99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB2422

 

Introduced 2/9/2016, by Sen. Sue Rezin

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 115/2d

    Amends the Service Occupation Tax Act. Makes a technical change in a Section concerning rolling stock.


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A BILL FOR

 

SB2422LRB099 18684 HLH 43067 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 Service Occupation Tax Act is amended by
5changing Section 2d as follows:
 
6    (35 ILCS 115/2d)
7    Sec. 2d. Motor vehicles; trailers; use as rolling stock
8definition.
9    (a) Through June 30, 2003, "use as as rolling stock moving
10in interstate commerce" in subsections (d) and (d-1) of the
11definition of "sale of service" in Section 2 means for motor
12vehicles, as defined in Section 1-146 of the Illinois Vehicle
13Code, and trailers, as defined in Section 1-209 of the Illinois
14Vehicle Code, when on 15 or more occasions in a 12-month period
15the motor vehicle and trailer has carried persons or property
16for hire in interstate commerce, even just between points in
17Illinois, if the motor vehicle and trailer transports persons
18whose journeys or property whose shipments originate or
19terminate outside Illinois. This definition applies to all
20property purchased for the purpose of being attached to those
21motor vehicles or trailers as a part thereof.
22    (b) On and after July 1, 2003 and through June 30, 2004,
23"use as rolling stock moving in interstate commerce" in

 

 

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1paragraphs (d) and (d-1) of the definition of "sale of service"
2in Section 2 occurs for motor vehicles, as defined in Section
31-146 of the Illinois Vehicle Code, when during a 12-month
4period the rolling stock has carried persons or property for
5hire in interstate commerce for 51% of its total trips and
6transports persons whose journeys or property whose shipments
7originate or terminate outside Illinois. Trips that are only
8between points in Illinois will not be counted as interstate
9trips when calculating whether the tangible personal property
10qualifies for the exemption but such trips will be included in
11total trips taken.
12    (c) Beginning July 1, 2004, "use as rolling stock moving in
13interstate commerce" in paragraphs (d) and (d-1) of the
14definition of "sale of service" in Section 2 occurs for motor
15vehicles, as defined in Section 1-146 of the Illinois Vehicle
16Code, when during a 12-month period the rolling stock has
17carried persons or property for hire in interstate commerce for
18greater than 50% of its total trips for that period or for
19greater than 50% of its total miles for that period. The person
20claiming the exemption shall make an election at the time of
21purchase to use either the trips or mileage method. Persons who
22purchased motor vehicles prior to July 1, 2004 shall make an
23election to use either the trips or mileage method and document
24that election in their books and records. If no election is
25made under this subsection to use the trips or mileage method,
26the person shall be deemed to have chosen the mileage method.

 

 

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1    For purposes of determining qualifying trips or miles,
2motor vehicles that carry persons or property for hire, even
3just between points in Illinois, will be considered used for
4hire in interstate commerce if the motor vehicle transports
5persons whose journeys or property whose shipments originate or
6terminate outside Illinois. The exemption for motor vehicles
7used as rolling stock moving in interstate commerce may be
8claimed only for the following vehicles: (i) motor vehicles
9whose gross vehicle weight rating exceeds 16,000 pounds; and
10(ii) limousines, as defined in Section 1-139.1 of the Illinois
11Vehicle Code. This definition applies to all property purchased
12for the purpose of being attached to those motor vehicles as a
13part thereof.
14    (d) Beginning July 1, 2004, "use as rolling stock moving in
15interstate commerce" in paragraphs (d) and (d-1) of the
16definition of "sale of service" in Section 2 occurs for
17trailers, as defined in Section 1-209 of the Illinois Vehicle
18Code, semitrailers as defined in Section 1-187 of the Illinois
19Vehicle Code, and pole trailers as defined in Section 1-161 of
20the Illinois Vehicle Code, when during a 12-month period the
21rolling stock has carried persons or property for hire in
22interstate commerce for greater than 50% of its total trips for
23that period or for greater than 50% of its total miles for that
24period. The person claiming the exemption for a trailer or
25trailers that will not be dedicated to a motor vehicle or group
26of motor vehicles shall make an election at the time of

 

 

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1purchase to use either the trips or mileage method. Persons who
2purchased trailers prior to July 1, 2004 that are not dedicated
3to a motor vehicle or group of motor vehicles shall make an
4election to use either the trips or mileage method and document
5that election in their books and records. If no election is
6made under this subsection to use the trips or mileage method,
7the person shall be deemed to have chosen the mileage method.
8    For purposes of determining qualifying trips or miles,
9trailers, semitrailers, or pole trailers that carry property
10for hire, even just between points in Illinois, will be
11considered used for hire in interstate commerce if the
12trailers, semitrailers, or pole trailers transport property
13whose shipments originate or terminate outside Illinois. This
14definition applies to all property purchased for the purpose of
15being attached to those trailers, semitrailers, or pole
16trailers as a part thereof. In lieu of a person providing
17documentation regarding the qualifying use of each individual
18trailer, semitrailer, or pole trailer, that person may document
19such qualifying use by providing documentation of the
20following:
21        (1) If a trailer, semitrailer, or pole trailer is
22    dedicated to a motor vehicle that qualifies as rolling
23    stock moving in interstate commerce under subsection (c) of
24    this Section, then that trailer, semitrailer, or pole
25    trailer qualifies as rolling stock moving in interstate
26    commerce under this subsection.

 

 

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1        (2) If a trailer, semitrailer, or pole trailer is
2    dedicated to a group of motor vehicles that all qualify as
3    rolling stock moving in interstate commerce under
4    subsection (c) of this Section, then that trailer,
5    semitrailer, or pole trailer qualifies as rolling stock
6    moving in interstate commerce under this subsection.
7        (3) If one or more trailers, semitrailers, or pole
8    trailers are dedicated to a group of motor vehicles and not
9    all of those motor vehicles in that group qualify as
10    rolling stock moving in interstate commerce under
11    subsection (c) of this Section, then the percentage of
12    those trailers, semitrailers, or pole trailers that
13    qualifies as rolling stock moving in interstate commerce
14    under this subsection is equal to the percentage of those
15    motor vehicles in that group that qualify as rolling stock
16    moving in interstate commerce under subsection (c) of this
17    Section to which those trailers, semitrailers, or pole
18    trailers are dedicated. However, to determine the
19    qualification for the exemption provided under this item
20    (3), the mathematical application of the qualifying
21    percentage to one or more trailers, semitrailers, or pole
22    trailers under this subpart shall not be allowed as to any
23    fraction of a trailer, semitrailer, or pole trailer.
24    (e) For aircraft and watercraft purchased on or after
25January 1 2014, "use as rolling stock moving in interstate
26commerce" in paragraphs (d) and (d-1) of the definition of

 

 

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1"sale of service" in Section 2 occurs when, during a 12-month
2period, the rolling stock has carried persons or property for
3hire in interstate commerce for greater than 50% of its total
4trips for that period or for greater than 50% of its total
5miles for that period. The person claiming the exemption shall
6make an election at the time of purchase to use either the
7trips or mileage method and document that election in their
8books and records. If no election is made under this subsection
9to use the trips or mileage method, the person shall be deemed
10to have chosen the mileage method. For aircraft, flight hours
11may be used in lieu of recording miles in determining whether
12the aircraft meets the mileage test in this subsection. For
13watercraft, nautical miles or trip hours may be used in lieu of
14recording miles in determining whether the watercraft meets the
15mileage test in this subsection.
16    Notwithstanding any other provision of law to the contrary,
17property purchased on or after January 1, 2014 for the purpose
18of being attached to aircraft or watercraft as a part thereof
19qualifies as rolling stock moving in interstate commerce only
20if the aircraft or watercraft to which it will be attached
21qualifies as rolling stock moving in interstate commerce under
22the test set forth in this subsection (e), regardless of when
23the aircraft or watercraft was purchased. Persons who purchased
24aircraft or watercraft prior to January 1, 2014 shall make an
25election to use either the trips or mileage method and document
26that election in their books and records for the purpose of

 

 

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1determining whether property purchased on or after January 1,
22014 for the purpose of being attached to aircraft or
3watercraft as a part thereof qualifies as rolling stock moving
4in interstate commerce under this subsection (e).
5    (f) The election to use either the trips or mileage method
6made under the provisions of subsections (c), (d), or (e) of
7this Section will remain in effect for the duration of the
8purchaser's ownership of that item.
9(Source: P.A. 98-584, eff. 8-27-13.)