97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3512

 

Introduced 2/24/2011, by Rep. Marlow H. Colvin

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/3-6
35 ILCS 105/3-10
35 ILCS 110/3-6 new
35 ILCS 110/3-10  from Ch. 120, par. 439.33-10
35 ILCS 110/9  from Ch. 120, par. 439.39
35 ILCS 115/3-6 new
35 ILCS 115/3-10  from Ch. 120, par. 439.103-10
35 ILCS 115/9  from Ch. 120, par. 439.109
35 ILCS 120/2-8
35 ILCS 120/2-10

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, during the first Monday in September in 2011 and each year thereafter, the tax imposed under the Acts on Energy Star products shall be at the rate of 1.25% (instead of 6.25%). Effective immediately.


LRB097 10581 HLH 50940 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3512LRB097 10581 HLH 50940 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 Sections
53-6 and 3-10 as follows:
 
6    (35 ILCS 105/3-6)
7    Sec. 3-6. Sales tax holiday items.
8    (a) The tangible personal property described in this
9subsection qualifies for the 1.25% reduced rate of tax for the
10period set forth in Section 3-10 of this Act (hereinafter
11referred to as the Sales Tax Holiday Period). The reduced rate
12on these items shall be administered under the provisions of
13subsection (b) of this Section. The following items are subject
14to the reduced rate:
15        (1) Clothing items that each have a retail selling
16    price of less than $100.
17        "Clothing" means, unless otherwise specified in this
18    Section, all human wearing apparel suitable for general
19    use. "Clothing" does not include clothing accessories,
20    protective equipment, or sport or recreational equipment.
21    "Clothing" includes, but is not limited to: household and
22    shop aprons; athletic supporters; bathing suits and caps;
23    belts and suspenders; boots; coats and jackets; ear muffs;

 

 

HB3512- 2 -LRB097 10581 HLH 50940 b

1    footlets; gloves and mittens for general use; hats and
2    caps; hosiery; insoles for shoes; lab coats; neckties;
3    overshoes; pantyhose; rainwear; rubber pants; sandals;
4    scarves; shoes and shoelaces; slippers; sneakers; socks
5    and stockings; steel-toed shoes; underwear; and school
6    uniforms.
7        "Clothing accessories" means, but is not limited to:
8    briefcases; cosmetics; hair notions, including, but not
9    limited to barrettes, hair bows, and hair nets; handbags;
10    handkerchiefs; jewelry; non-prescription sunglasses;
11    umbrellas; wallets; watches; and wigs and hair pieces.
12        "Protective equipment" means, but is not limited to:
13    breathing masks; clean room apparel and equipment; ear and
14    hearing protectors; face shields; hard hats; helmets;
15    paint or dust respirators; protective gloves; safety
16    glasses and goggles; safety belts; tool belts; and welder's
17    gloves and masks.
18        "Sport or recreational equipment" means, but is not
19    limited to: ballet and tap shoes; cleated or spiked
20    athletic shoes; gloves, including, but not limited to,
21    baseball, bowling, boxing, hockey, and golf gloves;
22    goggles; hand and elbow guards; life preservers and vests;
23    mouth guards; roller and ice skates; shin guards; shoulder
24    pads; ski boots; waders; and wetsuits and fins.
25        (2) School supplies. "School supplies" means, unless
26    otherwise specified in this Section, items used by a

 

 

HB3512- 3 -LRB097 10581 HLH 50940 b

1    student in a course of study. The purchase of school
2    supplies for use by persons other than students for use in
3    a course of study are not eligible for the reduced rate of
4    tax. "School supplies" do not include school art supplies;
5    school instructional materials; cameras; film and memory
6    cards; videocameras, tapes, and videotapes; computers;
7    cell phones; Personal Digital Assistants (PDAs); handheld
8    electronic schedulers; and school computer supplies.
9        "School supplies" includes, but is not limited to:
10    binders; book bags; calculators; cellophane tape;
11    blackboard chalk; compasses; composition books; crayons;
12    erasers; expandable, pocket, plastic, and manila folders;
13    glue, paste, and paste sticks; highlighters; index cards;
14    index card boxes; legal pads; lunch boxes; markers;
15    notebooks; paper, including loose leaf ruled notebook
16    paper, copy paper, graph paper, tracing paper, manila
17    paper, colored paper, poster board, and construction
18    paper; pencils; pencil leads; pens; ink and ink refills for
19    pens; pencil boxes and other school supply boxes; pencil
20    sharpeners; protractors; rulers; scissors; and writing
21    tablets.
22        "School art supply" means an item commonly used by a
23    student in a course of study for artwork and includes only
24    the following items: clay and glazes; acrylic, tempera, and
25    oil paint; paintbrushes for artwork; sketch and drawing
26    pads; and watercolors.

 

 

HB3512- 4 -LRB097 10581 HLH 50940 b

1        "School instructional material" means written material
2    commonly used by a student in a course of study as a
3    reference and to learn the subject being taught and
4    includes only the following items: reference books;
5    reference maps and globes; textbooks; and workbooks.
6        "School computer supply" means an item commonly used by
7    a student in a course of study in which a computer is used
8    and applies only to the following items: flashdrives and
9    other computer data storage devices; data storage media,
10    such as diskettes and compact disks; boxes and cases for
11    disk storage; external ports or drives; computer cases;
12    computer cables; computer printers; and printer
13    cartridges, toner, and ink.
14    (a-5) During the first Monday in September of each year
15beginning in 2011, energy efficient products are also subject
16to the reduced rate. For the purposes of this subsection (a-5),
17"energy efficient product" means any product that qualifies as
18an Energy Star product by the United States Environmental
19Protection Agency. The reduced rate on these items shall be
20administered under the provisions of subsection (b) of this
21Section.
22    (b) Administration. Notwithstanding any other provision of
23this Act, the reduced rate of tax under Section 3-10 of this
24Act for sales tax holiday items described in this Section
25clothing and school supplies shall be administered by the
26Department under the provisions of this subsection (b).

 

 

HB3512- 5 -LRB097 10581 HLH 50940 b

1        (1) Bundled sales. Items that qualify for the reduced
2    rate of tax that are bundled together with items that do
3    not qualify for the reduced rate of tax and that are sold
4    for one itemized price will be subject to the reduced rate
5    of tax only if the value of the items that qualify for the
6    reduced rate of tax exceeds the value of the items that do
7    not qualify for the reduced rate of tax.
8        (2) Coupons and discounts. An unreimbursed discount by
9    the seller reduces the sales price of the property so that
10    the discounted sales price determines whether the sales
11    price is within a sales tax holiday price threshold. A
12    coupon or other reduction in the sales price is treated as
13    a discount if the seller is not reimbursed for the coupon
14    or reduction amount by a third party.
15        (3) Splitting of items normally sold together.
16    Articles that are normally sold as a single unit must
17    continue to be sold in that manner. Such articles cannot be
18    priced separately and sold as individual items in order to
19    obtain the reduced rate of tax. For example, a pair of
20    shoes cannot have each shoe sold separately so that the
21    sales price of each shoe is within a sales tax holiday
22    price threshold.
23        (4) Rain checks. A rain check is a procedure that
24    allows a customer to purchase an item at a certain price at
25    a later time because the particular item was out of stock.
26    Eligible property that customers purchase during the Sales

 

 

HB3512- 6 -LRB097 10581 HLH 50940 b

1    Tax Holiday Period with the use of a rain check will
2    qualify for the reduced rate of tax regardless of when the
3    rain check was issued. Issuance of a rain check during the
4    Sales Tax Holiday Period will not qualify eligible property
5    for the reduced rate of tax if the property is actually
6    purchased after the Sales Tax Holiday Period.
7        (5) Exchanges. The procedure for an exchange in regards
8    to a sales tax holiday is as follows:
9            (A) If a customer purchases an item of eligible
10        property during the Sales Tax Holiday Period, but later
11        exchanges the item for a similar eligible item, even if
12        a different size, different color, or other feature, no
13        additional tax is due even if the exchange is made
14        after the Sales Tax Holiday Period.
15            (B) If a customer purchases an item of eligible
16        property during the Sales Tax Holiday Period, but after
17        the Sales Tax Holiday Period has ended, the customer
18        returns the item and receives credit on the purchase of
19        a different item, the 6.25% general merchandise sales
20        tax rate is due on the sale of the newly purchased
21        item.
22            (C) If a customer purchases an item of eligible
23        property before the Sales Tax Holiday Period, but
24        during the Sales Tax Holiday Period the customer
25        returns the item and receives credit on the purchase of
26        a different item of eligible property, the reduced rate

 

 

HB3512- 7 -LRB097 10581 HLH 50940 b

1        of tax is due on the sale of the new item if the new
2        item is purchased during the Sales Tax Holiday Period.
3        (6) Delivery charges. Delivery charges, including
4    shipping, handling and service charges, are part of the
5    sales price of eligible property.
6        (7) Order date and back orders. For the purpose of a
7    sales tax holiday, eligible property qualifies for the
8    reduced rate of tax if: (i) the item is both delivered to
9    and paid for by the customer during the Sales Tax Holiday
10    Period or (ii) the customer orders and pays for the item
11    and the seller accepts the order during the Sales Tax
12    Holiday Period for immediate shipment, even if delivery is
13    made after the Sales Tax Holiday Period. The seller accepts
14    an order when the seller has taken action to fill the order
15    for immediate shipment. Actions to fill an order include
16    placement of an "in date" stamp on an order or assignment
17    of an "order number" to an order within the Sales Tax
18    Holiday Period. An order is for immediate shipment when the
19    customer does not request delayed shipment. An order is for
20    immediate shipment notwithstanding that the shipment may
21    be delayed because of a backlog of orders or because stock
22    is currently unavailable to, or on back order by, the
23    seller.
24        (8) Returns. For a 60-day period immediately after the
25    Sales Tax Holiday Period, if a customer returns an item
26    that would qualify for the reduced rate of tax, credit for

 

 

HB3512- 8 -LRB097 10581 HLH 50940 b

1    or refund of sales tax shall be given only at the reduced
2    rate unless the customer provides a receipt or invoice that
3    shows tax was paid at the 6.25% general merchandise rate,
4    or the seller has sufficient documentation to show that tax
5    was paid at the 6.25% general merchandise rate on the
6    specific item. This 60-day period is set solely for the
7    purpose of designating a time period during which the
8    customer must provide documentation that shows that the
9    appropriate sales tax rate was paid on returned
10    merchandise. The 60-day period is not intended to change a
11    seller's policy on the time period during which the seller
12    will accept returns.
13    (c) The Department may implement the provisions of this
14Section through the use of emergency rules, along with
15permanent rules filed concurrently with such emergency rules,
16in accordance with the provisions of Section 5-45 of the
17Illinois Administrative Procedure Act. For purposes of the
18Illinois Administrative Procedure Act, the adoption of rules to
19implement the provisions of this Section shall be deemed an
20emergency and necessary for the public interest, safety, and
21welfare.
22(Source: P.A. 96-1012, eff. 7-7-10.)
 
23    (35 ILCS 105/3-10)
24    Sec. 3-10. Rate of tax. Unless otherwise provided in this
25Section, the tax imposed by this Act is at the rate of 6.25% of

 

 

HB3512- 9 -LRB097 10581 HLH 50940 b

1either the selling price or the fair market value, if any, of
2the tangible personal property. In all cases where property
3functionally used or consumed is the same as the property that
4was purchased at retail, then the tax is imposed on the selling
5price of the property. In all cases where property functionally
6used or consumed is a by-product or waste product that has been
7refined, manufactured, or produced from property purchased at
8retail, then the tax is imposed on the lower of the fair market
9value, if any, of the specific property so used in this State
10or on the selling price of the property purchased at retail.
11For purposes of this Section "fair market value" means the
12price at which property would change hands between a willing
13buyer and a willing seller, neither being under any compulsion
14to buy or sell and both having reasonable knowledge of the
15relevant facts. The fair market value shall be established by
16Illinois sales by the taxpayer of the same property as that
17functionally used or consumed, or if there are no such sales by
18the taxpayer, then comparable sales or purchases of property of
19like kind and character in Illinois.
20    Beginning on July 1, 2000 and through December 31, 2000,
21with respect to motor fuel, as defined in Section 1.1 of the
22Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
23the Use Tax Act, the tax is imposed at the rate of 1.25%.
24    Beginning on August 6, 2010 through August 15, 2010, with
25respect to sales tax holiday items as defined in subsection (a)
26of Section 3-6 of this Act, the tax is imposed at the rate of

 

 

HB3512- 10 -LRB097 10581 HLH 50940 b

11.25%. During the first Monday in September of each year
2beginning in 2011, with respect to sales tax holiday items as
3defined in subsection (a-5) of Section 3-6 of this Act, the tax
4is imposed at the rate of 1.25%.
5    With respect to gasohol, the tax imposed by this Act
6applies to (i) 70% of the proceeds of sales made on or after
7January 1, 1990, and before July 1, 2003, (ii) 80% of the
8proceeds of sales made on or after July 1, 2003 and on or
9before December 31, 2013, and (iii) 100% of the proceeds of
10sales made thereafter. If, at any time, however, the tax under
11this Act on sales of gasohol is imposed at the rate of 1.25%,
12then the tax imposed by this Act applies to 100% of the
13proceeds of sales of gasohol made during that time.
14    With respect to majority blended ethanol fuel, the tax
15imposed by this Act does not apply to the proceeds of sales
16made on or after July 1, 2003 and on or before December 31,
172013 but applies to 100% of the proceeds of sales made
18thereafter.
19    With respect to biodiesel blends with no less than 1% and
20no more than 10% biodiesel, the tax imposed by this Act applies
21to (i) 80% of the proceeds of sales made on or after July 1,
222003 and on or before December 31, 2013 and (ii) 100% of the
23proceeds of sales made thereafter. If, at any time, however,
24the tax under this Act on sales of biodiesel blends with no
25less than 1% and no more than 10% biodiesel is imposed at the
26rate of 1.25%, then the tax imposed by this Act applies to 100%

 

 

HB3512- 11 -LRB097 10581 HLH 50940 b

1of the proceeds of sales of biodiesel blends with no less than
21% and no more than 10% biodiesel made during that time.
3    With respect to 100% biodiesel and biodiesel blends with
4more than 10% but no more than 99% biodiesel, the tax imposed
5by this Act does not apply to the proceeds of sales made on or
6after July 1, 2003 and on or before December 31, 2013 but
7applies to 100% of the proceeds of sales made thereafter.
8    With respect to food for human consumption that is to be
9consumed off the premises where it is sold (other than
10alcoholic beverages, soft drinks, and food that has been
11prepared for immediate consumption) and prescription and
12nonprescription medicines, drugs, medical appliances,
13modifications to a motor vehicle for the purpose of rendering
14it usable by a disabled person, and insulin, urine testing
15materials, syringes, and needles used by diabetics, for human
16use, the tax is imposed at the rate of 1%. For the purposes of
17this Section, until September 1, 2009: the term "soft drinks"
18means any complete, finished, ready-to-use, non-alcoholic
19drink, whether carbonated or not, including but not limited to
20soda water, cola, fruit juice, vegetable juice, carbonated
21water, and all other preparations commonly known as soft drinks
22of whatever kind or description that are contained in any
23closed or sealed bottle, can, carton, or container, regardless
24of size; but "soft drinks" does not include coffee, tea,
25non-carbonated water, infant formula, milk or milk products as
26defined in the Grade A Pasteurized Milk and Milk Products Act,

 

 

HB3512- 12 -LRB097 10581 HLH 50940 b

1or drinks containing 50% or more natural fruit or vegetable
2juice.
3    Notwithstanding any other provisions of this Act,
4beginning September 1, 2009, "soft drinks" means non-alcoholic
5beverages that contain natural or artificial sweeteners. "Soft
6drinks" do not include beverages that contain milk or milk
7products, soy, rice or similar milk substitutes, or greater
8than 50% of vegetable or fruit juice by volume.
9    Until August 1, 2009, and notwithstanding any other
10provisions of this Act, "food for human consumption that is to
11be consumed off the premises where it is sold" includes all
12food sold through a vending machine, except soft drinks and
13food products that are dispensed hot from a vending machine,
14regardless of the location of the vending machine. Beginning
15August 1, 2009, and notwithstanding any other provisions of
16this Act, "food for human consumption that is to be consumed
17off the premises where it is sold" includes all food sold
18through a vending machine, except soft drinks, candy, and food
19products that are dispensed hot from a vending machine,
20regardless of the location of the vending machine.
21    Notwithstanding any other provisions of this Act,
22beginning September 1, 2009, "food for human consumption that
23is to be consumed off the premises where it is sold" does not
24include candy. For purposes of this Section, "candy" means a
25preparation of sugar, honey, or other natural or artificial
26sweeteners in combination with chocolate, fruits, nuts or other

 

 

HB3512- 13 -LRB097 10581 HLH 50940 b

1ingredients or flavorings in the form of bars, drops, or
2pieces. "Candy" does not include any preparation that contains
3flour or requires refrigeration.
4    Notwithstanding any other provisions of this Act,
5beginning September 1, 2009, "nonprescription medicines and
6drugs" does not include grooming and hygiene products. For
7purposes of this Section, "grooming and hygiene products"
8includes, but is not limited to, soaps and cleaning solutions,
9shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
10lotions and screens, unless those products are available by
11prescription only, regardless of whether the products meet the
12definition of "over-the-counter-drugs". For the purposes of
13this paragraph, "over-the-counter-drug" means a drug for human
14use that contains a label that identifies the product as a drug
15as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
16label includes:
17        (A) A "Drug Facts" panel; or
18        (B) A statement of the "active ingredient(s)" with a
19    list of those ingredients contained in the compound,
20    substance or preparation.
21    If the property that is purchased at retail from a retailer
22is acquired outside Illinois and used outside Illinois before
23being brought to Illinois for use here and is taxable under
24this Act, the "selling price" on which the tax is computed
25shall be reduced by an amount that represents a reasonable
26allowance for depreciation for the period of prior out-of-state

 

 

HB3512- 14 -LRB097 10581 HLH 50940 b

1use.
2(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
3eff. 7-13-09; 96-1000, eff. 7-2-10; 96-1012, eff. 7-7-10.)
 
4    Section 10. The Service Use Tax Act is amended by changing
5Sections 3-10 and 9 and by adding Section 3-6 as follows:
 
6    (35 ILCS 110/3-6 new)
7    Sec. 3-6. Sales tax holiday items.
8    (a) During the first Monday in September of each year
9beginning in 2011, energy efficient products qualify for a
101.25% reduced rate of tax as set forth in Section 3-10 of this
11Act. For the purposes of this subsection (a), "energy efficient
12product" means any product that qualifies as an Energy Star
13product by the United States Environmental Protection Agency.
14The reduced rate on these items shall be administered under the
15provisions of subsection (b) of this Section.
16    (b) Notwithstanding any other provision of this Act, the
17reduced rate of tax under Section 3-10 of this Act for sales
18tax holiday items described in subsection (a) of this Section
19shall be administered by the Department in the same manner as
20provided in subsection (b) of Section 3-6 of the Use Tax Act.
 
21    (35 ILCS 110/3-10)  (from Ch. 120, par. 439.33-10)
22    Sec. 3-10. Rate of tax. Unless otherwise provided in this
23Section, the tax imposed by this Act is at the rate of 6.25% of

 

 

HB3512- 15 -LRB097 10581 HLH 50940 b

1the selling price of tangible personal property transferred as
2an incident to the sale of service, but, for the purpose of
3computing this tax, in no event shall the selling price be less
4than the cost price of the property to the serviceman.
5    Beginning on July 1, 2000 and through December 31, 2000,
6with respect to motor fuel, as defined in Section 1.1 of the
7Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
8the Use Tax Act, the tax is imposed at the rate of 1.25%.
9    With respect to gasohol, as defined in the Use Tax Act, the
10tax imposed by this Act applies to (i) 70% of the selling price
11of property transferred as an incident to the sale of service
12on or after January 1, 1990, and before July 1, 2003, (ii) 80%
13of the selling price of property transferred as an incident to
14the sale of service on or after July 1, 2003 and on or before
15December 31, 2013, and (iii) 100% of the selling price
16thereafter. If, at any time, however, the tax under this Act on
17sales of gasohol, as defined in the Use Tax Act, is imposed at
18the rate of 1.25%, then the tax imposed by this Act applies to
19100% of the proceeds of sales of gasohol made during that time.
20    With respect to majority blended ethanol fuel, as defined
21in the Use Tax Act, the tax imposed by this Act does not apply
22to the selling price of property transferred as an incident to
23the sale of service on or after July 1, 2003 and on or before
24December 31, 2013 but applies to 100% of the selling price
25thereafter.
26    With respect to biodiesel blends, as defined in the Use Tax

 

 

HB3512- 16 -LRB097 10581 HLH 50940 b

1Act, with no less than 1% and no more than 10% biodiesel, the
2tax imposed by this Act applies to (i) 80% of the selling price
3of property transferred as an incident to the sale of service
4on or after July 1, 2003 and on or before December 31, 2013 and
5(ii) 100% of the proceeds of the selling price thereafter. If,
6at any time, however, the tax under this Act on sales of
7biodiesel blends, as defined in the Use Tax Act, with no less
8than 1% and no more than 10% biodiesel is imposed at the rate
9of 1.25%, then the tax imposed by this Act applies to 100% of
10the proceeds of sales of biodiesel blends with no less than 1%
11and no more than 10% biodiesel made during that time.
12    With respect to 100% biodiesel, as defined in the Use Tax
13Act, and biodiesel blends, as defined in the Use Tax Act, with
14more than 10% but no more than 99% biodiesel, the tax imposed
15by this Act does not apply to the proceeds of the selling price
16of property transferred as an incident to the sale of service
17on or after July 1, 2003 and on or before December 31, 2013 but
18applies to 100% of the selling price thereafter.
19    During the first Monday in September of each year beginning
20in 2011, with respect to sales tax holiday items as defined in
21Section 3-6 of this Act, the tax is imposed at the rate of
221.25%.
23    At the election of any registered serviceman made for each
24fiscal year, sales of service in which the aggregate annual
25cost price of tangible personal property transferred as an
26incident to the sales of service is less than 35%, or 75% in

 

 

HB3512- 17 -LRB097 10581 HLH 50940 b

1the case of servicemen transferring prescription drugs or
2servicemen engaged in graphic arts production, of the aggregate
3annual total gross receipts from all sales of service, the tax
4imposed by this Act shall be based on the serviceman's cost
5price of the tangible personal property transferred as an
6incident to the sale of those services.
7    The tax shall be imposed at the rate of 1% on food prepared
8for immediate consumption and transferred incident to a sale of
9service subject to this Act or the Service Occupation Tax Act
10by an entity licensed under the Hospital Licensing Act, the
11Nursing Home Care Act, the MR/DD Community Care Act, or the
12Child Care Act of 1969. The tax shall also be imposed at the
13rate of 1% on food for human consumption that is to be consumed
14off the premises where it is sold (other than alcoholic
15beverages, soft drinks, and food that has been prepared for
16immediate consumption and is not otherwise included in this
17paragraph) and prescription and nonprescription medicines,
18drugs, medical appliances, modifications to a motor vehicle for
19the purpose of rendering it usable by a disabled person, and
20insulin, urine testing materials, syringes, and needles used by
21diabetics, for human use. For the purposes of this Section,
22until September 1, 2009: the term "soft drinks" means any
23complete, finished, ready-to-use, non-alcoholic drink, whether
24carbonated or not, including but not limited to soda water,
25cola, fruit juice, vegetable juice, carbonated water, and all
26other preparations commonly known as soft drinks of whatever

 

 

HB3512- 18 -LRB097 10581 HLH 50940 b

1kind or description that are contained in any closed or sealed
2bottle, can, carton, or container, regardless of size; but
3"soft drinks" does not include coffee, tea, non-carbonated
4water, infant formula, milk or milk products as defined in the
5Grade A Pasteurized Milk and Milk Products Act, or drinks
6containing 50% or more natural fruit or vegetable juice.
7    Notwithstanding any other provisions of this Act,
8beginning September 1, 2009, "soft drinks" means non-alcoholic
9beverages that contain natural or artificial sweeteners. "Soft
10drinks" do not include beverages that contain milk or milk
11products, soy, rice or similar milk substitutes, or greater
12than 50% of vegetable or fruit juice by volume.
13    Until August 1, 2009, and notwithstanding any other
14provisions of this Act, "food for human consumption that is to
15be consumed off the premises where it is sold" includes all
16food sold through a vending machine, except soft drinks and
17food products that are dispensed hot from a vending machine,
18regardless of the location of the vending machine. Beginning
19August 1, 2009, and notwithstanding any other provisions of
20this Act, "food for human consumption that is to be consumed
21off the premises where it is sold" includes all food sold
22through a vending machine, except soft drinks, candy, and food
23products that are dispensed hot from a vending machine,
24regardless of the location of the vending machine.
25    Notwithstanding any other provisions of this Act,
26beginning September 1, 2009, "food for human consumption that

 

 

HB3512- 19 -LRB097 10581 HLH 50940 b

1is to be consumed off the premises where it is sold" does not
2include candy. For purposes of this Section, "candy" means a
3preparation of sugar, honey, or other natural or artificial
4sweeteners in combination with chocolate, fruits, nuts or other
5ingredients or flavorings in the form of bars, drops, or
6pieces. "Candy" does not include any preparation that contains
7flour or requires refrigeration.
8    Notwithstanding any other provisions of this Act,
9beginning September 1, 2009, "nonprescription medicines and
10drugs" does not include grooming and hygiene products. For
11purposes of this Section, "grooming and hygiene products"
12includes, but is not limited to, soaps and cleaning solutions,
13shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
14lotions and screens, unless those products are available by
15prescription only, regardless of whether the products meet the
16definition of "over-the-counter-drugs". For the purposes of
17this paragraph, "over-the-counter-drug" means a drug for human
18use that contains a label that identifies the product as a drug
19as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
20label includes:
21        (A) A "Drug Facts" panel; or
22        (B) A statement of the "active ingredient(s)" with a
23    list of those ingredients contained in the compound,
24    substance or preparation.
25    If the property that is acquired from a serviceman is
26acquired outside Illinois and used outside Illinois before

 

 

HB3512- 20 -LRB097 10581 HLH 50940 b

1being brought to Illinois for use here and is taxable under
2this Act, the "selling price" on which the tax is computed
3shall be reduced by an amount that represents a reasonable
4allowance for depreciation for the period of prior out-of-state
5use.
6(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
7eff. 7-13-09; 96-339, eff. 7-1-10; 96-1000, eff. 7-2-10.)
 
8    (35 ILCS 110/9)  (from Ch. 120, par. 439.39)
9    Sec. 9. Each serviceman required or authorized to collect
10the tax herein imposed shall pay to the Department the amount
11of such tax (except as otherwise provided) at the time when he
12is required to file his return for the period during which such
13tax was collected, less a discount of 2.1% prior to January 1,
141990 and 1.75% on and after January 1, 1990, or $5 per calendar
15year, whichever is greater, which is allowed to reimburse the
16serviceman for expenses incurred in collecting the tax, keeping
17records, preparing and filing returns, remitting the tax and
18supplying data to the Department on request. A serviceman need
19not remit that part of any tax collected by him to the extent
20that he is required to pay and does pay the tax imposed by the
21Service Occupation Tax Act with respect to his sale of service
22involving the incidental transfer by him of the same property.
23    Except as provided hereinafter in this Section, on or
24before the twentieth day of each calendar month, such
25serviceman shall file a return for the preceding calendar month

 

 

HB3512- 21 -LRB097 10581 HLH 50940 b

1in accordance with reasonable Rules and Regulations to be
2promulgated by the Department. Such return shall be filed on a
3form prescribed by the Department and shall contain such
4information as the Department may reasonably require.
5    The Department may require returns to be filed on a
6quarterly basis. If so required, a return for each calendar
7quarter shall be filed on or before the twentieth day of the
8calendar month following the end of such calendar quarter. The
9taxpayer shall also file a return with the Department for each
10of the first two months of each calendar quarter, on or before
11the twentieth day of the following calendar month, stating:
12        1. The name of the seller;
13        2. The address of the principal place of business from
14    which he engages in business as a serviceman in this State;
15        3. The total amount of taxable receipts received by him
16    during the preceding calendar month, including receipts
17    from charge and time sales, but less all deductions allowed
18    by law;
19        4. The amount of credit provided in Section 2d of this
20    Act;
21        5. The amount of tax due;
22        5-5. The signature of the taxpayer; and
23        6. Such other reasonable information as the Department
24    may require.
25    If a taxpayer fails to sign a return within 30 days after
26the proper notice and demand for signature by the Department,

 

 

HB3512- 22 -LRB097 10581 HLH 50940 b

1the return shall be considered valid and any amount shown to be
2due on the return shall be deemed assessed.
3    Beginning October 1, 1993, a taxpayer who has an average
4monthly tax liability of $150,000 or more shall make all
5payments required by rules of the Department by electronic
6funds transfer. Beginning October 1, 1994, a taxpayer who has
7an average monthly tax liability of $100,000 or more shall make
8all payments required by rules of the Department by electronic
9funds transfer. Beginning October 1, 1995, a taxpayer who has
10an average monthly tax liability of $50,000 or more shall make
11all payments required by rules of the Department by electronic
12funds transfer. Beginning October 1, 2000, a taxpayer who has
13an annual tax liability of $200,000 or more shall make all
14payments required by rules of the Department by electronic
15funds transfer. The term "annual tax liability" shall be the
16sum of the taxpayer's liabilities under this Act, and under all
17other State and local occupation and use tax laws administered
18by the Department, for the immediately preceding calendar year.
19The term "average monthly tax liability" means the sum of the
20taxpayer's liabilities under this Act, and under all other
21State and local occupation and use tax laws administered by the
22Department, for the immediately preceding calendar year
23divided by 12. Beginning on October 1, 2002, a taxpayer who has
24a tax liability in the amount set forth in subsection (b) of
25Section 2505-210 of the Department of Revenue Law shall make
26all payments required by rules of the Department by electronic

 

 

HB3512- 23 -LRB097 10581 HLH 50940 b

1funds transfer.
2    Before August 1 of each year beginning in 1993, the
3Department shall notify all taxpayers required to make payments
4by electronic funds transfer. All taxpayers required to make
5payments by electronic funds transfer shall make those payments
6for a minimum of one year beginning on October 1.
7    Any taxpayer not required to make payments by electronic
8funds transfer may make payments by electronic funds transfer
9with the permission of the Department.
10    All taxpayers required to make payment by electronic funds
11transfer and any taxpayers authorized to voluntarily make
12payments by electronic funds transfer shall make those payments
13in the manner authorized by the Department.
14    The Department shall adopt such rules as are necessary to
15effectuate a program of electronic funds transfer and the
16requirements of this Section.
17    If the serviceman is otherwise required to file a monthly
18return and if the serviceman's average monthly tax liability to
19the Department does not exceed $200, the Department may
20authorize his returns to be filed on a quarter annual basis,
21with the return for January, February and March of a given year
22being due by April 20 of such year; with the return for April,
23May and June of a given year being due by July 20 of such year;
24with the return for July, August and September of a given year
25being due by October 20 of such year, and with the return for
26October, November and December of a given year being due by

 

 

HB3512- 24 -LRB097 10581 HLH 50940 b

1January 20 of the following year.
2    If the serviceman is otherwise required to file a monthly
3or quarterly return and if the serviceman's average monthly tax
4liability to the Department does not exceed $50, the Department
5may authorize his returns to be filed on an annual basis, with
6the return 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 serviceman may file his return, in the
13case of any serviceman who ceases to engage in a kind of
14business which makes him responsible for filing returns under
15this Act, such serviceman shall file a final return under this
16Act with the Department not more than 1 month after
17discontinuing such business.
18    Where a serviceman collects the tax with respect to the
19selling price of property which he sells and the purchaser
20thereafter returns such property and the serviceman refunds the
21selling price thereof to the purchaser, such serviceman shall
22also refund, to the purchaser, the tax so collected from the
23purchaser. When filing his return for the period in which he
24refunds such tax to the purchaser, the serviceman may deduct
25the amount of the tax so refunded by him to the purchaser from
26any other Service Use Tax, Service Occupation Tax, retailers'

 

 

HB3512- 25 -LRB097 10581 HLH 50940 b

1occupation tax or use tax which such serviceman may be required
2to pay or remit to the Department, as shown by such return,
3provided that the amount of the tax to be deducted shall
4previously have been remitted to the Department by such
5serviceman. If the serviceman shall not previously have
6remitted the amount of such tax to the Department, he shall be
7entitled to no deduction hereunder upon refunding such tax to
8the purchaser.
9    Any serviceman filing a return hereunder shall also include
10the total tax upon the selling price of tangible personal
11property purchased for use by him as an incident to a sale of
12service, and such serviceman shall remit the amount of such tax
13to the Department when filing such return.
14    If experience indicates such action to be practicable, the
15Department may prescribe and furnish a combination or joint
16return which will enable servicemen, who are required to file
17returns hereunder and also under the Service Occupation Tax
18Act, to furnish all the return information required by both
19Acts on the one form.
20    Where the serviceman has more than one business registered
21with the Department under separate registration hereunder,
22such serviceman shall not file each return that is due as a
23single return covering all such registered businesses, but
24shall file separate returns for each such registered business.
25    Beginning January 1, 1990, each month the Department shall
26pay into the State and Local Tax Reform Fund, a special fund in

 

 

HB3512- 26 -LRB097 10581 HLH 50940 b

1the State Treasury, the net revenue realized for the preceding
2month from the 1% tax on sales of food for human consumption
3which is to be consumed off the premises where it is sold
4(other than alcoholic beverages, soft drinks and food which has
5been prepared for immediate consumption) and prescription and
6nonprescription medicines, drugs, medical appliances and
7insulin, urine testing materials, syringes and needles used by
8diabetics.
9    Beginning January 1, 1990, each month the Department shall
10pay into the State and Local Sales Tax Reform Fund 20% of the
11net revenue realized for the preceding month from the 6.25%
12general rate on transfers of tangible personal property, other
13than tangible personal property which is purchased outside
14Illinois at retail from a retailer and which is titled or
15registered by an agency of this State's government.
16    Beginning August 1, 2000, each month the Department shall
17pay into the State and Local Sales Tax Reform Fund 100% of the
18net revenue realized for the preceding month from the 1.25%
19rate on the selling price of motor fuel and gasohol.
20    On October 1 of each year beginning in 2011, the Department
21shall pay into the State and Local Sales Tax Reform Fund 100%
22of the net revenue realized for the preceding month from the
231.25% rate on the selling price of sales tax holiday items.
24    Beginning October 1, 2009, each month the Department shall
25pay into the Capital Projects Fund an amount that is equal to
26an amount estimated by the Department to represent 80% of the

 

 

HB3512- 27 -LRB097 10581 HLH 50940 b

1net revenue realized for the preceding month from the sale of
2candy, grooming and hygiene products, and soft drinks that had
3been taxed at a rate of 1% prior to September 1, 2009 but that
4is now taxed at 6.25%.
5    Of the remainder of the moneys received by the Department
6pursuant to this Act, (a) 1.75% thereof shall be paid into the
7Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
8and after July 1, 1989, 3.8% thereof shall be paid into the
9Build Illinois Fund; provided, however, that if in any fiscal
10year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
11may be, of the moneys received by the Department and required
12to be paid into the Build Illinois Fund pursuant to Section 3
13of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
14Act, Section 9 of the Service Use Tax Act, and Section 9 of the
15Service Occupation Tax Act, such Acts being hereinafter called
16the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
17may be, of moneys being hereinafter called the "Tax Act
18Amount", and (2) the amount transferred to the Build Illinois
19Fund from the State and Local Sales Tax Reform Fund shall be
20less than the Annual Specified Amount (as defined in Section 3
21of the Retailers' Occupation Tax Act), an amount equal to the
22difference shall be immediately paid into the Build Illinois
23Fund from other moneys received by the Department pursuant to
24the Tax Acts; and further provided, that if on the last
25business day of any month the sum of (1) the Tax Act Amount
26required to be deposited into the Build Illinois Bond Account

 

 

HB3512- 28 -LRB097 10581 HLH 50940 b

1in the Build Illinois Fund during such month and (2) the amount
2transferred during such month to the Build Illinois Fund from
3the State and Local Sales Tax Reform Fund shall have been less
4than 1/12 of the Annual Specified Amount, an amount equal to
5the difference shall be immediately paid into the Build
6Illinois Fund from other moneys received by the Department
7pursuant to the Tax Acts; and, further provided, that in no
8event shall the payments required under the preceding proviso
9result in aggregate payments into the Build Illinois Fund
10pursuant to this clause (b) for any fiscal year in excess of
11the greater of (i) the Tax Act Amount or (ii) the Annual
12Specified Amount for such fiscal year; and, further provided,
13that the amounts payable into the Build Illinois Fund under
14this clause (b) shall be payable only until such time as the
15aggregate amount on deposit under each trust indenture securing
16Bonds issued and outstanding pursuant to the Build Illinois
17Bond Act is sufficient, taking into account any future
18investment income, to fully provide, in accordance with such
19indenture, for the defeasance of or the payment of the
20principal of, premium, if any, and interest on the Bonds
21secured by such indenture and on any Bonds expected to be
22issued thereafter and all fees and costs payable with respect
23thereto, all as certified by the Director of the Bureau of the
24Budget (now Governor's Office of Management and Budget). If on
25the last business day of any month in which Bonds are
26outstanding pursuant to the Build Illinois Bond Act, the

 

 

HB3512- 29 -LRB097 10581 HLH 50940 b

1aggregate of the moneys deposited in the Build Illinois Bond
2Account in the Build Illinois Fund in such month shall be less
3than the amount required to be transferred in such month from
4the Build Illinois Bond Account to the Build Illinois Bond
5Retirement and Interest Fund pursuant to Section 13 of the
6Build Illinois Bond Act, an amount equal to such deficiency
7shall be immediately paid from other moneys received by the
8Department pursuant to the Tax Acts to the Build Illinois Fund;
9provided, however, that any amounts paid to the Build Illinois
10Fund in any fiscal year pursuant to this sentence shall be
11deemed to constitute payments pursuant to clause (b) of the
12preceding sentence and shall reduce the amount otherwise
13payable for such fiscal year pursuant to clause (b) of the
14preceding sentence. The moneys received by the Department
15pursuant to this Act and required to be deposited into the
16Build Illinois Fund are subject to the pledge, claim and charge
17set forth in Section 12 of the Build Illinois Bond Act.
18    Subject to payment of amounts into the Build Illinois Fund
19as provided in the preceding paragraph or in any amendment
20thereto hereafter enacted, the following specified monthly
21installment of the amount requested in the certificate of the
22Chairman of the Metropolitan Pier and Exposition Authority
23provided under Section 8.25f of the State Finance Act, but not
24in excess of the sums designated as "Total Deposit", shall be
25deposited in the aggregate from collections under Section 9 of
26the Use Tax Act, Section 9 of the Service Use Tax Act, Section

 

 

HB3512- 30 -LRB097 10581 HLH 50940 b

19 of the Service Occupation Tax Act, and Section 3 of the
2Retailers' Occupation Tax Act into the McCormick Place
3Expansion Project Fund in the specified fiscal years.
4Fiscal YearTotal Deposit
51993         $0
61994 53,000,000
71995 58,000,000
81996 61,000,000
91997 64,000,000
101998 68,000,000
111999 71,000,000
122000 75,000,000
132001 80,000,000
142002 93,000,000
152003 99,000,000
162004103,000,000
172005108,000,000
182006113,000,000
192007119,000,000
202008126,000,000
212009132,000,000
222010139,000,000
232011146,000,000
242012153,000,000
252013161,000,000

 

 

HB3512- 31 -LRB097 10581 HLH 50940 b

12014170,000,000
22015179,000,000
32016189,000,000
42017199,000,000
52018210,000,000
62019221,000,000
72020233,000,000
82021246,000,000
92022260,000,000
102023275,000,000
112024 275,000,000
122025 275,000,000
132026 279,000,000
142027 292,000,000
152028 307,000,000
162029 322,000,000
172030 338,000,000
182031 350,000,000
192032 350,000,000
20and
21each fiscal year
22thereafter that bonds
23are outstanding under
24Section 13.2 of the
25Metropolitan Pier and
26Exposition Authority Act,

 

 

HB3512- 32 -LRB097 10581 HLH 50940 b

1but not after fiscal year 2060.
2    Beginning July 20, 1993 and in each month of each fiscal
3year thereafter, one-eighth of the amount requested in the
4certificate of the Chairman of the Metropolitan Pier and
5Exposition Authority for that fiscal year, less the amount
6deposited into the McCormick Place Expansion Project Fund by
7the State Treasurer in the respective month under subsection
8(g) of Section 13 of the Metropolitan Pier and Exposition
9Authority Act, plus cumulative deficiencies in the deposits
10required under this Section for previous months and years,
11shall be deposited into the McCormick Place Expansion Project
12Fund, until the full amount requested for the fiscal year, but
13not in excess of the amount specified above as "Total Deposit",
14has been deposited.
15    Subject to payment of amounts into the Build Illinois Fund
16and the McCormick Place Expansion Project Fund pursuant to the
17preceding paragraphs or in any amendments thereto hereafter
18enacted, beginning July 1, 1993, the Department shall each
19month pay into the Illinois Tax Increment Fund 0.27% of 80% of
20the net revenue realized for the preceding month from the 6.25%
21general rate on the selling price of tangible personal
22property.
23    Subject to payment of amounts into the Build Illinois Fund
24and the McCormick Place Expansion Project Fund pursuant to the
25preceding paragraphs or in any amendments thereto hereafter
26enacted, beginning with the receipt of the first report of

 

 

HB3512- 33 -LRB097 10581 HLH 50940 b

1taxes paid by an eligible business and continuing for a 25-year
2period, the Department shall each month pay into the Energy
3Infrastructure Fund 80% of the net revenue realized from the
46.25% general rate on the selling price of Illinois-mined coal
5that was sold to an eligible business. For purposes of this
6paragraph, the term "eligible business" means a new electric
7generating facility certified pursuant to Section 605-332 of
8the Department of Commerce and Economic Opportunity Law of the
9Civil Administrative Code of Illinois.
10    All remaining moneys received by the Department pursuant to
11this Act shall be paid into the General Revenue Fund of the
12State Treasury.
13    As soon as possible after the first day of each month, upon
14certification of the Department of Revenue, the Comptroller
15shall order transferred and the Treasurer shall transfer from
16the General Revenue Fund to the Motor Fuel Tax Fund an amount
17equal to 1.7% of 80% of the net revenue realized under this Act
18for the second preceding month. Beginning April 1, 2000, this
19transfer is no longer required and shall not be made.
20    Net revenue realized for a month shall be the revenue
21collected by the State pursuant to this Act, less the amount
22paid out during that month as refunds to taxpayers for
23overpayment of liability.
24(Source: P.A. 96-34, eff. 7-13-09; 96-38, eff. 7-13-09; 96-898,
25eff. 5-27-10.)
 

 

 

HB3512- 34 -LRB097 10581 HLH 50940 b

1    Section 15. The Service Occupation Tax Act is amended by
2changing Sections 3-10 and 9 and by adding Section 3-6 as
3follows:
 
4    (35 ILCS 115/3-6 new)
5    Sec. 3-6. Sales tax holiday items.
6    (a) During the first Monday in September of each year
7beginning in 2011, energy efficient products qualify for a
81.25% reduced rate of tax as set forth in Section 3-10 of this
9Act. For the purposes of this subsection (a), "energy efficient
10product" means any product that qualifies as an Energy Star
11product by the United States Environmental Protection Agency.
12The reduced rate on these items shall be administered under the
13provisions of subsection (b) of this Section.
14    (b) Notwithstanding any other provision of this Act, the
15reduced rate of tax under Section 3-10 of this Act for sales
16tax holiday items described in subsection (a) of this Section
17shall be administered by the Department in the same manner as
18provided in subsection (b) of Section 3-6 of the Use Tax Act.
 
19    (35 ILCS 115/3-10)  (from Ch. 120, par. 439.103-10)
20    Sec. 3-10. Rate of tax. Unless otherwise provided in this
21Section, the tax imposed by this Act is at the rate of 6.25% of
22the "selling price", as defined in Section 2 of the Service Use
23Tax Act, of the tangible personal property. For the purpose of
24computing this tax, in no event shall the "selling price" be

 

 

HB3512- 35 -LRB097 10581 HLH 50940 b

1less than the cost price to the serviceman of the tangible
2personal property transferred. The selling price of each item
3of tangible personal property transferred as an incident of a
4sale of service may be shown as a distinct and separate item on
5the serviceman's billing to the service customer. If the
6selling price is not so shown, the selling price of the
7tangible personal property is deemed to be 50% of the
8serviceman's entire billing to the service customer. When,
9however, a serviceman contracts to design, develop, and produce
10special order machinery or equipment, the tax imposed by this
11Act shall be based on the serviceman's cost price of the
12tangible personal property transferred incident to the
13completion of the contract.
14    Beginning on July 1, 2000 and through December 31, 2000,
15with respect to motor fuel, as defined in Section 1.1 of the
16Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
17the Use Tax Act, the tax is imposed at the rate of 1.25%.
18    With respect to gasohol, as defined in the Use Tax Act, the
19tax imposed by this Act shall apply to (i) 70% of the cost
20price of property transferred as an incident to the sale of
21service on or after January 1, 1990, and before July 1, 2003,
22(ii) 80% of the selling price of property transferred as an
23incident to the sale of service on or after July 1, 2003 and on
24or before December 31, 2013, and (iii) 100% of the cost price
25thereafter. If, at any time, however, the tax under this Act on
26sales of gasohol, as defined in the Use Tax Act, is imposed at

 

 

HB3512- 36 -LRB097 10581 HLH 50940 b

1the rate of 1.25%, then the tax imposed by this Act applies to
2100% of the proceeds of sales of gasohol made during that time.
3    With respect to majority blended ethanol fuel, as defined
4in the Use Tax Act, the tax imposed by this Act does not apply
5to the selling price of property transferred as an incident to
6the sale of service on or after July 1, 2003 and on or before
7December 31, 2013 but applies to 100% of the selling price
8thereafter.
9    With respect to biodiesel blends, as defined in the Use Tax
10Act, with no less than 1% and no more than 10% biodiesel, the
11tax imposed by this Act applies to (i) 80% of the selling price
12of property transferred as an incident to the sale of service
13on or after July 1, 2003 and on or before December 31, 2013 and
14(ii) 100% of the proceeds of the selling price thereafter. If,
15at any time, however, the tax under this Act on sales of
16biodiesel blends, as defined in the Use Tax Act, with no less
17than 1% and no more than 10% biodiesel is imposed at the rate
18of 1.25%, then the tax imposed by this Act applies to 100% of
19the proceeds of sales of biodiesel blends with no less than 1%
20and no more than 10% biodiesel made during that time.
21    With respect to 100% biodiesel, as defined in the Use Tax
22Act, and biodiesel blends, as defined in the Use Tax Act, with
23more than 10% but no more than 99% biodiesel material, the tax
24imposed by this Act does not apply to the proceeds of the
25selling price of property transferred as an incident to the
26sale of service on or after July 1, 2003 and on or before

 

 

HB3512- 37 -LRB097 10581 HLH 50940 b

1December 31, 2013 but applies to 100% of the selling price
2thereafter.
3    During the first Monday in September of each year beginning
4in 2011, with respect to sales tax holiday items as defined in
5Section 3-6 of this Act, the tax is imposed at the rate of
61.25%.
7    At the election of any registered serviceman made for each
8fiscal year, sales of service in which the aggregate annual
9cost price of tangible personal property transferred as an
10incident to the sales of service is less than 35%, or 75% in
11the case of servicemen transferring prescription drugs or
12servicemen engaged in graphic arts production, of the aggregate
13annual total gross receipts from all sales of service, the tax
14imposed by this Act shall be based on the serviceman's cost
15price of the tangible personal property transferred incident to
16the sale of those services.
17    The tax shall be imposed at the rate of 1% on food prepared
18for immediate consumption and transferred incident to a sale of
19service subject to this Act or the Service Occupation Tax Act
20by an entity licensed under the Hospital Licensing Act, the
21Nursing Home Care Act, the MR/DD Community Care Act, or the
22Child Care Act of 1969. The tax shall also be imposed at the
23rate of 1% on food for human consumption that is to be consumed
24off the premises where it is sold (other than alcoholic
25beverages, soft drinks, and food that has been prepared for
26immediate consumption and is not otherwise included in this

 

 

HB3512- 38 -LRB097 10581 HLH 50940 b

1paragraph) and prescription and nonprescription medicines,
2drugs, medical appliances, modifications to a motor vehicle for
3the purpose of rendering it usable by a disabled person, and
4insulin, urine testing materials, syringes, and needles used by
5diabetics, for human use. For the purposes of this Section,
6until September 1, 2009: the term "soft drinks" means any
7complete, finished, ready-to-use, non-alcoholic drink, whether
8carbonated or not, including but not limited to soda water,
9cola, fruit juice, vegetable juice, carbonated water, and all
10other preparations commonly known as soft drinks of whatever
11kind or description that are contained in any closed or sealed
12can, carton, or container, regardless of size; but "soft
13drinks" does not include coffee, tea, non-carbonated water,
14infant formula, milk or milk products as defined in the Grade A
15Pasteurized Milk and Milk Products Act, or drinks containing
1650% or more natural fruit or vegetable juice.
17    Notwithstanding any other provisions of this Act,
18beginning September 1, 2009, "soft drinks" means non-alcoholic
19beverages that contain natural or artificial sweeteners. "Soft
20drinks" do not include beverages that contain milk or milk
21products, soy, rice or similar milk substitutes, or greater
22than 50% of vegetable or fruit juice by volume.
23    Until August 1, 2009, and notwithstanding any other
24provisions of this Act, "food for human consumption that is to
25be consumed off the premises where it is sold" includes all
26food sold through a vending machine, except soft drinks and

 

 

HB3512- 39 -LRB097 10581 HLH 50940 b

1food products that are dispensed hot from a vending machine,
2regardless of the location of the vending machine. Beginning
3August 1, 2009, and notwithstanding any other provisions of
4this Act, "food for human consumption that is to be consumed
5off the premises where it is sold" includes all food sold
6through a vending machine, except soft drinks, candy, and food
7products that are dispensed hot from a vending machine,
8regardless of the location of the vending machine.
9    Notwithstanding any other provisions of this Act,
10beginning September 1, 2009, "food for human consumption that
11is to be consumed off the premises where it is sold" does not
12include candy. For purposes of this Section, "candy" means a
13preparation of sugar, honey, or other natural or artificial
14sweeteners in combination with chocolate, fruits, nuts or other
15ingredients or flavorings in the form of bars, drops, or
16pieces. "Candy" does not include any preparation that contains
17flour or requires refrigeration.
18    Notwithstanding any other provisions of this Act,
19beginning September 1, 2009, "nonprescription medicines and
20drugs" does not include grooming and hygiene products. For
21purposes of this Section, "grooming and hygiene products"
22includes, but is not limited to, soaps and cleaning solutions,
23shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
24lotions and screens, unless those products are available by
25prescription only, regardless of whether the products meet the
26definition of "over-the-counter-drugs". For the purposes of

 

 

HB3512- 40 -LRB097 10581 HLH 50940 b

1this paragraph, "over-the-counter-drug" means a drug for human
2use that contains a label that identifies the product as a drug
3as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
4label includes:
5        (A) A "Drug Facts" panel; or
6        (B) A statement of the "active ingredient(s)" with a
7    list of those ingredients contained in the compound,
8    substance or preparation.
9(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
10eff. 7-13-09; 96-339, eff. 7-1-10; 96-1000, eff. 7-2-10.)
 
11    (35 ILCS 115/9)  (from Ch. 120, par. 439.109)
12    Sec. 9. Each serviceman required or authorized to collect
13the tax herein imposed shall pay to the Department the amount
14of such tax at the time when he is required to file his return
15for the period during which such tax was collectible, less a
16discount of 2.1% prior to January 1, 1990, and 1.75% on and
17after January 1, 1990, or $5 per calendar year, whichever is
18greater, which is allowed to reimburse the serviceman for
19expenses incurred in collecting the tax, keeping records,
20preparing and filing returns, remitting the tax and supplying
21data to the Department on request.
22    Where such tangible personal property is sold under a
23conditional sales contract, or under any other form of sale
24wherein the payment of the principal sum, or a part thereof, is
25extended beyond the close of the period for which the return is

 

 

HB3512- 41 -LRB097 10581 HLH 50940 b

1filed, the serviceman, in collecting the tax may collect, for
2each tax return period, only the tax applicable to the part of
3the selling price actually received during such tax return
4period.
5    Except as provided hereinafter in this Section, on or
6before the twentieth day of each calendar month, such
7serviceman shall file a return for the preceding calendar month
8in accordance with reasonable rules and regulations to be
9promulgated by the Department of Revenue. Such return shall be
10filed on a form prescribed by the Department and shall contain
11such information as the Department may reasonably require.
12    The Department may require returns to be filed on a
13quarterly basis. If so required, a return for each calendar
14quarter shall be filed on or before the twentieth day of the
15calendar month following the end of such calendar quarter. The
16taxpayer shall also file a return with the Department for each
17of the first two months of each calendar quarter, on or before
18the twentieth day of the following calendar month, stating:
19        1. The name of the seller;
20        2. The address of the principal place of business from
21    which he engages in business as a serviceman in this State;
22        3. The total amount of taxable receipts received by him
23    during the preceding calendar month, including receipts
24    from charge and time sales, but less all deductions allowed
25    by law;
26        4. The amount of credit provided in Section 2d of this

 

 

HB3512- 42 -LRB097 10581 HLH 50940 b

1    Act;
2        5. The amount of tax due;
3        5-5. The signature of the taxpayer; and
4        6. Such other reasonable information as the Department
5    may require.
6    If a taxpayer fails to sign a return within 30 days after
7the proper notice and demand for signature by the Department,
8the return shall be considered valid and any amount shown to be
9due on the return shall be deemed assessed.
10    Prior to October 1, 2003, and on and after September 1,
112004 a serviceman may accept a Manufacturer's Purchase Credit
12certification from a purchaser in satisfaction of Service Use
13Tax as provided in Section 3-70 of the Service Use Tax Act if
14the purchaser provides the appropriate documentation as
15required by Section 3-70 of the Service Use Tax Act. A
16Manufacturer's Purchase Credit certification, accepted prior
17to October 1, 2003 or on or after September 1, 2004 by a
18serviceman as provided in Section 3-70 of the Service Use Tax
19Act, may be used by that serviceman to satisfy Service
20Occupation Tax liability in the amount claimed in the
21certification, not to exceed 6.25% of the receipts subject to
22tax from a qualifying purchase. A Manufacturer's Purchase
23Credit reported on any original or amended return filed under
24this Act after October 20, 2003 for reporting periods prior to
25September 1, 2004 shall be disallowed. Manufacturer's Purchase
26Credit reported on annual returns due on or after January 1,

 

 

HB3512- 43 -LRB097 10581 HLH 50940 b

12005 will be disallowed for periods prior to September 1, 2004.
2No Manufacturer's Purchase Credit may be used after September
330, 2003 through August 31, 2004 to satisfy any tax liability
4imposed under this Act, including any audit liability.
5    If the serviceman's average monthly tax liability to the
6Department does not exceed $200, the Department may authorize
7his returns to be filed on a quarter annual basis, with the
8return for January, February and March of a given year being
9due by April 20 of such year; with the return for April, May
10and June of a given year being due by July 20 of such year; with
11the return for July, August and September of a given year being
12due by October 20 of such year, and with the return for
13October, November and December of a given year being due by
14January 20 of the following year.
15    If the serviceman's average monthly tax liability to the
16Department does not exceed $50, the Department may authorize
17his returns to be filed on an annual basis, with the return for
18a given year being due by January 20 of the following year.
19    Such quarter annual and annual returns, as to form and
20substance, shall be subject to the same requirements as monthly
21returns.
22    Notwithstanding any other provision in this Act concerning
23the time within which a serviceman may file his return, in the
24case of any serviceman who ceases to engage in a kind of
25business which makes him responsible for filing returns under
26this Act, such serviceman shall file a final return under this

 

 

HB3512- 44 -LRB097 10581 HLH 50940 b

1Act with the Department not more than 1 month after
2discontinuing such business.
3    Beginning October 1, 1993, a taxpayer who has an average
4monthly tax liability of $150,000 or more shall make all
5payments required by rules of the Department by electronic
6funds transfer. Beginning October 1, 1994, a taxpayer who has
7an average monthly tax liability of $100,000 or more shall make
8all payments required by rules of the Department by electronic
9funds transfer. Beginning October 1, 1995, a taxpayer who has
10an average monthly tax liability of $50,000 or more shall make
11all payments required by rules of the Department by electronic
12funds transfer. Beginning October 1, 2000, a taxpayer who has
13an annual tax liability of $200,000 or more shall make all
14payments required by rules of the Department by electronic
15funds transfer. The term "annual tax liability" shall be the
16sum of the taxpayer's liabilities under this Act, and under all
17other State and local occupation and use tax laws administered
18by the Department, for the immediately preceding calendar year.
19The term "average monthly tax liability" means the sum of the
20taxpayer's liabilities under this Act, and under all other
21State and local occupation and use tax laws administered by the
22Department, for the immediately preceding calendar year
23divided by 12. Beginning on October 1, 2002, a taxpayer who has
24a tax liability in the amount set forth in subsection (b) of
25Section 2505-210 of the Department of Revenue Law shall make
26all payments required by rules of the Department by electronic

 

 

HB3512- 45 -LRB097 10581 HLH 50940 b

1funds transfer.
2    Before August 1 of each year beginning in 1993, the
3Department shall notify all taxpayers required to make payments
4by electronic funds transfer. All taxpayers required to make
5payments by electronic funds transfer shall make those payments
6for a minimum of one year beginning on October 1.
7    Any taxpayer not required to make payments by electronic
8funds transfer may make payments by electronic funds transfer
9with the permission of the Department.
10    All taxpayers required to make payment by electronic funds
11transfer and any taxpayers authorized to voluntarily make
12payments by electronic funds transfer shall make those payments
13in the manner authorized by the Department.
14    The Department shall adopt such rules as are necessary to
15effectuate a program of electronic funds transfer and the
16requirements of this Section.
17    Where a serviceman collects the tax with respect to the
18selling price of tangible personal property which he sells and
19the purchaser thereafter returns such tangible personal
20property and the serviceman refunds the selling price thereof
21to the purchaser, such serviceman shall also refund, to the
22purchaser, the tax so collected from the purchaser. When filing
23his return for the period in which he refunds such tax to the
24purchaser, the serviceman may deduct the amount of the tax so
25refunded by him to the purchaser from any other Service
26Occupation Tax, Service Use Tax, Retailers' Occupation Tax or

 

 

HB3512- 46 -LRB097 10581 HLH 50940 b

1Use Tax which such serviceman may be required to pay or remit
2to the Department, as shown by such return, provided that the
3amount of the tax to be deducted shall previously have been
4remitted to the Department by such serviceman. If the
5serviceman shall not previously have remitted the amount of
6such tax to the Department, he shall be entitled to no
7deduction hereunder upon refunding such tax to the purchaser.
8    If experience indicates such action to be practicable, the
9Department may prescribe and furnish a combination or joint
10return which will enable servicemen, who are required to file
11returns hereunder and also under the Retailers' Occupation Tax
12Act, the Use Tax Act or the Service Use Tax Act, to furnish all
13the return information required by all said Acts on the one
14form.
15    Where the serviceman has more than one business registered
16with the Department under separate registrations hereunder,
17such serviceman shall file separate returns for each registered
18business.
19    Beginning January 1, 1990, each month the Department shall
20pay into the Local Government Tax Fund the revenue realized for
21the preceding month from the 1% tax on sales of food for human
22consumption which is to be consumed off the premises where it
23is sold (other than alcoholic beverages, soft drinks and food
24which has been prepared for immediate consumption) and
25prescription and nonprescription medicines, drugs, medical
26appliances and insulin, urine testing materials, syringes and

 

 

HB3512- 47 -LRB097 10581 HLH 50940 b

1needles used by diabetics.
2    Beginning January 1, 1990, each month the Department shall
3pay into the County and Mass Transit District Fund 4% of the
4revenue realized for the preceding month from the 6.25% general
5rate.
6    Beginning August 1, 2000, each month the Department shall
7pay into the County and Mass Transit District Fund 20% of the
8net revenue realized for the preceding month from the 1.25%
9rate on the selling price of motor fuel and gasohol.
10    On October 1 of each year beginning in 2011, the Department
11shall pay into the County and Mass Transit District Fund 20% of
12the net revenue realized for the preceding month from the 1.25%
13rate on the selling price of sales tax holiday items.
14    Beginning January 1, 1990, each month the Department shall
15pay into the Local Government Tax Fund 16% of the revenue
16realized for the preceding month from the 6.25% general rate on
17transfers of tangible personal property.
18    Beginning August 1, 2000, each month the Department shall
19pay into the Local Government Tax Fund 80% of the net revenue
20realized for the preceding month from the 1.25% rate on the
21selling price of motor fuel and gasohol.
22    On October 1 of each year beginning in 2011, the Department
23shall pay into the Local Government Tax Fund 80% of the net
24revenue realized for the preceding month from the 1.25% rate on
25the selling price of sales tax holiday items.
26    Beginning October 1, 2009, each month the Department shall

 

 

HB3512- 48 -LRB097 10581 HLH 50940 b

1pay into the Capital Projects Fund an amount that is equal to
2an amount estimated by the Department to represent 80% of the
3net revenue realized for the preceding month from the sale of
4candy, grooming and hygiene products, and soft drinks that had
5been taxed at a rate of 1% prior to September 1, 2009 but that
6is now taxed at 6.25%.
7    Of the remainder of the moneys received by the Department
8pursuant to this Act, (a) 1.75% thereof shall be paid into the
9Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
10and after July 1, 1989, 3.8% thereof shall be paid into the
11Build Illinois Fund; provided, however, that if in any fiscal
12year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
13may be, of the moneys received by the Department and required
14to be paid into the Build Illinois Fund pursuant to Section 3
15of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
16Act, Section 9 of the Service Use Tax Act, and Section 9 of the
17Service Occupation Tax Act, such Acts being hereinafter called
18the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
19may be, of moneys being hereinafter called the "Tax Act
20Amount", and (2) the amount transferred to the Build Illinois
21Fund from the State and Local Sales Tax Reform Fund shall be
22less than the Annual Specified Amount (as defined in Section 3
23of the Retailers' Occupation Tax Act), an amount equal to the
24difference shall be immediately paid into the Build Illinois
25Fund from other moneys received by the Department pursuant to
26the Tax Acts; and further provided, that if on the last

 

 

HB3512- 49 -LRB097 10581 HLH 50940 b

1business day of any month the sum of (1) the Tax Act Amount
2required to be deposited into the Build Illinois Account in the
3Build Illinois Fund during such month and (2) the amount
4transferred during such month to the Build Illinois Fund from
5the State and Local Sales Tax Reform Fund shall have been less
6than 1/12 of the Annual Specified Amount, an amount equal to
7the difference shall be immediately paid into the Build
8Illinois Fund from other moneys received by the Department
9pursuant to the Tax Acts; and, further provided, that in no
10event shall the payments required under the preceding proviso
11result in aggregate payments into the Build Illinois Fund
12pursuant to this clause (b) for any fiscal year in excess of
13the greater of (i) the Tax Act Amount or (ii) the Annual
14Specified Amount for such fiscal year; and, further provided,
15that the amounts payable into the Build Illinois Fund under
16this clause (b) shall be payable only until such time as the
17aggregate amount on deposit under each trust indenture securing
18Bonds issued and outstanding pursuant to the Build Illinois
19Bond Act is sufficient, taking into account any future
20investment income, to fully provide, in accordance with such
21indenture, for the defeasance of or the payment of the
22principal of, premium, if any, and interest on the Bonds
23secured by such indenture and on any Bonds expected to be
24issued thereafter and all fees and costs payable with respect
25thereto, all as certified by the Director of the Bureau of the
26Budget (now Governor's Office of Management and Budget). If on

 

 

HB3512- 50 -LRB097 10581 HLH 50940 b

1the last business day of any month in which Bonds are
2outstanding pursuant to the Build Illinois Bond Act, the
3aggregate of the moneys deposited in the Build Illinois Bond
4Account in the Build Illinois Fund in such month shall be less
5than the amount required to be transferred in such month from
6the Build Illinois Bond Account to the Build Illinois Bond
7Retirement and Interest Fund pursuant to Section 13 of the
8Build Illinois Bond Act, an amount equal to such deficiency
9shall be immediately paid from other moneys received by the
10Department pursuant to the Tax Acts to the Build Illinois Fund;
11provided, however, that any amounts paid to the Build Illinois
12Fund in any fiscal year pursuant to this sentence shall be
13deemed to constitute payments pursuant to clause (b) of the
14preceding sentence and shall reduce the amount otherwise
15payable for such fiscal year pursuant to clause (b) of the
16preceding sentence. The moneys received by the Department
17pursuant to this Act and required to be deposited into the
18Build Illinois Fund are subject to the pledge, claim and charge
19set forth in Section 12 of the Build Illinois Bond Act.
20    Subject to payment of amounts into the Build Illinois Fund
21as provided in the preceding paragraph or in any amendment
22thereto hereafter enacted, the following specified monthly
23installment of the amount requested in the certificate of the
24Chairman of the Metropolitan Pier and Exposition Authority
25provided under Section 8.25f of the State Finance Act, but not
26in excess of the sums designated as "Total Deposit", shall be

 

 

HB3512- 51 -LRB097 10581 HLH 50940 b

1deposited in the aggregate from collections under Section 9 of
2the Use Tax Act, Section 9 of the Service Use Tax Act, Section
39 of the Service Occupation Tax Act, and Section 3 of the
4Retailers' Occupation Tax Act into the McCormick Place
5Expansion Project Fund in the specified fiscal years.
6Fiscal YearTotal Deposit
71993         $0
81994 53,000,000
91995 58,000,000
101996 61,000,000
111997 64,000,000
121998 68,000,000
131999 71,000,000
142000 75,000,000
152001 80,000,000
162002 93,000,000
172003 99,000,000
182004103,000,000
192005108,000,000
202006113,000,000
212007119,000,000
222008126,000,000
232009132,000,000
242010139,000,000
252011146,000,000

 

 

HB3512- 52 -LRB097 10581 HLH 50940 b

12012153,000,000
22013161,000,000
32014170,000,000
42015179,000,000
52016189,000,000
62017199,000,000
72018210,000,000
82019221,000,000
92020233,000,000
102021246,000,000
112022260,000,000
122023275,000,000
132024 275,000,000
142025 275,000,000
152026 279,000,000
162027 292,000,000
172028 307,000,000
182029 322,000,000
192030 338,000,000
202031 350,000,000
212032 350,000,000
22and
23each fiscal year
24thereafter that bonds
25are outstanding under
26Section 13.2 of the

 

 

HB3512- 53 -LRB097 10581 HLH 50940 b

1Metropolitan Pier and
2Exposition Authority Act,
3but not after fiscal year 2060.
4    Beginning July 20, 1993 and in each month of each fiscal
5year thereafter, one-eighth of the amount requested in the
6certificate of the Chairman of the Metropolitan Pier and
7Exposition Authority for that fiscal year, less the amount
8deposited into the McCormick Place Expansion Project Fund by
9the State Treasurer in the respective month under subsection
10(g) of Section 13 of the Metropolitan Pier and Exposition
11Authority Act, plus cumulative deficiencies in the deposits
12required under this Section for previous months and years,
13shall be deposited into the McCormick Place Expansion Project
14Fund, until the full amount requested for the fiscal year, but
15not in excess of the amount specified above as "Total Deposit",
16has been deposited.
17    Subject to payment of amounts into the Build Illinois Fund
18and the McCormick Place Expansion Project Fund pursuant to the
19preceding paragraphs or in any amendments thereto hereafter
20enacted, beginning July 1, 1993, the Department shall each
21month pay into the Illinois Tax Increment Fund 0.27% of 80% of
22the net revenue realized for the preceding month from the 6.25%
23general rate on the selling price of tangible personal
24property.
25    Subject to payment of amounts into the Build Illinois Fund
26and the McCormick Place Expansion Project Fund pursuant to the

 

 

HB3512- 54 -LRB097 10581 HLH 50940 b

1preceding paragraphs or in any amendments thereto hereafter
2enacted, beginning with the receipt of the first report of
3taxes paid by an eligible business and continuing for a 25-year
4period, the Department shall each month pay into the Energy
5Infrastructure Fund 80% of the net revenue realized from the
66.25% general rate on the selling price of Illinois-mined coal
7that was sold to an eligible business. For purposes of this
8paragraph, the term "eligible business" means a new electric
9generating facility certified pursuant to Section 605-332 of
10the Department of Commerce and Economic Opportunity Law of the
11Civil Administrative Code of Illinois.
12    Remaining moneys received by the Department pursuant to
13this Act shall be paid into the General Revenue Fund of the
14State Treasury.
15    The Department may, upon separate written notice to a
16taxpayer, require the taxpayer to prepare and file with the
17Department on a form prescribed by the Department within not
18less than 60 days after receipt of the notice an annual
19information return for the tax year specified in the notice.
20Such annual return to the Department shall include a statement
21of gross receipts as shown by the taxpayer's last Federal
22income tax return. If the total receipts of the business as
23reported in the Federal income tax return do not agree with the
24gross receipts reported to the Department of Revenue for the
25same period, the taxpayer shall attach to his annual return a
26schedule showing a reconciliation of the 2 amounts and the

 

 

HB3512- 55 -LRB097 10581 HLH 50940 b

1reasons for the difference. The taxpayer's annual return to the
2Department shall also disclose the cost of goods sold by the
3taxpayer during the year covered by such return, opening and
4closing inventories of such goods for such year, cost of goods
5used from stock or taken from stock and given away by the
6taxpayer during such year, pay roll information of the
7taxpayer's business during such year and any additional
8reasonable information which the Department deems would be
9helpful in determining the accuracy of the monthly, quarterly
10or annual returns filed by such taxpayer as hereinbefore
11provided for in this Section.
12    If the annual information return required by this Section
13is not filed when and as required, the taxpayer shall be liable
14as follows:
15        (i) Until January 1, 1994, the taxpayer shall be liable
16    for a penalty equal to 1/6 of 1% of the tax due from such
17    taxpayer under this Act during the period to be covered by
18    the annual return for each month or fraction of a month
19    until such return is filed as required, the penalty to be
20    assessed and collected in the same manner as any other
21    penalty provided for in this Act.
22        (ii) On and after January 1, 1994, the taxpayer shall
23    be liable for a penalty as described in Section 3-4 of the
24    Uniform Penalty and Interest Act.
25    The chief executive officer, proprietor, owner or highest
26ranking manager shall sign the annual return to certify the

 

 

HB3512- 56 -LRB097 10581 HLH 50940 b

1accuracy of the information contained therein. Any person who
2willfully signs the annual return containing false or
3inaccurate information shall be guilty of perjury and punished
4accordingly. The annual return form prescribed by the
5Department shall include a warning that the person signing the
6return may be liable for perjury.
7    The foregoing portion of this Section concerning the filing
8of an annual information return shall not apply to a serviceman
9who is not required to file an income tax return with the
10United States Government.
11    As soon as possible after the first day of each month, upon
12certification of the Department of Revenue, the Comptroller
13shall order transferred and the Treasurer shall transfer from
14the General Revenue Fund to the Motor Fuel Tax Fund an amount
15equal to 1.7% of 80% of the net revenue realized under this Act
16for the second preceding month. Beginning April 1, 2000, this
17transfer is no longer required and shall not be made.
18    Net revenue realized for a month shall be the revenue
19collected by the State pursuant to this Act, less the amount
20paid out during that month as refunds to taxpayers for
21overpayment of liability.
22    For greater simplicity of administration, it shall be
23permissible for manufacturers, importers and wholesalers whose
24products are sold by numerous servicemen in Illinois, and who
25wish to do so, to assume the responsibility for accounting and
26paying to the Department all tax accruing under this Act with

 

 

HB3512- 57 -LRB097 10581 HLH 50940 b

1respect to such sales, if the servicemen who are affected do
2not make written objection to the Department to this
3arrangement.
4(Source: P.A. 96-34, eff. 7-13-09; 96-38, eff. 7-13-09; 96-898,
5eff. 5-27-10.)
 
6    Section 20. The Retailers' Occupation Tax Act is amended by
7changing Sections 2-8 and 2-10 as follows:
 
8    (35 ILCS 120/2-8)
9    Sec. 2-8. Sales tax holiday items.
10    (a) The tangible personal property described in this
11subsection qualifies for the 1.25% reduced rate of tax for the
12period set forth in Section 2-10 of this Act (hereinafter
13referred to as the Sales Tax Holiday Period). The reduced rate
14on these items shall be administered under the provisions of
15subsection (b) of this Section. The following items are subject
16to the reduced rate:
17        (1) Clothing items that each have a retail selling
18    price of less than $100.
19        "Clothing" means, unless otherwise specified in this
20    Section, all human wearing apparel suitable for general
21    use. "Clothing" does not include clothing accessories,
22    protective equipment, or sport or recreational equipment.
23    "Clothing" includes, but is not limited to: household and
24    shop aprons; athletic supporters; bathing suits and caps;

 

 

HB3512- 58 -LRB097 10581 HLH 50940 b

1    belts and suspenders; boots; coats and jackets; ear muffs;
2    footlets; gloves and mittens for general use; hats and
3    caps; hosiery; insoles for shoes; lab coats; neckties;
4    overshoes; pantyhose; rainwear; rubber pants; sandals;
5    scarves; shoes and shoelaces; slippers; sneakers; socks
6    and stockings; steel-toed shoes; underwear; and school
7    uniforms.
8        "Clothing accessories" means, but is not limited to:
9    briefcases; cosmetics; hair notions, including, but not
10    limited to barrettes, hair bows, and hair nets; handbags;
11    handkerchiefs; jewelry; non-prescription sunglasses;
12    umbrellas; wallets; watches; and wigs and hair pieces.
13        "Protective equipment" means, but is not limited to:
14    breathing masks; clean room apparel and equipment; ear and
15    hearing protectors; face shields; hard hats; helmets;
16    paint or dust respirators; protective gloves; safety
17    glasses and goggles; safety belts; tool belts; and welder's
18    gloves and masks.
19        "Sport or recreational equipment" means, but is not
20    limited to: ballet and tap shoes; cleated or spiked
21    athletic shoes; gloves, including, but not limited to,
22    baseball, bowling, boxing, hockey, and golf gloves;
23    goggles; hand and elbow guards; life preservers and vests;
24    mouth guards; roller and ice skates; shin guards; shoulder
25    pads; ski boots; waders; and wetsuits and fins.
26        (2) School supplies. "School supplies" means, unless

 

 

HB3512- 59 -LRB097 10581 HLH 50940 b

1    otherwise specified in this Section, items used by a
2    student in a course of study. The purchase of school
3    supplies for use by persons other than students for use in
4    a course of study are not eligible for the reduced rate of
5    tax. "School supplies" do not include school art supplies;
6    school instructional materials; cameras; film and memory
7    cards; videocameras, tapes, and videotapes; computers;
8    cell phones; Personal Digital Assistants (PDAs); handheld
9    electronic schedulers; and school computer supplies.
10        "School supplies" includes, but is not limited to:
11    binders; book bags; calculators; cellophane tape;
12    blackboard chalk; compasses; composition books; crayons;
13    erasers; expandable, pocket, plastic, and manila folders;
14    glue, paste, and paste sticks; highlighters; index cards;
15    index card boxes; legal pads; lunch boxes; markers;
16    notebooks; paper, including loose leaf ruled notebook
17    paper, copy paper, graph paper, tracing paper, manila
18    paper, colored paper, poster board, and construction
19    paper; pencils; pencil leads; pens; ink and ink refills for
20    pens; pencil boxes and other school supply boxes; pencil
21    sharpeners; protractors; rulers; scissors; and writing
22    tablets.
23        "School art supply" means an item commonly used by a
24    student in a course of study for artwork and includes only
25    the following items: clay and glazes; acrylic, tempera, and
26    oil paint; paintbrushes for artwork; sketch and drawing

 

 

HB3512- 60 -LRB097 10581 HLH 50940 b

1    pads; and watercolors.
2        "School instructional material" means written material
3    commonly used by a student in a course of study as a
4    reference and to learn the subject being taught and
5    includes only the following items: reference books;
6    reference maps and globes; textbooks; and workbooks.
7        "School computer supply" means an item commonly used by
8    a student in a course of study in which a computer is used
9    and applies only to the following items: flashdrives and
10    other computer data storage devices; data storage media,
11    such as diskettes and compact disks; boxes and cases for
12    disk storage; external ports or drives; computer cases;
13    computer cables; computer printers; and printer
14    cartridges, toner, and ink.
15    (a-5) During the first Monday in September of each year
16beginning in 2011, energy efficient products are also subject
17to the reduced rate. For the purposes of this subsection (a-5),
18"energy efficient product" means any product that qualifies as
19an Energy Star product by the United States Environmental
20Protection Agency.
21    (b) Administration. Notwithstanding any other provision of
22this Act, the reduced rate of tax under Section 3-10 of this
23Act for sales tax holiday items described in this Section
24clothing and school supplies shall be administered by the
25Department under the provisions of this subsection (b).
26        (1) Bundled sales. Items that qualify for the reduced

 

 

HB3512- 61 -LRB097 10581 HLH 50940 b

1    rate of tax that are bundled together with items that do
2    not qualify for the reduced rate of tax and that are sold
3    for one itemized price will be subject to the reduced rate
4    of tax only if the value of the items that qualify for the
5    reduced rate of tax exceeds the value of the items that do
6    not qualify for the reduced rate of tax.
7        (2) Coupons and discounts. An unreimbursed discount by
8    the seller reduces the sales price of the property so that
9    the discounted sales price determines whether the sales
10    price is within a sales tax holiday price threshold. A
11    coupon or other reduction in the sales price is treated as
12    a discount if the seller is not reimbursed for the coupon
13    or reduction amount by a third party.
14        (3) Splitting of items normally sold together.
15    Articles that are normally sold as a single unit must
16    continue to be sold in that manner. Such articles cannot be
17    priced separately and sold as individual items in order to
18    obtain the reduced rate of tax. For example, a pair of
19    shoes cannot have each shoe sold separately so that the
20    sales price of each shoe is within a sales tax holiday
21    price threshold.
22        (4) Rain checks. A rain check is a procedure that
23    allows a customer to purchase an item at a certain price at
24    a later time because the particular item was out of stock.
25    Eligible property that customers purchase during the Sales
26    Tax Holiday Period with the use of a rain check will

 

 

HB3512- 62 -LRB097 10581 HLH 50940 b

1    qualify for the reduced rate of tax regardless of when the
2    rain check was issued. Issuance of a rain check during the
3    Sales Tax Holiday Period will not qualify eligible property
4    for the reduced rate of tax if the property is actually
5    purchased after the Sales Tax Holiday Period.
6        (5) Exchanges. The procedure for an exchange in regards
7    to a sales tax holiday is as follows:
8            (A) If a customer purchases an item of eligible
9        property during the Sales Tax Holiday Period, but later
10        exchanges the item for a similar eligible item, even if
11        a different size, different color, or other feature, no
12        additional tax is due even if the exchange is made
13        after the Sales Tax Holiday Period.
14            (B) If a customer purchases an item of eligible
15        property during the Sales Tax Holiday Period, but after
16        the Sales Tax Holiday Period has ended, the customer
17        returns the item and receives credit on the purchase of
18        a different item, the 6.25% general merchandise sales
19        tax rate is due on the sale of the newly purchased
20        item.
21            (C) If a customer purchases an item of eligible
22        property before the Sales Tax Holiday Period, but
23        during the Sales Tax Holiday Period the customer
24        returns the item and receives credit on the purchase of
25        a different item of eligible property, the reduced rate
26        of tax is due on the sale of the new item if the new

 

 

HB3512- 63 -LRB097 10581 HLH 50940 b

1        item is purchased during the Sales Tax Holiday Period.
2        (6) Delivery charges. Delivery charges, including
3    shipping, handling and service charges, are part of the
4    sales price of eligible property.
5        (7) Order date and back orders. For the purpose of a
6    sales tax holiday, eligible property qualifies for the
7    reduced rate of tax if: (i) the item is both delivered to
8    and paid for by the customer during the Sales Tax Holiday
9    Period or (ii) the customer orders and pays for the item
10    and the seller accepts the order during the Sales Tax
11    Holiday Period for immediate shipment, even if delivery is
12    made after the Sales Tax Holiday Period. The seller accepts
13    an order when the seller has taken action to fill the order
14    for immediate shipment. Actions to fill an order include
15    placement of an "in date" stamp on an order or assignment
16    of an "order number" to an order within the Sales Tax
17    Holiday Period. An order is for immediate shipment when the
18    customer does not request delayed shipment. An order is for
19    immediate shipment notwithstanding that the shipment may
20    be delayed because of a backlog of orders or because stock
21    is currently unavailable to, or on back order by, the
22    seller.
23        (8) Returns. For a 60-day period immediately after the
24    Sales Tax Holiday Period, if a customer returns an item
25    that would qualify for the reduced rate of tax, credit for
26    or refund of sales tax shall be given only at the reduced

 

 

HB3512- 64 -LRB097 10581 HLH 50940 b

1    rate unless the customer provides a receipt or invoice that
2    shows tax was paid at the 6.25% general merchandise rate,
3    or the seller has sufficient documentation to show that tax
4    was paid at the 6.25% general merchandise rate on the
5    specific item. This 60-day period is set solely for the
6    purpose of designating a time period during which the
7    customer must provide documentation that shows that the
8    appropriate sales tax rate was paid on returned
9    merchandise. The 60-day period is not intended to change a
10    seller's policy on the time period during which the seller
11    will accept returns.
12    (c) The Department may implement the provisions of this
13Section through the use of emergency rules, along with
14permanent rules filed concurrently with such emergency rules,
15in accordance with the provisions of Section 5-45 of the
16Illinois Administrative Procedure Act. For purposes of the
17Illinois Administrative Procedure Act, the adoption of rules to
18implement the provisions of this Section shall be deemed an
19emergency and necessary for the public interest, safety, and
20welfare.
21(Source: P.A. 96-1012, eff. 7-7-10.)
 
22    (35 ILCS 120/2-10)
23    Sec. 2-10. Rate of tax. Unless otherwise provided in this
24Section, the tax imposed by this Act is at the rate of 6.25% of
25gross receipts from sales of tangible personal property made in

 

 

HB3512- 65 -LRB097 10581 HLH 50940 b

1the course of business.
2    Beginning on July 1, 2000 and through December 31, 2000,
3with respect to motor fuel, as defined in Section 1.1 of the
4Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
5the Use Tax Act, the tax is imposed at the rate of 1.25%.
6    Beginning on August 6, 2010 through August 15, 2010, with
7respect to sales tax holiday items as defined in subsection (a)
8of Section 2-8 of this Act, the tax is imposed at the rate of
91.25%. During the first Monday in September of each year
10beginning in 2011, with respect to sales tax holiday items as
11defined in subsection (a-5) of Section 3-6 of this Act, the tax
12is imposed at the rate of 1.25%.
13    Within 14 days after the effective date of this amendatory
14Act of the 91st General Assembly, each retailer of motor fuel
15and gasohol shall cause the following notice to be posted in a
16prominently visible place on each retail dispensing device that
17is used to dispense motor fuel or gasohol in the State of
18Illinois: "As of July 1, 2000, the State of Illinois has
19eliminated the State's share of sales tax on motor fuel and
20gasohol through December 31, 2000. The price on this pump
21should reflect the elimination of the tax." The notice shall be
22printed in bold print on a sign that is no smaller than 4
23inches by 8 inches. The sign shall be clearly visible to
24customers. Any retailer who fails to post or maintain a
25required sign through December 31, 2000 is guilty of a petty
26offense for which the fine shall be $500 per day per each

 

 

HB3512- 66 -LRB097 10581 HLH 50940 b

1retail premises where a violation occurs.
2    With respect to gasohol, as defined in the Use Tax Act, the
3tax imposed by this Act applies to (i) 70% of the proceeds of
4sales made on or after January 1, 1990, and before July 1,
52003, (ii) 80% of the proceeds of sales made on or after July
61, 2003 and on or before December 31, 2013, and (iii) 100% of
7the proceeds of sales made thereafter. If, at any time,
8however, the tax under this Act on sales of gasohol, as defined
9in the Use Tax Act, is imposed at the rate of 1.25%, then the
10tax imposed by this Act applies to 100% of the proceeds of
11sales of gasohol made during that time.
12    With respect to majority blended ethanol fuel, as defined
13in the Use Tax Act, the tax imposed by this Act does not apply
14to the proceeds of sales made on or after July 1, 2003 and on or
15before December 31, 2013 but applies to 100% of the proceeds of
16sales made thereafter.
17    With respect to biodiesel blends, as defined in the Use Tax
18Act, with no less than 1% and no more than 10% biodiesel, the
19tax imposed by this Act applies to (i) 80% of the proceeds of
20sales made on or after July 1, 2003 and on or before December
2131, 2013 and (ii) 100% of the proceeds of sales made
22thereafter. If, at any time, however, the tax under this Act on
23sales of biodiesel blends, as defined in the Use Tax Act, with
24no less than 1% and no more than 10% biodiesel is imposed at
25the rate of 1.25%, then the tax imposed by this Act applies to
26100% of the proceeds of sales of biodiesel blends with no less

 

 

HB3512- 67 -LRB097 10581 HLH 50940 b

1than 1% and no more than 10% biodiesel made during that time.
2    With respect to 100% biodiesel, as defined in the Use Tax
3Act, and biodiesel blends, as defined in the Use Tax Act, with
4more than 10% but no more than 99% biodiesel, the tax imposed
5by this Act does not apply to the proceeds of sales made on or
6after July 1, 2003 and on or before December 31, 2013 but
7applies to 100% of the proceeds of sales made thereafter.
8    With respect to food for human consumption that is to be
9consumed off the premises where it is sold (other than
10alcoholic beverages, soft drinks, and food that has been
11prepared for immediate consumption) and prescription and
12nonprescription medicines, drugs, medical appliances,
13modifications to a motor vehicle for the purpose of rendering
14it usable by a disabled person, and insulin, urine testing
15materials, syringes, and needles used by diabetics, for human
16use, the tax is imposed at the rate of 1%. For the purposes of
17this Section, until September 1, 2009: the term "soft drinks"
18means any complete, finished, ready-to-use, non-alcoholic
19drink, whether carbonated or not, including but not limited to
20soda water, cola, fruit juice, vegetable juice, carbonated
21water, and all other preparations commonly known as soft drinks
22of whatever kind or description that are contained in any
23closed or sealed bottle, can, carton, or container, regardless
24of size; but "soft drinks" does not include coffee, tea,
25non-carbonated water, infant formula, milk or milk products as
26defined in the Grade A Pasteurized Milk and Milk Products Act,

 

 

HB3512- 68 -LRB097 10581 HLH 50940 b

1or drinks containing 50% or more natural fruit or vegetable
2juice.
3    Notwithstanding any other provisions of this Act,
4beginning September 1, 2009, "soft drinks" means non-alcoholic
5beverages that contain natural or artificial sweeteners. "Soft
6drinks" do not include beverages that contain milk or milk
7products, soy, rice or similar milk substitutes, or greater
8than 50% of vegetable or fruit juice by volume.
9    Until August 1, 2009, and notwithstanding any other
10provisions of this Act, "food for human consumption that is to
11be consumed off the premises where it is sold" includes all
12food sold through a vending machine, except soft drinks and
13food products that are dispensed hot from a vending machine,
14regardless of the location of the vending machine. Beginning
15August 1, 2009, and notwithstanding any other provisions of
16this Act, "food for human consumption that is to be consumed
17off the premises where it is sold" includes all food sold
18through a vending machine, except soft drinks, candy, and food
19products that are dispensed hot from a vending machine,
20regardless of the location of the vending machine.
21    Notwithstanding any other provisions of this Act,
22beginning September 1, 2009, "food for human consumption that
23is to be consumed off the premises where it is sold" does not
24include candy. For purposes of this Section, "candy" means a
25preparation of sugar, honey, or other natural or artificial
26sweeteners in combination with chocolate, fruits, nuts or other

 

 

HB3512- 69 -LRB097 10581 HLH 50940 b

1ingredients or flavorings in the form of bars, drops, or
2pieces. "Candy" does not include any preparation that contains
3flour or requires refrigeration.
4    Notwithstanding any other provisions of this Act,
5beginning September 1, 2009, "nonprescription medicines and
6drugs" does not include grooming and hygiene products. For
7purposes of this Section, "grooming and hygiene products"
8includes, but is not limited to, soaps and cleaning solutions,
9shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
10lotions and screens, unless those products are available by
11prescription only, regardless of whether the products meet the
12definition of "over-the-counter-drugs". For the purposes of
13this paragraph, "over-the-counter-drug" means a drug for human
14use that contains a label that identifies the product as a drug
15as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
16label includes:
17        (A) A "Drug Facts" panel; or
18        (B) A statement of the "active ingredient(s)" with a
19    list of those ingredients contained in the compound,
20    substance or preparation.
21(Source: P.A. 96-34, eff. 7-13-09; 96-37, eff. 7-13-09; 96-38,
22eff. 7-13-09; 96-1000, eff. 7-2-10; 96-1012, eff. 7-7-10.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.