100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2502

 

Introduced 2/6/2018, by Sen. Jennifer Bertino-Tarrant

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-45.5 new
35 ILCS 105/10  from Ch. 120, par. 439.10
35 ILCS 110/3-40.5 new
35 ILCS 110/10  from Ch. 120, par. 439.40

    Amends the Use Tax Act and the Service Use Tax Act. Provides that retailers and servicemen that do not collect the taxes under those Acts shall make the following reports and notifications: (1) a notification with each purchase made to an Illinois purchaser that use tax is due on certain purchases at retail made from the retailer and that the State requires the purchaser to file a use tax return; and (2) an annual notification to each Illinois purchaser detailing the total amount paid by the purchaser for Illinois purchases at retail during the previous calendar year. Provides that, if a purchaser has otherwise failed to file a return with the Department of Revenue and remit the proper amount of tax due, and if the purchaser receives a notification from a retailer under the provisions of the amendatory Act, then that purchaser must file a return and pay the tax by April 15 of the year in which the notification is received. Effective immediately.


LRB100 14948 HLH 32495 b

 

 

A BILL FOR

 

SB2502LRB100 14948 HLH 32495 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section
510 and by adding Section 3-45.5 as follows:
 
6    (35 ILCS 105/3-45.5 new)
7    Sec. 3-45.5. Notice and reporting requirements for
8non-collecting retailers.
9    (a) Each retailer that does not collect the tax under this
10Act shall, at the time of purchase, notify Illinois purchasers
11that use tax is due on certain purchases at retail made from
12the retailer and that the State requires the purchaser to file
13a use tax return.
14    (b) Each retailer that does not collect the tax under this
15Act shall send notification to all Illinois purchasers by
16January 31 of each year showing such information as the
17Department shall require by rule and including the total amount
18paid by the purchaser for Illinois purchases at retail made
19from the retailer in the previous calendar year. Such
20notification shall include, if available, the dates of
21purchases at retail, the amounts of each purchase at retail,
22and the category of the purchase at retail, including, if known
23by the retailer, whether the purchase at retail is exempt or

 

 

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1not exempt from taxation. The notification shall inform the
2purchaser that the State requires a use tax return to be filed
3and use tax paid on certain Illinois purchases at retail made
4by the purchaser from the retailer, as provided in Section 10
5of this Act.
6    The Director of Revenue may require any retailer that does
7not collect the tax under this Act and makes total Illinois
8sales of more than $100,000 in a calendar year to file the
9annual statement described in this subsection (c) by magnetic
10media or another machine-readable form for that year.
11    (c) Failure to send the notification required in subsection
12(a) shall subject the retailer to a penalty of $5 for each such
13failure unless the retailer shows reasonable cause for the
14failure. Failure to send the notification required in
15subsection (b) shall subject the retailer to a penalty of $10
16for each such failure unless the retailer shows reasonable
17cause for the failure.
18    (d) Retailers that do not collect the tax under this Act
19but made less than $100,000 in total gross sales in Illinois in
20the previous calendar year, and who reasonably expect gross
21sales in the current calendar year to be less than $100,000,
22are exempt from the notice.
23    (e) As used in this Section, "Illinois purchaser" means a
24person who purchases tangible personal property from a retailer
25and provides either a billing address or a delivery address in
26the State of Illinois.
 

 

 

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1    (35 ILCS 105/10)  (from Ch. 120, par. 439.10)
2    Sec. 10. Except as to motor vehicles, aircraft, watercraft,
3and trailers, and except as to cigarettes as defined in the
4Cigarette Use Tax Act, when tangible personal property is
5purchased from a retailer for use in this State by a purchaser
6who did not pay the tax imposed by this Act to the retailer,
7and who does not file returns with the Department as a retailer
8under Section 9 of this Act, such purchaser (by the last day of
9the month following the calendar month in which such purchaser
10makes any payment upon the selling price of such property)
11shall, except as otherwise provided in this Section, file a
12return with the Department and pay the tax upon that portion of
13the selling price so paid by the purchaser during the preceding
14calendar month. Such return shall be filed on a form prescribed
15by the Department and shall contain such information as the
16Department may reasonably require. Such return and payment from
17the purchaser shall be submitted to the Department sooner than
18the last day of the month after the month in which the purchase
19is made to the extent that that may be necessary in order to
20secure the title to a motor vehicle or the certificate of
21registration for an aircraft. However, except as to motor
22vehicles and aircraft, and except as to cigarettes as defined
23in the Cigarette Use Tax Act, if the purchaser's annual use tax
24liability does not exceed $600, the purchaser may file the
25return on an annual basis on or before April 15th of the year

 

 

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1following the year use tax liability was incurred. Individual
2purchasers with an annual use tax liability that does not
3exceed $600 may, in lieu of the filing and payment requirements
4in this Section, file and pay in compliance with Section 502.1
5of the Illinois Income Tax Act.
6    If a purchaser has otherwise failed to file a return with
7the Department and remit the proper amount of tax due as
8required under this Act, and if the purchaser receives a
9notification from a retailer under Section 3-45.5 of this Act,
10then that purchaser, on or before April 15 of the year in which
11the notification is received, must file a return and pay the
12tax upon those portions of the selling prices so paid by the
13purchaser, plus late fees, as determined by the Department, for
14the failure to file a return with the Department and remit the
15proper amount of tax due by the applicable deadline as
16determined by this Act. Failure to file a return and pay taxes
17in the manner described in this paragraph will result in
18additional late fees as determined by the Department.
19    If cigarettes, as defined in the Cigarette Use Tax Act, are
20purchased from a retailer for use in this State by a purchaser
21who did not pay the tax imposed by this Act to the retailer,
22and who does not file returns with the Department as a retailer
23under Section 9 of this Act, such purchaser must, within 30
24days after acquiring the cigarettes, file a return with the
25Department and pay the tax upon that portion of the selling
26price so paid by the purchaser for the cigarettes.

 

 

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

 

 

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

 

 

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

 

 

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1registration from the Department. In that event, all of the
2provisions of Section 9 of this Act concerning the filing of
3regular monthly, quarterly or annual tax returns and all of the
4provisions of Section 2a of the "Retailers' Occupation Tax Act"
5concerning the requirements for registrants to post bond or
6other security with the Department, as the provisions of such
7sections now exist or may hereafter be amended, shall apply to
8such users to the same extent as if such provisions were
9included herein.
10(Source: P.A. 100-321, eff. 8-24-17.)
 
11    Section 10. The Service Use Tax Act is amended by changing
12Section 10 and by adding Section 3-40.5 as follows:
 
13    (35 ILCS 110/3-40.5 new)
14    Sec. 3-40.5. Notice and reporting requirements for
15non-collecting servicemen.
16    (a) Each serviceman that does not collect the tax under
17this Act shall, at the time of purchase, notify Illinois
18purchasers that use tax is due on certain purchases at retail
19made from the retailer and that the State requires the
20purchaser to file a use tax return.
21    (b) Each serviceman that does not collect the tax under
22this Act shall send notification to all Illinois purchasers by
23January 31 of each year showing such information as the
24Department shall require by rule and including the total amount

 

 

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1paid by the purchaser for Illinois purchases at retail made
2from the serviceman in the previous calendar year. Such
3notification shall include, if available, the dates of
4purchases at retail, the amounts of each purchase at retail,
5and the category of the purchase at retail, including, if known
6by the serviceman, whether the purchase at retail is exempt or
7not exempt from taxation. The notification shall inform the
8purchaser that the State requires a use tax return to be filed
9and use tax paid on certain Illinois purchases at retail made
10by the purchaser from the serviceman, as provided in Section 10
11of this Act.
12    The notification specified in this subsection (b) shall be
13sent separately to all Illinois purchasers by first-class mail
14and shall not be included with any other shipments. The
15notification shall include the words "Important Tax Document
16Enclosed" on the exterior of the mailing. The notification
17shall include the name of the serviceman.
18    (c) Failure to send the notification required in subsection
19(a) shall subject the serviceman to a penalty of $5 for each
20such failure unless the serviceman shows reasonable cause for
21the failure. Failure to send the notification required in
22subsection (b) shall subject the serviceman to a penalty of $10
23for each such failure unless the serviceman shows reasonable
24cause for the failure.
25    (d) Servicemen that do not collect the tax under this Act
26but made less than $100,000 in total gross sales in Illinois in

 

 

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1the previous calendar year, and who reasonably expect gross
2sales in the current calendar year to be less than $100,000,
3are exempt from the notice.
4    (e) As used in this Section, "Illinois purchaser" means a
5person who purchases tangible personal property from a
6serviceman and provides either a billing address or a delivery
7address in the State of Illinois.
 
8    (35 ILCS 110/10)  (from Ch. 120, par. 439.40)
9    Sec. 10. Where property is acquired as an incident to the
10purchase of a service from a serviceman for use in this State
11by a purchaser who did not pay the tax herein imposed to the
12serviceman, and who does not file returns with the Department
13as a serviceman under Section 9 of this Act, such purchaser (by
14the last day of the month following the calendar month in which
15such purchaser makes any payment upon the selling price of such
16property) shall, except as hereinafter provided in this
17Section, file a return with the Department and pay the tax upon
18that portion of the selling price so paid by the purchaser
19during the preceding calendar month. Such return shall be filed
20on a form prescribed by the Department and shall contain such
21information as the Department may reasonably require.
22    When a purchaser pays a tax herein imposed directly to the
23Department, the Department (upon request therefor from such
24purchaser) shall issue an appropriate receipt to such purchaser
25showing that he has paid such tax to the Department. Such

 

 

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1receipt shall be sufficient to relieve the purchaser from
2further liability from the tax to which such receipt may refer.
3    A user who is liable to pay Service Use Tax directly to the
4Department only occasionally and not on a frequently recurring
5basis, and who is not required to file returns within the
6Department as a serviceman under Section 9 of this Act, or as a
7serviceman under the "Service Occupation Tax Act", or as a
8retailer or user under the "Use Tax Act", or as a retailer
9under the "Retailers' Occupation Tax Act", need not register
10with the Department. However, if such a user has a frequently
11recurring direct Service Use Tax liability to pay to the
12Department, such user shall be required to register with the
13Department on forms prescribed by the Department and to obtain
14and display a certificate of registration from the Department.
15In that event, all of the provisions of Section 9 of this Act
16concerning the filing of regular monthly, quarterly or annual
17tax returns and all of the provisions of Section 2a of the
18"Retailers' Occupation Tax Act" concerning the requirements
19for registrants to post bond or other security with the
20Department, as the provisions of such sections now exist or may
21hereafter be amended, shall apply to such users to the same
22extent as if such provisions were included herein.
23    If a purchaser has otherwise failed to file a return with
24the Department and remit the proper amount of tax due as
25required under this Act, and if the purchaser receives a
26notification from a serviceman under Section 3-40.5 of this

 

 

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1Act, then that purchaser, on or before April 15 of the year in
2which the notification is received, must file a return and pay
3the tax upon those portions of the selling prices so paid by
4the purchaser, plus late fees, as determined by the Department,
5for the failure to file a return with the Department and remit
6the proper amount of tax due by the applicable deadline as
7determined by this Act. Failure to file a return and pay taxes
8in the manner described in this paragraph will result in
9additional late fees as determined by the Department.
10(Source: P.A. 91-51, eff. 6-30-99.)
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.