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|[ Introduced ]||[ Engrossed ]||[ House Amendment 001 ]|
|[ House Amendment 002 ]|
92_HB0843enr HB0843 Enrolled LRB9205887REdv 1 AN ACT concerning telecommunications. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 1. Short title. This Act may be cited as the 5 Mobile Telecommunications Sourcing Conformity Act. 6 Section 5. Legislative intent. The General Assembly 7 recognizes that the Mobile Telecommunications Sourcing Act, 8 Public Law 106-252, codified at 4 U.S.C Sections 116 through 9 126, was passed by the United States Congress to establish 10 sourcing requirements for state and local taxation of mobile 11 telecommunication services. In general, the rules provide 12 that taxes on mobile telecommunications services shall be 13 collected and remitted to the jurisdiction where the 14 customer's primary use of the services occurs, irrespective 15 of where the mobile telecommunications services originate, 16 terminate, or pass through. By passing this legislation in 17 the State of Illinois, the General Assembly desires to 18 implement that Act in this State by establishing the Mobile 19 Telecommunications Sourcing Conformity Act and to inform 20 State and local government officials of its provisions as it 21 applies to the taxes of this State. 22 Section 10. Definitions. As used in this Act: 23 "Charges for mobile telecommunications services" means 24 any charge for, or associated with, the provision of 25 commercial mobile radio service, as defined in Section 20.3 26 of Title 47 of the Code of Federal Regulations as in effect 27 on June 1, 1999, or any charge for, or associated with, a 28 service provided as an adjunct to a commercial mobile radio 29 service, that is billed to the customer by or for the 30 customer's home service provider regardless of whether HB0843 Enrolled -2- LRB9205887REdv 1 individual transmissions originate or terminate within the 2 licensed service area of the home service provider. 3 "Customer" means (i) the person or entity that contracts 4 with the home service provider for mobile telecommunications 5 services or (ii) if the end user of mobile telecommunications 6 services is not the contracting party, the end user of the 7 mobile telecommunications services, but this clause (ii) 8 applies only for the purpose of determining the place of 9 primary use. "Customer" does not include (i) a reseller of 10 mobile telecommunications service or (ii) a serving carrier 11 under an arrangement to serve the customer outside the home 12 service provider's licensed service area. 13 "Designated database provider" means a corporation, 14 association, or other entity representing all the political 15 subdivisions of a State that is: 16 (i) responsible for providing an electronic 17 database prescribed in Section 25 if the State has not 18 provided such electronic database; and 19 (ii) approved by municipal and county associations 20 or leagues of the State whose responsibility it would 21 otherwise be to provide such database prescribed by 22 Sections 116 through 126 of Title 4 of the United States 23 Code. 24 "Enhanced zip code" means a United States postal zip code 25 of 9 or more digits. 26 "Home service provider" means the facilities-based 27 carrier or reseller with which the customer contracts for the 28 provision of mobile telecommunications services. 29 "Licensed service area" means the geographic area in 30 which the home service provider is authorized by law or 31 contract to provide commercial mobile radio service to the 32 customer. 33 "Mobile telecommunications service" means commercial 34 mobile radio service, as defined in Section 20.3 of Title 47 HB0843 Enrolled -3- LRB9205887REdv 1 of the Code of Federal Regulations as in effect on June 1, 2 1999. 3 "Place of primary use" means the street address 4 representative of where the customer's use of the mobile 5 telecommunications service primarily occurs, which must be: 6 (i) the residential street address or the primary 7 business street address of the customer; and 8 (ii) within the licensed service area of the home 9 service provider. 10 "Prepaid telephone calling services" means the right to 11 purchase exclusively telecommunications services that must be 12 paid for in advance that enables the origination of calls 13 using an access number, authorization code, or both, whether 14 manually or electronically dialed, if the remaining amount of 15 units of service that have been prepaid is known by the 16 provider of the prepaid service on a continuous basis. 17 "Reseller" means a provider who purchases 18 telecommunications services from another telecommunications 19 service provider and then resells, uses as a component part 20 of, or integrates the purchased services into a mobile 21 telecommunications service. "Reseller" does not include a 22 serving carrier with which a home service provider arranges 23 for the services to its customers outside the home service 24 provider's licensed service area. 25 "Serving carrier" means a facilities-based carrier 26 providing mobile telecommunications service to a customer 27 outside a home service provider's or reseller's licensed 28 service area. 29 "Taxing jurisdiction" means any of the several states, 30 the District of Columbia, or any territory or possession of 31 the United States, any municipality, city, county, township, 32 parish, transportation district, or assessment jurisdiction, 33 or any other political subdivision within the territorial 34 limits of the United States with the authority to impose a HB0843 Enrolled -4- LRB9205887REdv 1 tax, charge, or fee. 2 Section 15. Application of this Act. The provisions of 3 this Act shall apply as follows: 4 (a) General provisions. This Act shall apply to any 5 tax, charge, or fee levied by the State or a taxing 6 jurisdiction within this State as a fixed charge for each 7 customer or measured by gross amounts charged to customers 8 for mobile telecommunications services, regardless of whether 9 the tax, charge, or fee is imposed on the vendor or customer 10 of the service and regardless of the terminology used to 11 describe the tax, charge, or fee. 12 (b) General exceptions. This Act does not apply to: 13 (1) any tax, charge, or fee levied upon or measured 14 by the net income, capital stock, net worth, or property 15 value of the provider of mobile telecommunications 16 service; 17 (2) any tax, charge, or fee that is applied to an 18 equitably apportioned amount that is not determined on a 19 transactional basis; 20 (3) any tax, charge, or fee that represents 21 compensation for a mobile telecommunications service 22 provider's use of public rights of way or other public 23 property, provided that such tax, charge, or fee is not 24 levied by the taxing jurisdiction as a fixed charge for 25 each customer or measured by gross amounts charged to 26 customers for mobile telecommunications services; 27 (4) any generally applicable business and 28 occupation tax that is imposed by a State, is applied to 29 gross receipts or gross proceeds, is the legal liability 30 of the home service provider, and that statutorily allows 31 the home service provider to elect to use the sourcing 32 method required in this Act; 33 (5) any fee related to obligations under Section HB0843 Enrolled -5- LRB9205887REdv 1 254 of the federal Communications Act of 1934; or 2 (6) any tax, charge, or fee imposed by the Federal 3 Communications Commission. 4 (c) Specific exceptions. The provisions of this Act: 5 (1) do not apply to the determination of the taxing 6 situs of prepaid telephone calling services; 7 (2) do not affect the taxability of either the 8 initial sale of mobile telecommunications services or 9 subsequent resale of such services, whether as sales of 10 such services alone or as a part of a bundled product, if 11 the federal Internet Tax Freedom Act would preclude a 12 taxing jurisdiction from subjecting the charges of the 13 sale of such services to a tax, charge, or fee, but this 14 Section provides no evidence of the intent of the General 15 Assembly with respect to the applicability of the federal 16 Internet Tax Freedom Act to such charges; and 17 (3) do not apply to the determination of the taxing 18 situs of air-ground radiotelephone service as defined in 19 Section 22.99 of Title 47 of the Code of Federal 20 Regulations as in effect on June 1, 1999. 21 (d) Date of applicability. The provisions of this Act 22 apply to customer bills issued on or after August 1, 2002. 23 Section 20. Sourcing rules for mobile telecommunications 24 services. 25 (a) Notwithstanding the law of this State or any 26 political subdivision of this State, mobile 27 telecommunications services provided in a taxing jurisdiction 28 to a customer, the charges for which are billed by or for the 29 customer's home service provider, shall be deemed to be 30 provided by the customer's home service provider. 31 (b) All charges for mobile telecommunications services 32 that are deemed to be provided by the customer's home service 33 provider under this Act are authorized to be subjected to HB0843 Enrolled -6- LRB9205887REdv 1 tax, charge, or fee by the taxing jurisdictions whose 2 territorial limits encompass the customer's place of primary 3 use, regardless of where the mobile telecommunications 4 services originate, terminate, or pass through, and no other 5 taxing jurisdiction may impose taxes, charges, or fees on 6 charges for such mobile telecommunications services. 7 Section 25. Provision of electronic database. 8 (a) The State may provide an electronic database to a 9 home service provider or, if the State does not provide such 10 an electronic database to home service providers, then the 11 designated database provider may provide an electronic 12 database to a home service provider. 13 (b) The electronic database, whether provided by the 14 State or the designated database provider, shall: 15 (1) be provided in a format approved by the 16 American National Standards Institute's Accredited 17 Standards Committee X12, that, allowing for de minimis 18 deviations, designates for each street address in the 19 State, including to the extent practical, any multiple 20 postal street addresses applicable to one street 21 location, the appropriate taxing jurisdictions, and the 22 appropriate code for each taxing jurisdiction, for each 23 level of taxing jurisdiction, identified by one 24 nationwide standard numeric code described in subsection 25 (c); and 26 (2) also provide the appropriate code for each 27 street address with respect to political subdivisions 28 that are not taxing jurisdictions when reasonably needed 29 to determine the proper taxing jurisdiction. 30 (c) The nationwide standard numeric codes shall contain 31 the same number of numeric digits with each digit or 32 combination of digits referring to the same level of taxing 33 jurisdiction throughout the United States using a format HB0843 Enrolled -7- LRB9205887REdv 1 similar to FIPS 55-3 or other appropriate standard approved 2 by the Federation of Tax Administrators and the Multistate 3 Tax Commission, or their successors. Each address shall be 4 provided in standard postal format. 5 Section 30. Notice; updates. If the State or a 6 designated database provider provides or maintains an 7 electronic database described in Section 25, then the State 8 or the electronic database provider shall provide notice of 9 the availability of the then current electronic database, and 10 any subsequent revisions thereof, by publication in the 11 manner normally employed for the publication of informational 12 tax, charge, or fee notices to taxpayers in the State. 13 Section 35. User held harmless. A home service provider 14 using the data contained in an electronic database described 15 in Section 25 shall be held harmless from any tax, charge, or 16 fee liability that otherwise would be due solely as a result 17 of any error or omission in the database provided by the 18 State or designated database provider. The home service 19 provider shall reflect changes made to the database during a 20 calendar quarter not later than 30 days after the end of the 21 calendar quarter if the State or an electronic database 22 provider issues notice of the availability of an electronic 23 database reflecting the changes under Section 30. 24 Section 40. Safe harbor. 25 (a) If neither the State nor a designated database 26 provider provides an electronic database under Section 25, a 27 home service provider shall be held harmless from any tax, 28 charge, or fee liability that otherwise would be due solely 29 as a result of an assignment of a street address to an 30 incorrect taxing jurisdiction if, subject to Section 60, the 31 home service provider employs an enhanced zip code to assign HB0843 Enrolled -8- LRB9205887REdv 1 each street address to a specific taxing jurisdiction for 2 each level of taxing jurisdiction and exercises due diligence 3 at each level of taxing jurisdiction to ensure that each such 4 street address is assigned to the correct taxing 5 jurisdiction. If an enhanced zip code overlaps boundaries of 6 taxing jurisdictions of the same level, the home service 7 provider must designate one specific jurisdiction within the 8 enhanced zip code for use in taxing the activity for the 9 enhanced zip code for each level of taxing jurisdiction. Any 10 enhanced zip code assignment changed in accordance with 11 Section 60 is deemed to be in compliance with this Section. 12 (b) For purposes of this Section, there is a rebuttable 13 presumption that a home service provider has exercised due 14 diligence if the home service provider demonstrates that it 15 has: 16 (1) expended reasonable resources to implement and 17 maintain an appropriately detailed electronic database of 18 street address assignments to taxing jurisdictions; 19 (2) implemented and maintained reasonable internal 20 controls to promptly correct misassignments of street 21 addresses to taxing jurisdictions; and 22 (3) used all reasonably obtainable and usable data 23 pertaining to municipal annexations, incorporations, 24 reorganizations, and any other changes in jurisdictional 25 boundaries that materially affect the accuracy of the 26 database. 27 Section 45. Termination of safe harbor. Section 40 28 applies to a home service provider that is in compliance with 29 the requirements of Section 40 until the later of: 30 (1) Eighteen months after the nationwide standard 31 numeric code described in Section 25 has been approved by the 32 Federation of Tax Administrators and the Multistate Tax 33 Commission; or HB0843 Enrolled -9- LRB9205887REdv 1 (2) Six months after the State or a designated database 2 provider in the State provides such database as prescribed in 3 Section 25. 4 Section 50. Home service provider required to obtain and 5 maintain customer's place of primary use. A home service 6 provider shall be responsible for obtaining and maintaining 7 the customer's place of primary use, as defined in this Act. 8 Subject to Section 60, and if the home service provider's 9 reliance on information provided by its customer is in good 10 faith, a taxing jurisdiction shall: 11 (1) allow a home service provider to rely on the 12 applicable residential or business street address supplied by 13 the home service provider's customer; and 14 (2) not hold a home service provider liable for any 15 additional taxes, charges, or fees based on a different 16 determination of the place of primary use for taxes, charges, 17 or fees that are customarily passed on to the customer as a 18 separate itemized charge. 19 Section 55. Primary place of use for service contracts 20 in effect on or before July 28, 2002. Except as provided in 21 Section 60, a taxing jurisdiction shall allow a home service 22 provider to treat the address used by the home service 23 provider for tax purposes for any customer under a service 24 contract or agreement in effect on or before July 28, 2002 as 25 that customer's place of primary use for the remaining term 26 of the service contract or agreement, excluding any extension 27 or renewal of the service contract or agreement, for purposes 28 of determining the taxing jurisdictions to which taxes, 29 charges, or fees on charges for mobile telecommunications 30 services are remitted. 31 Section 60. Determination by taxing jurisdiction or State HB0843 Enrolled -10- LRB9205887REdv 1 concerning place of primary use; notice to home service 2 provider. A taxing jurisdiction or the State, on behalf of 3 any taxing jurisdiction or taxing jurisdictions within this 4 State, may: 5 (a) determine that the address used for purposes of 6 determining the taxing jurisdictions to which taxes, charges, 7 or fees for mobile telecommunications services are remitted 8 does not meet the definition of place of primary use in this 9 Act and give binding notice to the home service provider to 10 change the place of primary use on a prospective basis from 11 the date of notice of determination if: 12 (1) the taxing jurisdiction obtains the consent of 13 all affected taxing jurisdictions within the State before 14 giving the notice of determination (if the taxing 15 jurisdiction making the determination is not the State); 16 and 17 (2) before the taxing jurisdiction gives the notice 18 of determination, the customer is given an opportunity to 19 demonstrate in accordance with applicable State or local 20 tax, charge, or fee administrative procedures that the 21 address is the customer's place of primary use. 22 (b) determine that the assignment of a taxing 23 jurisdiction by a home service provider under Section 40 does 24 not reflect the correct taxing jurisdiction and give binding 25 notice to the home service provider to change the assignment 26 on a prospective basis from the date of notice of 27 determination if: 28 (1) the taxing jurisdiction obtains the consent of 29 all affected taxing jurisdictions within the State before 30 giving the notice of determination (if the taxing 31 jurisdiction making the determination is not the State); 32 and 33 (2) the home service provider is given an 34 opportunity to demonstrate in accordance with applicable HB0843 Enrolled -11- LRB9205887REdv 1 State or local tax, charge, or fee administrative 2 procedures that the assignment reflects the correct 3 taxing jurisdiction. 4 Section 65. No change to authority of taxing 5 jurisdiction to collect tax if customer fails to provide 6 place of primary use. Nothing in this Act modifies, impairs, 7 supersedes, or authorizes the modification, impairment, or 8 supersession of, any law allowing a taxing jurisdiction to 9 collect a tax, charge, or fee from a customer that has failed 10 to provide its place of primary use. 11 Section 70. Tax may be imposed on items not subject to 12 taxation if those items not separately stated. If a taxing 13 jurisdiction does not otherwise subject charges for mobile 14 telecommunications services to taxation and if these charges 15 are aggregated with and not separately stated from charges 16 that are subject to taxation, then the charges for nontaxable 17 mobile telecommunications services may be subject to taxation 18 unless the home service provider can reasonably identify 19 charges not subject to such tax, charge, or fee from its 20 books and records that are kept in the regular course of 21 business. 22 Section 75. Customers and otherwise non-taxable charges. 23 If a taxing jurisdiction does not subject charges for mobile 24 telecommunications services to taxation, a customer may not 25 rely upon the nontaxability of charges for mobile 26 telecommunications services unless the customer's home 27 service provider separately states the charges for nontaxable 28 mobile telecommunications services from taxable charges or 29 the home service provider elects, after receiving a written 30 request from the customer in the form required by the 31 provider, to provide verifiable data based upon the home HB0843 Enrolled -12- LRB9205887REdv 1 service provider's books and records that are kept in the 2 regular course of business that reasonably identifies the 3 nontaxable charges. 4 Section 80. Customers' procedures and remedies for 5 correcting taxes and fees. 6 (a) If a customer believes that an amount of tax or 7 assignment of place of primary use or taxing jurisdiction 8 included on a billing is erroneous, the customer shall notify 9 the home service provider in writing. The customer shall 10 include in this written notification the street address for 11 her or his place of primary use, the account name and number 12 for which the customer seeks a correction of the tax 13 assignment, a description of the error asserted by the 14 customer, and any other information that the home service 15 provider reasonably requires to process the request. Within 16 60 days after receiving a notice under this subsection (a), 17 the home service provider shall review its records and the 18 electronic database or enhanced zip code used pursuant to 19 Section 25 or 40 to determine the customer's taxing 20 jurisdiction. If this review shows that the amount of tax, 21 assignment of place of primary use, or taxing jurisdiction is 22 in error, the home service provider shall correct the error 23 and refund or credit the amount of tax erroneously collected 24 from the customer for a period of up to 2 years. If this 25 review shows that the amount of tax, assignment of place of 26 primary use, or taxing jurisdiction is correct, the home 27 service provider shall provide a written explanation to the 28 customer. 29 (b) If the customer is dissatisfied with the response of 30 the home service provider under this Section, the customer 31 may seek a correction or refund or both from the taxing 32 jurisdiction affected. 33 (c) The procedures in this Section shall be the first HB0843 Enrolled -13- LRB9205887REdv 1 course of remedy available to customers seeking correction of 2 assignment of place of primary use or taxing jurisdiction or 3 a refund of or other compensation for taxes, charges, and 4 fees erroneously collected by the home service provider, and 5 no cause of action based upon a dispute arising from these 6 taxes, charges, or fees shall accrue until a customer has 7 reasonably exercised the rights and procedures set forth in 8 this Section. 9 Section 85. Inseverability clause. If a court of 10 competent jurisdiction enters a final judgment on the merits 11 that (i) is based on federal law, (ii) is no longer subject 12 to appeal, and (iii) substantially limits or impairs the 13 essential elements of Sections 116 through 126 of Title 4 of 14 the United States Code, then the provisions of this Act are 15 invalid and have no legal effect as of the date of entry of 16 such judgment. 17 Section 905. The Telecommunications Excise Tax Act is 18 amended by changing Section 2 as follows: 19 (35 ILCS 630/2) (from Ch. 120, par. 2002) 20 Sec. 2. As used in this Article, unless the context 21 clearly requires otherwise: 22 (a) "Gross charge" means the amount paid for the act or 23 privilege of originating or receiving telecommunications in 24 this State and for all services and equipment provided in 25 connection therewith by a retailer, valued in money whether 26 paid in money or otherwise, including cash, credits, services 27 and property of every kind or nature, and shall be determined 28 without any deduction on account of the cost of such 29 telecommunications, the cost of materials used, labor or 30 service costs or any other expense whatsoever. In case 31 credit is extended, the amount thereof shall be included only HB0843 Enrolled -14- LRB9205887REdv 1 as and when paid. "Gross charges" for private line service 2 shall include charges imposed at each channel point within 3 this State, charges for the channel mileage between each 4 channel point within this State, and charges for that portion 5 of the interstate inter-office channel provided within 6 Illinois. However, "gross charges" shall not include: 7 (1) any amounts added to a purchaser's bill because 8 of a charge made pursuant to (i) the tax imposed by this 9 Article; (ii) charges added to customers' bills pursuant 10 to the provisions of Sections 9-221 or 9-222 of the 11 Public Utilities Act, as amended, or any similar charges 12 added to customers' bills by retailers 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; or (iii) the tax imposed by Section 4251 of 17 the Internal Revenue Code; 18 (2) charges for a sent collect telecommunication 19 received outside of the State; 20 (3) charges for leased time on equipment or charges 21 for the storage of data or information for subsequent 22 retrieval or the processing of data or information 23 intended to change its form or content. Such equipment 24 includes, but is not limited to, the use of calculators, 25 computers, data processing equipment, tabulating 26 equipment or accounting equipment and also includes the 27 usage of computers under a time-sharing agreement; 28 (4) charges for customer equipment, including such 29 equipment that is leased or rented by the customer from 30 any source, wherein such charges are disaggregated and 31 separately identified from other charges; 32 (5) charges to business enterprises certified under 33 Section 9-222.1 of the Public Utilities Act, as amended, 34 to the extent of such exemption and during the period of HB0843 Enrolled -15- LRB9205887REdv 1 time specified by the Department of Commerce and 2 Community Affairs; 3 (6) charges for telecommunications and all services 4 and equipment provided in connection therewith between a 5 parent corporation and its wholly owned subsidiaries or 6 between wholly owned subsidiaries when the tax imposed 7 under this Article has already been paid to a retailer 8 and only to the extent that the charges between the 9 parent corporation and wholly owned subsidiaries or 10 between wholly owned subsidiaries represent expense 11 allocation between the corporations and not the 12 generation of profit for the corporation rendering such 13 service; 14 (7) bad debts. Bad debt means any portion of a debt 15 that is related to a sale at retail for which gross 16 charges are not otherwise deductible or excludable that 17 has become worthless or uncollectable, as determined 18 under applicable federal income tax standards. If the 19 portion of the debt deemed to be bad is subsequently 20 paid, the retailer shall report and pay the tax on that 21 portion during the reporting period in which the payment 22 is made; 23 (8) charges paid by inserting coins in 24 coin-operated telecommunication devices; 25 (9) amounts paid by telecommunications retailers 26 under the Telecommunications Municipal Infrastructure 27 Maintenance Fee Act. 28 (b) "Amount paid" means the amount charged to the 29 taxpayer's service address in this State regardless of where 30 such amount is billed or paid. 31 (c) "Telecommunications", in addition to the meaning 32 ordinarily and popularly ascribed to it, includes, without 33 limitation, messages or information transmitted through use 34 of local, toll and wide area telephone service; private line HB0843 Enrolled -16- LRB9205887REdv 1 services; channel services; telegraph services; 2 teletypewriter; computer exchange services; cellular mobile 3 telecommunications service; specialized mobile radio; 4 stationary two way radio; paging service; or any other form 5 of mobile and portable one-way or two-way communications; or 6 any other transmission of messages or information by 7 electronic or similar means, between or among points by wire, 8 cable, fiber-optics, laser, microwave, radio, satellite or 9 similar facilities. As used in this Act, "private line" means 10 a dedicated non-traffic sensitive service for a single 11 customer, that entitles the customer to exclusive or priority 12 use of a communications channel or group of channels, from 13 one or more specified locations to one or more other 14 specified locations. The definition of "telecommunications" 15 shall not include value added services in which computer 16 processing applications are used to act on the form, content, 17 code and protocol of the information for purposes other than 18 transmission. "Telecommunications" shall not include 19 purchases of telecommunications by a telecommunications 20 service provider for use as a component part of the service 21 provided by him to the ultimate retail consumer who 22 originates or terminates the taxable end-to-end 23 communications. Carrier access charges, right of access 24 charges, charges for use of inter-company facilities, and all 25 telecommunications resold in the subsequent provision of, 26 used as a component of, or integrated into end-to-end 27 telecommunications service shall be non-taxable as sales for 28 resale. 29 (d) "Interstate telecommunications" means all 30 telecommunications that either originate or terminate outside 31 this State. 32 (e) "Intrastate telecommunications" means all 33 telecommunications that originate and terminate within this 34 State. HB0843 Enrolled -17- LRB9205887REdv 1 (f) "Department" means the Department of Revenue of the 2 State of Illinois. 3 (g) "Director" means the Director of Revenue for the 4 Department of Revenue of the State of Illinois. 5 (h) "Taxpayer" means a person who individually or 6 through his agents, employees or permittees engages in the 7 act or privilege of originating or receiving 8 telecommunications in this State and who incurs a tax 9 liability under this Article. 10 (i) "Person" means any natural individual, firm, trust, 11 estate, partnership, association, joint stock company, joint 12 venture, corporation, limited liability company, or a 13 receiver, trustee, guardian or other representative appointed 14 by order of any court, the Federal and State governments, 15 including State universities created by statute or any city, 16 town, county or other political subdivision of this State. 17 (j) "Purchase at retail" means the acquisition, 18 consumption or use of telecommunication through a sale at 19 retail. 20 (k) "Sale at retail" means the transmitting, supplying 21 or furnishing of telecommunications and all services and 22 equipment provided in connection therewith for a 23 consideration to persons other than the Federal and State 24 governments, and State universities created by statute and 25 other than between a parent corporation and its wholly owned 26 subsidiaries or between wholly owned subsidiaries for their 27 use or consumption and not for resale. 28 (l) "Retailer" means and includes every person engaged 29 in the business of making sales at retail as defined in this 30 Article. The Department may, in its discretion, upon 31 application, authorize the collection of the tax hereby 32 imposed by any retailer not maintaining a place of business 33 within this State, who, to the satisfaction of the 34 Department, furnishes adequate security to insure collection HB0843 Enrolled -18- LRB9205887REdv 1 and payment of the tax. Such retailer shall be issued, 2 without charge, a permit to collect such tax. When so 3 authorized, it shall be the duty of such retailer to collect 4 the tax upon all of the gross charges for telecommunications 5 in this State in the same manner and subject to the same 6 requirements as a retailer maintaining a place of business 7 within this State. The permit may be revoked by the 8 Department at its discretion. 9 (m) "Retailer maintaining a place of business in this 10 State", or any like term, means and includes any retailer 11 having or maintaining within this State, directly or by a 12 subsidiary, an office, distribution facilities, transmission 13 facilities, sales office, warehouse or other place of 14 business, or any agent or other representative operating 15 within this State under the authority of the retailer or its 16 subsidiary, irrespective of whether such place of business or 17 agent or other representative is located here permanently or 18 temporarily, or whether such retailer or subsidiary is 19 licensed to do business in this State. 20 (n) "Service address" means the location of 21 telecommunications equipment from which the 22 telecommunications services are originated or at which 23 telecommunications services are received by a taxpayer. In 24 the event this may not be a defined location, as in the case 25 of mobile phones, paging systems, maritime systems, service 26 address means the customer's place of primary use as defined 27 in the Mobile Telecommunications Sourcing Conformity Act. 28 For air-to-ground systems and the like, service address shall 29 mean the location of a taxpayer's primary use of the 30 telecommunications equipment as defined by telephone number, 31 authorization code, or location in Illinois where bills are 32 sent. 33 (o) "Prepaid telephone calling arrangements" mean the 34 right to exclusively purchase telephone or telecommunications HB0843 Enrolled -19- LRB9205887REdv 1 services that must be paid for in advance and enable the 2 origination of one or more intrastate, interstate, or 3 international telephone calls or other telecommunications 4 using an access number, an authorization code, or both, 5 whether manually or electronically dialed, for which payment 6 to a retailer must be made in advance, provided that, unless 7 recharged, no further service is provided once that prepaid 8 amount of service has been consumed. Prepaid telephone 9 calling arrangements include the recharge of a prepaid 10 calling arrangement. For purposes of this subsection, 11 "recharge" means the purchase of additional prepaid telephone 12 or telecommunications services whether or not the purchaser 13 acquires a different access number or authorization code. 14 "Prepaid telephone calling arrangement" does not include an 15 arrangement whereby a customer purchases a payment card and 16 pursuant to which the service provider reflects the amount of 17 such purchase as a credit on an invoice issued to that 18 customer under an existing subscription plan. 19 (Source: P.A. 90-562, eff. 12-16-97; 91-870, eff. 6-22-00.) 20 Section 910. The Telecommunications Municipal 21 Infrastructure Maintenance Fee Act is amended by changing 22 Section 10 as follows: 23 (35 ILCS 635/10) 24 Sec. 10. Definitions. 25 (a) "Gross charges" means the amount paid to a 26 telecommunications retailer for the act or privilege of 27 originating or receiving telecommunications in this State or 28 the municipality imposing the fee under this Act, as the 29 context requires, and for all services rendered in connection 30 therewith, valued in money whether paid in money or 31 otherwise, including cash, credits, services, and property of 32 every kind or nature, and shall be determined without any HB0843 Enrolled -20- LRB9205887REdv 1 deduction on account of the cost of such telecommunications, 2 the cost of the materials used, labor or service costs, or 3 any other expense whatsoever. In case credit is extended, 4 the amount thereof shall be included only as and when paid. 5 "Gross charges" for private line service shall include 6 charges imposed at each channel point within this State or 7 the municipality imposing the fee under this Act, charges for 8 the channel mileage between each channel point within this 9 State or the municipality imposing the fee under this Act, 10 and charges for that portion of the interstate inter-office 11 channel provided within Illinois or the municipality imposing 12 the fee under this Act. However, "gross charges" shall not 13 include: 14 (1) any amounts added to a purchaser's bill because 15 of a charge made under: (i) the fee imposed by this 16 Section, (ii) additional charges added to a purchaser's 17 bill under Section 9-221 or 9-222 of the Public Utilities 18 Act, (iii) amounts collected under Section 8-11-17 of the 19 Illinois Municipal Code, (iv) the tax imposed by the 20 Telecommunications Excise Tax Act, (v) 911 surcharges, or 21 (vi) the tax imposed by Section 4251 of the Internal 22 Revenue Code; 23 (2) charges for a sent collect telecommunication 24 received outside of this State or the municipality 25 imposing the fee, as the context requires; 26 (3) charges for leased time on equipment or charges 27 for the storage of data or information or subsequent 28 retrieval or the processing of data or information 29 intended to change its form or content. Such equipment 30 includes, but is not limited to, the use of calculators, 31 computers, data processing equipment, tabulating 32 equipment, or accounting equipment and also includes the 33 usage of computers under a time-sharing agreement; 34 (4) charges for customer equipment, including such HB0843 Enrolled -21- LRB9205887REdv 1 equipment that is leased or rented by the customer from 2 any source, wherein such charges are disaggregated and 3 separately identified from other charges; 4 (5) charges to business enterprises certified under 5 Section 9-222.1 of the Public Utilities Act to the extent 6 of such exemption and during the period of time specified 7 by the Department of Commerce and Community Affairs or by 8 the municipality imposing the fee under the Act, as the 9 context requires; 10 (6) charges for telecommunications and all services 11 and equipment provided in connection therewith between a 12 parent corporation and its wholly owned subsidiaries or 13 between wholly owned subsidiaries, and only to the extent 14 that the charges between the parent corporation and 15 wholly owned subsidiaries or between wholly owned 16 subsidiaries represent expense allocation between the 17 corporations and not the generation of profit other than 18 a regulatory required profit for the corporation 19 rendering such services; 20 (7) bad debts ("bad debt" means any portion of a 21 debt that is related to a sale at retail for which gross 22 charges are not otherwise deductible or excludable that 23 has become worthless or uncollectible, as determined 24 under applicable federal income tax standards; if the 25 portion of the debt deemed to be bad is subsequently 26 paid, the retailer shall report and pay the tax on that 27 portion during the reporting period in which the payment 28 is made); 29 (8) charges paid by inserting coins in 30 coin-operated telecommunication devices; or 31 (9) charges for telecommunications and all services 32 and equipment provided to a municipality imposing the 33 infrastructure maintenance fee. 34 (a-5) "Department" means the Illinois Department of HB0843 Enrolled -22- LRB9205887REdv 1 Revenue. 2 (b) "Telecommunications" includes, but is not limited 3 to, messages or information transmitted through use of local, 4 toll, and wide area telephone service, channel services, 5 telegraph services, teletypewriter service, computer exchange 6 services, private line services, specialized mobile radio 7 services, or any other transmission of messages or 8 information by electronic or similar means, between or among 9 points by wire, cable, fiber optics, laser, microwave, radio, 10 satellite, or similar facilities. Unless the context clearly 11 requires otherwise, "telecommunications" shall also include 12 wireless telecommunications as hereinafter defined. 13 "Telecommunications" shall not include value added services 14 in which computer processing applications are used to act on 15 the form, content, code, and protocol of the information for 16 purposes other than transmission. "Telecommunications" shall 17 not include purchase of telecommunications by a 18 telecommunications service provider for use as a component 19 part of the service provided by him or her to the ultimate 20 retail consumer who originates or terminates the end-to-end 21 communications. Retailer access charges, right of access 22 charges, charges for use of intercompany facilities, and all 23 telecommunications resold in the subsequent provision and 24 used as a component of, or integrated into, end-to-end 25 telecommunications service shall not be included in gross 26 charges as sales for resale. "Telecommunications" shall not 27 include the provision of cable services through a cable 28 system as defined in the Cable Communications Act of 1984 (47 29 U.S.C. Sections 521 and following) as now or hereafter 30 amended or through an open video system as defined in the 31 Rules of the Federal Communications Commission (47 C.D.F. 32 76.1550 and following) as now or hereafter amended. Beginning 33 January 1, 2001, prepaid telephone calling arrangements shall 34 not be considered "telecommunications" subject to the tax HB0843 Enrolled -23- LRB9205887REdv 1 imposed under this Act. For purposes of this Section, 2 "prepaid telephone calling arrangements" means that term as 3 defined in Section 2-27 of the Retailers' Occupation Tax Act. 4 (c) "Wireless telecommunications" includes cellular 5 mobile telephone services, personal wireless services as 6 defined in Section 704(C) of the Telecommunications Act of 7 1996 (Public Law No. 104-104) as now or hereafter amended, 8 including all commercial mobile radio services, and paging 9 services. 10 (d) "Telecommunications retailer" or "retailer" or 11 "carrier" means and includes every person engaged in the 12 business of making sales of telecommunications at retail as 13 defined in this Section. The Illinois Department of Revenue 14 or the municipality imposing the fee, as the case may be, 15 may, in its discretion, upon applications, authorize the 16 collection of the fee hereby imposed by any retailer not 17 maintaining a place of business within this State, who, to 18 the satisfaction of the Department or municipality, furnishes 19 adequate security to insure collection and payment of the 20 fee. When so authorized, it shall be the duty of such 21 retailer to pay the fee upon all of the gross charges for 22 telecommunications in the same manner and subject to the same 23 requirements as a retailer maintaining a place of business 24 within the State or municipality imposing the fee. 25 (e) "Retailer maintaining a place of business in this 26 State", or any like term, means and includes any retailer 27 having or maintaining within this State, directly or by a 28 subsidiary, an office, distribution facilities, transmission 29 facilities, sales office, warehouse, or other place of 30 business, or any agent or other representative operating 31 within this State under the authority of the retailer or its 32 subsidiary, irrespective of whether such place of business or 33 agent or other representative is located here permanently or 34 temporarily, or whether such retailer or subsidiary is HB0843 Enrolled -24- LRB9205887REdv 1 licensed to do business in this State. 2 (f) "Sale of telecommunications at retail" means the 3 transmitting, supplying, or furnishing of telecommunications 4 and all services rendered in connection therewith for a 5 consideration, other than between a parent corporation and 6 its wholly owned subsidiaries or between wholly owned 7 subsidiaries, when the gross charge made by one such 8 corporation to another such corporation is not greater than 9 the gross charge paid to the retailer for their use or 10 consumption and not for sale. 11 (g) "Service address" means the location of 12 telecommunications equipment from which telecommunications 13 services are originated or at which telecommunications 14 services are received. If this is not a defined location, as 15 in the case of wireless telecommunications, paging systems, 16 maritime systems, service address means the customer's place 17 of primary use as defined in the Mobile Telecommunications 18 Sourcing Conformity Act. For air-to-ground systems, and the 19 like, "service address" shall mean the location of the 20 customer's primary use of the telecommunications equipment as 21 defined by the location in Illinois where bills are sent. 22 (Source: P.A. 90-154, eff. 1-1-98; 90-562, eff. 12-16-97; 23 91-870, eff. 6-22-00.) 24 Section 915. The Emergency Telephone System Act is 25 amended by changing Section 15.3 as follows: 26 (50 ILCS 750/15.3) (from Ch. 134, par. 45.3) 27 Sec. 15.3. (a) The corporate authorities of any 28 municipality or any county may, subject to the limitations of 29 subsections (c), (d), and (h), and in addition to any tax 30 levied pursuant to Section 8-11-2 of the Illinois Municipal 31 Code, impose a monthly surcharge on billed subscribers of 32 network connection provided by telecommunication carriers HB0843 Enrolled -25- LRB9205887REdv 1 engaged in the business of transmitting messages by means of 2 electricity originating within the corporate limits of the 3 municipality or county imposing the surcharge at a rate per 4 network connection determined in accordance with subsection 5 (c). For mobile telecommunications services, if a surcharge 6 is imposed it shall be imposed based upon the municipality or 7 county that encompasses the customer's place of primary use 8 as defined in the Mobile Telecommunications Sourcing 9 Conformity Act. A municipality may enter into an 10 intergovernmental agreement with any county in which it is 11 partially located, when the county has adopted an ordinance 12 to impose a surcharge as provided in subsection (c), to 13 include that portion of the municipality lying outside the 14 county in that county's surcharge referendum. If the 15 county's surcharge referendum is approved, the portion of the 16 municipality identified in the intergovernmental agreement 17 shall automatically be disconnected from the county in which 18 it lies and connected to the county which approved the 19 referendum for purposes of a surcharge on telecommunications 20 carriers. 21 (b) For purposes of computing the surcharge imposed by 22 subsection (a), the network connections to which the 23 surcharge shall apply shall be those in-service network 24 connections, other than those network connections assigned to 25 the municipality or county, where the service address for 26 each such network connection or connections is located within 27 the corporate limits of the municipality or county levying 28 the surcharge. Except for mobile telecommunication services, 29 the "service address" shall mean the location of the primary 30 use of the network connection or connections. For mobile 31 telecommunication services, "service address" means the 32 customer's place of primary use as defined in the Mobile 33 Telecommunications Sourcing Conformity Act. With respect to 34 network connections provided for use with pay telephone HB0843 Enrolled -26- LRB9205887REdv 1 services for which there is no billed subscriber, the 2 telecommunications carrier providing the network connection 3 shall be deemed to be its own billed subscriber for purposes 4 of applying the surcharge. 5 (c) Upon the passage of an ordinance to impose a 6 surcharge under this Section the clerk of the municipality or 7 county shall certify the question of whether the surcharge 8 may be imposed to the proper election authority who shall 9 submit the public question to the electors of the 10 municipality or county in accordance with the general 11 election law; provided that such question shall not be 12 submitted at a consolidated primary election. The public 13 question shall be in substantially the following form: 14 ------------------------------------------------------------- 15 Shall the county (or city, village 16 or incorporated town) of.....impose YES 17 a surcharge of up to...¢ per month per 18 network connection, which surcharge will 19 be added to the monthly bill you receive ------------------ 20 for telephone or telecommunications 21 charges, for the purpose of installing 22 (or improving) a 9-1-1 Emergency NO 23 Telephone System? 24 ------------------------------------------------------------- 25 If a majority of the votes cast upon the public question 26 are in favor thereof, the surcharge shall be imposed. 27 However, if a Joint Emergency Telephone System Board is 28 to be created pursuant to an intergovernmental agreement 29 under Section 15.4, the ordinance to impose the surcharge 30 shall be subject to the approval of a majority of the total 31 number of votes cast upon the public question by the electors 32 of all of the municipalities or counties, or combination 33 thereof, that are parties to the intergovernmental agreement. 34 The referendum requirement of this subsection (c) shall HB0843 Enrolled -27- LRB9205887REdv 1 not apply to any municipality with a population over 500,000 2 or to any county in which a proposition as to whether a 3 sophisticated 9-1-1 Emergency Telephone System should be 4 installed in the county, at a cost not to exceed a specified 5 monthly amount per network connection, has previously been 6 approved by a majority of the electors of the county voting 7 on the proposition at an election conducted before the 8 effective date of this amendatory Act of 1987. 9 (d) A county may not impose a surcharge, unless 10 requested by a municipality, in any incorporated area which 11 has previously approved a surcharge as provided in subsection 12 (c) or in any incorporated area where the corporate 13 authorities of the municipality have previously entered into 14 a binding contract or letter of intent with a 15 telecommunications carrier to provide sophisticated 9-1-1 16 service through municipal funds. 17 (e) A municipality or county may at any time by 18 ordinance change the rate of the surcharge imposed under this 19 Section if the new rate does not exceed the rate specified in 20 the referendum held pursuant to subsection (c). 21 (f) The surcharge authorized by this Section shall be 22 collected from the subscriber by the telecommunications 23 carrier providing the subscriber the network connection as a 24 separately stated item on the subscriber's bill. 25 (g) The amount of surcharge collected by the 26 telecommunications carrier shall be paid to the particular 27 municipality or county or Joint Emergency Telephone System 28 Board not later than 30 days after the surcharge is 29 collected, net of any network or other 9-1-1 or sophisticated 30 9-1-1 system charges then due the particular 31 telecommunications carrier, as shown on an itemized bill. 32 The telecommunications carrier collecting the surcharge shall 33 also be entitled to deduct 3% of the gross amount of 34 surcharge collected to reimburse the telecommunications HB0843 Enrolled -28- LRB9205887REdv 1 carrier for the expense of accounting and collecting the 2 surcharge. 3 (h) A municipality with a population over 500,000 may 4 not impose a monthly surcharge in excess of $1.25 per network 5 connection. 6 (i) Any municipality or county or joint emergency 7 telephone system board that has imposed a surcharge pursuant 8 to this Section prior to the effective date of this 9 amendatory Act of 1990 shall hereafter impose the surcharge 10 in accordance with subsection (b) of this Section. 11 (j) The corporate authorities of any municipality or 12 county may issue, in accordance with Illinois law, bonds, 13 notes or other obligations secured in whole or in part by the 14 proceeds of the surcharge described in this Section. 15 Notwithstanding any change in law subsequent to the issuance 16 of any bonds, notes or other obligations secured by the 17 surcharge, every municipality or county issuing such bonds, 18 notes or other obligations shall be authorized to impose the 19 surcharge as though the laws relating to the imposition of 20 the surcharge in effect at the time of issuance of the bonds, 21 notes or other obligations were in full force and effect 22 until the bonds, notes or other obligations are paid in full. 23 The State of Illinois pledges and agrees that it will not 24 limit or alter the rights and powers vested in municipalities 25 and counties by this Section to impose the surcharge so as to 26 impair the terms of or affect the security for bonds, notes 27 or other obligations secured in whole or in part with the 28 proceeds of the surcharge described in this Section. 29 (k) Any surcharge collected by or imposed on a 30 telecommunications carrier pursuant to this Section shall be 31 held to be a special fund in trust for the municipality, 32 county or Joint Emergency Telephone Board imposing the 33 surcharge. Except for the 3% deduction provided in 34 subsection (g) above, the special fund shall not be subject HB0843 Enrolled -29- LRB9205887REdv 1 to the claims of creditors of the telecommunication carrier. 2 (Source: P.A. 86-101; 86-1344.) 3 Section 920. The Illinois Municipal Code is amended by 4 changing Section 8-11-2 as follows: 5 (65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2) 6 Sec. 8-11-2. The corporate authorities of any 7 municipality may tax any or all of the following occupations 8 or privileges: 9 1. Persons engaged in the business of transmitting 10 messages by means of electricity or radio magnetic waves, 11 or fiber optics, at a rate not to exceed 5% of the gross 12 receipts from that business originating within the 13 corporate limits of the municipality. Beginning January 14 1, 2001, prepaid telephone calling arrangements shall not 15 be subject to the tax imposed under this Section. For 16 purposes of this Section, "prepaid telephone calling 17 arrangements" means that term as defined in Section 2-27 18 of the Retailers' Occupation Tax Act. 19 2. Persons engaged in the business of distributing, 20 supplying, furnishing, or selling gas for use or 21 consumption within the corporate limits of a municipality 22 of 500,000 or fewer population, and not for resale, at a 23 rate not to exceed 5% of the gross receipts therefrom. 24 2a. Persons engaged in the business of 25 distributing, supplying, furnishing, or selling gas for 26 use or consumption within the corporate limits of a 27 municipality of over 500,000 population, and not for 28 resale, at a rate not to exceed 8% of the gross receipts 29 therefrom. If imposed, this tax shall be paid in monthly 30 payments. 31 3. The privilege of using or consuming electricity 32 acquired in a purchase at retail and used or consumed HB0843 Enrolled -30- LRB9205887REdv 1 within the corporate limits of the municipality at rates 2 not to exceed the following maximum rates, calculated on 3 a monthly basis for each purchaser: 4 (i) For the first 2,000 kilowatt-hours used or 5 consumed in a month; 0.61 cents per kilowatt-hour; 6 (ii) For the next 48,000 kilowatt-hours used or 7 consumed in a month; 0.40 cents per kilowatt-hour; 8 (iii) For the next 50,000 kilowatt-hours used or 9 consumed in a month; 0.36 cents per kilowatt-hour; 10 (iv) For the next 400,000 kilowatt-hours used or 11 consumed in a month; 0.35 cents per kilowatt-hour; 12 (v) For the next 500,000 kilowatt-hours used or 13 consumed in a month; 0.34 cents per kilowatt-hour; 14 (vi) For the next 2,000,000 kilowatt-hours used or 15 consumed in a month; 0.32 cents per kilowatt-hour; 16 (vii) For the next 2,000,000 kilowatt-hours used or 17 consumed in a month; 0.315 cents per kilowatt-hour; 18 (viii) For the next 5,000,000 kilowatt-hours used 19 or consumed in a month; 0.31 cents per kilowatt-hour; 20 (ix) For the next 10,000,000 kilowatt-hours used or 21 consumed in a month; 0.305 cents per kilowatt-hour; and 22 (x) For all electricity used or consumed in excess 23 of 20,000,000 kilowatt-hours in a month, 0.30 cents per 24 kilowatt-hour. 25 If a municipality imposes a tax at rates lower than 26 either the maximum rates specified in this Section or the 27 alternative maximum rates promulgated by the Illinois 28 Commerce Commission, as provided below, the tax rates 29 shall be imposed upon the kilowatt hour categories set 30 forth above with the same proportional relationship as 31 that which exists among such maximum rates. 32 Notwithstanding the foregoing, until December 31, 2008, 33 no municipality shall establish rates that are in excess 34 of rates reasonably calculated to produce revenues that HB0843 Enrolled -31- LRB9205887REdv 1 equal the maximum total revenues such municipality could 2 have received under the tax authorized by this 3 subparagraph in the last full calendar year prior to the 4 effective date of Section 65 of this amendatory Act of 5 1997; provided that this shall not be a limitation on the 6 amount of tax revenues actually collected by such 7 municipality. 8 Upon the request of the corporate authorities of a 9 municipality, the Illinois Commerce Commission shall, 10 within 90 days after receipt of such request, promulgate 11 alternative rates for each of these kilowatt-hour 12 categories that will reflect, as closely as reasonably 13 practical for that municipality, the distribution of the 14 tax among classes of purchasers as if the tax were based 15 on a uniform percentage of the purchase price of 16 electricity. A municipality that has adopted an 17 ordinance imposing a tax pursuant to subparagraph 3 as it 18 existed prior to the effective date of Section 65 of this 19 amendatory Act of 1997 may, rather than imposing the tax 20 permitted by this amendatory Act of 1997, continue to 21 impose the tax pursuant to that ordinance with respect to 22 gross receipts received from residential customers 23 through July 31, 1999, and with respect to gross receipts 24 from any non-residential customer until the first bill 25 issued to such customer for delivery services in 26 accordance with Section 16-104 of the Public Utilities 27 Act but in no case later than the last bill issued to 28 such customer before December 31, 2000. No ordinance 29 imposing the tax permitted by this amendatory Act of 1997 30 shall be applicable to any non-residential customer until 31 the first bill issued to such customer for delivery 32 services in accordance with Section 16-104 of the Public 33 Utilities Act but in no case later than the last bill 34 issued to such non-residential customer before December HB0843 Enrolled -32- LRB9205887REdv 1 31, 2000. 2 4. Persons engaged in the business of distributing, 3 supplying, furnishing, or selling water for use or 4 consumption within the corporate limits of the 5 municipality, and not for resale, at a rate not to exceed 6 5% of the gross receipts therefrom. 7 None of the taxes authorized by this Section may be 8 imposed with respect to any transaction in interstate 9 commerce or otherwise to the extent to which the business or 10 privilege may not, under the constitution and statutes of the 11 United States, be made the subject of taxation by this State 12 or any political sub-division thereof; nor shall any persons 13 engaged in the business of distributing, supplying, 14 furnishing, selling or transmitting gas, water, or 15 electricity, or engaged in the business of transmitting 16 messages, or using or consuming electricity acquired in a 17 purchase at retail, be subject to taxation under the 18 provisions of this Section for those transactions that are or 19 may become subject to taxation under the provisions of the 20 "Municipal Retailers' Occupation Tax Act" authorized by 21 Section 8-11-1; nor shall any tax authorized by this Section 22 be imposed upon any person engaged in a business or on any 23 privilege unless the tax is imposed in like manner and at the 24 same rate upon all persons engaged in businesses of the same 25 class in the municipality, whether privately or municipally 26 owned or operated, or exercising the same privilege within 27 the municipality. 28 Any of the taxes enumerated in this Section may be in 29 addition to the payment of money, or value of products or 30 services furnished to the municipality by the taxpayer as 31 compensation for the use of its streets, alleys, or other 32 public places, or installation and maintenance therein, 33 thereon or thereunder of poles, wires, pipes or other 34 equipment used in the operation of the taxpayer's business. HB0843 Enrolled -33- LRB9205887REdv 1 (a) If the corporate authorities of any home rule 2 municipality have adopted an ordinance that imposed a tax on 3 public utility customers, between July 1, 1971, and October 4 1, 1981, on the good faith belief that they were exercising 5 authority pursuant to Section 6 of Article VII of the 1970 6 Illinois Constitution, that action of the corporate 7 authorities shall be declared legal and valid, 8 notwithstanding a later decision of a judicial tribunal 9 declaring the ordinance invalid. No municipality shall be 10 required to rebate, refund, or issue credits for any taxes 11 described in this paragraph, and those taxes shall be deemed 12 to have been levied and collected in accordance with the 13 Constitution and laws of this State. 14 (b) In any case in which (i) prior to October 19, 1979, 15 the corporate authorities of any municipality have adopted an 16 ordinance imposing a tax authorized by this Section (or by 17 the predecessor provision of the "Revised Cities and Villages 18 Act") and have explicitly or in practice interpreted gross 19 receipts to include either charges added to customers' bills 20 pursuant to the provision of paragraph (a) of Section 36 of 21 the Public Utilities Act or charges added to customers' bills 22 by taxpayers who are not subject to rate regulation by the 23 Illinois Commerce Commission for the purpose of recovering 24 any of the tax liabilities or other amounts specified in such 25 paragraph (a) of Section 36 of that Act, and (ii) on or after 26 October 19, 1979, a judicial tribunal has construed gross 27 receipts to exclude all or part of those charges, then 28 neither those municipality nor any taxpayer who paid the tax 29 shall be required to rebate, refund, or issue credits for any 30 tax imposed or charge collected from customers pursuant to 31 the municipality's interpretation prior to October 19, 1979. 32 This paragraph reflects a legislative finding that it would 33 be contrary to the public interest to require a municipality 34 or its taxpayers to refund taxes or charges attributable to HB0843 Enrolled -34- LRB9205887REdv 1 the municipality's more inclusive interpretation of gross 2 receipts prior to October 19, 1979, and is not intended to 3 prescribe or limit judicial construction of this Section. The 4 legislative finding set forth in this subsection does not 5 apply to taxes imposed after the effective date of this 6 amendatory Act of 1995. 7 (c) The tax authorized by subparagraph 3 shall be 8 collected from the purchaser by the person maintaining a 9 place of business in this State who delivers the electricity 10 to the purchaser. This tax shall constitute a debt of the 11 purchaser to the person who delivers the electricity to the 12 purchaser and if unpaid, is recoverable in the same manner as 13 the original charge for delivering the electricity. Any tax 14 required to be collected pursuant to an ordinance authorized 15 by subparagraph 3 and any such tax collected by a person 16 delivering electricity shall constitute a debt owed to the 17 municipality by such person delivering the electricity, 18 provided, that the person delivering electricity shall be 19 allowed credit for such tax related to deliveries of 20 electricity the charges for which are written off as 21 uncollectible, and provided further, that if such charges are 22 thereafter collected, the delivering supplier shall be 23 obligated to remit such tax. For purposes of this subsection 24 (c), any partial payment not specifically identified by the 25 purchaser shall be deemed to be for the delivery of 26 electricity. Persons delivering electricity shall collect the 27 tax from the purchaser by adding such tax to the gross charge 28 for delivering the electricity, in the manner prescribed by 29 the municipality. Persons delivering electricity shall also 30 be authorized to add to such gross charge an amount equal to 31 3% of the tax to reimburse the person delivering electricity 32 for the expenses incurred in keeping records, billing 33 customers, preparing and filing returns, remitting the tax 34 and supplying data to the municipality upon request. If the HB0843 Enrolled -35- LRB9205887REdv 1 person delivering electricity fails to collect the tax from 2 the purchaser, then the purchaser shall be required to pay 3 the tax directly to the municipality in the manner prescribed 4 by the municipality. Persons delivering electricity who file 5 returns pursuant to this paragraph (c) shall, at the time of 6 filing such return, pay the municipality the amount of the 7 tax collected pursuant to subparagraph 3. 8 (d) For the purpose of the taxes enumerated in this 9 Section: 10 "Gross receipts" means the consideration received for the 11 transmission of messages, the consideration received for 12 distributing, supplying, furnishing or selling gas for use or 13 consumption and not for resale, and the consideration 14 received for distributing, supplying, furnishing or selling 15 water for use or consumption and not for resale, and for all 16 services rendered in connection therewith valued in money, 17 whether received in money or otherwise, including cash, 18 credit, services and property of every kind and material and 19 for all services rendered therewith, and shall be determined 20 without any deduction on account of the cost of transmitting 21 such messages, without any deduction on account of the cost 22 of the service, product or commodity supplied, the cost of 23 materials used, labor or service cost, or any other expenses 24 whatsoever. "Gross receipts" shall not include that portion 25 of the consideration received for distributing, supplying, 26 furnishing, or selling gas or water to, or for the 27 transmission of messages for, business enterprises described 28 in paragraph (e) of this Section to the extent and during the 29 period in which the exemption authorized by paragraph (e) is 30 in effect or for school districts or units of local 31 government described in paragraph (f) during the period in 32 which the exemption authorized in paragraph (f) is in effect. 33 "Gross receipts" shall not include amounts paid by 34 telecommunications retailers under the Telecommunications HB0843 Enrolled -36- LRB9205887REdv 1 Municipal Infrastructure Maintenance Fee Act. 2 For utility bills issued on or after May 1, 1996, but 3 before May 1, 1997, and for receipts from those utility 4 bills, "gross receipts" does not include one-third of (i) 5 amounts added to customers' bills under Section 9-222 of the 6 Public Utilities Act, or (ii) amounts added to customers' 7 bills by taxpayers who are not subject to rate regulation by 8 the Illinois Commerce Commission for the purpose of 9 recovering any of the tax liabilities described in Section 10 9-222 of the Public Utilities Act. For utility bills issued 11 on or after May 1, 1997, but before May 1, 1998, and for 12 receipts from those utility bills, "gross receipts" does not 13 include two-thirds of (i) amounts added to customers' bills 14 under Section 9-222 of the Public Utilities Act, or (ii) 15 amount added to customers' bills by taxpayers 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 described in Section 9-222 of the Public 19 Utilities Act. For utility bills issued on or after May 1, 20 1998, and for receipts from those utility bills, "gross 21 receipts" does not include (i) amounts added to customers' 22 bills under Section 9-222 of the Public Utilities Act, or 23 (ii) amounts added to customers' bills by taxpayers who are 24 not subject to rate regulation by the Illinois Commerce 25 Commission for the purpose of recovering any of the tax 26 liabilities described in Section 9-222 of the Public 27 Utilities Act. 28 For purposes of this Section "gross receipts" shall not 29 include (i) amounts added to customers' bills under Section 30 9-221 of the Public Utilities Act, or (ii) charges added to 31 customers' bills to recover the surcharge imposed under the 32 Emergency Telephone System Act. This paragraph is not 33 intended to nor does it make any change in the meaning of 34 "gross receipts" for the purposes of this Section, but is HB0843 Enrolled -37- LRB9205887REdv 1 intended to remove possible ambiguities, thereby confirming 2 the existing meaning of "gross receipts" prior to the 3 effective date of this amendatory Act of 1995. 4 The words "transmitting messages", in addition to the 5 usual and popular meaning of person to person communication, 6 shall include the furnishing, for a consideration, of 7 services or facilities (whether owned or leased), or both, to 8 persons in connection with the transmission of messages where 9 those persons do not, in turn, receive any consideration in 10 connection therewith, but shall not include such furnishing 11 of services or facilities to persons for the transmission of 12 messages to the extent that any such services or facilities 13 for the transmission of messages are furnished for a 14 consideration, by those persons to other persons, for the 15 transmission of messages. 16 "Person" as used in this Section means any natural 17 individual, firm, trust, estate, partnership, association, 18 joint stock company, joint adventure, corporation, limited 19 liability company, municipal corporation, the State or any of 20 its political subdivisions, any State university created by 21 statute, or a receiver, trustee, guardian or other 22 representative appointed by order of any court. 23 "Person maintaining a place of business in this State" 24 shall mean any person having or maintaining within this 25 State, directly or by a subsidiary or other affiliate, an 26 office, generation facility, distribution facility, 27 transmission facility, sales office or other place of 28 business, or any employee, agent, or other representative 29 operating within this State under the authority of the person 30 or its subsidiary or other affiliate, irrespective of whether 31 such place of business or agent or other representative is 32 located in this State permanently or temporarily, or whether 33 such person, subsidiary or other affiliate is licensed or 34 qualified to do business in this State. HB0843 Enrolled -38- LRB9205887REdv 1 "Public utility" shall have the meaning ascribed to it in 2 Section 3-105 of the Public Utilities Act and shall include 3 telecommunications carriers as defined in Section 13-202 of 4 that Act and alternative retail electric suppliers as defined 5 in Section 16-102 of that Act. 6 "Purchase at retail" shall mean any acquisition of 7 electricity by a purchaser for purposes of use or 8 consumption, and not for resale, but shall not include the 9 use of electricity by a public utility directly in the 10 generation, production, transmission, delivery or sale of 11 electricity. 12 "Purchaser" shall mean any person who uses or consumes, 13 within the corporate limits of the municipality, electricity 14 acquired in a purchase at retail. 15 In the case of persons engaged in the business of 16 transmitting messages through the use of mobile equipment, 17 such as cellular phones and paging systems, the gross 18 receipts from the business shall be deemed to originate 19 within the corporate limits of a municipality only if the 20 customer's place of primary use as defined in the Mobile 21 Telecommunications Sourcing Conformity Act
address to which22 the bills for the service are sentis within those corporate 23 limits. If, however, that address is not located within a24 municipality that imposes a tax under this Section, then (i)25 if the party responsible for the bill is not an individual,26 the gross receipts from the business shall be deemed to27 originate within the corporate limits of the municipality28 where that party's principal place of business in Illinois is29 located, and (ii) if the party responsible for the bill is an30 individual, the gross receipts from the business shall be31 deemed to originate within the corporate limits of the32 municipality where that party's principal residence in33 Illinois is located.34 (e) Any municipality that imposes taxes upon public HB0843 Enrolled -39- LRB9205887REdv 1 utilities or upon the privilege of using or consuming 2 electricity pursuant to this Section whose territory includes 3 any part of an enterprise zone or federally designated 4 Foreign Trade Zone or Sub-Zone may, by a majority vote of its 5 corporate authorities, exempt from those taxes for a period 6 not exceeding 20 years any specified percentage of gross 7 receipts of public utilities received from, or electricity 8 used or consumed by, business enterprises that: 9 (1) either (i) make investments that cause the 10 creation of a minimum of 200 full-time equivalent jobs in 11 Illinois, (ii) make investments of at least $175,000,000 12 that cause the creation of a minimum of 150 full-time 13 equivalent jobs in Illinois, or (iii) make investments 14 that cause the retention of a minimum of 1,000 full-time 15 jobs in Illinois; and 16 (2) are either (i) located in an Enterprise Zone 17 established pursuant to the Illinois Enterprise Zone Act 18 or (ii) Department of Commerce and Community Affairs 19 designated High Impact Businesses located in a federally 20 designated Foreign Trade Zone or Sub-Zone; and 21 (3) are certified by the Department of Commerce and 22 Community Affairs as complying with the requirements 23 specified in clauses (1) and (2) of this paragraph (e). 24 Upon adoption of the ordinance authorizing the exemption, 25 the municipal clerk shall transmit a copy of that ordinance 26 to the Department of Commerce and Community Affairs. The 27 Department of Commerce and Community Affairs shall determine 28 whether the business enterprises located in the municipality 29 meet the criteria prescribed in this paragraph. If the 30 Department of Commerce and Community Affairs determines that 31 the business enterprises meet the criteria, it shall grant 32 certification. The Department of Commerce and Community 33 Affairs shall act upon certification requests within 30 days 34 after receipt of the ordinance. HB0843 Enrolled -40- LRB9205887REdv 1 Upon certification of the business enterprise by the 2 Department of Commerce and Community Affairs, the Department 3 of Commerce and Community Affairs shall notify the Department 4 of Revenue of the certification. The Department of Revenue 5 shall notify the public utilities of the exemption status of 6 the gross receipts received from, and the electricity used or 7 consumed by, the certified business enterprises. Such 8 exemption status shall be effective within 3 months after 9 certification. 10 (f) A municipality that imposes taxes upon public 11 utilities or upon the privilege of using or consuming 12 electricity under this Section and whose territory includes 13 part of another unit of local government or a school district 14 may by ordinance exempt the other unit of local government or 15 school district from those taxes. 16 (g) The amendment of this Section by Public Act 84-127 17 shall take precedence over any other amendment of this 18 Section by any other amendatory Act passed by the 84th 19 General Assembly before the effective date of Public Act 20 84-127. 21 (h) In any case in which, before July 1, 1992, a person 22 engaged in the business of transmitting messages through the 23 use of mobile equipment, such as cellular phones and paging 24 systems, has determined the municipality within which the 25 gross receipts from the business originated by reference to 26 the location of its transmitting or switching equipment, then 27 (i) neither the municipality to which tax was paid on that 28 basis nor the taxpayer that paid tax on that basis shall be 29 required to rebate, refund, or issue credits for any such tax 30 or charge collected from customers to reimburse the taxpayer 31 for the tax and (ii) no municipality to which tax would have 32 been paid with respect to those gross receipts if the 33 provisions of this amendatory Act of 1991 had been in effect 34 before July 1, 1992, shall have any claim against the HB0843 Enrolled -41- LRB9205887REdv 1 taxpayer for any amount of the tax. 2 (Source: P.A. 90-16, eff. 6-16-97; 90-561, eff. 8-1-98; 3 90-562, eff. 12-16-97; 90-655, eff. 7-30-98; 91-870, eff. 4 6-22-00.) 5 Section 999. Effective date. This Act takes effect on 6 August 1, 2002.
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