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92_HB2097 LRB9205006SMdv 1 AN ACT in relation to taxes. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Municipal Code is amended by 5 changing Section 8-11-2 as follows: 6 (65 ILCS 5/8-11-2) (from Ch. 24, par. 8-11-2) 7 Sec. 8-11-2. The corporate authorities of any 8 municipality may tax any or all of the following occupations 9 or privileges: 10 1. Persons engaged in the business of transmitting 11 messages by means of electricity or radio magnetic waves, 12 or fiber optics, at a rate not to exceed 5% of the gross 13 receipts from that business originating within the 14 corporate limits of the municipality. Beginning January 15 1, 2001, prepaid telephone calling arrangements shall not 16 be subject to the tax imposed under this Section. For 17 purposes of this Section, "prepaid telephone calling 18 arrangements" means that term as defined in Section 2-27 19 of the Retailers' Occupation Tax Act. 20 2. Persons engaged in the business of distributing, 21 supplying, furnishing, or selling gas for use or 22 consumption within the corporate limits of a municipality 23 of 500,000 or fewer population, and not for resale, at a 24 rate not to exceed 5% of the gross receipts therefrom. 25 2a. Persons engaged in the business of 26 distributing, supplying, furnishing, or selling gas for 27 use or consumption within the corporate limits of a 28 municipality of over 500,000 population, and not for 29 resale, at a rate not to exceed 8% of the gross receipts 30 therefrom. If imposed, this tax shall be paid in monthly 31 payments. -2- LRB9205006SMdv 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, -3- LRB9205006SMdv 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 -4- LRB9205006SMdv 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 The taxes imposed under this subparagraph 3 shall 5 not be in addition to the tax authorized by subsection 6 (c-5), but rather shall be an alternative method to 7 impose the tax. 8 4. Persons engaged in the business of distributing, 9 supplying, furnishing, or selling water for use or 10 consumption within the corporate limits of the 11 municipality, and not for resale, at a rate not to exceed 12 5% of the gross receipts therefrom. 13 None of the taxes authorized by this Section may be 14 imposed with respect to any transaction in interstate 15 commerce or otherwise to the extent to which the business or 16 privilege may not, under the constitution and statutes of the 17 United States, be made the subject of taxation by this State 18 or any political sub-division thereof; nor shall any persons 19 engaged in the business of distributing, supplying, 20 furnishing, selling or transmitting gas, water, or 21 electricity, or engaged in the business of transmitting 22 messages, or using or consuming electricity acquired in a 23 purchase at retail, be subject to taxation under the 24 provisions of this Section for those transactions that are or 25 may become subject to taxation under the provisions of the 26 "Municipal Retailers' Occupation Tax Act" authorized by 27 Section 8-11-1; nor shall any tax authorized by this Section 28 be imposed upon any person engaged in a business or on any 29 privilege unless the tax is imposed in like manner and at the 30 same rate upon all persons engaged in businesses of the same 31 class in the municipality, whether privately or municipally 32 owned or operated, or exercising the same privilege within 33 the municipality. 34 Any of the taxes enumerated in this Section may be in -5- LRB9205006SMdv 1 addition to the payment of money, or value of products or 2 services furnished to the municipality by the taxpayer as 3 compensation for the use of its streets, alleys, or other 4 public places, or installation and maintenance therein, 5 thereon or thereunder of poles, wires, pipes or other 6 equipment used in the operation of the taxpayer's business. 7 (a) If the corporate authorities of any home rule 8 municipality have adopted an ordinance that imposed a tax on 9 public utility customers, between July 1, 1971, and October 10 1, 1981, on the good faith belief that they were exercising 11 authority pursuant to Section 6 of Article VII of the 1970 12 Illinois Constitution, that action of the corporate 13 authorities shall be declared legal and valid, 14 notwithstanding a later decision of a judicial tribunal 15 declaring the ordinance invalid. No municipality shall be 16 required to rebate, refund, or issue credits for any taxes 17 described in this paragraph, and those taxes shall be deemed 18 to have been levied and collected in accordance with the 19 Constitution and laws of this State. 20 (b) In any case in which (i) prior to October 19, 1979, 21 the corporate authorities of any municipality have adopted an 22 ordinance imposing a tax authorized by this Section (or by 23 the predecessor provision of the "Revised Cities and Villages 24 Act") and have explicitly or in practice interpreted gross 25 receipts to include either charges added to customers' bills 26 pursuant to the provision of paragraph (a) of Section 36 of 27 the Public Utilities Act or charges added to customers' bills 28 by taxpayers who are not subject to rate regulation by the 29 Illinois Commerce Commission for the purpose of recovering 30 any of the tax liabilities or other amounts specified in such 31 paragraph (a) of Section 36 of that Act, and (ii) on or after 32 October 19, 1979, a judicial tribunal has construed gross 33 receipts to exclude all or part of those charges, then 34 neither those municipality nor any taxpayer who paid the tax -6- LRB9205006SMdv 1 shall be required to rebate, refund, or issue credits for any 2 tax imposed or charge collected from customers pursuant to 3 the municipality's interpretation prior to October 19, 1979. 4 This paragraph reflects a legislative finding that it would 5 be contrary to the public interest to require a municipality 6 or its taxpayers to refund taxes or charges attributable to 7 the municipality's more inclusive interpretation of gross 8 receipts prior to October 19, 1979, and is not intended to 9 prescribe or limit judicial construction of this Section. The 10 legislative finding set forth in this subsection does not 11 apply to taxes imposed after the effective date of this 12 amendatory Act of 1995. 13 (c) The tax authorized by subparagraph 3 shall be 14 collected from the purchaser by the person maintaining a 15 place of business in this State who delivers the electricity 16 to the purchaser. This tax shall constitute a debt of the 17 purchaser to the person who delivers the electricity to the 18 purchaser and if unpaid, is recoverable in the same manner as 19 the original charge for delivering the electricity. Any tax 20 required to be collected pursuant to an ordinance authorized 21 by subparagraph 3 and any such tax collected by a person 22 delivering electricity shall constitute a debt owed to the 23 municipality by such person delivering the electricity, 24 provided, that the person delivering electricity shall be 25 allowed credit for such tax related to deliveries of 26 electricity the charges for which are written off as 27 uncollectible, and provided further, that if such charges are 28 thereafter collected, the delivering supplier shall be 29 obligated to remit such tax. For purposes of this subsection 30 (c), any partial payment not specifically identified by the 31 purchaser shall be deemed to be for the delivery of 32 electricity. Persons delivering electricity shall collect the 33 tax from the purchaser by adding such tax to the gross charge 34 for delivering the electricity, in the manner prescribed by -7- LRB9205006SMdv 1 the municipality. Persons delivering electricity shall also 2 be authorized to add to such gross charge an amount equal to 3 3% of the tax to reimburse the person delivering electricity 4 for the expenses incurred in keeping records, billing 5 customers, preparing and filing returns, remitting the tax 6 and supplying data to the municipality upon request. If the 7 person delivering electricity fails to collect the tax from 8 the purchaser, then the purchaser shall be required to pay 9 the tax directly to the municipality in the manner prescribed 10 by the municipality. Persons delivering electricity who file 11 returns pursuant to this paragraph (c) shall, at the time of 12 filing such return, pay the municipality the amount of the 13 tax collected pursuant to subparagraph 3. 14 (c-5) A municipality having a population of less than 15 500,000 may, by ordinance, allow a purchaser for 16 non-residential electrical use (i) to elect to register with 17 the municipality as a self-assessing purchaser in relation to 18 payment of the tax imposed by subparagraph 3, on the 19 privilege of using or consuming electricity, and (ii) to pay 20 the tax imposed by subparagraph 3 directly to the 21 municipality on the basis of the uniform percentage of the 22 gross purchase price of electricity purchased at retail and 23 used in the municipality rather than paying the tax to the 24 purchaser's delivering supplier. The maximum rate of tax for 25 a self-assessing purchaser may not exceed 5% and the minimum 26 rate of tax shall be no less than and, until December 31, 27 2008, the maximum rate of tax shall be no more than, the rate 28 the municipality applied in the last full calendar year prior 29 to the effective date of Section 65 of Public Act 90-561 30 (August 1, 1998) based on the purchase price of the 31 electricity purchased at retail and used in the community as 32 calculated on a monthly basis for each purchaser. The 33 municipality shall establish by ordinance the requirements 34 for (i) the voluntary election, registration, and termination -8- LRB9205006SMdv 1 of a self-assessing purchaser, (ii) direct return and payment 2 of the taxes to the municipality by a self-assessing 3 purchaser, and (iii) the rate of tax applied, which shall be 4 the percent of the gross purchase price as provided in this 5 subsection up to but not exceeding 5%. The taxes imposed 6 under this subsection (c-5) shall not be in addition to the 7 tax authorized by subparagraph 3, but rather shall be an 8 alternative method to impose the tax. 9 (d) For the purpose of the taxes enumerated in this 10 Section: 11 "Gross receipts" means the consideration received for the 12 transmission of messages, the consideration received for 13 distributing, supplying, furnishing or selling gas for use or 14 consumption and not for resale, and the consideration 15 received for distributing, supplying, furnishing or selling 16 water for use or consumption and not for resale, and for all 17 services rendered in connection therewith valued in money, 18 whether received in money or otherwise, including cash, 19 credit, services and property of every kind and material and 20 for all services rendered therewith, and shall be determined 21 without any deduction on account of the cost of transmitting 22 such messages, without any deduction on account of the cost 23 of the service, product or commodity supplied, the cost of 24 materials used, labor or service cost, or any other expenses 25 whatsoever. "Gross receipts" shall not include that portion 26 of the consideration received for distributing, supplying, 27 furnishing, or selling gas or water to, or for the 28 transmission of messages for, business enterprises described 29 in paragraph (e) of this Section to the extent and during the 30 period in which the exemption authorized by paragraph (e) is 31 in effect or for school districts or units of local 32 government described in paragraph (f) during the period in 33 which the exemption authorized in paragraph (f) is in effect. 34 "Gross receipts" shall not include amounts paid by -9- LRB9205006SMdv 1 telecommunications retailers under the Telecommunications 2 Municipal Infrastructure Maintenance Fee Act. 3 For utility bills issued on or after May 1, 1996, but 4 before May 1, 1997, and for receipts from those utility 5 bills, "gross receipts" does not include one-third of (i) 6 amounts added to customers' bills under Section 9-222 of the 7 Public Utilities Act, or (ii) amounts added to customers' 8 bills by taxpayers who are not subject to rate regulation by 9 the Illinois Commerce Commission for the purpose of 10 recovering any of the tax liabilities described in Section 11 9-222 of the Public Utilities Act. For utility bills issued 12 on or after May 1, 1997, but before May 1, 1998, and for 13 receipts from those utility bills, "gross receipts" does not 14 include two-thirds of (i) amounts added to customers' bills 15 under Section 9-222 of the Public Utilities Act, or (ii) 16 amount added to customers' bills by taxpayers who are not 17 subject to rate regulation by the Illinois Commerce 18 Commission for the purpose of recovering any of the tax 19 liabilities described in Section 9-222 of the Public 20 Utilities Act. For utility bills issued on or after May 1, 21 1998, and for receipts from those utility bills, "gross 22 receipts" does not include (i) amounts added to customers' 23 bills under Section 9-222 of the Public Utilities Act, or 24 (ii) amounts added to customers' bills by taxpayers who are 25 not subject to rate regulation by the Illinois Commerce 26 Commission for the purpose of recovering any of the tax 27 liabilities described in Section 9-222 of the Public 28 Utilities Act. 29 For purposes of this Section "gross receipts" shall not 30 include (i) amounts added to customers' bills under Section 31 9-221 of the Public Utilities Act, or (ii) charges added to 32 customers' bills to recover the surcharge imposed under the 33 Emergency Telephone System Act. This paragraph is not 34 intended to nor does it make any change in the meaning of -10- LRB9205006SMdv 1 "gross receipts" for the purposes of this Section, but is 2 intended to remove possible ambiguities, thereby confirming 3 the existing meaning of "gross receipts" prior to the 4 effective date of this amendatory Act of 1995. 5 The words "transmitting messages", in addition to the 6 usual and popular meaning of person to person communication, 7 shall include the furnishing, for a consideration, of 8 services or facilities (whether owned or leased), or both, to 9 persons in connection with the transmission of messages where 10 those persons do not, in turn, receive any consideration in 11 connection therewith, but shall not include such furnishing 12 of services or facilities to persons for the transmission of 13 messages to the extent that any such services or facilities 14 for the transmission of messages are furnished for a 15 consideration, by those persons to other persons, for the 16 transmission of messages. 17 "Person" as used in this Section means any natural 18 individual, firm, trust, estate, partnership, association, 19 joint stock company, joint adventure, corporation, limited 20 liability company, municipal corporation, the State or any of 21 its political subdivisions, any State university created by 22 statute, or a receiver, trustee, guardian or other 23 representative appointed by order of any court. 24 "Person maintaining a place of business in this State" 25 shall mean any person having or maintaining within this 26 State, directly or by a subsidiary or other affiliate, an 27 office, generation facility, distribution facility, 28 transmission facility, sales office or other place of 29 business, or any employee, agent, or other representative 30 operating within this State under the authority of the person 31 or its subsidiary or other affiliate, irrespective of whether 32 such place of business or agent or other representative is 33 located in this State permanently or temporarily, or whether 34 such person, subsidiary or other affiliate is licensed or -11- LRB9205006SMdv 1 qualified to do business in this State. 2 "Public utility" shall have the meaning ascribed to it in 3 Section 3-105 of the Public Utilities Act and shall include 4 telecommunications carriers as defined in Section 13-202 of 5 that Act and alternative retail electric suppliers as defined 6 in Section 16-102 of that Act. 7 "Purchase at retail" shall mean any acquisition of 8 electricity by a purchaser for purposes of use or 9 consumption, and not for resale, but shall not include the 10 use of electricity by a public utility directly in the 11 generation, production, transmission, delivery or sale of 12 electricity. 13 "Purchaser" shall mean any person who uses or consumes, 14 within the corporate limits of the municipality, electricity 15 acquired in a purchase at retail. 16 In the case of persons engaged in the business of 17 transmitting messages through the use of mobile equipment, 18 such as cellular phones and paging systems, the gross 19 receipts from the business shall be deemed to originate 20 within the corporate limits of a municipality only if the 21 address to which the bills for the service are sent is within 22 those corporate limits. If, however, that address is not 23 located within a municipality that imposes a tax under this 24 Section, then (i) if the party responsible for the bill is 25 not an individual, the gross receipts from the business shall 26 be deemed to originate within the corporate limits of the 27 municipality where that party's principal place of business 28 in Illinois is located, and (ii) if the party responsible for 29 the bill is an individual, the gross receipts from the 30 business shall be deemed to originate within the corporate 31 limits of the municipality where that party's principal 32 residence in Illinois is located. 33 (e) Any municipality that imposes taxes upon public 34 utilities or upon the privilege of using or consuming -12- LRB9205006SMdv 1 electricity pursuant to this Section whose territory includes 2 any part of an enterprise zone or federally designated 3 Foreign Trade Zone or Sub-Zone may, by a majority vote of its 4 corporate authorities, exempt from those taxes for a period 5 not exceeding 20 years any specified percentage of gross 6 receipts of public utilities received from, or electricity 7 used or consumed by, business enterprises that: 8 (1) either (i) make investments that cause the 9 creation of a minimum of 200 full-time equivalent jobs in 10 Illinois, (ii) make investments of at least $175,000,000 11 that cause the creation of a minimum of 150 full-time 12 equivalent jobs in Illinois, or (iii) make investments 13 that cause the retention of a minimum of 1,000 full-time 14 jobs in Illinois; and 15 (2) are either (i) located in an Enterprise Zone 16 established pursuant to the Illinois Enterprise Zone Act 17 or (ii) Department of Commerce and Community Affairs 18 designated High Impact Businesses located in a federally 19 designated Foreign Trade Zone or Sub-Zone; and 20 (3) are certified by the Department of Commerce and 21 Community Affairs as complying with the requirements 22 specified in clauses (1) and (2) of this paragraph (e). 23 Upon adoption of the ordinance authorizing the exemption, 24 the municipal clerk shall transmit a copy of that ordinance 25 to the Department of Commerce and Community Affairs. The 26 Department of Commerce and Community Affairs shall determine 27 whether the business enterprises located in the municipality 28 meet the criteria prescribed in this paragraph. If the 29 Department of Commerce and Community Affairs determines that 30 the business enterprises meet the criteria, it shall grant 31 certification. The Department of Commerce and Community 32 Affairs shall act upon certification requests within 30 days 33 after receipt of the ordinance. 34 Upon certification of the business enterprise by the -13- LRB9205006SMdv 1 Department of Commerce and Community Affairs, the Department 2 of Commerce and Community Affairs shall notify the Department 3 of Revenue of the certification. The Department of Revenue 4 shall notify the public utilities of the exemption status of 5 the gross receipts received from, and the electricity used or 6 consumed by, the certified business enterprises. Such 7 exemption status shall be effective within 3 months after 8 certification. 9 (f) A municipality that imposes taxes upon public 10 utilities or upon the privilege of using or consuming 11 electricity under this Section and whose territory includes 12 part of another unit of local government or a school district 13 may by ordinance exempt the other unit of local government or 14 school district from those taxes. 15 (g) The amendment of this Section by Public Act 84-127 16 shall take precedence over any other amendment of this 17 Section by any other amendatory Act passed by the 84th 18 General Assembly before the effective date of Public Act 19 84-127. 20 (h) In any case in which, before July 1, 1992, a person 21 engaged in the business of transmitting messages through the 22 use of mobile equipment, such as cellular phones and paging 23 systems, has determined the municipality within which the 24 gross receipts from the business originated by reference to 25 the location of its transmitting or switching equipment, then 26 (i) neither the municipality to which tax was paid on that 27 basis nor the taxpayer that paid tax on that basis shall be 28 required to rebate, refund, or issue credits for any such tax 29 or charge collected from customers to reimburse the taxpayer 30 for the tax and (ii) no municipality to which tax would have 31 been paid with respect to those gross receipts if the 32 provisions of this amendatory Act of 1991 had been in effect 33 before July 1, 1992, shall have any claim against the 34 taxpayer for any amount of the tax. -14- LRB9205006SMdv 1 (Source: P.A. 90-16, eff. 6-16-97; 90-561, eff. 8-1-98; 2 90-562, eff. 12-16-97; 90-655, eff. 7-30-98; 91-870, eff. 3 6-22-00.) 4 Section 99. Effective date. This Act takes effect upon 5 becoming law.
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