101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3386

 

Introduced 2/14/2020, by Sen. Cristina Castro

 

SYNOPSIS AS INTRODUCED:
 
New Act
65 ILCS 5/8-3-13  from Ch. 24, par. 8-3-13
65 ILCS 5/8-3-14  from Ch. 24, par. 8-3-14
65 ILCS 5/8-3-14a
55 ILCS 5/5-1030  from Ch. 34, par. 5-1030

    Creates the Short-Term Rental Operators' Occupation Tax Act. Imposes a tax upon persons engaged in the business of short-term rental at the rate of 5% of 94% of the gross rental receipts from such renting, leasing or letting. Imposes an additional tax at the rate of 1% of 94% of the gross rental receipts from such renting, leasing or letting. Provides that operators of short-term rentals shall obtain a business license from the Department of Revenue. Effective October 1, 2020.


LRB101 19771 HLH 69281 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB3386LRB101 19771 HLH 69281 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Short-Term Rental Operators' Occupation Tax Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Booking transaction" means a transaction in which a
8hosting platform collects or receives compensation for
9facilitating a rental of a short-term rental located in this
10State by directly or indirectly allowing a reservation to be
11made for an occupant or collecting or processing payments
12through the hosting platform's online application, software,
13website, or system.
14    "Department" means the Department of Revenue.
15    "Hosting platform" means a person who provides an online
16application, software, website, or system through which a
17short-term rental located in this State is advertised or held
18out to the public as available to rent for occupancy.
19    "Operator" means any person operating a short-term rental.
20    "Occupancy" means the use or possession, or the right to
21the use or possession, of any room or rooms in a short-term
22rental for any purpose, or the right to the use or possession
23of the furnishings or to the services and accommodations

 

 

SB3386- 2 -LRB101 19771 HLH 69281 b

1accompanying the use and possession of the room or rooms, by an
2occupant.
3    "Permanent resident" means any person who occupied or has
4the right to occupy any room or rooms, regardless of whether or
5not it is the same room or rooms, in a short-term rental for at
6least 30 consecutive days.
7    "Person" means any natural individual, firm, partnership,
8association, joint stock company, joint adventure, public or
9private corporation, limited liability company, or a receiver,
10executor, trustee, guardian or other representative appointed
11by order of any court.
12    "Rent" or "rental" means the consideration received for an
13occupant's occupancy, valued in money, whether received in
14money or otherwise, including all receipts, cash, credits and
15property or services of any kind or nature.
16    "Room" or "rooms" means any living quarters, sleeping or
17housekeeping accommodations.
18    "Short-term rental" means an owner-occupied,
19tenant-occupied, or non-owner-occupied dwelling including, but
20not limited to, an apartment, house, cottage, condominium, or
21furnished accommodation that is not a hotel as defined in the
22Hotel Operators' Occupation Tax Act, where: (i) at least one
23room in the dwelling is rented to an occupant for a period of
24less than 30 consecutive days; and (ii) all accommodations are
25reserved in advance; provided, however, that a dwelling shall
26be considered a single room if rented as such. This definition

 

 

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1does not include:
2        (1) any dormitory or other living or sleeping facility
3    maintained by a public or private school, college, or
4    university for the use of students, faculty, or visitors.
5        (2) any facility certified or licensed and regulated by
6    the Department of Human Services or Department of Public
7    Health;
8        (3) any room in a condominium, cooperative, or
9    timeshare plan and any individually or collectively owned
10    single-family or multi-family dwelling house or room in
11    such dwelling that is rented for a period of at least 30
12    consecutive days and that is not advertised or held out to
13    the public as a place regularly rented for periods of less
14    than 30 consecutive days;
15        (4) any migrant labor camp or residential migrant
16    housing permitted by the Department of Public Health;
17        (5) any nonprofit organization that operates a
18    facility providing housing only to patients, patients'
19    families, and patients' caregivers and not to the general
20    public; or
21        (6) any apartment building inspected by the United
22    States Department of Housing and Urban Development or other
23    entity acting on behalf of the United States Department of
24    Housing and Urban Development that is designated primarily
25    as housing for persons at least 62 years of age. The
26    Department may require the operator of the apartment

 

 

SB3386- 4 -LRB101 19771 HLH 69281 b

1    building to attest in writing that such building meets the
2    criteria provided in this subparagraph. The Department may
3    adopt rules to implement this requirement.
 
4    Section 10. Rate; exemptions.
5    (a) A tax is imposed upon persons engaged in the business
6of short-term rental at the rate of 5% of 94% of the gross
7rental receipts from such renting, leasing, or letting.
8    (b) There shall be imposed an additional tax upon persons
9engaged in the business of short-term rental at the rate of 1%
10of 94% of the gross rental receipts from such renting, leasing,
11or letting.
12    (c) No funds received pursuant to this Act shall be used to
13advertise for or otherwise promote new competition in the hotel
14business.
15    (d) The tax is not imposed upon the privilege of engaging
16in any business in Interstate Commerce or otherwise, which
17business may not, under the Constitution and statutes of the
18United States, be made the subject of taxation by this State.
19In addition, the tax is not imposed upon gross rental receipts
20for which the short-term rental operator is prohibited from
21obtaining reimbursement for the tax from the customer by reason
22of a federal treaty.
23    (e) The tax imposed by this Act shall not apply to gross
24rental receipts received by an entity that is organized and
25operated exclusively for religious purposes and possesses an

 

 

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1active Exemption Identification Number issued by the
2Department pursuant to the Retailers' Occupation Tax Act when
3acting as a short-term rental operator renting, leasing, or
4letting rooms as follows:
5        (1) in furtherance of the purposes for which it is
6    organized; or
7        (2) to entities that (i) are organized and operated
8    exclusively for religious purposes, (ii) possess an active
9    Exemption Identification Number issued by the Department
10    pursuant to the Retailers' Occupation Tax Act, and (iii)
11    rent the rooms in furtherance of the purposes for which
12    they are organized.
13    No gross rental receipts are exempt under paragraph (2) of
14this subsection (e) unless the short-term rental operator
15obtains the active Exemption Identification Number from the
16exclusively religious entity to whom it is renting and
17maintains that number in its books and records. Gross rental
18receipts from all rentals other than those described in items
19(1) or (2) of this subsection (e) are subject to the tax
20imposed by this Act unless otherwise exempt under this Act.
21    (f) Persons subject to the tax imposed by this Act may
22reimburse themselves for their tax liability under this Act by
23separately stating such tax as an additional charge, which
24charge may be stated in combination, in a single amount, with
25any tax imposed by any unit of local government.
26    (g) If any short-term rental operator or a hosting platform

 

 

SB3386- 6 -LRB101 19771 HLH 69281 b

1acting as an agent collects an amount (however designated)
2which purports to reimburse such operator for short-term rental
3operators' occupation tax liability measured by receipts which
4are not subject to short-term rental operators' occupation tax,
5or if any short-term rental operator or a hosting platform
6acting as an agent, in collecting an amount (however
7designated) which purports to reimburse such operator for
8short-term rental operators' occupation tax liability measured
9by receipts which are subject to tax under this Act, collects
10more from the customer than the operators' short-term rental
11operators' occupation tax liability in the transaction is, the
12customer shall have a legal right to claim a refund of such
13amount from such operator. However, if such amount is not
14refunded to the customer for any reason, the short-term rental
15operator or hosting platform is liable to pay such amount to
16the Department.
17    (h) The tax imposed under this Act shall be in addition to
18all other occupation or privilege taxes imposed by the State of
19Illinois or by any municipal corporation or political
20subdivision thereof.
 
21    Section 15. Hosting platform collection and remittance of
22taxes.
23    (a) Any hosting platform that facilitates a booking
24transaction shall be required to act as the relevant short-term
25rental operator's agent and: (i) assess, collect, report, and

 

 

SB3386- 7 -LRB101 19771 HLH 69281 b

1remit the tax to the appropriate taxing body; (ii) maintain
2records of any taxes collected that have been remitted to the
3appropriate taxing body and submit these records to the
4Department in accordance with this Act; and (iii) notify the
5short-term rental operator that the operator must comply with
6all applicable local, State, and federal laws, regulations, and
7ordinances, including this Act.
8    (b) A hosting platform that facilitates a booking
9transaction shall provide notification within a reasonable
10time to the relevant short-term rental operator that the tax
11has been collected and remitted to the appropriate taxing body.
12The notification must be delivered in hand, by mail, or
13conveyed electronically by electronic message, mobile or smart
14phone application, or another similar electronic process,
15digital media, or communication portal. A short-term rental
16operator shall not be responsible for collecting and remitting
17taxes for which the operator has received notification from a
18hosting platform that the excise has been collected and
19remitted to the taxing body on their behalf.
20    (c) A hosting platform acting as an agent of a short-term
21rental operator in accordance with subsection (a) shall provide
22notification to the Department in a manner prescribed by the
23Department.
 
24    Section 20. Hosting Platforms.
25    (a) It is unlawful for any hosting platform to facilitate a

 

 

SB3386- 8 -LRB101 19771 HLH 69281 b

1booking transaction for a short-term rental located in this
2State unless the hosting platform:
3        (1) is first registered with the Department in
4    accordance with subsection (d); and
5        (2) as a condition of registration with the Department,
6    has obtained written consent from all operators with
7    short-term rentals located in this State who intend to
8    short-term rent such dwelling or room within such dwelling
9    through the platform, for the disclosure of the information
10    required under, and the furnishing of such information in
11    accordance with, Section 25 of this Act.
12    (b) It is unlawful for any hosting platform to facilitate a
13booking transaction for a short-term rental located in this
14State if the dwelling or room within the dwelling is not
15lawfully registered, licensed, permitted, or otherwise allowed
16as a short-term rental pursuant to an applicable local, State,
17or federal law, regulation, or ordinance, including this Act,
18at the time it is rented.
19    (c) A hosting platform shall designate and maintain on file
20with the Department an agent for service of process in this
21state. If the registered agent is unable, with reasonable
22diligence, to be located, or if the hosting platform fails to
23reasonably designate or maintain a registered agent in this
24State, the Director may deem himself or herself or another
25appropriate person an agent of the hosting platform for
26purposes of accepting service of any process, notice, or

 

 

SB3386- 9 -LRB101 19771 HLH 69281 b

1demand.
2    (d) The Department may issue a certificate of registration
3to each hosting platform that meets the requirements of this
4Act and the rules for hosting platform registration adopted
5thereunder by the Department.
 
6    Section 25. Records and reporting.
7    (a) Notwithstanding any other provision of law or
8Department action to the contrary:
9        (1) Every operator shall keep separate books or records
10    of the operator's business so as to show the rents and
11    occupancies taxable under this Act separately from the
12    operator's transactions not taxable under this Act. If any
13    operator fails to keep such separate books or records, the
14    operator shall be liable to remit the tax at the rate
15    designated in this Act upon the entire proceeds from the
16    short-term rental. The Department may adopt rules that
17    establish requirements, including record forms and
18    formats, for records required to be kept and maintained by
19    taxpayers. For purposes of this Section, "records" means
20    all data maintained by the taxpayer, including data on
21    paper, microfilm, microfiche or any type of
22    machine-sensible data compilation.
23        (2) In accordance with rules adopted by the Department
24    and subject to applicable laws, for all booking
25    transactions it facilitates for short-term rentals located

 

 

SB3386- 10 -LRB101 19771 HLH 69281 b

1    in this State a hosting platform shall develop and maintain
2    a report that must include all of the following information
3    about each short-term rental booking transaction:
4            (A) the name of the operator;
5            (B) the operator's or short-term rental's license,
6        registration, permit, or other number as applicable;
7            (C) the physical address;
8            (D) any room or dwelling designation;
9            (E) the individual periods of rental by calendar
10        date;
11            (F) the itemized amounts collected or processed by
12        the hosting platform for the rental, taxes, and all
13        other charges; and
14            (G) any additional information that the Department
15        may require by rule.
16    (b) The hosting platform shall submit the report to the
17Department monthly in the format requested by the Department
18and shall make the report available for audit by the Department
19upon request, as well as any underlying records requested by
20the Department. The Department may issue and serve subpoenas
21and compel the production of the report and underlying records
22as necessary to enforce hosting platform compliance with this
23Section. Such underlying records may not include copies of
24specific message exchanges between the hosting platform and an
25operator, short-term rental renter, or occupant, or between the
26operator and short-term rental renter or occupant.

 

 

SB3386- 11 -LRB101 19771 HLH 69281 b

1    (c) The hosting platform shall maintain the report and
2underlying records for at least 3 years, in accordance with any
3rules adopted by the Department.
4    (d) The Department shall share the report, sections of the
5report, underlying records, or any combination of those items,
6with an agency or local government of this State to ensure
7compliance with this Act, the laws of this State, and any local
8laws, regulations or ordinances.
9    (e) The Department may use the report and underlying
10records for tax auditing purposes and local governments may use
11the reports and underlying records to ensure compliance with
12laws, ordinances, or regulations.
13    (f) A hosting platform may not facilitate a booking
14transaction for a rental of a short-term rental located in this
15State unless the operator consents to the hosting platform's
16disclosure of the information required by this Section.
17    (g) A hosting platform that has operated or is operating in
18violation of this Section, or the rules of the Department,
19shall be subject to fines up to $1,000 per offense and to
20suspension, revocation, or refusal of a registration issued
21pursuant to this Act. For purposes of this subsection, the
22Department may regard as a separate offense each transaction a
23hosting platform processes in violation of this Act or the
24rules of the Department.
 
25    Section 30. State business licensing.

 

 

SB3386- 12 -LRB101 19771 HLH 69281 b

1    (a) Before an operator engages in the business of a
2short-term rental in this State, the operator shall obtain a
3business license from the Department. In order to obtain a
4business license from the Department, the operator must first
5provide evidence to the Department that the short-term rental
6is lawfully registered, licensed, permitted, or otherwise
7allowed to operate as a short-term rental pursuant to the
8applicable local law, regulation, or ordinance.
9    (b) An operator's business license number issued by the
10Department must be displayed on any advertisement or listing of
11a short-term rental and be physically displayed within the
12short-term rental.
13    (c) If the Department notifies a hosting platform in
14writing that an advertisement or listing for a short-term
15rental in this state fails to display a valid business license
16number issued by the Department, the hosting platform must
17remove all advertisements or listings for that short-term
18rental from its online application, software, website, or
19system within 3 business days unless the listing is otherwise
20brought into compliance with the law.
21    (d) The Department shall revoke or refuse to issue or renew
22a short-term rental operator's business license when: (i) the
23Department determines that the operation of the subject
24short-term rental violates the terms of an applicable lease or
25property restriction; or (ii) the Department determines that
26the operation of the short-term rental violates a State,

 

 

SB3386- 13 -LRB101 19771 HLH 69281 b

1federal, or local law, ordinance, or regulation, or the
2short-term rental operator is the subject of a final order or
3judgment lawfully directing the termination of the premises'
4use as a short-term rental.
 
5    Section 35. Filing of returns and distribution of proceeds.
6    Except as provided in this Section, on or before the last
7day of each calendar month, every operator or agent in this
8State shall file a return for the preceding calendar month with
9the Department, stating:
10        (1) the name of the operator;
11        (2) the operator's residence address and the address of
12    his principal place of business and the address of the
13    principal place of business (if that is a different
14    address) from which he engages in the business of renting,
15    leasing or letting rooms in a short-term rental in this
16    State;
17        (3) the total amount of rental receipts received by the
18    operator during the preceding calendar month from renting,
19    leasing or letting rooms during such preceding calendar
20    month;
21        (4) the total amount of rental receipts received by the
22    operator during the preceding calendar month from renting,
23    leasing or letting rooms to permanent residents during such
24    preceding calendar month;
25        (5) the total amount of other exclusions from gross

 

 

SB3386- 14 -LRB101 19771 HLH 69281 b

1    rental receipts allowed by this Act;
2        (6) gross rental receipts which were received by the
3    operator during the preceding calendar month and upon the
4    basis of which the tax is imposed;
5        (7) the amount of tax due; and
6        (8) such other reasonable information as the
7    Department may require.
8    If the operator's average monthly tax liability to the
9Department does not exceed $200, the Department may authorize
10the operator's returns to be filed on a quarter annual basis,
11with the return for January, February, and March of a given
12year being due by April 30 of such year; with the return for
13April, May, and June of a given year being due by July 31 of
14such year; with the return for July, August, and September of a
15given year being due by October 31 of such year, and with the
16return for October, November, and December of a given year
17being due by January 31 of the following year.
18    If the operator's average monthly tax liability to the
19Department does not exceed $50, the Department may authorize
20the operator's returns to be filed on an annual basis, with the
21return for a given year being due by January 31 of the
22following year.
23    Such quarter annual and annual returns, as to form and
24substance, shall be subject to the same requirements as monthly
25returns.
26    Notwithstanding any other provision in this Act concerning

 

 

SB3386- 15 -LRB101 19771 HLH 69281 b

1the time within which an operator may file his return, in the
2case of any operator who ceases to engage in a kind of business
3which makes the operator responsible for filing returns under
4this Act, such operator shall file a final return under this
5Act with the Department not more than 1 month after
6discontinuing such business.
7    Where the same person has more than one business registered
8with the Department under separate registrations under this
9Act, such person shall not file each return that is due as a
10single return covering all such registered businesses, but
11shall file separate returns for each such registered business.
12    In the operator's return, the operator shall determine the
13value of any consideration other than money received by him in
14connection with the renting, leasing, or letting of rooms in
15the course of his business, and the operator shall include such
16value in his return. Such determination shall be subject to
17review and revision by the Department in the manner provided in
18this Act for the correction of returns.
19    Where the operator is a corporation, the return filed on
20behalf of such corporation shall be signed by the president,
21vice-president, secretary or treasurer or by the properly
22accredited agent of such corporation.
23    The person filing the return shall, at the time of filing
24such return, pay to the Department the amount of tax herein
25imposed. The operator filing the return under this Section
26shall, at the time of filing such return, pay to the Department

 

 

SB3386- 16 -LRB101 19771 HLH 69281 b

1the amount of tax imposed by this Act less a discount of 2.1%
2or $25 per calendar year, whichever is greater, which is
3allowed to reimburse the operator for the expenses incurred in
4keeping records, preparing and filing returns, remitting the
5tax and supplying data to the Department on request.
6    If any payment provided for in this Section exceeds the
7operator's liabilities under this Act, as shown on an original
8return, the Department may authorize the operator to credit
9such excess payment against liability subsequently to be
10remitted to the Department under this Act, in accordance with
11reasonable rules adopted by the Department. If the Department
12subsequently determines that all or any part of the credit
13taken was not actually due to the operator, the operator's
14discount shall be reduced by an amount equal to the difference
15between the discount as applied to the credit taken and that
16actually due, and that operator shall be liable for penalties
17and interest on such difference.
18    The proceeds collected from the tax under this Act shall be
19deposited into the same funds and in the same manner as
20proceeds are deposited under Section 6 of the Hotel Operators'
21Occupation Tax Act.
22    The Department may, upon separate written notice to a
23taxpayer, require the taxpayer to prepare and file with the
24Department on a form prescribed by the Department within not
25less than 60 days after receipt of the notice an annual
26information return for the tax year specified in the notice.

 

 

SB3386- 17 -LRB101 19771 HLH 69281 b

1Such annual return to the Department shall include a statement
2of gross receipts as shown by the operator's last State income
3tax return. If the total receipts of the business as reported
4in the State income tax return do not agree with the gross
5receipts reported to the Department for the same period, the
6operator shall attach to his annual information return a
7schedule showing a reconciliation of the 2 amounts and the
8reasons for the difference. The operator's annual information
9return to the Department shall also disclose pay roll
10information of the operator's business during the year covered
11by such return and any additional reasonable information which
12the Department deems would be helpful in determining the
13accuracy of the monthly, quarterly or annual tax returns by
14such operator as hereinbefore provided for in this Section.
15    If the annual information return required by this Section
16is not filed when and as required the taxpayer shall be liable
17for a penalty in an amount determined in accordance with
18Section 3-4 of the Uniform Penalty and Interest Act until such
19return is filed as required, the penalty to be assessed and
20collected in the same manner as any other penalty provided for
21in this Act.
22    The chief executive officer, proprietor, owner or highest
23ranking manager shall sign the annual return to certify the
24accuracy of the information contained therein. Any person who
25willfully signs the annual return containing false or
26inaccurate information shall be guilty of perjury and punished

 

 

SB3386- 18 -LRB101 19771 HLH 69281 b

1accordingly. The annual return form prescribed by the
2Department shall include a warning that the person signing the
3return may be liable for perjury.
4    The foregoing portion of this Section concerning the filing
5of an annual information return shall not apply to an operator
6who is not required to file an income tax return with the
7United States Government.
 
8    Section 40. Incorporation of Retailers' Occupation Tax Act
9and Uniform Penalty and Interest Act. All of the provisions of
10Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b,
116c, 7, 8, 9, 10, 11 and 12 of the Retailers' Occupation Tax Act
12and Section 3-7 of the Uniform Penalty and Interest Act shall
13apply to persons in the business of renting, leasing or letting
14short-term rental rooms in this State to the same extent as if
15such provisions were included herein.
 
16    Section 45. Recordkeeping. When the amount due is under
17$300, any person engaged in the business of renting, leasing or
18letting short-term rental rooms in this State, who fails to
19make a return, or to keep books and records as required herein,
20or who makes a fraudulent return, or who willfully violates any
21rule or regulation of the Department for the administration and
22enforcement of the provisions of this Act, or any officer or
23agent of a corporation engaged in the business of renting,
24leasing or letting short-term rental rooms in this State, who

 

 

SB3386- 19 -LRB101 19771 HLH 69281 b

1signs a fraudulent return made on behalf of such corporation,
2is guilty of a Class 4 felony.
3    Any person who violates any provision of Section 5 of this
4Act is guilty of a Class 4 felony. Each and every day any such
5person is engaged in business in violation of said Section 5
6shall constitute a separate offense.
7    When the amount due is under $300, any person who accepts
8money that is due to the Department under this Act from a
9taxpayer for the purpose of acting as the taxpayer's agent to
10make the payment to the Department, but who fails to remit such
11payment to the Department when due is guilty of a Class 4
12felony. Any such person who purports to make such payment by
13issuing or delivering a check or other order upon a real or
14fictitious depository for the payment of money, knowing that it
15will not be paid by the depository, shall be guilty of a
16deceptive practice in violation of Section 17-1 of the Criminal
17Code of 2012.
18    Any short-term rental operator who collects or attempts to
19collect an amount (however designated) which purports to
20reimburse such operator for a short-term rental operators'
21occupation tax liability measured by receipts which such
22operator knows are not subject to short-term rental operators'
23occupation tax, or any short-term rental operator who knowingly
24over-collects or attempts to over-collect an amount purporting
25to reimburse such operator for short-term operators'
26occupation tax liability in a transaction which is subject to

 

 

SB3386- 20 -LRB101 19771 HLH 69281 b

1the tax that is imposed by this Act, shall be guilty of a Class
24 felony.
3    When the amount due is $300 or more, any person engaged in
4the business of renting, leasing or letting short-term rental
5rooms in this State, who fails to make a return, or to keep
6books and records as required herein, or who makes a fraudulent
7return, or who willfully violates any rule or regulation of the
8Department for the administration and enforcement of the
9provisions of this Act, or any officer or agent of a
10corporation engaged in the business of renting, leasing or
11letting short-term rental rooms in this State who signs a
12fraudulent return made on behalf of such corporation is guilty
13of a Class 3 felony.
14    When the amount due is $300 or more, any person who accepts
15money that is due to the Department under this Act from a
16taxpayer for the purpose of acting as the taxpayer's agent to
17make the payment to the Department, but who fails to remit such
18payment to the Department is guilty of a Class 3 felony. Any
19such person who purports to make such payment by issuing or
20delivering a check or other order upon a real or fictitious
21depository for the payment of money, knowing that it will not
22be paid by the depository, shall be guilty of a deceptive
23practice in violation of Section 17-1 of the Criminal Code of
242012.
25    A prosecution for any act in violation of this Section may
26be commenced at any time within 3 years of the commission of

 

 

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1that act.
 
2    Section 50. Intergovernmental sharing of information. Any
3information collected by the Department pursuant to this Act
4shall not be subject to the Freedom of Information Act.
5Information collected pursuant to this Act by the Department
6may be shared with local units of government upon request,
7provided that the information is treated as confidential at all
8times by the local unit of government.
 
9    Section 55. Local regulation. A unit of local government
10may adopt an ordinance or resolution regulating short-term
11rental activities within that unit of local government that
12imposes requirements not inconsistent with nor less stringent
13than those imposed by this Act.
 
14    Section 60. Severability. If any provision of this Act, in
15part or in full, or its application to any person, entity, or
16circumstance is held invalid, the invalidity does not affect
17other provisions or applications of the Act which can be given
18effect without the invalid provision or application, and to
19this end the provisions of this Act are severable.
 
20    Section 90. The Illinois Municipal Code is amended by
21changing Sections 8-3-13, 8-3-14, and 8-3-14a as follows:
 

 

 

SB3386- 22 -LRB101 19771 HLH 69281 b

1    (65 ILCS 5/8-3-13)  (from Ch. 24, par. 8-3-13)
2    Sec. 8-3-13. The corporate authorities of any municipality
3containing 500,000 or more inhabitants may impose a tax prior
4to July 1, 1969, upon all persons engaged in the municipality
5in the business of renting, leasing or letting rooms in a
6hotel, as defined in the Hotel Operators' Occupation Tax Act,
7or a short-term rental, as defined in the Short-Term Rental
8Operators' Occupation Tax Act, at a rate not to exceed 1% of
9the gross rental receipts from the renting, leasing or letting,
10excluding, however, from gross rental receipts, the proceeds of
11the renting, leasing or letting to permanent residents of that
12hotel or short-term rental and proceeds from the tax imposed
13under subsection (c) of Section 13 of the Metropolitan Pier and
14Exposition Authority Act.
15    The tax imposed by a municipality under this Section and
16all civil penalties that may be assessed as an incident thereof
17shall be collected and enforced by the State Department of
18Revenue. The certificate of registration that is issued by the
19Department to a lessor under the Hotel Operators' Occupation
20Tax Act, or a business license issued by the Department under
21the Short-Term Rental Operators' Act shall permit the
22registrant to engage in a business that is taxable under any
23ordinance or resolution enacted under this Section without
24registering separately with the Department under the ordinance
25or resolution or under this Section. The Department shall have
26full power to administer and enforce this Section; to collect

 

 

SB3386- 23 -LRB101 19771 HLH 69281 b

1all taxes and penalties due hereunder; to dispose of taxes and
2penalties so collected in the manner provided in this Section;
3and to determine all rights to credit memoranda arising on
4account of the erroneous payment of tax or penalty hereunder.
5In the administration of and compliance with this Section, the
6Department and persons who are subject to this Section shall
7have the same rights, remedies, privileges, immunities, powers
8and duties, and be subject to the same conditions,
9restrictions, limitations, penalties and definitions of terms,
10and employ the same modes of procedure, as are prescribed in
11the Hotel Operators' Occupation Tax Act, the Short-Term Rental
12Operators' Occupation Tax Act, and the Uniform Penalty and
13Interest Act, as fully as if the provisions contained in those
14Acts were set forth herein.
15    Whenever the Department determines that a refund should be
16made under this Section to a claimant instead of issuing a
17credit memorandum, the Department shall notify the State
18Comptroller, who shall cause the warrant to be drawn for the
19amount specified, and to the person named, in the notification
20from the Department. The refund shall be paid by the State
21Treasurer out of the Illinois tourism tax fund.
22    Persons subject to any tax imposed under authority granted
23by this Section may reimburse themselves for their tax
24liability for that tax by separately stating the tax as an
25additional charge, which charge may be stated in combination,
26in a single amount, with State tax imposed under the Hotel

 

 

SB3386- 24 -LRB101 19771 HLH 69281 b

1Operators' Occupation Tax Act or the Short-Term Rental
2Operators' Occupation Tax Act.
3    The Department shall forthwith pay over to the State
4Treasurer, ex-officio, as trustee, all taxes and penalties
5collected hereunder. On or before the 25th day of each calendar
6month, the Department shall prepare and certify to the
7Comptroller the disbursement of stated sums of money to named
8municipalities from which lessors have paid taxes or penalties
9hereunder to the Department during the second preceding
10calendar month. The amount to be paid to each municipality
11shall be the amount (not including credit memoranda) collected
12hereunder during the second preceding calendar month by the
13Department, and not including an amount equal to the amount of
14refunds made during the second preceding calendar month by the
15Department on behalf of the municipality, less 4% of the
16balance, which sum shall be retained by the State Treasurer to
17cover the costs incurred by the Department in administering and
18enforcing the provisions of this Section, as provided herein.
19The Department, at the time of each monthly disbursement to the
20municipalities, shall prepare and certify to the Comptroller
21the amount so retained by the State Treasurer, which shall be
22paid into the General Revenue Fund of the State Treasury.
23    Within 10 days after receipt by the Comptroller of the
24disbursement certification to the municipalities and the
25General Revenue Fund provided for in this Section to be given
26to the Comptroller by the Department, the Comptroller shall

 

 

SB3386- 25 -LRB101 19771 HLH 69281 b

1cause the warrants to be drawn for the respective amounts in
2accordance with the directions contained in the certification.
3    Nothing in this Section shall be construed to authorize a
4municipality to impose a tax upon the privilege of engaging in
5any business that, under the Constitution of the United States,
6may not be made the subject of taxation by this State.
7    An ordinance or resolution imposing a tax hereunder or
8effecting a change in the rate thereof shall be effective on
9the first day of the calendar month next following the
10expiration of the publication period provided in Section 1-2-4
11in respect to municipalities governed by that Section.
12    The corporate authorities of any municipality that levies a
13tax authorized by this Section shall transmit to the Department
14of Revenue on or not later than 5 days after the effective date
15of the ordinance or resolution a certified copy of the
16ordinance or resolution imposing the tax; whereupon, the
17Department of Revenue shall proceed to administer and enforce
18this Section on behalf of the municipality as of the effective
19date of the ordinance or resolution. Upon a change in rate of a
20tax levied hereunder, or upon the discontinuance of the tax,
21the corporate authorities of the municipality shall, on or not
22later than 5 days after the effective date of the ordinance or
23resolution discontinuing the tax or effecting a change in rate,
24transmit to the Department of Revenue a certified copy of the
25ordinance or resolution effecting the change or
26discontinuance. The amounts disbursed to any municipality

 

 

SB3386- 26 -LRB101 19771 HLH 69281 b

1under this Section shall be expended by the municipality solely
2to promote tourism, conventions and other special events within
3that municipality or otherwise to attract nonresidents to visit
4the municipality.
5    Any municipality receiving and disbursing money under this
6Section shall report on or before the first Monday in January
7of each year to the Advisory Committee of the Illinois Tourism
8Promotion Fund, created by Section 12 of the Illinois Promotion
9Act. The reports shall specify the purposes for which the
10disbursements were made and shall contain detailed amounts of
11all receipts and disbursements under this Section.
12    This Section may be cited as the Tourism, Conventions and
13Other Special Events Promotion Act of 1967.
14(Source: P.A. 87-205; 87-733; 87-895.)
 
15    (65 ILCS 5/8-3-14)  (from Ch. 24, par. 8-3-14)
16    Sec. 8-3-14. Municipal hotel and short-term rental
17operators' occupation tax. The corporate authorities of any
18municipality may impose a tax upon all persons engaged in such
19municipality in the business of renting, leasing or letting
20rooms in a hotel, as defined in "The Hotel Operators'
21Occupation Tax Act," or a short-term rental, as defined in the
22Short-Term Rental Operators' Occupation Tax Act, at a rate not
23to exceed 6% in the City of East Peoria and in the Village of
24Morton and 5% in all other municipalities of the gross rental
25receipts from such renting, leasing or letting, excluding,

 

 

SB3386- 27 -LRB101 19771 HLH 69281 b

1however, from gross rental receipts, the proceeds of such
2renting, leasing or letting to permanent residents of that
3hotel or short-term rental and proceeds from the tax imposed
4under subsection (c) of Section 13 of the Metropolitan Pier and
5Exposition Authority Act, and may provide for the
6administration and enforcement of the tax, and for the
7collection thereof from the persons subject to the tax, as the
8corporate authorities determine to be necessary or practicable
9for the effective administration of the tax. The municipality
10may not impose a tax under this Section if it imposes a tax
11under Section 8-3-14a.
12    Persons subject to any tax imposed pursuant to authority
13granted by this Section may reimburse themselves for their tax
14liability for such tax by separately stating such tax as an
15additional charge, which charge may be stated in combination,
16in a single amount, with State tax imposed under "The Hotel
17Operators' Occupation Tax Act" or the Short-Term Rental
18Operators' Occupation Tax Act.
19    Nothing in this Section shall be construed to authorize a
20municipality to impose a tax upon the privilege of engaging in
21any business which under the constitution of the United States
22may not be made the subject of taxation by this State.
23    Except as otherwise provided in this Division, the amounts
24collected by any municipality pursuant to this Section shall be
25expended by the municipality solely to promote tourism and
26conventions within that municipality or otherwise to attract

 

 

SB3386- 28 -LRB101 19771 HLH 69281 b

1nonresident overnight visitors to the municipality.
2    No funds received pursuant to this Section shall be used to
3advertise for or otherwise promote new competition in the hotel
4business.
5(Source: P.A. 101-204, eff. 8-2-19.)
 
6    (65 ILCS 5/8-3-14a)
7    Sec. 8-3-14a. Municipal hotel or short-term rental use tax.
8    (a) The corporate authorities of any municipality may
9impose a tax upon the privilege of renting or leasing rooms in
10a hotel or short-term rental within the municipality at a rate
11not to exceed 5% of the rental or lease payment. The corporate
12authorities may provide for the administration and enforcement
13of the tax and for the collection thereof from the persons
14subject to the tax, as the corporate authorities determine to
15be necessary or practical for the effective administration of
16the tax.
17    (b) Each hotel, short-term rental operator, or hosting
18platform acting as an agent for the short-term rental operator
19in the municipality shall collect the tax from the person
20making the rental or lease payment at the time that the payment
21is tendered to the hotel. The hotel shall, as trustee, remit
22the tax to the municipality.
23    (c) The tax authorized under this Section does not apply to
24any rental or lease payment by a permanent resident of that
25hotel or short-term rental or to any payment made to any hotel

 

 

SB3386- 29 -LRB101 19771 HLH 69281 b

1that is subject to the tax imposed under subsection (c) of
2Section 13 of the Metropolitan Pier and Exposition Authority
3Act. A municipality may not impose a tax under this Section if
4it imposes a tax under Section 8-3-14. Nothing in this Section
5may be construed to authorize a municipality to impose a tax
6upon the privilege of engaging in any business that under the
7Constitution of the United States may not be made the subject
8of taxation by this State.
9    (d) Except as otherwise provided in this Division, the
10moneys collected by a municipality under this Section may be
11expended solely to promote tourism and conventions within that
12municipality or otherwise to attract nonresident overnight
13visitors to the municipality. No moneys received under this
14Section may be used to advertise for or otherwise promote new
15competition in the hotel business.
16    (e) As used in this Section, "hotel" has the meaning set
17forth in Section 2 of the Hotel Operators' Occupation Tax Act.
18    (f) As used in this Section, "short-term rental" and
19"hosting platform" have the meaning set forth in Section 2 of
20the Short-Term Rental Operators' Occupation Tax Act.
21(Source: P.A. 101-204, eff. 8-2-19.)
 
22    Section 95. The Counties Code is amended by changing
23Section 5-1030 as follows:
 
24    (55 ILCS 5/5-1030)  (from Ch. 34, par. 5-1030)

 

 

SB3386- 30 -LRB101 19771 HLH 69281 b

1    Sec. 5-1030. Hotel rooms, short-term rentals, tax on gross
2rental receipts.
3    (a) The corporate authorities of any county may by
4ordinance impose a tax upon all persons engaged in such county
5in the business of renting, leasing or letting rooms in a hotel
6or short-term rental which is not located within a city,
7village, or incorporated town that imposes a tax under Section
88-3-14 of the Illinois Municipal Code, as defined in "The Hotel
9Operators' Occupation Tax Act or the Short-Term Rental
10Operators' Occupation Tax Act ", at a rate not to exceed 5% of
11the gross rental receipts from such renting, leasing or
12letting, excluding, however, from gross rental receipts, the
13proceeds of such renting, leasing or letting to permanent
14residents of that hotel or short-term rental, and may provide
15for the administration and enforcement of the tax, and for the
16collection thereof from the persons subject to the tax, as the
17corporate authorities determine to be necessary or practicable
18for the effective administration of the tax.
19    (b) With the consent of municipalities representing at
20least 67% of the population of Winnebago County, as determined
21by the 2010 federal decennial census and as expressed by
22resolution of the corporate authorities of those
23municipalities, the county board of Winnebago County may, by
24ordinance, impose a tax upon all persons engaged in the county
25in the business of renting, leasing, or letting rooms in a
26hotel or short-term rental that imposes a tax under Section

 

 

SB3386- 31 -LRB101 19771 HLH 69281 b

18-3-14 of the Illinois Municipal Code, as defined in "The Hotel
2Operators' Occupation Tax Act" or the Short-Term Rental
3Operators' Occupation Tax Act, at a rate not to exceed 2% of
4the gross rental receipts from renting, leasing, or letting,
5excluding, however, from gross rental receipts, the proceeds of
6the renting, leasing, or letting to permanent residents of that
7hotel or short-term rental, and may provide for the
8administration and enforcement of the tax, and for the
9collection thereof from the persons subject to the tax, as the
10county board determines to be necessary or practicable for the
11effective administration of the tax. The tax shall be
12instituted on a county-wide basis and shall be in addition to
13any tax imposed by this or any other provision of law. The
14revenue generated under this subsection shall be accounted for
15and segregated from all other funds of the county and shall be
16utilized solely for either: (1) encouraging, supporting,
17marketing, constructing, or operating, either directly by the
18county or through other taxing bodies within the county,
19sports, arts, or other entertainment or tourism facilities or
20programs for the purpose of promoting tourism,
21competitiveness, job growth, and for the general health and
22well-being of the citizens of the county; or (2) payment
23towards debt services on bonds issued for the purposes set
24forth in this subsection.
25    (c) A Tourism Facility Board shall be established,
26comprised of a representative from the county and from each

 

 

SB3386- 32 -LRB101 19771 HLH 69281 b

1municipality that has approved the imposition of the tax under
2subsection (b) of this Section.
3        (1) A Board member's vote is weighted based on the
4    municipality's population relative to the population of
5    the county, with the county representing the population
6    within unincorporated areas of the county. Representatives
7    from the Rockford Park District and Rockford Area
8    Convention and Visitors Bureau shall serve as ex-officio
9    members with no voting rights.
10        (2) The Board must meet not less frequently than once
11    per year to direct the use of revenues collected from the
12    tax imposed under subsection (b) of this Section that are
13    not already directed for use pursuant to an
14    intergovernmental agreement between the county and another
15    entity represented on the Board, including the ex-officio
16    members, and for any other reason the Board deems
17    necessary. Affirmative actions of the Board shall require a
18    weighted vote of Board members representing not less than
19    67% of the population of the county.
20        (3) The Board shall not be a separate unit of local
21    government, shall have no paid staff, and members of the
22    Board shall receive no compensation or reimbursement of
23    expenses from proceeds of the tax imposed under subsection
24    (b) of this Section.
25    (d) Persons subject to any tax imposed pursuant to
26authority granted by this Section may reimburse themselves for

 

 

SB3386- 33 -LRB101 19771 HLH 69281 b

1their tax liability for such tax by separately stating such tax
2as an additional charge, which charge may be stated in
3combination, in a single amount, with State tax imposed under
4"The Hotel Operators' Occupation Tax Act" or the Short-Term
5Rental Operators' Occupation Tax Act.
6    Nothing in this Section shall be construed to authorize a
7county to impose a tax upon the privilege of engaging in any
8business which under the Constitution of the United States may
9not be made the subject of taxation by this State.
10    An ordinance or resolution imposing a tax hereunder or
11effecting a change in the rate thereof shall be effective on
12the first day of the calendar month next following its passage
13and required publication.
14    The amounts collected by any county pursuant to this
15Section shall be expended to promote tourism; conventions;
16expositions; theatrical, sports and cultural activities within
17that county or otherwise to attract nonresident overnight
18visitors to the county.
19    Any county may agree with any unit of local government,
20including any authority defined as a metropolitan exposition,
21auditorium and office building authority, fair and exposition
22authority, exposition and auditorium authority, or civic
23center authority created pursuant to provisions of Illinois law
24and the territory of which unit of local government or
25authority is co-extensive with or wholly within such county, to
26impose and collect for a period not to exceed 40 years, any

 

 

SB3386- 34 -LRB101 19771 HLH 69281 b

1portion or all of the tax authorized pursuant to this Section
2and to transmit such tax so collected to such unit of local
3government or authority. The amount so paid shall be expended
4by any such unit of local government or authority for the
5purposes for which such tax is authorized. Any such agreement
6must be authorized by resolution or ordinance, as the case may
7be, of such county and unit of local government or authority,
8and such agreement may provide for the irrevocable imposition
9and collection of said tax at such rate, or amount as limited
10by a given rate, as may be agreed upon for the full period of
11time set forth in such agreement; and such agreement may
12further provide for any other terms as deemed necessary or
13advisable by such county and such unit of local government or
14authority. Any such agreement shall be binding and enforceable
15by either party to such agreement. Such agreement entered into
16pursuant to this Section shall not in any event constitute an
17indebtedness of such county subject to any limitation imposed
18by statute or otherwise.
19(Source: P.A. 98-313, eff. 8-12-13.)
 
20    Section 99. Effective date. This Act takes effect October
211, 2020.