Sen. Toi W. Hutchinson

Filed: 1/24/2017

 

 


 

 


 
10000SB0009sam002LRB100 06347 HLH 18628 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,

 

 

10000SB0009sam002- 2 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 3 -LRB100 06347 HLH 18628 a

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.
 

 

 

10000SB0009sam002- 4 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 5 -LRB100 06347 HLH 18628 a

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,

 

 

10000SB0009sam002- 6 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 7 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 8 -LRB100 06347 HLH 18628 a

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.

 

 

10000SB0009sam002- 9 -LRB100 06347 HLH 18628 a

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.

 

 

10000SB0009sam002- 10 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 11 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 12 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 13 -LRB100 06347 HLH 18628 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 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

 

 

10000SB0009sam002- 14 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 15 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 16 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 17 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 18 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 19 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 20 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 21 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 22 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 23 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 24 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 25 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 26 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 27 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 28 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 29 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 30 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 31 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 32 -LRB100 06347 HLH 18628 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:

 

 

10000SB0009sam002- 33 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 34 -LRB100 06347 HLH 18628 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.
 

 

 

10000SB0009sam002- 35 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 36 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 37 -LRB100 06347 HLH 18628 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.
 

 

 

10000SB0009sam002- 38 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 39 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 40 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 41 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 42 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 43 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 44 -LRB100 06347 HLH 18628 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.

 

 

10000SB0009sam002- 45 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 46 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 47 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 48 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 49 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 50 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 51 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 52 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 53 -LRB100 06347 HLH 18628 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.
 

 

 

10000SB0009sam002- 54 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 55 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 56 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 57 -LRB100 06347 HLH 18628 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;

 

 

10000SB0009sam002- 58 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 59 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 60 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 61 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 62 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 63 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 64 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 65 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 66 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 67 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 68 -LRB100 06347 HLH 18628 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.

 

 

10000SB0009sam002- 69 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 70 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 71 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 72 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 73 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 74 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 75 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 76 -LRB100 06347 HLH 18628 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.
 

 

 

10000SB0009sam002- 77 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 78 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 79 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 80 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 81 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 82 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 83 -LRB100 06347 HLH 18628 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.

 

 

10000SB0009sam002- 84 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 85 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 86 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 87 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 88 -LRB100 06347 HLH 18628 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.

 

 

10000SB0009sam002- 89 -LRB100 06347 HLH 18628 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.
 

 

 

10000SB0009sam002- 90 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 91 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 92 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 93 -LRB100 06347 HLH 18628 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.

 

 

10000SB0009sam002- 94 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 95 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 96 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 97 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 98 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 99 -LRB100 06347 HLH 18628 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,

 

 

10000SB0009sam002- 100 -LRB100 06347 HLH 18628 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.
 

 

 

10000SB0009sam002- 101 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 102 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 103 -LRB100 06347 HLH 18628 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:

 

 

10000SB0009sam002- 104 -LRB100 06347 HLH 18628 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 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

 

 

10000SB0009sam002- 105 -LRB100 06347 HLH 18628 a

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.
 

 

 

10000SB0009sam002- 106 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 107 -LRB100 06347 HLH 18628 a

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.

 

 

10000SB0009sam002- 108 -LRB100 06347 HLH 18628 a

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.
 

 

 

10000SB0009sam002- 109 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 110 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 111 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 112 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 113 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 114 -LRB100 06347 HLH 18628 a

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;

 

 

10000SB0009sam002- 115 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 116 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 117 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 118 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 119 -LRB100 06347 HLH 18628 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.
 

 

 

10000SB0009sam002- 120 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 121 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 122 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 123 -LRB100 06347 HLH 18628 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.
 

 

 

10000SB0009sam002- 124 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 125 -LRB100 06347 HLH 18628 a

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.

 

 

10000SB0009sam002- 126 -LRB100 06347 HLH 18628 a

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.

 

 

10000SB0009sam002- 127 -LRB100 06347 HLH 18628 a

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:
 

 

 

10000SB0009sam002- 128 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 129 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 130 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 131 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 132 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 133 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 134 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 135 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 136 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 137 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 138 -LRB100 06347 HLH 18628 a

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,

 

 

10000SB0009sam002- 139 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 140 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 141 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 142 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 143 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 144 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 145 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 146 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 147 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 148 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 149 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 150 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 151 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 152 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 153 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 154 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 155 -LRB100 06347 HLH 18628 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)

 

 

10000SB0009sam002- 156 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 157 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 158 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 159 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 160 -LRB100 06347 HLH 18628 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.

 

 

10000SB0009sam002- 161 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 162 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 163 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 164 -LRB100 06347 HLH 18628 a

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

 

 

10000SB0009sam002- 165 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 166 -LRB100 06347 HLH 18628 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.

 

 

10000SB0009sam002- 167 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 168 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 169 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 170 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 171 -LRB100 06347 HLH 18628 a

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,

 

 

10000SB0009sam002- 172 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 173 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 174 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 175 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 176 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 177 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 178 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 179 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 180 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 181 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 182 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 183 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 184 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 185 -LRB100 06347 HLH 18628 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"

 

 

10000SB0009sam002- 186 -LRB100 06347 HLH 18628 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:

 

 

10000SB0009sam002- 187 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 188 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 189 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 190 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 191 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 192 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 193 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 194 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 195 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 196 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 197 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 198 -LRB100 06347 HLH 18628 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;

 

 

10000SB0009sam002- 199 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 200 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 201 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 202 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 203 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 204 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 205 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 206 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 207 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 208 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 209 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 210 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 211 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 212 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 213 -LRB100 06347 HLH 18628 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

 

 

10000SB0009sam002- 214 -LRB100 06347 HLH 18628 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        &