State of Illinois
91st General Assembly
Legislation

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91_SB0659eng

 
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 1        AN ACT regarding telecommunications taxes, amending named
 2    Acts.

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

 5        Section 5.  The  Use  Tax  Act  is  amended  by  changing
 6    Section 3 as follows:

 7        (35 ILCS 105/3) (from Ch. 120, par. 439.3)
 8        Sec. 3. Tax imposed.
 9        (a)  A tax is imposed upon the privilege of using in this
10    State  tangible  personal property purchased at retail from a
11    retailer,  including   computer   software,   and   including
12    photographs, negatives, and positives that are the product of
13    photoprocessing,    but    not    including    products    of
14    photoprocessing  produced  for  use  in  motion  pictures for
15    commercial exhibition.
16        (b)  Beginning January 1, 2000, a tax is imposed upon the
17    privilege of using in this State  prepaid  telephone  calling
18    card   arrangements,   as   defined   in  Section  2  of  the
19    Telecommunications Excise Tax Act, purchased at retail from a
20    retailer.
21        If the sale of prepaid calling card arrangements does not
22    take place at the retailer's  place  of  business,  the  sale
23    shall  be  conclusively  determined  to  take  place  at  the
24    location of the retailer's acceptance of a purchase order; or
25    if  the  location  of  the  purchase order is outside of this
26    State, the sale shall  be  conclusively  determined  to  take
27    place  at  the  customer's shipping address; or if no item is
28    shipped, the sale shall be conclusively  determined  to  take
29    place at the customer's credit card billing address.
30    (Source:  P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
31    86-953; 86-1394; 86-1475; 87-876.)
 
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 1        Section 10.  The  Service  Use  Tax  Act  is  amended  by
 2    changing Section 3 as follows:

 3        (35 ILCS 110/3) (from Ch. 120, par. 439.33)
 4        Sec. 3.  Tax imposed.
 5        (a)  A tax is imposed upon the privilege of using in this
 6    State  real  or  tangible  personal  property  acquired as an
 7    incident to the purchase of  a  service  from  a  serviceman,
 8    including   computer  software,  and  including  photographs,
 9    negatives,  and   positives   that   are   the   product   of
10    photoprocessing,    but    not    including    products    of
11    photoprocessing  produced  for  use  in  motion  pictures for
12    public commercial exhibition.
13        (b)  Beginning January 1, 2000, a tax is imposed upon the
14    privilege of using in this State  prepaid  telephone  calling
15    card   arrangements,   as   defined   in  Section  2  of  the
16    Telecommunications Excise Tax Act, acquired as an incident to
17    the purchase of a service from a serviceman.
18        If the sale of prepaid calling card arrangements does not
19    take place at the retailer's  place  of  business,  the  sale
20    shall  be  conclusively  determined  to  take  place  at  the
21    location of the retailer's acceptance of a purchase order; or
22    if  the  location  of  the  purchase order is outside of this
23    State, the sale shall  be  conclusively  determined  to  take
24    place  at  the  customer's shipping address; or if no item is
25    shipped, the sale shall be conclusively  determined  to  take
26    place at the customer's credit card billing address.
27    (Source:  P.A. 86-44; 86-244; 86-252; 86-820; 86-905; 86-928;
28    86-1028; 86-1475; 87-879.)

29        Section 15. The Service Occupation Tax Act is amended  by
30    changing Section 3 as follows:

31        (35 ILCS 115/3) (from Ch. 120, par. 439.103)
 
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 1        Sec. 3.  Tax imposed.
 2        (a)  A  tax  is  imposed  upon all persons engaged in the
 3    business  of  making  sales  of  service  (referred   to   as
 4    "servicemen")  on  all tangible personal property transferred
 5    as an incident of  a  sale  of  service,  including  computer
 6    software, and including photographs, negatives, and positives
 7    that  are  the  product of photoprocessing, but not including
 8    products  of  photoprocessing  produced  for  use  in  motion
 9    pictures for public commercial exhibition.
10        (b)  Beginning January 1, 2000, a tax is imposed upon all
11    persons engaged in the business of making  sales  of  service
12    (referred  to  as  "servicemen") on prepaid telephone calling
13    card  arrangements,  as  defined  in   Section   2   of   the
14    Telecommunications Excise Tax Act, transferred as an incident
15    of a sale of service.
16        If the sale of prepaid calling card arrangements does not
17    take  place  at  the  retailer's  place of business, the sale
18    shall  be  conclusively  determined  to  take  place  at  the
19    location of the retailer's acceptance of a purchase order; or
20    if the location of the purchase  order  is  outside  of  this
21    State,  the  sale  shall  be  conclusively determined to take
22    place at the customer's shipping address; or if  no  item  is
23    shipped,  the  sale  shall be conclusively determined to take
24    place at the customer's credit card billing address.
25    (Source: P.A. 86-44; 86-244; 86-252; 86-820; 86-905;  86-928;
26    86-1028; 86-1475.)

27        Section 20.  The Retailers' Occupation Tax Act is amended
28    by changing Section 2 as follows:

29        (35 ILCS 120/2) (from Ch. 120, par. 441)
30        Sec. 2.  Tax imposed.
31        (a)  A  tax  is  imposed  upon  persons  engaged  in  the
32    business  of  selling  at  retail tangible personal property,
 
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 1    including  computer  software,  and  including   photographs,
 2    negatives,   and   positives   that   are   the   product  of
 3    photoprocessing,    but    not    including    products    of
 4    photoprocessing produced  for  use  in  motion  pictures  for
 5    public commercial exhibition.
 6        (b)  Beginning  January  1,  2000,  a tax is imposed upon
 7    persons engaged in the business of selling at retail  prepaid
 8    telephone  calling card arrangements, as defined in Section 2
 9    of the Telecommunications Excise Tax Act.
10        If the sale of prepaid calling card arrangements does not
11    take place at the retailer's  place  of  business,  the  sale
12    shall  be  conclusively  determined  to  take  place  at  the
13    location of the retailer's acceptance of a purchase order; or
14    if  the  location  of  the  purchase order is outside of this
15    State, the sale shall  be  conclusively  determined  to  take
16    place  at  the  customer's shipping address; or if no item is
17    shipped, the sale shall be conclusively  determined  to  take
18    place at the customer's credit card billing address.
19    (Source:  P.A. 86-44; 86-244; 86-252; 86-444; 86-820; 86-905;
20    86-928; 86-953; 86-1394; 86-1475.)

21        Section 25.  The Telecommunications  Excise  Tax  Act  is
22    amended by changing Section 2 as follows:

23        (35 ILCS 630/2) (from Ch. 120, par. 2002)
24        Sec.  2.   As  used  in  this Article, unless the context
25    clearly requires otherwise:
26        (a)  "Gross charge" means the amount paid for the act  or
27    privilege  of  originating or receiving telecommunications in
28    this State and for all services  and  equipment  provided  in
29    connection  therewith  by a retailer, valued in money whether
30    paid in money or otherwise, including cash, credits, services
31    and property of every kind or nature, and shall be determined
32    without  any  deduction  on  account  of  the  cost  of  such
 
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 1    telecommunications, the cost  of  materials  used,  labor  or
 2    service  costs  or  any  other  expense  whatsoever.  In case
 3    credit is extended, the amount thereof shall be included only
 4    as and when paid. "Gross charges" for  private  line  service
 5    shall  include  charges  imposed at each channel point within
 6    this State, charges for  the  channel  mileage  between  each
 7    channel point within this State, and charges for that portion
 8    of   the  interstate  inter-office  channel  provided  within
 9    Illinois. However, "gross charges" shall not include:
10             (1)  any amounts added to a purchaser's bill because
11        of a charge made pursuant to (i) the tax imposed by  this
12        Article;  (ii) charges added to customers' bills pursuant
13        to the provisions of  Sections  9-221  or  9-222  of  the
14        Public  Utilities Act, as amended, or any similar charges
15        added to  customers'  bills  by  retailers  who  are  not
16        subject  to  rate  regulation  by  the  Illinois Commerce
17        Commission for the purpose of recovering any of  the  tax
18        liabilities or other amounts specified in such provisions
19        of  such Act; or (iii) the tax imposed by Section 4251 of
20        the Internal Revenue Code;
21             (2)  charges for a  sent  collect  telecommunication
22        received outside of the State;
23             (3)  charges for leased time on equipment or charges
24        for  the  storage  of  data or information for subsequent
25        retrieval  or  the  processing  of  data  or  information
26        intended to change its form or content.   Such  equipment
27        includes,  but is not limited to, the use of calculators,
28        computers,   data   processing   equipment,    tabulating
29        equipment  or  accounting equipment and also includes the
30        usage of computers under a time-sharing agreement;
31             (4)  charges for customer equipment, including  such
32        equipment  that  is leased or rented by the customer from
33        any source, wherein such charges  are  disaggregated  and
34        separately identified from other charges;
 
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 1             (5)  charges to business enterprises certified under
 2        Section  9-222.1 of the Public Utilities Act, as amended,
 3        to the extent of such exemption and during the period  of
 4        time   specified   by  the  Department  of  Commerce  and
 5        Community Affairs;
 6             (6)  charges for telecommunications and all services
 7        and equipment provided in connection therewith between  a
 8        parent  corporation  and its wholly owned subsidiaries or
 9        between wholly owned subsidiaries when  the  tax  imposed
10        under  this  Article  has already been paid to a retailer
11        and only to the  extent  that  the  charges  between  the
12        parent  corporation  and  wholly  owned  subsidiaries  or
13        between   wholly  owned  subsidiaries  represent  expense
14        allocation  between  the   corporations   and   not   the
15        generation  of  profit for the corporation rendering such
16        service;
17             (7)  bad debts. Bad debt means any portion of a debt
18        that is related to a  sale  at  retail  for  which  gross
19        charges  are  not otherwise deductible or excludable that
20        has become  worthless  or  uncollectable,  as  determined
21        under  applicable  federal  income tax standards.  If the
22        portion of the debt deemed  to  be  bad  is  subsequently
23        paid,  the  retailer shall report and pay the tax on that
24        portion during the reporting period in which the  payment
25        is made;
26             (8)  charges    paid    by    inserting   coins   in
27        coin-operated telecommunication devices;
28             (9)  amounts paid  by  telecommunications  retailers
29        under  the  Telecommunications  Municipal  Infrastructure
30        Maintenance Fee Act.
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
 
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 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.
18        The  definition of "telecommunications" shall not include
19    value   added   services   in   which   computer   processing
20    applications are used to act on the form, content,  code  and
21    protocol   of   the   information  for  purposes  other  than
22    transmission.   "Telecommunications"   shall   not    include
23    purchases   of  telecommunications  by  a  telecommunications
24    service provider for use as a component part of  the  service
25    provided   by   him  to  the  ultimate  retail  consumer  who
26    originates   or    terminates    the    taxable    end-to-end
27    communications.      Beginning      January      1,     2000,
28    "telecommunications"  shall  not  include  prepaid  telephone
29    calling card arrangements; "prepaid  telephone  calling  card
30    arrangement"   means   the   right  to  exclusively  purchase
31    telecommunications services, whether an initial purchase or a
32    recharge, that must be paid for in advance and  that  enables
33    the   origination   of  calls  using  an  access  number  and
34    authorization  code,  whether  manually   or   electronically
 
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 1    dialed.  Carrier  access  charges,  right  of access charges,
 2    charges  for  use  of  inter-company  facilities,   and   all
 3    telecommunications  resold  in  the  subsequent provision of,
 4    used  as  a  component  of,  or  integrated  into  end-to-end
 5    telecommunications service shall be non-taxable as sales  for
 6    resale.
 7        (d)  "Interstate     telecommunications"     means    all
 8    telecommunications that either originate or terminate outside
 9    this State.
10        (e)  "Intrastate    telecommunications"     means     all
11    telecommunications  that  originate and terminate within this
12    State.
13        (f)  "Department" means the Department of Revenue of  the
14    State of Illinois.
15        (g)  "Director"  means  the  Director  of Revenue for the
16    Department of Revenue of the State of Illinois.
17        (h)  "Taxpayer"  means  a  person  who  individually   or
18    through  his  agents,  employees or permittees engages in the
19    act   or    privilege    of    originating    or    receiving
20    telecommunications  in  this  State  and  who  incurs  a  tax
21    liability under this Article.
22        (i)  "Person"  means any natural individual, firm, trust,
23    estate, partnership, association, joint stock company,  joint
24    venture,   corporation,   limited  liability  company,  or  a
25    receiver, trustee, guardian or other representative appointed
26    by order of any court, the  Federal  and  State  governments,
27    including  State universities created by statute or any city,
28    town, county or other political subdivision of this State.
29        (j)  "Purchase  at   retail"   means   the   acquisition,
30    consumption  or  use  of  telecommunication through a sale at
31    retail.
32        (k)  "Sale at retail" means the  transmitting,  supplying
33    or  furnishing  of  telecommunications  and  all services and
34    equipment   provided   in   connection   therewith   for    a
 
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 1    consideration  to  persons  other  than the Federal and State
 2    governments, and State universities created  by  statute  and
 3    other  than between a parent corporation and its wholly owned
 4    subsidiaries or between wholly owned subsidiaries  for  their
 5    use or consumption and not for resale.
 6        (l)  "Retailer"  means  and includes every person engaged
 7    in the business of making sales at retail as defined in  this
 8    Article.    The  Department  may,  in  its  discretion,  upon
 9    application, authorize  the  collection  of  the  tax  hereby
10    imposed  by  any retailer not maintaining a place of business
11    within  this  State,  who,  to  the   satisfaction   of   the
12    Department,  furnishes adequate security to insure collection
13    and payment of the  tax.   Such  retailer  shall  be  issued,
14    without  charge,  a  permit  to  collect  such  tax.  When so
15    authorized, it shall be the duty of such retailer to  collect
16    the  tax upon all of the gross charges for telecommunications
17    in this State in the same manner  and  subject  to  the  same
18    requirements  as  a  retailer maintaining a place of business
19    within  this  State.   The  permit  may  be  revoked  by  the
20    Department at its discretion.
21        (m)  "Retailer maintaining a place of  business  in  this
22    State",  or  any  like  term, means and includes any retailer
23    having or maintaining within this State,  directly  or  by  a
24    subsidiary,  an office, distribution facilities, transmission
25    facilities,  sales  office,  warehouse  or  other  place   of
26    business,  or  any  agent  or  other representative operating
27    within this State under the authority of the retailer or  its
28    subsidiary, irrespective of whether such place of business or
29    agent  or other representative is located here permanently or
30    temporarily,  or  whether  such  retailer  or  subsidiary  is
31    licensed to do business in this State.
32        (n)  "Service   address"   means    the    location    of
33    telecommunications      equipment      from     which     the
34    telecommunications  services  are  originated  or  at   which
 
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 1    telecommunications  services  are received by a taxpayer.  In
 2    the event this may not be a defined location, as in the  case
 3    of   mobile   phones,   paging   systems,  maritime  systems,
 4    air-to-ground systems and the  like,  service  address  shall
 5    mean  the  location  of  a  taxpayer's  primary  use  of  the
 6    telecommunications  equipment as defined by telephone number,
 7    authorization code, or location in Illinois where  bills  are
 8    sent.
 9    (Source: P.A. 90-562, eff. 12-16-97.)

10        Section  30.   The  Illinois Municipal Code is amended by
11    changing Sections 8-11-2 and 8-11-17 as follows:

12        (65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2)
13        Sec.   8-11-2.  The   corporate   authorities   of    any
14    municipality  may tax any or all of the following occupations
15    or privileges:
16             1.  Persons engaged in the business of  transmitting
17        messages by means of electricity or radio magnetic waves,
18        or  fiber optics, at a rate not to exceed 5% of the gross
19        receipts  from  that  business  originating  within   the
20        corporate limits of the municipality.
21             2.  Persons engaged in the business of distributing,
22        supplying,   furnishing,   or  selling  gas  for  use  or
23        consumption within the corporate limits of a municipality
24        of 500,000 or fewer population, and not for resale, at  a
25        rate not to exceed 5% of the gross receipts therefrom.
26             2a.  Persons    engaged    in    the   business   of
27        distributing, supplying, furnishing, or selling  gas  for
28        use  or  consumption  within  the  corporate  limits of a
29        municipality of over  500,000  population,  and  not  for
30        resale,  at a rate not to exceed 8% of the gross receipts
31        therefrom.  If imposed, this tax shall be paid in monthly
32        payments.
 
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 1             3.  The privilege of using or consuming  electricity
 2        acquired  in  a  purchase  at retail and used or consumed
 3        within the corporate limits of the municipality at  rates
 4        not  to exceed the following maximum rates, calculated on
 5        a monthly basis for each purchaser:
 6             (i)  For the  first  2,000  kilowatt-hours  used  or
 7        consumed in a month; 0.61 cents per kilowatt-hour;
 8             (ii)  For  the  next  48,000  kilowatt-hours used or
 9        consumed in a month; 0.40 cents per kilowatt-hour;
10             (iii)  For the next 50,000  kilowatt-hours  used  or
11        consumed in a month; 0.36 cents per kilowatt-hour;
12             (iv)  For  the  next  400,000 kilowatt-hours used or
13        consumed in a month; 0.35 cents per kilowatt-hour;
14             (v)  For the next  500,000  kilowatt-hours  used  or
15        consumed in a month; 0.34 cents per kilowatt-hour;
16             (vi)  For  the next 2,000,000 kilowatt-hours used or
17        consumed in a month; 0.32 cents per kilowatt-hour;
18             (vii)  For the next 2,000,000 kilowatt-hours used or
19        consumed in a month; 0.315 cents per kilowatt-hour;
20             (viii)  For the next 5,000,000  kilowatt-hours  used
21        or consumed in a month; 0.31 cents per kilowatt-hour;
22             (ix)  For the next 10,000,000 kilowatt-hours used or
23        consumed in a month; 0.305 cents per kilowatt-hour; and
24             (x)  For  all electricity used or consumed in excess
25        of 20,000,000 kilowatt-hours in a month, 0.30  cents  per
26        kilowatt-hour.
27             If  a municipality imposes a tax at rates lower than
28        either the maximum rates specified in this Section or the
29        alternative maximum rates  promulgated  by  the  Illinois
30        Commerce  Commission,  as  provided  below, the tax rates
31        shall be imposed upon the kilowatt  hour  categories  set
32        forth  above  with  the same proportional relationship as
33        that   which   exists   among   such    maximum    rates.
34        Notwithstanding  the  foregoing, until December 31, 2008,
 
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 1        no municipality shall establish rates that are in  excess
 2        of  rates  reasonably calculated to produce revenues that
 3        equal the maximum total revenues such municipality  could
 4        have   received   under   the   tax  authorized  by  this
 5        subparagraph in the last full calendar year prior to  the
 6        effective  date  of  Section 65 of this amendatory Act of
 7        1997; provided that this shall not be a limitation on the
 8        amount  of  tax  revenues  actually  collected  by   such
 9        municipality.
10             Upon  the  request of the corporate authorities of a
11        municipality, the  Illinois  Commerce  Commission  shall,
12        within  90 days after receipt of such request, promulgate
13        alternative  rates  for  each  of   these   kilowatt-hour
14        categories  that  will  reflect, as closely as reasonably
15        practical for that municipality, the distribution of  the
16        tax  among classes of purchasers as if the tax were based
17        on  a  uniform  percentage  of  the  purchase  price   of
18        electricity.    A   municipality   that  has  adopted  an
19        ordinance imposing a tax pursuant to subparagraph 3 as it
20        existed prior to the effective date of Section 65 of this
21        amendatory Act of 1997 may, rather than imposing the  tax
22        permitted  by  this  amendatory  Act of 1997, continue to
23        impose the tax pursuant to that ordinance with respect to
24        gross  receipts  received  from   residential   customers
25        through July 31, 1999, and with respect to gross receipts
26        from  any  non-residential  customer until the first bill
27        issued  to  such  customer  for  delivery   services   in
28        accordance  with  Section  16-104 of the Public Utilities
29        Act but in no case later than the  last  bill  issued  to
30        such  customer  before  December  31,  2000. No ordinance
31        imposing the tax permitted by this amendatory Act of 1997
32        shall be applicable to any non-residential customer until
33        the first bill  issued  to  such  customer  for  delivery
34        services  in accordance with Section 16-104 of the Public
 
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 1        Utilities Act but in no case later  than  the  last  bill
 2        issued  to  such non-residential customer before December
 3        31, 2000.
 4             4.  Persons engaged in the business of distributing,
 5        supplying,  furnishing,  or  selling  water  for  use  or
 6        consumption  within   the   corporate   limits   of   the
 7        municipality, and not for resale, at a rate not to exceed
 8        5% of the gross receipts therefrom.
 9        None  of  the  taxes  authorized  by  this Section may be
10    imposed  with  respect  to  any  transaction  in   interstate
11    commerce  or otherwise to the extent to which the business or
12    privilege may not, under the constitution and statutes of the
13    United States, be made the subject of taxation by this  State
14    or  any political sub-division thereof; nor shall any persons
15    engaged  in  the   business   of   distributing,   supplying,
16    furnishing,   selling   or   transmitting   gas,   water,  or
17    electricity, or  engaged  in  the  business  of  transmitting
18    messages,  or  using  or  consuming electricity acquired in a
19    purchase  at  retail,  be  subject  to  taxation  under   the
20    provisions of this Section for those transactions that are or
21    may  become  subject  to taxation under the provisions of the
22    "Municipal  Retailers'  Occupation  Tax  Act"  authorized  by
23    Section 8-11-1; nor shall any tax authorized by this  Section
24    be  imposed  upon  any person engaged in a business or on any
25    privilege unless the tax is imposed in like manner and at the
26    same rate upon all persons engaged in businesses of the  same
27    class  in  the municipality, whether privately or municipally
28    owned or operated, or exercising the  same  privilege  within
29    the municipality.
30        Any  of  the  taxes  enumerated in this Section may be in
31    addition to the payment of money, or  value  of  products  or
32    services  furnished  to  the  municipality by the taxpayer as
33    compensation for the use of its  streets,  alleys,  or  other
34    public  places,  or  installation  and  maintenance  therein,
 
SB659 Engrossed             -14-               LRB9104061PTmb
 1    thereon  or  thereunder  of  poles,  wires,  pipes  or  other
 2    equipment used in the operation of the taxpayer's business.
 3        (a)  If  the  corporate  authorities  of  any  home  rule
 4    municipality  have adopted an ordinance that imposed a tax on
 5    public utility customers, between July 1, 1971,  and  October
 6    1,  1981,  on the good faith belief that they were exercising
 7    authority pursuant to Section 6 of Article VII  of  the  1970
 8    Illinois   Constitution,   that   action   of  the  corporate
 9    authorities   shall   be   declared    legal    and    valid,
10    notwithstanding  a  later  decision  of  a  judicial tribunal
11    declaring the ordinance invalid.  No  municipality  shall  be
12    required  to  rebate,  refund, or issue credits for any taxes
13    described in this paragraph, and those taxes shall be  deemed
14    to  have  been  levied  and  collected in accordance with the
15    Constitution and laws of this State.
16        (b)  In any case in which (i) prior to October 19,  1979,
17    the corporate authorities of any municipality have adopted an
18    ordinance  imposing  a  tax authorized by this Section (or by
19    the predecessor provision of the "Revised Cities and Villages
20    Act") and have explicitly or in  practice  interpreted  gross
21    receipts  to include either charges added to customers' bills
22    pursuant to the provision of paragraph (a) of Section  36  of
23    the Public Utilities Act or charges added to customers' bills
24    by  taxpayers  who  are not subject to rate regulation by the
25    Illinois Commerce Commission for the  purpose  of  recovering
26    any of the tax liabilities or other amounts specified in such
27    paragraph (a) of Section 36 of that Act, and (ii) on or after
28    October  19,  1979,  a  judicial tribunal has construed gross
29    receipts to exclude  all  or  part  of  those  charges,  then
30    neither  those municipality nor any taxpayer who paid the tax
31    shall be required to rebate, refund, or issue credits for any
32    tax imposed or charge collected from  customers  pursuant  to
33    the  municipality's interpretation prior to October 19, 1979.
34    This paragraph reflects a legislative finding that  it  would
 
SB659 Engrossed             -15-               LRB9104061PTmb
 1    be  contrary to the public interest to require a municipality
 2    or its taxpayers to refund taxes or charges  attributable  to
 3    the  municipality's  more  inclusive  interpretation of gross
 4    receipts prior to October 19, 1979, and is  not  intended  to
 5    prescribe or limit judicial construction of this Section. The
 6    legislative  finding  set  forth  in this subsection does not
 7    apply to taxes imposed  after  the  effective  date  of  this
 8    amendatory Act of 1995.
 9        (c)  The  tax  authorized  by  subparagraph  3  shall  be
10    collected  from  the  purchaser   by the person maintaining a
11    place of business in this State who delivers the  electricity
12    to  the  purchaser.   This tax shall constitute a debt of the
13    purchaser to the person who delivers the electricity  to  the
14    purchaser and if unpaid, is recoverable in the same manner as
15    the  original charge for delivering the electricity.  Any tax
16    required to be collected pursuant to an ordinance  authorized
17    by  subparagraph  3  and  any  such tax collected by a person
18    delivering electricity shall constitute a debt  owed  to  the
19    municipality  by  such  person  delivering  the  electricity,
20    provided,  that  the  person  delivering electricity shall be
21    allowed  credit  for  such  tax  related  to  deliveries   of
22    electricity   the  charges  for  which  are  written  off  as
23    uncollectible, and provided further, that if such charges are
24    thereafter  collected,  the  delivering  supplier  shall   be
25    obligated to remit such tax.  For purposes of this subsection
26    (c),  any  partial payment not specifically identified by the
27    purchaser  shall  be  deemed  to  be  for  the  delivery   of
28    electricity. Persons delivering electricity shall collect the
29    tax from the purchaser by adding such tax to the gross charge
30    for  delivering  the electricity, in the manner prescribed by
31    the municipality.  Persons delivering electricity shall  also
32    be  authorized to add to such gross charge an amount equal to
33    3% of the tax to reimburse the person delivering  electricity
34    for   the  expenses  incurred  in  keeping  records,  billing
 
SB659 Engrossed             -16-               LRB9104061PTmb
 1    customers, preparing and filing returns,  remitting  the  tax
 2    and  supplying data to the municipality upon request.  If the
 3    person delivering electricity fails to collect the  tax  from
 4    the  purchaser,  then  the purchaser shall be required to pay
 5    the tax directly to the municipality in the manner prescribed
 6    by the municipality.  Persons delivering electricity who file
 7    returns pursuant to this paragraph (c) shall, at the time  of
 8    filing  such  return,  pay the municipality the amount of the
 9    tax collected pursuant to subparagraph 3.
10        (d)  For the purpose of  the  taxes  enumerated  in  this
11    Section:
12        "Gross receipts" means the consideration received for the
13    transmission  of  messages,  the  consideration  received for
14    distributing, supplying, furnishing or selling gas for use or
15    consumption  and  not  for  resale,  and  the   consideration
16    received  for  distributing, supplying, furnishing or selling
17    water for use or consumption and not for resale, and for  all
18    services  rendered  in  connection therewith valued in money,
19    whether received  in  money  or  otherwise,  including  cash,
20    credit,  services and property of every kind and material and
21    for all services rendered therewith, and shall be  determined
22    without  any deduction on account of the cost of transmitting
23    such messages, without any deduction on account of  the  cost
24    of  the  service,  product or commodity supplied, the cost of
25    materials used, labor or service cost, or any other  expenses
26    whatsoever.   "Gross receipts" shall not include that portion
27    of the consideration received  for  distributing,  supplying,
28    furnishing,   or   selling  gas  or  water  to,  or  for  the
29    transmission of messages for, business enterprises  described
30    in paragraph (e) of this Section to the extent and during the
31    period  in which the exemption authorized by paragraph (e) is
32    in  effect  or  for  school  districts  or  units  of   local
33    government  described  in  paragraph (f) during the period in
34    which the exemption authorized in paragraph (f) is in effect.
 
SB659 Engrossed             -17-               LRB9104061PTmb
 1    "Gross  receipts"  shall  not   include   amounts   paid   by
 2    telecommunications  retailers  under  the  Telecommunications
 3    Municipal Infrastructure Maintenance Fee Act.
 4        For  utility  bills  issued  on or after May 1, 1996, but
 5    before May 1, 1997,  and  for  receipts  from  those  utility
 6    bills,  "gross  receipts"  does  not include one-third of (i)
 7    amounts added to customers' bills under Section 9-222 of  the
 8    Public  Utilities  Act,  or  (ii) amounts added to customers'
 9    bills by taxpayers who are not subject to rate regulation  by
10    the   Illinois   Commerce   Commission  for  the  purpose  of
11    recovering any of the tax liabilities  described  in  Section
12    9-222  of  the Public Utilities Act. For utility bills issued
13    on or after May 1, 1997, but before  May  1,  1998,  and  for
14    receipts  from those utility bills, "gross receipts" does not
15    include two-thirds of (i) amounts added to  customers'  bills
16    under  Section  9-222  of  the  Public Utilities Act, or (ii)
17    amount added to customers' bills by  taxpayers  who  are  not
18    subject   to   rate   regulation  by  the  Illinois  Commerce
19    Commission for the purpose  of  recovering  any  of  the  tax
20    liabilities   described   in  Section  9-222  of  the  Public
21    Utilities Act. For utility bills issued on or  after  May  1,
22    1998,  and  for  receipts  from  those  utility bills, "gross
23    receipts" does not include (i) amounts  added  to  customers'
24    bills  under  Section  9-222  of the Public Utilities Act, or
25    (ii) amounts added to customers' bills by taxpayers  who  are
26    not  subject  to  rate  regulation  by  the Illinois Commerce
27    Commission for the purpose  of  recovering  any  of  the  tax
28    liabilities   described   in  Section  9-222  of  the  Public
29    Utilities Act.
30        For purposes of this Section "gross receipts"  shall  not
31    include  (i)  amounts added to customers' bills under Section
32    9-221 of the Public Utilities Act, or (ii) charges  added  to
33    customers'  bills  to recover the surcharge imposed under the
34    Emergency  Telephone  System  Act.  This  paragraph  is   not
 
SB659 Engrossed             -18-               LRB9104061PTmb
 1    intended  to  nor  does  it make any change in the meaning of
 2    "gross receipts" for the purposes of  this  Section,  but  is
 3    intended  to  remove possible ambiguities, thereby confirming
 4    the  existing  meaning  of  "gross  receipts"  prior  to  the
 5    effective date of this amendatory Act of 1995.
 6        The words "transmitting messages",  in  addition  to  the
 7    usual  and popular meaning of person to person communication,
 8    shall  include  the  furnishing,  for  a  consideration,   of
 9    services or facilities (whether owned or leased), or both, to
10    persons in connection with the transmission of messages where
11    those  persons  do not, in turn, receive any consideration in
12    connection therewith, but shall not include  such  furnishing
13    of  services or facilities to persons for the transmission of
14    messages to the extent that any such services  or  facilities
15    for   the  transmission  of  messages  are  furnished  for  a
16    consideration, by those persons to  other  persons,  for  the
17    transmission   of   messages.   Beginning  January  1,  2000,
18    "transmitting messages" shall not include  prepaid  telephone
19    calling  card  arrangements;  "prepaid telephone calling card
20    arrangement"  means  the  right   to   exclusively   purchase
21    telecommunications services, whether an initial purchase or a
22    recharge,  that  must be paid for in advance and that enables
23    the  origination  of  calls  using  an  access   number   and
24    authorization   code,   whether  manually  or  electronically
25    dialed.
26        "Person" as  used  in  this  Section  means  any  natural
27    individual,  firm,  trust,  estate, partnership, association,
28    joint stock company, joint  adventure,  corporation,  limited
29    liability company, municipal corporation, the State or any of
30    its  political  subdivisions, any State university created by
31    statute,  or  a  receiver,   trustee,   guardian   or   other
32    representative appointed by order of any court.
33        "Person  maintaining  a  place of business in this State"
34    shall mean any  person  having  or  maintaining  within  this
 
SB659 Engrossed             -19-               LRB9104061PTmb
 1    State,  directly  or  by  a subsidiary or other affiliate, an
 2    office,   generation   facility,    distribution    facility,
 3    transmission   facility,  sales  office  or  other  place  of
 4    business, or any employee,  agent,  or  other  representative
 5    operating within this State under the authority of the person
 6    or its subsidiary or other affiliate, irrespective of whether
 7    such  place  of  business or agent or other representative is
 8    located in this State permanently or temporarily, or  whether
 9    such  person,  subsidiary  or  other affiliate is licensed or
10    qualified to do business in this State.
11        "Public utility" shall have the meaning ascribed to it in
12    Section 3-105 of the Public Utilities Act and  shall  include
13    telecommunications  carriers  as defined in Section 13-202 of
14    that Act and alternative retail electric suppliers as defined
15    in Section 16-102 of that Act.
16        "Purchase  at  retail"  shall  mean  any  acquisition  of
17    electricity  by  a  purchaser  for   purposes   of   use   or
18    consumption,  and  not  for resale, but shall not include the
19    use of electricity  by  a  public  utility  directly  in  the
20    generation,  production,  transmission,  delivery  or sale of
21    electricity.
22        "Purchaser" shall mean any person who uses  or  consumes,
23    within  the corporate limits of the municipality, electricity
24    acquired in a purchase at retail.
25        In the  case  of  persons  engaged  in  the  business  of
26    transmitting  messages  through  the use of mobile equipment,
27    such  as  cellular  phones  and  paging  systems,  the  gross
28    receipts  from  the  business  shall  be  deemed to originate
29    within the corporate limits of a  municipality  only  if  the
30    address to which the bills for the service are sent is within
31    those  corporate  limits.  If,  however,  that address is not
32    located within a municipality that imposes a tax  under  this
33    Section,  then  (i)  if the party responsible for the bill is
34    not an individual, the gross receipts from the business shall
 
SB659 Engrossed             -20-               LRB9104061PTmb
 1    be deemed to originate within the  corporate  limits  of  the
 2    municipality  where  that party's principal place of business
 3    in Illinois is located, and (ii) if the party responsible for
 4    the bill is  an  individual,  the  gross  receipts  from  the
 5    business  shall  be  deemed to originate within the corporate
 6    limits of  the  municipality  where  that  party's  principal
 7    residence in Illinois is located.
 8        (e)  Any  municipality  that  imposes  taxes  upon public
 9    utilities  or  upon  the  privilege  of  using  or  consuming
10    electricity pursuant to this Section whose territory includes
11    any part  of  an  enterprise  zone  or  federally  designated
12    Foreign Trade Zone or Sub-Zone may, by a majority vote of its
13    corporate  authorities,  exempt from those taxes for a period
14    not exceeding 20 years  any  specified  percentage  of  gross
15    receipts  of  public  utilities received from, or electricity
16    used or consumed by, business enterprises that:
17             (1)  either (i)  make  investments  that  cause  the
18        creation of a minimum of 200 full-time equivalent jobs in
19        Illinois,  (ii) make investments of at least $175,000,000
20        that cause the creation of a  minimum  of  150  full-time
21        equivalent  jobs  in  Illinois, or (iii) make investments
22        that cause the retention of a minimum of 1,000  full-time
23        jobs in Illinois; and
24             (2)  are  either  (i)  located in an Enterprise Zone
25        established pursuant to the Illinois Enterprise Zone  Act
26        or  (ii)  Department  of  Commerce  and Community Affairs
27        designated High Impact Businesses located in a  federally
28        designated Foreign Trade Zone or Sub-Zone; and
29             (3)  are certified by the Department of Commerce and
30        Community  Affairs  as  complying  with  the requirements
31        specified in clauses (1) and (2) of this paragraph (e).
32        Upon adoption of the ordinance authorizing the exemption,
33    the municipal clerk shall transmit a copy of  that  ordinance
34    to  the  Department  of  Commerce and Community Affairs.  The
 
SB659 Engrossed             -21-               LRB9104061PTmb
 1    Department of Commerce and Community Affairs shall  determine
 2    whether  the business enterprises located in the municipality
 3    meet the criteria  prescribed  in  this  paragraph.   If  the
 4    Department  of Commerce and Community Affairs determines that
 5    the business enterprises meet the criteria,  it  shall  grant
 6    certification.   The  Department  of  Commerce  and Community
 7    Affairs shall act upon certification requests within 30  days
 8    after receipt of the ordinance.
 9        Upon  certification  of  the  business  enterprise by the
10    Department of Commerce and Community Affairs, the  Department
11    of Commerce and Community Affairs shall notify the Department
12    of  Revenue  of the certification.  The Department of Revenue
13    shall notify the public utilities of the exemption status  of
14    the gross receipts received from, and the electricity used or
15    consumed   by,  the  certified  business  enterprises.   Such
16    exemption status shall be effective  within  3  months  after
17    certification.
18        (f)  A   municipality  that  imposes  taxes  upon  public
19    utilities  or  upon  the  privilege  of  using  or  consuming
20    electricity under this Section and whose  territory  includes
21    part of another unit of local government or a school district
22    may by ordinance exempt the other unit of local government or
23    school district from those taxes.
24        (g)  The  amendment  of this Section by Public Act 84-127
25    shall take  precedence  over  any  other  amendment  of  this
26    Section  by  any  other  amendatory  Act  passed  by the 84th
27    General Assembly before the  effective  date  of  Public  Act
28    84-127.
29        (h)  In  any case in which, before July 1, 1992, a person
30    engaged in the business of transmitting messages through  the
31    use  of  mobile equipment, such as cellular phones and paging
32    systems, has determined the  municipality  within  which  the
33    gross  receipts  from the business originated by reference to
34    the location of its transmitting or switching equipment, then
 
SB659 Engrossed             -22-               LRB9104061PTmb
 1    (i) neither the municipality to which tax was  paid  on  that
 2    basis  nor  the taxpayer that paid tax on that basis shall be
 3    required to rebate, refund, or issue credits for any such tax
 4    or charge collected from customers to reimburse the  taxpayer
 5    for  the tax and (ii) no municipality to which tax would have
 6    been paid  with  respect  to  those  gross  receipts  if  the
 7    provisions  of this amendatory Act of 1991 had been in effect
 8    before July  1,  1992,  shall  have  any  claim  against  the
 9    taxpayer for any amount of the tax.
10    (Source: P.A.  89-325,  eff.  1-1-96;  90-16,  eff.  6-16-97;
11    90-561,  eff.  8-1-98;  90-562,  eff.  12-16-97; 90-655, eff.
12    7-30-98.)

13        (65 ILCS 5/8-11-17) (from Ch. 24, par. 8-11-17)
14        Sec. 8-11-17.  Municipal telecommunications tax.
15        (a)  Beginning on the effective date of  this  amendatory
16    Act of 1991, the corporate authorities of any municipality in
17    this  State  may  tax  any  or  all  of the following acts or
18    privileges:
19             (1)  The act or privilege  of  originating  in  such
20        municipality or receiving in such municipality intrastate
21        telecommunications by a person at a rate not to exceed 5%
22        of the gross charge for such telecommunications purchased
23        at  retail from a retailer by such person.  However, such
24        tax is not imposed on such act or privilege to the extent
25        such act or privilege may not, under the Constitution and
26        statutes of the United States, be  made  the  subject  of
27        taxation by municipalities in this State.
28             (2)  The  act  or  privilege  of originating in such
29        municipality or receiving in such municipality interstate
30        telecommunications by a person at a rate not to exceed 5%
31        of the gross charge for such telecommunications purchased
32        at retail from a retailer by  such  person.   To  prevent
33        actual  multi-state taxation of the act or privilege that
 
SB659 Engrossed             -23-               LRB9104061PTmb
 1        is  subject  to  taxation  under  this   paragraph,   any
 2        taxpayer,  upon proof that the taxpayer has paid a tax in
 3        another state on such event, shall be  allowed  a  credit
 4        against   any   tax  enacted  pursuant  to  an  ordinance
 5        authorized by this paragraph to the extent of the  amount
 6        of  such  tax  properly  due and paid in such other state
 7        which was not previously allowed as a credit against  any
 8        other  state  or  local tax in this State.  However, such
 9        tax is not imposed on the act or privilege to the  extent
10        such act or privilege may not, under the Constitution and
11        statutes  of  the  United  States, be made the subject of
12        taxation by municipalities in this State.
13             (3)  The taxes authorized by paragraphs (1) and  (2)
14        of  subsection  (a) of this Section may only be levied if
15        such  municipality  does  not  then  have  in  effect  an
16        occupation tax imposed on persons engaged in the business
17        of transmitting  messages  by  means  of  electricity  as
18        authorized  by  Section  8-11-2 of the Illinois Municipal
19        Code.
20        (b)  The  tax  authorized  by  this  Section   shall   be
21    collected from the taxpayer by a retailer maintaining a place
22    of business in this State and making or effectuating the sale
23    at  retail  and  shall  be  remitted  by such retailer to the
24    municipality.  Any tax required to be collected  pursuant  to
25    an  ordinance  authorized  by  this  Section and any such tax
26    collected by such retailer shall constitute a  debt  owed  by
27    the  retailer  to  such municipality. Retailers shall collect
28    the tax from the taxpayer by adding  the  tax  to  the  gross
29    charge  for  the act or privilege of originating or receiving
30    telecommunications  when  sold  for  use,   in   the   manner
31    prescribed  by  the municipality.  The tax authorized by this
32    Section shall constitute a  debt  of  the  purchaser  to  the
33    retailer  who  provides such taxable services until paid and,
34    if unpaid, is recoverable at law in the same  manner  as  the
 
SB659 Engrossed             -24-               LRB9104061PTmb
 1    original  charge  for such taxable services.  If the retailer
 2    fails to collect the tax from the taxpayer, then the taxpayer
 3    shall be required to pay the tax directly to the municipality
 4    in the manner provided by the municipality.  The municipality
 5    imposing the tax shall provide  for  its  administration  and
 6    enforcement.
 7        Beginning  January  1, 1994, retailers filing tax returns
 8    pursuant to this Section shall, at the time  of  filing  such
 9    return, pay to the municipality the amount of the tax imposed
10    by  this Section, less a commission of 1.75% which is allowed
11    to reimburse  the  retailer  for  the  expenses  incurred  in
12    keeping  records,  billing the customer, preparing and filing
13    returns,  remitting  the  tax  and  supplying  data  to   the
14    municipality  upon request. No commission may be claimed by a
15    retailer for tax not timely remitted to the municipality.
16        Whenever possible, the tax  authorized  by  this  Section
17    shall,  when collected, be stated as a distinct item separate
18    and apart from the gross charge for telecommunications.
19        (c)  For the purpose of  the  taxes  authorized  by  this
20    Section:
21             (1)  "Amount  paid"  means the amount charged to the
22        taxpayer's   service   address   in   such   municipality
23        regardless of where such amount is billed or paid.
24             (2)  "Gross charge" means the amount  paid  for  the
25        act    or   privilege   of   originating   or   receiving
26        telecommunications  in  such  municipality  and  for  all
27        services rendered  in  connection  therewith,  valued  in
28        money whether paid in money or otherwise, including cash,
29        credits,  services  and property of every kind or nature,
30        and shall be determined without any deduction on  account
31        of  the  cost of such telecommunications, the cost of the
32        materials used, labor  or  service  costs  or  any  other
33        expense  whatsoever.   In  case  credit  is extended, the
34        amount thereof shall be included only as and  when  paid.
 
SB659 Engrossed             -25-               LRB9104061PTmb
 1        However, "gross charge" shall not include:
 2                  (A)  any  amounts  added  to a purchaser's bill
 3             because of a charge made pursuant to:  (i)  the  tax
 4             imposed  by  this  Section,  (ii) additional charges
 5             added to a purchaser's   bill  pursuant  to  Section
 6             9-222  of  the  Public  Utilities Act, (iii) the tax
 7             imposed by the Telecommunications Excise Tax Act, or
 8             (iv) the tax imposed by Section 4251 of the Internal
 9             Revenue Code;
10                  (B)  charges     for     a     sent     collect
11             telecommunication   received   outside    of    such
12             municipality;
13                  (C)  charges  for  leased  time on equipment or
14             charges for the storage of data  or  information  or
15             subsequent  retrieval  or  the processing of data or
16             information intended to change its form or  content.
17             Such  equipment includes, but is not limited to, the
18             use  of  calculators,  computers,  data   processing
19             equipment,   tabulating   equipment   or  accounting
20             equipment and also includes the usage  of  computers
21             under a time-sharing agreement;
22                  (D)  charges  for customer equipment, including
23             such equipment that  is  leased  or  rented  by  the
24             customer  from  any source, wherein such charges are
25             disaggregated and separately identified  from  other
26             charges;
27                  (E)  charges  to business enterprises certified
28             under Section 9-222.1 of the Public Utilities Act to
29             the extent of such exemption and during  the  period
30             of  time specified by the Department of Commerce and
31             Community Affairs;
32                  (F)  charges  for  telecommunications  and  all
33             services  and  equipment  provided   in   connection
34             therewith  between  a  parent  corporation  and  its
 
SB659 Engrossed             -26-               LRB9104061PTmb
 1             wholly  owned  subsidiaries  or between wholly owned
 2             subsidiaries when the tax imposed under this Section
 3             has already been paid to a retailer and only to  the
 4             extent   that   the   charges   between  the  parent
 5             corporation and wholly owned subsidiaries or between
 6             wholly   owned   subsidiaries   represent    expense
 7             allocation  between  the  corporations  and  not the
 8             generation of profit for the  corporation  rendering
 9             such service;
10                  (G)  bad debts ("bad debt" means any portion of
11             a debt that is related to a sale at retail for which
12             gross   charges  are  not  otherwise  deductible  or
13             excludable   that   has    become    worthless    or
14             uncollectable,   as   determined   under  applicable
15             federal income tax standards; if the portion of  the
16             debt  deemed  to  be  bad  is subsequently paid, the
17             retailer shall  report  and  pay  the  tax  on  that
18             portion  during  the  reporting  period in which the
19             payment is made);
20                  (H)  charges  paid  by   inserting   coins   in
21             coin-operated telecommunication devices; or
22                  (I)  amounts    paid    by   telecommunications
23             retailers  under  the  Telecommunications  Municipal
24             Infrastructure Maintenance Fee Act.
25             (3)  "Interstate   telecommunications"   means   all
26        telecommunications that  either  originate  or  terminate
27        outside this State.
28             (4)  "Intrastate   telecommunications"   means   all
29        telecommunications  that  originate  and terminate within
30        this State.
31             (5)  "Person" means any  natural  individual,  firm,
32        trust,  estate,  partnership,  association,  joint  stock
33        company,  joint  venture,  corporation, limited liability
34        company,  or  a  receiver,  trustee,  guardian  or  other
 
SB659 Engrossed             -27-               LRB9104061PTmb
 1        representative appointed  by  order  of  any  court,  the
 2        Federal    and   State   governments,   including   State
 3        universities created  by  statute,  or  any  city,  town,
 4        county, or other political subdivision of this State.
 5             (6)  "Purchase  at  retail"  means  the acquisition,
 6        consumption or use of telecommunications through  a  sale
 7        at retail.
 8             (7)  "Retailer"  means  and  includes  every  person
 9        engaged  in  the  business  of  making sales at retail as
10        defined in this Section.   A  municipality  may,  in  its
11        discretion, upon application, authorize the collection of
12        the  tax hereby imposed by any retailer not maintaining a
13        place  of  business  within  this  State,  who   to   the
14        satisfaction  of  the  municipality,  furnishes  adequate
15        security  to  insure  collection  and payment of the tax.
16        Such retailer shall be issued, without charge,  a  permit
17        to collect such tax.  When so authorized, it shall be the
18        duty  of such retailer to collect the tax upon all of the
19        gross charges for telecommunications in such municipality
20        in the same manner and subject to the  same  requirements
21        as a retailer maintaining a place of business within such
22        municipality.
23             (8)  "Retailer  maintaining  a  place of business in
24        this State", or any like term,  means  and  includes  any
25        retailer   having   or  maintaining  within  this  State,
26        directly or by  a  subsidiary,  an  office,  distribution
27        facilities,   transmission   facilities,   sales  office,
28        warehouse or other place of business,  or  any  agent  or
29        other  representative  operating  within this State under
30        the  authority  of  the  retailer  or   its   subsidiary,
31        irrespective  of  whether such place of business or agent
32        or other representative is located  here  permanently  or
33        temporarily,  or  whether  such retailer or subsidiary is
34        licensed to do business in this State.
 
SB659 Engrossed             -28-               LRB9104061PTmb
 1             (9)  "Sale  at  retail"  means   the   transmitting,
 2        supplying  or  furnishing  of  telecommunications and all
 3        services  rendered  in   connection   therewith   for   a
 4        consideration,  to  persons  other  than  the Federal and
 5        State governments,  and  State  universities  created  by
 6        statute  and  other than between a parent corporation and
 7        its wholly owned subsidiaries  or  between  wholly  owned
 8        subsidiaries,  when  the  tax  has already been paid to a
 9        retailer  and  the  gross  charge  made   by   one   such
10        corporation  to  another  such corporation is not greater
11        than the gross charge paid to the retailer for their  use
12        or consumption and not for resale.
13             (10)  "Service   address"   means  the  location  of
14        telecommunications       equipment       from       which
15        telecommunications services are originated  or  at  which
16        telecommunications  services  are received by a taxpayer.
17        If this is not a defined location,  as  in  the  case  of
18        mobile   phones,   paging   systems,   maritime  systems,
19        air-to-ground systems and  the  like,  "service  address"
20        shall  mean  the  location of a taxpayer's primary use of
21        the telecommunication equipment as defined  by  telephone
22        number, authorization code, or location in Illinois where
23        bills are sent.
24             (11)  "Taxpayer"  means a person who individually or
25        through his agents, employees, or permittees  engages  in
26        the  act or privilege of originating in such municipality
27        or receiving in such municipality telecommunications  and
28        who incurs a tax liability under any ordinance authorized
29        by this Section.
30             (12)  "Telecommunications", in addition to the usual
31        and  popular  meaning,  includes,  but is not limited to,
32        messages or information transmitted through use of local,
33        toll and wide area telephone service,  channel  services,
34        telegraph   services,  teletypewriter  service,  computer
 
SB659 Engrossed             -29-               LRB9104061PTmb
 1        exchange  services;  cellular  mobile  telecommunications
 2        service,  specialized  mobile  radio   services,   paging
 3        service, or any other form of mobile and portable one-way
 4        or  two-way  communications, or any other transmission of
 5        messages or information by electronic or  similar  means,
 6        between  or  among  points  by wire, cable, fiber optics,
 7        laser, microwave, radio, satellite or similar facilities.
 8             The definition  of  "telecommunications"  shall  not
 9        include value added services in which computer processing
10        applications  are  used to act on the form, content, code
11        and protocol of the information for purposes  other  than
12        transmission.   "Telecommunications"  shall  not  include
13        purchase  of  telecommunications  by a telecommunications
14        service provider for use  as  a  component  part  of  the
15        service  provided  by him to the ultimate retail consumer
16        who  originates  or  terminates  the  taxable  end-to-end
17        communications.    Beginning     January     1,     2000,
18        "telecommunications"  shall not include prepaid telephone
19        calling card  arrangements;  "prepaid  telephone  calling
20        card arrangement" means the right to exclusively purchase
21        telecommunications  services, whether an initial purchase
22        or a recharge, that must be paid for in advance and  that
23        enables  the  origination of calls using an access number
24        and   authorization    code,    whether    manually    or
25        electronically  dialed.  Carrier access charges, right of
26        access  charges,  charges  for   use   of   inter-company
27        facilities,  and  all  telecommunications  resold  in the
28        subsequent  provision  used  as  a   component   of,   or
29        integrated  into,  end-to-end  telecommunications service
30        shall be non-taxable as sales for resale.
31        (d)  If   a   person,   who   originates   or    receives
32    telecommunications  in  such  municipality  claims  to  be  a
33    reseller  of such telecommunications, such person shall apply
34    to the municipality for  a  resale  number.   Such  applicant
 
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 1    shall  state  facts which will show the municipality why such
 2    applicant  is  not  liable  for  tax  under   any   ordinance
 3    authorized by this Section on any of such purchases and shall
 4    furnish  such  additional information as the municipality may
 5    reasonably require.
 6        Upon approval of the application, the municipality  shall
 7    assign  a  resale  number  to the applicant and shall certify
 8    such number to the applicant.  The  municipality  may  cancel
 9    any  number  which  is obtained through misrepresentation, or
10    which is used  to  send  or  receive  such  telecommunication
11    tax-free  when  such  actions  in fact are not for resale, or
12    which no  longer  applies  because  of  the  person's  having
13    discontinued the making of resales.
14        Except  as  provided hereinabove in this Section, the act
15    or privilege of sending or  receiving  telecommunications  in
16    this  State shall not be made tax-free on the ground of being
17    a sale for resale unless the  person  has  an  active  resale
18    number from the municipality and furnishes that number to the
19    retailer  in  connection with certifying to the retailer that
20    any sale to such person is non-taxable  because  of  being  a
21    sale for resale.
22        (e)  A    municipality    that    imposes    taxes   upon
23    telecommunications under this  Section  and  whose  territory
24    includes part of another unit of local government or a school
25    district  may,  by  ordinance, exempt the other unit of local
26    government or school district from those taxes.
27        (f)  A   municipality    that    imposes    taxes    upon
28    telecommunications  under this Section may, by ordinance, (i)
29    reduce the rate of the tax for persons 65  years  of  age  or
30    older  or  (ii)  exempt persons 65 years of age or older from
31    those taxes.   Taxes  related  to  such  rate  reductions  or
32    exemptions shall be rebated from the municipality directly to
33    persons  qualified  for  the  rate  reduction or exemption as
34    determined by the municipality's ordinance.
 
SB659 Engrossed             -31-               LRB9104061PTmb
 1    (Source: P.A. 90-357, eff. 1-1-98; 90-562, eff. 12-16-97.)

 2        Section 99.  Effective date.  This Act takes effect  upon
 3    becoming law.

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