97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB2075

 

Introduced 2/22/2011, by Rep. Lou Lang

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 173/5-50
35 ILCS 615/1  from Ch. 120, par. 467.16
35 ILCS 640/2-4

    Amends the Gas Use Tax Law. Exempts certain business enterprises designated by Standard Industrial Classification from taxation under the Act. Amends the Gas Revenue Tax Act. Provides that the definition of "gross receipts" does not include consideration received from those business enterprises. Amends the Electricity Excise Tax Law. Provides that the tax under the Act is not imposed with respect to any use by those business enterprises in the process of manufacturing or assembling tangible personal property for wholesale or for retail sale or lease. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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 Gas Use Tax Law is amended by changing
5Section 5-50 as follows:
 
6    (35 ILCS 173/5-50)
7    Sec. 5-50. Exemptions. The tax imposed under this Act shall
8not apply to:
9        (1) Gas used by business enterprises located in an
10    enterprise zone certified by the Department of Commerce and
11    Economic Opportunity pursuant to the Illinois Enterprise
12    Zone Act;
13        (2) Gas used by governmental bodies, or a corporation,
14    society, association, foundation, or institution organized
15    and operated exclusively for charitable, religious, or
16    educational purposes. Such use shall not be exempt unless
17    the government body, or corporation, society, association,
18    foundation, or institution organized and operated
19    exclusively for charitable, religious, or educational
20    purposes has first been issued a tax exemption
21    identification number by the Department of Revenue
22    pursuant to Section 1g of the Retailers' Occupation Tax
23    Act. A limited liability company may qualify for the

 

 

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1    exemption under this Section only if the limited liability
2    company is organized and operated exclusively for
3    educational purposes. The term "educational purposes"
4    shall have the same meaning as that set forth in Section 2h
5    of the Retailers' Occupation Tax Act;
6        (3) Gas used in the production of electric energy. This
7    exemption does not include gas used in the general
8    maintenance or heating of an electric energy production
9    facility or other structure;
10        (4) Gas used in a petroleum refinery operation;
11        (5) Gas purchased by persons for use in liquefaction
12    and fractionation processes that produce value added
13    natural gas byproducts for resale;
14        (6) Gas used in the production of anhydrous ammonia and
15    downstream nitrogen fertilizer products for resale.
16        (7) Gas used by any business enterprise that is
17    properly assigned or included within one of the following
18    Standard Industrial Classifications, as designated in the
19    Standard Industrial Classification Manual prepared by the
20    federal Office of Management and Budget: 10; 12; 13; 14;
21    20; 21; 22; 23; 24; 25; 26; 27; 28; 29; 30; 31; 32; 33; 34;
22    35; 36; 37; 38; or 39.
23    The Department may adopt rules to implement the provisions
24of this Section.
25(Source: P.A. 93-31, eff. 10-1-03.)
 

 

 

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1    Section 10. The Gas Revenue Tax Act is amended by changing
2Section 1 as follows:
 
3    (35 ILCS 615/1)  (from Ch. 120, par. 467.16)
4    Sec. 1. For the purposes of this Act: "Gross receipts"
5means the consideration received for gas distributed,
6supplied, furnished or sold to persons for use or consumption
7and not for resale, and for all services (including the
8transportation or storage of gas for an end-user) rendered in
9connection therewith, and shall include cash, services and
10property of every kind or nature, and shall be determined
11without any deduction on account of the cost of the service,
12product or commodity supplied, the cost of materials used,
13labor or service costs, or any other expense whatsoever.
14However, "gross receipts" shall not include receipts from:
15        (i) any minimum or other charge for gas or gas service
16    where the customer has taken no therms of gas;
17        (ii) any charge for a dishonored check;
18        (iii) any finance or credit charge, penalty or charge
19    for delayed payment, or discount for prompt payment;
20        (iv) any charge for reconnection of service or for
21    replacement or relocation of facilities;
22        (v) any advance or contribution in aid of construction;
23        (vi) repair, inspection or servicing of equipment
24    located on customer premises;
25        (vii) leasing or rental of equipment, the leasing or

 

 

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1    rental of which is not necessary to distributing,
2    furnishing, supplying, selling, transporting or storing
3    gas;
4        (viii) any sale to a customer if the taxpayer is
5    prohibited by federal or State constitution, treaty,
6    convention, statute or court decision from recovering the
7    related tax liability from such customer;
8        (ix) any charges added to customers' bills pursuant to
9    the provisions of Section 9-221 or Section 9-222 of the
10    Public Utilities Act, as amended, or any charges added to
11    customers' bills by taxpayers who are not subject to rate
12    regulation by the Illinois Commerce Commission for the
13    purpose of recovering any of the tax liabilities or other
14    amounts specified in such provisions of such Act; and
15        (x) prior to October 1, 2003, any charge for gas or gas
16    services to a customer who acquired contractual rights for
17    the direct purchase of gas or gas services originating from
18    an out-of-state supplier or source on or before March 1,
19    1995, except for those charges solely related to the local
20    distribution of gas by a public utility. This exemption
21    includes any charge for gas or gas service, except for
22    those charges solely related to the local distribution of
23    gas by a public utility, to a customer who maintained an
24    account with a public utility (as defined in Section 3-105
25    of the Public Utilities Act) for the transportation of
26    customer-owned gas on or before March 1, 1995. The

 

 

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1    provisions of this amendatory Act of 1997 are intended to
2    clarify, rather than change, existing law as to the meaning
3    and scope of this exemption. This exemption (x) expires on
4    September 30, 2003.
5    In case credit is extended, the amount thereof shall be
6included only as and when payments are received.
7    "Gross receipts" shall not include consideration received
8from business enterprises certified under Section 9-222.1 of
9the Public Utilities Act, as amended, to the extent of such
10exemption and during the period of time specified by the
11Department of Commerce and Economic Opportunity.
12    "Gross receipts" does not include consideration received
13from any business enterprise that is properly assigned or
14included within one of the following Standard Industrial
15Classifications, as designated in the Standard Industrial
16Classification Manual prepared by the federal Office of
17Management and Budget: 10; 12; 13; 14; 20; 21; 22; 23; 24; 25;
1826; 27; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39,
19during the period in time in which such business enterprise
20provides a valid exemption certificate (as determined by the
21Illinois Department of Revenue) to their gas supplier and
22delivering gas utility. Gas suppliers and delivering gas
23utilities may reasonably rely on exemption certificates
24provided by those business enterprises. Gas suppliers and
25delivering gas utilities may implement this exemption
26beginning with any bill issued to the business enterprise on or

 

 

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1after receipt of the certificate of exemption, but shall
2implement the exemption not later than the first bill issued on
3or after 30 days after receipt of the certificate of exemption.
4    "Department" means the Department of Revenue of the State
5of Illinois.
6    "Director" means the Director of Revenue for the Department
7of Revenue of the State of Illinois.
8    "Taxpayer" means a person engaged in the business of
9distributing, supplying, furnishing or selling gas for use or
10consumption and not for resale.
11    "Person" means any natural individual, firm, trust,
12estate, partnership, association, joint stock company, joint
13adventure, corporation, limited liability company, or a
14receiver, trustee, guardian or other representative appointed
15by order of any court, or any city, town, county or other
16political subdivision of this State.
17    "Invested capital" means that amount equal to (i) the
18average of the balances at the beginning and end of each
19taxable period of the taxpayer's total stockholder's equity and
20total long-term debt, less investments in and advances to all
21corporations, as set forth on the balance sheets included in
22the taxpayer's annual report to the Illinois Commerce
23Commission for the taxable period; (ii) multiplied by a
24fraction determined under Sections 301 and 304(a) of the
25"Illinois Income Tax Act" and reported on the Illinois income
26tax return for the taxable period ending in or with the taxable

 

 

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1period in question. However, notwithstanding the income tax
2return reporting requirement stated above, beginning July 1,
31979, no taxpayer's denominators used to compute the sales,
4property or payroll factors under subsection (a) of Section 304
5of the Illinois Income Tax Act shall include payroll, property
6or sales of any corporate entity other than the taxpayer for
7the purposes of determining an allocation for the invested
8capital tax. This amendatory Act of 1982, Public Act 82-1024,
9is not intended to and does not make any change in the meaning
10of any provision of this Act, it having been the intent of the
11General Assembly in initially enacting the definition of
12"invested capital" to provide for apportionment of the invested
13capital of each company, based solely upon the sales, property
14and payroll of that company.
15    "Taxable period" means each period which ends after the
16effective date of this Act and which is covered by an annual
17report filed by the taxpayer with the Illinois Commerce
18Commission.
19(Source: P.A. 93-31, eff. 10-1-03; 94-793, eff. 5-19-06.)
 
20    Section 15. The Electricity Excise Tax Law is amended by
21changing Section 2-4 as follows:
 
22    (35 ILCS 640/2-4)
23    Sec. 2-4. Tax imposed.
24    (a) Except as provided in subsection (b), a tax is imposed

 

 

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1on the privilege of using in this State electricity purchased
2for use or consumption and not for resale, other than by
3municipal corporations owning and operating a local
4transportation system for public service, at the following
5rates per kilowatt-hour delivered to the purchaser:
6        (i) For the first 2000 kilowatt-hours used or consumed
7    in a month: 0.330 cents per kilowatt-hour;
8        (ii) For the next 48,000 kilowatt-hours used or
9    consumed in a month: 0.319 cents per kilowatt-hour;
10        (iii) For the next 50,000 kilowatt-hours used or
11    consumed in a month: 0.303 cents per kilowatt-hour;
12        (iv) For the next 400,000 kilowatt-hours used or
13    consumed in a month: 0.297 cents per kilowatt-hour;
14        (v) For the next 500,000 kilowatt-hours used or
15    consumed in a month: 0.286 cents per kilowatt-hour;
16        (vi) For the next 2,000,000 kilowatt-hours used or
17    consumed in a month: 0.270 cents per kilowatt-hour;
18        (vii) For the next 2,000,000 kilowatt-hours used or
19    consumed in a month: 0.254 cents per kilowatt-hour;
20        (viii) For the next 5,000,000 kilowatt-hours used or
21    consumed in a month: 0.233 cents per kilowatt-hour;
22        (ix) For the next 10,000,000 kilowatt-hours used or
23    consumed in a month: 0.207 cents per kilowatt-hour;
24        (x) For all electricity in excess of 20,000,000
25    kilowatt-hours used or consumed in a month: 0.202 cents per
26    kilowatt-hour.

 

 

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1    Provided, that in lieu of the foregoing rates, the tax is
2imposed on a self-assessing purchaser at the rate of 5.1% of
3the self-assessing purchaser's purchase price for all
4electricity distributed, supplied, furnished, sold,
5transmitted and delivered to the self-assessing purchaser in a
6month.
7    (b) A tax is imposed on the privilege of using in this
8State electricity purchased from a municipal system or electric
9cooperative, as defined in Article XVII of the Public Utilities
10Act, which has not made an election as permitted by either
11Section 17-200 or Section 17-300 of such Act, at the lesser of
120.32 cents per kilowatt hour of all electricity distributed,
13supplied, furnished, sold, transmitted, and delivered by such
14municipal system or electric cooperative to the purchaser or 5%
15of each such purchaser's purchase price for all electricity
16distributed, supplied, furnished, sold, transmitted, and
17delivered by such municipal system or electric cooperative to
18the purchaser, whichever is the lower rate as applied to each
19purchaser in each billing period.
20    (c) The tax imposed by this Section 2-4 is not imposed: (i)
21with respect to any use of electricity by business enterprises
22certified under Section 9-222.1 or 9-222.1A of the Public
23Utilities Act, as amended, to the extent of such exemption and
24during the time specified by the Department of Commerce and
25Economic Opportunity; (ii) with respect to any use by any
26business enterprise that is properly assigned or included

 

 

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1within one of the following Standard Industrial
2Classifications, as designated in the Standard Industrial
3Classification Manual prepared by the federal Office of
4Management and Budget: 10; 12; 13; 14; 20; 21; 22; 23; 24; 25;
526; 27; 28; 29; 30; 31; 32; 33; 34; 35; 36; 37; 38; or 39, in
6the process of manufacturing or assembling tangible personal
7property for wholesale or for retail sale or lease; or (iii)
8with respect to any transaction in interstate commerce, or
9otherwise, to the extent to which such transaction may not,
10under the Constitution and statutes of the United States, be
11made the subject of taxation by this State.
12(Source: P.A. 94-793, eff. 5-19-06.)
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law.