[ Home ] [ ILCS ] [ Search ] [ Bottom ]
[ Other General Assemblies ]
Public Act 92-0012
HB1599 Enrolled LRB9207178TAcs
AN ACT regarding Illinois resource development and energy
security.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Illinois Resource Development and Energy Security Act.
Section 5. Findings. The General Assembly finds that:
(a) Growth of the State's population and economic base
has created a need for new electric generation capacity in
Illinois.
(b) Illinois has considerable natural resources that are
currently underutilized and could support development of new
electric power at an affordable price.
(c) The development of new electric generating capacity
is needed if the State is to continue to be successful in
attracting new businesses and jobs.
(d) Certain regions of the State, such as Southern
Illinois, could benefit greatly from new employment
opportunities created by development of electric generating
plants utilizing the plentiful supply of Illinois coal.
(e) Technology can be deployed that allows high-sulfur
Illinois coal to be burned efficiently while meeting strict
State and federal air quality limitations. Specifically, the
State of Illinois will encourage the use of advanced clean
coal technology, such as coal gasification.
(f) Renewable forms of energy should be promoted as an
important element of the energy and environmental policies of
the State and it is a goal of the State that at least 5% of
the State's energy production and use be derived from
renewable forms of energy by 2010 and at least 15% from
renewable forms of energy by 2020.
Section 10. Definitions. As used in this Act:
"Department" means the Illinois Department of Commerce
and Community Affairs.
Section 15. Purpose. The State of Illinois and its
people will benefit for many years to come if new electric
generating facilities are built that increase the in-State
capacity to provide for current and anticipated electricity
demand at a competitive price. The purpose of this Act is to
enhance the State's energy security by ensuring that: (i) the
State's vast and underutilized coal resources are tapped as a
fuel source for new electric plants; (ii) the electric
transmission system within the State is upgraded to more
efficiently distribute additional amounts of electricity;
(iii) well-paying jobs are created as new electric plants are
built in regions of the State with relatively high
unemployment; and (iv) pilot projects are undertaken to
explore the capacity of new, often renewable sources of
energy to contribute to the State's energy security.
Section 20. Rules. The Department is authorized to
adopt rules necessary to administer the requirements of this
Act. The Department may implement this Act through the use
of emergency rules in accordance with the provisions of
Section 5-45 of the Illinois Administrative Procedure Act.
For purposes of the Illinois Administrative Procedure Act,
the adoption of rules to implement this Act shall be deemed
an emergency and necessary for the public interest, safety,
and welfare.
Section 905. The Department of Commerce and Community
Affairs Law of the Civil Administrative Code of Illinois is
amended by adding Section 605-332 as follows:
(20 ILCS 605/605-332 new)
Sec. 605-332. Financial assistance to energy generation
facilities.
(a) As used in this Section:
"New electric generating facility" means a
newly-constructed electric generation plant or a newly
constructed generation capacity expansion at an existing
facility, including the transmission lines and associated
equipment that transfers electricity from points of supply to
points of delivery, and for which foundation construction
commenced not sooner than July 1, 2001, which is designed to
provide baseload electric generation operating on a
continuous basis throughout the year; and which has an
aggregate rated generating capacity of at least 400 megawatts
for all new units at one site, uses coal or gases derived
from coal as its primary fuel source, and supports the
creation of at least 150 new Illinois coal mining jobs.
"Eligible business" means an entity that proposes to
construct a new electric generating facility and that has
applied to the Department to receive financial assistance
pursuant to this Section. With respect to use and occupation
taxes, wherever there is a reference to taxes, that reference
means only those taxes paid on Illinois-mined coal used in a
new electric generating facility.
"Department" means the Illinois Department of Commerce
and Community Affairs.
(b) The Department is authorized to provide financial
assistance to eligible businesses for new electric generating
facilities from funds appropriated by the General Assembly as
further provided in this Section.
An eligible business seeking qualification for financial
assistance for a new electric generating facility, for
purposes of this Section only, shall apply to the Department
in the manner specified by the Department. An application
shall include, but not be limited to:
(1) the completion date of the new electric
generating facility for which financial assistance is
sought;
(2) copies of documentation deemed acceptable by
the Department establishing the total State occupation
and use taxes paid on Illinois-mined coal used at the new
electric generating facility for a minimum of 4 preceding
calendar quarters; and
(3) the amount of capital investment by the
eligible business in the new electric generating
facility.
The Department shall determine the maximum amount of
financial assistance for eligible businesses in accordance
with this paragraph. The Department shall not provide
financial assistance from general obligation bond funds to
any eligible business unless it receives a written
certification from the Director of the Bureau of the Budget
that 80% of the State occupation and use tax receipts for a
minimum of the preceding 4 calendar quarters for all eligible
businesses equal or exceed 110% of the maximum annual debt
service required with respect to general obligation bonds
issued for that purpose. The Department may provide
financial assistance not to exceed the amount of State
general obligation debt calculated as above, the amount of
capital investment in the energy generation facility, or
$100,000,000, whichever is less. Financial assistance
received pursuant to this Section may be used for capital
facilities consisting of buildings, structures, durable
equipment, and land at the new electric generating facility.
An eligible business shall file a monthly report with the
Illinois Department of Revenue stating the amount of
Illinois-mined coal purchased during the previous month for
use in the new electric generating facility, the purchase
price of that coal, the amount of State occupation and use
taxes paid on that purchase to the seller of the
Illinois-mined coal, and such other information as that
Department may reasonably require. In sales of
Illinois-mined coal between related parties, the purchase
price of the coal must have been determined in an arms-length
transaction. The report shall be filed with the Illinois
Department of Revenue on or before the 20th day of each month
on a form provided by that Department. However, no report
need be filed by an eligible business in a month when it made
no reportable purchases of coal in the previous month. The
Illinois Department of Revenue shall provide a summary of
such reports to the Bureau of the Budget.
Upon granting financial assistance to an eligible
business, the Department shall certify the name of the
eligible business to the Illinois Department of Revenue.
Beginning with the receipt of the first report of State
occupation and use taxes paid by an eligible business and
continuing for a 25-year period, the Illinois Department of
Revenue shall each month pay into the Energy Infrastructure
Fund 80% of the net revenue realized from the 6.25% general
rate on the selling price of Illinois-mined coal that was
sold to an eligible business.
Section 910. The Illinois Enterprise Zone Act is amended
by changing Section 5.5 as follows:
(20 ILCS 655/5.5) (from Ch. 67 1/2, par. 609.1)
Sec. 5.5. High Impact Business.
(a) In order to respond to unique opportunities to
assist in the encouragement, development, growth and
expansion of the private sector through large scale
investment and development projects, the Department is
authorized to receive and approve applications for the
designation of "High Impact Businesses" in Illinois subject
to the following conditions:
(1) such applications may be submitted at any time
during the year;
(2) such business is not located, at the time of
designation, in an enterprise zone designated pursuant to
this Act;
(3) (A) the business intends to make a minimum
investment of $12,000,000 which will be placed in
service in qualified property and intends to create
500 full-time equivalent jobs at a designated
location in Illinois or intends to make a minimum
investment of $30,000,000 which will be placed in
service in qualified property and intends to retain
1,500 full-time jobs at a designated location in
Illinois. The business must certify in writing that
the investments would not be placed in service in
qualified property and the job creation or job
retention would not occur without the tax credits
and exemptions set forth in subsection (b) of this
Section. The terms "placed in service" and
"qualified property" have the same meanings as
described in subsection (h) of Section 201 of the
Illinois Income Tax Act; or
(B) the business intends to establish a new
electric generating facility at a designated
location in Illinois. "New electric generating
facility" for purposes of this Section means a
newly-constructed electric generation plant or a
newly-constructed generation capacity expansion at
an existing electric generation plant, including the
transmission lines and associated equipment that
transfers electricity from points of supply to
points of delivery, and for which such new
foundation construction commenced not sooner than
July 1, 2001. Such facility shall be designed to
provide baseload electric generation and shall
operate on a continuous basis throughout the year;
and shall have an aggregate rated generating
capacity of at least 1,000 megawatts for all new
units at one site if it uses natural gas as its
primary fuel and foundation construction of the
facility is commenced on or before December 31,
2004, or shall have an aggregate rated generating
capacity of at least 400 megawatts for all new units
at one site if it uses coal or gases derived from
coal as its primary fuel and shall support the
creation of at least 150 new Illinois coal mining
jobs. The business must certify in writing that the
investments necessary to establish a new electric
generating facility would not be placed in service
and the job creation in the case of a coal-fueled
plant would not occur without the tax credits and
exemptions set forth in subsection (b-5) of this
Section. The term "placed in service" has the same
meaning as described in subsection (h) of Section
201 of the Illinois Income Tax Act; or
(C) the business intends to establish
production operations at a new coal mine,
re-establish production operations at a closed coal
mine, or expand production at an existing coal mine
at a designated location in Illinois not sooner than
July 1, 2001; provided that the production
operations result in the creation of 150 new
Illinois coal mining jobs as described in
subdivision (a)(3)(B) of this Section, and further
provided that the coal extracted from such mine is
utilized as the predominant source for a new
electric generating facility. The business must
certify in writing that the investments necessary to
establish a new, expanded, or reopened coal mine
would not be placed in service and the job creation
would not occur without the tax credits and
exemptions set forth in subsection (b-5) of this
Section. The term "placed in service" has the same
meaning as described in subsection (h) of Section
201 of the Illinois Income Tax Act; or
(D) the business intends to construct new
transmission facilities or upgrade existing
transmission facilities at designated locations in
Illinois, for which construction commenced not
sooner than July 1, 2001. For the purposes of this
Section, "transmission facilities" means
transmission lines with a voltage rating of 115
kilovolts or above, including associated equipment,
that transfer electricity from points of supply to
points of delivery and that transmit a majority of
the electricity generated by a new electric
generating facility designated as a High Impact
Business in accordance with this Section. The
business must certify in writing that the
investments necessary to construct new transmission
facilities or upgrade existing transmission
facilities would not be placed in service without
the tax credits and exemptions set forth in
subsection (b-5) of this Section. The term "placed
in service" has the same meaning as described in
subsection (h) of Section 201 of the Illinois Income
Tax Act; and
(4) no later than 90 days after an application is
submitted, the Department shall notify the applicant of
the Department's determination of the qualification of
the proposed High Impact Business under this Section.
(b) Businesses designated as High Impact Businesses
pursuant to subdivision (a)(3)(A) of this Section shall
qualify for the credits and exemptions described in the
following Acts: Section 9-222 and Section 9-222.1A of The
Public Utilities Act, subsection (h) of Section 201 of the
Illinois Income Tax Act; and, Section 1d of the Retailers'
Occupation Tax Act, provided that these credits and
exemptions described in these Acts shall not be authorized
until the minimum investments set forth in subdivision
(a)(3)(A) subsection (a) of this Section have been placed in
service in qualified properties and, in the case of the
exemptions described in the Public Utilities Act and Section
1d of the Retailers' Occupation Tax Act, the minimum
full-time equivalent jobs or full-time jobs set forth in
subdivision (a)(3)(A) subsection (a) of this Section have
been created or retained. Businesses designated as High
Impact Businesses under this Section shall also qualify for
the exemption described in Section 5l of the Retailers'
Occupation Tax Act. The credit provided in subsection (h) of
Section 201 of the Illinois Income Tax Act shall be
applicable to investments in qualified property as set forth
in subdivision (a)(3)(A) subsection (a) of this Section.
(b-5) Businesses designated as High Impact Businesses
pursuant to subdivisions (a)(3)(B), (a)(3)(C), and (a)(3)(D)
of this Section shall qualify for the credits and exemptions
described in the following Acts: Section 51 of the
Retailers' Occupation Tax Act, Section 9-222 and Section
9-222.1A of the Public Utilities Act, and subsection (h) of
Section 201 of the Illinois Income Tax Act; however, the
credits and exemptions authorized under Section 9-222 and
Section 9-222.1A of the Public Utilities Act, and subsection
(h) of Section 201 of the Illinois Income Tax Act shall not
be authorized until the new electric generating facility, the
new transmission facility, or the new, expanded, or reopened
coal mine is operational, except that a new electric
generating facility whose primary fuel source is natural gas
is eligible only for the exemption under Section 5l of the
Retailers' Occupation Tax Act.
(c) High Impact Businesses located in federally
designated foreign trade zones or sub-zones are also eligible
for additional credits, exemptions and deductions as
described in the following Acts: Section 9-221 and Section
9-222.1 of the Public Utilities Act; and subsection (g) of
Section 201, and Section 203 of the Illinois Income Tax Act.
(d) Existing Illinois businesses which apply for
designation as a High Impact Business must provide the
Department with the prospective plan for which 1,500
full-time jobs would be eliminated in the event that the
business is not designated.
(e) New proposed facilities which apply for designation
as High Impact Business must provide the Department with
proof of alternative non-Illinois sites which would receive
the proposed investment and job creation in the event that
the business is not designated as a High Impact Business.
(f) In the event that a business is designated a High
Impact Business and it is later determined after reasonable
notice and an opportunity for a hearing as provided under The
Illinois Administrative Procedure Act, that the business
would have placed in service in qualified property the
investments and created or retained the requisite number of
jobs without the benefits of the High Impact Business
designation, the Department shall be required to immediately
revoke the designation and notify the Director of the
Department of Revenue who shall begin proceedings to recover
all wrongfully exempted State taxes with interest. The
business shall also be ineligible for all State funded
Department programs for a period of 10 years.
(g) The Department shall revoke a High Impact Business
designation if the participating business fails to comply
with the terms and conditions of the designation.
(h) Prior to designating a business, the Department
shall provide the members of the General Assembly and
Illinois Economic and Fiscal Commission with a report setting
forth the terms and conditions of the designation and
guarantees that have been received by the Department in
relation to the proposed business being designated.
(Source: P.A. 91-914, eff. 7-7-00.)
Section 912. The Renewable Energy, Energy Efficiency,
and Coal Resources Development Law of 1997 is amended by
changing Section 6-3 as follows:
(20 ILCS 687/6-3)
(Section scheduled to be repealed on December 16, 2007)
Sec. 6-3. Renewable energy resources program.
(a) The Department of Commerce and Community Affairs, to
be called the "Department" hereinafter in this Law, shall
administer the Renewable Energy Resources Program to provide
grants, loans, and other incentives to foster investment in
and the development and use of renewable energy resources.
(b) The Department shall establish eligibility criteria
for grants, loans, and other incentives to foster investment
in and the development and use of renewable energy resources.
These criteria shall be reviewed annually and adjusted as
necessary. The criteria should promote the goal of fostering
investment in and the development and use, in Illinois, of
renewable energy resources.
(c) The Department shall accept applications for grants,
loans, and other incentives to foster investment in and the
development and use of renewable energy resources.
(d) To the extent that funds are available and
appropriated, the Department shall provide grants, loans, and
other incentives to applicants that meet the criteria
specified by the Department.
(e) The Department shall conduct an annual study on the
use and availability of renewable energy resources in
Illinois. Each year, the Department shall submit a report on
the study to the General Assembly. This report shall include
suggestions for legislation which will encourage the
development and use of renewable energy resources.
(f) As used in this Law, "renewable energy resources"
includes energy from wind, solar thermal energy, photovoltaic
cells and panels, dedicated crops grown for energy production
and organic waste biomass, hydropower that does not involve
new construction or significant expansion of hydropower dams,
and other such alternative sources of environmentally
preferable energy. "Renewable energy resources" does not
include, however, energy from the incineration, burning or
heating of waste wood, tires, garbage, general household,
institutional and commercial waste, industrial lunchroom or
office waste, landscape waste, or construction or demolition
debris.
(g) There is created the Energy Efficiency Investment
Fund as a special fund in the State Treasury, to be
administered by the Department to support the development of
technologies for wind, biomass, and solar power in Illinois.
The Department may accept private and public funds, including
federal funds, for deposit into the Fund.
(Source: P.A. 90-561, eff. 12-16-97.)
Section 915. The State Finance Act is amended by adding
Sections 5.545, 5.546, and 6z-51 as follows:
(30 ILCS 105/5.545 new)
Sec. 5.545. The Energy Infrastructure Fund.
(30 ILCS 105/5.546 new)
Sec. 5.546. The Energy Efficiency Investment Fund.
(30 ILCS 105/6z-51 new)
Sec. 6z-51. The Energy Infrastructure Fund.
(a) The Energy Infrastructure Fund is created as a
special fund in the State treasury.
(b) Money in the Energy Infrastructure Fund shall, if
and when the State of Illinois issues any bonded indebtedness
for financial assistance to new electric generating
facilities, as provided in Section 605-332 of the Department
of Commerce and Community Affairs Law of the Civil
Administrative Code of Illinois, be set aside and used for
the purpose of paying and discharging annually the principal
and interest on that bonded indebtedness then due and
payable, and for no other purpose.
In addition to other transfers to the General Obligation
Bond Retirement and Interest Fund made pursuant to Section 15
of the General Obligation Bond Act, upon each delivery of
bonds issued for financial assistance to new electric
generating facilities under Section 605-332 of the Department
of Commerce and Community Affairs Law of the Civil
Administrative Code of Illinois, the State Comptroller shall
compute and certify to the State Treasurer the total amount
of principal and interest, and premium, if any, on such bonds
during the then current and each succeeding fiscal year. On
or before the last day of each month, the State Treasurer and
the State Comptroller shall transfer from the Energy
Infrastructure Fund to the General Obligation Bond Retirement
and Interest Fund an amount sufficient to pay the aggregate
of the principal of, interest on, and premium, if any, on the
bonds payable on their next payment date, divided by the
number of monthly transfers occurring between the last
previous payment date (or the delivery date if no payment
date has yet occurred) and the next succeeding payment date.
(c) To the extent that moneys in the Energy
Infrastructure Fund, in the opinion of the Governor and the
Director of the Bureau of the Budget, are in excess of 125%
of the maximum debt service in any fiscal year, such surplus
shall, subject to appropriation, be used by the Department of
Commerce and Community Affairs for financial assistance under
other coal development programs administered by the
Department, in accordance with the rules of the Department or
for other State purposes subject to appropriation.
Section 918. The Illinois Income Tax Act is amended by
changing Section 201 as follows:
(35 ILCS 5/201) (from Ch. 120, par. 2-201)
Sec. 201. Tax Imposed.
(a) In general. A tax measured by net income is hereby
imposed on every individual, corporation, trust and estate
for each taxable year ending after July 31, 1969 on the
privilege of earning or receiving income in or as a resident
of this State. Such tax shall be in addition to all other
occupation or privilege taxes imposed by this State or by any
municipal corporation or political subdivision thereof.
(b) Rates. The tax imposed by subsection (a) of this
Section shall be determined as follows, except as adjusted by
subsection (d-1):
(1) In the case of an individual, trust or estate,
for taxable years ending prior to July 1, 1989, an amount
equal to 2 1/2% of the taxpayer's net income for the
taxable year.
(2) In the case of an individual, trust or estate,
for taxable years beginning prior to July 1, 1989 and
ending after June 30, 1989, an amount equal to the sum of
(i) 2 1/2% of the taxpayer's net income for the period
prior to July 1, 1989, as calculated under Section 202.3,
and (ii) 3% of the taxpayer's net income for the period
after June 30, 1989, as calculated under Section 202.3.
(3) In the case of an individual, trust or estate,
for taxable years beginning after June 30, 1989, an
amount equal to 3% of the taxpayer's net income for the
taxable year.
(4) (Blank).
(5) (Blank).
(6) In the case of a corporation, for taxable years
ending prior to July 1, 1989, an amount equal to 4% of
the taxpayer's net income for the taxable year.
(7) In the case of a corporation, for taxable years
beginning prior to July 1, 1989 and ending after June 30,
1989, an amount equal to the sum of (i) 4% of the
taxpayer's net income for the period prior to July 1,
1989, as calculated under Section 202.3, and (ii) 4.8% of
the taxpayer's net income for the period after June 30,
1989, as calculated under Section 202.3.
(8) In the case of a corporation, for taxable years
beginning after June 30, 1989, an amount equal to 4.8% of
the taxpayer's net income for the taxable year.
(c) Beginning on July 1, 1979 and thereafter, in
addition to such income tax, there is also hereby imposed the
Personal Property Tax Replacement Income Tax measured by net
income on every corporation (including Subchapter S
corporations), partnership and trust, for each taxable year
ending after June 30, 1979. Such taxes are imposed on the
privilege of earning or receiving income in or as a resident
of this State. The Personal Property Tax Replacement Income
Tax shall be in addition to the income tax imposed by
subsections (a) and (b) of this Section and in addition to
all other occupation or privilege taxes imposed by this State
or by any municipal corporation or political subdivision
thereof.
(d) Additional Personal Property Tax Replacement Income
Tax Rates. The personal property tax replacement income tax
imposed by this subsection and subsection (c) of this Section
in the case of a corporation, other than a Subchapter S
corporation and except as adjusted by subsection (d-1), shall
be an additional amount equal to 2.85% of such taxpayer's net
income for the taxable year, except that beginning on January
1, 1981, and thereafter, the rate of 2.85% specified in this
subsection shall be reduced to 2.5%, and in the case of a
partnership, trust or a Subchapter S corporation shall be an
additional amount equal to 1.5% of such taxpayer's net income
for the taxable year.
(d-1) Rate reduction for certain foreign insurers. In
the case of a foreign insurer, as defined by Section 35A-5 of
the Illinois Insurance Code, whose state or country of
domicile imposes on insurers domiciled in Illinois a
retaliatory tax (excluding any insurer whose premiums from
reinsurance assumed are 50% or more of its total insurance
premiums as determined under paragraph (2) of subsection (b)
of Section 304, except that for purposes of this
determination premiums from reinsurance do not include
premiums from inter-affiliate reinsurance arrangements),
beginning with taxable years ending on or after December 31,
1999, the sum of the rates of tax imposed by subsections (b)
and (d) shall be reduced (but not increased) to the rate at
which the total amount of tax imposed under this Act, net of
all credits allowed under this Act, shall equal (i) the total
amount of tax that would be imposed on the foreign insurer's
net income allocable to Illinois for the taxable year by such
foreign insurer's state or country of domicile if that net
income were subject to all income taxes and taxes measured by
net income imposed by such foreign insurer's state or country
of domicile, net of all credits allowed or (ii) a rate of
zero if no such tax is imposed on such income by the foreign
insurer's state of domicile. For the purposes of this
subsection (d-1), an inter-affiliate includes a mutual
insurer under common management.
(1) For the purposes of subsection (d-1), in no
event shall the sum of the rates of tax imposed by
subsections (b) and (d) be reduced below the rate at
which the sum of:
(A) the total amount of tax imposed on such
foreign insurer under this Act for a taxable year,
net of all credits allowed under this Act, plus
(B) the privilege tax imposed by Section 409
of the Illinois Insurance Code, the fire insurance
company tax imposed by Section 12 of the Fire
Investigation Act, and the fire department taxes
imposed under Section 11-10-1 of the Illinois
Municipal Code,
equals 1.25% of the net taxable premiums written for the
taxable year, as described by subsection (1) of Section
409 of the Illinois Insurance Code. This paragraph will
in no event increase the rates imposed under subsections
(b) and (d).
(2) Any reduction in the rates of tax imposed by
this subsection shall be applied first against the rates
imposed by subsection (b) and only after the tax imposed
by subsection (a) net of all credits allowed under this
Section other than the credit allowed under subsection
(i) has been reduced to zero, against the rates imposed
by subsection (d).
This subsection (d-1) is exempt from the provisions of
Section 250.
(e) Investment credit. A taxpayer shall be allowed a
credit against the Personal Property Tax Replacement Income
Tax for investment in qualified property.
(1) A taxpayer shall be allowed a credit equal to
.5% of the basis of qualified property placed in service
during the taxable year, provided such property is placed
in service on or after July 1, 1984. There shall be
allowed an additional credit equal to .5% of the basis of
qualified property placed in service during the taxable
year, provided such property is placed in service on or
after July 1, 1986, and the taxpayer's base employment
within Illinois has increased by 1% or more over the
preceding year as determined by the taxpayer's employment
records filed with the Illinois Department of Employment
Security. Taxpayers who are new to Illinois shall be
deemed to have met the 1% growth in base employment for
the first year in which they file employment records with
the Illinois Department of Employment Security. The
provisions added to this Section by Public Act 85-1200
(and restored by Public Act 87-895) shall be construed as
declaratory of existing law and not as a new enactment.
If, in any year, the increase in base employment within
Illinois over the preceding year is less than 1%, the
additional credit shall be limited to that percentage
times a fraction, the numerator of which is .5% and the
denominator of which is 1%, but shall not exceed .5%.
The investment credit shall not be allowed to the extent
that it would reduce a taxpayer's liability in any tax
year below zero, nor may any credit for qualified
property be allowed for any year other than the year in
which the property was placed in service in Illinois. For
tax years ending on or after December 31, 1987, and on or
before December 31, 1988, the credit shall be allowed for
the tax year in which the property is placed in service,
or, if the amount of the credit exceeds the tax liability
for that year, whether it exceeds the original liability
or the liability as later amended, such excess may be
carried forward and applied to the tax liability of the 5
taxable years following the excess credit years if the
taxpayer (i) makes investments which cause the creation
of a minimum of 2,000 full-time equivalent jobs in
Illinois, (ii) is located in an enterprise zone
established pursuant to the Illinois Enterprise Zone Act
and (iii) is certified by the Department of Commerce and
Community Affairs as complying with the requirements
specified in clause (i) and (ii) by July 1, 1986. The
Department of Commerce and Community Affairs shall notify
the Department of Revenue of all such certifications
immediately. For tax years ending after December 31,
1988, the credit shall be allowed for the tax year in
which the property is placed in service, or, if the
amount of the credit exceeds the tax liability for that
year, whether it exceeds the original liability or the
liability as later amended, such excess may be carried
forward and applied to the tax liability of the 5 taxable
years following the excess credit years. The credit shall
be applied to the earliest year for which there is a
liability. If there is credit from more than one tax year
that is available to offset a liability, earlier credit
shall be applied first.
(2) The term "qualified property" means property
which:
(A) is tangible, whether new or used,
including buildings and structural components of
buildings and signs that are real property, but not
including land or improvements to real property that
are not a structural component of a building such as
landscaping, sewer lines, local access roads,
fencing, parking lots, and other appurtenances;
(B) is depreciable pursuant to Section 167 of
the Internal Revenue Code, except that "3-year
property" as defined in Section 168(c)(2)(A) of that
Code is not eligible for the credit provided by this
subsection (e);
(C) is acquired by purchase as defined in
Section 179(d) of the Internal Revenue Code;
(D) is used in Illinois by a taxpayer who is
primarily engaged in manufacturing, or in mining
coal or fluorite, or in retailing; and
(E) has not previously been used in Illinois
in such a manner and by such a person as would
qualify for the credit provided by this subsection
(e) or subsection (f).
(3) For purposes of this subsection (e),
"manufacturing" means the material staging and production
of tangible personal property by procedures commonly
regarded as manufacturing, processing, fabrication, or
assembling which changes some existing material into new
shapes, new qualities, or new combinations. For purposes
of this subsection (e) the term "mining" shall have the
same meaning as the term "mining" in Section 613(c) of
the Internal Revenue Code. For purposes of this
subsection (e), the term "retailing" means the sale of
tangible personal property or services rendered in
conjunction with the sale of tangible consumer goods or
commodities.
(4) The basis of qualified property shall be the
basis used to compute the depreciation deduction for
federal income tax purposes.
(5) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in Illinois by the taxpayer, the amount
of such increase shall be deemed property placed in
service on the date of such increase in basis.
(6) The term "placed in service" shall have the
same meaning as under Section 46 of the Internal Revenue
Code.
(7) If during any taxable year, any property ceases
to be qualified property in the hands of the taxpayer
within 48 months after being placed in service, or the
situs of any qualified property is moved outside Illinois
within 48 months after being placed in service, the
Personal Property Tax Replacement Income Tax for such
taxable year shall be increased. Such increase shall be
determined by (i) recomputing the investment credit which
would have been allowed for the year in which credit for
such property was originally allowed by eliminating such
property from such computation and, (ii) subtracting such
recomputed credit from the amount of credit previously
allowed. For the purposes of this paragraph (7), a
reduction of the basis of qualified property resulting
from a redetermination of the purchase price shall be
deemed a disposition of qualified property to the extent
of such reduction.
(8) Unless the investment credit is extended by
law, the basis of qualified property shall not include
costs incurred after December 31, 2003, except for costs
incurred pursuant to a binding contract entered into on
or before December 31, 2003.
(9) Each taxable year ending before December 31,
2000, a partnership may elect to pass through to its
partners the credits to which the partnership is entitled
under this subsection (e) for the taxable year. A
partner may use the credit allocated to him or her under
this paragraph only against the tax imposed in
subsections (c) and (d) of this Section. If the
partnership makes that election, those credits shall be
allocated among the partners in the partnership in
accordance with the rules set forth in Section 704(b) of
the Internal Revenue Code, and the rules promulgated
under that Section, and the allocated amount of the
credits shall be allowed to the partners for that taxable
year. The partnership shall make this election on its
Personal Property Tax Replacement Income Tax return for
that taxable year. The election to pass through the
credits shall be irrevocable.
For taxable years ending on or after December 31,
2000, a partner that qualifies its partnership for a
subtraction under subparagraph (I) of paragraph (2) of
subsection (d) of Section 203 or a shareholder that
qualifies a Subchapter S corporation for a subtraction
under subparagraph (S) of paragraph (2) of subsection (b)
of Section 203 shall be allowed a credit under this
subsection (e) equal to its share of the credit earned
under this subsection (e) during the taxable year by the
partnership or Subchapter S corporation, determined in
accordance with the determination of income and
distributive share of income under Sections 702 and 704
and Subchapter S of the Internal Revenue Code. This
paragraph is exempt from the provisions of Section 250.
(f) Investment credit; Enterprise Zone.
(1) A taxpayer shall be allowed a credit against
the tax imposed by subsections (a) and (b) of this
Section for investment in qualified property which is
placed in service in an Enterprise Zone created pursuant
to the Illinois Enterprise Zone Act. For partners,
shareholders of Subchapter S corporations, and owners of
limited liability companies, if the liability company is
treated as a partnership for purposes of federal and
State income taxation, there shall be allowed a credit
under this subsection (f) to be determined in accordance
with the determination of income and distributive share
of income under Sections 702 and 704 and Subchapter S of
the Internal Revenue Code. The credit shall be .5% of the
basis for such property. The credit shall be available
only in the taxable year in which the property is placed
in service in the Enterprise Zone and shall not be
allowed to the extent that it would reduce a taxpayer's
liability for the tax imposed by subsections (a) and (b)
of this Section to below zero. For tax years ending on or
after December 31, 1985, the credit shall be allowed for
the tax year in which the property is placed in service,
or, if the amount of the credit exceeds the tax liability
for that year, whether it exceeds the original liability
or the liability as later amended, such excess may be
carried forward and applied to the tax liability of the 5
taxable years following the excess credit year. The
credit shall be applied to the earliest year for which
there is a liability. If there is credit from more than
one tax year that is available to offset a liability, the
credit accruing first in time shall be applied first.
(2) The term qualified property means property
which:
(A) is tangible, whether new or used,
including buildings and structural components of
buildings;
(B) is depreciable pursuant to Section 167 of
the Internal Revenue Code, except that "3-year
property" as defined in Section 168(c)(2)(A) of that
Code is not eligible for the credit provided by this
subsection (f);
(C) is acquired by purchase as defined in
Section 179(d) of the Internal Revenue Code;
(D) is used in the Enterprise Zone by the
taxpayer; and
(E) has not been previously used in Illinois
in such a manner and by such a person as would
qualify for the credit provided by this subsection
(f) or subsection (e).
(3) The basis of qualified property shall be the
basis used to compute the depreciation deduction for
federal income tax purposes.
(4) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in the Enterprise Zone by the taxpayer,
the amount of such increase shall be deemed property
placed in service on the date of such increase in basis.
(5) The term "placed in service" shall have the
same meaning as under Section 46 of the Internal Revenue
Code.
(6) If during any taxable year, any property ceases
to be qualified property in the hands of the taxpayer
within 48 months after being placed in service, or the
situs of any qualified property is moved outside the
Enterprise Zone within 48 months after being placed in
service, the tax imposed under subsections (a) and (b) of
this Section for such taxable year shall be increased.
Such increase shall be determined by (i) recomputing the
investment credit which would have been allowed for the
year in which credit for such property was originally
allowed by eliminating such property from such
computation, and (ii) subtracting such recomputed credit
from the amount of credit previously allowed. For the
purposes of this paragraph (6), a reduction of the basis
of qualified property resulting from a redetermination of
the purchase price shall be deemed a disposition of
qualified property to the extent of such reduction.
(g) Jobs Tax Credit; Enterprise Zone and Foreign Trade
Zone or Sub-Zone.
(1) A taxpayer conducting a trade or business in an
enterprise zone or a High Impact Business designated by
the Department of Commerce and Community Affairs
conducting a trade or business in a federally designated
Foreign Trade Zone or Sub-Zone shall be allowed a credit
against the tax imposed by subsections (a) and (b) of
this Section in the amount of $500 per eligible employee
hired to work in the zone during the taxable year.
(2) To qualify for the credit:
(A) the taxpayer must hire 5 or more eligible
employees to work in an enterprise zone or federally
designated Foreign Trade Zone or Sub-Zone during the
taxable year;
(B) the taxpayer's total employment within the
enterprise zone or federally designated Foreign
Trade Zone or Sub-Zone must increase by 5 or more
full-time employees beyond the total employed in
that zone at the end of the previous tax year for
which a jobs tax credit under this Section was
taken, or beyond the total employed by the taxpayer
as of December 31, 1985, whichever is later; and
(C) the eligible employees must be employed
180 consecutive days in order to be deemed hired for
purposes of this subsection.
(3) An "eligible employee" means an employee who
is:
(A) Certified by the Department of Commerce
and Community Affairs as "eligible for services"
pursuant to regulations promulgated in accordance
with Title II of the Job Training Partnership Act,
Training Services for the Disadvantaged or Title III
of the Job Training Partnership Act, Employment and
Training Assistance for Dislocated Workers Program.
(B) Hired after the enterprise zone or
federally designated Foreign Trade Zone or Sub-Zone
was designated or the trade or business was located
in that zone, whichever is later.
(C) Employed in the enterprise zone or Foreign
Trade Zone or Sub-Zone. An employee is employed in
an enterprise zone or federally designated Foreign
Trade Zone or Sub-Zone if his services are rendered
there or it is the base of operations for the
services performed.
(D) A full-time employee working 30 or more
hours per week.
(4) For tax years ending on or after December 31,
1985 and prior to December 31, 1988, the credit shall be
allowed for the tax year in which the eligible employees
are hired. For tax years ending on or after December 31,
1988, the credit shall be allowed for the tax year
immediately following the tax year in which the eligible
employees are hired. If the amount of the credit exceeds
the tax liability for that year, whether it exceeds the
original liability or the liability as later amended,
such excess may be carried forward and applied to the tax
liability of the 5 taxable years following the excess
credit year. The credit shall be applied to the earliest
year for which there is a liability. If there is credit
from more than one tax year that is available to offset a
liability, earlier credit shall be applied first.
(5) The Department of Revenue shall promulgate such
rules and regulations as may be deemed necessary to carry
out the purposes of this subsection (g).
(6) The credit shall be available for eligible
employees hired on or after January 1, 1986.
(h) Investment credit; High Impact Business.
(1) Subject to subsections subsection (b) and (b-5)
of Section 5.5 of the Illinois Enterprise Zone Act, a
taxpayer shall be allowed a credit against the tax
imposed by subsections (a) and (b) of this Section for
investment in qualified property which is placed in
service by a Department of Commerce and Community Affairs
designated High Impact Business. The credit shall be .5%
of the basis for such property. The credit shall not be
available (i) until the minimum investments in qualified
property set forth in subdivision (a)(3)(A) of Section
5.5 of the Illinois Enterprise Zone Act have been
satisfied or (ii) until the time authorized in subsection
(b-5) of the Illinois Enterprise Zone Act for entities
designated as High Impact Businesses under subdivisions
(a)(3)(B), (a)(3)(C), and (a)(3)(D) of Section 5.5 of the
Illinois Enterprise Zone Act, and shall not be allowed to
the extent that it would reduce a taxpayer's liability
for the tax imposed by subsections (a) and (b) of this
Section to below zero. The credit applicable to such
minimum investments shall be taken in the taxable year in
which such minimum investments have been completed. The
credit for additional investments beyond the minimum
investment by a designated high impact business
authorized under subdivision (a)(3)(A) of Section 5.5 of
the Illinois Enterprise Zone Act shall be available only
in the taxable year in which the property is placed in
service and shall not be allowed to the extent that it
would reduce a taxpayer's liability for the tax imposed
by subsections (a) and (b) of this Section to below zero.
For tax years ending on or after December 31, 1987, the
credit shall be allowed for the tax year in which the
property is placed in service, or, if the amount of the
credit exceeds the tax liability for that year, whether
it exceeds the original liability or the liability as
later amended, such excess may be carried forward and
applied to the tax liability of the 5 taxable years
following the excess credit year. The credit shall be
applied to the earliest year for which there is a
liability. If there is credit from more than one tax
year that is available to offset a liability, the credit
accruing first in time shall be applied first.
Changes made in this subdivision (h)(1) by Public
Act 88-670 restore changes made by Public Act 85-1182 and
reflect existing law.
(2) The term qualified property means property
which:
(A) is tangible, whether new or used,
including buildings and structural components of
buildings;
(B) is depreciable pursuant to Section 167 of
the Internal Revenue Code, except that "3-year
property" as defined in Section 168(c)(2)(A) of that
Code is not eligible for the credit provided by this
subsection (h);
(C) is acquired by purchase as defined in
Section 179(d) of the Internal Revenue Code; and
(D) is not eligible for the Enterprise Zone
Investment Credit provided by subsection (f) of this
Section.
(3) The basis of qualified property shall be the
basis used to compute the depreciation deduction for
federal income tax purposes.
(4) If the basis of the property for federal income
tax depreciation purposes is increased after it has been
placed in service in a federally designated Foreign Trade
Zone or Sub-Zone located in Illinois by the taxpayer, the
amount of such increase shall be deemed property placed
in service on the date of such increase in basis.
(5) The term "placed in service" shall have the
same meaning as under Section 46 of the Internal Revenue
Code.
(6) If during any taxable year ending on or before
December 31, 1996, any property ceases to be qualified
property in the hands of the taxpayer within 48 months
after being placed in service, or the situs of any
qualified property is moved outside Illinois within 48
months after being placed in service, the tax imposed
under subsections (a) and (b) of this Section for such
taxable year shall be increased. Such increase shall be
determined by (i) recomputing the investment credit which
would have been allowed for the year in which credit for
such property was originally allowed by eliminating such
property from such computation, and (ii) subtracting such
recomputed credit from the amount of credit previously
allowed. For the purposes of this paragraph (6), a
reduction of the basis of qualified property resulting
from a redetermination of the purchase price shall be
deemed a disposition of qualified property to the extent
of such reduction.
(7) Beginning with tax years ending after December
31, 1996, if a taxpayer qualifies for the credit under
this subsection (h) and thereby is granted a tax
abatement and the taxpayer relocates its entire facility
in violation of the explicit terms and length of the
contract under Section 18-183 of the Property Tax Code,
the tax imposed under subsections (a) and (b) of this
Section shall be increased for the taxable year in which
the taxpayer relocated its facility by an amount equal to
the amount of credit received by the taxpayer under this
subsection (h).
(i) A credit shall be allowed against the tax imposed by
subsections (a) and (b) of this Section for the tax imposed
by subsections (c) and (d) of this Section. This credit
shall be computed by multiplying the tax imposed by
subsections (c) and (d) of this Section by a fraction, the
numerator of which is base income allocable to Illinois and
the denominator of which is Illinois base income, and further
multiplying the product by the tax rate imposed by
subsections (a) and (b) of this Section.
Any credit earned on or after December 31, 1986 under
this subsection which is unused in the year the credit is
computed because it exceeds the tax liability imposed by
subsections (a) and (b) for that year (whether it exceeds the
original liability or the liability as later amended) may be
carried forward and applied to the tax liability imposed by
subsections (a) and (b) of the 5 taxable years following the
excess credit year. This credit shall be applied first to
the earliest year for which there is a liability. If there
is a credit under this subsection from more than one tax year
that is available to offset a liability the earliest credit
arising under this subsection shall be applied first.
If, during any taxable year ending on or after December
31, 1986, the tax imposed by subsections (c) and (d) of this
Section for which a taxpayer has claimed a credit under this
subsection (i) is reduced, the amount of credit for such tax
shall also be reduced. Such reduction shall be determined by
recomputing the credit to take into account the reduced tax
imposed by subsection (c) and (d). If any portion of the
reduced amount of credit has been carried to a different
taxable year, an amended return shall be filed for such
taxable year to reduce the amount of credit claimed.
(j) Training expense credit. Beginning with tax years
ending on or after December 31, 1986, a taxpayer shall be
allowed a credit against the tax imposed by subsection (a)
and (b) under this Section for all amounts paid or accrued,
on behalf of all persons employed by the taxpayer in Illinois
or Illinois residents employed outside of Illinois by a
taxpayer, for educational or vocational training in
semi-technical or technical fields or semi-skilled or skilled
fields, which were deducted from gross income in the
computation of taxable income. The credit against the tax
imposed by subsections (a) and (b) shall be 1.6% of such
training expenses. For partners, shareholders of subchapter
S corporations, and owners of limited liability companies, if
the liability company is treated as a partnership for
purposes of federal and State income taxation, there shall be
allowed a credit under this subsection (j) to be determined
in accordance with the determination of income and
distributive share of income under Sections 702 and 704 and
subchapter S of the Internal Revenue Code.
Any credit allowed under this subsection which is unused
in the year the credit is earned may be carried forward to
each of the 5 taxable years following the year for which the
credit is first computed until it is used. This credit shall
be applied first to the earliest year for which there is a
liability. If there is a credit under this subsection from
more than one tax year that is available to offset a
liability the earliest credit arising under this subsection
shall be applied first.
(k) Research and development credit.
Beginning with tax years ending after July 1, 1990, a
taxpayer shall be allowed a credit against the tax imposed by
subsections (a) and (b) of this Section for increasing
research activities in this State. The credit allowed
against the tax imposed by subsections (a) and (b) shall be
equal to 6 1/2% of the qualifying expenditures for increasing
research activities in this State. For partners, shareholders
of subchapter S corporations, and owners of limited liability
companies, if the liability company is treated as a
partnership for purposes of federal and State income
taxation, there shall be allowed a credit under this
subsection to be determined in accordance with the
determination of income and distributive share of income
under Sections 702 and 704 and subchapter S of the Internal
Revenue Code.
For purposes of this subsection, "qualifying
expenditures" means the qualifying expenditures as defined
for the federal credit for increasing research activities
which would be allowable under Section 41 of the Internal
Revenue Code and which are conducted in this State,
"qualifying expenditures for increasing research activities
in this State" means the excess of qualifying expenditures
for the taxable year in which incurred over qualifying
expenditures for the base period, "qualifying expenditures
for the base period" means the average of the qualifying
expenditures for each year in the base period, and "base
period" means the 3 taxable years immediately preceding the
taxable year for which the determination is being made.
Any credit in excess of the tax liability for the taxable
year may be carried forward. A taxpayer may elect to have the
unused credit shown on its final completed return carried
over as a credit against the tax liability for the following
5 taxable years or until it has been fully used, whichever
occurs first.
If an unused credit is carried forward to a given year
from 2 or more earlier years, that credit arising in the
earliest year will be applied first against the tax liability
for the given year. If a tax liability for the given year
still remains, the credit from the next earliest year will
then be applied, and so on, until all credits have been used
or no tax liability for the given year remains. Any
remaining unused credit or credits then will be carried
forward to the next following year in which a tax liability
is incurred, except that no credit can be carried forward to
a year which is more than 5 years after the year in which the
expense for which the credit is given was incurred.
Unless extended by law, the credit shall not include
costs incurred after December 31, 2004, except for costs
incurred pursuant to a binding contract entered into on or
before December 31, 2004.
No inference shall be drawn from this amendatory Act of
the 91st General Assembly in construing this Section for
taxable years beginning before January 1, 1999.
(l) Environmental Remediation Tax Credit.
(i) For tax years ending after December 31, 1997
and on or before December 31, 2001, a taxpayer shall be
allowed a credit against the tax imposed by subsections
(a) and (b) of this Section for certain amounts paid for
unreimbursed eligible remediation costs, as specified in
this subsection. For purposes of this Section,
"unreimbursed eligible remediation costs" means costs
approved by the Illinois Environmental Protection Agency
("Agency") under Section 58.14 of the Environmental
Protection Act that were paid in performing environmental
remediation at a site for which a No Further Remediation
Letter was issued by the Agency and recorded under
Section 58.10 of the Environmental Protection Act. The
credit must be claimed for the taxable year in which
Agency approval of the eligible remediation costs is
granted. The credit is not available to any taxpayer if
the taxpayer or any related party caused or contributed
to, in any material respect, a release of regulated
substances on, in, or under the site that was identified
and addressed by the remedial action pursuant to the Site
Remediation Program of the Environmental Protection Act.
After the Pollution Control Board rules are adopted
pursuant to the Illinois Administrative Procedure Act for
the administration and enforcement of Section 58.9 of the
Environmental Protection Act, determinations as to credit
availability for purposes of this Section shall be made
consistent with those rules. For purposes of this
Section, "taxpayer" includes a person whose tax
attributes the taxpayer has succeeded to under Section
381 of the Internal Revenue Code and "related party"
includes the persons disallowed a deduction for losses by
paragraphs (b), (c), and (f)(1) of Section 267 of the
Internal Revenue Code by virtue of being a related
taxpayer, as well as any of its partners. The credit
allowed against the tax imposed by subsections (a) and
(b) shall be equal to 25% of the unreimbursed eligible
remediation costs in excess of $100,000 per site, except
that the $100,000 threshold shall not apply to any site
contained in an enterprise zone as determined by the
Department of Commerce and Community Affairs. The total
credit allowed shall not exceed $40,000 per year with a
maximum total of $150,000 per site. For partners and
shareholders of subchapter S corporations, there shall be
allowed a credit under this subsection to be determined
in accordance with the determination of income and
distributive share of income under Sections 702 and 704
and of subchapter S of the Internal Revenue Code.
(ii) A credit allowed under this subsection that is
unused in the year the credit is earned may be carried
forward to each of the 5 taxable years following the year
for which the credit is first earned until it is used.
The term "unused credit" does not include any amounts of
unreimbursed eligible remediation costs in excess of the
maximum credit per site authorized under paragraph (i).
This credit shall be applied first to the earliest year
for which there is a liability. If there is a credit
under this subsection from more than one tax year that is
available to offset a liability, the earliest credit
arising under this subsection shall be applied first. A
credit allowed under this subsection may be sold to a
buyer as part of a sale of all or part of the remediation
site for which the credit was granted. The purchaser of
a remediation site and the tax credit shall succeed to
the unused credit and remaining carry-forward period of
the seller. To perfect the transfer, the assignor shall
record the transfer in the chain of title for the site
and provide written notice to the Director of the
Illinois Department of Revenue of the assignor's intent
to sell the remediation site and the amount of the tax
credit to be transferred as a portion of the sale. In no
event may a credit be transferred to any taxpayer if the
taxpayer or a related party would not be eligible under
the provisions of subsection (i).
(iii) For purposes of this Section, the term "site"
shall have the same meaning as under Section 58.2 of the
Environmental Protection Act.
(m) Education expense credit.
Beginning with tax years ending after December 31, 1999,
a taxpayer who is the custodian of one or more qualifying
pupils shall be allowed a credit against the tax imposed by
subsections (a) and (b) of this Section for qualified
education expenses incurred on behalf of the qualifying
pupils. The credit shall be equal to 25% of qualified
education expenses, but in no event may the total credit
under this Section claimed by a family that is the custodian
of qualifying pupils exceed $500. In no event shall a credit
under this subsection reduce the taxpayer's liability under
this Act to less than zero. This subsection is exempt from
the provisions of Section 250 of this Act.
For purposes of this subsection;
"Qualifying pupils" means individuals who (i) are
residents of the State of Illinois, (ii) are under the age of
21 at the close of the school year for which a credit is
sought, and (iii) during the school year for which a credit
is sought were full-time pupils enrolled in a kindergarten
through twelfth grade education program at any school, as
defined in this subsection.
"Qualified education expense" means the amount incurred
on behalf of a qualifying pupil in excess of $250 for
tuition, book fees, and lab fees at the school in which the
pupil is enrolled during the regular school year.
"School" means any public or nonpublic elementary or
secondary school in Illinois that is in compliance with Title
VI of the Civil Rights Act of 1964 and attendance at which
satisfies the requirements of Section 26-1 of the School
Code, except that nothing shall be construed to require a
child to attend any particular public or nonpublic school to
qualify for the credit under this Section.
"Custodian" means, with respect to qualifying pupils, an
Illinois resident who is a parent, the parents, a legal
guardian, or the legal guardians of the qualifying pupils.
(Source: P.A. 90-123, eff. 7-21-97; 90-458, eff. 8-17-97;
90-605, eff. 6-30-98; 90-655, eff. 7-30-98; 90-717, eff.
8-7-98; 90-792, eff. 1-1-99; 91-9, eff. 1-1-00; 91-357, eff.
7-29-99; 91-643, eff. 8-20-99; 91-644, eff. 8-20-99; 91-860,
eff. 6-22-00; 91-913, eff. 1-1-01; revised 10-24-00.)
Section 920. The Use Tax Act is amended by changing
Section 9 as follows:
(35 ILCS 105/9) (from Ch. 120, par. 439.9)
Sec. 9. Except as to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered
with an agency of this State, each retailer required or
authorized to collect the tax imposed by this Act shall pay
to the Department the amount of such tax (except as otherwise
provided) at the time when he is required to file his return
for the period during which such tax was collected, less a
discount of 2.1% prior to January 1, 1990, and 1.75% on and
after January 1, 1990, or $5 per calendar year, whichever is
greater, which is allowed to reimburse the retailer for
expenses incurred in collecting the tax, keeping records,
preparing and filing returns, remitting the tax and supplying
data to the Department on request. In the case of retailers
who report and pay the tax on a transaction by transaction
basis, as provided in this Section, such discount shall be
taken with each such tax remittance instead of when such
retailer files his periodic return. A retailer need not
remit that part of any tax collected by him to the extent
that he is required to remit and does remit the tax imposed
by the Retailers' Occupation Tax Act, with respect to the
sale of the same property.
Where such tangible personal property is sold under a
conditional sales contract, or under any other form of sale
wherein the payment of the principal sum, or a part thereof,
is extended beyond the close of the period for which the
return is filed, the retailer, in collecting the tax (except
as to motor vehicles, watercraft, aircraft, and trailers that
are required to be registered with an agency of this State),
may collect for each tax return period, only the tax
applicable to that part of the selling price actually
received during such tax return period.
Except as provided in this Section, on or before the
twentieth day of each calendar month, such retailer shall
file a return for the preceding calendar month. Such return
shall be filed on forms prescribed by the Department and
shall furnish such information as the Department may
reasonably require.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter.
The taxpayer shall also file a return with the Department for
each of the first two months of each calendar quarter, on or
before the twentieth day of the following calendar month,
stating:
1. The name of the seller;
2. The address of the principal place of business
from which he engages in the business of selling tangible
personal property at retail in this State;
3. The total amount of taxable receipts received by
him during the preceding calendar month from sales of
tangible personal property by him during such preceding
calendar month, including receipts from charge and time
sales, but less all deductions allowed by law;
4. The amount of credit provided in Section 2d of
this Act;
5. The amount of tax due;
5-5. The signature of the taxpayer; and
6. Such other reasonable information as the
Department may require.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to
be due on the return shall be deemed assessed.
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who has
an average monthly tax liability of $100,000 or more shall
make all payments required by rules of the Department by
electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. Beginning October 1,
2000, a taxpayer who has an annual tax liability of $200,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. The term "annual
tax liability" shall be the sum of the taxpayer's liabilities
under this Act, and under all other State and local
occupation and use tax laws administered by the Department,
for the immediately preceding calendar year. The term
"average monthly tax liability" means the sum of the
taxpayer's liabilities under this Act, and under all other
State and local occupation and use tax laws administered by
the Department, for the immediately preceding calendar year
divided by 12.
Before August 1 of each year beginning in 1993, the
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers required
to make payments by electronic funds transfer shall make
those payments for a minimum of one year beginning on October
1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic
funds transfer and any taxpayers authorized to voluntarily
make payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
Before October 1, 2000, if the taxpayer's average monthly
tax liability to the Department under this Act, the
Retailers' Occupation Tax Act, the Service Occupation Tax
Act, the Service Use Tax Act was $10,000 or more during the
preceding 4 complete calendar quarters, he shall file a
return with the Department each month by the 20th day of the
month next following the month during which such tax
liability is incurred and shall make payments to the
Department on or before the 7th, 15th, 22nd and last day of
the month during which such liability is incurred. On and
after October 1, 2000, if the taxpayer's average monthly tax
liability to the Department under this Act, the Retailers'
Occupation Tax Act, the Service Occupation Tax Act, and the
Service Use Tax Act was $20,000 or more during the preceding
4 complete calendar quarters, he shall file a return with the
Department each month by the 20th day of the month next
following the month during which such tax liability is
incurred and shall make payment to the Department on or
before the 7th, 15th, 22nd and last day of the month during
which such liability is incurred. If the month during which
such tax liability is incurred began prior to January 1,
1985, each payment shall be in an amount equal to 1/4 of the
taxpayer's actual liability for the month or an amount set by
the Department not to exceed 1/4 of the average monthly
liability of the taxpayer to the Department for the preceding
4 complete calendar quarters (excluding the month of highest
liability and the month of lowest liability in such 4 quarter
period). If the month during which such tax liability is
incurred begins on or after January 1, 1985, and prior to
January 1, 1987, each payment shall be in an amount equal to
22.5% of the taxpayer's actual liability for the month or
27.5% of the taxpayer's liability for the same calendar month
of the preceding year. If the month during which such tax
liability is incurred begins on or after January 1, 1987, and
prior to January 1, 1988, each payment shall be in an amount
equal to 22.5% of the taxpayer's actual liability for the
month or 26.25% of the taxpayer's liability for the same
calendar month of the preceding year. If the month during
which such tax liability is incurred begins on or after
January 1, 1988, and prior to January 1, 1989, or begins on
or after January 1, 1996, each payment shall be in an amount
equal to 22.5% of the taxpayer's actual liability for the
month or 25% of the taxpayer's liability for the same
calendar month of the preceding year. If the month during
which such tax liability is incurred begins on or after
January 1, 1989, and prior to January 1, 1996, each payment
shall be in an amount equal to 22.5% of the taxpayer's actual
liability for the month or 25% of the taxpayer's liability
for the same calendar month of the preceding year or 100% of
the taxpayer's actual liability for the quarter monthly
reporting period. The amount of such quarter monthly
payments shall be credited against the final tax liability of
the taxpayer's return for that month. Before October 1,
2000, once applicable, the requirement of the making of
quarter monthly payments to the Department shall continue
until such taxpayer's average monthly liability to the
Department during the preceding 4 complete calendar quarters
(excluding the month of highest liability and the month of
lowest liability) is less than $9,000, or until such
taxpayer's average monthly liability to the Department as
computed for each calendar quarter of the 4 preceding
complete calendar quarter period is less than $10,000.
However, if a taxpayer can show the Department that a
substantial change in the taxpayer's business has occurred
which causes the taxpayer to anticipate that his average
monthly tax liability for the reasonably foreseeable future
will fall below the $10,000 threshold stated above, then such
taxpayer may petition the Department for change in such
taxpayer's reporting status. On and after October 1, 2000,
once applicable, the requirement of the making of quarter
monthly payments to the Department shall continue until such
taxpayer's average monthly liability to the Department during
the preceding 4 complete calendar quarters (excluding the
month of highest liability and the month of lowest liability)
is less than $19,000 or until such taxpayer's average monthly
liability to the Department as computed for each calendar
quarter of the 4 preceding complete calendar quarter period
is less than $20,000. However, if a taxpayer can show the
Department that a substantial change in the taxpayer's
business has occurred which causes the taxpayer to anticipate
that his average monthly tax liability for the reasonably
foreseeable future will fall below the $20,000 threshold
stated above, then such taxpayer may petition the Department
for a change in such taxpayer's reporting status. The
Department shall change such taxpayer's reporting status
unless it finds that such change is seasonal in nature and
not likely to be long term. If any such quarter monthly
payment is not paid at the time or in the amount required by
this Section, then the taxpayer shall be liable for penalties
and interest on the difference between the minimum amount due
and the amount of such quarter monthly payment actually and
timely paid, except insofar as the taxpayer has previously
made payments for that month to the Department in excess of
the minimum payments previously due as provided in this
Section. The Department shall make reasonable rules and
regulations to govern the quarter monthly payment amount and
quarter monthly payment dates for taxpayers who file on other
than a calendar monthly basis.
If any such payment provided for in this Section exceeds
the taxpayer's liabilities under this Act, the Retailers'
Occupation Tax Act, the Service Occupation Tax Act and the
Service Use Tax Act, as shown by an original monthly return,
the Department shall issue to the taxpayer a credit
memorandum no later than 30 days after the date of payment,
which memorandum may be submitted by the taxpayer to the
Department in payment of tax liability subsequently to be
remitted by the taxpayer to the Department or be assigned by
the taxpayer to a similar taxpayer under this Act, the
Retailers' Occupation Tax Act, the Service Occupation Tax Act
or the Service Use Tax Act, in accordance with reasonable
rules and regulations to be prescribed by the Department,
except that if such excess payment is shown on an original
monthly return and is made after December 31, 1986, no credit
memorandum shall be issued, unless requested by the taxpayer.
If no such request is made, the taxpayer may credit such
excess payment against tax liability subsequently to be
remitted by the taxpayer to the Department under this Act,
the Retailers' Occupation Tax Act, the Service Occupation Tax
Act or the Service Use Tax Act, in accordance with reasonable
rules and regulations prescribed by the Department. If the
Department subsequently determines that all or any part of
the credit taken was not actually due to the taxpayer, the
taxpayer's 2.1% or 1.75% vendor's discount shall be reduced
by 2.1% or 1.75% of the difference between the credit taken
and that actually due, and the taxpayer shall be liable for
penalties and interest on such difference.
If the retailer is otherwise required to file a monthly
return and if the retailer's average monthly tax liability to
the Department does not exceed $200, the Department may
authorize his returns to be filed on a quarter annual basis,
with the return for January, February, and March of a given
year being due by April 20 of such year; with the return for
April, May and June of a given year being due by July 20 of
such year; with the return for July, August and September of
a given year being due by October 20 of such year, and with
the return for October, November and December of a given year
being due by January 20 of the following year.
If the retailer is otherwise required to file a monthly
or quarterly return and if the retailer's average monthly tax
liability to the Department does not exceed $50, the
Department may authorize his returns to be filed on an annual
basis, with the return for a given year being due by January
20 of the following year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as
monthly returns.
Notwithstanding any other provision in this Act
concerning the time within which a retailer may file his
return, in the case of any retailer who ceases to engage in a
kind of business which makes him responsible for filing
returns under this Act, such retailer shall file a final
return under this Act with the Department not more than one
month after discontinuing such business.
In addition, with respect to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered
with an agency of this State, every retailer selling this
kind of tangible personal property shall file, with the
Department, upon a form to be prescribed and supplied by the
Department, a separate return for each such item of tangible
personal property which the retailer sells, except that if,
in the same transaction, (i) a retailer of aircraft,
watercraft, motor vehicles or trailers transfers more than
one aircraft, watercraft, motor vehicle or trailer to another
aircraft, watercraft, motor vehicle or trailer retailer for
the purpose of resale or (ii) a retailer of aircraft,
watercraft, motor vehicles, or trailers transfers more than
one aircraft, watercraft, motor vehicle, or trailer to a
purchaser for use as a qualifying rolling stock as provided
in Section 3-55 of this Act, then that seller may report the
transfer of all the aircraft, watercraft, motor vehicles or
trailers involved in that transaction to the Department on
the same uniform invoice-transaction reporting return form.
For purposes of this Section, "watercraft" means a Class 2,
Class 3, or Class 4 watercraft as defined in Section 3-2 of
the Boat Registration and Safety Act, a personal watercraft,
or any boat equipped with an inboard motor.
The transaction reporting return in the case of motor
vehicles or trailers that are required to be registered with
an agency of this State, shall be the same document as the
Uniform Invoice referred to in Section 5-402 of the Illinois
Vehicle Code and must show the name and address of the
seller; the name and address of the purchaser; the amount of
the selling price including the amount allowed by the
retailer for traded-in property, if any; the amount allowed
by the retailer for the traded-in tangible personal property,
if any, to the extent to which Section 2 of this Act allows
an exemption for the value of traded-in property; the balance
payable after deducting such trade-in allowance from the
total selling price; the amount of tax due from the retailer
with respect to such transaction; the amount of tax collected
from the purchaser by the retailer on such transaction (or
satisfactory evidence that such tax is not due in that
particular instance, if that is claimed to be the fact); the
place and date of the sale; a sufficient identification of
the property sold; such other information as is required in
Section 5-402 of the Illinois Vehicle Code, and such other
information as the Department may reasonably require.
The transaction reporting return in the case of
watercraft and aircraft must show the name and address of the
seller; the name and address of the purchaser; the amount of
the selling price including the amount allowed by the
retailer for traded-in property, if any; the amount allowed
by the retailer for the traded-in tangible personal property,
if any, to the extent to which Section 2 of this Act allows
an exemption for the value of traded-in property; the balance
payable after deducting such trade-in allowance from the
total selling price; the amount of tax due from the retailer
with respect to such transaction; the amount of tax collected
from the purchaser by the retailer on such transaction (or
satisfactory evidence that such tax is not due in that
particular instance, if that is claimed to be the fact); the
place and date of the sale, a sufficient identification of
the property sold, and such other information as the
Department may reasonably require.
Such transaction reporting return shall be filed not
later than 20 days after the date of delivery of the item
that is being sold, but may be filed by the retailer at any
time sooner than that if he chooses to do so. The
transaction reporting return and tax remittance or proof of
exemption from the tax that is imposed by this Act may be
transmitted to the Department by way of the State agency with
which, or State officer with whom, the tangible personal
property must be titled or registered (if titling or
registration is required) if the Department and such agency
or State officer determine that this procedure will expedite
the processing of applications for title or registration.
With each such transaction reporting return, the retailer
shall remit the proper amount of tax due (or shall submit
satisfactory evidence that the sale is not taxable if that is
the case), to the Department or its agents, whereupon the
Department shall issue, in the purchaser's name, a tax
receipt (or a certificate of exemption if the Department is
satisfied that the particular sale is tax exempt) which such
purchaser may submit to the agency with which, or State
officer with whom, he must title or register the tangible
personal property that is involved (if titling or
registration is required) in support of such purchaser's
application for an Illinois certificate or other evidence of
title or registration to such tangible personal property.
No retailer's failure or refusal to remit tax under this
Act precludes a user, who has paid the proper tax to the
retailer, from obtaining his certificate of title or other
evidence of title or registration (if titling or registration
is required) upon satisfying the Department that such user
has paid the proper tax (if tax is due) to the retailer. The
Department shall adopt appropriate rules to carry out the
mandate of this paragraph.
If the user who would otherwise pay tax to the retailer
wants the transaction reporting return filed and the payment
of tax or proof of exemption made to the Department before
the retailer is willing to take these actions and such user
has not paid the tax to the retailer, such user may certify
to the fact of such delay by the retailer, and may (upon the
Department being satisfied of the truth of such
certification) transmit the information required by the
transaction reporting return and the remittance for tax or
proof of exemption directly to the Department and obtain his
tax receipt or exemption determination, in which event the
transaction reporting return and tax remittance (if a tax
payment was required) shall be credited by the Department to
the proper retailer's account with the Department, but
without the 2.1% or 1.75% discount provided for in this
Section being allowed. When the user pays the tax directly
to the Department, he shall pay the tax in the same amount
and in the same form in which it would be remitted if the tax
had been remitted to the Department by the retailer.
Where a retailer collects the tax with respect to the
selling price of tangible personal property which he sells
and the purchaser thereafter returns such tangible personal
property and the retailer refunds the selling price thereof
to the purchaser, such retailer shall also refund, to the
purchaser, the tax so collected from the purchaser. When
filing his return for the period in which he refunds such tax
to the purchaser, the retailer may deduct the amount of the
tax so refunded by him to the purchaser from any other use
tax which such retailer may be required to pay or remit to
the Department, as shown by such return, if the amount of the
tax to be deducted was previously remitted to the Department
by such retailer. If the retailer has not previously
remitted the amount of such tax to the Department, he is
entitled to no deduction under this Act upon refunding such
tax to the purchaser.
Any retailer filing a return under this Section shall
also include (for the purpose of paying tax thereon) the
total tax covered by such return upon the selling price of
tangible personal property purchased by him at retail from a
retailer, but as to which the tax imposed by this Act was not
collected from the retailer filing such return, and such
retailer shall remit the amount of such tax to the Department
when filing such return.
If experience indicates such action to be practicable,
the Department may prescribe and furnish a combination or
joint return which will enable retailers, who are required to
file returns hereunder and also under the Retailers'
Occupation Tax Act, to furnish all the return information
required by both Acts on the one form.
Where the retailer has more than one business registered
with the Department under separate registration under this
Act, such retailer may not file each return that is due as a
single return covering all such registered businesses, but
shall file separate returns for each such registered
business.
Beginning January 1, 1990, each month the Department
shall pay into the State and Local Sales Tax Reform Fund, a
special fund in the State Treasury which is hereby created,
the net revenue realized for the preceding month from the 1%
tax on sales of food for human consumption which is to be
consumed off the premises where it is sold (other than
alcoholic beverages, soft drinks and food which has been
prepared for immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances and
insulin, urine testing materials, syringes and needles used
by diabetics.
Beginning January 1, 1990, each month the Department
shall pay into the County and Mass Transit District Fund 4%
of the net revenue realized for the preceding month from the
6.25% general rate on the selling price of tangible personal
property which is purchased outside Illinois at retail from a
retailer and which is titled or registered by an agency of
this State's government.
Beginning January 1, 1990, each month the Department
shall pay into the State and Local Sales Tax Reform Fund, a
special fund in the State Treasury, 20% of the net revenue
realized for the preceding month from the 6.25% general rate
on the selling price of tangible personal property, other
than tangible personal property which is purchased outside
Illinois at retail from a retailer and which is titled or
registered by an agency of this State's government.
Beginning August 1, 2000, each month the Department shall
pay into the State and Local Sales Tax Reform Fund 100% of
the net revenue realized for the preceding month from the
1.25% rate on the selling price of motor fuel and gasohol.
Beginning January 1, 1990, each month the Department
shall pay into the Local Government Tax Fund 16% of the net
revenue realized for the preceding month from the 6.25%
general rate on the selling price of tangible personal
property which is purchased outside Illinois at retail from a
retailer and which is titled or registered by an agency of
this State's government.
Of the remainder of the moneys received by the Department
pursuant to this Act, (a) 1.75% thereof shall be paid into
the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
and on and after July 1, 1989, 3.8% thereof shall be paid
into the Build Illinois Fund; provided, however, that if in
any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
as the case may be, of the moneys received by the Department
and required to be paid into the Build Illinois Fund pursuant
to Section 3 of the Retailers' Occupation Tax Act, Section 9
of the Use Tax Act, Section 9 of the Service Use Tax Act, and
Section 9 of the Service Occupation Tax Act, such Acts being
hereinafter called the "Tax Acts" and such aggregate of 2.2%
or 3.8%, as the case may be, of moneys being hereinafter
called the "Tax Act Amount", and (2) the amount transferred
to the Build Illinois Fund from the State and Local Sales Tax
Reform Fund shall be less than the Annual Specified Amount
(as defined in Section 3 of the Retailers' Occupation Tax
Act), an amount equal to the difference shall be immediately
paid into the Build Illinois Fund from other moneys received
by the Department pursuant to the Tax Acts; and further
provided, that if on the last business day of any month the
sum of (1) the Tax Act Amount required to be deposited into
the Build Illinois Bond Account in the Build Illinois Fund
during such month and (2) the amount transferred during such
month to the Build Illinois Fund from the State and Local
Sales Tax Reform Fund shall have been less than 1/12 of the
Annual Specified Amount, an amount equal to the difference
shall be immediately paid into the Build Illinois Fund from
other moneys received by the Department pursuant to the Tax
Acts; and, further provided, that in no event shall the
payments required under the preceding proviso result in
aggregate payments into the Build Illinois Fund pursuant to
this clause (b) for any fiscal year in excess of the greater
of (i) the Tax Act Amount or (ii) the Annual Specified Amount
for such fiscal year; and, further provided, that the amounts
payable into the Build Illinois Fund under this clause (b)
shall be payable only until such time as the aggregate amount
on deposit under each trust indenture securing Bonds issued
and outstanding pursuant to the Build Illinois Bond Act is
sufficient, taking into account any future investment income,
to fully provide, in accordance with such indenture, for the
defeasance of or the payment of the principal of, premium, if
any, and interest on the Bonds secured by such indenture and
on any Bonds expected to be issued thereafter and all fees
and costs payable with respect thereto, all as certified by
the Director of the Bureau of the Budget. If on the last
business day of any month in which Bonds are outstanding
pursuant to the Build Illinois Bond Act, the aggregate of the
moneys deposited in the Build Illinois Bond Account in the
Build Illinois Fund in such month shall be less than the
amount required to be transferred in such month from the
Build Illinois Bond Account to the Build Illinois Bond
Retirement and Interest Fund pursuant to Section 13 of the
Build Illinois Bond Act, an amount equal to such deficiency
shall be immediately paid from other moneys received by the
Department pursuant to the Tax Acts to the Build Illinois
Fund; provided, however, that any amounts paid to the Build
Illinois Fund in any fiscal year pursuant to this sentence
shall be deemed to constitute payments pursuant to clause (b)
of the preceding sentence and shall reduce the amount
otherwise payable for such fiscal year pursuant to clause (b)
of the preceding sentence. The moneys received by the
Department pursuant to this Act and required to be deposited
into the Build Illinois Fund are subject to the pledge, claim
and charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois
Fund as provided in the preceding paragraph or in any
amendment thereto hereafter enacted, the following specified
monthly installment of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority provided under Section 8.25f of the
State Finance Act, but not in excess of the sums designated
as "Total Deposit", shall be deposited in the aggregate from
collections under Section 9 of the Use Tax Act, Section 9 of
the Service Use Tax Act, Section 9 of the Service Occupation
Tax Act, and Section 3 of the Retailers' Occupation Tax Act
into the McCormick Place Expansion Project Fund in the
specified fiscal years.
Fiscal Year Total Deposit
1993 $0
1994 53,000,000
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 84,000,000
2003 89,000,000
2004 93,000,000
2005 97,000,000
2006 102,000,000
2007 108,000,000
2008 115,000,000
2009 120,000,000
2010 126,000,000
2011 132,000,000
2012 138,000,000
2013 and 145,000,000
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and
Exposition Authority
Act, but not after fiscal year 2029.
Beginning July 20, 1993 and in each month of each fiscal
year thereafter, one-eighth of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority for that fiscal year, less the amount
deposited into the McCormick Place Expansion Project Fund by
the State Treasurer in the respective month under subsection
(g) of Section 13 of the Metropolitan Pier and Exposition
Authority Act, plus cumulative deficiencies in the deposits
required under this Section for previous months and years,
shall be deposited into the McCormick Place Expansion Project
Fund, until the full amount requested for the fiscal year,
but not in excess of the amount specified above as "Total
Deposit", has been deposited.
Subject to payment of amounts into the Build Illinois
Fund and the McCormick Place Expansion Project Fund pursuant
to the preceding paragraphs or in any amendment thereto
hereafter enacted, each month the Department shall pay into
the Local Government Distributive Fund .4% of the net revenue
realized for the preceding month from the 5% general rate, or
.4% of 80% of the net revenue realized for the preceding
month from the 6.25% general rate, as the case may be, on the
selling price of tangible personal property which amount
shall, subject to appropriation, be distributed as provided
in Section 2 of the State Revenue Sharing Act. No payments or
distributions pursuant to this paragraph shall be made if the
tax imposed by this Act on photoprocessing products is
declared unconstitutional, or if the proceeds from such tax
are unavailable for distribution because of litigation.
Subject to payment of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, and the
Local Government Distributive Fund pursuant to the preceding
paragraphs or in any amendments thereto hereafter enacted,
beginning July 1, 1993, the Department shall each month pay
into the Illinois Tax Increment Fund 0.27% of 80% of the net
revenue realized for the preceding month from the 6.25%
general rate on the selling price of tangible personal
property.
Subject to payment of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, and the
Local Government Distributive Fund pursuant to the preceding
paragraphs or in any amendments thereto hereafter enacted,
beginning with the receipt of the first report of taxes paid
by an eligible business and continuing for a 25-year period,
the Department shall each month pay into the Energy
Infrastructure Fund 80% of the net revenue realized from the
6.25% general rate on the selling price of Illinois-mined
coal that was sold to an eligible business. For purposes of
this paragraph, the term "eligible business" means a new
electric generating facility certified pursuant to Section
605-332 of the Department of Commerce and Community Affairs
Law of the Civil Administrative Code of Illinois.
Of the remainder of the moneys received by the Department
pursuant to this Act, 75% thereof shall be paid into the
State Treasury and 25% shall be reserved in a special account
and used only for the transfer to the Common School Fund as
part of the monthly transfer from the General Revenue Fund in
accordance with Section 8a of the State Finance Act.
As soon as possible after the first day of each month,
upon certification of the Department of Revenue, the
Comptroller shall order transferred and the Treasurer shall
transfer from the General Revenue Fund to the Motor Fuel Tax
Fund an amount equal to 1.7% of 80% of the net revenue
realized under this Act for the second preceding month.
Beginning April 1, 2000, this transfer is no longer required
and shall not be made.
Net revenue realized for a month shall be the revenue
collected by the State pursuant to this Act, less the amount
paid out during that month as refunds to taxpayers for
overpayment of liability.
For greater simplicity of administration, manufacturers,
importers and wholesalers whose products are sold at retail
in Illinois by numerous retailers, and who wish to do so, may
assume the responsibility for accounting and paying to the
Department all tax accruing under this Act with respect to
such sales, if the retailers who are affected do not make
written objection to the Department to this arrangement.
(Source: P.A. 90-491, eff. 1-1-99; 90-612, eff. 7-8-98;
91-37, eff. 7-1-99; 91-51, eff. 6-30-99; 91-101, eff.
7-12-99; 91-541, eff. 8-13-99; 91-872, eff. 7-1-00; 91-901,
eff. 1-1-01; revised 8-30-00.)
Section 925. The Service Use Tax Act is amended by
changing Section 9 as follows:
(35 ILCS 110/9) (from Ch. 120, par. 439.39)
Sec. 9. Each serviceman required or authorized to
collect the tax herein imposed shall pay to the Department
the amount of such tax (except as otherwise provided) at the
time when he is required to file his return for the period
during which such tax was collected, less a discount of 2.1%
prior to January 1, 1990 and 1.75% on and after January 1,
1990, or $5 per calendar year, whichever is greater, which is
allowed to reimburse the serviceman for expenses incurred in
collecting the tax, keeping records, preparing and filing
returns, remitting the tax and supplying data to the
Department on request. A serviceman need not remit that part
of any tax collected by him to the extent that he is required
to pay and does pay the tax imposed by the Service Occupation
Tax Act with respect to his sale of service involving the
incidental transfer by him of the same property.
Except as provided hereinafter in this Section, on or
before the twentieth day of each calendar month, such
serviceman shall file a return for the preceding calendar
month in accordance with reasonable Rules and Regulations to
be promulgated by the Department. Such return shall be filed
on a form prescribed by the Department and shall contain such
information as the Department may reasonably require.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter.
The taxpayer shall also file a return with the Department for
each of the first two months of each calendar quarter, on or
before the twentieth day of the following calendar month,
stating:
1. The name of the seller;
2. The address of the principal place of business
from which he engages in business as a serviceman in this
State;
3. The total amount of taxable receipts received by
him during the preceding calendar month, including
receipts from charge and time sales, but less all
deductions allowed by law;
4. The amount of credit provided in Section 2d of
this Act;
5. The amount of tax due;
5-5. The signature of the taxpayer; and
6. Such other reasonable information as the
Department may require.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to
be due on the return shall be deemed assessed.
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who
has an average monthly tax liability of $100,000 or more
shall make all payments required by rules of the Department
by electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. Beginning October 1,
2000, a taxpayer who has an annual tax liability of $200,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. The term "annual
tax liability" shall be the sum of the taxpayer's liabilities
under this Act, and under all other State and local
occupation and use tax laws administered by the Department,
for the immediately preceding calendar year. The term
"average monthly tax liability" means the sum of the
taxpayer's liabilities under this Act, and under all other
State and local occupation and use tax laws administered by
the Department, for the immediately preceding calendar year
divided by 12.
Before August 1 of each year beginning in 1993, the
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers required
to make payments by electronic funds transfer shall make
those payments for a minimum of one year beginning on October
1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic
funds transfer and any taxpayers authorized to voluntarily
make payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
If the serviceman is otherwise required to file a monthly
return and if the serviceman's average monthly tax liability
to the Department does not exceed $200, the Department may
authorize his returns to be filed on a quarter annual basis,
with the return for January, February and March of a given
year being due by April 20 of such year; with the return for
April, May and June of a given year being due by July 20 of
such year; with the return for July, August and September of
a given year being due by October 20 of such year, and with
the return for October, November and December of a given year
being due by January 20 of the following year.
If the serviceman is otherwise required to file a monthly
or quarterly return and if the serviceman's average monthly
tax liability to the Department does not exceed $50, the
Department may authorize his returns to be filed on an annual
basis, with the return for a given year being due by January
20 of the following year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as
monthly returns.
Notwithstanding any other provision in this Act
concerning the time within which a serviceman may file his
return, in the case of any serviceman who ceases to engage in
a kind of business which makes him responsible for filing
returns under this Act, such serviceman shall file a final
return under this Act with the Department not more than 1
month after discontinuing such business.
Where a serviceman collects the tax with respect to the
selling price of property which he sells and the purchaser
thereafter returns such property and the serviceman refunds
the selling price thereof to the purchaser, such serviceman
shall also refund, to the purchaser, the tax so collected
from the purchaser. When filing his return for the period in
which he refunds such tax to the purchaser, the serviceman
may deduct the amount of the tax so refunded by him to the
purchaser from any other Service Use Tax, Service Occupation
Tax, retailers' occupation tax or use tax which such
serviceman may be required to pay or remit to the Department,
as shown by such return, provided that the amount of the tax
to be deducted shall previously have been remitted to the
Department by such serviceman. If the serviceman shall not
previously have remitted the amount of such tax to the
Department, he shall be entitled to no deduction hereunder
upon refunding such tax to the purchaser.
Any serviceman filing a return hereunder shall also
include the total tax upon the selling price of tangible
personal property purchased for use by him as an incident to
a sale of service, and such serviceman shall remit the amount
of such tax to the Department when filing such return.
If experience indicates such action to be practicable,
the Department may prescribe and furnish a combination or
joint return which will enable servicemen, who are required
to file returns hereunder and also under the Service
Occupation Tax Act, to furnish all the return information
required by both Acts on the one form.
Where the serviceman has more than one business
registered with the Department under separate registration
hereunder, such serviceman shall not file each return that is
due as a single return covering all such registered
businesses, but shall file separate returns for each such
registered business.
Beginning January 1, 1990, each month the Department
shall pay into the State and Local Tax Reform Fund, a special
fund in the State Treasury, the net revenue realized for the
preceding month from the 1% tax on sales of food for human
consumption which is to be consumed off the premises where it
is sold (other than alcoholic beverages, soft drinks and food
which has been prepared for immediate consumption) and
prescription and nonprescription medicines, drugs, medical
appliances and insulin, urine testing materials, syringes and
needles used by diabetics.
Beginning January 1, 1990, each month the Department
shall pay into the State and Local Sales Tax Reform Fund 20%
of the net revenue realized for the preceding month from the
6.25% general rate on transfers of tangible personal
property, other than tangible personal property which is
purchased outside Illinois at retail from a retailer and
which is titled or registered by an agency of this State's
government.
Beginning August 1, 2000, each month the Department shall
pay into the State and Local Sales Tax Reform Fund 100% of
the net revenue realized for the preceding month from the
1.25% rate on the selling price of motor fuel and gasohol.
Of the remainder of the moneys received by the Department
pursuant to this Act, (a) 1.75% thereof shall be paid into
the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
and on and after July 1, 1989, 3.8% thereof shall be paid
into the Build Illinois Fund; provided, however, that if in
any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
as the case may be, of the moneys received by the Department
and required to be paid into the Build Illinois Fund pursuant
to Section 3 of the Retailers' Occupation Tax Act, Section 9
of the Use Tax Act, Section 9 of the Service Use Tax Act, and
Section 9 of the Service Occupation Tax Act, such Acts being
hereinafter called the "Tax Acts" and such aggregate of 2.2%
or 3.8%, as the case may be, of moneys being hereinafter
called the "Tax Act Amount", and (2) the amount transferred
to the Build Illinois Fund from the State and Local Sales Tax
Reform Fund shall be less than the Annual Specified Amount
(as defined in Section 3 of the Retailers' Occupation Tax
Act), an amount equal to the difference shall be immediately
paid into the Build Illinois Fund from other moneys received
by the Department pursuant to the Tax Acts; and further
provided, that if on the last business day of any month the
sum of (1) the Tax Act Amount required to be deposited into
the Build Illinois Bond Account in the Build Illinois Fund
during such month and (2) the amount transferred during such
month to the Build Illinois Fund from the State and Local
Sales Tax Reform Fund shall have been less than 1/12 of the
Annual Specified Amount, an amount equal to the difference
shall be immediately paid into the Build Illinois Fund from
other moneys received by the Department pursuant to the Tax
Acts; and, further provided, that in no event shall the
payments required under the preceding proviso result in
aggregate payments into the Build Illinois Fund pursuant to
this clause (b) for any fiscal year in excess of the greater
of (i) the Tax Act Amount or (ii) the Annual Specified Amount
for such fiscal year; and, further provided, that the amounts
payable into the Build Illinois Fund under this clause (b)
shall be payable only until such time as the aggregate amount
on deposit under each trust indenture securing Bonds issued
and outstanding pursuant to the Build Illinois Bond Act is
sufficient, taking into account any future investment income,
to fully provide, in accordance with such indenture, for the
defeasance of or the payment of the principal of, premium, if
any, and interest on the Bonds secured by such indenture and
on any Bonds expected to be issued thereafter and all fees
and costs payable with respect thereto, all as certified by
the Director of the Bureau of the Budget. If on the last
business day of any month in which Bonds are outstanding
pursuant to the Build Illinois Bond Act, the aggregate of the
moneys deposited in the Build Illinois Bond Account in the
Build Illinois Fund in such month shall be less than the
amount required to be transferred in such month from the
Build Illinois Bond Account to the Build Illinois Bond
Retirement and Interest Fund pursuant to Section 13 of the
Build Illinois Bond Act, an amount equal to such deficiency
shall be immediately paid from other moneys received by the
Department pursuant to the Tax Acts to the Build Illinois
Fund; provided, however, that any amounts paid to the Build
Illinois Fund in any fiscal year pursuant to this sentence
shall be deemed to constitute payments pursuant to clause (b)
of the preceding sentence and shall reduce the amount
otherwise payable for such fiscal year pursuant to clause (b)
of the preceding sentence. The moneys received by the
Department pursuant to this Act and required to be deposited
into the Build Illinois Fund are subject to the pledge, claim
and charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois
Fund as provided in the preceding paragraph or in any
amendment thereto hereafter enacted, the following specified
monthly installment of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority provided under Section 8.25f of the
State Finance Act, but not in excess of the sums designated
as "Total Deposit", shall be deposited in the aggregate from
collections under Section 9 of the Use Tax Act, Section 9 of
the Service Use Tax Act, Section 9 of the Service Occupation
Tax Act, and Section 3 of the Retailers' Occupation Tax Act
into the McCormick Place Expansion Project Fund in the
specified fiscal years.
Fiscal Year Total Deposit
1993 $0
1994 53,000,000
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 84,000,000
2003 89,000,000
2004 93,000,000
2005 97,000,000
2006 102,000,000
2007 108,000,000
2008 115,000,000
2009 120,000,000
2010 126,000,000
2011 132,000,000
2012 138,000,000
2013 and 145,000,000
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and
Exposition Authority Act,
but not after fiscal year 2029.
Beginning July 20, 1993 and in each month of each fiscal
year thereafter, one-eighth of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority for that fiscal year, less the amount
deposited into the McCormick Place Expansion Project Fund by
the State Treasurer in the respective month under subsection
(g) of Section 13 of the Metropolitan Pier and Exposition
Authority Act, plus cumulative deficiencies in the deposits
required under this Section for previous months and years,
shall be deposited into the McCormick Place Expansion Project
Fund, until the full amount requested for the fiscal year,
but not in excess of the amount specified above as "Total
Deposit", has been deposited.
Subject to payment of amounts into the Build Illinois
Fund and the McCormick Place Expansion Project Fund pursuant
to the preceding paragraphs or in any amendment thereto
hereafter enacted, each month the Department shall pay into
the Local Government Distributive Fund 0.4% of the net
revenue realized for the preceding month from the 5% general
rate or 0.4% of 80% of the net revenue realized for the
preceding month from the 6.25% general rate, as the case may
be, on the selling price of tangible personal property which
amount shall, subject to appropriation, be distributed as
provided in Section 2 of the State Revenue Sharing Act. No
payments or distributions pursuant to this paragraph shall be
made if the tax imposed by this Act on photo processing
products is declared unconstitutional, or if the proceeds
from such tax are unavailable for distribution because of
litigation.
Subject to payment of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, and the
Local Government Distributive Fund pursuant to the preceding
paragraphs or in any amendments thereto hereafter enacted,
beginning July 1, 1993, the Department shall each month pay
into the Illinois Tax Increment Fund 0.27% of 80% of the net
revenue realized for the preceding month from the 6.25%
general rate on the selling price of tangible personal
property.
Subject to payment of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, and the
Local Government Distributive Fund pursuant to the preceding
paragraphs or in any amendments thereto hereafter enacted,
beginning with the receipt of the first report of taxes paid
by an eligible business and continuing for a 25-year period,
the Department shall each month pay into the Energy
Infrastructure Fund 80% of the net revenue realized from the
6.25% general rate on the selling price of Illinois-mined
coal that was sold to an eligible business. For purposes of
this paragraph, the term "eligible business" means a new
electric generating facility certified pursuant to Section
605-332 of the Department of Commerce and Community Affairs
Law of the Civi