HB0851sam002 93RD GENERAL ASSEMBLY

Sen. Debbie DeFrancesco Halvorson

Filed: 5/19/2004

09300HB0851sam002 LRB093 05715 MKM 51336 a

AMENDMENT TO HOUSE BILL 851

AMENDMENT NO. ______. Amend House Bill 851 by replacing everything after the enacting clause with the following:

"Section 1. Short title. This Act may be cited as the Watercraft Use Tax Law.

Section 5. Definitions. For the purposes of this Law:

"Department" means the Department of Revenue.

"Purchase price" means the reasonable consideration paid for a watercraft valued at $10,000 or more whether received in money or otherwise, including, but not limited to, cash, credits, property, and services, and including the value of any motor sold with, or in conjunction with, the watercraft. Except in the case of transfers between immediate family members, reasonable consideration ordinarily means the fair market value on the date the watercraft or the share of the watercraft was acquired or the date the watercraft was brought into this State, whichever is later, unless the taxpayer can demonstrate that a different value is reasonable. In the case of transfers between immediate family members, reasonable consideration ordinarily means the consideration actually paid, unless it appears from the facts and circumstances that the primary motivation of the transfer was the avoidance of tax.

"Watercraft" means:

(1) Class 1, Class 2, Class 3, and Class 4 watercraft, as defined in Section 3-2 of the Boat Registration and Safety Act;

(2) personal watercraft, as defined in Section 1-2 of the Boat Registration and Safety Act; and

(3) any boat equipped with an inboard motor.

Section 10. Tax imposed. A tax is hereby imposed on the privilege of using, in this State, any watercraft acquired by gift, transfer, or purchase after June 30, 2004. This tax does not apply if: (i) the use of the watercraft is otherwise taxed under the Use Tax Act; (ii) the watercraft is bought and used by a governmental agency or a society, association, foundation, or institution organized and operated exclusively for charitable, religious, or educational purposes and that entity has been issued an exemption identification number under Section 1g of the Retailers' Occupation Tax Act; (iii) the use of the watercraft is not subject to the Use Tax Act by reason of subsection (a), (b), (c), (d), or (e) of Section 3-55 of that Act dealing with the prevention of actual or likely multi-state taxation; or (iv) the transfer is a gift to a beneficiary in the administration of an estate and the beneficiary is a surviving spouse.

Section 15. Rate of tax.

The rate of tax is 6.25% of the purchase price for each purchase of watercraft that is subject to tax under this Law. When an ownership share of a watercraft is acquired, the tax is imposed on the purchase price of that share. All owners are jointly and severally liable for any tax due as a result of the purchase, gift, or transfer of an ownership share of the watercraft.

Section 20. Returns.

(a) The purchaser, transferee, or donee shall file with the Department a return signed by the purchaser, transferee, or donee on a form prescribed by the Department. The return shall contain a verification in substantially the following form and such other information as the Department may reasonably require:

VERIFICATION

I declare that I have examined this return and, to the best of my knowledge, it is true, correct, and complete. I understand that the penalty for willfully filing a false return is a fine not to exceed $1,000 or imprisonment in a penal institution other than the penitentiary not to exceed one year, or both a fine and imprisonment.

(b) The return and payment from the purchaser, transferee, or donee shall be submitted to the Department within 30 days after the date of purchase, donation, or other transfer or the date the watercraft is brought into this State, whichever is later. Payment of tax is a condition to securing certificate of title for the watercraft from the Department of Natural Resources. When a purchaser, transferee, or donee pays the tax imposed by Section 10 of this Law, the Department (upon request therefor from the purchaser, transferee, or donee) shall issue an appropriate receipt to the purchaser, transferee, or donee showing that he or she has paid the tax to the Department. The receipt shall be sufficient to relieve the purchaser, transferee, or donee from further liability for the tax to which the receipt may refer.

Section 25. Filing false or incomplete return. Any person required to file a return under this Law who willfully files a false or incomplete return is guilty of a Class A misdemeanor.

Section 30. Determining purchase price. For the purpose of assisting in determining the validity of the purchase price reported on returns filed with the Department, the Department may furnish the following information to persons with whom the Department has contracted for service related to making that determination: (i) the purchase price stated on the return; (ii) the watercraft identification number; (iii) the year, the make, and the model name or number of the watercraft; (iv) the purchase date; and (v) the hours of operation.

Section 35. Powers of Department. The Department has full power to: (i) administer and enforce this Law; (ii) collect all taxes, penalties, and interest due under this Law; (iii) dispose of taxes, penalties, and interest so collected in the manner set forth in this Law; and (iv) determine all rights to credit memoranda or refunds arising on account of the erroneous payment of tax, penalty, or interest under this Law. In the administration of, and compliance with, this Law, the Department and persons who are subject to this Law have the same rights, remedies, privileges, immunities, powers, and duties, and are subject to the same conditions, restrictions, limitations, penalties, and definitions of terms, and employ the same modes of procedure, as are prescribed in the Use Tax Act (except for the provisions of Section 3-70), that are not inconsistent with this Law, as fully as if the provisions of the Use Tax Act were set forth in this Law. In addition to any other penalties imposed under law, any person convicted of violating the provisions of this Law shall be assessed a fine of $1,000.

Section 40. Payments to Local Government Distributive Fund and General Revenue Fund. The Department shall each month, upon collecting any taxes as provided in this Law, pay 20% of the money collected into the Local Government Distributive Fund, a special fund in the State treasury, and 80% into the General Revenue Fund.

Section 45. Rules. The Department has the authority to adopt such rules as are reasonable and necessary to implement the provisions of this Law.

Section 990. The Retailers' Occupation Tax Act is amended by changing Section 1c as follows:

(35 ILCS 120/1c) (from Ch. 120, par. 440c)

Sec. 1c. A person who is engaged in the business of leasing or renting motor vehicles or, beginning July 1, 2003, aircraft or, beginning July 1, 2004, watercraft to others and who, in connection with such business sells any used motor vehicle, or aircraft, or watercraft to a purchaser for his use and not for the purpose of resale, is a retailer engaged in the business of selling tangible personal property at retail under this Act to the extent of the value of the vehicle or aircraft sold. For the purpose of this Section "motor vehicle" has the meaning prescribed in Section 1-157 of the Illinois Vehicle Code, as now or hereafter amended. For the purpose of this Section "aircraft" has the meaning prescribed in Section 3 of the Illinois Aeronautics Act. For the purpose of this Section, "watercraft" has the meaning prescribed in Section 5 of the Watercraft Use Tax Law. (Nothing provided herein shall affect liability incurred under this Act because of the sale at retail of such motor vehicles, or aircraft, or watercraft to a lessor.)

(Source: P.A. 93-24, eff. 6-20-03.)

Section 995. The Boat Registration and Safety Act is amended by changing Section 3A-5 as follows:

(625 ILCS 45/3A-5) (from Ch. 95 1/2, par. 313A-5)

Sec. 3A-5. Certificate of title - Issuance - Records.

(a) The Department of Natural Resources shall file each application received and, when satisfied as to its genuineness and regularity, and that no tax imposed by the "Use Tax Act" or the Watercraft Use Tax Law is owed as evidenced by the receipt for payment or determination of exemption from the Department of Revenue provided for in Section 3A-3 of this Article, and that the applicant is entitled to the issuance of a certificate of title, shall issue a certificate of title.

(b) The Department of Natural Resources shall maintain a record of all certificates of title issued under a distinctive title number assigned to the watercraft and, in the discretion of the Department, in any other method determined.

(Source: P.A. 89-445, eff. 2-7-96.)

Section 999. Effective date. This Act takes effect July 1, 2004.".