SB3224 100TH GENERAL ASSEMBLY

LRB100 20669 HLH 36121 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB3224

Introduced 2/15/2018, by Sen. Chris Nybo

SYNOPSIS AS INTRODUCED:

35 ILCS 505/1.1	from Ch. 120, par. 417.1
35 ILCS 505/1.2	from Ch. 120, par. 417.2
35 ILCS 505/1.3a new
35 ILCS 505/1.6	from Ch. 120, par. 417.6
35 ILCS 505/1.14	from Ch. 120, par. 417.14
35 ILCS 505/1.20	from Ch. 120, par. 417.20
35 ILCS 505/1.30 new
35 ILCS 505/3	from Ch. 120, par. 419
35 ILCS 505/3d new
35 ILCS 505/3e new
35 ILCS 505/3f new
35 ILCS 505/3g new
35 ILCS 505/12	from Ch. 120, par. 428
35 ILCS 505/12a	from Ch. 120, par. 428a
35 ILCS 505/13	from Ch. 120, par. 429
35 ILCS 505/15	from Ch. 120, par. 431
35 ILCS 505/16	from Ch. 120, par. 432
35 ILCS 120/2d	from Ch. 120, par. 441d

Amends the Motor Fuel Tax Law. Contains provisions requiring alternative fuel supplier licenses. Provides that licensed distributors, suppliers, and receivers are not considered blenders under the Act. Provides that the term "blender" includes persons who engage in the business of selling motor fuel at retail and not for resale that is blended by purchasers through the use of blender pumps. Amends the Retailers' Occupation Tax Act. Provides that prepayment provisions do not apply to alternative fuel.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

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

Section 5. The Motor Fuel Tax Law is amended by changing Sections 1.1, 1.2, 1.6, 1.14, 1.20, 3, 12, 12a, 13, 15, and 16 and by adding Sections 1.3a, 1.30, 3d, 3e, 3f, and 3g as follows:

(35 ILCS 505/1.1) (from Ch. 120, par. 417.1)

Sec. 1.1. "Motor Fuel" means all volatile and inflammable liquids, volatile and inflammable gases, or any other products, now known or hereafter developed, that are produced, blended or compounded for the purpose of, or which are suitable or practicable for, operating motor vehicles. Among other things, "Motor Fuel" includes "Special Fuel" as defined in Section 1.13 of this Act and "alternative fuel" as defined in Section 1.3a of this Act.

(Source: Laws 1963, p. 1557.)

(35 ILCS 505/1.2) (from Ch. 120, par. 417.2)

Sec. 1.2. Distributor. "Distributor" means a person who either (i) produces, refines, blends, compounds or manufactures motor fuel in this State, or (ii) transports motor fuel into this State, or (iii) exports motor fuel out of this State, or (iv) engages in the distribution of motor fuel primarily by tank car or tank truck, or both, and who operates an Illinois bulk plant where he or she has active bulk storage capacity of not less than 30,000 gallons for gasoline as defined in item (A) of Section 5 of this Law. A person licensed under the provisions of this Section is also authorized to engage in blending. A person licensed under the provisions of this Section is also authorized to engage in blending.

"Distributor" does not, however, include a person who receives or transports into this State and sells or uses motor fuel under such circumstances as preclude the collection of the tax herein imposed, by reason of the provisions of the constitution and statutes of the United States. However, a person operating a motor vehicle into the State, may transport motor fuel in the ordinary fuel tank attached to the motor vehicle for the operation of the motor vehicle, without being considered a distributor. Any railroad registered under Section 18c-7201 of the Illinois Vehicle Code may deliver special fuel directly into the fuel supply tank of a locomotive owned, operated, or controlled by any other railroad registered under Section 18c-7201 of the Illinois Vehicle Code without being considered a distributor or supplier.

(Source: P.A. 96-1384, eff. 7-29-10.)

(35 ILCS 505/1.3a new)

Sec. 1.3a. Alternative fuel. "Alternative fuel" means: (i) compressed natural gas, liquefied natural gas and liquefied petroleum gas, when sold or used for operating motor vehicles on public highways or recreational-type watercraft upon the waters of this State; or (ii) any product, other than gasoline or diesel fuel, that is used or purchased for the purpose of blending with gasoline or diesel fuel to produce a product that is sold or used for operating motor vehicles on public highways and recreational-type watercraft upon the waters of this State. Products purchased or used for the purpose of blending include, but are not limited to, ethanol, butane, alcohol, and soy oil.

(35 ILCS 505/1.6) (from Ch. 120, par. 417.6)

Sec. 1.6. "Blender" means any person, other than a licensed distributor, supplier, or receiver, who engages in the practice of blending as herein defined. Blenders include, but are not limited to, persons who engage in the business of selling motor fuel at retail and not for resale that is blended by purchasers through the use of blender pumps.

(Source: Laws 1961, p. 3653.)

(35 ILCS 505/1.14) (from Ch. 120, par. 417.14)

Sec. 1.14. Supplier. "Supplier" means any person other than a licensed distributor who (i) transports special fuel into this State; (ii) exports special fuel out of this State; or (iii) engages in the distribution of special fuel primarily by tank car or tank truck, or both, and who operates an Illinois bulk plant where he has active bulk storage capacity of not less than 30,000 gallons for special fuel as defined in Section 1.13 of this Law.

"Supplier" does not, however, include a person who receives or transports into this State and sells or uses special fuel under such circumstances as preclude the collection of the tax herein imposed, by reason of the provisions of the Constitution and laws of the United States. However, a person operating a motor vehicle into the State, may transport special fuel in the ordinary fuel tank attached to the motor vehicle for the operation of the motor vehicle without being considered a supplier. Any railroad licensed as a bulk user and registered under Section 18c-7201 of the Illinois Vehicle Code may deliver special fuel directly into the fuel supply tank of a locomotive owned, operated, or controlled by any other railroad registered under Section 18c-7201 of the Illinois Vehicle Code without being considered a supplier. A person licensed as a supplier under the provisions of this Section is also authorized to engage in blending special fuel.

(Source: P.A. 96-1384, eff. 7-29-10.)

(35 ILCS 505/1.20) (from Ch. 120, par. 417.20)

Sec. 1.20. "Receiver" means a person who either produces, refines, blends, compounds or manufactures fuel in this State, or transports fuel into this State or receives fuel transported to him from without the State or exports fuel out of this State, or who is engaged in distribution of fuel primarily by tank car or tank truck, or both, and who operates an Illinois bulk plant where he has active fuel bulk storage capacity of not less than 30,000 gallons. A person licensed as a receiver under the provisions of this Section is also authorized to engage in blending.

(Source: P.A. 86-125; 86-958.)

(35 ILCS 505/1.30 new)

Sec. 1.30. Alternative fuel supplier. "Alternative fuel supplier" means any person, other than a licensed distributor, receiver, or supplier who sells alternative fuel: (i) to persons for the purpose of blending motor fuel that will be sold or used by such persons for the purpose of operating motor vehicles upon the public highways and recreational-type watercraft upon the waters of this State; (ii) to persons for the purpose of retail sale as motor fuel that will be used for the purpose of operating motor vehicles upon the public highways and recreational-type watercraft upon the waters of this State; or (iii) to persons for use by such persons in operating motor vehicles on the public highways and recreational-type watercraft upon the waters of this State.

(35 ILCS 505/3) (from Ch. 120, par. 419)

Sec. 3. No person shall act as a distributor of motor fuel within this State without first securing a license to act as a distributor of motor fuel from the Department. Application for such license shall be made to the Department upon blanks furnished by it. The application shall be signed and verified, and shall contain such information as the Department deems necessary. A blender shall, in addition to securing a distributor's license, make application to the Department for a blender's permit, setting forth in the application such information as the Department deems necessary. The applicant for a distributor's license shall also file with the Department a bond on a form to be approved by and with a surety or sureties satisfactory to the Department conditioned upon such applicant paying to the State of Illinois all monies becoming due by reason of the sale, export, or use of motor fuel by the applicant, together with all penalties and interest thereon. The Department shall fix the penalty of such bond in each case taking into consideration the amount of motor fuel expected to be sold, distributed, exported, and used by such applicant and the penalty fixed by the Department shall be such, as in its opinion, will protect the State of Illinois against failure to pay the amount hereinafter provided on motor fuel sold, distributed, exported, and used, but the amount of the penalty fixed by the Department shall not exceed twice the monthly amount that would be collectable as a tax in the event of a sale on all the motor fuel sold, distributed, exported, and used by the distributor inclusive of tax-free sales, exports, use, or distribution. Upon receipt of the application and bond in proper form, the Department shall issue to the applicant a license to act as a distributor. No person who is in default to the State for monies due under this Act for the sale, distribution, export, or use of motor fuel shall receive a license to act as a distributor.

A license shall not be granted to any person whose principal place of business is in a state other than Illinois, unless such person is licensed for motor fuel distribution or export in the state in which the principal place of business is located and that such person is not in default to that State for any monies due for the sale, distribution, export, or use of motor fuel.

(Source: P.A. 96-1384, eff. 7-29-10.)

(35 ILCS 505/3d new)

Sec. 3d. Alternative fuel supplier license. No person shall act as an alternative fuels supplier in this State without first securing a license as an alternative fuel supplier. Application for an alternative fuel supplier's license shall be made in the form and manner required by the Department. The application shall be signed and verified and shall contain such information as the Department deems necessary.

The Department, for cause, may require an applicant to post a bond on a form to be approved by and with a surety or sureties satisfactory to the Department conditioned upon such applicant paying to the State of Illinois all monies becoming due by reason of the sale or use of alternative fuel by the applicant, together with all penalties and interest thereon. If a bond is required, it shall be equal to at least twice the estimated average tax liability of a monthly return. The Department shall fix the penalty of such bond in each case taking into consideration the amount of alternative fuel expected to be sold or used by such applicant and the penalty fixed by the Department shall be such as, in its opinion, will protect the State of Illinois against failure to pay the amount hereinafter provided on alternative fuel sold or used. No person who is in default to the State for moneys due under this Act for the sale, or use of motor fuel shall receive a license to act as an alternative fuel supplier.

A license shall not be granted to any person whose principal place of business is in a state other than Illinois, unless such person is licensed for motor fuel distribution, export or blending in the State in which the principal place of business is located and that other State requires such license and that such person is not in default to that State for any monies due for the sale, distribution, export, blending or use of motor fuel.

(35 ILCS 505/3e new)

Sec. 3e. Tax on purchases of alternative fuel; payment to alternative fuel suppliers; self-assessment of tax by purchasers. Persons, other than licensed distributors, suppliers and receivers, that purchase alternative fuel for the purpose of (i) blending motor fuel that will be sold or used by such persons for the purpose of operating motor vehicles upon the public highways and recreational-type watercraft upon the waters of this State; (ii) sale to purchasers as motor fuel that will be used for the purpose of operating motor vehicles upon the public highways and recreational-type watercraft upon the waters of this State; or (iii) use by such persons in operating motor vehicles on the public highways and recreational-type watercraft upon the waters of this State shall remit the tax imposed under Sections 2 and 2a to licensed alternative fuel suppliers. Any person purchasing alternative fuel subject to tax under this Act as to which there has been no charge made to him of the tax imposed by Section 2 or 2a, or both, shall make payment to the Department of the tax imposed by Sections 2 and 2a on such alternative fuel. Any person who blends alternative fuel subject to tax under this Act that he or she has refined (and to which there has been no charge made to him of the tax imposed by Section 2 or 2a, or both) with gasoline or diesel fuel, shall make payment to the Department of the tax imposed by Sections 2 and 2a on such alternative fuel. Such payment shall be made to the Department no later than the 20th day of the month following the month in which the alternative fuel was purchased and shall be reported on the return required by Section 3f of the Law.

(35 ILCS 505/3f new)

Sec. 3f. Alternative fuel suppliers; returns. A person holding a valid unrevoked license to act as an alternative fuel supplier shall, between the 1st and 20th days of each calendar month, make return to the Department, showing an itemized statement of the number of invoiced gallons of alternative fuel (i) sold to persons for the purpose of blending motor fuel that will be sold or used by such persons for the purpose of operating motor vehicles upon the public highways and recreational-type watercraft upon the waters of this State; (ii) sold to persons for the purpose of retail sale as motor fuel that will be used for the purpose of operating motor vehicles upon the public highways and recreational-type watercraft upon the waters of this State; (iii) sold to persons for use by such persons in operating motor vehicles upon public highways and recreational-type watercraft upon the waters of this State; and (iv) used by the alternative fuel supplier for operating motor vehicles upon public highways and recreational-type watercraft upon the waters of this State. The return shall also include the amount of alternative fuel that is lost or destroyed and such other reasonable information as required by the Department.

A person whose license to act as an alternative fuel supplier has been revoked shall make a return to the Department covering the period from the date of the last return to the date of the revocation of the license, which return shall be delivered to the Department not later than 10 days from the date of the revocation or termination of the license of such alternative fuel supplier; the return shall in all other respects be subject to the same provisions and conditions as returns by alternative fuel suppliers licensed under the provisions of this Act.

If the Department has reason to believe and does believe that the amount shown on the return as sold, used, lost or destroyed is incorrect, the Department shall fix an amount for such sale, use, loss or destruction according to its best judgment and information, which amount so fixed by the Department shall be prima facie correct. All returns shall be in the form and manner required by the Department, and shall contain such other information as the Department may reasonably require. The return must be accompanied by supporting schedule data in the form required by the Department. All licensed alternative fuel suppliers shall report all losses of alternative fuel that are sustained on account of fire, theft, spillage, spoilage, leakage, or any other provable cause when filing the return for the period during which the loss occurred. If the alternative fuel supplier reports losses due to fire or theft, then the alternative fuel supplier must include fire department or police department reports and any other documentation that the Department may require. The mere making of the report does not assure the allowance of the loss as a reduction in tax liability.

(35 ILCS 505/3g new)

Sec. 3g. Alternative fuel suppliers; payment of tax. Alternative fuel suppliers, when filing a return required by Section 3f, shall report to the Department the amount of tax imposed under this Act on all alternative fuels required to be reported under Section 3f. At the time of making a return, an alternative fuel supplier shall pay to the Department all taxes due, less, except as otherwise provided, a discount of 1.75% which is allowed to reimburse the alternative fuel supplier for the expenses incurred in keeping records, preparing and filing returns, remitting tax and supplying data to the Department on request. The 1.75% discount shall not be allowed for amounts remitted for alternative fuels used by the alternative fuel supplier for operating motor vehicles upon the public highways and recreational-type watercraft upon the waters of this State. The 1.75% discount shall only be applicable to the amount of tax payment which accompanies a return which is filed timely in accordance with Section 3f of the Law. However, no payment shall be made based upon alternative fuels that were sold and used for the purpose of blending with special fuel to produce dyed diesel fuel. An alternative fuel supplier shall not be liable for tax on the sale of alternative fuel, to the extent to which such sale or use of blended motor fuel may not, under the constitution and statutes of the United States, be made the subject of taxation by this State. A person whose license to act as an alternative fuel supplier has been revoked shall, at the time of making a return, also pay to the Department an amount equal to the amount that would be due as a tax in the event of a sale thereof on all alternative fuels, which he is required by Section 3f to report to the Department in making a return, and which he had on hand on the date on which the license was revoked, and with respect to which no tax had been previously paid under this Act.

An alternative fuel supplier is not liable for tax on alternative fuels which he is otherwise required to remit to the Department, only as specified in the following items (1) through (5).

(1) When the sale of the alternative fuel is made with delivery to a purchaser outside of this State.

(2) When the sale of the alternative fuel is made to the Federal Government or its instrumentalities.

(3) When the sale of the alternative fuel is made to a municipal corporation owning and operating a local transportation system for public service in this State when an official certificate of exemption is obtained in lieu of the tax.

(4) When the sale of the alternative fuel is made to a privately owned public utility owning and operating 2 axle vehicles designed and used for transporting more than 7 passengers, which vehicles are used as common carriers in general transportation of passengers, are not devoted to any specialized purpose and are operated entirely within the territorial limits of a single municipality or of any group of contiguous municipalities, or in a close radius thereof, and the operations of which are subject to the regulations of the Illinois Commerce Commission, when an official certificate of exemption is obtained in lieu of the tax.

(5) When a sale of alternative fuel is made to someone other than a licensed distributor or a licensed supplier for non-highway purposes and the fuel is dispensed from a fuel dispensing facility that has withdrawal facilities that are not readily accessible to and are not capable of dispensing fuel into the fuel supply tank of a motor vehicle. A specific notation is required on the invoice or sales slip covering such sales, and any supporting documentation that may be required by the Department must be obtained by the retail blender. The alternative fuel supplier shall obtain and keep the supporting documentation in such form as the Department may require by rule for all exempt sales. For purposes of this exemption, a fuel dispensing facility is considered to have withdrawal facilities that are "not readily accessible to and not capable of dispensing fuel into the fuel supply tank of a motor vehicle" only if the fuel is delivered from: (i) a dispenser hose that is short enough so that it will not reach the fuel supply tank of a motor vehicle or (ii) a dispenser that is enclosed by a fence or other physical barrier so that a vehicle cannot pull alongside the dispenser to permit fueling.

(35 ILCS 505/12) (from Ch. 120, par. 428)

Sec. 12. It is the duty of every distributor, receiver, and supplier, and alternative fuel supplier under this Act to keep within this State or at some office outside this State for any period for which the Department is authorized to issue a Notice of Tax Liability to the distributor, receiver, or supplier, or alternative fuel supplier records and books showing all purchases, receipts, losses through any cause, sales, distribution and use of motor fuel, aviation fuels, home heating oils, and kerosene, and products used for the purpose of blending to produce motor fuel, which records and books shall, at all times during business hours of the day, be subject to inspection by the Department, or its duly authorized agents and employees. For purposes of this Section, "records" means all data maintained by the taxpayer including data on paper, microfilm, microfiche or any type of machine-sensible data compilation. The Department may, in its discretion, prescribe reasonable and uniform methods for keeping of records and books by licensees and that set forth requirements for the form and format of records that must be maintained in order to comply with any recordkeeping requirement under this Act.

(Source: P.A. 91-173, eff. 1-1-00.)

(35 ILCS 505/12a) (from Ch. 120, par. 428a)

Sec. 12a. (a) Any duly authorized agent or employee of the Department shall have authority to enter in or upon the premises of any manufacturer, vendor, dealer, retailer, distributor, receiver, supplier, alternative fuel supplier, or user of motor fuel or special fuels during the regular business hours in order to examine books, records, invoices, storage tanks, and any other applicable equipment pertaining to motor fuel, alternative fuel, aviation fuels, home heating oils, kerosene, or special fuels, to determine whether or not the taxes imposed by this Act have been paid.

(b) Any duly authorized agent of the Department, upon presenting appropriate credentials and a written notice to the person who owns, operates, or controls the place to be inspected, shall have the authority to enter any place and to conduct inspections in accordance with subsections (b) through (g) of this Section.

(c) Inspections will be performed in a reasonable manner and at times that are reasonable under the circumstances, taking into consideration the normal business hours of the place to be entered.

(d) Inspections may be at any place at which taxable motor fuel is or may be produced or stored or at any inspection site where evidence of the following activities may be discovered:

(1) Where any dyed diesel fuel is sold or held for sale by any person for any use which the person knows or has reason to know is not a nontaxable use of such fuel.

(2) Where any dyed diesel fuel is held for use or used by any person for a use other than a nontaxable use and the person knew, or had reason to know, that the fuel was dyed according to Section 4d.

(3) Where any person willfully alters, or attempts to alter, the strength or composition of any dye or marking done pursuant to Section 4d of this Law.

The places may include, but are not limited to, the following:

(1) Any terminal.

(2) Any fuel storage facility that is not a terminal.

(3) Any retail fuel facility.

(4) Any designated inspection site.

(e) Duly authorized agents of the Department may physically inspect, examine, or otherwise search any tank, reservoir, or other container that can or may be used for the production, storage, or transportation of fuel, fuel dyes, or fuel markers. Inspection may also be made of any equipment used for, or in connection with, production, storage, or transportation of fuel, fuel dyes, or fuel markers. This includes any equipment used for the dyeing or marking of fuel. This also includes books and records, if any, that are maintained at the place of inspection and are kept to determine tax liability under this Law.

(f) Duly authorized agents of the Department may detain any motor vehicle, train, barge, ship, or vessel for the purpose of inspecting its fuel tanks and storage tanks. Detainment will be either on the premises under inspection or at a designated inspection site. Detainment may continue for a reasonable period of time as is necessary to determine the amount and composition of the fuel.

(g) Duly authorized agents of the Department may take and remove samples of fuel in quantities as are reasonably necessary to determine the composition of the fuel.

(h) (1) Any person that refuses to allow an inspection shall pay a $1,000 penalty for each refusal. This penalty is in addition to any other penalty or tax that may be imposed upon that person or any other person liable for tax under this Law. All penalties received under this subsection shall be deposited into the Tax Compliance and Administration Fund. Any person aggrieved by any action of the Department under this subsection (h)(1) may protest the action by making a written request for a hearing within 60 days of the original action. If the hearing is not requested in writing within 60 days, the original action is final.

(2) In addition, any licensee who refuses to allow an inspection shall be subject to license revocation as provided by Section 16 of this Law.

(Source: P.A. 91-173, eff. 1-1-00.)

(35 ILCS 505/13) (from Ch. 120, par. 429)

Sec. 13. Refund of tax paid. Any person other than a licensed distributor or supplier, or alternative fuel supplier, who loses motor fuel through any cause or uses motor fuel (upon which he has paid the amount required to be collected under Section 2 of this Act) for any purpose other than operating a motor vehicle upon the public highways or waters, shall be reimbursed and repaid the amount so paid.

Any person who purchases motor fuel in Illinois and uses that motor fuel in another state and that other state imposes a tax on the use of such motor fuel shall be reimbursed and repaid the amount of Illinois tax paid under Section 2 of this Act on the motor fuel used in such other state. Reimbursement and repayment shall be made by the Department upon receipt of adequate proof of taxes directly paid to another state and the amount of motor fuel used in that state.

Claims based in whole or in part on taxes paid to another state shall include (i) a certified copy of the tax return filed with such other state by the claimant; (ii) a copy of either the cancelled check paying the tax due on such return, or a receipt acknowledging payment of the tax due on such tax return; and (iii) such other information as the Department may reasonably require. This paragraph shall not apply to taxes paid on returns filed under Section 13a.3 of this Act.

Any person who purchases motor fuel use tax decals as required by Section 13a.4 and pays an amount of fees for such decals that exceeds the amount due shall be reimbursed and repaid the amount of the decal fees that are deemed by the department to be in excess of the amount due.

Claims for such reimbursement must be made to the Department of Revenue, duly verified by the claimant (or by the claimant's legal representative if the claimant has died or become a person under legal disability), upon forms prescribed by the Department. The claim must state such facts relating to the purchase, importation, manufacture or production of the motor fuel by the claimant as the Department may deem necessary, and the time when, and the circumstances of its loss or the specific purpose for which it was used (as the case may be), together with such other information as the Department may reasonably require. No claim based upon idle time shall be allowed. Claims for reimbursement for overpayment of decal fees shall be made to the Department of Revenue, duly verified by the claimant (or by the claimant's legal representative if the claimant has died or become a person under legal disability), upon forms prescribed by the Department. The claim shall state facts relating to the overpayment of decal fees, together with such other information as the Department may reasonably require. Claims for reimbursement of overpayment of decal fees paid on or after January 1, 2011 must be filed not later than one year after the date on which the fees were paid by the claimant. If it is determined that the Department should reimburse a claimant for overpayment of decal fees, the Department shall first apply the amount of such refund against any tax or penalty or interest due by the claimant under Section 13a of this Act.

Claims for full reimbursement for taxes paid on or before December 31, 1999 must be filed not later than one year after the date on which the tax was paid by the claimant. If, however, a claim for such reimbursement otherwise meeting the requirements of this Section is filed more than one year but less than 2 years after that date, the claimant shall be reimbursed at the rate of 80% of the amount to which he would have been entitled if his claim had been timely filed.

Claims for full reimbursement for taxes paid on or after January 1, 2000 must be filed not later than 2 years after the date on which the tax was paid by the claimant.

The Department may make such investigation of the correctness of the facts stated in such claims as it deems necessary. When the Department has approved any such claim, it shall pay to the claimant (or to the claimant's legal representative, as such if the claimant has died or become a person under legal disability) the reimbursement provided in this Section, out of any moneys appropriated to it for that purpose.

Any distributor, or supplier, or alternative fuel supplier who has paid the tax imposed by Section 2 of this Act upon motor fuel that is lost or used by such distributor, or supplier, or alternative fuel supplier for any purpose other than operating a motor vehicle upon the public highways or recreational-type watercraft upon the waters of this State may file a claim for credit or refund to recover the amount so paid. Such claims shall be filed on forms prescribed by the Department. Such claims shall be made to the Department, duly verified by the claimant (or by the claimant's legal representative if the claimant has died or become a person under legal disability), upon forms prescribed by the Department. The claim shall state such facts relating to the purchase, importation, manufacture or production of the motor fuel by the claimant as the Department may deem necessary and the time when the loss or nontaxable use occurred, and the circumstances of its loss or the specific purpose for which it was used (as the case may be), together with such other information as the Department may reasonably require. Claims must be filed not later than one year after the date on which the tax was paid by the claimant.

The Department may make such investigation of the correctness of the facts stated in such claims as it deems necessary. When the Department approves a claim, the Department shall issue a refund or credit memorandum as requested by the taxpayer, to the distributor, or supplier, or alternative fuel supplier who made the payment for which the refund or credit is being given or, if the distributor, or supplier , or alternative fuel supplier has died or become incompetent, to such distributor's, or supplier's, or alternative fuel supplier legal representative, as such. The amount of such credit memorandum shall be credited against any tax due or to become due under this Act from the distributor, or supplier , or alternative fuel supplier who made the payment for which credit has been given.

Any credit or refund that is allowed under this Section shall bear interest at the rate and in the manner specified in the Uniform Penalty and Interest Act.

In case the distributor or supplier requests and the Department determines that the claimant is entitled to a refund, such refund shall be made only from such appropriation as may be available for that purpose. If it appears unlikely that the amount appropriated would permit everyone having a claim allowed during the period covered by such appropriation to elect to receive a cash refund, the Department, by rule or regulation, shall provide for the payment of refunds in hardship cases and shall define what types of cases qualify as hardship cases.

In any case in which there has been an erroneous refund of tax or fees payable under this Section, a notice of tax liability may be issued at any time within 3 years from the making of that refund, or within 5 years from the making of that refund if it appears that any part of the refund was induced by fraud or the misrepresentation of material fact. The amount of any proposed assessment set forth by the Department shall be limited to the amount of the erroneous refund.

If no tax is due and no proceeding is pending to determine whether such distributor, or supplier, or alternative fuel supplier is indebted to the Department for tax, the credit memorandum so issued may be assigned and set over by the lawful holder thereof, subject to reasonable rules of the Department, to any other licensed distributor, or supplier, or alternative fuel supplier who is subject to this Act, and the amount thereof applied by the Department against any tax due or to become due under this Act from such assignee.

If the payment for which the distributor's, or supplier's, or alternative fuel supplier's claim is filed is held in the protest fund of the State Treasury during the pendency of the claim for credit proceedings pursuant to the order of the court in accordance with Section 2a of the State Officers and Employees Money Disposition Act and if it is determined by the Department or by the final order of a reviewing court under the Administrative Review Law that the claimant is entitled to all or a part of the credit claimed, the claimant, instead of receiving a credit memorandum from the Department, shall receive a cash refund from the protest fund as provided for in Section 2a of the State Officers and Employees Money Disposition Act.

If any person ceases to be licensed as a distributor, or supplier, or alternative fuel supplier while still holding an unused credit memorandum issued under this Act, such person may, at his election (instead of assigning the credit memorandum to a licensed distributor, or licensed supplier, or licensed alternative fuel supplier under this Act), surrender such unused credit memorandum to the Department and receive a refund of the amount to which such person is entitled.

For claims based upon taxes paid on or before December 31, 2000, a claim based upon the use of undyed diesel fuel shall not be allowed except (i) if allowed under the following paragraph or (ii) for undyed diesel fuel used by a commercial vehicle, as that term is defined in Section 1-111.8 of the Illinois Vehicle Code, for any purpose other than operating the commercial vehicle upon the public highways and unlicensed commercial vehicles operating on private property. Claims shall be limited to commercial vehicles that are operated for both highway purposes and any purposes other than operating such vehicles upon the public highways.

For claims based upon taxes paid on or after January 1, 2000, a claim based upon the use of undyed diesel fuel shall not be allowed except (i) if allowed under the preceding paragraph or (ii) for claims for the following:

(1) Undyed diesel fuel used (i) in a manufacturing process, as defined in Section 2-45 of the Retailers' Occupation Tax Act, wherein the undyed diesel fuel becomes a component part of a product or by-product, other than fuel or motor fuel, when the use of dyed diesel fuel in that manufacturing process results in a product that is unsuitable for its intended use or (ii) for testing machinery and equipment in a manufacturing process, as defined in Section 2-45 of the Retailers' Occupation Tax Act, wherein the testing takes place on private property.

(2) Undyed diesel fuel used by a manufacturer on private property in the research and development, as defined in Section 1.29, of machinery or equipment intended for manufacture.

(3) Undyed diesel fuel used by a single unit self-propelled agricultural fertilizer implement, designed for on and off road use, equipped with flotation tires and specially adapted for the application of plant food materials or agricultural chemicals.

(4) Undyed diesel fuel used by a commercial motor vehicle for any purpose other than operating the commercial motor vehicle upon the public highways. Claims shall be limited to commercial motor vehicles that are operated for both highway purposes and any purposes other than operating such vehicles upon the public highways.

(5) Undyed diesel fuel used by a unit of local government in its operation of an airport if the undyed diesel fuel is used directly in airport operations on airport property.

(6) Undyed diesel fuel used by refrigeration units that are permanently mounted to a semitrailer, as defined in Section 1.28 of this Law, wherein the refrigeration units have a fuel supply system dedicated solely for the operation of the refrigeration units.

(7) Undyed diesel fuel used by power take-off equipment as defined in Section 1.27 of this Law.

(8) Beginning on the effective date of this amendatory Act of the 94th General Assembly, undyed diesel fuel used by tugs and spotter equipment to shift vehicles or parcels on both private and airport property. Any claim under this item (8) may be made only by a claimant that owns tugs and spotter equipment and operates that equipment on both private and airport property. The aggregate of all credits or refunds resulting from claims filed under this item (8) by a claimant in any calendar year may not exceed $100,000. A claim may not be made under this item (8) by the same claimant more often than once each quarter. For the purposes of this item (8), "tug" means a vehicle designed for use on airport property that shifts custom-designed containers of parcels from loading docks to aircraft, and "spotter equipment" means a vehicle designed for use on both private and airport property that shifts trailers containing parcels between staging areas and loading docks.

Any person who has paid the tax imposed by Section 2 of this Law upon undyed diesel fuel that is unintentionally mixed with dyed diesel fuel and who owns or controls the mixture of undyed diesel fuel and dyed diesel fuel may file a claim for refund to recover the amount paid. The amount of undyed diesel fuel unintentionally mixed must equal 500 gallons or more. Any claim for refund of unintentionally mixed undyed diesel fuel and dyed diesel fuel shall be supported by documentation showing the date and location of the unintentional mixing, the number of gallons involved, the disposition of the mixed diesel fuel, and any other information that the Department may reasonably require. Any unintentional mixture of undyed diesel fuel and dyed diesel fuel shall be sold or used only for non-highway purposes.

The Department shall promulgate regulations establishing specific limits on the amount of undyed diesel fuel that may be claimed for refund.

For purposes of claims for refund, "loss" means the reduction of motor fuel resulting from fire, theft, spillage, spoilage, leakage, or any other provable cause, but does not include a reduction resulting from evaporation, or shrinkage due to temperature variations. In the case of losses due to fire or theft, the claimant must include fire department or police department reports and any other documentation that the Department may require.

(Source: P.A. 96-1384, eff. 7-29-10.)

(35 ILCS 505/15) (from Ch. 120, par. 431)

Sec. 15. 1. Any person who knowingly acts as a distributor of motor fuel, or supplier of special fuel, or receiver of fuel, or alternative fuel supplier without having a license so to do, or who knowingly fails or refuses to file a return with the Department as provided in Section 2b, Section 3f, Section 5, or Section 5a of this Act, or who knowingly fails or refuses to make payment to the Department as provided either in Section 2b, 3g, Section 6, Section 6a, or Section 7 of this Act, shall be guilty of a Class 3 felony. Each day any person knowingly acts as a distributor of motor fuel, supplier of special fuel, or receiver of fuel fuel, or alternative fuel supplier without having a license so to do or after such a license has been revoked, constitutes a separate offense.

2. Any person who acts as a motor carrier without having a valid motor fuel use tax license, issued by the Department or by a member jurisdiction under the provisions of the International Fuel Tax Agreement, or a valid single trip permit is guilty of a Class A misdemeanor for a first offense and is guilty of a Class 4 felony for each subsequent offense. Any person (i) who fails or refuses to make payment to the Department as provided in Section 13a.1 of this Act or in the International Fuel Tax Agreement referenced in Section 14a, or (ii) who fails or refuses to make the quarterly return as provided in Section 13a.3 is guilty of a Class 4 felony; and for each subsequent offense, such person is guilty of a Class 3 felony.

3. In case such person acting as a distributor, receiver, supplier, alternative fuel supplier or motor carrier is a corporation, then the officer or officers, agent or agents, employee or employees, of such corporation responsible for any act of such corporation, or failure of such corporation to act, which acts or failure to act constitutes a violation of any of the provisions of this Act as enumerated in paragraphs 1 and 2 of this Section, shall be punished by such fine or imprisonment, or by both such fine and imprisonment as provided in those paragraphs.

3.5. Any person who knowingly enters false information on any supporting documentation required to be kept by Section 6 or 6a of this Act is guilty of a Class 3 felony.

3.7. Any person who knowingly attempts in any manner to evade or defeat any tax imposed by this Act or the payment of any tax imposed by this Act is guilty of a Class 2 felony.

4. Any person who refuses, upon demand, to submit for inspection, books and records, or who fails or refuses to keep books and records in violation of Section 12 of this Act, or any distributor, receiver, or supplier , or alternative fuel supplier who violates any reasonable rule or regulation adopted by the Department for the enforcement of this Act is guilty of a Class A misdemeanor. Any person who acts as a blender in violation of Section 3 of this Act or who having transported reportable motor fuel within Section 7b of this Act fails to make the return required by that Section, is guilty of a Class 4 felony.

5. Any person licensed under Section 13a.4, 13a.5, or the International Fuel Tax Agreement who: (a) fails or refuses to keep records and books, as provided in Section 13a.2 or as required by the terms of the International Fuel Tax Agreement, (b) refuses upon demand by the Department to submit for inspection and examination the records required by Section 13a.2 of this Act or by the terms of the International Fuel Tax Agreement, or (c) violates any reasonable rule or regulation adopted by the Department for the enforcement of this Act, is guilty of a Class A misdemeanor.

6. Any person who makes any false return or report to the Department as to any material fact required by Sections 2b, 3f, 5, 5a, 7, 13, or 13a.3 of this Act or by the International Fuel Tax Agreement is guilty of a Class 2 felony.

7. A prosecution for any violation of this Section may be commenced anytime within 5 years of the commission of that violation. A prosecution for tax evasion as set forth in paragraph 3.7 of this Section may be prosecuted any time within 5 years of the commission of the last act in furtherance of evasion. The running of the period of limitations under this Section shall be suspended while any proceeding or appeal from any proceeding relating to the quashing or enforcement of any grand jury or administrative subpoena issued in connection with an investigation of the violation of any provision of this Act is pending.

8. Any person who provides false documentation required by any Section of this Act is guilty of a Class 4 felony.

9. Any person filing a fraudulent application or order form under any provision of this Act is guilty of a Class A misdemeanor. For each subsequent offense, the person is guilty of a Class 4 felony.

10. Any person who acts as a motor carrier and who fails to carry a manifest as provided in Section 5.5 is guilty of a Class A misdemeanor. For each subsequent offense, the person is guilty of a Class 4 felony.

11. Any person who knowingly sells or attempts to sell dyed diesel fuel for highway use or for use by recreational-type watercraft on the waters of this State is guilty of a Class 4 felony. For each subsequent offense, the person is guilty of a Class 2 felony.

12. Any person who knowingly possesses dyed diesel fuel for highway use or for use by recreational-type watercraft on the waters of this State is guilty of a Class A misdemeanor. For each subsequent offense, the person is guilty of a Class 4 felony.

13. Any person who sells or transports dyed diesel fuel without the notice required by Section 4e shall pay the following penalty:

First occurrence....................................$ 500

Second and each occurrence thereafter..............$1,000

14. Any person who owns, operates, or controls any container, storage tank, or facility used to store or distribute dyed diesel fuel without the notice required by Section 4f shall pay the following penalty:

First occurrence....................................$ 500

Second and each occurrence thereafter..............$1,000

15. If a motor vehicle required to be registered for highway purposes is found to have dyed diesel fuel within the ordinary fuel tanks attached to the motor vehicle or if a recreational-type watercraft on the waters of this State is found to have dyed diesel fuel within the ordinary fuel tanks attached to the watercraft, the operator shall pay the following penalty:

First occurrence...................................$1,000

Second and each occurrence thereafter..............$5,000

16. Any licensed motor fuel distributor or licensed supplier, or licensed alternative fuel supplier who sells or attempts to sell dyed diesel fuel for highway use or for use by recreational-type watercraft on the waters of this State shall pay the following penalty:

First occurrence...................................$1,000

Second and each occurrence thereafter..............$5,000

17. Any person who knowingly sells or distributes dyed diesel fuel without the notice required by Section 4e is guilty of a petty offense. For each subsequent offense, the person is guilty of a Class A misdemeanor.

18. Any person who knowingly owns, operates, or controls any container, storage tank, or facility used to store or distribute dyed diesel fuel without the notice required by Section 4f is guilty of a petty offense. For each subsequent offense the person is guilty of a Class A misdemeanor.

For purposes of this Section, dyed diesel fuel means any dyed diesel fuel whether or not dyed pursuant to Section 4d of this Law.

Any person aggrieved by any action of the Department under item 13, 14, 15, or 16 of this Section may protest the action by making a written request for a hearing within 60 days of the original action. If the hearing is not requested in writing within 60 days, the original action is final.

All penalties received under items 13, 14, 15, and 16 of this Section shall be deposited into the Tax Compliance and Administration Fund.

(Source: P.A. 96-1384, eff. 7-29-10.)

(35 ILCS 505/16) (from Ch. 120, par. 432)

Sec. 16. The Department may, after 5 days' notice, revoke the distributor's, receiver's, or supplier's, or alternative fuel supplier's license or permit of any person (1) who does not operate as a distributor, receiver, alternative fuel supplier, or supplier (a) under Sections 1.2, 1.14, or 1.20, 1.30 or (2) who violates any provision of this Act or any rule or regulation promulgated by the Department under Section 14 of this Act, or (3) who refuses to allow any inspection or test authorized by this Law.

Any person whose returns for 2 or more consecutive months do not show sufficient taxable sales to indicate an active business as a distributor, receiver, or supplier, or alternative fuel supplier shall be deemed to not be operating as a distributor, receiver, or supplier, or alternative fuel supplier as defined in Sections 1.2, 1.14, or 1.20, 1.30.

The Department may, after 5 days notice, revoke any distributor's, receiver's, or supplier's license of a person who is registered as a reseller of motor fuel pursuant to Section 2a or 2c of the Retailers' Occupation Tax Act and who fails to collect such prepaid tax on invoiced gallons of motor fuel sold or who fails to deliver a statement of tax paid to the purchaser or to the Department as required by Sections 2d and 2e of the Retailers' Occupation Tax Act.

The Department may, on notice given by registered mail, cancel a Blender's Permit for any violation of any provisions of this Act or for noncompliance with any rule or regulation made by the Department under Section 14 of this Act.

The Department, upon complaint filed in the circuit court, may, by injunction, restrain any person who fails or refuses to comply with the provisions of this Act from acting as a blender or distributor of motor fuel, supplier of special fuel, or receiver of fuel, or alternative fuel supplier in this State.

The Department may revoke the motor fuel use tax license of a motor carrier registered under Section 13a.4, or that is required to be registered under the terms of the International Fuel Tax Agreement, that violates any provision of this Act or any rule promulgated by the Department under Sections 14 or 14a of this Act. Motor fuel use tax licenses that have been revoked are subject to a $100 reinstatement fee.

Licensees registered or required to be registered under Section 13a.4, or persons required to obtain single trip permits under Section 13a.5, may protest any action or audit finding made by the Department by making a written request for a hearing within 30 days after service of the notice of the original action or finding. If the hearing is not requested within 30 days in writing, the original finding or action is final. Once a hearing has been properly requested, the Department shall give at least 20 days written notice of the time and place of the hearing.

(Source: P.A. 94-1074, eff. 12-26-06.)

Section 10. The Retailers' Occupation Tax Act is amended by changing Section 2d as follows:

(35 ILCS 120/2d) (from Ch. 120, par. 441d)

Sec. 2d. Tax prepayment by motor fuel retailer.

(a) Any person engaged in the business of selling motor fuel at retail, as defined in the Motor Fuel Tax Law, and who is not a licensed distributor or supplier, as defined in the Motor Fuel Tax Law, shall prepay to his or her distributor, supplier, or other reseller of motor fuel a portion of the tax imposed by this Act if the distributor, supplier, or other reseller of motor fuel is registered under Section 2a or Section 2c of this Act. The prepayment requirement provided for in this Section does not apply to alternative fuel, as defined in Section 1.3a of the Motor Fuel Tax Law liquid propane gas.

(b) Beginning on July 1, 2000 and through December 31, 2000, the Retailers' Occupation Tax paid to the distributor, supplier, or other reseller shall be an amount equal to $0.01 per gallon of the motor fuel, except gasohol as defined in Section 2-10 of this Act which shall be an amount equal to $0.01 per gallon, purchased from the distributor, supplier, or other reseller.

(c) Before July 1, 2000 and then beginning on January 1, 2001 and through June 30, 2003, the Retailers' Occupation Tax paid to the distributor, supplier, or other reseller shall be an amount equal to $0.04 per gallon of the motor fuel, except gasohol as defined in Section 2-10 of this Act which shall be an amount equal to $0.03 per gallon, purchased from the distributor, supplier, or other reseller.

(d) Beginning July 1, 2003 and through December 31, 2010, the Retailers' Occupation Tax paid to the distributor, supplier, or other reseller shall be an amount equal to $0.06 per gallon of the motor fuel, except gasohol as defined in Section 2-10 of this Act which shall be an amount equal to $0.05 per gallon, purchased from the distributor, supplier, or other reseller.

(e) Beginning on January 1, 2011 and thereafter, the Retailers' Occupation Tax paid to the distributor, supplier, or other reseller shall be at the rate established by the Department under this subsection. The rate shall be established by the Department on January 1 and July 1 of each year using the average selling price, as defined in Section 1 of this Act, per gallon of motor fuel sold in the State during the previous 6 months and multiplying that amount by 6.25% to determine the cents per gallon rate. In the case of biodiesel blends, as defined in Section 3-42 of the Use Tax Act, with no less than 1% and no more than 10% biodiesel, and in the case of gasohol, as defined in Section 3-40 of the Use Tax Act, the rate shall be 80% of the rate established by the Department under this subsection for motor fuel. The Department shall provide persons subject to this Section notice of the rate established under this subsection at least 20 days prior to each January 1 and July 1. Publication of the established rate on the Department's internet website shall constitute sufficient notice under this Section. The Department may use data derived from independent surveys conducted or accumulated by third parties to determine the average selling price per gallon of motor fuel sold in the State.

(f) Any person engaged in the business of selling motor fuel at retail shall be entitled to a credit against tax due under this Act in an amount equal to the tax paid to the distributor, supplier, or other reseller.

(g) Every distributor, supplier, or other reseller registered as provided in Section 2a or Section 2c of this Act shall remit the prepaid tax on all motor fuel that is due from any person engaged in the business of selling at retail motor fuel with the returns filed under Section 2f or Section 3 of this Act, but the vendors discount provided in Section 3 shall not apply to the amount of prepaid tax that is remitted. Any distributor or supplier who fails to properly collect and remit the tax shall be liable for the tax. For purposes of this Section, the prepaid tax is due on invoiced gallons sold during a month by the 20th day of the following month.

(Source: P.A. 96-1384, eff. 7-29-10.)