers under any provision of
19this Act.
 
20    (35 ILCS 120/2-6.6 new)
21    Sec. 2-6.6. Amusement Excise Tax exemption. Retailers may
22make exempt sales to providers, as defined in the Amusement
23Excise Tax Act, of tangible personal property that will be
24transferred to purchasers as part of a sale of service subject

 

 

10000SB0009sam001- 431 -LRB100 06347 HLH 18430 a

1to tax under the Amusement Excise Tax Act if the retailer could
2make an exempt sale, other than resale, of that tangible
3personal property to those purchasers under any provision of
4this Act.
 
5    (35 ILCS 120/2-6.7 new)
6    Sec. 2-6.7. Repair and Maintenance Excise Tax exemption.
7Retailers may make exempt sales to providers, as defined in the
8Repair and Maintenance Excise Tax Act, of tangible personal
9property that will be transferred to purchasers as part of a
10sale of service subject to tax under the Repair and Maintenance
11Excise Tax Act if the retailer could make an exempt sale, other
12than resale, of that tangible personal property to those
13purchasers under any provision of this Act.
 
14    (35 ILCS 120/2-6.8 new)
15    Sec. 2-6.8. Landscaping Excise Tax exemption. Retailers
16may make exempt sales to providers, as defined in the
17Landscaping Excise Tax Act, of tangible personal property that
18will be transferred to purchasers as part of a sale of service
19subject to tax under the Landscaping Excise Tax Act if the
20retailer could make an exempt sale, other than resale, of that
21tangible personal property to those purchasers under any
22provision of this Act.
 
23    (35 ILCS 120/2-6.9 new)

 

 

10000SB0009sam001- 432 -LRB100 06347 HLH 18430 a

1    Sec. 2-6.9. Laundry and Drycleaning Excise Tax exemption.
2Retailers may make exempt sales to providers, as defined in the
3Laundry and Drycleaning Excise Tax Act, of tangible personal
4property that will be transferred to purchasers as part of a
5sale of service subject to tax under the Laundry and
6Drycleaning Excise Tax Act if the retailer could make an exempt
7sale, other than resale, of that tangible personal property to
8those purchasers under any provision of this Act.
 
9    (35 ILCS 120/2-45)  (from Ch. 120, par. 441-45)
10    Sec. 2-45. Manufacturing and assembly exemption. The
11manufacturing and assembly machinery and equipment exemption
12includes machinery and equipment that replaces machinery and
13equipment in an existing manufacturing facility as well as
14machinery and equipment that are for use in an expanded or new
15manufacturing facility.
16    The machinery and equipment exemption also includes
17machinery and equipment used in the general maintenance or
18repair of exempt machinery and equipment or for in-house
19manufacture of exempt machinery and equipment. Beginning on
20July 1, 2017, the manufacturing and assembling machinery and
21equipment exemption also includes graphic arts machinery and
22equipment, as defined in paragraph (4) of Section 2-5.
23Beginning on July 1, 2017, the manufacturing and assembling
24machinery and equipment exemption also includes production
25related tangible personal property, as defined in this Section.

 

 

10000SB0009sam001- 433 -LRB100 06347 HLH 18430 a

1The machinery and equipment exemption does not include
2machinery and equipment used in (i) the generation of
3electricity for wholesale or retail sale; (ii) the generation
4or treatment of natural or artificial gas for wholesale or
5retail sale that is delivered to customers through pipes,
6pipelines, or mains; or (iii) the treatment of water for
7wholesale or retail sale that is delivered to customers through
8pipes, pipelines, or mains. The provisions of this amendatory
9Act of the 98th General Assembly are declaratory of existing
10law as to the meaning and scope of this exemption. For the
11purposes of this exemption, terms have the following meanings:
12        (1) "Manufacturing process" means the production of an
13    article of tangible personal property, whether the article
14    is a finished product or an article for use in the process
15    of manufacturing or assembling a different article of
16    tangible personal property, by a procedure commonly
17    regarded as manufacturing, processing, fabricating, or
18    refining that changes some existing material or materials
19    into a material with a different form, use, or name. In
20    relation to a recognized integrated business composed of a
21    series of operations that collectively constitute
22    manufacturing, or individually constitute manufacturing
23    operations, the manufacturing process commences with the
24    first operation or stage of production in the series and
25    does not end until the completion of the final product in
26    the last operation or stage of production in the series.

 

 

10000SB0009sam001- 434 -LRB100 06347 HLH 18430 a

1    For purposes of this exemption, photoprocessing is a
2    manufacturing process of tangible personal property for
3    wholesale or retail sale.
4        (2) "Assembling process" means the production of an
5    article of tangible personal property, whether the article
6    is a finished product or an article for use in the process
7    of manufacturing or assembling a different article of
8    tangible personal property, by the combination of existing
9    materials in a manner commonly regarded as assembling that
10    results in a material of a different form, use, or name.
11        (3) "Machinery" means major mechanical machines or
12    major components of those machines contributing to a
13    manufacturing or assembling process.
14        (4) "Equipment" includes an independent device or tool
15    separate from machinery but essential to an integrated
16    manufacturing or assembly process; including computers
17    used primarily in a manufacturer's computer assisted
18    design, computer assisted manufacturing (CAD/CAM) system;
19    any subunit or assembly comprising a component of any
20    machinery or auxiliary, adjunct, or attachment parts of
21    machinery, such as tools, dies, jigs, fixtures, patterns,
22    and molds; and any parts that require periodic replacement
23    in the course of normal operation; but does not include
24    hand tools. Equipment includes chemicals or chemicals
25    acting as catalysts but only if the chemicals or chemicals
26    acting as catalysts effect a direct and immediate change

 

 

10000SB0009sam001- 435 -LRB100 06347 HLH 18430 a

1    upon a product being manufactured or assembled for
2    wholesale or retail sale or lease.
3        (5) "Production related tangible personal property"
4    means all tangible personal property that is used or
5    consumed by the purchaser in a manufacturing facility in
6    which a manufacturing process takes place and includes,
7    without limitation, tangible personal property that is
8    purchased for incorporation into real estate within a
9    manufacturing facility and tangible personal property that
10    is used or consumed in activities such as research and
11    development, preproduction material handling, receiving,
12    quality control, inventory control, storage, staging, and
13    packaging for shipping and transportation purposes.
14    "Production related tangible personal property" does not
15    include (i) tangible personal property that is used, within
16    or without a manufacturing facility, in sales, purchasing,
17    accounting, fiscal management, marketing, personnel
18    recruitment or selection, or landscaping or (ii) tangible
19    personal property that is required to be titled or
20    registered with a department, agency, or unit of federal,
21    State, or local government.
22    The manufacturing and assembling machinery and equipment
23exemption includes production related tangible personal
24property that is purchased (i) on or after July 1, 2007 and on
25or before June 30, 2008 or (ii) on and after July 1, 2017. The
26exemption for production related tangible personal property

 

 

10000SB0009sam001- 436 -LRB100 06347 HLH 18430 a

1purchased on or after July 1, 2007 and on or before June 30,
22008 is subject to both of the following limitations:
3        (1) The maximum amount of the exemption for any one
4    taxpayer may not exceed 5% of the purchase price of
5    production related tangible personal property that is
6    purchased on or after July 1, 2007 and on or before June
7    30, 2008. A credit under Section 3-85 of this Act may not
8    be earned by the purchase of production related tangible
9    personal property for which an exemption is received under
10    this Section.
11        (2) The maximum aggregate amount of the exemptions for
12    production related tangible personal property awarded
13    under this Act and the Use Tax Act to all taxpayers may not
14    exceed $10,000,000. If the claims for the exemption exceed
15    $10,000,000, then the Department shall reduce the amount of
16    the exemption to each taxpayer on a pro rata basis.
17The Department may adopt rules to implement and administer the
18exemption for production related tangible personal property.
19    The manufacturing and assembling machinery and equipment
20exemption includes the sale of materials to a purchaser who
21produces exempted types of machinery, equipment, or tools and
22who rents or leases that machinery, equipment, or tools to a
23manufacturer of tangible personal property. This exemption
24also includes the sale of materials to a purchaser who
25manufactures those materials into an exempted type of
26machinery, equipment, or tools that the purchaser uses himself

 

 

10000SB0009sam001- 437 -LRB100 06347 HLH 18430 a

1or herself in the manufacturing of tangible personal property.
2The purchaser of the machinery and equipment who has an active
3resale registration number shall furnish that number to the
4seller at the time of purchase. A purchaser of the machinery,
5equipment, and tools without an active resale registration
6number shall furnish to the seller a certificate of exemption
7for each transaction stating facts establishing the exemption
8for that transaction, and that certificate shall be available
9to the Department for inspection or audit. Informal rulings,
10opinions, or letters issued by the Department in response to an
11inquiry or request for an opinion from any person regarding the
12coverage and applicability of this exemption to specific
13devices shall be published, maintained as a public record, and
14made available for public inspection and copying. If the
15informal ruling, opinion, or letter contains trade secrets or
16other confidential information, where possible, the Department
17shall delete that information before publication. Whenever
18informal rulings, opinions, or letters contain a policy of
19general applicability, the Department shall formulate and
20adopt that policy as a rule in accordance with the Illinois
21Administrative Procedure Act.
22    The manufacturing and assembling machinery and equipment
23exemption is exempt from the provisions of Section 2-70.
24(Source: P.A. 98-583, eff. 1-1-14.)
 
25    (35 ILCS 120/2c)  (from Ch. 120, par. 441c)

 

 

10000SB0009sam001- 438 -LRB100 06347 HLH 18430 a

1    Sec. 2c. If the purchaser is not registered with the
2Department as a taxpayer, but claims to be a reseller of the
3tangible personal property in such a way that such resales are
4not taxable under this Act or under some other tax law which
5the Department may administer, such purchaser (except in the
6case of an out-of-State purchaser who will always resell and
7deliver the property to his customers outside Illinois) shall
8apply to the Department for a resale number. Such applicant
9shall state facts which will show the Department why such
10applicant is not liable for tax under this Act or under some
11other tax law which the Department may administer on any of his
12resales and shall furnish such additional information as the
13Department may reasonably require.
14    Upon approval of the application, the Department shall
15assign a resale number to the applicant and shall certify such
16number to him. The Department may cancel any such number which
17is obtained through misrepresentation, or which is used to make
18a purchase tax-free when the purchase in fact is not a purchase
19for resale, or which no longer applies because of the
20purchaser's having discontinued the making of tax exempt
21resales of the property.
22    The Department may restrict the use of the number to one
23year at a time or to some other definite period if the
24Department finds it impracticable or otherwise inadvisable to
25issue such numbers for indefinite periods.
26    Except as provided hereinabove in this Section, a sale

 

 

10000SB0009sam001- 439 -LRB100 06347 HLH 18430 a

1shall be made tax-free on the ground of being a sale for resale
2if the purchaser has an active registration number or resale
3number from the Department and furnishes that number to the
4seller in connection with certifying to the seller that any
5sale to such purchaser is nontaxable because of being a sale
6for resale.
7    Failure to present an active registration number or resale
8number and a certification to the seller that a sale is for
9resale creates a presumption that a sale is not for resale.
10This presumption may be rebutted by other evidence that all of
11the seller's sales are sale for resale, or that a particular
12sale is a sale for resale.
13    A provider under the Storage Excise Tax Act who is required
14to collect the tax imposed under that Act is not authorized to
15purchase tangible personal property for resale which he or she
16will transfer incident to a sale of service subject to tax
17under that Act. However, any provider who also makes sales of
18that tangible personal property at retail and who has properly
19elected to use the method of calculating tax provided in
20subsection (e) of Section 5-10 of the Storage Excise Tax Act
21may provide resale certificates to his or her suppliers for
22tangible personal property that will be transferred incident to
23sales of service.
24    A provider under the Amusement Excise Tax Act who is
25required to collect the tax imposed under that Act is not
26authorized to purchase tangible personal property for resale

 

 

10000SB0009sam001- 440 -LRB100 06347 HLH 18430 a

1which he or she will transfer incident to a sale of service
2subject to tax under that Act. However, any provider who also
3makes sales of that tangible personal property at retail and
4who has properly elected to use the method of calculating tax
5provided in subsection (e) of Section 10 of the Amusement
6Excise Tax Act may provide resale certificates to his or her
7suppliers for tangible personal property that will be
8transferred incident to sales of service.
9    A provider under the Repair and Maintenance Excise Tax Act
10who is required to collect the tax imposed under that Act is
11not authorized to purchase tangible personal property for
12resale which he or she will transfer incident to a sale of
13service subject to tax under that Act. However, any provider
14who also makes sales of that tangible personal property at
15retail and who has properly elected to use the method of
16calculating tax provided in subsection (e) of Section 10 of the
17Repair and Maintenance Excise Tax Act may provide resale
18certificates to his or her suppliers for tangible personal
19property that will be transferred incident to sales of service.
20    A provider under the Landscaping Excise Tax Act who is
21required to collect the tax imposed under that Act is not
22authorized to purchase tangible personal property for resale
23which he or she will transfer incident to a sale of service
24subject to tax under that Act. However, any provider who also
25makes sales of that tangible personal property at retail, and
26who has properly elected to use the method of calculating tax

 

 

10000SB0009sam001- 441 -LRB100 06347 HLH 18430 a

1under subsection (e) of Section 10 of the Landscaping Excise
2Tax Act, may provide resale certificates to his or her
3suppliers for tangible personal property that will be
4transferred incident to sales of service.
5    A provider under the Laundry and Drycleaning Excise Tax Act
6who is required to collect the tax imposed under that Act is
7not authorized to purchase tangible personal property for
8resale which he or she will transfer incident to a sale of
9service subject to tax under that Act. However, any provider
10who also makes sales of that tangible personal property at
11retail and who has properly elected to use the method of
12calculating tax provided in subsection (e) of Section 10 of the
13Laundry and Drycleaning Excise Tax Act may provide resale
14certificates to his or her suppliers for tangible personal
15property that will be transferred incident to sales of service.
16(Source: P.A. 83-1463.)
 
17    Section 30-45. The Live Adult Entertainment Facility
18Surcharge Act is amended by adding Section 1.1 as follows:
 
19    (35 ILCS 175/1.1 new)
20    Sec. 1.1. Applicability. This Act is not applicable to
21operators of live adult entertainment facilities on and after
22January 1, 2018. This amendatory Act of the 100th General
23Assembly does not affect surcharge liability that arose before
24January 1, 2018.
 

 

 

10000SB0009sam001- 442 -LRB100 06347 HLH 18430 a

1    Section 30-50. The Property Tax Code is amended by changing
2Sections 11-10, 11-15, and 11-25 as follows:
 
3    (35 ILCS 200/11-10)
4    Sec. 11-10. Definition of pollution control facilities.
5"Pollution control facilities" means any system, method,
6construction, device or appliance appurtenant thereto, or any
7portion of any building or equipment, that is designed,
8constructed, installed or operated for the primary purpose of:
9    (a) eliminating, preventing, or reducing air or water
10pollution, as the terms "air pollution" and "water pollution"
11are defined in the Environmental Protection Act, in compliance
12with federal or State requirements enacted or promulgated to
13eliminate, prevent, or reduce air pollution or water pollution;
14or
15    (b) treating, pretreating, modifying or disposing of any
16potential solid, liquid or gaseous pollutant which if released
17without treatment, pretreatment, modification or disposal
18might be harmful, detrimental or offensive to human, plant or
19animal life, or to property. "Pollution control facilities"
20shall not include, however,
21        (1) any facility with the primary purpose of (i)
22    eliminating, containing, preventing or reducing
23    radioactive contaminants or energy, or (ii) treating waste
24    water produced by the nuclear generation of electric power,

 

 

10000SB0009sam001- 443 -LRB100 06347 HLH 18430 a

1        (2) any large diameter pipes or piping systems used to
2    remove and disperse heat from water involved in the nuclear
3    generation of electric power,
4        (3) any facility operated by any person other than a
5    unit of government, whether within or outside of the
6    territorial boundaries of a unit of local government, for
7    sewage disposal or treatment, or
8        (4) land underlying a cooling pond, .
9        (5) wind turbines, or
10        (6) ethanol producing facilities, except that systems,
11    methods, construction, devices, or appliances appurtenant
12    to those ethanol producing facilities may be considered
13    pollution control facilities for the purposes of this Act.
14(Source: P.A. 83-883; 88-455.)
 
15    (35 ILCS 200/11-15)
16    Sec. 11-15. Method of valuation for pollution control
17facilities. To determine 33 1/3% of the fair cash value of any
18certified pollution control facilities in assessing those
19facilities, the Department shall, where reasonable, consider:
20(1) take into consideration the actual or probable net earnings
21attributable to the facilities in question, capitalized on the
22basis of their productive earning value to their owner; (2) the
23probable net value which could be realized by their owner if
24the facilities were removed and sold at a fair, voluntary sale,
25giving due account to the expense of removal and condition of

 

 

10000SB0009sam001- 444 -LRB100 06347 HLH 18430 a

1the particular facilities in question; or (3) such and other
2information as the Department may, consistent with principles
3set forth in this Section, believe to have a bearing on the
4fair cash value of the facilities to their owner consider as
5bearing on the fair cash value of the facilities to their
6owner, consistent with the principles set forth in this
7Section. For the purposes of this Code, earnings shall be
8attributed to a pollution control facility only to the extent
9that its operation results in the production of a commercially
10saleable by-product, or increases the production of the
11products or services otherwise sold by the owner of the
12facility, or reduces the production costs of the products or
13services otherwise sold by the owner of such facility.
14(Source: P.A. 83-121; 88-455.)
 
15    (35 ILCS 200/11-25)
16    Sec. 11-25. Certification procedure. Application for a
17pollution control facility certificate shall be filed with the
18Pollution Control Board in a manner and form prescribed in
19regulations issued by that board. The application shall contain
20appropriate and available descriptive information concerning
21anything claimed to be entitled in whole or in part to tax
22treatment as a pollution control facility. If it is found that
23the claimed facility or relevant portion thereof is a pollution
24control facility as defined in Section 11-10, the Pollution
25Control Board, acting through its Chairman or his or her

 

 

10000SB0009sam001- 445 -LRB100 06347 HLH 18430 a

1specifically authorized delegate, shall enter a finding and
2issue a certificate to that effect. The certificate shall
3require tax treatment as a pollution control facility, but only
4for the portion certified if only a portion is certified. The
5effective date of a certificate shall be January 1 of the year
6in which the certificate is issued the date of application for
7the certificate or the date of the construction of the
8facility, which ever is later.
9(Source: P.A. 76-2451; 88-455; revised 9-13-16.)
 
10    Section 30-55. The Telecommunications Excise Tax Act is
11amended by changing Sections 2 and 6 and by adding Section 4.1
12as follows:
 
13    (35 ILCS 630/2)  (from Ch. 120, par. 2002)
14    Sec. 2. As used in this Article, unless the context clearly
15requires otherwise:
16    (a) "Gross charge" means the amount paid for the act or
17privilege of originating or receiving telecommunications in
18this State and for all services and equipment provided in
19connection therewith by a retailer, valued in money whether
20paid in money or otherwise, including cash, credits, services
21and property of every kind or nature, and shall be determined
22without any deduction on account of the cost of such
23telecommunications, the cost of materials used, labor or
24service costs or any other expense whatsoever. In case credit

 

 

10000SB0009sam001- 446 -LRB100 06347 HLH 18430 a

1is extended, the amount thereof shall be included only as and
2when paid. "Gross charges" for private line service shall
3include charges imposed at each channel termination point
4within this State, charges for the channel mileage between each
5channel termination point within this State, and charges for
6that portion of the interstate inter-office channel provided
7within Illinois. Charges for that portion of the interstate
8inter-office channel provided in Illinois shall be determined
9by the retailer as follows: (i) for interstate inter-office
10channels having 2 channel termination points, only one of which
11is in Illinois, 50% of the total charge imposed; or (ii) for
12interstate inter-office channels having more than 2 channel
13termination points, one or more of which are in Illinois, an
14amount equal to the total charge multiplied by a fraction, the
15numerator of which is the number of channel termination points
16within Illinois and the denominator of which is the total
17number of channel termination points. Prior to January 1, 2004,
18any method consistent with this paragraph or other method that
19reasonably apportions the total charges for interstate
20inter-office channels among the states in which channel
21terminations points are located shall be accepted as a
22reasonable method to determine the charges for that portion of
23the interstate inter-office channel provided within Illinois
24for that period. However, "gross charges" shall not include any
25of the following:
26        (1) Any amounts added to a purchaser's bill because of

 

 

10000SB0009sam001- 447 -LRB100 06347 HLH 18430 a

1    a charge made pursuant to (i) the tax imposed by this
2    Article; (ii) charges added to customers' bills pursuant to
3    the provisions of Sections 9-221 or 9-222 of the Public
4    Utilities Act, as amended, or any similar charges added to
5    customers' bills by retailers who are not subject to rate
6    regulation by the Illinois Commerce Commission for the
7    purpose of recovering any of the tax liabilities or other
8    amounts specified in such provisions of such Act; (iii) the
9    tax imposed by Section 4251 of the Internal Revenue Code;
10    (iv) 911 surcharges; or (v) the tax imposed by the
11    Simplified Municipal Telecommunications Tax Act.
12        (2) Charges for a sent collect telecommunication
13    received outside of the State.
14        (3) Charges for leased time on equipment or charges for
15    the storage of data or information for subsequent retrieval
16    or the processing of data or information intended to change
17    its form or content. Such equipment includes, but is not
18    limited to, the use of calculators, computers, data
19    processing equipment, tabulating equipment or accounting
20    equipment and also includes the usage of computers under a
21    time-sharing agreement.
22        (4) Charges for customer equipment, including such
23    equipment that is leased or rented by the customer from any
24    source, wherein such charges are disaggregated and
25    separately identified from other charges.
26        (5) Charges to business enterprises certified under

 

 

10000SB0009sam001- 448 -LRB100 06347 HLH 18430 a

1    Section 9-222.1 of the Public Utilities Act, as amended, to
2    the extent of such exemption and during the period of time
3    specified by the Department of Commerce and Economic
4    Opportunity.
5        (6) Charges for telecommunications and all services
6    and equipment provided in connection therewith between a
7    parent corporation and its wholly owned subsidiaries or
8    between wholly owned subsidiaries when the tax imposed
9    under this Article has already been paid to a retailer and
10    only to the extent that the charges between the parent
11    corporation and wholly owned subsidiaries or between
12    wholly owned subsidiaries represent expense allocation
13    between the corporations and not the generation of profit
14    for the corporation rendering such service.
15        (7) Bad debts. Bad debt means any portion of a debt
16    that is related to a sale at retail for which gross charges
17    are not otherwise deductible or excludable that has become
18    worthless or uncollectable, as determined under applicable
19    federal income tax standards. If the portion of the debt
20    deemed to be bad is subsequently paid, the retailer shall
21    report and pay the tax on that portion during the reporting
22    period in which the payment is made.
23        (8) Charges paid by inserting coins in coin-operated
24    telecommunication devices.
25        (9) Amounts paid by telecommunications retailers under
26    the Telecommunications Municipal Infrastructure

 

 

10000SB0009sam001- 449 -LRB100 06347 HLH 18430 a

1    Maintenance Fee Act.
2        (10) Charges for nontaxable services or
3    telecommunications if (i) those charges are aggregated
4    with other charges for telecommunications that are
5    taxable, (ii) those charges are not separately stated on
6    the customer bill or invoice, and (iii) the retailer can
7    reasonably identify the nontaxable charges on the
8    retailer's books and records kept in the regular course of
9    business. If the nontaxable charges cannot reasonably be
10    identified, the gross charge from the sale of both taxable
11    and nontaxable services or telecommunications billed on a
12    combined basis shall be attributed to the taxable services
13    or telecommunications. The burden of proving nontaxable
14    charges shall be on the retailer of the telecommunications.
15    (b) "Amount paid" means the amount charged to the
16taxpayer's service address in this State regardless of where
17such amount is billed or paid.
18    (c) "Telecommunications", in addition to the meaning
19ordinarily and popularly ascribed to it, includes, without
20limitation, messages or information transmitted through use of
21local, toll and wide area telephone service; private line
22services; channel services; telegraph services;
23teletypewriter; computer exchange services; cellular mobile
24telecommunications service; specialized mobile radio;
25stationary two way radio; paging service; or any other form of
26mobile and portable one-way or two-way communications; or any

 

 

10000SB0009sam001- 450 -LRB100 06347 HLH 18430 a

1other transmission of messages or information by electronic or
2similar means, between or among points by wire, cable,
3fiber-optics, laser, microwave, radio, satellite or similar
4facilities. Beginning July 1, 2017, "telecommunications"
5includes messages or information transmitted through use of
6cable television service or direct broadcast satellite
7service. As used in this Act, "private line" means a dedicated
8non-traffic sensitive service for a single customer, that
9entitles the customer to exclusive or priority use of a
10communications channel or group of channels, from one or more
11specified locations to one or more other specified locations.
12The definition of "telecommunications" shall not include value
13added services in which computer processing applications are
14used to act on the form, content, code and protocol of the
15information for purposes other than transmission.
16"Telecommunications" shall not include purchases of
17telecommunications by a telecommunications service provider
18for use as a component part of the service provided by him to
19the ultimate retail consumer who originates or terminates the
20taxable end-to-end communications. Carrier access charges,
21right of access charges, charges for use of inter-company
22facilities, and all telecommunications resold in the
23subsequent provision of, used as a component of, or integrated
24into end-to-end telecommunications service shall be
25non-taxable as sales for resale.
26    (d) "Interstate telecommunications" means all

 

 

10000SB0009sam001- 451 -LRB100 06347 HLH 18430 a

1telecommunications that either originate or terminate outside
2this State.
3    (e) "Intrastate telecommunications" means all
4telecommunications that originate and terminate within this
5State.
6    (f) "Department" means the Department of Revenue of the
7State of Illinois.
8    (g) "Director" means the Director of Revenue for the
9Department of Revenue of the State of Illinois.
10    (h) "Taxpayer" means a person who individually or through
11his agents, employees or permittees engages in the act or
12privilege of originating or receiving telecommunications in
13this State and who incurs a tax liability under this Article.
14    (i) "Person" means any natural individual, firm, trust,
15estate, partnership, association, joint stock company, joint
16venture, corporation, limited liability company, or a
17receiver, trustee, guardian or other representative appointed
18by order of any court, the Federal and State governments,
19including State universities created by statute or any city,
20town, county or other political subdivision of this State.
21    (j) "Purchase at retail" means the acquisition,
22consumption or use of telecommunication through a sale at
23retail.
24    (k) "Sale at retail" means the transmitting, supplying or
25furnishing of telecommunications and all services and
26equipment provided in connection therewith for a consideration

 

 

10000SB0009sam001- 452 -LRB100 06347 HLH 18430 a

1to persons other than the Federal and State governments, and
2State universities created by statute and other than between a
3parent corporation and its wholly owned subsidiaries or between
4wholly owned subsidiaries for their use or consumption and not
5for resale.
6    (l) "Retailer" means and includes every person engaged in
7the business of making sales at retail as defined in this
8Article. The Department may, in its discretion, upon
9application, authorize the collection of the tax hereby imposed
10by any retailer not maintaining a place of business within this
11State, who, to the satisfaction of the Department, furnishes
12adequate security to insure collection and payment of the tax.
13Such retailer shall be issued, without charge, a permit to
14collect such tax. When so authorized, it shall be the duty of
15such retailer to collect the tax upon all of the gross charges
16for telecommunications in this State in the same manner and
17subject to the same requirements as a retailer maintaining a
18place of business within this State. The permit may be revoked
19by the Department at its discretion.
20    (m) "Retailer maintaining a place of business in this
21State", or any like term, means and includes any retailer
22having or maintaining within this State, directly or by a
23subsidiary, an office, distribution facilities, transmission
24facilities, sales office, warehouse or other place of business,
25or any agent or other representative operating within this
26State under the authority of the retailer or its subsidiary,

 

 

10000SB0009sam001- 453 -LRB100 06347 HLH 18430 a

1irrespective of whether such place of business or agent or
2other representative is located here permanently or
3temporarily, or whether such retailer or subsidiary is licensed
4to do business in this State.
5    (n) "Service address" means the location of
6telecommunications equipment from which the telecommunications
7services are originated or at which telecommunications
8services are received by a taxpayer. In the event this may not
9be a defined location, as in the case of mobile phones, paging
10systems, maritime systems, service address means the
11customer's place of primary use as defined in the Mobile
12Telecommunications Sourcing Conformity Act. For air-to-ground
13systems and the like, service address shall mean the location
14of a taxpayer's primary use of the telecommunications equipment
15as defined by telephone number, authorization code, or location
16in Illinois where bills are sent.
17    (o) "Prepaid telephone calling arrangements" mean the
18right to exclusively purchase telephone or telecommunications
19services that must be paid for in advance and enable the
20origination of one or more intrastate, interstate, or
21international telephone calls or other telecommunications
22using an access number, an authorization code, or both, whether
23manually or electronically dialed, for which payment to a
24retailer must be made in advance, provided that, unless
25recharged, no further service is provided once that prepaid
26amount of service has been consumed. Prepaid telephone calling

 

 

10000SB0009sam001- 454 -LRB100 06347 HLH 18430 a

1arrangements include the recharge of a prepaid calling
2arrangement. For purposes of this subsection, "recharge" means
3the purchase of additional prepaid telephone or
4telecommunications services whether or not the purchaser
5acquires a different access number or authorization code.
6"Prepaid telephone calling arrangement" does not include an
7arrangement whereby a customer purchases a payment card and
8pursuant to which the service provider reflects the amount of
9such purchase as a credit on an invoice issued to that customer
10under an existing subscription plan.
11    (p) "Cable television service" means cable service as
12defined in 47 U.S.C. 522(6).
13    (q) "Direct broadcast satellite service" means the
14distribution or broadcasting of programming or services by
15satellite, including audio or video programming, to receiving
16equipment located at a customer's premises.
17(Source: P.A. 93-286, 1-1-04; 94-793, eff. 5-19-06.)
 
18    (35 ILCS 630/4.1 new)
19    Sec. 4.1. Cable television; direct broadcast satellite
20service. Beginning July 1, 2017, a tax is imposed upon the act
21or privilege of receiving cable television service or direct
22broadcast satellite service by a person in this State at the
23rate of 7% of the gross charge for such cable television
24service or direct broadcast satellite service purchased at
25retail from a retailer by such person. To prevent actual

 

 

10000SB0009sam001- 455 -LRB100 06347 HLH 18430 a

1multi-state taxation of the act or privilege that is subject to
2taxation under this paragraph, any taxpayer, upon proof that
3that taxpayer has paid a tax in another state on such event,
4shall be allowed a credit against the tax imposed under this
5Section to the extent of the amount of such tax properly due
6and paid in such other state. However, such tax is not imposed
7on the act or privilege to the extent such act or privilege may
8not, under the Constitution and statutes of the United States,
9be made the subject of taxation by the State.
 
10    (35 ILCS 630/6)  (from Ch. 120, par. 2006)
11    Sec. 6. Except as provided hereinafter in this Section, on
12or before the last day of each month, each retailer maintaining
13a place of business in this State shall make a return to the
14Department for the preceding calendar month, stating:
15        1. His name;
16        2. The address of his principal place of business, or
17    the address of the principal place of business (if that is
18    a different address) from which he engages in the business
19    of transmitting telecommunications;
20        3. Total amount of gross charges billed by him during
21    the preceding calendar month for providing
22    telecommunications during such calendar month;
23        4. Total amount received by him during the preceding
24    calendar month on credit extended;
25        5. Deductions allowed by law;

 

 

10000SB0009sam001- 456 -LRB100 06347 HLH 18430 a

1        6. Gross charges which were billed by him during the
2    preceding calendar month and upon the basis of which the
3    tax is imposed;
4        7. Amount of tax (computed upon Item 6);
5        8. Such other reasonable information as the Department
6    may require.
7    Any taxpayer required to make payments under this Section
8may make the payments by electronic funds transfer. The
9Department shall adopt rules necessary to effectuate a program
10of electronic funds transfer. Any taxpayer who has average
11monthly tax billings due to the Department under this Act and
12the Simplified Municipal Telecommunications Tax Act that
13exceed $1,000 shall make all payments by electronic funds
14transfer as required by rules of the Department and shall file
15the return required by this Section by electronic means as
16required by rules of the Department.
17    If the retailer's average monthly tax billings due to the
18Department under this Act and the Simplified Municipal
19Telecommunications Tax Act do not exceed $1,000, the Department
20may authorize his returns to be filed on a quarter annual
21basis, with the return for January, February and March of a
22given year being due by April 30 of such year; with the return
23for April, May and June of a given year being due by July 31st
24of such year; with the return for July, August and September of
25a given year being due by October 31st of such year; and with
26the return of October, November and December of a given year

 

 

10000SB0009sam001- 457 -LRB100 06347 HLH 18430 a

1being due by January 31st of the following year.
2    If the retailer is otherwise required to file a monthly or
3quarterly return and if the retailer's average monthly tax
4billings due to the Department under this Act and the
5Simplified Municipal Telecommunications Tax Act do not exceed
6$400, the Department may authorize his or her return to be
7filed on an annual basis, with the return for a given year
8being due by January 31st of the following year.
9    Notwithstanding any other provision of this Article
10containing the time within which a retailer may file his
11return, in the case of any retailer who ceases to engage in a
12kind of business which makes him responsible for filing returns
13under this Article, such retailer shall file a final return
14under this Article with the Department not more than one month
15after discontinuing such business.
16    In making such return, the retailer shall determine the
17value of any consideration other than money received by him and
18he shall include such value in his return. Such determination
19shall be subject to review and revision by the Department in
20the manner hereinafter provided for the correction of returns.
21    Each retailer whose average monthly liability to the
22Department under this Article and the Simplified Municipal
23Telecommunications Tax Act was $25,000 or more during the
24preceding calendar year, excluding the month of highest
25liability and the month of lowest liability in such calendar
26year, and who is not operated by a unit of local government,

 

 

10000SB0009sam001- 458 -LRB100 06347 HLH 18430 a

1shall make estimated payments to the Department on or before
2the 7th, 15th, 22nd and last day of the month during which tax
3collection liability to the Department is incurred in an amount
4not less than the lower of either 22.5% of the retailer's
5actual tax collections for the month or 25% of the retailer's
6actual tax collections for the same calendar month of the
7preceding year. The amount of such quarter monthly payments
8shall be credited against the final liability of the retailer's
9return for that month. Any outstanding credit, approved by the
10Department, arising from the retailer's overpayment of its
11final liability for any month may be applied to reduce the
12amount of any subsequent quarter monthly payment or credited
13against the final liability of the retailer's return for any
14subsequent month. If any quarter monthly payment is not paid at
15the time or in the amount required by this Section, the
16retailer shall be liable for penalty and interest on the
17difference between the minimum amount due as a payment and the
18amount of such payment actually and timely paid, except insofar
19as the retailer has previously made payments for that month to
20the Department in excess of the minimum payments previously
21due.
22    The retailer making the return herein provided for shall,
23at the time of making such return, pay to the Department the
24amount of tax herein imposed, less a discount of 1% which is
25allowed to reimburse the retailer for the expenses incurred in
26keeping records, billing the customer, preparing and filing

 

 

10000SB0009sam001- 459 -LRB100 06347 HLH 18430 a

1returns, remitting the tax, and supplying data to the
2Department upon request. No discount may be claimed by a
3retailer on returns not timely filed and for taxes not timely
4remitted.
5    On and after the effective date of this Article of 1985, of
6the moneys received by the Department of Revenue pursuant to
7this Article, other than moneys received pursuant to the
8additional taxes imposed by Public Act 90-548 and this
9amendatory Act of the 100th General Assembly:
10        (1) $1,000,000 shall be paid each month into the Common
11    School Fund;
12        (2) beginning on the first day of the first calendar
13    month to occur on or after the effective date of this
14    amendatory Act of the 98th General Assembly, an amount
15    equal to 1/12 of 5% of the cash receipts collected during
16    the preceding fiscal year by the Audit Bureau of the
17    Department from the tax under this Act and the Simplified
18    Municipal Telecommunications Tax Act shall be paid each
19    month into the Tax Compliance and Administration Fund;
20    those moneys shall be used, subject to appropriation, to
21    fund additional auditors and compliance personnel at the
22    Department of Revenue; and
23        (3) the remainder shall be deposited into the General
24    Revenue Fund.
25    On and after February 1, 1998, however, of the moneys
26received by the Department of Revenue pursuant to the

 

 

10000SB0009sam001- 460 -LRB100 06347 HLH 18430 a

1additional taxes imposed by Public Act 90-548, one-half shall
2be deposited into the School Infrastructure Fund and one-half
3shall be deposited into the Common School Fund. On and after
4the effective date of this amendatory Act of the 91st General
5Assembly, if in any fiscal year the total of the moneys
6deposited into the School Infrastructure Fund under this Act is
7less than the total of the moneys deposited into that Fund from
8the additional taxes imposed by Public Act 90-548 during fiscal
9year 1999, then, as soon as possible after the close of the
10fiscal year, the Comptroller shall order transferred and the
11Treasurer shall transfer from the General Revenue Fund to the
12School Infrastructure Fund an amount equal to the difference
13between the fiscal year total deposits and the total amount
14deposited into the Fund in fiscal year 1999.
15    On and after July 1, 2017, the additional moneys received
16by the Department pursuant to this amendatory Act of the 100th
17General Assembly shall be deposited into the General Revenue
18Fund.
19(Source: P.A. 98-1098, eff. 8-26-14.)
 
20    Section 30-60. The Illinois Independent Tax Tribunal Act of
212012 is amended by changing Section 1-45 as follows:
 
22    (35 ILCS 1010/1-45)
23    Sec. 1-45. Jurisdiction of the Tax Tribunal.
24    (a) Except as provided by the Constitution of the United

 

 

10000SB0009sam001- 461 -LRB100 06347 HLH 18430 a

1States, the Constitution of the State of Illinois, or any
2statutes of this State, including, but not limited to, the
3State Officers and Employees Money Disposition Act, the Tax
4Tribunal shall have original jurisdiction over all
5determinations of the Department reflected on a Notice of
6Deficiency, Notice of Tax Liability, Notice of Claim Denial, or
7Notice of Penalty Liability issued under the Illinois Income
8Tax Act, the Use Tax Act, the Service Use Tax Act, the Service
9Occupation Tax Act, the Retailers' Occupation Tax Act, the
10Cigarette Tax Act, the Cigarette Use Tax Act, the Tobacco
11Products Tax Act of 1995, the Hotel Operators' Occupation Tax
12Act, the Motor Fuel Tax Law, the Automobile Renting Occupation
13and Use Tax Act, the Coin-Operated Amusement Device and
14Redemption Machine Tax Act, the Gas Revenue Tax Act, the Water
15Company Invested Capital Tax Act, the Telecommunications
16Excise Tax Act, the Telecommunications Infrastructure
17Maintenance Fee Act, the Public Utilities Revenue Act, the
18Electricity Excise Tax Law, the Aircraft Use Tax Law, the
19Watercraft Use Tax Law, the Gas Use Tax Law, the Storage Excise
20Tax Act, the Amusement Excise Tax Act, the Repair and
21Maintenance Excise Tax Act, the Landscaping Excise Tax Act, the
22Laundry and Drycleaning Excise Tax Act, or the Uniform Penalty
23and Interest Act. Jurisdiction of the Tax Tribunal is limited
24to Notices of Tax Liability, Notices of Deficiency, Notices of
25Claim Denial, and Notices of Penalty Liability where the amount
26at issue in a notice, or the aggregate amount at issue in

 

 

10000SB0009sam001- 462 -LRB100 06347 HLH 18430 a

1multiple notices issued for the same tax year or audit period,
2exceeds $15,000, exclusive of penalties and interest. In
3notices solely asserting either an interest or penalty
4assessment, or both, the Tax Tribunal shall have jurisdiction
5over cases where the combined total of all penalties or
6interest assessed exceeds $15,000.
7    (b) Except as otherwise permitted by this Act and by the
8Constitution of the State of Illinois or otherwise by State
9law, including, but not limited to, the State Officers and
10Employees Money Disposition Act, no person shall contest any
11matter within the jurisdiction of the Tax Tribunal in any
12action, suit, or proceeding in the circuit court or any other
13court of the State. If a person attempts to do so, then such
14action, suit, or proceeding shall be dismissed without
15prejudice. The improper commencement of any action, suit, or
16proceeding does not extend the time period for commencing a
17proceeding in the Tax Tribunal.
18    (c) The Tax Tribunal may require the taxpayer to post a
19bond equal to 25% of the liability at issue (1) upon motion of
20the Department and a showing that (A) the taxpayer's action is
21frivolous or legally insufficient or (B) the taxpayer is acting
22primarily for the purpose of delaying the collection of tax or
23prejudicing the ability ultimately to collect the tax, or (2)
24if, at any time during the proceedings, it is determined by the
25Tax Tribunal that the taxpayer is not pursuing the resolution
26of the case with due diligence. If the Tax Tribunal finds in a

 

 

10000SB0009sam001- 463 -LRB100 06347 HLH 18430 a

1particular case that the taxpayer cannot procure and furnish a
2satisfactory surety or sureties for the kind of bond required
3herein, the Tax Tribunal may relieve the taxpayer of the
4obligation of filing such bond, if, upon the timely application
5for a lien in lieu thereof and accompanying proof therein
6submitted, the Tax Tribunal is satisfied that any such lien
7imposed would operate to secure the assessment in the manner
8and to the degree as would a bond. The Tax Tribunal shall adopt
9rules for the procedures to be used in securing a bond or lien
10under this Section.
11    (d) If, with or after the filing of a timely petition, the
12taxpayer pays all or part of the tax or other amount in issue
13before the Tax Tribunal has rendered a decision, the Tax
14Tribunal shall treat the taxpayer's petition as a protest of a
15denial of claim for refund of the amount so paid upon a written
16motion filed by the taxpayer.
17    (e) The Tax Tribunal shall not have jurisdiction to review:
18        (1) any assessment made under the Property Tax Code;
19        (2) any decisions relating to the issuance or denial of
20    an exemption ruling for any entity claiming exemption from
21    any tax imposed under the Property Tax Code or any State
22    tax administered by the Department;
23        (3) a notice of proposed tax liability, notice of
24    proposed deficiency, or any other notice of proposed
25    assessment or notice of intent to take some action;
26        (4) any action or determination of the Department

 

 

10000SB0009sam001- 464 -LRB100 06347 HLH 18430 a

1    regarding tax liabilities that have become finalized by
2    law, including but not limited to the issuance of liens,
3    levies, and revocations, suspensions, or denials of
4    licenses or certificates of registration or any other
5    collection activities;
6        (5) any proceedings of the Department's informal
7    administrative appeals function; and
8        (6) any challenge to an administrative subpoena issued
9    by the Department.
10    (f) The Tax Tribunal shall decide questions regarding the
11constitutionality of statutes and rules adopted by the
12Department as applied to the taxpayer, but shall not have the
13power to declare a statute or rule unconstitutional or
14otherwise invalid on its face. A taxpayer challenging the
15constitutionality of a statute or rule on its face may present
16such challenge to the Tax Tribunal for the sole purpose of
17making a record for review by the Illinois Appellate Court.
18Failure to raise a constitutional issue regarding the
19application of a statute or regulations to the taxpayer shall
20not preclude the taxpayer or the Department from raising those
21issues at the appellate court level.
22(Source: P.A. 97-1129, eff. 8-28-12; 98-463, eff. 8-16-13.)
 
23    Section 30-65. The Illinois False Claims Act is amended by
24changing Section 3 as follows:
 

 

 

10000SB0009sam001- 465 -LRB100 06347 HLH 18430 a

1    (740 ILCS 175/3)  (from Ch. 127, par. 4103)
2    Sec. 3. False claims.
3    (a) Liability for certain acts.
4        (1) In general, any person who:
5            (A) knowingly presents, or causes to be presented,
6        a false or fraudulent claim for payment or approval;
7            (B) knowingly makes, uses, or causes to be made or
8        used, a false record or statement material to a false
9        or fraudulent claim;
10            (C) conspires to commit a violation of
11        subparagraph (A), (B), (D), (E), (F), or (G);
12            (D) has possession, custody, or control of
13        property or money used, or to be used, by the State and
14        knowingly delivers, or causes to be delivered, less
15        than all the money or property;
16            (E) is authorized to make or deliver a document
17        certifying receipt of property used, or to be used, by
18        the State and, intending to defraud the State, makes or
19        delivers the receipt without completely knowing that
20        the information on the receipt is true;
21             (F) knowingly buys, or receives as a pledge of an
22        obligation or debt, public property from an officer or
23        employee of the State, or a member of the Guard, who
24        lawfully may not sell or pledge property; or
25            (G) knowingly makes, uses, or causes to be made or
26        used, a false record or statement material to an

 

 

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1        obligation to pay or transmit money or property to the
2        State, or knowingly conceals or knowingly and
3        improperly avoids or decreases an obligation to pay or
4        transmit money or property to the State,
5    is liable to the State for a civil penalty of not less than
6    $5,500 and not more than $11,000, plus 3 times the amount
7    of damages which the State sustains because of the act of
8    that person. The penalties in this Section are intended to
9    be remedial rather than punitive, and shall not preclude,
10    nor be precluded by, a criminal prosecution for the same
11    conduct.
12        (2) A person violating this subsection shall also be
13    liable to the State for the costs of a civil action brought
14    to recover any such penalty or damages.
15    (b) Definitions. For purposes of this Section:
16        (1) The terms "knowing" and "knowingly":
17            (A) mean that a person, with respect to
18        information:
19                (i) has actual knowledge of the information;
20                (ii) acts in deliberate ignorance of the truth
21            or falsity of the information; or
22                (iii) acts in reckless disregard of the truth
23            or falsity of the information, and
24            (B) require no proof of specific intent to defraud.
25        (2) The term "claim":
26            (A) means any request or demand, whether under a

 

 

10000SB0009sam001- 467 -LRB100 06347 HLH 18430 a

1        contract or otherwise, for money or property and
2        whether or not the State has title to the money or
3        property, that
4                (i) is presented to an officer, employee, or
5            agent of the State; or
6                (ii) is made to a contractor, grantee, or other
7            recipient, if the money or property is to be spent
8            or used on the State's behalf or to advance a State
9            program or interest, and if the State:
10                    (I) provides or has provided any portion
11                of the money or property requested or demanded;
12                or
13                    (II) will reimburse such contractor,
14                grantee, or other recipient for any portion of
15                the money or property which is requested or
16                demanded; and
17            (B) does not include requests or demands for money
18        or property that the State has paid to an individual as
19        compensation for State employment or as an income
20        subsidy with no restrictions on that individual's use
21        of the money or property.
22        (3) The term "obligation" means an established duty,
23    whether or not fixed, arising from an express or implied
24    contractual, grantor-grantee, or licensor-licensee
25    relationship, from a fee-based or similar relationship,
26    from statute or regulation, or from the retention of any

 

 

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1    overpayment.
2        (4) The term "material" means having a natural tendency
3    to influence, or be capable of influencing, the payment or
4    receipt of money or property.
5    (c) Exclusion. This Section does not apply to any taxes
6imposed, collected, or administered by the State of Illinois
7claims, records, or statements made under the Illinois Income
8Tax Act.
9(Source: P.A. 95-128, eff. 1-1-08; 96-1304, eff. 7-27-10.)
 
10    Section 30-70. The Business Corporation Act of 1983 is
11amended by changing Sections 13.70, 14.30, 15.35, 15.65, 15.97,
12and 16.05 as follows:
 
13    (805 ILCS 5/13.70)  (from Ch. 32, par. 13.70)
14    Sec. 13.70. Transacting business without authority.
15    (a) No foreign corporation transacting business in this
16State without authority to do so is permitted to maintain a
17civil action in any court of this State, until the corporation
18obtains that authority. Nor shall a civil action be maintained
19in any court of this State by any successor or assignee of the
20corporation on any right, claim or demand arising out of the
21transaction of business by the corporation in this State, until
22authority to transact business in this State is obtained by the
23corporation or by a corporation that has acquired all or
24substantially all of its assets.

 

 

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1    (b) The failure of a foreign corporation to obtain
2authority to transact business in this State does not impair
3the validity of any contract or act of the corporation, and
4does not prevent the corporation from defending any action in
5any court of this State.
6    (c) A foreign corporation that transacts business in this
7State without authority is liable to this State, for the years
8or parts thereof during which it transacted business in this
9State without authority, in an amount equal to all fees,
10franchise taxes, penalties and other charges that would have
11been imposed by this Act upon the corporation had it duly
12applied for and received authority to transact business in this
13State as required by this Act, but failed to pay the franchise
14taxes that would have been computed thereon, and thereafter
15filed all reports required by this Act; and, if a corporation
16fails to file an application for authority within 60 days after
17it commences business in this State, in addition thereto it is
18liable for a penalty of either 10% of the filing fee, license
19fee and franchise taxes or $500 $200 plus $25 $5.00 for each
20month or fraction thereof in which it has continued to transact
21business in this State without authority therefor, whichever
22penalty is greater. The Attorney General shall bring
23proceedings to recover all amounts due this State under this
24Section.
25    (d) The Attorney General shall bring an action to restrain
26a foreign corporation from transacting business in this State,

 

 

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1if the authority of the foreign corporation to transact
2business has been revoked under subsection (m) of Section 13.50
3of this Act.
4(Source: P.A. 95-515, eff. 8-28-07.)
 
5    (805 ILCS 5/14.30)  (from Ch. 32, par. 14.30)
6    Sec. 14.30. Cumulative report of changes in issued shares
7or paid-in capital.
8        (a) Each domestic corporation and each foreign
9corporation authorized to transact business in this State that
10effects any change in the number of issued shares or the amount
11of paid-in capital prior to July 1, 2017 that has not
12theretofore been reported in any report other than an annual
13report, interim annual report, or final transition annual
14report, shall execute and file, in accordance with Section 1.10
15of this Act, a report with respect to the changes in its issued
16shares or paid-in capital:
17        (1) that have occurred subsequent to the last day of
18    the third month preceding its anniversary month in the
19    preceding year and prior to the first day of the second
20    month immediately preceding its anniversary month in the
21    current year; or
22        (2) in the case of a corporation that has established
23    an extended filing month, that have occurred during its
24    fiscal year; or
25        (3) in the case of a statutory merger or consolidation

 

 

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1    or an amendment to the corporation's articles of
2    incorporation that affects the number of issued shares or
3    the amount of paid-in capital, that have occurred between
4    the last day of the third month immediately preceding its
5    anniversary month and the date of the merger,
6    consolidation, or amendment or, in the case of a
7    corporation that has established an extended filing month,
8    that have occurred between the first day of its fiscal year
9    and the date of the merger, consolidation, or amendment; or
10        (4) in the case of a statutory merger or consolidation
11    or an amendment to the corporation's articles of
12    incorporation that affects the number of issued shares or
13    the amount of paid-in capital, that have occurred between
14    the date of the merger, consolidation, or amendment (but
15    not including the merger, consolidation, or amendment) and
16    the first day of the second month immediately preceding its
17    anniversary month in the current year, or in the case of a
18    corporation that has established an extended filing month,
19    that have occurred between the date of the merger,
20    consolidation or amendment (but not including the merger,
21    consolidation or amendment) and the last day of its fiscal
22    year.
23    (b) The corporation shall file the report required under
24subsection (a) not later than (i) the time its annual report is
25required to be filed in 1992 and in each subsequent year and
26(ii) not later than the time of filing the articles of merger,

 

 

10000SB0009sam001- 472 -LRB100 06347 HLH 18430 a

1consolidation, or amendment to the articles of incorporation
2that affects the number of issued shares or the amount of
3paid-in capital of a domestic corporation or the certified copy
4of merger of a foreign corporation.
5    (c) The report shall net decreases against increases that
6occur during the same taxable period. The report shall set
7forth:
8        (1) The name of the corporation and the state or
9    country under the laws of which it is organized.
10        (2) A statement of the aggregate number of shares which
11    the corporation has authority to issue, itemized by classes
12    and series, if any, within a class.
13        (3) A statement of the aggregate number of issued
14    shares as last reported to the Secretary of State in any
15    document required or permitted by this Act to be filed,
16    other than an annual report, interim annual report or final
17    transition annual report, itemized by classes and series,
18    if any, within a class.
19        (4) A statement, expressed in dollars, of the amount of
20    paid-in capital of the corporation as last reported to the
21    Secretary of State in any document required or permitted by
22    this Act to be filed, other than an annual report, interim
23    annual report or final transition annual report.
24        (5) A statement, if applicable, of the aggregate number
25    of shares issued by the corporation not theretofore
26    reported to the Secretary of State as having been issued,

 

 

10000SB0009sam001- 473 -LRB100 06347 HLH 18430 a

1    and a statement, expressed in dollars, of the value of the
2    entire consideration received, less expenses, including
3    commissions, paid or incurred in connection with the
4    issuance, for, or on account of, the issuance of the
5    shares, itemized by classes, and series, if any, within a
6    class; and in the case of shares issued as a share
7    dividend, the amount added or transferred to the paid-in
8    capital of the corporation for, or on account of, the
9    issuance of the shares; provided, however, that the report
10    shall also include the date of each issuance made prior to
11    the current reporting period, and the number of issued
12    shares and consideration received in each case.
13        (6) A statement, if applicable, expressed in dollars,
14    of the amount added or transferred to paid-in capital of
15    the corporation without the issuance of shares; provided,
16    however, that the report shall also include the date of
17    each increase made prior to the current reporting period,
18    and the consideration received in each case.
19        (7) In case of an exchange or reclassification of
20    issued shares resulting in an increase in the amount of
21    paid-in capital, a statement of the manner in which it was
22    effected, and a statement, expressed in dollars, of the
23    amount added or transferred to the paid-in capital of the
24    corporation as a result thereof, except any portion thereof
25    reported under any other subsection of this Section as a
26    part of the consideration received by the corporation for,

 

 

10000SB0009sam001- 474 -LRB100 06347 HLH 18430 a

1    or on account of, its issued shares; provided, however,
2    that the report shall also include the date of each
3    exchange or reclassification made prior to the current
4    reporting period and the consideration received in each
5    case.
6        (8) If the consideration received for the issuance of
7    any shares not theretofore reported as having been issued
8    consists of labor or services performed or of property,
9    other than cash, then a statement, expressed in dollars, of
10    the value of that consideration as fixed by the board of
11    directors.
12        (9) In the case of a cancellation of shares or a
13    reduction in paid-in capital made pursuant to Section 9.20,
14    the aggregate reduction in paid-in capital; provided,
15    however, that the report shall also include the date of
16    each reduction made prior to the current reporting period.
17        (10) A statement of the aggregate number of issued
18    shares itemized by classes and series, if any, within a
19    class, after giving effect to the changes reported.
20        (11) A statement, expressed in dollars, of the amount
21    of paid-in capital of the corporation after giving effect
22    to the changes reported.
23    (d) No additional license fees or franchise taxes shall be
24payable upon the filing of the report to the extent that
25license fees or franchise taxes shall have been previously paid
26by the corporation in respect of shares previously issued which

 

 

10000SB0009sam001- 475 -LRB100 06347 HLH 18430 a

1are being exchanged for the shares the issuance of which is
2being reported, provided those facts are shown in the report.
3    (e) The report shall be made on forms prescribed and
4furnished by the Secretary of State.
5    (f) Until the report under this Section or a report under
6Section 14.25 shall have been filed in the Office of the
7Secretary of State showing a reduction in paid-in capital, the
8basis of the annual franchise tax payable by the corporation
9shall not be reduced, provided, however, in no event shall the
10annual franchise tax for any taxable year be reduced if the
11report is not filed prior to the first day of the anniversary
12month or, in the case of a corporation which has established an
13extended filing month, the extended filing month of the
14corporation of that taxable year and before payment of its
15annual franchise tax.
16(Source: P.A. 90-421, eff. 1-1-98.)
 
17    (805 ILCS 5/15.35)  (from Ch. 32, par. 15.35)
18    Sec. 15.35. Franchise taxes payable by domestic
19corporations. For the privilege of exercising its franchises in
20this State, each domestic corporation shall pay to the
21Secretary of State the following franchise taxes, computed on
22the basis, at the rates and for the periods prescribed in this
23Act:
24    (a) An initial franchise tax at the time of filing its
25first report of issuance of shares.

 

 

10000SB0009sam001- 476 -LRB100 06347 HLH 18430 a

1    (b) An additional franchise tax at the time of filing (1) a
2report of the issuance of additional shares, or (2) a report of
3an increase in paid-in capital without the issuance of shares,
4or (3) an amendment to the articles of incorporation or a
5report of cumulative changes in paid-in capital, whenever any
6amendment or such report discloses an increase in its paid-in
7capital over the amount thereof last reported in any document,
8other than an annual report, interim annual report or final
9transition annual report required by this Act to be filed in
10the office of the Secretary of State.
11    (c) An additional franchise tax at the time of filing a
12report of paid-in capital following a statutory merger or
13consolidation, which discloses that the paid-in capital of the
14surviving or new corporation immediately after the merger or
15consolidation is greater than the sum of the paid-in capital of
16all of the merged or consolidated corporations as last reported
17by them in any documents, other than annual reports, required
18by this Act to be filed in the office of the Secretary of
19State; and in addition, the surviving or new corporation shall
20be liable for a further additional franchise tax on the paid-in
21capital of each of the merged or consolidated corporations as
22last reported by them in any document, other than an annual
23report, required by this Act to be filed with the Secretary of
24State from their taxable year end to the next succeeding
25anniversary month or, in the case of a corporation which has
26established an extended filing month, the extended filing month

 

 

10000SB0009sam001- 477 -LRB100 06347 HLH 18430 a

1of the surviving or new corporation; however if the taxable
2year ends within the 2 month period immediately preceding the
3anniversary month or, in the case of a corporation which has
4established an extended filing month, the extended filing month
5of the surviving or new corporation the tax will be computed to
6the anniversary month or, in the case of a corporation which
7has established an extended filing month, the extended filing
8month of the surviving or new corporation in the next
9succeeding calendar year.
10    (d) An annual franchise tax payable each year with the
11annual report which the corporation is required by this Act to
12file.
13    (e) The provisions of this Section shall not apply to
14require the payment of any franchise tax that would otherwise
15have been due and payable on or after July 1, 2017. There shall
16be no refunds or proration of franchise tax for any taxes due
17and payable prior to July 1, 2017 on the basis that a portion
18of the corporation's taxable year extends beyond July 1, 2017.
19This amendatory Act of the 100th General Assembly shall not
20affect any right accrued or established, or any liability or
21penalty incurred prior to July 1, 2017.
22(Source: P.A. 86-985.)
 
23    (805 ILCS 5/15.65)  (from Ch. 32, par. 15.65)
24    Sec. 15.65. Franchise taxes payable by foreign
25corporations. For the privilege of exercising its authority to

 

 

10000SB0009sam001- 478 -LRB100 06347 HLH 18430 a

1transact such business in this State as set out in its
2application therefor or any amendment thereto, each foreign
3corporation shall pay to the Secretary of State the following
4franchise taxes, computed on the basis, at the rates and for
5the periods prescribed in this Act:
6    (a) An initial franchise tax at the time of filing its
7application for authority to transact business in this State.
8    (b) An additional franchise tax at the time of filing (1) a
9report of the issuance of additional shares, or (2) a report of
10an increase in paid-in capital without the issuance of shares,
11or (3) a report of cumulative changes in paid-in capital or a
12report of an exchange or reclassification of shares, whenever
13any such report discloses an increase in its paid-in capital
14over the amount thereof last reported in any document, other
15than an annual report, interim annual report or final
16transition annual report, required by this Act to be filed in
17the office of the Secretary of State.
18    (c) Whenever the corporation shall be a party to a
19statutory merger and shall be the surviving corporation, an
20additional franchise tax at the time of filing its report
21following merger, if such report discloses that the amount
22represented in this State of its paid-in capital immediately
23after the merger is greater than the aggregate of the amounts
24represented in this State of the paid-in capital of such of the
25merged corporations as were authorized to transact business in
26this State at the time of the merger, as last reported by them

 

 

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1in any documents, other than annual reports, required by this
2Act to be filed in the office of the Secretary of State; and in
3addition, the surviving corporation shall be liable for a
4further additional franchise tax on the paid-in capital of each
5of the merged corporations as last reported by them in any
6document, other than an annual report, required by this Act to
7be filed with the Secretary of State, from their taxable year
8end to the next succeeding anniversary month or, in the case of
9a corporation which has established an extended filing month,
10the extended filing month of the surviving corporation; however
11if the taxable year ends within the 2 month period immediately
12preceding the anniversary month or the extended filing month of
13the surviving corporation, the tax will be computed to the
14anniversary or, extended filing month of the surviving
15corporation in the next succeeding calendar year.
16    (d) An annual franchise tax payable each year with any
17annual report which the corporation is required by this Act to
18file.
19    (e) The provisions of this Section shall not apply to
20require the payment of any franchise tax that would otherwise
21have been due and payable on or after July 1, 2017. There shall
22be no refunds or proration of franchise tax for any taxes due
23and payable prior to July 1, 2017 on the basis that a portion
24of the corporation's taxable year extends beyond July 1, 2017.
25This amendatory Act of the 100th General Assembly shall not
26affect any right accrued or established, or any liability or

 

 

10000SB0009sam001- 480 -LRB100 06347 HLH 18430 a

1penalty incurred prior to July 1, 2017.
2(Source: P.A. 92-33, eff. 7-1-01.)
 
3    (805 ILCS 5/15.97)  (from Ch. 32, par. 15.97)
4    Sec. 15.97. Corporate Franchise Tax Refund Fund.
5    (a) Beginning July 1, 1993, a percentage of the amounts
6collected under Sections 15.35, 15.45, 15.65, and 15.75 of this
7Act shall be deposited into the Corporate Franchise Tax Refund
8Fund, a special Fund hereby created in the State treasury. From
9July 1, 1993, until December 31, 1994, there shall be deposited
10into the Fund 3% of the amounts received under those Sections.
11Beginning January 1, 1995, and for each fiscal year beginning
12thereafter, 2% of the amounts collected under those Sections
13during the preceding fiscal year shall be deposited into the
14Fund.
15    (b) Beginning July 1, 1993, moneys in the Fund shall be
16expended exclusively for the purpose of paying refunds payable
17because of overpayment of franchise taxes, penalties, or
18interest under Sections 13.70, 15.35, 15.45, 15.65, 15.75, and
1916.05 of this Act and making transfers authorized under this
20Section. Refunds in accordance with the provisions of
21subsections (f) and (g) of Section 1.15 and Section 1.17 of
22this Act may be made from the Fund only to the extent that
23amounts collected under Sections 15.35, 15.45, 15.65, and 15.75
24of this Act have been deposited in the Fund and remain
25available. On or before August 31 of each year, the balance in

 

 

10000SB0009sam001- 481 -LRB100 06347 HLH 18430 a

1the Fund in excess of $100,000 shall be transferred to the
2General Revenue Fund. Notwithstanding the above, for the period
3commencing on the effective date of this amendatory Act of the
4100th General Assembly and continuing through December 31,
52019, amounts in the fund shall not be transferred to the
6General Revenue Fund and shall be used to pay refunds in
7accordance with the provisions of this Act. Within a reasonable
8time after January 1, 2020, the Secretary of State shall direct
9and the Comptroller shall order transferred to the General
10Revenue Fund all amounts remaining in the fund.
11    (c) This Act shall constitute an irrevocable and continuing
12appropriation from the Corporate Franchise Tax Refund Fund for
13the purpose of paying refunds upon the order of the Secretary
14of State in accordance with the provisions of this Section.
15(Source: P.A. 99-620, eff. 1-1-17.)
 
16    (805 ILCS 5/16.05)  (from Ch. 32, par. 16.05)
17    Sec. 16.05. Penalties and interest imposed upon
18corporations.
19    (a) Each corporation, domestic or foreign, that fails or
20refuses to file any annual report or report of cumulative
21changes in paid-in capital and pay any franchise tax due
22pursuant to the report prior to the first day of its
23anniversary month or, in the case of a corporation which has
24established an extended filing month, the extended filing month
25of the corporation shall pay a penalty of 10% of the amount of

 

 

10000SB0009sam001- 482 -LRB100 06347 HLH 18430 a

1any delinquent franchise tax due for the report. From February
21, 2008 through March 15, 2008, no penalty shall be imposed
3with respect to any amount of delinquent franchise tax paid
4pursuant to the Franchise Tax and License Fee Amnesty Act of
52007. Notwithstanding the above, commencing on July 1, 2017,
6each corporation, domestic or foreign, that fails or refuses to
7file any annual report prior to the first day of its
8anniversary month, or in the case of a corporation which has
9established an extended filing month, the extended filing month
10of the corporation, shall, for each report, pay a one-time
11penalty of $50, plus an additional penalty of $10 for each
12calendar month or part of the month that the report is
13delinquent.
14    (b) Each corporation, domestic or foreign, that fails or
15refuses to file a report of issuance of shares or increase in
16paid-in capital within the time prescribed by this Act is
17subject to a penalty on any obligation occurring prior to
18January 1, 1991, and interest on those obligations on or after
19January 1, 1991, for each calendar month or part of month that
20it is delinquent in the amount of 2% of the amount of license
21fees and franchise taxes provided by this Act to be paid on
22account of the issuance of shares or increase in paid-in
23capital. From February 1, 2008 through March 15, 2008, no
24penalty shall be imposed, or interest charged, with respect to
25any amount of delinquent license fees and franchise taxes paid
26pursuant to the Franchise Tax and License Fee Amnesty Act of

 

 

10000SB0009sam001- 483 -LRB100 06347 HLH 18430 a

12007.
2    (c) Each corporation, domestic or foreign, that fails or
3refuses to file a report of cumulative changes in paid-in
4capital or report following merger within the time prescribed
5by this Act is subject to interest on or after January 1, 1992,
6for each calendar month or part of month that it is delinquent,
7in the amount of 2% of the amount of franchise taxes provided
8by this Act to be paid on account of the issuance of shares or
9increase in paid-in capital disclosed on the report of
10cumulative changes in paid-in capital or report following
11merger, or $1, whichever is greater. From February 1, 2008
12through March 15, 2008, no interest shall be charged with
13respect to any amount of delinquent franchise tax paid pursuant
14to the Franchise Tax and License Fee Amnesty Act of 2007.
15Notwithstanding the above, commencing on July 1, 2017, each
16corporation, domestic or foreign, that fails or refuses to file
17any report following merger within the time prescribed by this
18Act, shall, for each report, pay a one-time penalty of $50,
19plus an additional penalty of $10 for each calendar month or
20part of the month that the report is delinquent.
21    (d) If the annual franchise tax, or the supplemental annual
22franchise tax for any 12-month period commencing July 1, 1968,
23or July 1 of any subsequent year through June 30, 1983,
24assessed in accordance with this Act, is not paid by July 31,
25it is delinquent, and there is added a penalty prior to January
261, 1991, and interest on and after January 1, 1991, of 2% for

 

 

10000SB0009sam001- 484 -LRB100 06347 HLH 18430 a

1each month or part of month that it is delinquent commencing
2with the month of August, or $1, whichever is greater. From
3February 1, 2008 through March 15, 2008, no penalty shall be
4imposed, or interest charged, with respect to any amount of
5delinquent franchise taxes paid pursuant to the Franchise Tax
6and License Fee Amnesty Act of 2007.
7    (e) If the supplemental annual franchise tax assessed in
8accordance with the provisions of this Act for the 12-month
9period commencing July 1, 1967, is not paid by September 30,
101967, it is delinquent, and there is added a penalty prior to
11January 1, 1991, and interest on and after January 1, 1991, of
122% for each month or part of month that it is delinquent
13commencing with the month of October, 1967. From February 1,
142008 through March 15, 2008, no penalty shall be imposed, or
15interest charged, with respect to any amount of delinquent
16franchise taxes paid pursuant to the Franchise Tax and License
17Fee Amnesty Act of 2007.
18    (f) If any annual franchise tax for any period beginning on
19or after July 1, 1983, is not paid by the time period herein
20prescribed, it is delinquent and there is added a penalty prior
21to January 1, 1991, and interest on and after January 1, 1991,
22of 2% for each month or part of a month that it is delinquent
23commencing with the anniversary month or in the case of a
24corporation that has established an extended filing month, the
25extended filing month, or $1, whichever is greater. From
26February 1, 2008 through March 15, 2008, no penalty shall be

 

 

10000SB0009sam001- 485 -LRB100 06347 HLH 18430 a

1imposed, or interest charged, with respect to any amount of
2delinquent franchise taxes paid pursuant to the Franchise Tax
3and License Fee Amnesty Act of 2007.
4    (g) Any corporation, domestic or foreign, failing to pay
5the prescribed fee for assumed corporate name renewal when due
6and payable shall be given notice of nonpayment by the
7Secretary of State by regular mail; and if the fee together
8with a penalty fee of $5 is not paid within 90 days after the
9notice is mailed, the right to use the assumed name shall
10cease.
11    (h) Any corporation which (i) puts forth any sign or
12advertisement, assuming any name other than that by which it is
13incorporated or otherwise authorized by law to act or (ii)
14violates Section 3.25, shall be guilty of a Class C misdemeanor
15and shall be deemed guilty of an additional offense for each
16day it shall continue to so offend.
17    (i) Each corporation, domestic or foreign, that fails or
18refuses (1) to answer truthfully and fully within the time
19prescribed by this Act interrogatories propounded by the
20Secretary of State in accordance with this Act or (2) to
21perform any other act required by this Act to be performed by
22the corporation, is guilty of a Class C misdemeanor.
23    (j) Each corporation that fails or refuses to file articles
24of revocation of dissolution within the time prescribed by this
25Act is subject to a penalty for each calendar month or part of
26the month that it is delinquent in the amount of $50.

 

 

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1(Source: P.A. 95-233, eff. 8-16-07; 95-707, eff. 1-11-08;
296-1121, eff. 1-1-11.)
 
3    Section 30-75. The Limited Liability Company Act is amended
4by changing Section 50-10 as follows:
 
5    (805 ILCS 180/50-10)
6    (Text of Section before amendment by P.A. 99-637)
7    Sec. 50-10. Fees.
8    (a) The Secretary of State shall charge and collect in
9accordance with the provisions of this Act and rules
10promulgated under its authority all of the following:
11        (1) Fees for filing documents.
12        (2) Miscellaneous charges.
13        (3) Fees for the sale of lists of filings and for
14    copies of any documents.
15    (b) The Secretary of State shall charge and collect for all
16of the following:
17        (1) Filing articles of organization (domestic),
18    application for admission (foreign), and restated articles
19    of organization (domestic), $39 $500. Notwithstanding the
20    foregoing, the fee for filing articles of organization
21    (domestic), application for admission (foreign), and
22    restated articles of organization (domestic) in connection
23    with a limited liability company with ability to establish
24    series pursuant to Section 37-40 of this Act is $59 $750.

 

 

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1        (2) Filing articles of amendment or an amended
2    application for admission, $150.
3        (3) Filing articles of dissolution or application for
4    withdrawal, $100.
5        (4) Filing an application to reserve a name, $300.
6        (5) Filing a notice of cancellation of a reserved name,
7    $100.
8        (6) Filing a notice of a transfer of a reserved name,
9    $100.
10        (7) Registration of a name, $300.
11        (8) Renewal of registration of a name, $100.
12        (9) Filing an application for use of an assumed name
13    under Section 1-20 of this Act, $150 for each year or part
14    thereof ending in 0 or 5, $120 for each year or part
15    thereof ending in 1 or 6, $90 for each year or part thereof
16    ending in 2 or 7, $60 for each year or part thereof ending
17    in 3 or 8, $30 for each year or part thereof ending in 4 or
18    9, and a renewal for each assumed name, $150.
19        (10) Filing an application for change or cancellation
20    of an assumed name, $100.
21        (11) Filing an annual report of a limited liability
22    company or foreign limited liability company, $250, if
23    filed as required by this Act, plus a penalty if
24    delinquent. Notwithstanding the foregoing, the fee for
25    filing an annual report of a limited liability company or
26    foreign limited liability company with ability to

 

 

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1    establish series is $250 plus $50 for each series for which
2    a certificate of designation has been filed pursuant to
3    Section 37-40 of this Act and active on the last day of the
4    third month preceding the company's anniversary month,
5    plus a penalty if delinquent.
6        (12) Filing an application for reinstatement of a
7    limited liability company or foreign limited liability
8    company $500.
9        (13) Filing Articles of Merger, $100 plus $50 for each
10    party to the merger in excess of the first 2 parties.
11        (14) Filing an Agreement of Conversion or Statement of
12    Conversion, $100.
13        (15) Filing a statement of change of address of
14    registered office or change of registered agent, or both,
15    or filing a statement of correction, $25.
16        (16) Filing a petition for refund, $15.
17        (17) Filing any other document, $100.
18        (18) Filing a certificate of designation of a limited
19    liability company with the ability to establish series
20    pursuant to Section 37-40 of this Act, $50.
21    (c) The Secretary of State shall charge and collect all of
22the following:
23        (1) For furnishing a copy or certified copy of any
24    document, instrument, or paper relating to a limited
25    liability company or foreign limited liability company, or
26    for a certificate, $25.

 

 

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1        (2) For the transfer of information by computer process
2    media to any purchaser, fees established by rule.
3(Source: P.A. 97-839, eff. 7-20-12.)
 
4    (Text of Section after amendment by P.A. 99-637)
5    Sec. 50-10. Fees.
6    (a) The Secretary of State shall charge and collect in
7accordance with the provisions of this Act and rules
8promulgated under its authority all of the following:
9        (1) Fees for filing documents.
10        (2) Miscellaneous charges.
11        (3) Fees for the sale of lists of filings and for
12    copies of any documents.
13    (b) The Secretary of State shall charge and collect for all
14of the following:
15        (1) Filing articles of organization (domestic),
16    application for admission (foreign), and restated articles
17    of organization (domestic), $39 $500. Notwithstanding the
18    foregoing, the fee for filing articles of organization
19    (domestic), application for admission (foreign), and
20    restated articles of organization (domestic) in connection
21    with a limited liability company with a series or the
22    ability to establish a series pursuant to Section 37-40 of
23    this Act is $59 $750.
24        (2) Filing amendments (domestic or foreign), $150.
25        (3) Filing a statement of termination or application

 

 

10000SB0009sam001- 490 -LRB100 06347 HLH 18430 a

1    for withdrawal, $25.
2        (4) Filing an application to reserve a name, $300.
3        (5) Filing a notice of cancellation of a reserved name,
4    $100.
5        (6) Filing a notice of a transfer of a reserved name,
6    $100.
7        (7) Registration of a name, $300.
8        (8) Renewal of registration of a name, $100.
9        (9) Filing an application for use of an assumed name
10    under Section 1-20 of this Act, $150 for each year or part
11    thereof ending in 0 or 5, $120 for each year or part
12    thereof ending in 1 or 6, $90 for each year or part thereof
13    ending in 2 or 7, $60 for each year or part thereof ending
14    in 3 or 8, $30 for each year or part thereof ending in 4 or
15    9, and a renewal for each assumed name, $150.
16        (10) Filing an application for change or cancellation
17    of an assumed name, $100.
18        (11) Filing an annual report of a limited liability
19    company or foreign limited liability company, $250, if
20    filed as required by this Act, plus a penalty if
21    delinquent. Notwithstanding the foregoing, the fee for
22    filing an annual report of a limited liability company or
23    foreign limited liability company is $250 plus $50 for each
24    series for which a certificate of designation has been
25    filed pursuant to Section 37-40 of this Act and is in
26    effect on the last day of the third month preceding the

 

 

10000SB0009sam001- 491 -LRB100 06347 HLH 18430 a

1    company's anniversary month, plus a penalty if delinquent.
2        (12) Filing an application for reinstatement of a
3    limited liability company or foreign limited liability
4    company $500.
5        (13) Filing articles of merger, $100 plus $50 for each
6    party to the merger in excess of the first 2 parties.
7        (14) Filing articles of conversion, $100.
8        (15) Filing a statement of change of address of
9    registered office or change of registered agent, or both,
10    or filing a statement of correction, $25.
11        (16) Filing a petition for refund, $15.
12        (17) Filing a certificate of designation of a limited
13    liability company with a series pursuant to Section 37-40
14    of this Act, $50.
15        (18) Filing articles of domestication, $100.
16        (19) Filing, amending, or cancelling a statement of
17    authority, $50.
18        (20) Filing, amending, or cancelling a statement of
19    denial, $10.
20        (21) Filing any other document, $100.
21    (c) The Secretary of State shall charge and collect all of
22the following:
23        (1) For furnishing a copy or certified copy of any
24    document, instrument, or paper relating to a limited
25    liability company or foreign limited liability company, or
26    for a certificate, $25.

 

 

10000SB0009sam001- 492 -LRB100 06347 HLH 18430 a

1        (2) For the transfer of information by computer process
2    media to any purchaser, fees established by rule.
3(Source: P.A. 99-637, eff. 7-1-17.)
 
4
ARTICLE 95. NO ACCELERATION OR DELAY

 
5    Section 95-995. No acceleration or delay. Where this Act
6makes changes in a statute that is represented in this Act by
7text that is not yet or no longer in effect (for example, a
8Section represented by multiple versions), the use of that text
9does not accelerate or delay the taking effect of (i) the
10changes made by this Act or (ii) provisions derived from any
11other Public Act.
 
12
ARTICLE 99. EFFECTIVE DATE

 
13    Section 99-999. Effective date. This Act takes effect upon
14becoming law, but this Act does not take effect at all unless
15Senate Bills 1, 2, 3, 4, 5, 6, 7, 8, 10, 11, 12, and 13 of the
16100th General Assembly become law.".