SB2985 93RD GENERAL ASSEMBLY

LRB093 20402 SJM 46180 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2985

Introduced 2/6/2004, by Don Harmon

SYNOPSIS AS INTRODUCED:

35 ILCS 105/14.1 new
35 ILCS 110/15.1 new
35 ILCS 115/15.1 new
35 ILCS 120/13.1 new

Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Imposes a penalty in the amount of 200% of any amount of the proceeds of mandatory service charges separately stated on customers' bills for purchase and consumption of food and beverages, to the extent that the proceeds of the service charge are not turned over as tips or as a substitute for tips to the employees who participate directly in preparing, serving, hosting, or cleaning up the food or beverage function with respect to which the service charge is imposed. Effective January 1, 2005.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning taxes.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Use Tax Act is amended by adding Section 14.1 as follows:

(35 ILCS 105/14.1 new)

Sec. 14.1. Penalty for mandatory services charges not passed on to employees. Two hundred percent of any amount of the proceeds of mandatory service charges separately stated on customers' bills for the purchase and consumption of food and beverages purchased at retail from a retailer, to the extent that the proceeds of the service charge are not turned over as tips or as a substitute for tips to the employees who participate directly in preparing, serving, hosting, or cleaning up the food or beverage function with respect to which the service charge is imposed, shall be paid to the Department as a penalty. The penalty shall be reported and remitted at the same time as and along with the next return required to be submitted to the Department under this Act after the mandatory service charge is collected by the taxpayer.

Section 10. The Service Use Tax Act is amended by adding Section 15.1 as follows:

(35 ILCS 110/15.1 new)

Sec. 15.1. Penalty for mandatory services charges not passed on to employees. Two hundred percent of any amount of the proceeds of mandatory service charges separately stated on customers' bills for the purchase and consumption of food and beverages acquired as an incident to the purchase of a service from a serviceman, to the extent that the proceeds of the service charge are not turned over as tips or as a substitute for tips to the employees who participate directly in preparing, serving, hosting, or cleaning up the food or beverage function with respect to which the service charge is imposed, shall be paid to the Department as a penalty. The penalty shall be reported and remitted at the same time as and along with the next return required to be submitted to the Department under this Act after the mandatory service charge is collected by the taxpayer.

Section 15. The Service Occupation Tax Act is amended by adding Section 15.1 as follows:

(35 ILCS 115/15.1 new)

Sec. 15.1. Penalty for mandatory services charges not passed on to employees. Two hundred percent of any amount of the proceeds of mandatory service charges separately stated on customers' bills for the purchase and consumption of food and beverages, to the extent that the proceeds of the service charge are not turned over as tips or as a substitute for tips to the employees who participate directly in preparing, serving, hosting, or cleaning up the food or beverage function with respect to which the service charge is imposed, shall be paid to the Department as a penalty. The penalty shall be reported and remitted at the same time as and along with the next return required to be submitted to the Department under this Act after the mandatory service charge is collected by the taxpayer.

Section 20. The Retailers' Occupation Tax Act is amended by adding Section 13.1 as follows:

(35 ILCS 120/13.1 new)

Sec. 13.1. Penalty for mandatory services charges not passed on to employees. Two hundred percent of any amount of the proceeds of mandatory service charges separately stated on customers' bills for the purchase and consumption of food and beverages, to the extent that the proceeds of the service charge are not turned over as tips or as a substitute for tips to the employees who participate directly in preparing, serving, hosting, or cleaning up the food or beverage function with respect to which the service charge is imposed, shall be paid to the Department as a penalty. The penalty shall be reported and remitted at the same time as and along with the next return required to be submitted to the Department under this Act after the mandatory service charge is collected by the taxpayer.

Section 99. Effective date. This Act takes effect on January 1, 2005.