State of Illinois
90th General Assembly
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90_HB0516

      35 ILCS 615/1             from Ch. 120, par. 467.16
      35 ILCS 620/1             from Ch. 120, par. 468
      35 ILCS 630/2             from Ch. 120, par. 2002
      220 ILCS 5/3-121          from Ch. 111 2/3, par. 3-121
          Amends the Gas Revenue  Tax  Act,  the  Public  Utilities
      Revenue  Act,  the Telecommunications Excise Tax Act, and the
      Public Utilities Act to exempt school  districts  subject  to
      the  School  Code  from liability for the taxes imposed under
      those Acts.
                                                     LRB9001444JScw
                                               LRB9001444JScw
 1        AN ACT to exempt school  districts  from  certain  taxes,
 2    amending named Acts.
 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:
 5        Section  5.  The  Gas  Revenue  Tax  Act  is  amended  by
 6    changing Section 1 as follows:
 7        (35 ILCS 615/1) (from Ch. 120, par. 467.16)
 8        Sec. 1.  Definitions.  For  the  purposes  of  this  Act:
 9    "Gross  receipts"  means  the  consideration received for gas
10    distributed, supplied, furnished or sold to persons  for  use
11    or  consumption  and  not  for  resale,  and for all services
12    (including the  transportation  or  storage  of  gas  for  an
13    end-user) rendered in connection therewith, and shall include
14    cash,  services  and  property  of  every kind or nature, and
15    shall be determined without any deduction on account  of  the
16    cost  of the service, product or commodity supplied, the cost
17    of materials used, labor  or  service  costs,  or  any  other
18    expense  whatsoever.  However,  "gross  receipts"  shall  not
19    include receipts from:
20             (i)  any  minimum  or  other  charge  for gas or gas
21        service where the customer has taken no therms of gas;
22             (ii)  any charge for a dishonored check;
23             (iii)  any finance  or  credit  charge,  penalty  or
24        charge  for  delayed  payment,  or  discount  for  prompt
25        payment;
26             (iv)  any  charge for reconnection of service or for
27        replacement or relocation of facilities;
28             (v)  any  advance  or   contribution   in   aid   of
29        construction;
30             (vi)  repair,  inspection  or servicing of equipment
31        located on customer premises;
                            -2-                LRB9001444JScw
 1             (vii)  leasing or rental of equipment,  the  leasing
 2        or  rental  of  which  is  not necessary to distributing,
 3        furnishing, supplying, selling, transporting  or  storing
 4        gas;
 5             (viii)  any  sale  to  a customer if the taxpayer is
 6        prohibited by  federal  or  State  constitution,  treaty,
 7        convention, statute or court decision from recovering the
 8        related tax liability from such customer;
 9             (ix)  any charges added to customers' bills pursuant
10        to  the  provisions  of Section 9-221 or Section 9-222 of
11        the Public Utilities Act,  as  amended,  or  any  charges
12        added  to  customers'  bills  by  taxpayers  who  are not
13        subject to  rate  regulation  by  the  Illinois  Commerce
14        Commission  for  the purpose of recovering any of the tax
15        liabilities or other amounts specified in such provisions
16        of such Act; and
17             (x)  any  charge  for  gas  or  gas  services  to  a
18        customer who acquired contractual rights for  the  direct
19        purchase  of  gas  or  gas  services  originating from an
20        out-of-state supplier or source on  or  before  March  1,
21        1995,  except  for  those  charges  solely related to the
22        local distribution of gas by a public utility; and.
23             (ix)  a sale to a school  district  subject  to  the
24        School Code.
25        In  case  credit is extended, the amount thereof shall be
26    included only as and when payments are received.
27        "Gross receipts" shall not include consideration received
28    from business enterprises certified under Section 9-222.1  of
29    the  Public  Utilities Act, as amended, to the extent of such
30    exemption and during the period  of  time  specified  by  the
31    Department of Commerce and Community Affairs.
32        "Department" means the Department of Revenue of the State
33    of Illinois.
34        "Director"   means   the  Director  of  Revenue  for  the
                            -3-                LRB9001444JScw
 1    Department of Revenue of the State of Illinois.
 2        "Taxpayer" means a person  engaged  in  the  business  of
 3    distributing, supplying, furnishing or selling gas for use or
 4    consumption and not for resale.
 5        "Person"  means  any  natural  individual,  firm,  trust,
 6    estate,  partnership, association, joint stock company, joint
 7    adventure,  corporation,  limited  liability  company,  or  a
 8    receiver, trustee, guardian or other representative appointed
 9    by order of any court, or any city,  town,  county  or  other
10    political subdivision of this State.
11        "Invested  capital"  means  that  amount equal to (i) the
12    average of the balances at the  beginning  and  end  of  each
13    taxable  period  of the taxpayer's total stockholder's equity
14    and total long-term debt, less investments in and advances to
15    all corporations, as set forth on the balance sheets included
16    in the taxpayer's annual  report  to  the  Illinois  Commerce
17    Commission  for  the  taxable  period;  (ii)  multiplied by a
18    fraction determined under Sections  301  and  304(a)  of  the
19    Illinois  "Illinois  Income  Tax  Act"  and  reported  on the
20    Illinois income tax return for the taxable period  ending  in
21    or   with   the   taxable   period   in   question.  However,
22    notwithstanding the income tax return  reporting  requirement
23    stated   above,   beginning   July  1,  1979,  no  taxpayer's
24    denominators used to compute the sales, property  or  payroll
25    factors  under  subsection (a) of Section 304 of the Illinois
26    Income Tax Act shall include payroll, property  or  sales  of
27    any corporate entity other than the taxpayer for the purposes
28    of  determining  an  allocation for the invested capital tax.
29    This amendatory Act of  1982,  Public  Act  82-1024,  is  not
30    intended  to  and  does not make any change in the meaning of
31    any provision of this Act, it having been the intent  of  the
32    General  Assembly  in  initially  enacting  the definition of
33    "invested  capital"  to  provide  for  apportionment  of  the
34    invested capital of  each  company,  based  solely  upon  the
                            -4-                LRB9001444JScw
 1    sales, property and payroll of that company.
 2        "Taxable  period"  means each period which ends after the
 3    effective date of this Act and which is covered by an  annual
 4    report  filed  by  the  taxpayer  with  the Illinois Commerce
 5    Commission.
 6    (Source: P.A. 88-480; 89-417, eff. 1-1-96.)
 7        Section 10.  The Public Utilities Revenue Act is  amended
 8    by changing Section 1 as follows:
 9        (35 ILCS 620/1) (from Ch. 120, par. 468)
10        Sec.  1.  Definitions.   For  the  purposes  of this Act:
11    "Gross  receipts"  means  the  consideration   received   for
12    electricity  distributed,  supplied,  furnished  or  sold  to
13    persons  for  use  or consumption and not for resale, and for
14    all services (including the transmission of  electricity  for
15    an  end-user)  rendered in connection therewith, and includes
16    cash, services and property of  every  kind  or  nature,  and
17    shall  be  determined without any deduction on account of the
18    cost of the service, product or commodity supplied, the  cost
19    of  materials  used,  labor  or  service  costs, or any other
20    expense  whatsoever.  However,  "gross  receipts"  shall  not
21    include receipts from:
22             (i)  any minimum or other charge for electricity  or
23        electric   service   where  the  customer  has  taken  no
24        kilowatt-hours of electricity;
25             (ii)  any charge for a dishonored check;
26             (iii)  any finance  or  credit  charge,  penalty  or
27        charge  for  delayed  payment,  or  discount  for  prompt
28        payment;
29             (iv)  any  charge for reconnection of service or for
30        replacement or relocation of facilities;
31             (v)  any  advance  or   contribution   in   aid   of
32        construction;
                            -5-                LRB9001444JScw
 1             (vi)  repair,  inspection  or servicing of equipment
 2        located on customer premises;
 3             (vii)  leasing or rental of equipment,  the  leasing
 4        or  rental  of  which  is  not necessary to distributing,
 5        furnishing,   supplying,    selling    or    transporting
 6        electricity;
 7             (viii)  any  sale  to  a customer if the taxpayer is
 8        prohibited by  federal  or  State  constitution,  treaty,
 9        convention, statute or court decision from recovering the
10        related tax liability from such customer; and
11             (ix)  any charges added to customers' bills pursuant
12        to  the  provisions  of Section 9-221 or Section 9-222 of
13        the Public Utilities Act,  as  amended,  or  any  charges
14        added  to  customers'  bills  by  taxpayers  who  are not
15        subject to  rate  regulation  by  the  Illinois  Commerce
16        Commission  for  the purpose of recovering any of the tax
17        liabilities or other amount specified in such  provisions
18        of  such  Act.  In  case  credit  is extended, the amount
19        thereof shall be included only as and when  payments  are
20        received; and.
21             (x)  a  sale  to  a  school  district subject to the
22        School Code.
23        "Gross receipts" shall not include consideration received
24    from business enterprises certified under Section 9-222.1  of
25    the  Public  Utilities Act, as amended, to the extent of such
26    exemption and during the period  of  time  specified  by  the
27    Department of Commerce and Community Affairs.
28        "Department" means the Department of Revenue of the State
29    of Illinois.
30        "Director"   means   the  Director  of  Revenue  for  the
31    Department of Revenue of the State of Illinois.
32        "Taxpayer" means a person  engaged  in  the  business  of
33    distributing,  supplying,  furnishing  or selling electricity
34    for use or consumption and not for resale.
                            -6-                LRB9001444JScw
 1        "Person"  means  any  natural  individual,  firm,  trust,
 2    estate, partnership, association, joint stock company,  joint
 3    adventure,  corporation,  limited  liability  company,  or  a
 4    receiver, trustee, guardian or other representative appointed
 5    by  order  of  any  court, or any city, town, county or other
 6    political subdivision of this State.
 7        "Invested capital" means that amount  equal  to  (i)  the
 8    average  of  the  balances  at  the beginning and end of each
 9    taxable period of the taxpayer's total  stockholder's  equity
10    and total long-term debt, less investments in and advances to
11    all corporations, as set forth on the balance sheets included
12    in  the  taxpayer's  annual  report  to the Illinois Commerce
13    Commission for the  taxable  period;  (ii)  multiplied  by  a
14    fraction  determined  under  Sections  301  and 304(a) of the
15    Illinois "Illinois  Income  Tax  Act"  and  reported  on  the
16    Illinois  income  tax return for the taxable period ending in
17    or  with   the   taxable   period   in   question.   However,
18    notwithstanding  the  income tax return reporting requirement
19    stated  above,  beginning  July  1,   1979,   no   taxpayer's
20    denominators  used  to compute the sales, property or payroll
21    factors under subsection (a) of Section 304 of  the  Illinois
22    Income  Tax  Act  shall include payroll, property or sales of
23    any corporate entity other than the taxpayer for the purposes
24    of determining an allocation for the  invested  capital  tax.
25    This  amendatory  Act  of  1982,  Public  Act 82-1024, is not
26    intended to and does not make any change in  the  meaning  of
27    any  provision  of this Act, it having been the intent of the
28    General Assembly in  initially  enacting  the  definition  of
29    "invested  capital"  to  provide  for  apportionment  of  the
30    invested  capital  of  each  company,  based  solely upon the
31    sales, property and payroll of that company.
32        In the case of an electric cooperative subject to the tax
33    imposed by Section 2a.1, "invested capital" means  an  amount
34    equal  to  the  product  determined  by  multiplying, (i) the
                            -7-                LRB9001444JScw
 1    average of the balances at  the  beginning  and  end  of  the
 2    taxable  period  of  the  taxpayer's  total equity (including
 3    memberships,   patronage    capital,    operating    margins,
 4    non-operating  margins, other margins and other equities), as
 5    set forth on the balance sheets included  in  the  taxpayer's
 6    annual  report to the United States Department of Agriculture
 7    Rural Electrification Administration (established pursuant to
 8    the federal Rural Electrification Act of 1936,  as  amended),
 9    by (ii) the fraction determined under Sections 301 and 304(a)
10    of  the  Illinois Income Tax Act, as amended, for the taxable
11    period.
12        "Taxable period" means each period which ends  after  the
13    effective  date of this Act and which is covered by an annual
14    report filed by the  taxpayer  with   the  Illinois  Commerce
15    Commission.   In  the case of an electric cooperative subject
16    to the tax imposed by Section 2a.1,  "taxable  period"  means
17    each  calendar  year  ending after the effective date of this
18    Act and covered by an annual report  filed  by  the  taxpayer
19    with  the  United  States  Department  of  Agriculture  Rural
20    Electrification Administration.
21    (Source: P.A. 88-480.)
22        Section  15.  The  Telecommunications  Excise  Tax Act is
23    amended by changing Section 2 as follows:
24        (35 ILCS 630/2) (from Ch. 120, par. 2002)
25        Sec. 2.  Definitions.  As used in  this  Article,  unless
26    the context clearly requires otherwise:
27        (a)  "Gross  charge" means the amount paid for the act or
28    privilege of originating or receiving  telecommunications  in
29    this  State  and  for  all services and equipment provided in
30    connection therewith by a retailer, valued in  money  whether
31    paid in money or otherwise, including cash, credits, services
32    and property of every kind or nature, and shall be determined
                            -8-                LRB9001444JScw
 1    without  any  deduction  on  account  of  the  cost  of  such
 2    telecommunications,  the  cost  of  materials  used, labor or
 3    service costs or  any  other  expense  whatsoever.   In  case
 4    credit is extended, the amount thereof shall be included only
 5    as  and  when  paid. "Gross charges" for private line service
 6    shall include charges imposed at each  channel  point  within
 7    this  State,  charges  for  the  channel mileage between each
 8    channel point within this State, and charges for that portion
 9    of  the  interstate  inter-office  channel  provided   within
10    Illinois. However, "gross charges" shall not include:
11             (1)  any amounts added to a purchaser's bill because
12        of  a charge made pursuant to (i) the tax imposed by this
13        Article; (ii) charges added to customers' bills  pursuant
14        to  the  provisions  of  Sections  9-221  or 9-222 of the
15        Public Utilities Act, as amended, or any similar  charges
16        added  to  customers'  bills  by  retailers  who  are not
17        subject to  rate  regulation  by  the  Illinois  Commerce
18        Commission  for  the purpose of recovering any of the tax
19        liabilities or other amounts specified in such provisions
20        of such Act; or (iii) the tax imposed by Section 4251  of
21        the Internal Revenue Code;
22             (2)  charges  for  a  sent collect telecommunication
23        received outside of the State;
24             (3)  charges for leased time on equipment or charges
25        for the storage of data  or  information  for  subsequent
26        retrieval  or  the  processing  of  data  or  information
27        intended  to  change its form or content.  Such equipment
28        includes, but is not limited to, the use of  calculators,
29        computers,    data   processing   equipment,   tabulating
30        equipment or accounting equipment and also  includes  the
31        usage of computers under a time-sharing agreement;
32             (4)  charges  for customer equipment, including such
33        equipment that is leased or rented by the  customer  from
34        any  source,  wherein  such charges are disaggregated and
                            -9-                LRB9001444JScw
 1        separately identified from other charges;
 2             (5)  charges to business enterprises certified under
 3        Section 9-222.1 of the Public Utilities Act, as  amended,
 4        to  the extent of such exemption and during the period of
 5        time  specified  by  the  Department  of   Commerce   and
 6        Community Affairs;
 7             (6)  charges for telecommunications and all services
 8        and  equipment provided in connection therewith between a
 9        parent corporation and its wholly owned  subsidiaries  or
10        between  wholly  owned  subsidiaries when the tax imposed
11        under this Article has already been paid  to  a  retailer
12        and  only  to  the  extent  that  the charges between the
13        parent  corporation  and  wholly  owned  subsidiaries  or
14        between  wholly  owned  subsidiaries  represent   expense
15        allocation   between   the   corporations   and  not  the
16        generation of profit for the corporation  rendering  such
17        service;
18             (7)  bad debts. Bad debt means any portion of a debt
19        that  is  related  to  a  sale  at retail for which gross
20        charges are not otherwise deductible or  excludable  that
21        has  become  worthless  or  uncollectable,  as determined
22        under applicable federal income tax  standards.   If  the
23        portion  of  the  debt  deemed  to be bad is subsequently
24        paid, the retailer shall report and pay the tax  on  that
25        portion  during the reporting period in which the payment
26        is made;
27             (8)  charges   paid   by    inserting    coins    in
28        coin-operated telecommunication devices;.
29             (9)  charges  to  school  districts  subject  to the
30        School Code.
31        (b)  "Amount  paid"  means  the  amount  charged  to  the
32    taxpayer's service address in this State regardless of  where
33    such amount is billed or paid.
34        (c)  "Telecommunications",  in  addition  to  the meaning
                            -10-               LRB9001444JScw
 1    ordinarily and popularly ascribed to  it,  includes,  without
 2    limitation,  messages  or information transmitted through use
 3    of local, toll and wide area telephone service; private  line
 4    services;     channel     services;    telegraph    services;
 5    teletypewriter; computer exchange services;  cellular  mobile
 6    telecommunications   service;   specialized   mobile   radio;
 7    stationary  two  way radio; paging service; or any other form
 8    of mobile and portable one-way or two-way communications;  or
 9    any   other   transmission  of  messages  or  information  by
10    electronic or similar means, between or among points by wire,
11    cable, fiber-optics, laser, microwave,  radio,  satellite  or
12    similar facilities. As used in this Act, "private line" means
13    a  dedicated  non-traffic  sensitive  service  for  a  single
14    customer, that entitles the customer to exclusive or priority
15    use  of  a  communications channel or group of channels, from
16    one  or  more  specified  locations  to  one  or  more  other
17    specified locations. The definition  of  "telecommunications"
18    shall  not  include  value  added  services in which computer
19    processing applications are used to act on the form, content,
20    code and protocol of the information for purposes other  than
21    transmission.    "Telecommunications"   shall   not   include
22    purchases  of  telecommunications  by  a   telecommunications
23    service  provider  for use as a component part of the service
24    provided  by  him  to  the  ultimate  retail   consumer   who
25    originates    or    terminates    the    taxable   end-to-end
26    communications.  Carrier  access  charges,  right  of  access
27    charges, charges for use of inter-company facilities, and all
28    telecommunications resold in  the  subsequent  provision  of,
29    used  as  a  component  of,  or  integrated  into  end-to-end
30    telecommunications  service shall be non-taxable as sales for
31    resale.
32        (d)  "Interstate    telecommunications"     means     all
33    telecommunications that either originate or terminate outside
34    this State.
                            -11-               LRB9001444JScw
 1        (e)  "Intrastate     telecommunications"     means    all
 2    telecommunications that originate and terminate  within  this
 3    State.
 4        (f)  "Department"  means the Department of Revenue of the
 5    State of Illinois.
 6        (g)  "Director" means the Director  of  Revenue  for  the
 7    Department of Revenue of the State of Illinois.
 8        (h)  "Taxpayer"   means  a  person  who  individually  or
 9    through his agents, employees or permittees  engages  in  the
10    act    or    privilege    of    originating    or   receiving
11    telecommunications  in  this  State  and  who  incurs  a  tax
12    liability under this Article.
13        (i)  "Person" means any natural individual, firm,  trust,
14    estate,  partnership, association, joint stock company, joint
15    venture,  corporation,  limited  liability  company,   or   a
16    receiver, trustee, guardian or other representative appointed
17    by  order  of  any  court, the Federal and State governments,
18    including State universities created by statute or any  city,
19    town, county or other political subdivision of this State.
20        (j)  "Purchase   at   retail"   means   the  acquisition,
21    consumption or use of telecommunication  through  a  sale  at
22    retail.
23        (k)  "Sale  at  retail" means the transmitting, supplying
24    or furnishing of  telecommunications  and  all  services  and
25    equipment    provided   in   connection   therewith   for   a
26    consideration to persons other than  the  Federal  and  State
27    governments,  and  State  universities created by statute and
28    other than between a parent corporation and its wholly  owned
29    subsidiaries  or  between wholly owned subsidiaries for their
30    use or consumption and not for resale.
31        (l)  "Retailer" means and includes every  person  engaged
32    in  the business of making sales at retail as defined in this
33    Article.   The  Department  may,  in  its  discretion,   upon
34    application,  authorize  the  collection  of  the  tax hereby
                            -12-               LRB9001444JScw
 1    imposed by any retailer not maintaining a place  of  business
 2    within   this   State,   who,  to  the  satisfaction  of  the
 3    Department, furnishes adequate security to insure  collection
 4    and  payment  of  the  tax.   Such  retailer shall be issued,
 5    without charge, a  permit  to  collect  such  tax.   When  so
 6    authorized,  it shall be the duty of such retailer to collect
 7    the tax upon all of the gross charges for  telecommunications
 8    in  this  State  in  the  same manner and subject to the same
 9    requirements as a retailer maintaining a  place  of  business
10    within  this  State.   The  permit  may  be  revoked  by  the
11    Department at its discretion.
12        (m)  "Retailer  maintaining  a  place of business in this
13    State", or any like term, means  and  includes  any  retailer
14    having  or  maintaining  within  this State, directly or by a
15    subsidiary, an office, distribution facilities,  transmission
16    facilities,   sales  office,  warehouse  or  other  place  of
17    business, or any  agent  or  other  representative  operating
18    within  this State under the authority of the retailer or its
19    subsidiary, irrespective of whether such place of business or
20    agent or other representative is located here permanently  or
21    temporarily,  or  whether  such  retailer  or  subsidiary  is
22    licensed to do business in this State.
23        (n)  "Service    address"    means    the   location   of
24    telecommunications     equipment     from      which      the
25    telecommunications   services  are  originated  or  at  which
26    telecommunications services are received by a  taxpayer.   In
27    the  event this may not be a defined location, as in the case
28    of  mobile  phones,   paging   systems,   maritime   systems,
29    air-to-ground  systems  and  the  like, service address shall
30    mean  the  location  of  a  taxpayer's  primary  use  of  the
31    telecommunications equipment as defined by telephone  number,
32    authorization  code,  or location in Illinois where bills are
33    sent.
34    (Source: P.A. 88-480.)
                            -13-               LRB9001444JScw
 1        Section 20.  The  Public  Utilities  Act  is  amended  by
 2    changing Section 3-121 as follows:
 3        (220 ILCS 5/3-121) (from Ch. 111 2/3, par. 3-121)
 4        Sec.  3-121.  Gross revenue.  As used in Section 2-202 of
 5    this Act, the term "gross revenue" includes all revenue which
 6    (1) is collected by a public utility subject  to  regulations
 7    under  this Act (a) pursuant to the rates, other charges, and
 8    classifications which it is required to  file  under  Section
 9    9-102  of  this  Act  and  (b) pursuant to emergency rates as
10    permitted by Section 9-104 of this Act, and  (2)  is  derived
11    from  the  intrastate  public  utility  business  of  such  a
12    utility. Such term does not include revenue derived by such a
13    public  utility  from  the  sale  of public utility services,
14    products or commodities to another public utility  or  to  an
15    electric  cooperative  for  resale  by such public utility or
16    electric cooperative or to school districts  subject  to  the
17    School  Code.   "Gross revenue" shall not include any charges
18    added to customers'  bills  pursuant  to  the  provisions  of
19    Section 9-221, 9-221.1 and 9-222 of this Act or consideration
20    received  from  business  enterprises certified under Section
21    9-222.1 of this Act to  the  extent  of  such  exemption  and
22    during the period in which the exemption is in effect.
23    (Source: P.A. 85-1021.)

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