Sen. Toi W. Hutchinson

Filed: 5/22/2017

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 9

2    AMENDMENT NO. ______. Amend Senate Bill 9 immediately above
3the enacting clause, by inserting the following:
4    "WHEREAS, the changes made by this Act are made under
5subsection (a) of Section 3 of Article IX of the Illinois
6Constitution. If there are future changes made to subsection
7(a) of Section 3 of Article IX of the Illinois Constitution,
8then it may result in evaluating the taxes on income imposed by
9this Act; therefore"; and
 
10by replacing everything after the enacting clause with the
11following:
 
12
"ARTICLE 5. BUDGET ECONOMIC STABILIZATION FUND ACT

 
13    Section 5-1. Short title. This Act may be cited as the
14Budget Economic Stabilization Fund Act.
 

 

 

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1    Section 5-5. Legislative intent.
2    The General Assembly finds that, in order to restore
3Illinois' fiscal health, retaining a share of above-trend State
4revenues for future needs and for reducing the need for new
5taxes or increasing any rate of tax or otherwise modifying the
6tax structure, including the elimination or modification of
7deductions, exclusions, or exemptions, is a priority.
 
8    Section 5-10. Definitions. As used in this Act:
9    "Above-trend revenues" means general funds revenue
10collections that exceed 2.4% of the prior fiscal year's general
11funds revenue collections.
12    "General funds" means the General Revenue Fund, the Common
13School Fund, the Education Assistance Fund, and the General
14Revenue Common School Special Account Fund.
15    "General funds revenue collections" means, for each fiscal
16year, all gross personal and corporate income taxes, other
17taxes, fees, and other revenues expected to be deposited into
18the State's general funds and recurring transfers into general
19funds from the State Lottery and gaming, but does not include
20other transfers and federal funds.
21    "Unpaid bills" means: pending vouchers approved for
22payment but not paid as of December 31st for each fiscal year
23by the Office of the Comptroller; pending transfers required by
24State statute that have been recorded but have not been paid
25from the General Revenue Fund, Common School Fund, or Education

 

 

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1Assistance Fund; and all vouchers for invoices that have been
2certified as a proper bill, as defined by the State Prompt
3Payment Act, by the Departments of Healthcare and Family
4Services, Central Management Services, Human Services,
5Revenue, and Aging but not yet approved by the Comptroller as
6of December 31st of each fiscal year from the General Revenue
7Fund, Common School Fund, Education Assistance Fund, Health
8Insurance Fund, Income Tax Refund Fund, and Healthcare Provider
9Relief Fund.
 
10    Section 5-15. Certification of the backlog of bills. The
11amount of unpaid bills shall be reported by the Comptroller and
12the Departments of Healthcare and Family Services, Central
13Management Services, Human Services, Revenue, and Aging to the
14Governor's Office of Management and Budget no later than
15January 10th of each year. By January 15th of each year, the
16Governor's Office of Management and Budget shall notify the
17Comptroller, Treasurer, the Speaker and Minority Leader of the
18House, and the President and Minority Leader of the Senate of
19the total amount of unpaid bills as of the preceding December
2031st.
 
21    Section 5-20. Payment of unpaid bills. If unpaid bills
22total more than $1,000,000,000, the Governor shall include in
23his or her budget for the next fiscal year an amount to pay
24unpaid bills equal to the lesser of (i) 50% of above-trend

 

 

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1revenues that the Governor projects to be received by the State
2in the next fiscal year or (ii) the amount of above-trend
3revenues needed to reduce the unpaid bills to $1,000,000,000.
4This amount to pay off unpaid bills shall be included in the
5Governor's budget as an appropriation to the Bill Backlog
6Payment Fund from the General Revenue Fund. Nothing in this Act
7prohibits the Governor from including in his or her budget, or
8the General Assembly from appropriating, additional moneys for
9the payment of unpaid bills. If for any reason the
10appropriations enacted are insufficient to meet the payment of
11unpaid bills required to be included in the Governor's budget
12under this Section, then there is hereby appropriated, on a
13continuing annual basis in each fiscal year, from the General
14Revenue Fund, the amounts necessary for this payment.
 
15    Section 5-25. Transfers into the Budget Economic
16Stabilization Fund.
17    (a) If unpaid bills total less than $1,000,000,000 the
18Governor shall include in his or her budget for the next fiscal
19year at least 50% of any above-trend revenues that the Governor
20projects to be received in the next fiscal year for deposit to
21the Budget Economic Stabilization Fund as an appropriation from
22the General Revenue Fund. Except as provided in subsection (b)
23of this Section, if for any reason the appropriations enacted
24are insufficient to make the deposit required by this Section,
25then this Section shall constitute a continuing appropriation

 

 

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1from the General Revenue Fund of all amounts necessary for this
2deposit.
3    (b) If the balance of the Budget Economic Stabilization
4Fund at the beginning of the next fiscal year is projected by
5the Governor to exceed 5% of the general funds revenue
6collections estimated for the next fiscal year, transfers into
7the Budget Economic Stabilization Fund are not required for
8that fiscal year.
 
9    Section 5-30. Withdrawal from Budget Economic
10Stabilization Fund.
11    (a) Upon the direction of the Governor at any time within a
12fiscal year and within the limitations set forth in this
13Section, the Comptroller and the Treasurer shall transfer the
14amounts designated by the Governor from the Budget Economic
15Stabilization Fund to general funds as specified by the
16Governor. The transfer shall be made as soon as practicable on
17or after the 30th day after the Governor has provided written
18notice of his or her direction to transfer to the Clerk of the
19House of Representatives, the Secretary of the Senate, and the
20Index Department of the Office of the Secretary of State, with
21copies of the notice provided to the Comptroller and Treasurer.
22The notice shall be published on the website of the Governor's
23Office of Management and Budget. The amount directed to be
24transferred may not exceed the limits set forth in subsection
25(c) of this Section. The Governor may direct a transfer from

 

 

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1the Budget Economic Stabilization Fund to any of the general
2funds only if: he or she estimates that general funds revenue
3collections for the current fiscal year will be less than the
4general funds revenue collections as estimated at the time of
5enactment of appropriations for the current fiscal year; the
6transfer is necessary to provide for the health, safety, and
7welfare of the people of the State of Illinois; and the funds
8transferred are to be spent within previously enacted
9appropriations.
10    (b) In addition to transfers directed by the Governor
11within a fiscal year, transfers or appropriations from the
12Budget Economic Stabilization Fund for the current or next
13fiscal year may be made by vote of the General Assembly if:
14        (1) the General Assembly projects that general funds
15    revenue collections for the current or next fiscal year are
16    less than the general funds revenue collections as
17    estimated at the time of enactment of appropriations for
18    the current fiscal year for the preceding year;
19        (2) the General Assembly finds that general funds
20    revenue collections have remained stagnant or dropped
21    during 2 consecutive fiscal quarters within the preceding
22    12 months as compared to the corresponding 2 fiscal
23    quarters of the prior fiscal year; or
24        (3) that the State Coincident Index for the State of
25    Illinois has remained stagnant or dropped over 2
26    consecutive quarters within the preceding 12 months, as

 

 

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1    published in the Federal Reserve Bank of Philadelphia's
2    publication entitled "State Coincident Indexes" or its
3    successor publication.
4    (c) Transfers or appropriations from the Budget Economic
5Stabilization Fund may not, during any fiscal year, exceed the
6lesser of:
7        (1) 50% of the Budget Economic Stabilization Fund's
8    balance;
9        (2) in the case of appropriation enacted by the General
10    Assembly, 50% of the difference between (i) general funds
11    revenue collections, as projected by the Commission on
12    Government Forecasting and Accountability to be received
13    in the next fiscal year, and (ii) a revised general fund
14    revenue collections projection for the current fiscal year
15    presented to the General Assembly by the Commission on
16    Government Forecasting and Accountability; or
17        (3) in the case of transfers to be directed by the
18    Governor within a fiscal year, 50% of the difference
19    between (i) general funds revenue collections, to be
20    received in the next fiscal year as projected by the
21    Governor, and (ii) a revised general fund revenue
22    collections projection for the current fiscal year as
23    projected by the Governor.
 
24    Section 5-35. Fund creation.
25    (a) There is created the Budget Economic Stabilization Fund

 

 

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1as a special fund in the State Treasury consisting of moneys
2appropriated or transferred to that Fund as provided in Section
35-30 of this Act and as otherwise provided by law. All earnings
4on Budget Economic Stabilization Fund investments shall be
5deposited into that Fund.
6    (b) There is created the Bill Backlog Payment Fund as a
7special fund in the State Treasury consisting of moneys
8appropriated or transferred to that Fund as provided in Section -
925 of this Act and as otherwise provided by law. All earnings
10on Bill Backlog Payment Fund investments shall be deposited
11into that Fund.
 
12
ARTICLE 10. VIDEO SERVICE TAX MODERNIZATION

 
13    Section 10-1. Short title. This Act may be cited as the
14Video Service Tax Modernization Act.
 
15    Section 10-5. Application. This Act applies to the
16provision of direct-to-home satellite service, direct
17broadcast satellite service, and digital audio-visual works on
18or after the effective date of this Act.
19    This Act does not apply to: (1) satellite radio service or
20subscription radio service whereby a digital radio signal is
21broadcast without any corresponding or related video
22programming or services; or (2) a satellite television
23transmission of simulcast horse races broadcast from or

 

 

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1received at locations operated by an organization licensee, an
2inter-track wagering licensee, or an inter-track wagering
3location licensee licensed under the Illinois Horse Racing Act
4of 1975.
 
5    Section 10-10. Definitions. As used in this Act:
6    "Department" means the Department of Revenue.
7    "Digital audio-visual works" means a series of related
8images that, when shown in succession, impart an impression of
9motion, together with accompanying sounds, if any, sold to an
10end user with rights of less than permanent use. "Digital
11audio-visual works" does not include cable service provided by
12a cable operator, as those terms are defined in 47 U.S.C. 522,
13and does not include video service provided by a holder, as
14those terms are defined in Article 21 of the Public Utilities
15Act.
16    "Direct broadcast satellite service" means video services
17transmitted or broadcast by satellite directly to the
18subscriber's premises with the use of or accompanied by ground
19receiving or distribution equipment, including, but not
20limited to, infrastructure to provide Internet access used in
21the transmission or broadcast of such video services, at the
22subscriber's premises, but not in the uplink process to the
23satellite, and includes, but is not limited to, the
24retransmission of local broadcast television, the provision of
25premium channels, other recurring monthly services, service

 

 

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1and pay-per-view, video-on-demand, and other event-based
2services.
3    "Direct-to-home satellite service" has the meaning given
4to that term in Public Law No. 104-104, Title VI, Section
5602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
6152).
7    "End user" means any person other than a person who
8receives by contract a product transferred electronically for
9further commercial broadcast, rebroadcast, transmission,
10retransmission, licensing, relicensing, distribution,
11redistribution, or exhibition of the product, in whole or in
12part, to another person or persons.
13    "Gross revenue" means all consideration of any kind or
14nature received by a provider, or an affiliate of the provider,
15in connection with the provision of direct-to-home satellite
16service, direct broadcast satellite service, or digital
17audio-visual works to subscribers. "Gross revenue" does not
18include:
19        (1) charges for the rental of equipment related to the
20    provision of direct-to-home satellite service, direct
21    broadcast satellite service, or digital audiovisual works;
22        (2) activation, installation, repair, or maintenance
23    charges or similar service charges related to the provision
24    of direct-to-home satellite service, direct broadcast
25    satellite service, or digital audio-visual works;
26        (3) service order charges, service termination

 

 

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1    charges, or any other administrative charges related to the
2    provision of direct-to-home satellite service, direct
3    broadcast satellite service, or digital audiovisual works;
4        (4) revenue not actually received, regardless of
5    whether it is billed, including, but not limited to, bad
6    debts;
7        (5) revenue received by an affiliate or other person in
8    exchange for supplying goods and services used by a
9    provider;
10        (6) the amount of any refunds, rebates, or discounts
11    made to subscribers, advertisers, or other persons;
12        (7) revenue from any service that is subject to tax
13    under the Service Occupation Tax Act, Retailers'
14    Occupation Tax Act, Service Use Tax Act, or Use Tax Act;
15        (8) the tax imposed by this Act or any other tax of
16    general applicability imposed on a provider or a purchaser
17    of direct-to-home satellite service, direct broadcast
18    satellite service, or digital audio-visual works by a
19    federal, State, or local governmental entity and required
20    to be collected by a person and remitted to the taxing
21    entity;
22        (9) late payment fees collected from subscribers;
23        (10) charges, other than those charges specifically
24    described in this Act, that are aggregated or bundled with
25    such specifically-described charges on a subscriber's
26    bill, if the provider can reasonably identify the charges

 

 

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1    in its books and records kept in the regular course of
2    business;
3        (11) revenue from advertising services; or
4        (12) charges that may not be taxed pursuant to the
5    federal Internet Tax Freedom Act.
6    "Permanent" means perpetual or for an indefinite or
7unspecified length of time.
8    "Person" means a natural individual, firm, trust, estate,
9partnership, association, joint stock company, joint venture,
10corporation, or limited liability company, or a receiver,
11trustee, guardian, or other representative appointed by order
12of any court, and includes the federal and State governments,
13including State universities created by statute, and
14municipalities, counties, and other political subdivisions of
15this State.
16    "Premises" means a residence or place of business of a
17subscriber in this State.
18    "Provider" means a person who transmits, broadcasts,
19sells, or distributes direct-to-home satellite service, direct
20broadcast satellite service, or digital audio-visual works to
21subscribers in the State.
22    "Subscriber" means a member of the general public who
23receives direct-to-home satellite service, direct broadcast
24satellite service, or digital audio-visual works from a
25provider and does not further distribute the service in the
26ordinary course of business.
 

 

 

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1    Section 10-15. Imposition of tax.
2    (a) A tax is imposed upon the act or privilege of providing
3direct-to-home satellite service, direct broadcast satellite
4service, or digital audio-visual works to a subscriber in this
5State by any provider at the rate of 5% of the provider's gross
6revenues derived from or attributable to that subscriber.
7    (b) For purposes of the tax imposed by subsection (a), a
8subscriber is in this State if the subscriber's street address
9representative of where the subscriber's use or access of the
10direct-to-home satellite service, direct broadcast satellite
11service, or digital audio visual work primarily occurs, which
12must be the street address of the subscriber based on such
13other information kept by the provider in the regular course of
14its business.
15    (c) The tax imposed by subsection (a) may be passed through
16to, and collected from, the provider's subscribers in Illinois.
17To the extent allowed under federal or State law, a provider
18may identify as a separate line item on each regular bill
19issued to a subscriber the amount of the total bill assessed as
20a tax under this Act.
21    (d) To prevent actual multi-state taxation upon the act or
22privilege that is subject to taxation under this Act, any
23taxpayer, upon proof that that taxpayer has paid a tax in
24another state on such event, shall be allowed a credit against
25the tax imposed in this Act to the extent of the amount of such

 

 

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1tax properly due and paid in such other state. However, such
2tax is not imposed on the act or privilege to the extent such
3act or privilege may not, under the Constitution and statutes
4of the United States, be made the subject of taxation by the
5State.
 
6    Section 10-20. Remittances.
7    (a) On or before the twentieth day of each calendar month,
8every provider of direct-to-home satellite service, direct
9broadcast satellite service, or digital audio-visual works
10that provides such service or services to a subscriber in this
11State during the preceding calendar month shall file a return
12with the Department, in a form prescribed by the Department,
13stating:
14        (1) the name of the provider;
15        (2) the address of the provider's principal place of
16    business;
17        (3) the total amount of gross revenues received by the
18    provider during the preceding calendar month, quarter, or
19    year, as the case may be, from the provision of
20    direct-to-home satellite service, direct broadcast
21    satellite service, or digital audio-visual works during
22    that preceding calendar month, quarter, or year and upon
23    the basis of which the tax is imposed;
24        (4) the amount of tax due;
25        (5) the signature of the taxpayer; and

 

 

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1        (6) such other reasonable information as the
2    Department may require.
3    (b) If a taxpayer fails to sign a return within 30 days
4after the proper notice and demand for signature by the
5Department is received by the taxpayer, then the return shall
6be considered valid and any amount shown to be due on the
7return shall be deemed assessed.
8    (c) If the provider is otherwise required to file a monthly
9return, and if the provider's average monthly tax liability to
10the Department under this Act does not exceed $200, the
11Department may authorize the provider's returns to be filed on
12a quarter annual basis, with the return for January, February,
13and March of a given year being due by April 20 of that year;
14with the return for April, May, and June of a given year being
15due by July 20 of that year; with the return for July, August,
16and September of a given year being due by October 20 of that
17year, and with the return for October, November, and December
18of a given year being due by January 20 of the following year.
19    (d) If the provider is otherwise required to file a monthly
20or quarterly return, and if the provider's average monthly tax
21liability with the Department under this Act does not exceed
22$50, the Department may authorize the provider's returns to be
23filed on an annual basis, with the return for a given year
24being due by January 20 of the following year.
25    (e) Those quarterly and annual returns shall be subject to
26the same requirements as to form and substance as monthly

 

 

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1returns.
2    (f) A taxpayer who has an annual tax liability in the
3amount set forth in subsection (b) of Section 2505-210 of the
4Department of Revenue Law shall make all payments required by
5rules of the Department by electronic funds transfer.
6    Any taxpayer not required to make payments by electronic
7funds transfer may make payments by electronic funds transfer
8with the permission of the Department.
9    All taxpayers required to make payment by electronic funds
10transfer and any taxpayers authorized to voluntarily make
11payments by electronic funds transfer shall make those payments
12in the manner authorized by the Department.
 
13    Section 10-25. Records.
14    (a) A provider on whom the tax is imposed by this Act shall
15maintain the necessary records, and any other information
16required by the Department, to determine the amount of the tax
17that the provider is required to remit and any credit that the
18provider is entitled to claim under this Act.
19    (b) The records shall be open at all times to inspection by
20the Department.
 
21    Section 10-30. Rules. The Department is authorized to adopt
22and enforce any reasonable rules and to prescribe such forms
23relating to the administration and enforcement of this Act as
24it may deem appropriate.
 

 

 

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1    Section 10-35. Incorporation of Retailers' Occupation Tax
2Act and Uniform Penalty and Interest Act. All of the provisions
3of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
4Retailers' Occupation Tax Act, which are not inconsistent with
5this Act, and the Uniform Penalty and Interest Act, shall
6apply, as far as practicable, to the subject matter of this Act
7to the same extent as if such provisions were included herein.
8References in those incorporated Sections to taxpayers and to
9persons engaged in the business of selling tangible personal
10property at retail mean providers of direct-to-home satellite
11service, direct broadcast satellite service, or digital
12audio-visual works when used in this Act.
 
13
ARTICLE 15. ENTERTAINMENT TAX FAIRNESS ACT

 
14    Section 15-1. Short title. This Act may be cited as the
15Entertainment Tax Fairness Act.
 
16    Section 15-5. Application. This Act applies to all
17subscribers of entertainment in this State for the privilege to
18witness, view, or otherwise enjoy the entertainment.
19    This Act does not apply to: (1) satellite radio service or
20subscription radio service whereby a digital radio signal is
21broadcast without any corresponding or related video
22programming or services; or (2) a satellite television

 

 

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1transmission of simulcast horse races broadcast from or
2received at locations operated by an organization licensee, an
3inter-track wagering licensee, or an inter-track wagering
4location licensee licensed under the Illinois Horse Racing Act
5of 1975.
 
6    Section 15-10. Definitions. As used in this Act:
7    "Cable service" has the meaning given to that term in item
8(6) of 47 U.S.C. 522.
9    "Department" means the Department of Revenue.
10    "Digital audio-visual works service" means the
11transmission of a series of related images that, when shown in
12succession, impart an impression of motion, together with
13accompanying sounds, if any, sold to an end user with rights of
14less than permanent use. "Digital audio-visual works service"
15does not include cable service or video service.
16    "Direct broadcast satellite service" means video services
17transmitted or broadcast by satellite directly to the
18subscriber's premises with the use of or accompanied by ground
19receiving or distribution equipment, including, but not
20limited to, infrastructure to provide Internet access used in
21the transmission or broadcast of such video services, at the
22subscriber's premises, but not in the uplink process to the
23satellite, and includes, but is not limited to, the
24retransmission of local broadcast television, the provision of
25premium channels, other recurring monthly services, service

 

 

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1and pay-per-view, video-on-demand, and other event-based
2services.
3    "Direct-to-home satellite service" has the meaning given
4to that term in Public Law No. 104-104, Title VI, Section
5602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
6152).
7    "End user" means any person other than a person who
8receives by contract a product transferred electronically for
9further commercial broadcast, rebroadcast, transmission,
10retransmission, licensing, relicensing, distribution,
11redistribution, or exhibition of the product, in whole or in
12part, to another person or persons.
13    "Entertainment" means any paid video programming whether
14transmitted by cable service, direct-to-home satellite
15service, direct broadcast satellite service, digital
16audio-visual works service, or video service to a subscriber in
17this State.
18    "Permanent" means perpetual or for an indefinite or
19unspecified length of time.
20    "Provider" means a person who transmits, broadcasts,
21sells, or distributes cable service, direct-to-home satellite
22service, direct broadcast satellite service, digital
23audio-visual works service, or video service to subscribers in
24the State.
25    "Subscriber" means a member of the general public who
26receives cable service, direct-to-home satellite service,

 

 

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1direct broadcast satellite service, or digital audio-visual
2works service, or video service from a provider and does not
3further distribute the service in the ordinary course of
4business.
5    "Video service" has the meaning given to that term in the
6Cable and Video Competition Law of 2007 of the Public Utilities
7Act.
 
8    Section 15-15. Imposition of tax.
9    (a) A tax is imposed upon the subscribers of entertainment
10in this State at the rate of 1% of the charges paid for the
11privilege to witness, view, or otherwise enjoy the
12entertainment.
13    (b) For purposes of the tax imposed by subsection (a), a
14subscriber is in this State if the subscriber's street address
15is representative of where the subscriber's use or access of
16the entertainment primarily occurs, which must be the street
17address of the subscriber based on such other information kept
18by the provider in the regular course of its business.
19    (c) The provider of the entertainment shall collect and
20secure from each subscriber the tax imposed by this Act and
21remit the tax to the Department as set forth in Section 15-20
22of this Act.
 
23    Section 15-20. Remittances.
24    (a) On or before the twentieth day of each calendar month,

 

 

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1every provider shall file a return with the Department, in a
2form prescribed by the Department, stating:
3        (1) the name of the provider;
4        (2) the address of the provider's principal place of
5    business;
6        (3) the total amount of tax revenues collected by the
7    provider under this Act during the preceding calendar
8    month, quarter, or year, as the case may be, during that
9    preceding calendar month, quarter, or year and upon the
10    basis of which the tax is imposed;
11        (4) the amount of tax due;
12        (5) the signature of the provider; and
13        (6) such other reasonable information as the
14    Department may require.
15    (b) If a provider fails to sign a return within 30 days
16after the proper notice and demand for signature by the
17Department is received by the provider, then the return shall
18be considered valid and any amount shown to be due on the
19return shall be deemed assessed.
20    (c) If the provider is otherwise required to file a monthly
21return, and if the amount collected by the provider under this
22Act does not exceed $200, the Department may authorize the
23provider's returns to be filed on a quarter annual basis, with
24the return for January, February, and March of a given year
25being due by April 20 of that year; with the return for April,
26May, and June of a given year being due by July 20 of that year;

 

 

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1with the return for July, August, and September of a given year
2being due by October 20 of that year, and with the return for
3October, November, and December of a given year being due by
4January 20 of the following year.
5    (d) If the provider is otherwise required to file a monthly
6or quarterly return, and if the amount collected by the
7provider under this Act does not exceed $50, the Department may
8authorize the provider's returns to be filed on an annual
9basis, with the return for a given year being due by January 20
10of the following year.
11    (e) Those quarterly and annual returns shall be subject to
12the same requirements as to form and substance as monthly
13returns.
14    (f) A provider responsible for collecting and remitting the
15amount set forth in subsection (b) of Section 2505-210 of the
16Department of Revenue Law shall make all payments required by
17rules of the Department by electronic funds transfer.
18    Any provider not required to make payments by electronic
19funds transfer may make payments by electronic funds transfer
20with the permission of the Department.
21    All providers required to make payment by electronic funds
22transfer and any taxpayers authorized to voluntarily make
23payments by electronic funds transfer shall make those payments
24in the manner authorized by the Department.
 
25    Section 15-25. Records.

 

 

10000SB0009sam006- 23 -LRB100 06347 HLH 26817 a

1    (a) A provider subject to this Act shall maintain the
2necessary records, and any other information required by the
3Department, to determine the amount of the tax that the
4provider is required to collect and remit and any credit that
5the provider is entitled to claim under this Act.
6    (b) The records shall be open at all times to inspection by
7the Department.
 
8    Section 15-30. Rules. The Department is authorized to adopt
9and enforce any reasonable rules and to prescribe such forms
10relating to the administration and enforcement of this Act as
11it may deem appropriate.
 
12    Section 15-35. Incorporation of Retailers' Occupation Tax
13Act and Uniform Penalty and Interest Act. All of the provisions
14of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
15Retailers' Occupation Tax Act, which are not inconsistent with
16this Act, and the Uniform Penalty and Interest Act, shall
17apply, as far as practicable, to the subject matter of this Act
18to the same extent as if such provisions were included herein.
19References in those incorporated Sections to taxpayers and to
20persons engaged in the business of selling tangible personal
21property at retail mean providers of direct-to-home satellite
22service, direct broadcast satellite service, or digital
23audio-visual works service when used in this Act.
 

 

 

10000SB0009sam006- 24 -LRB100 06347 HLH 26817 a

1
ARTICLE 30. AMENDATORY PROVISIONS

 
2    Section 30-5. The State Finance Act is amended by changing
3Section 6z-51 and by adding Sections 5.878 and 5.879 as
4follows:
 
5    (30 ILCS 105/5.878 new)
6    Sec. 5.878. The Budget Economic Stabilization Fund.
 
7    (30 ILCS 105/5.879 new)
8    Sec. 5.879. The Bill Backlog Payment Fund.
 
9    (30 ILCS 105/6z-51)
10    Sec. 6z-51. Budget Stabilization Fund.
11    (a) The Budget Stabilization Fund, a special fund in the
12State Treasury, shall consist of moneys appropriated or
13transferred to that Fund, as provided in Section 6z-43 and as
14otherwise provided by law. All earnings on Budget Stabilization
15Fund investments shall be deposited into that Fund.
16    (b) Until an initial transfer has been made to the Budget
17Economic Stabilization Fund under Section 5-30 of the Budget
18Economic Stabilization Fund Act, the The State Comptroller may
19direct the State Treasurer to transfer moneys from the Budget
20Stabilization Fund to the General Revenue Fund in order to meet
21cash flow deficits resulting from timing variations between
22disbursements and the receipt of funds within a fiscal year.

 

 

10000SB0009sam006- 25 -LRB100 06347 HLH 26817 a

1Any moneys so borrowed in any fiscal year other than Fiscal
2Year 2011 shall be repaid by June 30 of the fiscal year in
3which they were borrowed. Any moneys so borrowed in Fiscal Year
42011 shall be repaid no later than July 15, 2011.
5    (c) During Fiscal Year 2017 only, amounts may be expended
6from the Budget Stabilization Fund only pursuant to specific
7authorization by appropriation. Any moneys expended pursuant
8to appropriation shall not be subject to repayment.
9(Source: P.A. 99-523, eff. 6-30-16.)
 
10    Section 30-10. The Illinois Income Tax Act is amended by
11changing Sections 201, 203, 204, 208, 212, 222, 804, 901, and
121501 and by adding Section 225 as follows:
 
13    (35 ILCS 5/201)  (from Ch. 120, par. 2-201)
14    Sec. 201. Tax Imposed.
15    (a) In general. A tax measured by net income is hereby
16imposed on every individual, corporation, trust and estate for
17each taxable year ending after July 31, 1969 on the privilege
18of earning or receiving income in or as a resident of this
19State. Such tax shall be in addition to all other occupation or
20privilege taxes imposed by this State or by any municipal
21corporation or political subdivision thereof.
22    (b) Rates. The tax imposed by subsection (a) of this
23Section shall be determined as follows, except as adjusted by
24subsection (d-1):

 

 

10000SB0009sam006- 26 -LRB100 06347 HLH 26817 a

1        (1) In the case of an individual, trust or estate, for
2    taxable years ending prior to July 1, 1989, an amount equal
3    to 2 1/2% of the taxpayer's net income for the taxable
4    year.
5        (2) In the case of an individual, trust or estate, for
6    taxable years beginning prior to July 1, 1989 and ending
7    after June 30, 1989, an amount equal to the sum of (i) 2
8    1/2% of the taxpayer's net income for the period prior to
9    July 1, 1989, as calculated under Section 202.3, and (ii)
10    3% of the taxpayer's net income for the period after June
11    30, 1989, as calculated under Section 202.3.
12        (3) In the case of an individual, trust or estate, for
13    taxable years beginning after June 30, 1989, and ending
14    prior to January 1, 2011, an amount equal to 3% of the
15    taxpayer's net income for the taxable year.
16        (4) In the case of an individual, trust, or estate, for
17    taxable years beginning prior to January 1, 2011, and
18    ending after December 31, 2010, an amount equal to the sum
19    of (i) 3% of the taxpayer's net income for the period prior
20    to January 1, 2011, as calculated under Section 202.5, and
21    (ii) 5% of the taxpayer's net income for the period after
22    December 31, 2010, as calculated under Section 202.5.
23        (5) In the case of an individual, trust, or estate, for
24    taxable years beginning on or after January 1, 2011, and
25    ending prior to January 1, 2015, an amount equal to 5% of
26    the taxpayer's net income for the taxable year.

 

 

10000SB0009sam006- 27 -LRB100 06347 HLH 26817 a

1        (5.1) In the case of an individual, trust, or estate,
2    for taxable years beginning prior to January 1, 2015, and
3    ending after December 31, 2014, an amount equal to the sum
4    of (i) 5% of the taxpayer's net income for the period prior
5    to January 1, 2015, as calculated under Section 202.5, and
6    (ii) 3.75% of the taxpayer's net income for the period
7    after December 31, 2014, as calculated under Section 202.5.
8        (5.2) In the case of an individual, trust, or estate,
9    for taxable years beginning on or after January 1, 2015,
10    and ending prior to January 1, 2017 January 1, 2025, an
11    amount equal to 3.75% of the taxpayer's net income for the
12    taxable year.
13        (5.3) In the case of an individual, trust, or estate,
14    for taxable years beginning prior to January 1, 2017
15    January 1, 2025, and ending after December 31, 2016
16    December 31, 2024, an amount equal to the sum of (i) 3.75%
17    of the taxpayer's net income for the period prior to
18    January 1, 2017 January 1, 2025, as calculated under
19    Section 202.5, and (ii) 4.95% 3.25% of the taxpayer's net
20    income for the period after December 31, 2016 December 31,
21    2024, as calculated under Section 202.5.
22        (5.4) In the case of an individual, trust, or estate,
23    for taxable years beginning on or after January 1, 2017
24    January 1, 2025, an amount equal to 4.95% 3.25% of the
25    taxpayer's net income for the taxable year.
26        (6) In the case of a corporation, for taxable years

 

 

10000SB0009sam006- 28 -LRB100 06347 HLH 26817 a

1    ending prior to July 1, 1989, an amount equal to 4% of the
2    taxpayer's net income for the taxable year.
3        (7) In the case of a corporation, for taxable years
4    beginning prior to July 1, 1989 and ending after June 30,
5    1989, an amount equal to the sum of (i) 4% of the
6    taxpayer's net income for the period prior to July 1, 1989,
7    as calculated under Section 202.3, and (ii) 4.8% of the
8    taxpayer's net income for the period after June 30, 1989,
9    as calculated under Section 202.3.
10        (8) In the case of a corporation, for taxable years
11    beginning after June 30, 1989, and ending prior to January
12    1, 2011, an amount equal to 4.8% of the taxpayer's net
13    income for the taxable year.
14        (9) In the case of a corporation, for taxable years
15    beginning prior to January 1, 2011, and ending after
16    December 31, 2010, an amount equal to the sum of (i) 4.8%
17    of the taxpayer's net income for the period prior to
18    January 1, 2011, as calculated under Section 202.5, and
19    (ii) 7% of the taxpayer's net income for the period after
20    December 31, 2010, as calculated under Section 202.5.
21        (10) In the case of a corporation, for taxable years
22    beginning on or after January 1, 2011, and ending prior to
23    January 1, 2015, an amount equal to 7% of the taxpayer's
24    net income for the taxable year.
25        (11) In the case of a corporation, for taxable years
26    beginning prior to January 1, 2015, and ending after

 

 

10000SB0009sam006- 29 -LRB100 06347 HLH 26817 a

1    December 31, 2014, an amount equal to the sum of (i) 7% of
2    the taxpayer's net income for the period prior to January
3    1, 2015, as calculated under Section 202.5, and (ii) 5.25%
4    of the taxpayer's net income for the period after December
5    31, 2014, as calculated under Section 202.5.
6        (12) In the case of a corporation, for taxable years
7    beginning on or after January 1, 2015, and ending prior to
8    January 1, 2017 January 1, 2025, an amount equal to 5.25%
9    of the taxpayer's net income for the taxable year.
10        (13) In the case of a corporation, for taxable years
11    beginning prior to January 1, 2017 January 1, 2025, and
12    ending after December 31, 2016 December 31, 2024, an amount
13    equal to the sum of (i) 5.25% of the taxpayer's net income
14    for the period prior to January 1, 2017 January 1, 2025, as
15    calculated under Section 202.5, and (ii) 7% 4.8% of the
16    taxpayer's net income for the period after December 31,
17    2016 December 31, 2024, as calculated under Section 202.5.
18        (14) In the case of a corporation, for taxable years
19    beginning on or after January 1, 2017 January 1, 2025, an
20    amount equal to 7% 4.8% of the taxpayer's net income for
21    the taxable year.
22    The rates under this subsection (b) are subject to the
23provisions of Section 201.5.
24    (c) Personal Property Tax Replacement Income Tax.
25Beginning on July 1, 1979 and thereafter, in addition to such
26income tax, there is also hereby imposed the Personal Property

 

 

10000SB0009sam006- 30 -LRB100 06347 HLH 26817 a

1Tax Replacement Income Tax measured by net income on every
2corporation (including Subchapter S corporations), partnership
3and trust, for each taxable year ending after June 30, 1979.
4Such taxes are imposed on the privilege of earning or receiving
5income in or as a resident of this State. The Personal Property
6Tax Replacement Income Tax shall be in addition to the income
7tax imposed by subsections (a) and (b) of this Section and in
8addition to all other occupation or privilege taxes imposed by
9this State or by any municipal corporation or political
10subdivision thereof.
11    (d) Additional Personal Property Tax Replacement Income
12Tax Rates. The personal property tax replacement income tax
13imposed by this subsection and subsection (c) of this Section
14in the case of a corporation, other than a Subchapter S
15corporation and except as adjusted by subsection (d-1), shall
16be an additional amount equal to 2.85% of such taxpayer's net
17income for the taxable year, except that beginning on January
181, 1981, and thereafter, the rate of 2.85% specified in this
19subsection shall be reduced to 2.5%, and in the case of a
20partnership, trust or a Subchapter S corporation shall be an
21additional amount equal to 1.5% of such taxpayer's net income
22for the taxable year.
23    (d-1) Rate reduction for certain foreign insurers. In the
24case of a foreign insurer, as defined by Section 35A-5 of the
25Illinois Insurance Code, whose state or country of domicile
26imposes on insurers domiciled in Illinois a retaliatory tax

 

 

10000SB0009sam006- 31 -LRB100 06347 HLH 26817 a

1(excluding any insurer whose premiums from reinsurance assumed
2are 50% or more of its total insurance premiums as determined
3under paragraph (2) of subsection (b) of Section 304, except
4that for purposes of this determination premiums from
5reinsurance do not include premiums from inter-affiliate
6reinsurance arrangements), beginning with taxable years ending
7on or after December 31, 1999, the sum of the rates of tax
8imposed by subsections (b) and (d) shall be reduced (but not
9increased) to the rate at which the total amount of tax imposed
10under this Act, net of all credits allowed under this Act,
11shall equal (i) the total amount of tax that would be imposed
12on the foreign insurer's net income allocable to Illinois for
13the taxable year by such foreign insurer's state or country of
14domicile if that net income were subject to all income taxes
15and taxes measured by net income imposed by such foreign
16insurer's state or country of domicile, net of all credits
17allowed or (ii) a rate of zero if no such tax is imposed on such
18income by the foreign insurer's state of domicile. For the
19purposes of this subsection (d-1), an inter-affiliate includes
20a mutual insurer under common management.
21        (1) For the purposes of subsection (d-1), in no event
22    shall the sum of the rates of tax imposed by subsections
23    (b) and (d) be reduced below the rate at which the sum of:
24            (A) the total amount of tax imposed on such foreign
25        insurer under this Act for a taxable year, net of all
26        credits allowed under this Act, plus

 

 

10000SB0009sam006- 32 -LRB100 06347 HLH 26817 a

1            (B) the privilege tax imposed by Section 409 of the
2        Illinois Insurance Code, the fire insurance company
3        tax imposed by Section 12 of the Fire Investigation
4        Act, and the fire department taxes imposed under
5        Section 11-10-1 of the Illinois Municipal Code,
6    equals 1.25% for taxable years ending prior to December 31,
7    2003, or 1.75% for taxable years ending on or after
8    December 31, 2003, of the net taxable premiums written for
9    the taxable year, as described by subsection (1) of Section
10    409 of the Illinois Insurance Code. This paragraph will in
11    no event increase the rates imposed under subsections (b)
12    and (d).
13        (2) Any reduction in the rates of tax imposed by this
14    subsection shall be applied first against the rates imposed
15    by subsection (b) and only after the tax imposed by
16    subsection (a) net of all credits allowed under this
17    Section other than the credit allowed under subsection (i)
18    has been reduced to zero, against the rates imposed by
19    subsection (d).
20    This subsection (d-1) is exempt from the provisions of
21Section 250.
22    (e) Investment credit. A taxpayer shall be allowed a credit
23against the Personal Property Tax Replacement Income Tax for
24investment in qualified property.
25        (1) A taxpayer shall be allowed a credit equal to .5%
26    of the basis of qualified property placed in service during

 

 

10000SB0009sam006- 33 -LRB100 06347 HLH 26817 a

1    the taxable year, provided such property is placed in
2    service on or after July 1, 1984. There shall be allowed an
3    additional credit equal to .5% of the basis of qualified
4    property placed in service during the taxable year,
5    provided such property is placed in service on or after
6    July 1, 1986, and the taxpayer's base employment within
7    Illinois has increased by 1% or more over the preceding
8    year as determined by the taxpayer's employment records
9    filed with the Illinois Department of Employment Security.
10    Taxpayers who are new to Illinois shall be deemed to have
11    met the 1% growth in base employment for the first year in
12    which they file employment records with the Illinois
13    Department of Employment Security. The provisions added to
14    this Section by Public Act 85-1200 (and restored by Public
15    Act 87-895) shall be construed as declaratory of existing
16    law and not as a new enactment. If, in any year, the
17    increase in base employment within Illinois over the
18    preceding year is less than 1%, the additional credit shall
19    be limited to that percentage times a fraction, the
20    numerator of which is .5% and the denominator of which is
21    1%, but shall not exceed .5%. The investment credit shall
22    not be allowed to the extent that it would reduce a
23    taxpayer's liability in any tax year below zero, nor may
24    any credit for qualified property be allowed for any year
25    other than the year in which the property was placed in
26    service in Illinois. For tax years ending on or after

 

 

10000SB0009sam006- 34 -LRB100 06347 HLH 26817 a

1    December 31, 1987, and on or before December 31, 1988, the
2    credit shall be allowed for the tax year in which the
3    property is placed in service, or, if the amount of the
4    credit exceeds the tax liability for that year, whether it
5    exceeds the original liability or the liability as later
6    amended, such excess may be carried forward and applied to
7    the tax liability of the 5 taxable years following the
8    excess credit years if the taxpayer (i) makes investments
9    which cause the creation of a minimum of 2,000 full-time
10    equivalent jobs in Illinois, (ii) is located in an
11    enterprise zone established pursuant to the Illinois
12    Enterprise Zone Act and (iii) is certified by the
13    Department of Commerce and Community Affairs (now
14    Department of Commerce and Economic Opportunity) as
15    complying with the requirements specified in clause (i) and
16    (ii) by July 1, 1986. The Department of Commerce and
17    Community Affairs (now Department of Commerce and Economic
18    Opportunity) shall notify the Department of Revenue of all
19    such certifications immediately. For tax years ending
20    after December 31, 1988, the credit shall be allowed for
21    the tax year in which the property is placed in service,
22    or, if the amount of the credit exceeds the tax liability
23    for that year, whether it exceeds the original liability or
24    the liability as later amended, such excess may be carried
25    forward and applied to the tax liability of the 5 taxable
26    years following the excess credit years. The credit shall

 

 

10000SB0009sam006- 35 -LRB100 06347 HLH 26817 a

1    be applied to the earliest year for which there is a
2    liability. If there is credit from more than one tax year
3    that is available to offset a liability, earlier credit
4    shall be applied first.
5        (2) The term "qualified property" means property
6    which:
7            (A) is tangible, whether new or used, including
8        buildings and structural components of buildings and
9        signs that are real property, but not including land or
10        improvements to real property that are not a structural
11        component of a building such as landscaping, sewer
12        lines, local access roads, fencing, parking lots, and
13        other appurtenances;
14            (B) is depreciable pursuant to Section 167 of the
15        Internal Revenue Code, except that "3-year property"
16        as defined in Section 168(c)(2)(A) of that Code is not
17        eligible for the credit provided by this subsection
18        (e);
19            (C) is acquired by purchase as defined in Section
20        179(d) of the Internal Revenue Code;
21            (D) is used in Illinois by a taxpayer who is
22        primarily engaged in manufacturing, or in mining coal
23        or fluorite, or in retailing, or was placed in service
24        on or after July 1, 2006 in a River Edge Redevelopment
25        Zone established pursuant to the River Edge
26        Redevelopment Zone Act; and

 

 

10000SB0009sam006- 36 -LRB100 06347 HLH 26817 a

1            (E) has not previously been used in Illinois in
2        such a manner and by such a person as would qualify for
3        the credit provided by this subsection (e) or
4        subsection (f).
5        (3) For purposes of this subsection (e),
6    "manufacturing" means the material staging and production
7    of tangible personal property by procedures commonly
8    regarded as manufacturing, processing, fabrication, or
9    assembling which changes some existing material into new
10    shapes, new qualities, or new combinations. For purposes of
11    this subsection (e) the term "mining" shall have the same
12    meaning as the term "mining" in Section 613(c) of the
13    Internal Revenue Code. For purposes of this subsection (e),
14    the term "retailing" means the sale of tangible personal
15    property for use or consumption and not for resale, or
16    services rendered in conjunction with the sale of tangible
17    personal property for use or consumption and not for
18    resale. For purposes of this subsection (e), "tangible
19    personal property" has the same meaning as when that term
20    is used in the Retailers' Occupation Tax Act, and, for
21    taxable years ending after December 31, 2008, does not
22    include the generation, transmission, or distribution of
23    electricity.
24        (4) The basis of qualified property shall be the basis
25    used to compute the depreciation deduction for federal
26    income tax purposes.

 

 

10000SB0009sam006- 37 -LRB100 06347 HLH 26817 a

1        (5) If the basis of the property for federal income tax
2    depreciation purposes is increased after it has been placed
3    in service in Illinois by the taxpayer, the amount of such
4    increase shall be deemed property placed in service on the
5    date of such increase in basis.
6        (6) The term "placed in service" shall have the same
7    meaning as under Section 46 of the Internal Revenue Code.
8        (7) If during any taxable year, any property ceases to
9    be qualified property in the hands of the taxpayer within
10    48 months after being placed in service, or the situs of
11    any qualified property is moved outside Illinois within 48
12    months after being placed in service, the Personal Property
13    Tax Replacement Income Tax for such taxable year shall be
14    increased. Such increase shall be determined by (i)
15    recomputing the investment credit which would have been
16    allowed for the year in which credit for such property was
17    originally allowed by eliminating such property from such
18    computation and, (ii) subtracting such recomputed credit
19    from the amount of credit previously allowed. For the
20    purposes of this paragraph (7), a reduction of the basis of
21    qualified property resulting from a redetermination of the
22    purchase price shall be deemed a disposition of qualified
23    property to the extent of such reduction.
24        (8) Unless the investment credit is extended by law,
25    the basis of qualified property shall not include costs
26    incurred after December 31, 2018, except for costs incurred

 

 

10000SB0009sam006- 38 -LRB100 06347 HLH 26817 a

1    pursuant to a binding contract entered into on or before
2    December 31, 2018.
3        (9) Each taxable year ending before December 31, 2000,
4    a partnership may elect to pass through to its partners the
5    credits to which the partnership is entitled under this
6    subsection (e) for the taxable year. A partner may use the
7    credit allocated to him or her under this paragraph only
8    against the tax imposed in subsections (c) and (d) of this
9    Section. If the partnership makes that election, those
10    credits shall be allocated among the partners in the
11    partnership in accordance with the rules set forth in
12    Section 704(b) of the Internal Revenue Code, and the rules
13    promulgated under that Section, and the allocated amount of
14    the credits shall be allowed to the partners for that
15    taxable year. The partnership shall make this election on
16    its Personal Property Tax Replacement Income Tax return for
17    that taxable year. The election to pass through the credits
18    shall be irrevocable.
19        For taxable years ending on or after December 31, 2000,
20    a partner that qualifies its partnership for a subtraction
21    under subparagraph (I) of paragraph (2) of subsection (d)
22    of Section 203 or a shareholder that qualifies a Subchapter
23    S corporation for a subtraction under subparagraph (S) of
24    paragraph (2) of subsection (b) of Section 203 shall be
25    allowed a credit under this subsection (e) equal to its
26    share of the credit earned under this subsection (e) during

 

 

10000SB0009sam006- 39 -LRB100 06347 HLH 26817 a

1    the taxable year by the partnership or Subchapter S
2    corporation, determined in accordance with the
3    determination of income and distributive share of income
4    under Sections 702 and 704 and Subchapter S of the Internal
5    Revenue Code. This paragraph is exempt from the provisions
6    of Section 250.
7    (f) Investment credit; Enterprise Zone; River Edge
8Redevelopment Zone.
9        (1) A taxpayer shall be allowed a credit against the
10    tax imposed by subsections (a) and (b) of this Section for
11    investment in qualified property which is placed in service
12    in an Enterprise Zone created pursuant to the Illinois
13    Enterprise Zone Act or, for property placed in service on
14    or after July 1, 2006, a River Edge Redevelopment Zone
15    established pursuant to the River Edge Redevelopment Zone
16    Act. For partners, shareholders of Subchapter S
17    corporations, and owners of limited liability companies,
18    if the liability company is treated as a partnership for
19    purposes of federal and State income taxation, there shall
20    be allowed a credit under this subsection (f) to be
21    determined in accordance with the determination of income
22    and distributive share of income under Sections 702 and 704
23    and Subchapter S of the Internal Revenue Code. The credit
24    shall be .5% of the basis for such property. The credit
25    shall be available only in the taxable year in which the
26    property is placed in service in the Enterprise Zone or

 

 

10000SB0009sam006- 40 -LRB100 06347 HLH 26817 a

1    River Edge Redevelopment Zone and shall not be allowed to
2    the extent that it would reduce a taxpayer's liability for
3    the tax imposed by subsections (a) and (b) of this Section
4    to below zero. For tax years ending on or after December
5    31, 1985, the credit shall be allowed for the tax year in
6    which the property is placed in service, or, if the amount
7    of the credit exceeds the tax liability for that year,
8    whether it exceeds the original liability or the liability
9    as later amended, such excess may be carried forward and
10    applied to the tax liability of the 5 taxable years
11    following the excess credit year. The credit shall be
12    applied to the earliest year for which there is a
13    liability. If there is credit from more than one tax year
14    that is available to offset a liability, the credit
15    accruing first in time shall be applied first.
16        (2) The term qualified property means property which:
17            (A) is tangible, whether new or used, including
18        buildings and structural components of buildings;
19            (B) is depreciable pursuant to Section 167 of the
20        Internal Revenue Code, except that "3-year property"
21        as defined in Section 168(c)(2)(A) of that Code is not
22        eligible for the credit provided by this subsection
23        (f);
24            (C) is acquired by purchase as defined in Section
25        179(d) of the Internal Revenue Code;
26            (D) is used in the Enterprise Zone or River Edge

 

 

10000SB0009sam006- 41 -LRB100 06347 HLH 26817 a

1        Redevelopment Zone by the taxpayer; and
2            (E) has not been previously used in Illinois in
3        such a manner and by such a person as would qualify for
4        the credit provided by this subsection (f) or
5        subsection (e).
6        (3) The basis of qualified property shall be the basis
7    used to compute the depreciation deduction for federal
8    income tax purposes.
9        (4) If the basis of the property for federal income tax
10    depreciation purposes is increased after it has been placed
11    in service in the Enterprise Zone or River Edge
12    Redevelopment Zone by the taxpayer, the amount of such
13    increase shall be deemed property placed in service on the
14    date of such increase in basis.
15        (5) The term "placed in service" shall have the same
16    meaning as under Section 46 of the Internal Revenue Code.
17        (6) If during any taxable year, any property ceases to
18    be qualified property in the hands of the taxpayer within
19    48 months after being placed in service, or the situs of
20    any qualified property is moved outside the Enterprise Zone
21    or River Edge Redevelopment Zone within 48 months after
22    being placed in service, the tax imposed under subsections
23    (a) and (b) of this Section for such taxable year shall be
24    increased. Such increase shall be determined by (i)
25    recomputing the investment credit which would have been
26    allowed for the year in which credit for such property was

 

 

10000SB0009sam006- 42 -LRB100 06347 HLH 26817 a

1    originally allowed by eliminating such property from such
2    computation, and (ii) subtracting such recomputed credit
3    from the amount of credit previously allowed. For the
4    purposes of this paragraph (6), a reduction of the basis of
5    qualified property resulting from a redetermination of the
6    purchase price shall be deemed a disposition of qualified
7    property to the extent of such reduction.
8        (7) There shall be allowed an additional credit equal
9    to 0.5% of the basis of qualified property placed in
10    service during the taxable year in a River Edge
11    Redevelopment Zone, provided such property is placed in
12    service on or after July 1, 2006, and the taxpayer's base
13    employment within Illinois has increased by 1% or more over
14    the preceding year as determined by the taxpayer's
15    employment records filed with the Illinois Department of
16    Employment Security. Taxpayers who are new to Illinois
17    shall be deemed to have met the 1% growth in base
18    employment for the first year in which they file employment
19    records with the Illinois Department of Employment
20    Security. If, in any year, the increase in base employment
21    within Illinois over the preceding year is less than 1%,
22    the additional credit shall be limited to that percentage
23    times a fraction, the numerator of which is 0.5% and the
24    denominator of which is 1%, but shall not exceed 0.5%.
25    (g) (Blank).
26    (h) Investment credit; High Impact Business.

 

 

10000SB0009sam006- 43 -LRB100 06347 HLH 26817 a

1        (1) Subject to subsections (b) and (b-5) of Section 5.5
2    of the Illinois Enterprise Zone Act, a taxpayer shall be
3    allowed a credit against the tax imposed by subsections (a)
4    and (b) of this Section for investment in qualified
5    property which is placed in service by a Department of
6    Commerce and Economic Opportunity designated High Impact
7    Business. The credit shall be .5% of the basis for such
8    property. The credit shall not be available (i) until the
9    minimum investments in qualified property set forth in
10    subdivision (a)(3)(A) of Section 5.5 of the Illinois
11    Enterprise Zone Act have been satisfied or (ii) until the
12    time authorized in subsection (b-5) of the Illinois
13    Enterprise Zone Act for entities designated as High Impact
14    Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
15    (a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
16    Act, and shall not be allowed to the extent that it would
17    reduce a taxpayer's liability for the tax imposed by
18    subsections (a) and (b) of this Section to below zero. The
19    credit applicable to such investments shall be taken in the
20    taxable year in which such investments have been completed.
21    The credit for additional investments beyond the minimum
22    investment by a designated high impact business authorized
23    under subdivision (a)(3)(A) of Section 5.5 of the Illinois
24    Enterprise Zone Act shall be available only in the taxable
25    year in which the property is placed in service and shall
26    not be allowed to the extent that it would reduce a

 

 

10000SB0009sam006- 44 -LRB100 06347 HLH 26817 a

1    taxpayer's liability for the tax imposed by subsections (a)
2    and (b) of this Section to below zero. For tax years ending
3    on or after December 31, 1987, the credit shall be allowed
4    for the tax year in which the property is placed in
5    service, or, if the amount of the credit exceeds the tax
6    liability for that year, whether it exceeds the original
7    liability or the liability as later amended, such excess
8    may be carried forward and applied to the tax liability of
9    the 5 taxable years following the excess credit year. The
10    credit shall be applied to the earliest year for which
11    there is a liability. If there is credit from more than one
12    tax year that is available to offset a liability, the
13    credit accruing first in time shall be applied first.
14        Changes made in this subdivision (h)(1) by Public Act
15    88-670 restore changes made by Public Act 85-1182 and
16    reflect existing law.
17        (2) The term qualified property means property which:
18            (A) is tangible, whether new or used, including
19        buildings and structural components of buildings;
20            (B) is depreciable pursuant to Section 167 of the
21        Internal Revenue Code, except that "3-year property"
22        as defined in Section 168(c)(2)(A) of that Code is not
23        eligible for the credit provided by this subsection
24        (h);
25            (C) is acquired by purchase as defined in Section
26        179(d) of the Internal Revenue Code; and

 

 

10000SB0009sam006- 45 -LRB100 06347 HLH 26817 a

1            (D) is not eligible for the Enterprise Zone
2        Investment Credit provided by subsection (f) of this
3        Section.
4        (3) The basis of qualified property shall be the basis
5    used to compute the depreciation deduction for federal
6    income tax purposes.
7        (4) If the basis of the property for federal income tax
8    depreciation purposes is increased after it has been placed
9    in service in a federally designated Foreign Trade Zone or
10    Sub-Zone located in Illinois by the taxpayer, the amount of
11    such increase shall be deemed property placed in service on
12    the date of such increase in basis.
13        (5) The term "placed in service" shall have the same
14    meaning as under Section 46 of the Internal Revenue Code.
15        (6) If during any taxable year ending on or before
16    December 31, 1996, any property ceases to be qualified
17    property in the hands of the taxpayer within 48 months
18    after being placed in service, or the situs of any
19    qualified property is moved outside Illinois within 48
20    months after being placed in service, the tax imposed under
21    subsections (a) and (b) of this Section for such taxable
22    year shall be increased. Such increase shall be determined
23    by (i) recomputing the investment credit which would have
24    been allowed for the year in which credit for such property
25    was originally allowed by eliminating such property from
26    such computation, and (ii) subtracting such recomputed

 

 

10000SB0009sam006- 46 -LRB100 06347 HLH 26817 a

1    credit from the amount of credit previously allowed. For
2    the purposes of this paragraph (6), a reduction of the
3    basis of qualified property resulting from a
4    redetermination of the purchase price shall be deemed a
5    disposition of qualified property to the extent of such
6    reduction.
7        (7) Beginning with tax years ending after December 31,
8    1996, if a taxpayer qualifies for the credit under this
9    subsection (h) and thereby is granted a tax abatement and
10    the taxpayer relocates its entire facility in violation of
11    the explicit terms and length of the contract under Section
12    18-183 of the Property Tax Code, the tax imposed under
13    subsections (a) and (b) of this Section shall be increased
14    for the taxable year in which the taxpayer relocated its
15    facility by an amount equal to the amount of credit
16    received by the taxpayer under this subsection (h).
17    (i) Credit for Personal Property Tax Replacement Income
18Tax. For tax years ending prior to December 31, 2003, a credit
19shall be allowed against the tax imposed by subsections (a) and
20(b) of this Section for the tax imposed by subsections (c) and
21(d) of this Section. This credit shall be computed by
22multiplying the tax imposed by subsections (c) and (d) of this
23Section by a fraction, the numerator of which is base income
24allocable to Illinois and the denominator of which is Illinois
25base income, and further multiplying the product by the tax
26rate imposed by subsections (a) and (b) of this Section.

 

 

10000SB0009sam006- 47 -LRB100 06347 HLH 26817 a

1    Any credit earned on or after December 31, 1986 under this
2subsection which is unused in the year the credit is computed
3because it exceeds the tax liability imposed by subsections (a)
4and (b) for that year (whether it exceeds the original
5liability or the liability as later amended) may be carried
6forward and applied to the tax liability imposed by subsections
7(a) and (b) of the 5 taxable years following the excess credit
8year, provided that no credit may be carried forward to any
9year ending on or after December 31, 2003. This credit shall be
10applied first to the earliest year for which there is a
11liability. If there is a credit under this subsection from more
12than one tax year that is available to offset a liability the
13earliest credit arising under this subsection shall be applied
14first.
15    If, during any taxable year ending on or after December 31,
161986, the tax imposed by subsections (c) and (d) of this
17Section for which a taxpayer has claimed a credit under this
18subsection (i) is reduced, the amount of credit for such tax
19shall also be reduced. Such reduction shall be determined by
20recomputing the credit to take into account the reduced tax
21imposed by subsections (c) and (d). If any portion of the
22reduced amount of credit has been carried to a different
23taxable year, an amended return shall be filed for such taxable
24year to reduce the amount of credit claimed.
25    (j) Training expense credit. Beginning with tax years
26ending on or after December 31, 1986 and prior to December 31,

 

 

10000SB0009sam006- 48 -LRB100 06347 HLH 26817 a

12003, a taxpayer shall be allowed a credit against the tax
2imposed by subsections (a) and (b) under this Section for all
3amounts paid or accrued, on behalf of all persons employed by
4the taxpayer in Illinois or Illinois residents employed outside
5of Illinois by a taxpayer, for educational or vocational
6training in semi-technical or technical fields or semi-skilled
7or skilled fields, which were deducted from gross income in the
8computation of taxable income. The credit against the tax
9imposed by subsections (a) and (b) shall be 1.6% of such
10training expenses. For partners, shareholders of subchapter S
11corporations, and owners of limited liability companies, if the
12liability company is treated as a partnership for purposes of
13federal and State income taxation, there shall be allowed a
14credit under this subsection (j) to be determined in accordance
15with the determination of income and distributive share of
16income under Sections 702 and 704 and subchapter S of the
17Internal Revenue Code.
18    Any credit allowed under this subsection which is unused in
19the year the credit is earned may be carried forward to each of
20the 5 taxable years following the year for which the credit is
21first computed until it is used. This credit shall be applied
22first to the earliest year for which there is a liability. If
23there is a credit under this subsection from more than one tax
24year that is available to offset a liability the earliest
25credit arising under this subsection shall be applied first. No
26carryforward credit may be claimed in any tax year ending on or

 

 

10000SB0009sam006- 49 -LRB100 06347 HLH 26817 a

1after December 31, 2003.
2    (k) Research and development credit. For tax years ending
3after July 1, 1990 and prior to December 31, 2003, and
4beginning again for tax years ending on or after December 31,
52004, and ending prior to January 1, 2016, a taxpayer shall be
6allowed a credit against the tax imposed by subsections (a) and
7(b) of this Section for increasing research activities in this
8State. The credit allowed against the tax imposed by
9subsections (a) and (b) shall be equal to 6 1/2% of the
10qualifying expenditures for increasing research activities in
11this State. For partners, shareholders of subchapter S
12corporations, and owners of limited liability companies, if the
13liability company is treated as a partnership for purposes of
14federal and State income taxation, there shall be allowed a
15credit under this subsection to be determined in accordance
16with the determination of income and distributive share of
17income under Sections 702 and 704 and subchapter S of the
18Internal Revenue Code.
19    For purposes of this subsection, "qualifying expenditures"
20means the qualifying expenditures as defined for the federal
21credit for increasing research activities which would be
22allowable under Section 41 of the Internal Revenue Code and
23which are conducted in this State, "qualifying expenditures for
24increasing research activities in this State" means the excess
25of qualifying expenditures for the taxable year in which
26incurred over qualifying expenditures for the base period,

 

 

10000SB0009sam006- 50 -LRB100 06347 HLH 26817 a

1"qualifying expenditures for the base period" means (i) for tax
2years ending prior to December 31, 2017, the average of the
3qualifying expenditures for each year in the base period; and
4(2) for tax years ending on or after December 31, 2017, 50% of
5the average of the qualifying expenditures for each year in the
6base period, and "base period" means the 3 taxable years
7immediately preceding the taxable year for which the
8determination is being made.
9    Any credit in excess of the tax liability for the taxable
10year may be carried forward. A taxpayer may elect to have the
11unused credit shown on its final completed return carried over
12as a credit against the tax liability for the following 5
13taxable years or until it has been fully used, whichever occurs
14first; provided that no credit earned in a tax year ending
15prior to December 31, 2003 may be carried forward to any year
16ending on or after December 31, 2003.
17    If an unused credit is carried forward to a given year from
182 or more earlier years, that credit arising in the earliest
19year will be applied first against the tax liability for the
20given year. If a tax liability for the given year still
21remains, the credit from the next earliest year will then be
22applied, and so on, until all credits have been used or no tax
23liability for the given year remains. Any remaining unused
24credit or credits then will be carried forward to the next
25following year in which a tax liability is incurred, except
26that no credit can be carried forward to a year which is more

 

 

10000SB0009sam006- 51 -LRB100 06347 HLH 26817 a

1than 5 years after the year in which the expense for which the
2credit is given was incurred.
3    No inference shall be drawn from this amendatory Act of the
491st General Assembly in construing this Section for taxable
5years beginning before January 1, 1999.
6    This subsection (k) is exempt from the provisions of
7Section 250.
8    It is the intent of the General Assembly that the research
9and development credit under this subsection (k) shall apply
10continuously for all tax years ending on or after December 31,
112004, including, but not limited to, the period beginning on
12January 1, 2016 and ending on the effective date of this
13amendatory Act of the 100th General Assembly. All actions taken
14in reliance on the continuation of the credit under this
15subsection (k) by any taxpayer are hereby validated.
16    (l) Environmental Remediation Tax Credit.
17        (i) For tax years ending after December 31, 1997 and on
18    or before December 31, 2001, a taxpayer shall be allowed a
19    credit against the tax imposed by subsections (a) and (b)
20    of this Section for certain amounts paid for unreimbursed
21    eligible remediation costs, as specified in this
22    subsection. For purposes of this Section, "unreimbursed
23    eligible remediation costs" means costs approved by the
24    Illinois Environmental Protection Agency ("Agency") under
25    Section 58.14 of the Environmental Protection Act that were
26    paid in performing environmental remediation at a site for

 

 

10000SB0009sam006- 52 -LRB100 06347 HLH 26817 a

1    which a No Further Remediation Letter was issued by the
2    Agency and recorded under Section 58.10 of the
3    Environmental Protection Act. The credit must be claimed
4    for the taxable year in which Agency approval of the
5    eligible remediation costs is granted. The credit is not
6    available to any taxpayer if the taxpayer or any related
7    party caused or contributed to, in any material respect, a
8    release of regulated substances on, in, or under the site
9    that was identified and addressed by the remedial action
10    pursuant to the Site Remediation Program of the
11    Environmental Protection Act. After the Pollution Control
12    Board rules are adopted pursuant to the Illinois
13    Administrative Procedure Act for the administration and
14    enforcement of Section 58.9 of the Environmental
15    Protection Act, determinations as to credit availability
16    for purposes of this Section shall be made consistent with
17    those rules. For purposes of this Section, "taxpayer"
18    includes a person whose tax attributes the taxpayer has
19    succeeded to under Section 381 of the Internal Revenue Code
20    and "related party" includes the persons disallowed a
21    deduction for losses by paragraphs (b), (c), and (f)(1) of
22    Section 267 of the Internal Revenue Code by virtue of being
23    a related taxpayer, as well as any of its partners. The
24    credit allowed against the tax imposed by subsections (a)
25    and (b) shall be equal to 25% of the unreimbursed eligible
26    remediation costs in excess of $100,000 per site, except

 

 

10000SB0009sam006- 53 -LRB100 06347 HLH 26817 a

1    that the $100,000 threshold shall not apply to any site
2    contained in an enterprise zone as determined by the
3    Department of Commerce and Community Affairs (now
4    Department of Commerce and Economic Opportunity). The
5    total credit allowed shall not exceed $40,000 per year with
6    a maximum total of $150,000 per site. For partners and
7    shareholders of subchapter S corporations, there shall be
8    allowed a credit under this subsection to be determined in
9    accordance with the determination of income and
10    distributive share of income under Sections 702 and 704 and
11    subchapter S of the Internal Revenue Code.
12        (ii) A credit allowed under this subsection that is
13    unused in the year the credit is earned may be carried
14    forward to each of the 5 taxable years following the year
15    for which the credit is first earned until it is used. The
16    term "unused credit" does not include any amounts of
17    unreimbursed eligible remediation costs in excess of the
18    maximum credit per site authorized under paragraph (i).
19    This credit shall be applied first to the earliest year for
20    which there is a liability. If there is a credit under this
21    subsection from more than one tax year that is available to
22    offset a liability, the earliest credit arising under this
23    subsection shall be applied first. A credit allowed under
24    this subsection may be sold to a buyer as part of a sale of
25    all or part of the remediation site for which the credit
26    was granted. The purchaser of a remediation site and the

 

 

10000SB0009sam006- 54 -LRB100 06347 HLH 26817 a

1    tax credit shall succeed to the unused credit and remaining
2    carry-forward period of the seller. To perfect the
3    transfer, the assignor shall record the transfer in the
4    chain of title for the site and provide written notice to
5    the Director of the Illinois Department of Revenue of the
6    assignor's intent to sell the remediation site and the
7    amount of the tax credit to be transferred as a portion of
8    the sale. In no event may a credit be transferred to any
9    taxpayer if the taxpayer or a related party would not be
10    eligible under the provisions of subsection (i).
11        (iii) For purposes of this Section, the term "site"
12    shall have the same meaning as under Section 58.2 of the
13    Environmental Protection Act.
14    (m) Education expense credit. Beginning with tax years
15ending after December 31, 1999, a taxpayer who is the custodian
16of one or more qualifying pupils shall be allowed a credit
17against the tax imposed by subsections (a) and (b) of this
18Section for qualified education expenses incurred on behalf of
19the qualifying pupils. The credit shall be equal to 25% of
20qualified education expenses, but in no event may the total
21credit under this subsection claimed by a family that is the
22custodian of qualifying pupils exceed (i) $500 for tax years
23ending prior to December 31, 2017, and (ii) $750 for tax years
24ending on or after December 31, 2017. In no event shall a
25credit under this subsection reduce the taxpayer's liability
26under this Act to less than zero. Notwithstanding any other

 

 

10000SB0009sam006- 55 -LRB100 06347 HLH 26817 a

1provision of law, for taxable years beginning on or after
2January 1, 2018, no taxpayer may claim a credit under this
3subsection (m) if the taxpayer's adjusted gross income for the
4taxable year exceeds (i) $500,000, in the case of spouses
5filing a joint federal tax return or (ii) $250,000, in the case
6of all other taxpayers. This subsection is exempt from the
7provisions of Section 250 of this Act.
8    For purposes of this subsection:
9    "Qualifying pupils" means individuals who (i) are
10residents of the State of Illinois, (ii) are under the age of
1121 at the close of the school year for which a credit is
12sought, and (iii) during the school year for which a credit is
13sought were full-time pupils enrolled in a kindergarten through
14twelfth grade education program at any school, as defined in
15this subsection.
16    "Qualified education expense" means the amount incurred on
17behalf of a qualifying pupil in excess of $250 for tuition,
18book fees, and lab fees at the school in which the pupil is
19enrolled during the regular school year.
20    "School" means any public or nonpublic elementary or
21secondary school in Illinois that is in compliance with Title
22VI of the Civil Rights Act of 1964 and attendance at which
23satisfies the requirements of Section 26-1 of the School Code,
24except that nothing shall be construed to require a child to
25attend any particular public or nonpublic school to qualify for
26the credit under this Section.

 

 

10000SB0009sam006- 56 -LRB100 06347 HLH 26817 a

1    "Custodian" means, with respect to qualifying pupils, an
2Illinois resident who is a parent, the parents, a legal
3guardian, or the legal guardians of the qualifying pupils.
4    (n) River Edge Redevelopment Zone site remediation tax
5credit.
6        (i) For tax years ending on or after December 31, 2006,
7    a taxpayer shall be allowed a credit against the tax
8    imposed by subsections (a) and (b) of this Section for
9    certain amounts paid for unreimbursed eligible remediation
10    costs, as specified in this subsection. For purposes of
11    this Section, "unreimbursed eligible remediation costs"
12    means costs approved by the Illinois Environmental
13    Protection Agency ("Agency") under Section 58.14a of the
14    Environmental Protection Act that were paid in performing
15    environmental remediation at a site within a River Edge
16    Redevelopment Zone for which a No Further Remediation
17    Letter was issued by the Agency and recorded under Section
18    58.10 of the Environmental Protection Act. The credit must
19    be claimed for the taxable year in which Agency approval of
20    the eligible remediation costs is granted. The credit is
21    not available to any taxpayer if the taxpayer or any
22    related party caused or contributed to, in any material
23    respect, a release of regulated substances on, in, or under
24    the site that was identified and addressed by the remedial
25    action pursuant to the Site Remediation Program of the
26    Environmental Protection Act. Determinations as to credit

 

 

10000SB0009sam006- 57 -LRB100 06347 HLH 26817 a

1    availability for purposes of this Section shall be made
2    consistent with rules adopted by the Pollution Control
3    Board pursuant to the Illinois Administrative Procedure
4    Act for the administration and enforcement of Section 58.9
5    of the Environmental Protection Act. For purposes of this
6    Section, "taxpayer" includes a person whose tax attributes
7    the taxpayer has succeeded to under Section 381 of the
8    Internal Revenue Code and "related party" includes the
9    persons disallowed a deduction for losses by paragraphs
10    (b), (c), and (f)(1) of Section 267 of the Internal Revenue
11    Code by virtue of being a related taxpayer, as well as any
12    of its partners. The credit allowed against the tax imposed
13    by subsections (a) and (b) shall be equal to 25% of the
14    unreimbursed eligible remediation costs in excess of
15    $100,000 per site.
16        (ii) A credit allowed under this subsection that is
17    unused in the year the credit is earned may be carried
18    forward to each of the 5 taxable years following the year
19    for which the credit is first earned until it is used. This
20    credit shall be applied first to the earliest year for
21    which there is a liability. If there is a credit under this
22    subsection from more than one tax year that is available to
23    offset a liability, the earliest credit arising under this
24    subsection shall be applied first. A credit allowed under
25    this subsection may be sold to a buyer as part of a sale of
26    all or part of the remediation site for which the credit

 

 

10000SB0009sam006- 58 -LRB100 06347 HLH 26817 a

1    was granted. The purchaser of a remediation site and the
2    tax credit shall succeed to the unused credit and remaining
3    carry-forward period of the seller. To perfect the
4    transfer, the assignor shall record the transfer in the
5    chain of title for the site and provide written notice to
6    the Director of the Illinois Department of Revenue of the
7    assignor's intent to sell the remediation site and the
8    amount of the tax credit to be transferred as a portion of
9    the sale. In no event may a credit be transferred to any
10    taxpayer if the taxpayer or a related party would not be
11    eligible under the provisions of subsection (i).
12        (iii) For purposes of this Section, the term "site"
13    shall have the same meaning as under Section 58.2 of the
14    Environmental Protection Act.
15    (o) For each of taxable years during the Compassionate Use
16of Medical Cannabis Pilot Program, a surcharge is imposed on
17all taxpayers on income arising from the sale or exchange of
18capital assets, depreciable business property, real property
19used in the trade or business, and Section 197 intangibles of
20an organization registrant under the Compassionate Use of
21Medical Cannabis Pilot Program Act. The amount of the surcharge
22is equal to the amount of federal income tax liability for the
23taxable year attributable to those sales and exchanges. The
24surcharge imposed does not apply if:
25        (1) the medical cannabis cultivation center
26    registration, medical cannabis dispensary registration, or

 

 

10000SB0009sam006- 59 -LRB100 06347 HLH 26817 a

1    the property of a registration is transferred as a result
2    of any of the following:
3            (A) bankruptcy, a receivership, or a debt
4        adjustment initiated by or against the initial
5        registration or the substantial owners of the initial
6        registration;
7            (B) cancellation, revocation, or termination of
8        any registration by the Illinois Department of Public
9        Health;
10            (C) a determination by the Illinois Department of
11        Public Health that transfer of the registration is in
12        the best interests of Illinois qualifying patients as
13        defined by the Compassionate Use of Medical Cannabis
14        Pilot Program Act;
15            (D) the death of an owner of the equity interest in
16        a registrant;
17            (E) the acquisition of a controlling interest in
18        the stock or substantially all of the assets of a
19        publicly traded company;
20            (F) a transfer by a parent company to a wholly
21        owned subsidiary; or
22            (G) the transfer or sale to or by one person to
23        another person where both persons were initial owners
24        of the registration when the registration was issued;
25        or
26        (2) the cannabis cultivation center registration,

 

 

10000SB0009sam006- 60 -LRB100 06347 HLH 26817 a

1    medical cannabis dispensary registration, or the
2    controlling interest in a registrant's property is
3    transferred in a transaction to lineal descendants in which
4    no gain or loss is recognized or as a result of a
5    transaction in accordance with Section 351 of the Internal
6    Revenue Code in which no gain or loss is recognized.
7(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
8eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
9eff. 7-16-14.)
 
10    (35 ILCS 5/203)  (from Ch. 120, par. 2-203)
11    Sec. 203. Base income defined.
12    (a) Individuals.
13        (1) In general. In the case of an individual, base
14    income means an amount equal to the taxpayer's adjusted
15    gross income for the taxable year as modified by paragraph
16    (2).
17        (2) Modifications. The adjusted gross income referred
18    to in paragraph (1) shall be modified by adding thereto the
19    sum of the following amounts:
20            (A) An amount equal to all amounts paid or accrued
21        to the taxpayer as interest or dividends during the
22        taxable year to the extent excluded from gross income
23        in the computation of adjusted gross income, except
24        stock dividends of qualified public utilities
25        described in Section 305(e) of the Internal Revenue

 

 

10000SB0009sam006- 61 -LRB100 06347 HLH 26817 a

1        Code;
2            (B) An amount equal to the amount of tax imposed by
3        this Act to the extent deducted from gross income in
4        the computation of adjusted gross income for the
5        taxable year;
6            (C) An amount equal to the amount received during
7        the taxable year as a recovery or refund of real
8        property taxes paid with respect to the taxpayer's
9        principal residence under the Revenue Act of 1939 and
10        for which a deduction was previously taken under
11        subparagraph (L) of this paragraph (2) prior to July 1,
12        1991, the retrospective application date of Article 4
13        of Public Act 87-17. In the case of multi-unit or
14        multi-use structures and farm dwellings, the taxes on
15        the taxpayer's principal residence shall be that
16        portion of the total taxes for the entire property
17        which is attributable to such principal residence;
18            (D) An amount equal to the amount of the capital
19        gain deduction allowable under the Internal Revenue
20        Code, to the extent deducted from gross income in the
21        computation of adjusted gross income;
22            (D-5) An amount, to the extent not included in
23        adjusted gross income, equal to the amount of money
24        withdrawn by the taxpayer in the taxable year from a
25        medical care savings account and the interest earned on
26        the account in the taxable year of a withdrawal

 

 

10000SB0009sam006- 62 -LRB100 06347 HLH 26817 a

1        pursuant to subsection (b) of Section 20 of the Medical
2        Care Savings Account Act or subsection (b) of Section
3        20 of the Medical Care Savings Account Act of 2000;
4            (D-10) For taxable years ending after December 31,
5        1997, an amount equal to any eligible remediation costs
6        that the individual deducted in computing adjusted
7        gross income and for which the individual claims a
8        credit under subsection (l) of Section 201;
9            (D-15) For taxable years 2001 and thereafter, an
10        amount equal to the bonus depreciation deduction taken
11        on the taxpayer's federal income tax return for the
12        taxable year under subsection (k) of Section 168 of the
13        Internal Revenue Code;
14            (D-16) If the taxpayer sells, transfers, abandons,
15        or otherwise disposes of property for which the
16        taxpayer was required in any taxable year to make an
17        addition modification under subparagraph (D-15), then
18        an amount equal to the aggregate amount of the
19        deductions taken in all taxable years under
20        subparagraph (Z) with respect to that property.
21            If the taxpayer continues to own property through
22        the last day of the last tax year for which the
23        taxpayer may claim a depreciation deduction for
24        federal income tax purposes and for which the taxpayer
25        was allowed in any taxable year to make a subtraction
26        modification under subparagraph (Z), then an amount

 

 

10000SB0009sam006- 63 -LRB100 06347 HLH 26817 a

1        equal to that subtraction modification.
2            The taxpayer is required to make the addition
3        modification under this subparagraph only once with
4        respect to any one piece of property;
5            (D-17) An amount equal to the amount otherwise
6        allowed as a deduction in computing base income for
7        interest paid, accrued, or incurred, directly or
8        indirectly, (i) for taxable years ending on or after
9        December 31, 2004, to a foreign person who would be a
10        member of the same unitary business group but for the
11        fact that foreign person's business activity outside
12        the United States is 80% or more of the foreign
13        person's total business activity and (ii) for taxable
14        years ending on or after December 31, 2008, to a person
15        who would be a member of the same unitary business
16        group but for the fact that the person is prohibited
17        under Section 1501(a)(27) from being included in the
18        unitary business group because he or she is ordinarily
19        required to apportion business income under different
20        subsections of Section 304. The addition modification
21        required by this subparagraph shall be reduced to the
22        extent that dividends were included in base income of
23        the unitary group for the same taxable year and
24        received by the taxpayer or by a member of the
25        taxpayer's unitary business group (including amounts
26        included in gross income under Sections 951 through 964

 

 

10000SB0009sam006- 64 -LRB100 06347 HLH 26817 a

1        of the Internal Revenue Code and amounts included in
2        gross income under Section 78 of the Internal Revenue
3        Code) with respect to the stock of the same person to
4        whom the interest was paid, accrued, or incurred.
5            This paragraph shall not apply to the following:
6                (i) an item of interest paid, accrued, or
7            incurred, directly or indirectly, to a person who
8            is subject in a foreign country or state, other
9            than a state which requires mandatory unitary
10            reporting, to a tax on or measured by net income
11            with respect to such interest; or
12                (ii) an item of interest paid, accrued, or
13            incurred, directly or indirectly, to a person if
14            the taxpayer can establish, based on a
15            preponderance of the evidence, both of the
16            following:
17                    (a) the person, during the same taxable
18                year, paid, accrued, or incurred, the interest
19                to a person that is not a related member, and
20                    (b) the transaction giving rise to the
21                interest expense between the taxpayer and the
22                person did not have as a principal purpose the
23                avoidance of Illinois income tax, and is paid
24                pursuant to a contract or agreement that
25                reflects an arm's-length interest rate and
26                terms; or

 

 

10000SB0009sam006- 65 -LRB100 06347 HLH 26817 a

1                (iii) the taxpayer can establish, based on
2            clear and convincing evidence, that the interest
3            paid, accrued, or incurred relates to a contract or
4            agreement entered into at arm's-length rates and
5            terms and the principal purpose for the payment is
6            not federal or Illinois tax avoidance; or
7                (iv) an item of interest paid, accrued, or
8            incurred, directly or indirectly, to a person if
9            the taxpayer establishes by clear and convincing
10            evidence that the adjustments are unreasonable; or
11            if the taxpayer and the Director agree in writing
12            to the application or use of an alternative method
13            of apportionment under Section 304(f).
14                Nothing in this subsection shall preclude the
15            Director from making any other adjustment
16            otherwise allowed under Section 404 of this Act for
17            any tax year beginning after the effective date of
18            this amendment provided such adjustment is made
19            pursuant to regulation adopted by the Department
20            and such regulations provide methods and standards
21            by which the Department will utilize its authority
22            under Section 404 of this Act;
23            (D-18) An amount equal to the amount of intangible
24        expenses and costs otherwise allowed as a deduction in
25        computing base income, and that were paid, accrued, or
26        incurred, directly or indirectly, (i) for taxable

 

 

10000SB0009sam006- 66 -LRB100 06347 HLH 26817 a

1        years ending on or after December 31, 2004, to a
2        foreign person who would be a member of the same
3        unitary business group but for the fact that the
4        foreign person's business activity outside the United
5        States is 80% or more of that person's total business
6        activity and (ii) for taxable years ending on or after
7        December 31, 2008, to a person who would be a member of
8        the same unitary business group but for the fact that
9        the person is prohibited under Section 1501(a)(27)
10        from being included in the unitary business group
11        because he or she is ordinarily required to apportion
12        business income under different subsections of Section
13        304. The addition modification required by this
14        subparagraph shall be reduced to the extent that
15        dividends were included in base income of the unitary
16        group for the same taxable year and received by the
17        taxpayer or by a member of the taxpayer's unitary
18        business group (including amounts included in gross
19        income under Sections 951 through 964 of the Internal
20        Revenue Code and amounts included in gross income under
21        Section 78 of the Internal Revenue Code) with respect
22        to the stock of the same person to whom the intangible
23        expenses and costs were directly or indirectly paid,
24        incurred, or accrued. The preceding sentence does not
25        apply to the extent that the same dividends caused a
26        reduction to the addition modification required under

 

 

10000SB0009sam006- 67 -LRB100 06347 HLH 26817 a

1        Section 203(a)(2)(D-17) of this Act. As used in this
2        subparagraph, the term "intangible expenses and costs"
3        includes (1) expenses, losses, and costs for, or
4        related to, the direct or indirect acquisition, use,
5        maintenance or management, ownership, sale, exchange,
6        or any other disposition of intangible property; (2)
7        losses incurred, directly or indirectly, from
8        factoring transactions or discounting transactions;
9        (3) royalty, patent, technical, and copyright fees;
10        (4) licensing fees; and (5) other similar expenses and
11        costs. For purposes of this subparagraph, "intangible
12        property" includes patents, patent applications, trade
13        names, trademarks, service marks, copyrights, mask
14        works, trade secrets, and similar types of intangible
15        assets.
16            This paragraph shall not apply to the following:
17                (i) any item of intangible expenses or costs
18            paid, accrued, or incurred, directly or
19            indirectly, from a transaction with a person who is
20            subject in a foreign country or state, other than a
21            state which requires mandatory unitary reporting,
22            to a tax on or measured by net income with respect
23            to such item; or
24                (ii) any item of intangible expense or cost
25            paid, accrued, or incurred, directly or
26            indirectly, if the taxpayer can establish, based

 

 

10000SB0009sam006- 68 -LRB100 06347 HLH 26817 a

1            on a preponderance of the evidence, both of the
2            following:
3                    (a) the person during the same taxable
4                year paid, accrued, or incurred, the
5                intangible expense or cost to a person that is
6                not a related member, and
7                    (b) the transaction giving rise to the
8                intangible expense or cost between the
9                taxpayer and the person did not have as a
10                principal purpose the avoidance of Illinois
11                income tax, and is paid pursuant to a contract
12                or agreement that reflects arm's-length terms;
13                or
14                (iii) any item of intangible expense or cost
15            paid, accrued, or incurred, directly or
16            indirectly, from a transaction with a person if the
17            taxpayer establishes by clear and convincing
18            evidence, that the adjustments are unreasonable;
19            or if the taxpayer and the Director agree in
20            writing to the application or use of an alternative
21            method of apportionment under Section 304(f);
22                Nothing in this subsection shall preclude the
23            Director from making any other adjustment
24            otherwise allowed under Section 404 of this Act for
25            any tax year beginning after the effective date of
26            this amendment provided such adjustment is made

 

 

10000SB0009sam006- 69 -LRB100 06347 HLH 26817 a

1            pursuant to regulation adopted by the Department
2            and such regulations provide methods and standards
3            by which the Department will utilize its authority
4            under Section 404 of this Act;
5            (D-19) For taxable years ending on or after
6        December 31, 2008, an amount equal to the amount of
7        insurance premium expenses and costs otherwise allowed
8        as a deduction in computing base income, and that were
9        paid, accrued, or incurred, directly or indirectly, to
10        a person who would be a member of the same unitary
11        business group but for the fact that the person is
12        prohibited under Section 1501(a)(27) from being
13        included in the unitary business group because he or
14        she is ordinarily required to apportion business
15        income under different subsections of Section 304. The
16        addition modification required by this subparagraph
17        shall be reduced to the extent that dividends were
18        included in base income of the unitary group for the
19        same taxable year and received by the taxpayer or by a
20        member of the taxpayer's unitary business group
21        (including amounts included in gross income under
22        Sections 951 through 964 of the Internal Revenue Code
23        and amounts included in gross income under Section 78
24        of the Internal Revenue Code) with respect to the stock
25        of the same person to whom the premiums and costs were
26        directly or indirectly paid, incurred, or accrued. The

 

 

10000SB0009sam006- 70 -LRB100 06347 HLH 26817 a

1        preceding sentence does not apply to the extent that
2        the same dividends caused a reduction to the addition
3        modification required under Section 203(a)(2)(D-17) or
4        Section 203(a)(2)(D-18) of this Act.
5            (D-20) For taxable years beginning on or after
6        January 1, 2002 and ending on or before December 31,
7        2006, in the case of a distribution from a qualified
8        tuition program under Section 529 of the Internal
9        Revenue Code, other than (i) a distribution from a
10        College Savings Pool created under Section 16.5 of the
11        State Treasurer Act or (ii) a distribution from the
12        Illinois Prepaid Tuition Trust Fund, an amount equal to
13        the amount excluded from gross income under Section
14        529(c)(3)(B). For taxable years beginning on or after
15        January 1, 2007, in the case of a distribution from a
16        qualified tuition program under Section 529 of the
17        Internal Revenue Code, other than (i) a distribution
18        from a College Savings Pool created under Section 16.5
19        of the State Treasurer Act, (ii) a distribution from
20        the Illinois Prepaid Tuition Trust Fund, or (iii) a
21        distribution from a qualified tuition program under
22        Section 529 of the Internal Revenue Code that (I)
23        adopts and determines that its offering materials
24        comply with the College Savings Plans Network's
25        disclosure principles and (II) has made reasonable
26        efforts to inform in-state residents of the existence

 

 

10000SB0009sam006- 71 -LRB100 06347 HLH 26817 a

1        of in-state qualified tuition programs by informing
2        Illinois residents directly and, where applicable, to
3        inform financial intermediaries distributing the
4        program to inform in-state residents of the existence
5        of in-state qualified tuition programs at least
6        annually, an amount equal to the amount excluded from
7        gross income under Section 529(c)(3)(B).
8            For the purposes of this subparagraph (D-20), a
9        qualified tuition program has made reasonable efforts
10        if it makes disclosures (which may use the term
11        "in-state program" or "in-state plan" and need not
12        specifically refer to Illinois or its qualified
13        programs by name) (i) directly to prospective
14        participants in its offering materials or makes a
15        public disclosure, such as a website posting; and (ii)
16        where applicable, to intermediaries selling the
17        out-of-state program in the same manner that the
18        out-of-state program distributes its offering
19        materials;
20            (D-21) For taxable years beginning on or after
21        January 1, 2007, in the case of transfer of moneys from
22        a qualified tuition program under Section 529 of the
23        Internal Revenue Code that is administered by the State
24        to an out-of-state program, an amount equal to the
25        amount of moneys previously deducted from base income
26        under subsection (a)(2)(Y) of this Section;

 

 

10000SB0009sam006- 72 -LRB100 06347 HLH 26817 a

1            (D-22) For taxable years beginning on or after
2        January 1, 2009, in the case of a nonqualified
3        withdrawal or refund of moneys from a qualified tuition
4        program under Section 529 of the Internal Revenue Code
5        administered by the State that is not used for
6        qualified expenses at an eligible education
7        institution, an amount equal to the contribution
8        component of the nonqualified withdrawal or refund
9        that was previously deducted from base income under
10        subsection (a)(2)(y) of this Section, provided that
11        the withdrawal or refund did not result from the
12        beneficiary's death or disability;
13            (D-23) An amount equal to the credit allowable to
14        the taxpayer under Section 218(a) of this Act,
15        determined without regard to Section 218(c) of this
16        Act;
17            (D-24) For taxable years beginning on or after
18        January 1, 2017, an amount equal to the deduction
19        allowed under Section 199 of the Internal Revenue Code
20        for the taxable year;
21    and by deducting from the total so obtained the sum of the
22    following amounts:
23            (E) For taxable years ending before December 31,
24        2001, any amount included in such total in respect of
25        any compensation (including but not limited to any
26        compensation paid or accrued to a serviceman while a

 

 

10000SB0009sam006- 73 -LRB100 06347 HLH 26817 a

1        prisoner of war or missing in action) paid to a
2        resident by reason of being on active duty in the Armed
3        Forces of the United States and in respect of any
4        compensation paid or accrued to a resident who as a
5        governmental employee was a prisoner of war or missing
6        in action, and in respect of any compensation paid to a
7        resident in 1971 or thereafter for annual training
8        performed pursuant to Sections 502 and 503, Title 32,
9        United States Code as a member of the Illinois National
10        Guard or, beginning with taxable years ending on or
11        after December 31, 2007, the National Guard of any
12        other state. For taxable years ending on or after
13        December 31, 2001, any amount included in such total in
14        respect of any compensation (including but not limited
15        to any compensation paid or accrued to a serviceman
16        while a prisoner of war or missing in action) paid to a
17        resident by reason of being a member of any component
18        of the Armed Forces of the United States and in respect
19        of any compensation paid or accrued to a resident who
20        as a governmental employee was a prisoner of war or
21        missing in action, and in respect of any compensation
22        paid to a resident in 2001 or thereafter by reason of
23        being a member of the Illinois National Guard or,
24        beginning with taxable years ending on or after
25        December 31, 2007, the National Guard of any other
26        state. The provisions of this subparagraph (E) are

 

 

10000SB0009sam006- 74 -LRB100 06347 HLH 26817 a

1        exempt from the provisions of Section 250;
2            (F) An amount equal to all amounts included in such
3        total pursuant to the provisions of Sections 402(a),
4        402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
5        Internal Revenue Code, or included in such total as
6        distributions under the provisions of any retirement
7        or disability plan for employees of any governmental
8        agency or unit, or retirement payments to retired
9        partners, which payments are excluded in computing net
10        earnings from self employment by Section 1402 of the
11        Internal Revenue Code and regulations adopted pursuant
12        thereto;
13            (G) The valuation limitation amount;
14            (H) An amount equal to the amount of any tax
15        imposed by this Act which was refunded to the taxpayer
16        and included in such total for the taxable year;
17            (I) An amount equal to all amounts included in such
18        total pursuant to the provisions of Section 111 of the
19        Internal Revenue Code as a recovery of items previously
20        deducted from adjusted gross income in the computation
21        of taxable income;
22            (J) An amount equal to those dividends included in
23        such total which were paid by a corporation which
24        conducts business operations in a River Edge
25        Redevelopment Zone or zones created under the River
26        Edge Redevelopment Zone Act, and conducts

 

 

10000SB0009sam006- 75 -LRB100 06347 HLH 26817 a

1        substantially all of its operations in a River Edge
2        Redevelopment Zone or zones. This subparagraph (J) is
3        exempt from the provisions of Section 250;
4            (K) An amount equal to those dividends included in
5        such total that were paid by a corporation that
6        conducts business operations in a federally designated
7        Foreign Trade Zone or Sub-Zone and that is designated a
8        High Impact Business located in Illinois; provided
9        that dividends eligible for the deduction provided in
10        subparagraph (J) of paragraph (2) of this subsection
11        shall not be eligible for the deduction provided under
12        this subparagraph (K);
13            (L) For taxable years ending after December 31,
14        1983, an amount equal to all social security benefits
15        and railroad retirement benefits included in such
16        total pursuant to Sections 72(r) and 86 of the Internal
17        Revenue Code;
18            (M) With the exception of any amounts subtracted
19        under subparagraph (N), an amount equal to the sum of
20        all amounts disallowed as deductions by (i) Sections
21        171(a) (2), and 265(2) of the Internal Revenue Code,
22        and all amounts of expenses allocable to interest and
23        disallowed as deductions by Section 265(1) of the
24        Internal Revenue Code; and (ii) for taxable years
25        ending on or after August 13, 1999, Sections 171(a)(2),
26        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue

 

 

10000SB0009sam006- 76 -LRB100 06347 HLH 26817 a

1        Code, plus, for taxable years ending on or after
2        December 31, 2011, Section 45G(e)(3) of the Internal
3        Revenue Code and, for taxable years ending on or after
4        December 31, 2008, any amount included in gross income
5        under Section 87 of the Internal Revenue Code; the
6        provisions of this subparagraph are exempt from the
7        provisions of Section 250;
8            (N) An amount equal to all amounts included in such
9        total which are exempt from taxation by this State
10        either by reason of its statutes or Constitution or by
11        reason of the Constitution, treaties or statutes of the
12        United States; provided that, in the case of any
13        statute of this State that exempts income derived from
14        bonds or other obligations from the tax imposed under
15        this Act, the amount exempted shall be the interest net
16        of bond premium amortization;
17            (O) An amount equal to any contribution made to a
18        job training project established pursuant to the Tax
19        Increment Allocation Redevelopment Act;
20            (P) An amount equal to the amount of the deduction
21        used to compute the federal income tax credit for
22        restoration of substantial amounts held under claim of
23        right for the taxable year pursuant to Section 1341 of
24        the Internal Revenue Code or of any itemized deduction
25        taken from adjusted gross income in the computation of
26        taxable income for restoration of substantial amounts

 

 

10000SB0009sam006- 77 -LRB100 06347 HLH 26817 a

1        held under claim of right for the taxable year;
2            (Q) An amount equal to any amounts included in such
3        total, received by the taxpayer as an acceleration in
4        the payment of life, endowment or annuity benefits in
5        advance of the time they would otherwise be payable as
6        an indemnity for a terminal illness;
7            (R) An amount equal to the amount of any federal or
8        State bonus paid to veterans of the Persian Gulf War;
9            (S) An amount, to the extent included in adjusted
10        gross income, equal to the amount of a contribution
11        made in the taxable year on behalf of the taxpayer to a
12        medical care savings account established under the
13        Medical Care Savings Account Act or the Medical Care
14        Savings Account Act of 2000 to the extent the
15        contribution is accepted by the account administrator
16        as provided in that Act;
17            (T) An amount, to the extent included in adjusted
18        gross income, equal to the amount of interest earned in
19        the taxable year on a medical care savings account
20        established under the Medical Care Savings Account Act
21        or the Medical Care Savings Account Act of 2000 on
22        behalf of the taxpayer, other than interest added
23        pursuant to item (D-5) of this paragraph (2);
24            (U) For one taxable year beginning on or after
25        January 1, 1994, an amount equal to the total amount of
26        tax imposed and paid under subsections (a) and (b) of

 

 

10000SB0009sam006- 78 -LRB100 06347 HLH 26817 a

1        Section 201 of this Act on grant amounts received by
2        the taxpayer under the Nursing Home Grant Assistance
3        Act during the taxpayer's taxable years 1992 and 1993;
4            (V) Beginning with tax years ending on or after
5        December 31, 1995 and ending with tax years ending on
6        or before December 31, 2004, an amount equal to the
7        amount paid by a taxpayer who is a self-employed
8        taxpayer, a partner of a partnership, or a shareholder
9        in a Subchapter S corporation for health insurance or
10        long-term care insurance for that taxpayer or that
11        taxpayer's spouse or dependents, to the extent that the
12        amount paid for that health insurance or long-term care
13        insurance may be deducted under Section 213 of the
14        Internal Revenue Code, has not been deducted on the
15        federal income tax return of the taxpayer, and does not
16        exceed the taxable income attributable to that
17        taxpayer's income, self-employment income, or
18        Subchapter S corporation income; except that no
19        deduction shall be allowed under this item (V) if the
20        taxpayer is eligible to participate in any health
21        insurance or long-term care insurance plan of an
22        employer of the taxpayer or the taxpayer's spouse. The
23        amount of the health insurance and long-term care
24        insurance subtracted under this item (V) shall be
25        determined by multiplying total health insurance and
26        long-term care insurance premiums paid by the taxpayer

 

 

10000SB0009sam006- 79 -LRB100 06347 HLH 26817 a

1        times a number that represents the fractional
2        percentage of eligible medical expenses under Section
3        213 of the Internal Revenue Code of 1986 not actually
4        deducted on the taxpayer's federal income tax return;
5            (W) For taxable years beginning on or after January
6        1, 1998, all amounts included in the taxpayer's federal
7        gross income in the taxable year from amounts converted
8        from a regular IRA to a Roth IRA. This paragraph is
9        exempt from the provisions of Section 250;
10            (X) For taxable year 1999 and thereafter, an amount
11        equal to the amount of any (i) distributions, to the
12        extent includible in gross income for federal income
13        tax purposes, made to the taxpayer because of his or
14        her status as a victim of persecution for racial or
15        religious reasons by Nazi Germany or any other Axis
16        regime or as an heir of the victim and (ii) items of
17        income, to the extent includible in gross income for
18        federal income tax purposes, attributable to, derived
19        from or in any way related to assets stolen from,
20        hidden from, or otherwise lost to a victim of
21        persecution for racial or religious reasons by Nazi
22        Germany or any other Axis regime immediately prior to,
23        during, and immediately after World War II, including,
24        but not limited to, interest on the proceeds receivable
25        as insurance under policies issued to a victim of
26        persecution for racial or religious reasons by Nazi

 

 

10000SB0009sam006- 80 -LRB100 06347 HLH 26817 a

1        Germany or any other Axis regime by European insurance
2        companies immediately prior to and during World War II;
3        provided, however, this subtraction from federal
4        adjusted gross income does not apply to assets acquired
5        with such assets or with the proceeds from the sale of
6        such assets; provided, further, this paragraph shall
7        only apply to a taxpayer who was the first recipient of
8        such assets after their recovery and who is a victim of
9        persecution for racial or religious reasons by Nazi
10        Germany or any other Axis regime or as an heir of the
11        victim. The amount of and the eligibility for any
12        public assistance, benefit, or similar entitlement is
13        not affected by the inclusion of items (i) and (ii) of
14        this paragraph in gross income for federal income tax
15        purposes. This paragraph is exempt from the provisions
16        of Section 250;
17            (Y) For taxable years beginning on or after January
18        1, 2002 and ending on or before December 31, 2004,
19        moneys contributed in the taxable year to a College
20        Savings Pool account under Section 16.5 of the State
21        Treasurer Act, except that amounts excluded from gross
22        income under Section 529(c)(3)(C)(i) of the Internal
23        Revenue Code shall not be considered moneys
24        contributed under this subparagraph (Y). For taxable
25        years beginning on or after January 1, 2005, a maximum
26        of $10,000 contributed in the taxable year to (i) a

 

 

10000SB0009sam006- 81 -LRB100 06347 HLH 26817 a

1        College Savings Pool account under Section 16.5 of the
2        State Treasurer Act or (ii) the Illinois Prepaid
3        Tuition Trust Fund, except that amounts excluded from
4        gross income under Section 529(c)(3)(C)(i) of the
5        Internal Revenue Code shall not be considered moneys
6        contributed under this subparagraph (Y). For purposes
7        of this subparagraph, contributions made by an
8        employer on behalf of an employee, or matching
9        contributions made by an employee, shall be treated as
10        made by the employee. This subparagraph (Y) is exempt
11        from the provisions of Section 250;
12            (Z) For taxable years 2001 and thereafter, for the
13        taxable year in which the bonus depreciation deduction
14        is taken on the taxpayer's federal income tax return
15        under subsection (k) of Section 168 of the Internal
16        Revenue Code and for each applicable taxable year
17        thereafter, an amount equal to "x", where:
18                (1) "y" equals the amount of the depreciation
19            deduction taken for the taxable year on the
20            taxpayer's federal income tax return on property
21            for which the bonus depreciation deduction was
22            taken in any year under subsection (k) of Section
23            168 of the Internal Revenue Code, but not including
24            the bonus depreciation deduction;
25                (2) for taxable years ending on or before
26            December 31, 2005, "x" equals "y" multiplied by 30

 

 

10000SB0009sam006- 82 -LRB100 06347 HLH 26817 a

1            and then divided by 70 (or "y" multiplied by
2            0.429); and
3                (3) for taxable years ending after December
4            31, 2005:
5                    (i) for property on which a bonus
6                depreciation deduction of 30% of the adjusted
7                basis was taken, "x" equals "y" multiplied by
8                30 and then divided by 70 (or "y" multiplied by
9                0.429); and
10                    (ii) for property on which a bonus
11                depreciation deduction of 50% of the adjusted
12                basis was taken, "x" equals "y" multiplied by
13                1.0.
14            The aggregate amount deducted under this
15        subparagraph in all taxable years for any one piece of
16        property may not exceed the amount of the bonus
17        depreciation deduction taken on that property on the
18        taxpayer's federal income tax return under subsection
19        (k) of Section 168 of the Internal Revenue Code. This
20        subparagraph (Z) is exempt from the provisions of
21        Section 250;
22            (AA) If the taxpayer sells, transfers, abandons,
23        or otherwise disposes of property for which the
24        taxpayer was required in any taxable year to make an
25        addition modification under subparagraph (D-15), then
26        an amount equal to that addition modification.

 

 

10000SB0009sam006- 83 -LRB100 06347 HLH 26817 a

1            If the taxpayer continues to own property through
2        the last day of the last tax year for which the
3        taxpayer may claim a depreciation deduction for
4        federal income tax purposes and for which the taxpayer
5        was required in any taxable year to make an addition
6        modification under subparagraph (D-15), then an amount
7        equal to that addition modification.
8            The taxpayer is allowed to take the deduction under
9        this subparagraph only once with respect to any one
10        piece of property.
11            This subparagraph (AA) is exempt from the
12        provisions of Section 250;
13            (BB) Any amount included in adjusted gross income,
14        other than salary, received by a driver in a
15        ridesharing arrangement using a motor vehicle;
16            (CC) The amount of (i) any interest income (net of
17        the deductions allocable thereto) taken into account
18        for the taxable year with respect to a transaction with
19        a taxpayer that is required to make an addition
20        modification with respect to such transaction under
21        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
22        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
23        the amount of that addition modification, and (ii) any
24        income from intangible property (net of the deductions
25        allocable thereto) taken into account for the taxable
26        year with respect to a transaction with a taxpayer that

 

 

10000SB0009sam006- 84 -LRB100 06347 HLH 26817 a

1        is required to make an addition modification with
2        respect to such transaction under Section
3        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
4        203(d)(2)(D-8), but not to exceed the amount of that
5        addition modification. This subparagraph (CC) is
6        exempt from the provisions of Section 250;
7            (DD) An amount equal to the interest income taken
8        into account for the taxable year (net of the
9        deductions allocable thereto) with respect to
10        transactions with (i) a foreign person who would be a
11        member of the taxpayer's unitary business group but for
12        the fact that the foreign person's business activity
13        outside the United States is 80% or more of that
14        person's total business activity and (ii) for taxable
15        years ending on or after December 31, 2008, to a person
16        who would be a member of the same unitary business
17        group but for the fact that the person is prohibited
18        under Section 1501(a)(27) from being included in the
19        unitary business group because he or she is ordinarily
20        required to apportion business income under different
21        subsections of Section 304, but not to exceed the
22        addition modification required to be made for the same
23        taxable year under Section 203(a)(2)(D-17) for
24        interest paid, accrued, or incurred, directly or
25        indirectly, to the same person. This subparagraph (DD)
26        is exempt from the provisions of Section 250;

 

 

10000SB0009sam006- 85 -LRB100 06347 HLH 26817 a

1            (EE) An amount equal to the income from intangible
2        property taken into account for the taxable year (net
3        of the deductions allocable thereto) with respect to
4        transactions with (i) a foreign person who would be a
5        member of the taxpayer's unitary business group but for
6        the fact that the foreign person's business activity
7        outside the United States is 80% or more of that
8        person's total business activity and (ii) for taxable
9        years ending on or after December 31, 2008, to a person
10        who would be a member of the same unitary business
11        group but for the fact that the person is prohibited
12        under Section 1501(a)(27) from being included in the
13        unitary business group because he or she is ordinarily
14        required to apportion business income under different
15        subsections of Section 304, but not to exceed the
16        addition modification required to be made for the same
17        taxable year under Section 203(a)(2)(D-18) for
18        intangible expenses and costs paid, accrued, or
19        incurred, directly or indirectly, to the same foreign
20        person. This subparagraph (EE) is exempt from the
21        provisions of Section 250;
22            (FF) An amount equal to any amount awarded to the
23        taxpayer during the taxable year by the Court of Claims
24        under subsection (c) of Section 8 of the Court of
25        Claims Act for time unjustly served in a State prison.
26        This subparagraph (FF) is exempt from the provisions of

 

 

10000SB0009sam006- 86 -LRB100 06347 HLH 26817 a

1        Section 250; and
2            (GG) For taxable years ending on or after December
3        31, 2011, in the case of a taxpayer who was required to
4        add back any insurance premiums under Section
5        203(a)(2)(D-19), such taxpayer may elect to subtract
6        that part of a reimbursement received from the
7        insurance company equal to the amount of the expense or
8        loss (including expenses incurred by the insurance
9        company) that would have been taken into account as a
10        deduction for federal income tax purposes if the
11        expense or loss had been uninsured. If a taxpayer makes
12        the election provided for by this subparagraph (GG),
13        the insurer to which the premiums were paid must add
14        back to income the amount subtracted by the taxpayer
15        pursuant to this subparagraph (GG). This subparagraph
16        (GG) is exempt from the provisions of Section 250.
 
17    (b) Corporations.
18        (1) In general. In the case of a corporation, base
19    income means an amount equal to the taxpayer's taxable
20    income for the taxable year as modified by paragraph (2).
21        (2) Modifications. The taxable income referred to in
22    paragraph (1) shall be modified by adding thereto the sum
23    of the following amounts:
24            (A) An amount equal to all amounts paid or accrued
25        to the taxpayer as interest and all distributions

 

 

10000SB0009sam006- 87 -LRB100 06347 HLH 26817 a

1        received from regulated investment companies during
2        the taxable year to the extent excluded from gross
3        income in the computation of taxable income;
4            (B) An amount equal to the amount of tax imposed by
5        this Act to the extent deducted from gross income in
6        the computation of taxable income for the taxable year;
7            (C) In the case of a regulated investment company,
8        an amount equal to the excess of (i) the net long-term
9        capital gain for the taxable year, over (ii) the amount
10        of the capital gain dividends designated as such in
11        accordance with Section 852(b)(3)(C) of the Internal
12        Revenue Code and any amount designated under Section
13        852(b)(3)(D) of the Internal Revenue Code,
14        attributable to the taxable year (this amendatory Act
15        of 1995 (Public Act 89-89) is declarative of existing
16        law and is not a new enactment);
17            (D) The amount of any net operating loss deduction
18        taken in arriving at taxable income, other than a net
19        operating loss carried forward from a taxable year
20        ending prior to December 31, 1986;
21            (E) For taxable years in which a net operating loss
22        carryback or carryforward from a taxable year ending
23        prior to December 31, 1986 is an element of taxable
24        income under paragraph (1) of subsection (e) or
25        subparagraph (E) of paragraph (2) of subsection (e),
26        the amount by which addition modifications other than

 

 

10000SB0009sam006- 88 -LRB100 06347 HLH 26817 a

1        those provided by this subparagraph (E) exceeded
2        subtraction modifications in such earlier taxable
3        year, with the following limitations applied in the
4        order that they are listed:
5                (i) the addition modification relating to the
6            net operating loss carried back or forward to the
7            taxable year from any taxable year ending prior to
8            December 31, 1986 shall be reduced by the amount of
9            addition modification under this subparagraph (E)
10            which related to that net operating loss and which
11            was taken into account in calculating the base
12            income of an earlier taxable year, and
13                (ii) the addition modification relating to the
14            net operating loss carried back or forward to the
15            taxable year from any taxable year ending prior to
16            December 31, 1986 shall not exceed the amount of
17            such carryback or carryforward;
18            For taxable years in which there is a net operating
19        loss carryback or carryforward from more than one other
20        taxable year ending prior to December 31, 1986, the
21        addition modification provided in this subparagraph
22        (E) shall be the sum of the amounts computed
23        independently under the preceding provisions of this
24        subparagraph (E) for each such taxable year;
25            (E-5) For taxable years ending after December 31,
26        1997, an amount equal to any eligible remediation costs

 

 

10000SB0009sam006- 89 -LRB100 06347 HLH 26817 a

1        that the corporation deducted in computing adjusted
2        gross income and for which the corporation claims a
3        credit under subsection (l) of Section 201;
4            (E-10) For taxable years 2001 and thereafter, an
5        amount equal to the bonus depreciation deduction taken
6        on the taxpayer's federal income tax return for the
7        taxable year under subsection (k) of Section 168 of the
8        Internal Revenue Code;
9            (E-11) If the taxpayer sells, transfers, abandons,
10        or otherwise disposes of property for which the
11        taxpayer was required in any taxable year to make an
12        addition modification under subparagraph (E-10), then
13        an amount equal to the aggregate amount of the
14        deductions taken in all taxable years under
15        subparagraph (T) with respect to that property.
16            If the taxpayer continues to own property through
17        the last day of the last tax year for which the
18        taxpayer may claim a depreciation deduction for
19        federal income tax purposes and for which the taxpayer
20        was allowed in any taxable year to make a subtraction
21        modification under subparagraph (T), then an amount
22        equal to that subtraction modification.
23            The taxpayer is required to make the addition
24        modification under this subparagraph only once with
25        respect to any one piece of property;
26            (E-12) An amount equal to the amount otherwise

 

 

10000SB0009sam006- 90 -LRB100 06347 HLH 26817 a

1        allowed as a deduction in computing base income for
2        interest paid, accrued, or incurred, directly or
3        indirectly, (i) for taxable years ending on or after
4        December 31, 2004, to a foreign person who would be a
5        member of the same unitary business group but for the
6        fact the foreign person's business activity outside
7        the United States is 80% or more of the foreign
8        person's total business activity and (ii) for taxable
9        years ending on or after December 31, 2008, to a person
10        who would be a member of the same unitary business
11        group but for the fact that the person is prohibited
12        under Section 1501(a)(27) from being included in the
13        unitary business group because he or she is ordinarily
14        required to apportion business income under different
15        subsections of Section 304. The addition modification
16        required by this subparagraph shall be reduced to the
17        extent that dividends were included in base income of
18        the unitary group for the same taxable year and
19        received by the taxpayer or by a member of the
20        taxpayer's unitary business group (including amounts
21        included in gross income pursuant to Sections 951
22        through 964 of the Internal Revenue Code and amounts
23        included in gross income under Section 78 of the
24        Internal Revenue Code) with respect to the stock of the
25        same person to whom the interest was paid, accrued, or
26        incurred.

 

 

10000SB0009sam006- 91 -LRB100 06347 HLH 26817 a

1            This paragraph shall not apply to the following:
2                (i) an item of interest paid, accrued, or
3            incurred, directly or indirectly, to a person who
4            is subject in a foreign country or state, other
5            than a state which requires mandatory unitary
6            reporting, to a tax on or measured by net income
7            with respect to such interest; or
8                (ii) an item of interest paid, accrued, or
9            incurred, directly or indirectly, to a person if
10            the taxpayer can establish, based on a
11            preponderance of the evidence, both of the
12            following:
13                    (a) the person, during the same taxable
14                year, paid, accrued, or incurred, the interest
15                to a person that is not a related member, and
16                    (b) the transaction giving rise to the
17                interest expense between the taxpayer and the
18                person did not have as a principal purpose the
19                avoidance of Illinois income tax, and is paid
20                pursuant to a contract or agreement that
21                reflects an arm's-length interest rate and
22                terms; or
23                (iii) the taxpayer can establish, based on
24            clear and convincing evidence, that the interest
25            paid, accrued, or incurred relates to a contract or
26            agreement entered into at arm's-length rates and

 

 

10000SB0009sam006- 92 -LRB100 06347 HLH 26817 a

1            terms and the principal purpose for the payment is
2            not federal or Illinois tax avoidance; or
3                (iv) an item of interest paid, accrued, or
4            incurred, directly or indirectly, to a person if
5            the taxpayer establishes by clear and convincing
6            evidence that the adjustments are unreasonable; or
7            if the taxpayer and the Director agree in writing
8            to the application or use of an alternative method
9            of apportionment under Section 304(f).
10                Nothing in this subsection shall preclude the
11            Director from making any other adjustment
12            otherwise allowed under Section 404 of this Act for
13            any tax year beginning after the effective date of
14            this amendment provided such adjustment is made
15            pursuant to regulation adopted by the Department
16            and such regulations provide methods and standards
17            by which the Department will utilize its authority
18            under Section 404 of this Act;
19            (E-13) An amount equal to the amount of intangible
20        expenses and costs otherwise allowed as a deduction in
21        computing base income, and that were paid, accrued, or
22        incurred, directly or indirectly, (i) for taxable
23        years ending on or after December 31, 2004, to a
24        foreign person who would be a member of the same
25        unitary business group but for the fact that the
26        foreign person's business activity outside the United

 

 

10000SB0009sam006- 93 -LRB100 06347 HLH 26817 a

1        States is 80% or more of that person's total business
2        activity and (ii) for taxable years ending on or after
3        December 31, 2008, to a person who would be a member of
4        the same unitary business group but for the fact that
5        the person is prohibited under Section 1501(a)(27)
6        from being included in the unitary business group
7        because he or she is ordinarily required to apportion
8        business income under different subsections of Section
9        304. The addition modification required by this
10        subparagraph shall be reduced to the extent that
11        dividends were included in base income of the unitary
12        group for the same taxable year and received by the
13        taxpayer or by a member of the taxpayer's unitary
14        business group (including amounts included in gross
15        income pursuant to Sections 951 through 964 of the
16        Internal Revenue Code and amounts included in gross
17        income under Section 78 of the Internal Revenue Code)
18        with respect to the stock of the same person to whom
19        the intangible expenses and costs were directly or
20        indirectly paid, incurred, or accrued. The preceding
21        sentence shall not apply to the extent that the same
22        dividends caused a reduction to the addition
23        modification required under Section 203(b)(2)(E-12) of
24        this Act. As used in this subparagraph, the term
25        "intangible expenses and costs" includes (1) expenses,
26        losses, and costs for, or related to, the direct or

 

 

10000SB0009sam006- 94 -LRB100 06347 HLH 26817 a

1        indirect acquisition, use, maintenance or management,
2        ownership, sale, exchange, or any other disposition of
3        intangible property; (2) losses incurred, directly or
4        indirectly, from factoring transactions or discounting
5        transactions; (3) royalty, patent, technical, and
6        copyright fees; (4) licensing fees; and (5) other
7        similar expenses and costs. For purposes of this
8        subparagraph, "intangible property" includes patents,
9        patent applications, trade names, trademarks, service
10        marks, copyrights, mask works, trade secrets, and
11        similar types of intangible assets.
12            This paragraph shall not apply to the following:
13                (i) any item of intangible expenses or costs
14            paid, accrued, or incurred, directly or
15            indirectly, from a transaction with a person who is
16            subject in a foreign country or state, other than a
17            state which requires mandatory unitary reporting,
18            to a tax on or measured by net income with respect
19            to such item; or
20                (ii) any item of intangible expense or cost
21            paid, accrued, or incurred, directly or
22            indirectly, if the taxpayer can establish, based
23            on a preponderance of the evidence, both of the
24            following:
25                    (a) the person during the same taxable
26                year paid, accrued, or incurred, the

 

 

10000SB0009sam006- 95 -LRB100 06347 HLH 26817 a

1                intangible expense or cost to a person that is
2                not a related member, and
3                    (b) the transaction giving rise to the
4                intangible expense or cost between the
5                taxpayer and the person did not have as a
6                principal purpose the avoidance of Illinois
7                income tax, and is paid pursuant to a contract
8                or agreement that reflects arm's-length terms;
9                or
10                (iii) any item of intangible expense or cost
11            paid, accrued, or incurred, directly or
12            indirectly, from a transaction with a person if the
13            taxpayer establishes by clear and convincing
14            evidence, that the adjustments are unreasonable;
15            or if the taxpayer and the Director agree in
16            writing to the application or use of an alternative
17            method of apportionment under Section 304(f);
18                Nothing in this subsection shall preclude the
19            Director from making any other adjustment
20            otherwise allowed under Section 404 of this Act for
21            any tax year beginning after the effective date of
22            this amendment provided such adjustment is made
23            pursuant to regulation adopted by the Department
24            and such regulations provide methods and standards
25            by which the Department will utilize its authority
26            under Section 404 of this Act;

 

 

10000SB0009sam006- 96 -LRB100 06347 HLH 26817 a

1            (E-14) For taxable years ending on or after
2        December 31, 2008, an amount equal to the amount of
3        insurance premium expenses and costs otherwise allowed
4        as a deduction in computing base income, and that were
5        paid, accrued, or incurred, directly or indirectly, to
6        a person who would be a member of the same unitary
7        business group but for the fact that the person is
8        prohibited under Section 1501(a)(27) from being
9        included in the unitary business group because he or
10        she is ordinarily required to apportion business
11        income under different subsections of Section 304. The
12        addition modification required by this subparagraph
13        shall be reduced to the extent that dividends were
14        included in base income of the unitary group for the
15        same taxable year and received by the taxpayer or by a
16        member of the taxpayer's unitary business group
17        (including amounts included in gross income under
18        Sections 951 through 964 of the Internal Revenue Code
19        and amounts included in gross income under Section 78
20        of the Internal Revenue Code) with respect to the stock
21        of the same person to whom the premiums and costs were
22        directly or indirectly paid, incurred, or accrued. The
23        preceding sentence does not apply to the extent that
24        the same dividends caused a reduction to the addition
25        modification required under Section 203(b)(2)(E-12) or
26        Section 203(b)(2)(E-13) of this Act;

 

 

10000SB0009sam006- 97 -LRB100 06347 HLH 26817 a

1            (E-15) For taxable years beginning after December
2        31, 2008, any deduction for dividends paid by a captive
3        real estate investment trust that is allowed to a real
4        estate investment trust under Section 857(b)(2)(B) of
5        the Internal Revenue Code for dividends paid;
6            (E-16) An amount equal to the credit allowable to
7        the taxpayer under Section 218(a) of this Act,
8        determined without regard to Section 218(c) of this
9        Act;
10            (E-17) For taxable years beginning on or after
11        January 1, 2017, an amount equal to the deduction
12        allowed under Section 199 of the Internal Revenue Code
13        for the taxable year;
14    and by deducting from the total so obtained the sum of the
15    following amounts:
16            (F) An amount equal to the amount of any tax
17        imposed by this Act which was refunded to the taxpayer
18        and included in such total for the taxable year;
19            (G) An amount equal to any amount included in such
20        total under Section 78 of the Internal Revenue Code;
21            (H) In the case of a regulated investment company,
22        an amount equal to the amount of exempt interest
23        dividends as defined in subsection (b) (5) of Section
24        852 of the Internal Revenue Code, paid to shareholders
25        for the taxable year;
26            (I) With the exception of any amounts subtracted

 

 

10000SB0009sam006- 98 -LRB100 06347 HLH 26817 a

1        under subparagraph (J), an amount equal to the sum of
2        all amounts disallowed as deductions by (i) Sections
3        171(a) (2), and 265(a)(2) and amounts disallowed as
4        interest expense by Section 291(a)(3) of the Internal
5        Revenue Code, and all amounts of expenses allocable to
6        interest and disallowed as deductions by Section
7        265(a)(1) of the Internal Revenue Code; and (ii) for
8        taxable years ending on or after August 13, 1999,
9        Sections 171(a)(2), 265, 280C, 291(a)(3), and
10        832(b)(5)(B)(i) of the Internal Revenue Code, plus,
11        for tax years ending on or after December 31, 2011,
12        amounts disallowed as deductions by Section 45G(e)(3)
13        of the Internal Revenue Code and, for taxable years
14        ending on or after December 31, 2008, any amount
15        included in gross income under Section 87 of the
16        Internal Revenue Code and the policyholders' share of
17        tax-exempt interest of a life insurance company under
18        Section 807(a)(2)(B) of the Internal Revenue Code (in
19        the case of a life insurance company with gross income
20        from a decrease in reserves for the tax year) or
21        Section 807(b)(1)(B) of the Internal Revenue Code (in
22        the case of a life insurance company allowed a
23        deduction for an increase in reserves for the tax
24        year); the provisions of this subparagraph are exempt
25        from the provisions of Section 250;
26            (J) An amount equal to all amounts included in such

 

 

10000SB0009sam006- 99 -LRB100 06347 HLH 26817 a

1        total which are exempt from taxation by this State
2        either by reason of its statutes or Constitution or by
3        reason of the Constitution, treaties or statutes of the
4        United States; provided that, in the case of any
5        statute of this State that exempts income derived from
6        bonds or other obligations from the tax imposed under
7        this Act, the amount exempted shall be the interest net
8        of bond premium amortization;
9            (K) An amount equal to those dividends included in
10        such total which were paid by a corporation which
11        conducts business operations in a River Edge
12        Redevelopment Zone or zones created under the River
13        Edge Redevelopment Zone Act and conducts substantially
14        all of its operations in a River Edge Redevelopment
15        Zone or zones. This subparagraph (K) is exempt from the
16        provisions of Section 250;
17            (L) An amount equal to those dividends included in
18        such total that were paid by a corporation that
19        conducts business operations in a federally designated
20        Foreign Trade Zone or Sub-Zone and that is designated a
21        High Impact Business located in Illinois; provided
22        that dividends eligible for the deduction provided in
23        subparagraph (K) of paragraph 2 of this subsection
24        shall not be eligible for the deduction provided under
25        this subparagraph (L);
26            (M) For any taxpayer that is a financial

 

 

10000SB0009sam006- 100 -LRB100 06347 HLH 26817 a

1        organization within the meaning of Section 304(c) of
2        this Act, an amount included in such total as interest
3        income from a loan or loans made by such taxpayer to a
4        borrower, to the extent that such a loan is secured by
5        property which is eligible for the River Edge
6        Redevelopment Zone Investment Credit. To determine the
7        portion of a loan or loans that is secured by property
8        eligible for a Section 201(f) investment credit to the
9        borrower, the entire principal amount of the loan or
10        loans between the taxpayer and the borrower should be
11        divided into the basis of the Section 201(f) investment
12        credit property which secures the loan or loans, using
13        for this purpose the original basis of such property on
14        the date that it was placed in service in the River
15        Edge Redevelopment Zone. The subtraction modification
16        available to taxpayer in any year under this subsection
17        shall be that portion of the total interest paid by the
18        borrower with respect to such loan attributable to the
19        eligible property as calculated under the previous
20        sentence. This subparagraph (M) is exempt from the
21        provisions of Section 250;
22            (M-1) For any taxpayer that is a financial
23        organization within the meaning of Section 304(c) of
24        this Act, an amount included in such total as interest
25        income from a loan or loans made by such taxpayer to a
26        borrower, to the extent that such a loan is secured by

 

 

10000SB0009sam006- 101 -LRB100 06347 HLH 26817 a

1        property which is eligible for the High Impact Business
2        Investment Credit. To determine the portion of a loan
3        or loans that is secured by property eligible for a
4        Section 201(h) investment credit to the borrower, the
5        entire principal amount of the loan or loans between
6        the taxpayer and the borrower should be divided into
7        the basis of the Section 201(h) investment credit
8        property which secures the loan or loans, using for
9        this purpose the original basis of such property on the
10        date that it was placed in service in a federally
11        designated Foreign Trade Zone or Sub-Zone located in
12        Illinois. No taxpayer that is eligible for the
13        deduction provided in subparagraph (M) of paragraph
14        (2) of this subsection shall be eligible for the
15        deduction provided under this subparagraph (M-1). The
16        subtraction modification available to taxpayers in any
17        year under this subsection shall be that portion of the
18        total interest paid by the borrower with respect to
19        such loan attributable to the eligible property as
20        calculated under the previous sentence;
21            (N) Two times any contribution made during the
22        taxable year to a designated zone organization to the
23        extent that the contribution (i) qualifies as a
24        charitable contribution under subsection (c) of
25        Section 170 of the Internal Revenue Code and (ii) must,
26        by its terms, be used for a project approved by the

 

 

10000SB0009sam006- 102 -LRB100 06347 HLH 26817 a

1        Department of Commerce and Economic Opportunity under
2        Section 11 of the Illinois Enterprise Zone Act or under
3        Section 10-10 of the River Edge Redevelopment Zone Act.
4        This subparagraph (N) is exempt from the provisions of
5        Section 250;
6            (O) An amount equal to: (i) 85% for taxable years
7        ending on or before December 31, 1992, or, a percentage
8        equal to the percentage allowable under Section
9        243(a)(1) of the Internal Revenue Code of 1986 for
10        taxable years ending after December 31, 1992, of the
11        amount by which dividends included in taxable income
12        and received from a corporation that is not created or
13        organized under the laws of the United States or any
14        state or political subdivision thereof, including, for
15        taxable years ending on or after December 31, 1988,
16        dividends received or deemed received or paid or deemed
17        paid under Sections 951 through 965 of the Internal
18        Revenue Code, exceed the amount of the modification
19        provided under subparagraph (G) of paragraph (2) of
20        this subsection (b) which is related to such dividends,
21        and including, for taxable years ending on or after
22        December 31, 2008, dividends received from a captive
23        real estate investment trust; plus (ii) 100% of the
24        amount by which dividends, included in taxable income
25        and received, including, for taxable years ending on or
26        after December 31, 1988, dividends received or deemed

 

 

10000SB0009sam006- 103 -LRB100 06347 HLH 26817 a

1        received or paid or deemed paid under Sections 951
2        through 964 of the Internal Revenue Code and including,
3        for taxable years ending on or after December 31, 2008,
4        dividends received from a captive real estate
5        investment trust, from any such corporation specified
6        in clause (i) that would but for the provisions of
7        Section 1504 (b) (3) of the Internal Revenue Code be
8        treated as a member of the affiliated group which
9        includes the dividend recipient, exceed the amount of
10        the modification provided under subparagraph (G) of
11        paragraph (2) of this subsection (b) which is related
12        to such dividends. This subparagraph (O) is exempt from
13        the provisions of Section 250 of this Act;
14            (P) An amount equal to any contribution made to a
15        job training project established pursuant to the Tax
16        Increment Allocation Redevelopment Act;
17            (Q) An amount equal to the amount of the deduction
18        used to compute the federal income tax credit for
19        restoration of substantial amounts held under claim of
20        right for the taxable year pursuant to Section 1341 of
21        the Internal Revenue Code;
22            (R) On and after July 20, 1999, in the case of an
23        attorney-in-fact with respect to whom an interinsurer
24        or a reciprocal insurer has made the election under
25        Section 835 of the Internal Revenue Code, 26 U.S.C.
26        835, an amount equal to the excess, if any, of the

 

 

10000SB0009sam006- 104 -LRB100 06347 HLH 26817 a

1        amounts paid or incurred by that interinsurer or
2        reciprocal insurer in the taxable year to the
3        attorney-in-fact over the deduction allowed to that
4        interinsurer or reciprocal insurer with respect to the
5        attorney-in-fact under Section 835(b) of the Internal
6        Revenue Code for the taxable year; the provisions of
7        this subparagraph are exempt from the provisions of
8        Section 250;
9            (S) For taxable years ending on or after December
10        31, 1997, in the case of a Subchapter S corporation, an
11        amount equal to all amounts of income allocable to a
12        shareholder subject to the Personal Property Tax
13        Replacement Income Tax imposed by subsections (c) and
14        (d) of Section 201 of this Act, including amounts
15        allocable to organizations exempt from federal income
16        tax by reason of Section 501(a) of the Internal Revenue
17        Code. This subparagraph (S) is exempt from the
18        provisions of Section 250;
19            (T) For taxable years 2001 and thereafter, for the
20        taxable year in which the bonus depreciation deduction
21        is taken on the taxpayer's federal income tax return
22        under subsection (k) of Section 168 of the Internal
23        Revenue Code and for each applicable taxable year
24        thereafter, an amount equal to "x", where:
25                (1) "y" equals the amount of the depreciation
26            deduction taken for the taxable year on the

 

 

10000SB0009sam006- 105 -LRB100 06347 HLH 26817 a

1            taxpayer's federal income tax return on property
2            for which the bonus depreciation deduction was
3            taken in any year under subsection (k) of Section
4            168 of the Internal Revenue Code, but not including
5            the bonus depreciation deduction;
6                (2) for taxable years ending on or before
7            December 31, 2005, "x" equals "y" multiplied by 30
8            and then divided by 70 (or "y" multiplied by
9            0.429); and
10                (3) for taxable years ending after December
11            31, 2005:
12                    (i) for property on which a bonus
13                depreciation deduction of 30% of the adjusted
14                basis was taken, "x" equals "y" multiplied by
15                30 and then divided by 70 (or "y" multiplied by
16                0.429); and
17                    (ii) for property on which a bonus
18                depreciation deduction of 50% of the adjusted
19                basis was taken, "x" equals "y" multiplied by
20                1.0.
21            The aggregate amount deducted under this
22        subparagraph in all taxable years for any one piece of
23        property may not exceed the amount of the bonus
24        depreciation deduction taken on that property on the
25        taxpayer's federal income tax return under subsection
26        (k) of Section 168 of the Internal Revenue Code. This

 

 

10000SB0009sam006- 106 -LRB100 06347 HLH 26817 a

1        subparagraph (T) is exempt from the provisions of
2        Section 250;
3            (U) If the taxpayer sells, transfers, abandons, or
4        otherwise disposes of property for which the taxpayer
5        was required in any taxable year to make an addition
6        modification under subparagraph (E-10), then an amount
7        equal to that addition modification.
8            If the taxpayer continues to own property through
9        the last day of the last tax year for which the
10        taxpayer may claim a depreciation deduction for
11        federal income tax purposes and for which the taxpayer
12        was required in any taxable year to make an addition
13        modification under subparagraph (E-10), then an amount
14        equal to that addition modification.
15            The taxpayer is allowed to take the deduction under
16        this subparagraph only once with respect to any one
17        piece of property.
18            This subparagraph (U) is exempt from the
19        provisions of Section 250;
20            (V) The amount of: (i) any interest income (net of
21        the deductions allocable thereto) taken into account
22        for the taxable year with respect to a transaction with
23        a taxpayer that is required to make an addition
24        modification with respect to such transaction under
25        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
26        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

 

 

10000SB0009sam006- 107 -LRB100 06347 HLH 26817 a

1        the amount of such addition modification, (ii) any
2        income from intangible property (net of the deductions
3        allocable thereto) taken into account for the taxable
4        year with respect to a transaction with a taxpayer that
5        is required to make an addition modification with
6        respect to such transaction under Section
7        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
8        203(d)(2)(D-8), but not to exceed the amount of such
9        addition modification, and (iii) any insurance premium
10        income (net of deductions allocable thereto) taken
11        into account for the taxable year with respect to a
12        transaction with a taxpayer that is required to make an
13        addition modification with respect to such transaction
14        under Section 203(a)(2)(D-19), Section
15        203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
16        203(d)(2)(D-9), but not to exceed the amount of that
17        addition modification. This subparagraph (V) is exempt
18        from the provisions of Section 250;
19            (W) An amount equal to the interest income taken
20        into account for the taxable year (net of the
21        deductions allocable thereto) with respect to
22        transactions with (i) a foreign person who would be a
23        member of the taxpayer's unitary business group but for
24        the fact that the foreign person's business activity
25        outside the United States is 80% or more of that
26        person's total business activity and (ii) for taxable

 

 

10000SB0009sam006- 108 -LRB100 06347 HLH 26817 a

1        years ending on or after December 31, 2008, to a person
2        who would be a member of the same unitary business
3        group but for the fact that the person is prohibited
4        under Section 1501(a)(27) from being included in the
5        unitary business group because he or she is ordinarily
6        required to apportion business income under different
7        subsections of Section 304, but not to exceed the
8        addition modification required to be made for the same
9        taxable year under Section 203(b)(2)(E-12) for
10        interest paid, accrued, or incurred, directly or
11        indirectly, to the same person. This subparagraph (W)
12        is exempt from the provisions of Section 250;
13            (X) An amount equal to the income from intangible
14        property taken into account for the taxable year (net
15        of the deductions allocable thereto) with respect to
16        transactions with (i) a foreign person who would be a
17        member of the taxpayer's unitary business group but for
18        the fact that the foreign person's business activity
19        outside the United States is 80% or more of that
20        person's total business activity and (ii) for taxable
21        years ending on or after December 31, 2008, to a person
22        who would be a member of the same unitary business
23        group but for the fact that the person is prohibited
24        under Section 1501(a)(27) from being included in the
25        unitary business group because he or she is ordinarily
26        required to apportion business income under different

 

 

10000SB0009sam006- 109 -LRB100 06347 HLH 26817 a

1        subsections of Section 304, but not to exceed the
2        addition modification required to be made for the same
3        taxable year under Section 203(b)(2)(E-13) for
4        intangible expenses and costs paid, accrued, or
5        incurred, directly or indirectly, to the same foreign
6        person. This subparagraph (X) is exempt from the
7        provisions of Section 250;
8            (Y) For taxable years ending on or after December
9        31, 2011, in the case of a taxpayer who was required to
10        add back any insurance premiums under Section
11        203(b)(2)(E-14), such taxpayer may elect to subtract
12        that part of a reimbursement received from the
13        insurance company equal to the amount of the expense or
14        loss (including expenses incurred by the insurance
15        company) that would have been taken into account as a
16        deduction for federal income tax purposes if the
17        expense or loss had been uninsured. If a taxpayer makes
18        the election provided for by this subparagraph (Y), the
19        insurer to which the premiums were paid must add back
20        to income the amount subtracted by the taxpayer
21        pursuant to this subparagraph (Y). This subparagraph
22        (Y) is exempt from the provisions of Section 250; and
23            (Z) The difference between the nondeductible
24        controlled foreign corporation dividends under Section
25        965(e)(3) of the Internal Revenue Code over the taxable
26        income of the taxpayer, computed without regard to

 

 

10000SB0009sam006- 110 -LRB100 06347 HLH 26817 a

1        Section 965(e)(2)(A) of the Internal Revenue Code, and
2        without regard to any net operating loss deduction.
3        This subparagraph (Z) is exempt from the provisions of
4        Section 250.
5        (3) Special rule. For purposes of paragraph (2) (A),
6    "gross income" in the case of a life insurance company, for
7    tax years ending on and after December 31, 1994, and prior
8    to December 31, 2011, shall mean the gross investment
9    income for the taxable year and, for tax years ending on or
10    after December 31, 2011, shall mean all amounts included in
11    life insurance gross income under Section 803(a)(3) of the
12    Internal Revenue Code.
 
13    (c) Trusts and estates.
14        (1) In general. In the case of a trust or estate, base
15    income means an amount equal to the taxpayer's taxable
16    income for the taxable year as modified by paragraph (2).
17        (2) Modifications. Subject to the provisions of
18    paragraph (3), the taxable income referred to in paragraph
19    (1) shall be modified by adding thereto the sum of the
20    following amounts:
21            (A) An amount equal to all amounts paid or accrued
22        to the taxpayer as interest or dividends during the
23        taxable year to the extent excluded from gross income
24        in the computation of taxable income;
25            (B) In the case of (i) an estate, $600; (ii) a

 

 

10000SB0009sam006- 111 -LRB100 06347 HLH 26817 a

1        trust which, under its governing instrument, is
2        required to distribute all of its income currently,
3        $300; and (iii) any other trust, $100, but in each such
4        case, only to the extent such amount was deducted in
5        the computation of taxable income;
6            (C) An amount equal to the amount of tax imposed by
7        this Act to the extent deducted from gross income in
8        the computation of taxable income for the taxable year;
9            (D) The amount of any net operating loss deduction
10        taken in arriving at taxable income, other than a net
11        operating loss carried forward from a taxable year
12        ending prior to December 31, 1986;
13            (E) For taxable years in which a net operating loss
14        carryback or carryforward from a taxable year ending
15        prior to December 31, 1986 is an element of taxable
16        income under paragraph (1) of subsection (e) or
17        subparagraph (E) of paragraph (2) of subsection (e),
18        the amount by which addition modifications other than
19        those provided by this subparagraph (E) exceeded
20        subtraction modifications in such taxable year, with
21        the following limitations applied in the order that
22        they are listed:
23                (i) the addition modification relating to the
24            net operating loss carried back or forward to the
25            taxable year from any taxable year ending prior to
26            December 31, 1986 shall be reduced by the amount of

 

 

10000SB0009sam006- 112 -LRB100 06347 HLH 26817 a

1            addition modification under this subparagraph (E)
2            which related to that net operating loss and which
3            was taken into account in calculating the base
4            income of an earlier taxable year, and
5                (ii) the addition modification relating to the
6            net operating loss carried back or forward to the
7            taxable year from any taxable year ending prior to
8            December 31, 1986 shall not exceed the amount of
9            such carryback or carryforward;
10            For taxable years in which there is a net operating
11        loss carryback or carryforward from more than one other
12        taxable year ending prior to December 31, 1986, the
13        addition modification provided in this subparagraph
14        (E) shall be the sum of the amounts computed
15        independently under the preceding provisions of this
16        subparagraph (E) for each such taxable year;
17            (F) For taxable years ending on or after January 1,
18        1989, an amount equal to the tax deducted pursuant to
19        Section 164 of the Internal Revenue Code if the trust
20        or estate is claiming the same tax for purposes of the
21        Illinois foreign tax credit under Section 601 of this
22        Act;
23            (G) An amount equal to the amount of the capital
24        gain deduction allowable under the Internal Revenue
25        Code, to the extent deducted from gross income in the
26        computation of taxable income;

 

 

10000SB0009sam006- 113 -LRB100 06347 HLH 26817 a

1            (G-5) For taxable years ending after December 31,
2        1997, an amount equal to any eligible remediation costs
3        that the trust or estate deducted in computing adjusted
4        gross income and for which the trust or estate claims a
5        credit under subsection (l) of Section 201;
6            (G-10) For taxable years 2001 and thereafter, an
7        amount equal to the bonus depreciation deduction taken
8        on the taxpayer's federal income tax return for the
9        taxable year under subsection (k) of Section 168 of the
10        Internal Revenue Code; and
11            (G-11) If the taxpayer sells, transfers, abandons,
12        or otherwise disposes of property for which the
13        taxpayer was required in any taxable year to make an
14        addition modification under subparagraph (G-10), then
15        an amount equal to the aggregate amount of the
16        deductions taken in all taxable years under
17        subparagraph (R) with respect to that property.
18            If the taxpayer continues to own property through
19        the last day of the last tax year for which the
20        taxpayer may claim a depreciation deduction for
21        federal income tax purposes and for which the taxpayer
22        was allowed in any taxable year to make a subtraction
23        modification under subparagraph (R), then an amount
24        equal to that subtraction modification.
25            The taxpayer is required to make the addition
26        modification under this subparagraph only once with

 

 

10000SB0009sam006- 114 -LRB100 06347 HLH 26817 a

1        respect to any one piece of property;
2            (G-12) An amount equal to the amount otherwise
3        allowed as a deduction in computing base income for
4        interest paid, accrued, or incurred, directly or
5        indirectly, (i) for taxable years ending on or after
6        December 31, 2004, to a foreign person who would be a
7        member of the same unitary business group but for the
8        fact that the foreign person's business activity
9        outside the United States is 80% or more of the foreign
10        person's total business activity and (ii) for taxable
11        years ending on or after December 31, 2008, to a person
12        who would be a member of the same unitary business
13        group but for the fact that the person is prohibited
14        under Section 1501(a)(27) from being included in the
15        unitary business group because he or she is ordinarily
16        required to apportion business income under different
17        subsections of Section 304. The addition modification
18        required by this subparagraph shall be reduced to the
19        extent that dividends were included in base income of
20        the unitary group for the same taxable year and
21        received by the taxpayer or by a member of the
22        taxpayer's unitary business group (including amounts
23        included in gross income pursuant to Sections 951
24        through 964 of the Internal Revenue Code and amounts
25        included in gross income under Section 78 of the
26        Internal Revenue Code) with respect to the stock of the

 

 

10000SB0009sam006- 115 -LRB100 06347 HLH 26817 a

1        same person to whom the interest was paid, accrued, or
2        incurred.
3            This paragraph shall not apply to the following:
4                (i) an item of interest paid, accrued, or
5            incurred, directly or indirectly, to a person who
6            is subject in a foreign country or state, other
7            than a state which requires mandatory unitary
8            reporting, to a tax on or measured by net income
9            with respect to such interest; or
10                (ii) an item of interest paid, accrued, or
11            incurred, directly or indirectly, to a person if
12            the taxpayer can establish, based on a
13            preponderance of the evidence, both of the
14            following:
15                    (a) the person, during the same taxable
16                year, paid, accrued, or incurred, the interest
17                to a person that is not a related member, and
18                    (b) the transaction giving rise to the
19                interest expense between the taxpayer and the
20                person did not have as a principal purpose the
21                avoidance of Illinois income tax, and is paid
22                pursuant to a contract or agreement that
23                reflects an arm's-length interest rate and
24                terms; or
25                (iii) the taxpayer can establish, based on
26            clear and convincing evidence, that the interest

 

 

10000SB0009sam006- 116 -LRB100 06347 HLH 26817 a

1            paid, accrued, or incurred relates to a contract or
2            agreement entered into at arm's-length rates and
3            terms and the principal purpose for the payment is
4            not federal or Illinois tax avoidance; or
5                (iv) an item of interest paid, accrued, or
6            incurred, directly or indirectly, to a person if
7            the taxpayer establishes by clear and convincing
8            evidence that the adjustments are unreasonable; or
9            if the taxpayer and the Director agree in writing
10            to the application or use of an alternative method
11            of apportionment under Section 304(f).
12                Nothing in this subsection shall preclude the
13            Director from making any other adjustment
14            otherwise allowed under Section 404 of this Act for
15            any tax year beginning after the effective date of
16            this amendment provided such adjustment is made
17            pursuant to regulation adopted by the Department
18            and such regulations provide methods and standards
19            by which the Department will utilize its authority
20            under Section 404 of this Act;
21            (G-13) An amount equal to the amount of intangible
22        expenses and costs otherwise allowed as a deduction in
23        computing base income, and that were paid, accrued, or
24        incurred, directly or indirectly, (i) for taxable
25        years ending on or after December 31, 2004, to a
26        foreign person who would be a member of the same

 

 

10000SB0009sam006- 117 -LRB100 06347 HLH 26817 a

1        unitary business group but for the fact that the
2        foreign person's business activity outside the United
3        States is 80% or more of that person's total business
4        activity and (ii) for taxable years ending on or after
5        December 31, 2008, to a person who would be a member of
6        the same unitary business group but for the fact that
7        the person is prohibited under Section 1501(a)(27)
8        from being included in the unitary business group
9        because he or she is ordinarily required to apportion
10        business income under different subsections of Section
11        304. The addition modification required by this
12        subparagraph shall be reduced to the extent that
13        dividends were included in base income of the unitary
14        group for the same taxable year and received by the
15        taxpayer or by a member of the taxpayer's unitary
16        business group (including amounts included in gross
17        income pursuant to Sections 951 through 964 of the
18        Internal Revenue Code and amounts included in gross
19        income under Section 78 of the Internal Revenue Code)
20        with respect to the stock of the same person to whom
21        the intangible expenses and costs were directly or
22        indirectly paid, incurred, or accrued. The preceding
23        sentence shall not apply to the extent that the same
24        dividends caused a reduction to the addition
25        modification required under Section 203(c)(2)(G-12) of
26        this Act. As used in this subparagraph, the term

 

 

10000SB0009sam006- 118 -LRB100 06347 HLH 26817 a

1        "intangible expenses and costs" includes: (1)
2        expenses, losses, and costs for or related to the
3        direct or indirect acquisition, use, maintenance or
4        management, ownership, sale, exchange, or any other
5        disposition of intangible property; (2) losses
6        incurred, directly or indirectly, from factoring
7        transactions or discounting transactions; (3) royalty,
8        patent, technical, and copyright fees; (4) licensing
9        fees; and (5) other similar expenses and costs. For
10        purposes of this subparagraph, "intangible property"
11        includes patents, patent applications, trade names,
12        trademarks, service marks, copyrights, mask works,
13        trade secrets, and similar types of intangible assets.
14            This paragraph shall not apply to the following:
15                (i) any item of intangible expenses or costs
16            paid, accrued, or incurred, directly or
17            indirectly, from a transaction with a person who is
18            subject in a foreign country or state, other than a
19            state which requires mandatory unitary reporting,
20            to a tax on or measured by net income with respect
21            to such item; or
22                (ii) any item of intangible expense or cost
23            paid, accrued, or incurred, directly or
24            indirectly, if the taxpayer can establish, based
25            on a preponderance of the evidence, both of the
26            following:

 

 

10000SB0009sam006- 119 -LRB100 06347 HLH 26817 a

1                    (a) the person during the same taxable
2                year paid, accrued, or incurred, the
3                intangible expense or cost to a person that is
4                not a related member, and
5                    (b) the transaction giving rise to the
6                intangible expense or cost between the
7                taxpayer and the person did not have as a
8                principal purpose the avoidance of Illinois
9                income tax, and is paid pursuant to a contract
10                or agreement that reflects arm's-length terms;
11                or
12                (iii) any item of intangible expense or cost
13            paid, accrued, or incurred, directly or
14            indirectly, from a transaction with a person if the
15            taxpayer establishes by clear and convincing
16            evidence, that the adjustments are unreasonable;
17            or if the taxpayer and the Director agree in
18            writing to the application or use of an alternative
19            method of apportionment under Section 304(f);
20                Nothing in this subsection shall preclude the
21            Director from making any other adjustment
22            otherwise allowed under Section 404 of this Act for
23            any tax year beginning after the effective date of
24            this amendment provided such adjustment is made
25            pursuant to regulation adopted by the Department
26            and such regulations provide methods and standards

 

 

10000SB0009sam006- 120 -LRB100 06347 HLH 26817 a

1            by which the Department will utilize its authority
2            under Section 404 of this Act;
3            (G-14) For taxable years ending on or after
4        December 31, 2008, an amount equal to the amount of
5        insurance premium expenses and costs otherwise allowed
6        as a deduction in computing base income, and that were
7        paid, accrued, or incurred, directly or indirectly, to
8        a person who would be a member of the same unitary
9        business group but for the fact that the person is
10        prohibited under Section 1501(a)(27) from being
11        included in the unitary business group because he or
12        she is ordinarily required to apportion business
13        income under different subsections of Section 304. The
14        addition modification required by this subparagraph
15        shall be reduced to the extent that dividends were
16        included in base income of the unitary group for the
17        same taxable year and received by the taxpayer or by a
18        member of the taxpayer's unitary business group
19        (including amounts included in gross income under
20        Sections 951 through 964 of the Internal Revenue Code
21        and amounts included in gross income under Section 78
22        of the Internal Revenue Code) with respect to the stock
23        of the same person to whom the premiums and costs were
24        directly or indirectly paid, incurred, or accrued. The
25        preceding sentence does not apply to the extent that
26        the same dividends caused a reduction to the addition

 

 

10000SB0009sam006- 121 -LRB100 06347 HLH 26817 a

1        modification required under Section 203(c)(2)(G-12) or
2        Section 203(c)(2)(G-13) of this Act;
3            (G-15) An amount equal to the credit allowable to
4        the taxpayer under Section 218(a) of this Act,
5        determined without regard to Section 218(c) of this
6        Act;
7            (G-16) For taxable years beginning on or after
8        January 1, 2017, an amount equal to the deduction
9        allowed under Section 199 of the Internal Revenue Code
10        for the taxable year;
11    and by deducting from the total so obtained the sum of the
12    following amounts:
13            (H) An amount equal to all amounts included in such
14        total pursuant to the provisions of Sections 402(a),
15        402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
16        Internal Revenue Code or included in such total as
17        distributions under the provisions of any retirement
18        or disability plan for employees of any governmental
19        agency or unit, or retirement payments to retired
20        partners, which payments are excluded in computing net
21        earnings from self employment by Section 1402 of the
22        Internal Revenue Code and regulations adopted pursuant
23        thereto;
24            (I) The valuation limitation amount;
25            (J) An amount equal to the amount of any tax
26        imposed by this Act which was refunded to the taxpayer

 

 

10000SB0009sam006- 122 -LRB100 06347 HLH 26817 a

1        and included in such total for the taxable year;
2            (K) An amount equal to all amounts included in
3        taxable income as modified by subparagraphs (A), (B),
4        (C), (D), (E), (F) and (G) which are exempt from
5        taxation by this State either by reason of its statutes
6        or Constitution or by reason of the Constitution,
7        treaties or statutes of the United States; provided
8        that, in the case of any statute of this State that
9        exempts income derived from bonds or other obligations
10        from the tax imposed under this Act, the amount
11        exempted shall be the interest net of bond premium
12        amortization;
13            (L) With the exception of any amounts subtracted
14        under subparagraph (K), an amount equal to the sum of
15        all amounts disallowed as deductions by (i) Sections
16        171(a) (2) and 265(a)(2) of the Internal Revenue Code,
17        and all amounts of expenses allocable to interest and
18        disallowed as deductions by Section 265(1) of the
19        Internal Revenue Code; and (ii) for taxable years
20        ending on or after August 13, 1999, Sections 171(a)(2),
21        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
22        Code, plus, (iii) for taxable years ending on or after
23        December 31, 2011, Section 45G(e)(3) of the Internal
24        Revenue Code and, for taxable years ending on or after
25        December 31, 2008, any amount included in gross income
26        under Section 87 of the Internal Revenue Code; the

 

 

10000SB0009sam006- 123 -LRB100 06347 HLH 26817 a

1        provisions of this subparagraph are exempt from the
2        provisions of Section 250;
3            (M) An amount equal to those dividends included in
4        such total which were paid by a corporation which
5        conducts business operations in a River Edge
6        Redevelopment Zone or zones created under the River
7        Edge Redevelopment Zone Act and conducts substantially
8        all of its operations in a River Edge Redevelopment
9        Zone or zones. This subparagraph (M) is exempt from the
10        provisions of Section 250;
11            (N) An amount equal to any contribution made to a
12        job training project established pursuant to the Tax
13        Increment Allocation Redevelopment Act;
14            (O) An amount equal to those dividends included in
15        such total that were paid by a corporation that
16        conducts business operations in a federally designated
17        Foreign Trade Zone or Sub-Zone and that is designated a
18        High Impact Business located in Illinois; provided
19        that dividends eligible for the deduction provided in
20        subparagraph (M) of paragraph (2) of this subsection
21        shall not be eligible for the deduction provided under
22        this subparagraph (O);
23            (P) An amount equal to the amount of the deduction
24        used to compute the federal income tax credit for
25        restoration of substantial amounts held under claim of
26        right for the taxable year pursuant to Section 1341 of

 

 

10000SB0009sam006- 124 -LRB100 06347 HLH 26817 a

1        the Internal Revenue Code;
2            (Q) For taxable year 1999 and thereafter, an amount
3        equal to the amount of any (i) distributions, to the
4        extent includible in gross income for federal income
5        tax purposes, made to the taxpayer because of his or
6        her status as a victim of persecution for racial or
7        religious reasons by Nazi Germany or any other Axis
8        regime or as an heir of the victim and (ii) items of
9        income, to the extent includible in gross income for
10        federal income tax purposes, attributable to, derived
11        from or in any way related to assets stolen from,
12        hidden from, or otherwise lost to a victim of
13        persecution for racial or religious reasons by Nazi
14        Germany or any other Axis regime immediately prior to,
15        during, and immediately after World War II, including,
16        but not limited to, interest on the proceeds receivable
17        as insurance under policies issued to a victim of
18        persecution for racial or religious reasons by Nazi
19        Germany or any other Axis regime by European insurance
20        companies immediately prior to and during World War II;
21        provided, however, this subtraction from federal
22        adjusted gross income does not apply to assets acquired
23        with such assets or with the proceeds from the sale of
24        such assets; provided, further, this paragraph shall
25        only apply to a taxpayer who was the first recipient of
26        such assets after their recovery and who is a victim of

 

 

10000SB0009sam006- 125 -LRB100 06347 HLH 26817 a

1        persecution for racial or religious reasons by Nazi
2        Germany or any other Axis regime or as an heir of the
3        victim. The amount of and the eligibility for any
4        public assistance, benefit, or similar entitlement is
5        not affected by the inclusion of items (i) and (ii) of
6        this paragraph in gross income for federal income tax
7        purposes. This paragraph is exempt from the provisions
8        of Section 250;
9            (R) For taxable years 2001 and thereafter, for the
10        taxable year in which the bonus depreciation deduction
11        is taken on the taxpayer's federal income tax return
12        under subsection (k) of Section 168 of the Internal
13        Revenue Code and for each applicable taxable year
14        thereafter, an amount equal to "x", where:
15                (1) "y" equals the amount of the depreciation
16            deduction taken for the taxable year on the
17            taxpayer's federal income tax return on property
18            for which the bonus depreciation deduction was
19            taken in any year under subsection (k) of Section
20            168 of the Internal Revenue Code, but not including
21            the bonus depreciation deduction;
22                (2) for taxable years ending on or before
23            December 31, 2005, "x" equals "y" multiplied by 30
24            and then divided by 70 (or "y" multiplied by
25            0.429); and
26                (3) for taxable years ending after December

 

 

10000SB0009sam006- 126 -LRB100 06347 HLH 26817 a

1            31, 2005:
2                    (i) for property on which a bonus
3                depreciation deduction of 30% of the adjusted
4                basis was taken, "x" equals "y" multiplied by
5                30 and then divided by 70 (or "y" multiplied by
6                0.429); and
7                    (ii) for property on which a bonus
8                depreciation deduction of 50% of the adjusted
9                basis was taken, "x" equals "y" multiplied by
10                1.0.
11            The aggregate amount deducted under this
12        subparagraph in all taxable years for any one piece of
13        property may not exceed the amount of the bonus
14        depreciation deduction taken on that property on the
15        taxpayer's federal income tax return under subsection
16        (k) of Section 168 of the Internal Revenue Code. This
17        subparagraph (R) is exempt from the provisions of
18        Section 250;
19            (S) If the taxpayer sells, transfers, abandons, or
20        otherwise disposes of property for which the taxpayer
21        was required in any taxable year to make an addition
22        modification under subparagraph (G-10), then an amount
23        equal to that addition modification.
24            If the taxpayer continues to own property through
25        the last day of the last tax year for which the
26        taxpayer may claim a depreciation deduction for

 

 

10000SB0009sam006- 127 -LRB100 06347 HLH 26817 a

1        federal income tax purposes and for which the taxpayer
2        was required in any taxable year to make an addition
3        modification under subparagraph (G-10), then an amount
4        equal to that addition modification.
5            The taxpayer is allowed to take the deduction under
6        this subparagraph only once with respect to any one
7        piece of property.
8            This subparagraph (S) is exempt from the
9        provisions of Section 250;
10            (T) The amount of (i) any interest income (net of
11        the deductions allocable thereto) taken into account
12        for the taxable year with respect to a transaction with
13        a taxpayer that is required to make an addition
14        modification with respect to such transaction under
15        Section 203(a)(2)(D-17), 203(b)(2)(E-12),
16        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
17        the amount of such addition modification and (ii) any
18        income from intangible property (net of the deductions
19        allocable thereto) taken into account for the taxable
20        year with respect to a transaction with a taxpayer that
21        is required to make an addition modification with
22        respect to such transaction under Section
23        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
24        203(d)(2)(D-8), but not to exceed the amount of such
25        addition modification. This subparagraph (T) is exempt
26        from the provisions of Section 250;

 

 

10000SB0009sam006- 128 -LRB100 06347 HLH 26817 a

1            (U) An amount equal to the interest income taken
2        into account for the taxable year (net of the
3        deductions allocable thereto) with respect to
4        transactions with (i) a foreign person who would be a
5        member of the taxpayer's unitary business group but for
6        the fact the foreign person's business activity
7        outside the United States is 80% or more of that
8        person's total business activity and (ii) for taxable
9        years ending on or after December 31, 2008, to a person
10        who would be a member of the same unitary business
11        group but for the fact that the person is prohibited
12        under Section 1501(a)(27) from being included in the
13        unitary business group because he or she is ordinarily
14        required to apportion business income under different
15        subsections of Section 304, but not to exceed the
16        addition modification required to be made for the same
17        taxable year under Section 203(c)(2)(G-12) for
18        interest paid, accrued, or incurred, directly or
19        indirectly, to the same person. This subparagraph (U)
20        is exempt from the provisions of Section 250;
21            (V) An amount equal to the income from intangible
22        property taken into account for the taxable year (net
23        of the deductions allocable thereto) with respect to
24        transactions with (i) a foreign person who would be a
25        member of the taxpayer's unitary business group but for
26        the fact that the foreign person's business activity

 

 

10000SB0009sam006- 129 -LRB100 06347 HLH 26817 a

1        outside the United States is 80% or more of that
2        person's total business activity and (ii) for taxable
3        years ending on or after December 31, 2008, to a person
4        who would be a member of the same unitary business
5        group but for the fact that the person is prohibited
6        under Section 1501(a)(27) from being included in the
7        unitary business group because he or she is ordinarily
8        required to apportion business income under different
9        subsections of Section 304, but not to exceed the
10        addition modification required to be made for the same
11        taxable year under Section 203(c)(2)(G-13) for
12        intangible expenses and costs paid, accrued, or
13        incurred, directly or indirectly, to the same foreign
14        person. This subparagraph (V) is exempt from the
15        provisions of Section 250;
16            (W) in the case of an estate, an amount equal to
17        all amounts included in such total pursuant to the
18        provisions of Section 111 of the Internal Revenue Code
19        as a recovery of items previously deducted by the
20        decedent from adjusted gross income in the computation
21        of taxable income. This subparagraph (W) is exempt from
22        Section 250;
23            (X) an amount equal to the refund included in such
24        total of any tax deducted for federal income tax
25        purposes, to the extent that deduction was added back
26        under subparagraph (F). This subparagraph (X) is

 

 

10000SB0009sam006- 130 -LRB100 06347 HLH 26817 a

1        exempt from the provisions of Section 250; and
2            (Y) For taxable years ending on or after December
3        31, 2011, in the case of a taxpayer who was required to
4        add back any insurance premiums under Section
5        203(c)(2)(G-14), such taxpayer may elect to subtract
6        that part of a reimbursement received from the
7        insurance company equal to the amount of the expense or
8        loss (including expenses incurred by the insurance
9        company) that would have been taken into account as a
10        deduction for federal income tax purposes if the
11        expense or loss had been uninsured. If a taxpayer makes
12        the election provided for by this subparagraph (Y), the
13        insurer to which the premiums were paid must add back
14        to income the amount subtracted by the taxpayer
15        pursuant to this subparagraph (Y). This subparagraph
16        (Y) is exempt from the provisions of Section 250.
17        (3) Limitation. The amount of any modification
18    otherwise required under this subsection shall, under
19    regulations prescribed by the Department, be adjusted by
20    any amounts included therein which were properly paid,
21    credited, or required to be distributed, or permanently set
22    aside for charitable purposes pursuant to Internal Revenue
23    Code Section 642(c) during the taxable year.
 
24    (d) Partnerships.
25        (1) In general. In the case of a partnership, base

 

 

10000SB0009sam006- 131 -LRB100 06347 HLH 26817 a

1    income means an amount equal to the taxpayer's taxable
2    income for the taxable year as modified by paragraph (2).
3        (2) Modifications. The taxable income referred to in
4    paragraph (1) shall be modified by adding thereto the sum
5    of the following amounts:
6            (A) An amount equal to all amounts paid or accrued
7        to the taxpayer as interest or dividends during the
8        taxable year to the extent excluded from gross income
9        in the computation of taxable income;
10            (B) An amount equal to the amount of tax imposed by
11        this Act to the extent deducted from gross income for
12        the taxable year;
13            (C) The amount of deductions allowed to the
14        partnership pursuant to Section 707 (c) of the Internal
15        Revenue Code in calculating its taxable income;
16            (D) An amount equal to the amount of the capital
17        gain deduction allowable under the Internal Revenue
18        Code, to the extent deducted from gross income in the
19        computation of taxable income;
20            (D-5) For taxable years 2001 and thereafter, an
21        amount equal to the bonus depreciation deduction taken
22        on the taxpayer's federal income tax return for the
23        taxable year under subsection (k) of Section 168 of the
24        Internal Revenue Code;
25            (D-6) If the taxpayer sells, transfers, abandons,
26        or otherwise disposes of property for which the

 

 

10000SB0009sam006- 132 -LRB100 06347 HLH 26817 a

1        taxpayer was required in any taxable year to make an
2        addition modification under subparagraph (D-5), then
3        an amount equal to the aggregate amount of the
4        deductions taken in all taxable years under
5        subparagraph (O) with respect to that property.
6            If the taxpayer continues to own property through
7        the last day of the last tax year for which the
8        taxpayer may claim a depreciation deduction for
9        federal income tax purposes and for which the taxpayer
10        was allowed in any taxable year to make a subtraction
11        modification under subparagraph (O), then an amount
12        equal to that subtraction modification.
13            The taxpayer is required to make the addition
14        modification under this subparagraph only once with
15        respect to any one piece of property;
16            (D-7) An amount equal to the amount otherwise
17        allowed as a deduction in computing base income for
18        interest paid, accrued, or incurred, directly or
19        indirectly, (i) for taxable years ending on or after
20        December 31, 2004, to a foreign person who would be a
21        member of the same unitary business group but for the
22        fact the foreign person's business activity outside
23        the United States is 80% or more of the foreign
24        person's total business activity and (ii) for taxable
25        years ending on or after December 31, 2008, to a person
26        who would be a member of the same unitary business

 

 

10000SB0009sam006- 133 -LRB100 06347 HLH 26817 a

1        group but for the fact that the person is prohibited
2        under Section 1501(a)(27) from being included in the
3        unitary business group because he or she is ordinarily
4        required to apportion business income under different
5        subsections of Section 304. The addition modification
6        required by this subparagraph shall be reduced to the
7        extent that dividends were included in base income of
8        the unitary group for the same taxable year and
9        received by the taxpayer or by a member of the
10        taxpayer's unitary business group (including amounts
11        included in gross income pursuant to Sections 951
12        through 964 of the Internal Revenue Code and amounts
13        included in gross income under Section 78 of the
14        Internal Revenue Code) with respect to the stock of the
15        same person to whom the interest was paid, accrued, or
16        incurred.
17            This paragraph shall not apply to the following:
18                (i) an item of interest paid, accrued, or
19            incurred, directly or indirectly, to a person who
20            is subject in a foreign country or state, other
21            than a state which requires mandatory unitary
22            reporting, to a tax on or measured by net income
23            with respect to such interest; or
24                (ii) an item of interest paid, accrued, or
25            incurred, directly or indirectly, to a person if
26            the taxpayer can establish, based on a

 

 

10000SB0009sam006- 134 -LRB100 06347 HLH 26817 a

1            preponderance of the evidence, both of the
2            following:
3                    (a) the person, during the same taxable
4                year, paid, accrued, or incurred, the interest
5                to a person that is not a related member, and
6                    (b) the transaction giving rise to the
7                interest expense between the taxpayer and the
8                person did not have as a principal purpose the
9                avoidance of Illinois income tax, and is paid
10                pursuant to a contract or agreement that
11                reflects an arm's-length interest rate and
12                terms; or
13                (iii) the taxpayer can establish, based on
14            clear and convincing evidence, that the interest
15            paid, accrued, or incurred relates to a contract or
16            agreement entered into at arm's-length rates and
17            terms and the principal purpose for the payment is
18            not federal or Illinois tax avoidance; or
19                (iv) an item of interest paid, accrued, or
20            incurred, directly or indirectly, to a person if
21            the taxpayer establishes by clear and convincing
22            evidence that the adjustments are unreasonable; or
23            if the taxpayer and the Director agree in writing
24            to the application or use of an alternative method
25            of apportionment under Section 304(f).
26                Nothing in this subsection shall preclude the

 

 

10000SB0009sam006- 135 -LRB100 06347 HLH 26817 a

1            Director from making any other adjustment
2            otherwise allowed under Section 404 of this Act for
3            any tax year beginning after the effective date of
4            this amendment provided such adjustment is made
5            pursuant to regulation adopted by the Department
6            and such regulations provide methods and standards
7            by which the Department will utilize its authority
8            under Section 404 of this Act; and
9            (D-8) An amount equal to the amount of intangible
10        expenses and costs otherwise allowed as a deduction in
11        computing base income, and that were paid, accrued, or
12        incurred, directly or indirectly, (i) for taxable
13        years ending on or after December 31, 2004, to a
14        foreign person who would be a member of the same
15        unitary business group but for the fact that the
16        foreign person's business activity outside the United
17        States is 80% or more of that person's total business
18        activity and (ii) for taxable years ending on or after
19        December 31, 2008, to a person who would be a member of
20        the same unitary business group but for the fact that
21        the person is prohibited under Section 1501(a)(27)
22        from being included in the unitary business group
23        because he or she is ordinarily required to apportion
24        business income under different subsections of Section
25        304. The addition modification required by this
26        subparagraph shall be reduced to the extent that

 

 

10000SB0009sam006- 136 -LRB100 06347 HLH 26817 a

1        dividends were included in base income of the unitary
2        group for the same taxable year and received by the
3        taxpayer or by a member of the taxpayer's unitary
4        business group (including amounts included in gross
5        income pursuant to Sections 951 through 964 of the
6        Internal Revenue Code and amounts included in gross
7        income under Section 78 of the Internal Revenue Code)
8        with respect to the stock of the same person to whom
9        the intangible expenses and costs were directly or
10        indirectly paid, incurred or accrued. The preceding
11        sentence shall not apply to the extent that the same
12        dividends caused a reduction to the addition
13        modification required under Section 203(d)(2)(D-7) of
14        this Act. As used in this subparagraph, the term
15        "intangible expenses and costs" includes (1) expenses,
16        losses, and costs for, or related to, the direct or
17        indirect acquisition, use, maintenance or management,
18        ownership, sale, exchange, or any other disposition of
19        intangible property; (2) losses incurred, directly or
20        indirectly, from factoring transactions or discounting
21        transactions; (3) royalty, patent, technical, and
22        copyright fees; (4) licensing fees; and (5) other
23        similar expenses and costs. For purposes of this
24        subparagraph, "intangible property" includes patents,
25        patent applications, trade names, trademarks, service
26        marks, copyrights, mask works, trade secrets, and

 

 

10000SB0009sam006- 137 -LRB100 06347 HLH 26817 a

1        similar types of intangible assets;
2            This paragraph shall not apply to the following:
3                (i) any item of intangible expenses or costs
4            paid, accrued, or incurred, directly or
5            indirectly, from a transaction with a person who is
6            subject in a foreign country or state, other than a
7            state which requires mandatory unitary reporting,
8            to a tax on or measured by net income with respect
9            to such item; or
10                (ii) any item of intangible expense or cost
11            paid, accrued, or incurred, directly or
12            indirectly, if the taxpayer can establish, based
13            on a preponderance of the evidence, both of the
14            following:
15                    (a) the person during the same taxable
16                year paid, accrued, or incurred, the
17                intangible expense or cost to a person that is
18                not a related member, and
19                    (b) the transaction giving rise to the
20                intangible expense or cost between the
21                taxpayer and the person did not have as a
22                principal purpose the avoidance of Illinois
23                income tax, and is paid pursuant to a contract
24                or agreement that reflects arm's-length terms;
25                or
26                (iii) any item of intangible expense or cost

 

 

10000SB0009sam006- 138 -LRB100 06347 HLH 26817 a

1            paid, accrued, or incurred, directly or
2            indirectly, from a transaction with a person if the
3            taxpayer establishes by clear and convincing
4            evidence, that the adjustments are unreasonable;
5            or if the taxpayer and the Director agree in
6            writing to the application or use of an alternative
7            method of apportionment under Section 304(f);
8                Nothing in this subsection shall preclude the
9            Director from making any other adjustment
10            otherwise allowed under Section 404 of this Act for
11            any tax year beginning after the effective date of
12            this amendment provided such adjustment is made
13            pursuant to regulation adopted by the Department
14            and such regulations provide methods and standards
15            by which the Department will utilize its authority
16            under Section 404 of this Act;
17            (D-9) For taxable years ending on or after December
18        31, 2008, an amount equal to the amount of insurance
19        premium expenses and costs otherwise allowed as a
20        deduction in computing base income, and that were paid,
21        accrued, or incurred, directly or indirectly, to a
22        person who would be a member of the same unitary
23        business group but for the fact that the person is
24        prohibited under Section 1501(a)(27) from being
25        included in the unitary business group because he or
26        she is ordinarily required to apportion business

 

 

10000SB0009sam006- 139 -LRB100 06347 HLH 26817 a

1        income under different subsections of Section 304. The
2        addition modification required by this subparagraph
3        shall be reduced to the extent that dividends were
4        included in base income of the unitary group for the
5        same taxable year and received by the taxpayer or by a
6        member of the taxpayer's unitary business group
7        (including amounts included in gross income under
8        Sections 951 through 964 of the Internal Revenue Code
9        and amounts included in gross income under Section 78
10        of the Internal Revenue Code) with respect to the stock
11        of the same person to whom the premiums and costs were
12        directly or indirectly paid, incurred, or accrued. The
13        preceding sentence does not apply to the extent that
14        the same dividends caused a reduction to the addition
15        modification required under Section 203(d)(2)(D-7) or
16        Section 203(d)(2)(D-8) of this Act;
17            (D-10) An amount equal to the credit allowable to
18        the taxpayer under Section 218(a) of this Act,
19        determined without regard to Section 218(c) of this
20        Act;
21            (D-11) For taxable years beginning on or after
22        January 1, 2017, an amount equal to the deduction
23        allowed under Section 199 of the Internal Revenue Code
24        for the taxable year;
25    and by deducting from the total so obtained the following
26    amounts:

 

 

10000SB0009sam006- 140 -LRB100 06347 HLH 26817 a

1            (E) The valuation limitation amount;
2            (F) An amount equal to the amount of any tax
3        imposed by this Act which was refunded to the taxpayer
4        and included in such total for the taxable year;
5            (G) An amount equal to all amounts included in
6        taxable income as modified by subparagraphs (A), (B),
7        (C) and (D) which are exempt from taxation by this
8        State either by reason of its statutes or Constitution
9        or by reason of the Constitution, treaties or statutes
10        of the United States; provided that, in the case of any
11        statute of this State that exempts income derived from
12        bonds or other obligations from the tax imposed under
13        this Act, the amount exempted shall be the interest net
14        of bond premium amortization;
15            (H) Any income of the partnership which
16        constitutes personal service income as defined in
17        Section 1348 (b) (1) of the Internal Revenue Code (as
18        in effect December 31, 1981) or a reasonable allowance
19        for compensation paid or accrued for services rendered
20        by partners to the partnership, whichever is greater;
21        this subparagraph (H) is exempt from the provisions of
22        Section 250;
23            (I) An amount equal to all amounts of income
24        distributable to an entity subject to the Personal
25        Property Tax Replacement Income Tax imposed by
26        subsections (c) and (d) of Section 201 of this Act

 

 

10000SB0009sam006- 141 -LRB100 06347 HLH 26817 a

1        including amounts distributable to organizations
2        exempt from federal income tax by reason of Section
3        501(a) of the Internal Revenue Code; this subparagraph
4        (I) is exempt from the provisions of Section 250;
5            (J) With the exception of any amounts subtracted
6        under subparagraph (G), an amount equal to the sum of
7        all amounts disallowed as deductions by (i) Sections
8        171(a) (2), and 265(2) of the Internal Revenue Code,
9        and all amounts of expenses allocable to interest and
10        disallowed as deductions by Section 265(1) of the
11        Internal Revenue Code; and (ii) for taxable years
12        ending on or after August 13, 1999, Sections 171(a)(2),
13        265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
14        Code, plus, (iii) for taxable years ending on or after
15        December 31, 2011, Section 45G(e)(3) of the Internal
16        Revenue Code and, for taxable years ending on or after
17        December 31, 2008, any amount included in gross income
18        under Section 87 of the Internal Revenue Code; the
19        provisions of this subparagraph are exempt from the
20        provisions of Section 250;
21            (K) An amount equal to those dividends included in
22        such total which were paid by a corporation which
23        conducts business operations in a River Edge
24        Redevelopment Zone or zones created under the River
25        Edge Redevelopment Zone Act and conducts substantially
26        all of its operations from a River Edge Redevelopment

 

 

10000SB0009sam006- 142 -LRB100 06347 HLH 26817 a

1        Zone or zones. This subparagraph (K) is exempt from the
2        provisions of Section 250;
3            (L) An amount equal to any contribution made to a
4        job training project established pursuant to the Real
5        Property Tax Increment Allocation Redevelopment Act;
6            (M) An amount equal to those dividends included in
7        such total that were paid by a corporation that
8        conducts business operations in a federally designated
9        Foreign Trade Zone or Sub-Zone and that is designated a
10        High Impact Business located in Illinois; provided
11        that dividends eligible for the deduction provided in
12        subparagraph (K) of paragraph (2) of this subsection
13        shall not be eligible for the deduction provided under
14        this subparagraph (M);
15            (N) An amount equal to the amount of the deduction
16        used to compute the federal income tax credit for
17        restoration of substantial amounts held under claim of
18        right for the taxable year pursuant to Section 1341 of
19        the Internal Revenue Code;
20            (O) For taxable years 2001 and thereafter, for the
21        taxable year in which the bonus depreciation deduction
22        is taken on the taxpayer's federal income tax return
23        under subsection (k) of Section 168 of the Internal
24        Revenue Code and for each applicable taxable year
25        thereafter, an amount equal to "x", where:
26                (1) "y" equals the amount of the depreciation

 

 

10000SB0009sam006- 143 -LRB100 06347 HLH 26817 a

1            deduction taken for the taxable year on the
2            taxpayer's federal income tax return on property
3            for which the bonus depreciation deduction was
4            taken in any year under subsection (k) of Section
5            168 of the Internal Revenue Code, but not including
6            the bonus depreciation deduction;
7                (2) for taxable years ending on or before
8            December 31, 2005, "x" equals "y" multiplied by 30
9            and then divided by 70 (or "y" multiplied by
10            0.429); and
11                (3) for taxable years ending after December
12            31, 2005:
13                    (i) for property on which a bonus
14                depreciation deduction of 30% of the adjusted
15                basis was taken, "x" equals "y" multiplied by
16                30 and then divided by 70 (or "y" multiplied by
17                0.429); and
18                    (ii) for property on which a bonus
19                depreciation deduction of 50% of the adjusted
20                basis was taken, "x" equals "y" multiplied by
21                1.0.
22            The aggregate amount deducted under this
23        subparagraph in all taxable years for any one piece of
24        property may not exceed the amount of the bonus
25        depreciation deduction taken on that property on the
26        taxpayer's federal income tax return under subsection

 

 

10000SB0009sam006- 144 -LRB100 06347 HLH 26817 a

1        (k) of Section 168 of the Internal Revenue Code. This
2        subparagraph (O) is exempt from the provisions of
3        Section 250;
4            (P) If the taxpayer sells, transfers, abandons, or
5        otherwise disposes of property for which the taxpayer
6        was required in any taxable year to make an addition
7        modification under subparagraph (D-5), then an amount
8        equal to that addition modification.
9            If the taxpayer continues to own property through
10        the last day of the last tax year for which the
11        taxpayer may claim a depreciation deduction for
12        federal income tax purposes and for which the taxpayer
13        was required in any taxable year to make an addition
14        modification under subparagraph (D-5), then an amount
15        equal to that addition modification.
16            The taxpayer is allowed to take the deduction under
17        this subparagraph only once with respect to any one
18        piece of property.
19            This subparagraph (P) is exempt from the
20        provisions of Section 250;
21            (Q) The amount of (i) any interest income (net of
22        the deductions allocable thereto) taken into account
23        for the taxable year with respect to a transaction with
24        a taxpayer that is required to make an addition
25        modification with respect to such transaction under
26        Section 203(a)(2)(D-17), 203(b)(2)(E-12),

 

 

10000SB0009sam006- 145 -LRB100 06347 HLH 26817 a

1        203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
2        the amount of such addition modification and (ii) any
3        income from intangible property (net of the deductions
4        allocable thereto) taken into account for the taxable
5        year with respect to a transaction with a taxpayer that
6        is required to make an addition modification with
7        respect to such transaction under Section
8        203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
9        203(d)(2)(D-8), but not to exceed the amount of such
10        addition modification. This subparagraph (Q) is exempt
11        from Section 250;
12            (R) An amount equal to the interest income taken
13        into account for the taxable year (net of the
14        deductions allocable thereto) with respect to
15        transactions with (i) a foreign person who would be a
16        member of the taxpayer's unitary business group but for
17        the fact that the foreign person's business activity
18        outside the United States is 80% or more of that
19        person's total business activity and (ii) for taxable
20        years ending on or after December 31, 2008, to a person
21        who would be a member of the same unitary business
22        group but for the fact that the person is prohibited
23        under Section 1501(a)(27) from being included in the
24        unitary business group because he or she is ordinarily
25        required to apportion business income under different
26        subsections of Section 304, but not to exceed the

 

 

10000SB0009sam006- 146 -LRB100 06347 HLH 26817 a

1        addition modification required to be made for the same
2        taxable year under Section 203(d)(2)(D-7) for interest
3        paid, accrued, or incurred, directly or indirectly, to
4        the same person. This subparagraph (R) is exempt from
5        Section 250;
6            (S) An amount equal to the income from intangible
7        property taken into account for the taxable year (net
8        of the deductions allocable thereto) with respect to
9        transactions with (i) a foreign person who would be a
10        member of the taxpayer's unitary business group but for
11        the fact that the foreign person's business activity
12        outside the United States is 80% or more of that
13        person's total business activity and (ii) for taxable
14        years ending on or after December 31, 2008, to a person
15        who would be a member of the same unitary business
16        group but for the fact that the person is prohibited
17        under Section 1501(a)(27) from being included in the
18        unitary business group because he or she is ordinarily
19        required to apportion business income under different
20        subsections of Section 304, but not to exceed the
21        addition modification required to be made for the same
22        taxable year under Section 203(d)(2)(D-8) for
23        intangible expenses and costs paid, accrued, or
24        incurred, directly or indirectly, to the same person.
25        This subparagraph (S) is exempt from Section 250; and
26            (T) For taxable years ending on or after December

 

 

10000SB0009sam006- 147 -LRB100 06347 HLH 26817 a

1        31, 2011, in the case of a taxpayer who was required to
2        add back any insurance premiums under Section
3        203(d)(2)(D-9), such taxpayer may elect to subtract
4        that part of a reimbursement received from the
5        insurance company equal to the amount of the expense or
6        loss (including expenses incurred by the insurance
7        company) that would have been taken into account as a
8        deduction for federal income tax purposes if the
9        expense or loss had been uninsured. If a taxpayer makes
10        the election provided for by this subparagraph (T), the
11        insurer to which the premiums were paid must add back
12        to income the amount subtracted by the taxpayer
13        pursuant to this subparagraph (T). This subparagraph
14        (T) is exempt from the provisions of Section 250.
 
15    (e) Gross income; adjusted gross income; taxable income.
16        (1) In general. Subject to the provisions of paragraph
17    (2) and subsection (b) (3), for purposes of this Section
18    and Section 803(e), a taxpayer's gross income, adjusted
19    gross income, or taxable income for the taxable year shall
20    mean the amount of gross income, adjusted gross income or
21    taxable income properly reportable for federal income tax
22    purposes for the taxable year under the provisions of the
23    Internal Revenue Code. Taxable income may be less than
24    zero. However, for taxable years ending on or after
25    December 31, 1986, net operating loss carryforwards from

 

 

10000SB0009sam006- 148 -LRB100 06347 HLH 26817 a

1    taxable years ending prior to December 31, 1986, may not
2    exceed the sum of federal taxable income for the taxable
3    year before net operating loss deduction, plus the excess
4    of addition modifications over subtraction modifications
5    for the taxable year. For taxable years ending prior to
6    December 31, 1986, taxable income may never be an amount in
7    excess of the net operating loss for the taxable year as
8    defined in subsections (c) and (d) of Section 172 of the
9    Internal Revenue Code, provided that when taxable income of
10    a corporation (other than a Subchapter S corporation),
11    trust, or estate is less than zero and addition
12    modifications, other than those provided by subparagraph
13    (E) of paragraph (2) of subsection (b) for corporations or
14    subparagraph (E) of paragraph (2) of subsection (c) for
15    trusts and estates, exceed subtraction modifications, an
16    addition modification must be made under those
17    subparagraphs for any other taxable year to which the
18    taxable income less than zero (net operating loss) is
19    applied under Section 172 of the Internal Revenue Code or
20    under subparagraph (E) of paragraph (2) of this subsection
21    (e) applied in conjunction with Section 172 of the Internal
22    Revenue Code.
23        (2) Special rule. For purposes of paragraph (1) of this
24    subsection, the taxable income properly reportable for
25    federal income tax purposes shall mean:
26            (A) Certain life insurance companies. In the case

 

 

10000SB0009sam006- 149 -LRB100 06347 HLH 26817 a

1        of a life insurance company subject to the tax imposed
2        by Section 801 of the Internal Revenue Code, life
3        insurance company taxable income, plus the amount of
4        distribution from pre-1984 policyholder surplus
5        accounts as calculated under Section 815a of the
6        Internal Revenue Code;
7            (B) Certain other insurance companies. In the case
8        of mutual insurance companies subject to the tax
9        imposed by Section 831 of the Internal Revenue Code,
10        insurance company taxable income;
11            (C) Regulated investment companies. In the case of
12        a regulated investment company subject to the tax
13        imposed by Section 852 of the Internal Revenue Code,
14        investment company taxable income;
15            (D) Real estate investment trusts. In the case of a
16        real estate investment trust subject to the tax imposed
17        by Section 857 of the Internal Revenue Code, real
18        estate investment trust taxable income;
19            (E) Consolidated corporations. In the case of a
20        corporation which is a member of an affiliated group of
21        corporations filing a consolidated income tax return
22        for the taxable year for federal income tax purposes,
23        taxable income determined as if such corporation had
24        filed a separate return for federal income tax purposes
25        for the taxable year and each preceding taxable year
26        for which it was a member of an affiliated group. For

 

 

10000SB0009sam006- 150 -LRB100 06347 HLH 26817 a

1        purposes of this subparagraph, the taxpayer's separate
2        taxable income shall be determined as if the election
3        provided by Section 243(b) (2) of the Internal Revenue
4        Code had been in effect for all such years;
5            (F) Cooperatives. In the case of a cooperative
6        corporation or association, the taxable income of such
7        organization determined in accordance with the
8        provisions of Section 1381 through 1388 of the Internal
9        Revenue Code, but without regard to the prohibition
10        against offsetting losses from patronage activities
11        against income from nonpatronage activities; except
12        that a cooperative corporation or association may make
13        an election to follow its federal income tax treatment
14        of patronage losses and nonpatronage losses. In the
15        event such election is made, such losses shall be
16        computed and carried over in a manner consistent with
17        subsection (a) of Section 207 of this Act and
18        apportioned by the apportionment factor reported by
19        the cooperative on its Illinois income tax return filed
20        for the taxable year in which the losses are incurred.
21        The election shall be effective for all taxable years
22        with original returns due on or after the date of the
23        election. In addition, the cooperative may file an
24        amended return or returns, as allowed under this Act,
25        to provide that the election shall be effective for
26        losses incurred or carried forward for taxable years

 

 

10000SB0009sam006- 151 -LRB100 06347 HLH 26817 a

1        occurring prior to the date of the election. Once made,
2        the election may only be revoked upon approval of the
3        Director. The Department shall adopt rules setting
4        forth requirements for documenting the elections and
5        any resulting Illinois net loss and the standards to be
6        used by the Director in evaluating requests to revoke
7        elections. Public Act 96-932 is declaratory of
8        existing law;
9            (G) Subchapter S corporations. In the case of: (i)
10        a Subchapter S corporation for which there is in effect
11        an election for the taxable year under Section 1362 of
12        the Internal Revenue Code, the taxable income of such
13        corporation determined in accordance with Section
14        1363(b) of the Internal Revenue Code, except that
15        taxable income shall take into account those items
16        which are required by Section 1363(b)(1) of the
17        Internal Revenue Code to be separately stated; and (ii)
18        a Subchapter S corporation for which there is in effect
19        a federal election to opt out of the provisions of the
20        Subchapter S Revision Act of 1982 and have applied
21        instead the prior federal Subchapter S rules as in
22        effect on July 1, 1982, the taxable income of such
23        corporation determined in accordance with the federal
24        Subchapter S rules as in effect on July 1, 1982; and
25            (H) Partnerships. In the case of a partnership,
26        taxable income determined in accordance with Section

 

 

10000SB0009sam006- 152 -LRB100 06347 HLH 26817 a

1        703 of the Internal Revenue Code, except that taxable
2        income shall take into account those items which are
3        required by Section 703(a)(1) to be separately stated
4        but which would be taken into account by an individual
5        in calculating his taxable income.
6        (3) Recapture of business expenses on disposition of
7    asset or business. Notwithstanding any other law to the
8    contrary, if in prior years income from an asset or
9    business has been classified as business income and in a
10    later year is demonstrated to be non-business income, then
11    all expenses, without limitation, deducted in such later
12    year and in the 2 immediately preceding taxable years
13    related to that asset or business that generated the
14    non-business income shall be added back and recaptured as
15    business income in the year of the disposition of the asset
16    or business. Such amount shall be apportioned to Illinois
17    using the greater of the apportionment fraction computed
18    for the business under Section 304 of this Act for the
19    taxable year or the average of the apportionment fractions
20    computed for the business under Section 304 of this Act for
21    the taxable year and for the 2 immediately preceding
22    taxable years.
 
23    (f) Valuation limitation amount.
24        (1) In general. The valuation limitation amount
25    referred to in subsections (a) (2) (G), (c) (2) (I) and

 

 

10000SB0009sam006- 153 -LRB100 06347 HLH 26817 a

1    (d)(2) (E) is an amount equal to:
2            (A) The sum of the pre-August 1, 1969 appreciation
3        amounts (to the extent consisting of gain reportable
4        under the provisions of Section 1245 or 1250 of the
5        Internal Revenue Code) for all property in respect of
6        which such gain was reported for the taxable year; plus
7            (B) The lesser of (i) the sum of the pre-August 1,
8        1969 appreciation amounts (to the extent consisting of
9        capital gain) for all property in respect of which such
10        gain was reported for federal income tax purposes for
11        the taxable year, or (ii) the net capital gain for the
12        taxable year, reduced in either case by any amount of
13        such gain included in the amount determined under
14        subsection (a) (2) (F) or (c) (2) (H).
15        (2) Pre-August 1, 1969 appreciation amount.
16            (A) If the fair market value of property referred
17        to in paragraph (1) was readily ascertainable on August
18        1, 1969, the pre-August 1, 1969 appreciation amount for
19        such property is the lesser of (i) the excess of such
20        fair market value over the taxpayer's basis (for
21        determining gain) for such property on that date
22        (determined under the Internal Revenue Code as in
23        effect on that date), or (ii) the total gain realized
24        and reportable for federal income tax purposes in
25        respect of the sale, exchange or other disposition of
26        such property.

 

 

10000SB0009sam006- 154 -LRB100 06347 HLH 26817 a

1            (B) If the fair market value of property referred
2        to in paragraph (1) was not readily ascertainable on
3        August 1, 1969, the pre-August 1, 1969 appreciation
4        amount for such property is that amount which bears the
5        same ratio to the total gain reported in respect of the
6        property for federal income tax purposes for the
7        taxable year, as the number of full calendar months in
8        that part of the taxpayer's holding period for the
9        property ending July 31, 1969 bears to the number of
10        full calendar months in the taxpayer's entire holding
11        period for the property.
12            (C) The Department shall prescribe such
13        regulations as may be necessary to carry out the
14        purposes of this paragraph.
 
15    (g) Double deductions. Unless specifically provided
16otherwise, nothing in this Section shall permit the same item
17to be deducted more than once.
 
18    (h) Legislative intention. Except as expressly provided by
19this Section there shall be no modifications or limitations on
20the amounts of income, gain, loss or deduction taken into
21account in determining gross income, adjusted gross income or
22taxable income for federal income tax purposes for the taxable
23year, or in the amount of such items entering into the
24computation of base income and net income under this Act for

 

 

10000SB0009sam006- 155 -LRB100 06347 HLH 26817 a

1such taxable year, whether in respect of property values as of
2August 1, 1969 or otherwise.
3(Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,
4eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;
596-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.
66-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,
7eff. 8-23-11; 97-905, eff. 8-7-12.)
 
8    (35 ILCS 5/204)  (from Ch. 120, par. 2-204)
9    Sec. 204. Standard Exemption.
10    (a) Allowance of exemption. In computing net income under
11this Act, there shall be allowed as an exemption the sum of the
12amounts determined under subsections (b), (c) and (d),
13multiplied by a fraction the numerator of which is the amount
14of the taxpayer's base income allocable to this State for the
15taxable year and the denominator of which is the taxpayer's
16total base income for the taxable year.
17    (b) Basic amount. For the purpose of subsection (a) of this
18Section, except as provided by subsection (a) of Section 205
19and in this subsection, each taxpayer shall be allowed a basic
20amount of $1000, except that for corporations the basic amount
21shall be zero for tax years ending on or after December 31,
222003, and for individuals the basic amount shall be:
23        (1) for taxable years ending on or after December 31,
24    1998 and prior to December 31, 1999, $1,300;
25        (2) for taxable years ending on or after December 31,

 

 

10000SB0009sam006- 156 -LRB100 06347 HLH 26817 a

1    1999 and prior to December 31, 2000, $1,650;
2        (3) for taxable years ending on or after December 31,
3    2000 and prior to December 31, 2012, $2,000;
4        (4) for taxable years ending on or after December 31,
5    2012 and prior to December 31, 2013, $2,050;
6        (5) for taxable years ending on or after December 31,
7    2013, $2,050 plus the cost-of-living adjustment under
8    subsection (d-5).
9For taxable years ending on or after December 31, 1992, a
10taxpayer whose Illinois base income exceeds the basic amount
11and who is claimed as a dependent on another person's tax
12return under the Internal Revenue Code shall not be allowed any
13basic amount under this subsection.
14    (c) Additional amount for individuals. In the case of an
15individual taxpayer, there shall be allowed for the purpose of
16subsection (a), in addition to the basic amount provided by
17subsection (b), an additional exemption equal to the basic
18amount for each exemption in excess of one allowable to such
19individual taxpayer for the taxable year under Section 151 of
20the Internal Revenue Code.
21    (d) Additional exemptions for an individual taxpayer and
22his or her spouse. In the case of an individual taxpayer and
23his or her spouse, he or she shall each be allowed additional
24exemptions as follows:
25        (1) Additional exemption for taxpayer or spouse 65
26    years of age or older.

 

 

10000SB0009sam006- 157 -LRB100 06347 HLH 26817 a

1            (A) For taxpayer. An additional exemption of
2        $1,000 for the taxpayer if he or she has attained the
3        age of 65 before the end of the taxable year.
4            (B) For spouse when a joint return is not filed. An
5        additional exemption of $1,000 for the spouse of the
6        taxpayer if a joint return is not made by the taxpayer
7        and his spouse, and if the spouse has attained the age
8        of 65 before the end of such taxable year, and, for the
9        calendar year in which the taxable year of the taxpayer
10        begins, has no gross income and is not the dependent of
11        another taxpayer.
12        (2) Additional exemption for blindness of taxpayer or
13    spouse.
14            (A) For taxpayer. An additional exemption of
15        $1,000 for the taxpayer if he or she is blind at the
16        end of the taxable year.
17            (B) For spouse when a joint return is not filed. An
18        additional exemption of $1,000 for the spouse of the
19        taxpayer if a separate return is made by the taxpayer,
20        and if the spouse is blind and, for the calendar year
21        in which the taxable year of the taxpayer begins, has
22        no gross income and is not the dependent of another
23        taxpayer. For purposes of this paragraph, the
24        determination of whether the spouse is blind shall be
25        made as of the end of the taxable year of the taxpayer;
26        except that if the spouse dies during such taxable year

 

 

10000SB0009sam006- 158 -LRB100 06347 HLH 26817 a

1        such determination shall be made as of the time of such
2        death.
3            (C) Blindness defined. For purposes of this
4        subsection, an individual is blind only if his or her
5        central visual acuity does not exceed 20/200 in the
6        better eye with correcting lenses, or if his or her
7        visual acuity is greater than 20/200 but is accompanied
8        by a limitation in the fields of vision such that the
9        widest diameter of the visual fields subtends an angle
10        no greater than 20 degrees.
11    (d-5) Cost-of-living adjustment. For purposes of item (5)
12of subsection (b), the cost-of-living adjustment for any
13calendar year and for taxable years ending prior to the end of
14the subsequent calendar year is equal to $2,050 times the
15percentage (if any) by which:
16        (1) the Consumer Price Index for the preceding calendar
17    year, exceeds
18        (2) the Consumer Price Index for the calendar year
19    2011.
20    The Consumer Price Index for any calendar year is the
21average of the Consumer Price Index as of the close of the
2212-month period ending on August 31 of that calendar year.
23    The term "Consumer Price Index" means the last Consumer
24Price Index for All Urban Consumers published by the United
25States Department of Labor or any successor agency.
26    If any cost-of-living adjustment is not a multiple of $25,

 

 

10000SB0009sam006- 159 -LRB100 06347 HLH 26817 a

1that adjustment shall be rounded to the next lowest multiple of
2$25.
3    (e) Cross reference. See Article 3 for the manner of
4determining base income allocable to this State.
5    (f) Application of Section 250. Section 250 does not apply
6to the amendments to this Section made by Public Act 90-613.
7    (g) Notwithstanding any other provision of law, for taxable
8years beginning on or after January 1, 2018, no taxpayer may
9claim an exemption under this Section if the taxpayer's
10adjusted gross income for the taxable year exceeds (i)
11$500,000, in the case of spouses filing a joint federal tax
12return or (ii) $250,000, in the case of all other taxpayers.
13(Source: P.A. 97-507, eff. 8-23-11; 97-652, eff. 6-1-12.)
 
14    (35 ILCS 5/208)  (from Ch. 120, par. 2-208)
15    Sec. 208. Tax credit for residential real property taxes.
16Beginning with tax years ending on or after December 31, 1991,
17every individual taxpayer shall be entitled to a tax credit
18equal to 5% of real property taxes paid by such taxpayer during
19the taxable year on the principal residence of the taxpayer. In
20the case of multi-unit or multi-use structures and farm
21dwellings, the taxes on the taxpayer's principal residence
22shall be that portion of the total taxes which is attributable
23to such principal residence. Notwithstanding any other
24provision of law, for taxable years beginning on or after
25January 1, 2018, no taxpayer may claim a credit under this

 

 

10000SB0009sam006- 160 -LRB100 06347 HLH 26817 a

1Section if the taxpayer's adjusted gross income for the taxable
2year exceeds (i) $500,000, in the case of spouses filing a
3joint federal tax return, or (ii) $250,000, in the case of all
4other taxpayers.
5(Source: P.A. 87-17.)
 
6    (35 ILCS 5/212)
7    Sec. 212. Earned income tax credit.
8    (a) With respect to the federal earned income tax credit
9allowed for the taxable year under Section 32 of the federal
10Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer
11is entitled to a credit against the tax imposed by subsections
12(a) and (b) of Section 201 in an amount equal to (i) 5% of the
13federal tax credit for each taxable year beginning on or after
14January 1, 2000 and ending prior to December 31, 2012, (ii)
157.5% of the federal tax credit for each taxable year beginning
16on or after January 1, 2012 and ending prior to December 31,
172013, and (iii) 10% of the federal tax credit for each taxable
18year beginning on or after January 1, 2013 and beginning prior
19to January 1, 2017, and (iv) 15% of the federal tax credit for
20each taxable year beginning on or after January 1, 2017.
21    For a non-resident or part-year resident, the amount of the
22credit under this Section shall be in proportion to the amount
23of income attributable to this State.
24    (b) For taxable years beginning before January 1, 2003, in
25no event shall a credit under this Section reduce the

 

 

10000SB0009sam006- 161 -LRB100 06347 HLH 26817 a

1taxpayer's liability to less than zero. For each taxable year
2beginning on or after January 1, 2003, if the amount of the
3credit exceeds the income tax liability for the applicable tax
4year, then the excess credit shall be refunded to the taxpayer.
5The amount of a refund shall not be included in the taxpayer's
6income or resources for the purposes of determining eligibility
7or benefit level in any means-tested benefit program
8administered by a governmental entity unless required by
9federal law.
10    (c) This Section is exempt from the provisions of Section
11250.
12(Source: P.A. 97-652, eff. 6-1-12.)
 
13    (35 ILCS 5/222)
14    Sec. 222. Live theater production credit.
15    (a) For tax years beginning on or after January 1, 2012 and
16beginning prior to January 1, 2027, a taxpayer who has received
17a tax credit award under the Live Theater Production Tax Credit
18Act is entitled to a credit against the taxes imposed under
19subsections (a) and (b) of Section 201 of this Act in an amount
20determined under that Act by the Department of Commerce and
21Economic Opportunity.
22    (b) If the taxpayer is a partnership, limited liability
23partnership, limited liability company, or Subchapter S
24corporation, the tax credit award is allowed to the partners,
25unit holders, or shareholders in accordance with the

 

 

10000SB0009sam006- 162 -LRB100 06347 HLH 26817 a

1determination of income and distributive share of income under
2Sections 702 and 704 and Subchapter S of the Internal Revenue
3Code.
4    (c) A sale, assignment, or transfer of the tax credit award
5may be made by the taxpayer earning the credit within one year
6after the credit is awarded in accordance with rules adopted by
7the Department of Commerce and Economic Opportunity.
8    (d) The Department of Revenue, in cooperation with the
9Department of Commerce and Economic Opportunity, shall adopt
10rules to enforce and administer the provisions of this Section.
11    (e) The tax credit award may not be carried back. If the
12amount of the credit exceeds the tax liability for the year,
13the excess may be carried forward and applied to the tax
14liability of the 5 tax years following the excess credit year.
15The tax credit award shall be applied to the earliest year for
16which there is a tax liability. If there are credits from more
17than one tax year that are available to offset liability, the
18earlier credit shall be applied first. In no event may a credit
19under this Section reduce the taxpayer's liability to less than
20zero.
21(Source: P.A. 97-636, eff. 6-1-12.)
 
22    (35 ILCS 5/225 new)
23    Sec. 225. Credit for instructional materials and supplies.
24For taxable years beginning on and after January 1, 2017, a
25taxpayer shall be allowed a credit in the amount paid by the

 

 

10000SB0009sam006- 163 -LRB100 06347 HLH 26817 a

1taxpayer during the taxable year for instructional materials
2and supplies with respect to classroom based instruction in a
3qualified school, or $250, whichever is less, provided that the
4taxpayer is a teacher, instructor, counselor, principal, or
5aide in a qualified school for at least 900 hours during a
6school year.
7    The credit may not be carried back and may not reduce the
8taxpayer's liability to less than zero. If the amount of the
9credit exceeds the tax liability for the year, the excess may
10be carried forward and applied to the tax liability of the 5
11taxable years following the excess credit year. The tax credit
12shall be applied to the earliest year for which there is a tax
13liability. If there are credits for more than one year that are
14available to offset a liability, the earlier credit shall be
15applied first.
16    For purposes of this Section, the term "materials and
17supplies" means amounts paid for instructional materials or
18supplies that are designated for classroom use in any qualified
19school. For purposes of this Section, the term "qualified
20school" means a public school or non-public school located in
21Illinois.
22    This Section is exempt from the provisions of Section 250.
 
23    (35 ILCS 5/804)  (from Ch. 120, par. 8-804)
24    Sec. 804. Failure to Pay Estimated Tax.
25    (a) In general. In case of any underpayment of estimated

 

 

10000SB0009sam006- 164 -LRB100 06347 HLH 26817 a

1tax by a taxpayer, except as provided in subsection (d) or (e),
2the taxpayer shall be liable to a penalty in an amount
3determined at the rate prescribed by Section 3-3 of the Uniform
4Penalty and Interest Act upon the amount of the underpayment
5(determined under subsection (b)) for each required
6installment.
7    (b) Amount of underpayment. For purposes of subsection (a),
8the amount of the underpayment shall be the excess of:
9        (1) the amount of the installment which would be
10    required to be paid under subsection (c), over
11        (2) the amount, if any, of the installment paid on or
12    before the last date prescribed for payment.
13    (c) Amount of Required Installments.
14        (1) Amount.
15            (A) In General. Except as provided in paragraphs
16        (2) and (3), the amount of any required installment
17        shall be 25% of the required annual payment.
18            (B) Required Annual Payment. For purposes of
19        subparagraph (A), the term "required annual payment"
20        means the lesser of:
21                (i) 90% of the tax shown on the return for the
22            taxable year, or if no return is filed, 90% of the
23            tax for such year;
24                (ii) for installments due prior to February 1,
25            2011, and after January 31, 2012, 100% of the tax
26            shown on the return of the taxpayer for the

 

 

10000SB0009sam006- 165 -LRB100 06347 HLH 26817 a

1            preceding taxable year if a return showing a
2            liability for tax was filed by the taxpayer for the
3            preceding taxable year and such preceding year was
4            a taxable year of 12 months; or
5                (iii) for installments due after January 31,
6            2011, and prior to February 1, 2012, 150% of the
7            tax shown on the return of the taxpayer for the
8            preceding taxable year if a return showing a
9            liability for tax was filed by the taxpayer for the
10            preceding taxable year and such preceding year was
11            a taxable year of 12 months.
12        (2) Lower Required Installment where Annualized Income
13    Installment is Less Than Amount Determined Under Paragraph
14    (1).
15            (A) In General. In the case of any required
16        installment if a taxpayer establishes that the
17        annualized income installment is less than the amount
18        determined under paragraph (1),
19                (i) the amount of such required installment
20            shall be the annualized income installment, and
21                (ii) any reduction in a required installment
22            resulting from the application of this
23            subparagraph shall be recaptured by increasing the
24            amount of the next required installment determined
25            under paragraph (1) by the amount of such
26            reduction, and by increasing subsequent required

 

 

10000SB0009sam006- 166 -LRB100 06347 HLH 26817 a

1            installments to the extent that the reduction has
2            not previously been recaptured under this clause.
3            (B) Determination of Annualized Income
4        Installment. In the case of any required installment,
5        the annualized income installment is the excess, if
6        any, of:
7                (i) an amount equal to the applicable
8            percentage of the tax for the taxable year computed
9            by placing on an annualized basis the net income
10            for months in the taxable year ending before the
11            due date for the installment, over
12                (ii) the aggregate amount of any prior
13            required installments for the taxable year.
14            (C) Applicable Percentage.
15        In the case of the followingThe applicable
16        required installments:percentage is:
17        1st ...............................22.5%
18        2nd ...............................45%
19        3rd ...............................67.5%
20        4th ...............................90%
21            (D) Annualized Net Income; Individuals. For
22        individuals, net income shall be placed on an
23        annualized basis by:
24                (i) multiplying by 12, or in the case of a
25            taxable year of less than 12 months, by the number
26            of months in the taxable year, the net income

 

 

10000SB0009sam006- 167 -LRB100 06347 HLH 26817 a

1            computed without regard to the standard exemption
2            for the months in the taxable year ending before
3            the month in which the installment is required to
4            be paid;
5                (ii) dividing the resulting amount by the
6            number of months in the taxable year ending before
7            the month in which such installment date falls; and
8                (iii) deducting from such amount the standard
9            exemption allowable for the taxable year, such
10            standard exemption being determined as of the last
11            date prescribed for payment of the installment.
12            (E) Annualized Net Income; Corporations. For
13        corporations, net income shall be placed on an
14        annualized basis by multiplying by 12 the taxable
15        income
16                (i) for the first 3 months of the taxable year,
17            in the case of the installment required to be paid
18            in the 4th month,
19                (ii) for the first 3 months or for the first 5
20            months of the taxable year, in the case of the
21            installment required to be paid in the 6th month,
22                (iii) for the first 6 months or for the first 8
23            months of the taxable year, in the case of the
24            installment required to be paid in the 9th month,
25            and
26                (iv) for the first 9 months or for the first 11

 

 

10000SB0009sam006- 168 -LRB100 06347 HLH 26817 a

1            months of the taxable year, in the case of the
2            installment required to be paid in the 12th month
3            of the taxable year,
4        then dividing the resulting amount by the number of
5        months in the taxable year (3, 5, 6, 8, 9, or 11 as the
6        case may be).
7        (3) Notwithstanding any other provision of this
8    subsection (c), in the case of a federally regulated
9    exchange that elects to apportion its income under Section
10    304(c-1) of this Act, the amount of each required
11    installment due prior to June 30 of the first taxable year
12    to which the election applies shall be 25% of the tax that
13    would have been shown on the return for that taxable year
14    if the taxpayer had not made such election.
15    (d) Exceptions. Notwithstanding the provisions of the
16preceding subsections, the penalty imposed by subsection (a)
17shall not be imposed if the taxpayer was not required to file
18an Illinois income tax return for the preceding taxable year,
19or, for individuals, if the taxpayer had no tax liability for
20the preceding taxable year and such year was a taxable year of
2112 months. The penalty imposed by subsection (a) shall also not
22be imposed on any underpayments of estimated tax due before the
23effective date of this amendatory Act of 1998 which
24underpayments are solely attributable to the change in
25apportionment from subsection (a) to subsection (h) of Section
26304. The provisions of this amendatory Act of 1998 apply to tax

 

 

10000SB0009sam006- 169 -LRB100 06347 HLH 26817 a

1years ending on or after December 31, 1998.
2    (e) The penalty imposed for underpayment of estimated tax
3by subsection (a) of this Section shall not be imposed to the
4extent that the Director or his or her designate determines,
5pursuant to Section 3-8 of the Uniform Penalty and Interest Act
6that the penalty should not be imposed.
7    (f) Definition of tax. For purposes of subsections (b) and
8(c), the term "tax" means the excess of the tax imposed under
9Article 2 of this Act, over the amounts credited against such
10tax under Sections 601(b) (3) and (4).
11    (g) Application of Section in case of tax withheld under
12Article 7. For purposes of applying this Section:
13        (1) tax withheld from compensation for the taxable year
14    shall be deemed a payment of estimated tax, and an equal
15    part of such amount shall be deemed paid on each
16    installment date for such taxable year, unless the taxpayer
17    establishes the dates on which all amounts were actually
18    withheld, in which case the amounts so withheld shall be
19    deemed payments of estimated tax on the dates on which such
20    amounts were actually withheld;
21        (2) amounts timely paid by a partnership, Subchapter S
22    corporation, or trust on behalf of a partner, shareholder,
23    or beneficiary pursuant to subsection (f) of Section 502 or
24    Section 709.5 and claimed as a payment of estimated tax
25    shall be deemed a payment of estimated tax made on the last
26    day of the taxable year of the partnership, Subchapter S

 

 

10000SB0009sam006- 170 -LRB100 06347 HLH 26817 a

1    corporation, or trust for which the income from the
2    withholding is made was computed; and
3        (3) all other amounts pursuant to Article 7 shall be
4    deemed a payment of estimated tax on the date the payment
5    is made to the taxpayer of the amount from which the tax is
6    withheld.
7    (g-5) Amounts withheld under the State Salary and Annuity
8Withholding Act. An individual who has amounts withheld under
9paragraph (10) of Section 4 of the State Salary and Annuity
10Withholding Act may elect to have those amounts treated as
11payments of estimated tax made on the dates on which those
12amounts are actually withheld.
13    (g-10) Notwithstanding any other provision of law, no
14penalty shall apply with respect to an underpayment of
15estimated tax for the first, second, or third quarter of any
16taxable year beginning on or after January 1, 2017 and
17beginning prior to January 1, 2018 if (i) the underpayment was
18due to the changes made by this amendatory Act of the 100th
19General Assembly, (ii) the payment was otherwise timely made,
20and (iii) the balance due is included with the taxpayer's
21estimated tax payment for the fourth quarter.
22    (i) Short taxable year. The application of this Section to
23taxable years of less than 12 months shall be in accordance
24with regulations prescribed by the Department.
25    The changes in this Section made by Public Act 84-127 shall
26apply to taxable years ending on or after January 1, 1986.

 

 

10000SB0009sam006- 171 -LRB100 06347 HLH 26817 a

1(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11;
297-636, eff. 6-1-12.)
 
3    (35 ILCS 5/901)  (from Ch. 120, par. 9-901)
4    Sec. 901. Collection authority.
5    (a) In general.
6    The Department shall collect the taxes imposed by this Act.
7The Department shall collect certified past due child support
8amounts under Section 2505-650 of the Department of Revenue Law
9(20 ILCS 2505/2505-650). Except as provided in subsections (c),
10(e), (f), (g), and (h) of this Section, money collected
11pursuant to subsections (a) and (b) of Section 201 of this Act
12shall be paid into the General Revenue Fund in the State
13treasury; money collected pursuant to subsections (c) and (d)
14of Section 201 of this Act shall be paid into the Personal
15Property Tax Replacement Fund, a special fund in the State
16Treasury; and money collected under Section 2505-650 of the
17Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
18into the Child Support Enforcement Trust Fund, a special fund
19outside the State Treasury, or to the State Disbursement Unit
20established under Section 10-26 of the Illinois Public Aid
21Code, as directed by the Department of Healthcare and Family
22Services.
23    (b) Local Government Distributive Fund.
24    Beginning August 1, 1969, and continuing through June 30,
251994, the Treasurer shall transfer each month from the General

 

 

10000SB0009sam006- 172 -LRB100 06347 HLH 26817 a

1Revenue Fund to a special fund in the State treasury, to be
2known as the "Local Government Distributive Fund", an amount
3equal to 1/12 of the net revenue realized from the tax imposed
4by subsections (a) and (b) of Section 201 of this Act during
5the preceding month. Beginning July 1, 1994, and continuing
6through June 30, 1995, the Treasurer shall transfer each month
7from the General Revenue Fund to the Local Government
8Distributive Fund an amount equal to 1/11 of the net revenue
9realized from the tax imposed by subsections (a) and (b) of
10Section 201 of this Act during the preceding month. Beginning
11July 1, 1995 and continuing through January 31, 2011, the
12Treasurer shall transfer each month from the General Revenue
13Fund to the Local Government Distributive Fund an amount equal
14to the net of (i) 1/10 of the net revenue realized from the tax
15imposed by subsections (a) and (b) of Section 201 of the
16Illinois Income Tax Act during the preceding month (ii) minus,
17beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
18and beginning July 1, 2004, zero. Beginning February 1, 2011,
19and continuing through January 31, 2015, the Treasurer shall
20transfer each month from the General Revenue Fund to the Local
21Government Distributive Fund an amount equal to the sum of (i)
226% (10% of the ratio of the 3% individual income tax rate prior
23to 2011 to the 5% individual income tax rate after 2010) of the
24net revenue realized from the tax imposed by subsections (a)
25and (b) of Section 201 of this Act upon individuals, trusts,
26and estates during the preceding month and (ii) 6.86% (10% of

 

 

10000SB0009sam006- 173 -LRB100 06347 HLH 26817 a

1the ratio of the 4.8% corporate income tax rate prior to 2011
2to the 7% corporate income tax rate after 2010) of the net
3revenue realized from the tax imposed by subsections (a) and
4(b) of Section 201 of this Act upon corporations during the
5preceding month. Beginning February 1, 2015 and continuing
6through January 31, 2017 January 31, 2025, the Treasurer shall
7transfer each month from the General Revenue Fund to the Local
8Government Distributive Fund an amount equal to the sum of (i)
98% (10% of the ratio of the 3% individual income tax rate prior
10to 2011 to the 3.75% individual income tax rate after 2014) of
11the net revenue realized from the tax imposed by subsections
12(a) and (b) of Section 201 of this Act upon individuals,
13trusts, and estates during the preceding month and (ii) 9.14%
14(10% of the ratio of the 4.8% corporate income tax rate prior
15to 2011 to the 5.25% corporate income tax rate after 2014) of
16the net revenue realized from the tax imposed by subsections
17(a) and (b) of Section 201 of this Act upon corporations during
18the preceding month. Beginning February 1, 2017 February 1,
192025, the Treasurer shall transfer each month from the General
20Revenue Fund to the Local Government Distributive Fund an
21amount equal to the sum of (i) 6.06% 9.23% (10% of the ratio of
22the 3% individual income tax rate prior to 2011 to the 4.95%
233.25% individual income tax rate beginning in 2017 after 2024)
24of the net revenue realized from the tax imposed by subsections
25(a) and (b) of Section 201 of this Act upon individuals,
26trusts, and estates during the preceding month and (ii) 6.86%

 

 

10000SB0009sam006- 174 -LRB100 06347 HLH 26817 a

1(10% of the ratio of the 4.8% corporate income tax rate prior
2to 2011 to the 7% corporate income tax rate beginning in 2017)
310% of the net revenue realized from the tax imposed by
4subsections (a) and (b) of Section 201 of this Act upon
5corporations during the preceding month. Net revenue realized
6for a month shall be defined as the revenue from the tax
7imposed by subsections (a) and (b) of Section 201 of this Act
8which is deposited in the General Revenue Fund, the Education
9Assistance Fund, the Income Tax Surcharge Local Government
10Distributive Fund, the Fund for the Advancement of Education,
11and the Commitment to Human Services Fund during the month
12minus the amount paid out of the General Revenue Fund in State
13warrants during that same month as refunds to taxpayers for
14overpayment of liability under the tax imposed by subsections
15(a) and (b) of Section 201 of this Act.
16    Beginning on August 26, 2014 (the effective date of Public
17Act 98-1052), the Comptroller shall perform the transfers
18required by this subsection (b) no later than 60 days after he
19or she receives the certification from the Treasurer as
20provided in Section 1 of the State Revenue Sharing Act.
21    (c) Deposits Into Income Tax Refund Fund.
22        (1) Beginning on January 1, 1989 and thereafter, the
23    Department shall deposit a percentage of the amounts
24    collected pursuant to subsections (a) and (b)(1), (2), and
25    (3), of Section 201 of this Act into a fund in the State
26    treasury known as the Income Tax Refund Fund. The

 

 

10000SB0009sam006- 175 -LRB100 06347 HLH 26817 a

1    Department shall deposit 6% of such amounts during the
2    period beginning January 1, 1989 and ending on June 30,
3    1989. Beginning with State fiscal year 1990 and for each
4    fiscal year thereafter, the percentage deposited into the
5    Income Tax Refund Fund during a fiscal year shall be the
6    Annual Percentage. For fiscal years 1999 through 2001, the
7    Annual Percentage shall be 7.1%. For fiscal year 2003, the
8    Annual Percentage shall be 8%. For fiscal year 2004, the
9    Annual Percentage shall be 11.7%. Upon the effective date
10    of this amendatory Act of the 93rd General Assembly, the
11    Annual Percentage shall be 10% for fiscal year 2005. For
12    fiscal year 2006, the Annual Percentage shall be 9.75%. For
13    fiscal year 2007, the Annual Percentage shall be 9.75%. For
14    fiscal year 2008, the Annual Percentage shall be 7.75%. For
15    fiscal year 2009, the Annual Percentage shall be 9.75%. For
16    fiscal year 2010, the Annual Percentage shall be 9.75%. For
17    fiscal year 2011, the Annual Percentage shall be 8.75%. For
18    fiscal year 2012, the Annual Percentage shall be 8.75%. For
19    fiscal year 2013, the Annual Percentage shall be 9.75%. For
20    fiscal year 2014, the Annual Percentage shall be 9.5%. For
21    fiscal year 2015, the Annual Percentage shall be 10%. For
22    all other fiscal years, the Annual Percentage shall be
23    calculated as a fraction, the numerator of which shall be
24    the amount of refunds approved for payment by the
25    Department during the preceding fiscal year as a result of
26    overpayment of tax liability under subsections (a) and

 

 

10000SB0009sam006- 176 -LRB100 06347 HLH 26817 a

1    (b)(1), (2), and (3) of Section 201 of this Act plus the
2    amount of such refunds remaining approved but unpaid at the
3    end of the preceding fiscal year, minus the amounts
4    transferred into the Income Tax Refund Fund from the
5    Tobacco Settlement Recovery Fund, and the denominator of
6    which shall be the amounts which will be collected pursuant
7    to subsections (a) and (b)(1), (2), and (3) of Section 201
8    of this Act during the preceding fiscal year; except that
9    in State fiscal year 2002, the Annual Percentage shall in
10    no event exceed 7.6%. The Director of Revenue shall certify
11    the Annual Percentage to the Comptroller on the last
12    business day of the fiscal year immediately preceding the
13    fiscal year for which it is to be effective.
14        (2) Beginning on January 1, 1989 and thereafter, the
15    Department shall deposit a percentage of the amounts
16    collected pursuant to subsections (a) and (b)(6), (7), and
17    (8), (c) and (d) of Section 201 of this Act into a fund in
18    the State treasury known as the Income Tax Refund Fund. The
19    Department shall deposit 18% of such amounts during the
20    period beginning January 1, 1989 and ending on June 30,
21    1989. Beginning with State fiscal year 1990 and for each
22    fiscal year thereafter, the percentage deposited into the
23    Income Tax Refund Fund during a fiscal year shall be the
24    Annual Percentage. For fiscal years 1999, 2000, and 2001,
25    the Annual Percentage shall be 19%. For fiscal year 2003,
26    the Annual Percentage shall be 27%. For fiscal year 2004,

 

 

10000SB0009sam006- 177 -LRB100 06347 HLH 26817 a

1    the Annual Percentage shall be 32%. Upon the effective date
2    of this amendatory Act of the 93rd General Assembly, the
3    Annual Percentage shall be 24% for fiscal year 2005. For
4    fiscal year 2006, the Annual Percentage shall be 20%. For
5    fiscal year 2007, the Annual Percentage shall be 17.5%. For
6    fiscal year 2008, the Annual Percentage shall be 15.5%. For
7    fiscal year 2009, the Annual Percentage shall be 17.5%. For
8    fiscal year 2010, the Annual Percentage shall be 17.5%. For
9    fiscal year 2011, the Annual Percentage shall be 17.5%. For
10    fiscal year 2012, the Annual Percentage shall be 17.5%. For
11    fiscal year 2013, the Annual Percentage shall be 14%. For
12    fiscal year 2014, the Annual Percentage shall be 13.4%. For
13    fiscal year 2015, the Annual Percentage shall be 14%. For
14    all other fiscal years, the Annual Percentage shall be
15    calculated as a fraction, the numerator of which shall be
16    the amount of refunds approved for payment by the
17    Department during the preceding fiscal year as a result of
18    overpayment of tax liability under subsections (a) and
19    (b)(6), (7), and (8), (c) and (d) of Section 201 of this
20    Act plus the amount of such refunds remaining approved but
21    unpaid at the end of the preceding fiscal year, and the
22    denominator of which shall be the amounts which will be
23    collected pursuant to subsections (a) and (b)(6), (7), and
24    (8), (c) and (d) of Section 201 of this Act during the
25    preceding fiscal year; except that in State fiscal year
26    2002, the Annual Percentage shall in no event exceed 23%.

 

 

10000SB0009sam006- 178 -LRB100 06347 HLH 26817 a

1    The Director of Revenue shall certify the Annual Percentage
2    to the Comptroller on the last business day of the fiscal
3    year immediately preceding the fiscal year for which it is
4    to be effective.
5        (3) The Comptroller shall order transferred and the
6    Treasurer shall transfer from the Tobacco Settlement
7    Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
8    in January, 2001, (ii) $35,000,000 in January, 2002, and
9    (iii) $35,000,000 in January, 2003.
10    (d) Expenditures from Income Tax Refund Fund.
11        (1) Beginning January 1, 1989, money in the Income Tax
12    Refund Fund shall be expended exclusively for the purpose
13    of paying refunds resulting from overpayment of tax
14    liability under Section 201 of this Act, for paying rebates
15    under Section 208.1 in the event that the amounts in the
16    Homeowners' Tax Relief Fund are insufficient for that
17    purpose, and for making transfers pursuant to this
18    subsection (d).
19        (2) The Director shall order payment of refunds
20    resulting from overpayment of tax liability under Section
21    201 of this Act from the Income Tax Refund Fund only to the
22    extent that amounts collected pursuant to Section 201 of
23    this Act and transfers pursuant to this subsection (d) and
24    item (3) of subsection (c) have been deposited and retained
25    in the Fund.
26        (3) As soon as possible after the end of each fiscal

 

 

10000SB0009sam006- 179 -LRB100 06347 HLH 26817 a

1    year, the Director shall order transferred and the State
2    Treasurer and State Comptroller shall transfer from the
3    Income Tax Refund Fund to the Personal Property Tax
4    Replacement Fund an amount, certified by the Director to
5    the Comptroller, equal to the excess of the amount
6    collected pursuant to subsections (c) and (d) of Section
7    201 of this Act deposited into the Income Tax Refund Fund
8    during the fiscal year over the amount of refunds resulting
9    from overpayment of tax liability under subsections (c) and
10    (d) of Section 201 of this Act paid from the Income Tax
11    Refund Fund during the fiscal year.
12        (4) As soon as possible after the end of each fiscal
13    year, the Director shall order transferred and the State
14    Treasurer and State Comptroller shall transfer from the
15    Personal Property Tax Replacement Fund to the Income Tax
16    Refund Fund an amount, certified by the Director to the
17    Comptroller, equal to the excess of the amount of refunds
18    resulting from overpayment of tax liability under
19    subsections (c) and (d) of Section 201 of this Act paid
20    from the Income Tax Refund Fund during the fiscal year over
21    the amount collected pursuant to subsections (c) and (d) of
22    Section 201 of this Act deposited into the Income Tax
23    Refund Fund during the fiscal year.
24        (4.5) As soon as possible after the end of fiscal year
25    1999 and of each fiscal year thereafter, the Director shall
26    order transferred and the State Treasurer and State

 

 

10000SB0009sam006- 180 -LRB100 06347 HLH 26817 a

1    Comptroller shall transfer from the Income Tax Refund Fund
2    to the General Revenue Fund any surplus remaining in the
3    Income Tax Refund Fund as of the end of such fiscal year;
4    excluding for fiscal years 2000, 2001, and 2002 amounts
5    attributable to transfers under item (3) of subsection (c)
6    less refunds resulting from the earned income tax credit.
7        (5) This Act shall constitute an irrevocable and
8    continuing appropriation from the Income Tax Refund Fund
9    for the purpose of paying refunds upon the order of the
10    Director in accordance with the provisions of this Section.
11    (e) Deposits into the Education Assistance Fund and the
12Income Tax Surcharge Local Government Distributive Fund.
13    On July 1, 1991, and thereafter, of the amounts collected
14pursuant to subsections (a) and (b) of Section 201 of this Act,
15minus deposits into the Income Tax Refund Fund, the Department
16shall deposit 7.3% into the Education Assistance Fund in the
17State Treasury. Beginning July 1, 1991, and continuing through
18January 31, 1993, of the amounts collected pursuant to
19subsections (a) and (b) of Section 201 of the Illinois Income
20Tax Act, minus deposits into the Income Tax Refund Fund, the
21Department shall deposit 3.0% into the Income Tax Surcharge
22Local Government Distributive Fund in the State Treasury.
23Beginning February 1, 1993 and continuing through June 30,
241993, of the amounts collected pursuant to subsections (a) and
25(b) of Section 201 of the Illinois Income Tax Act, minus
26deposits into the Income Tax Refund Fund, the Department shall

 

 

10000SB0009sam006- 181 -LRB100 06347 HLH 26817 a

1deposit 4.4% into the Income Tax Surcharge Local Government
2Distributive Fund in the State Treasury. Beginning July 1,
31993, and continuing through June 30, 1994, of the amounts
4collected under subsections (a) and (b) of Section 201 of this
5Act, minus deposits into the Income Tax Refund Fund, the
6Department shall deposit 1.475% into the Income Tax Surcharge
7Local Government Distributive Fund in the State Treasury.
8    (f) Deposits into the Fund for the Advancement of
9Education. Beginning February 1, 2015, the Department shall
10deposit the following portions of the revenue realized from the
11tax imposed upon individuals, trusts, and estates by
12subsections (a) and (b) of Section 201 of this Act during the
13preceding month, minus deposits into the Income Tax Refund
14Fund, into the Fund for the Advancement of Education:
15        (1) beginning February 1, 2015, and prior to February
16    1, 2025, 1/30; and
17        (2) beginning February 1, 2025, 1/26.
18    If the rate of tax imposed by subsection (a) and (b) of
19Section 201 is reduced pursuant to Section 201.5 of this Act,
20the Department shall not make the deposits required by this
21subsection (f) on or after the effective date of the reduction.
22    (g) Deposits into the Commitment to Human Services Fund.
23Beginning February 1, 2015, the Department shall deposit the
24following portions of the revenue realized from the tax imposed
25upon individuals, trusts, and estates by subsections (a) and
26(b) of Section 201 of this Act during the preceding month,

 

 

10000SB0009sam006- 182 -LRB100 06347 HLH 26817 a

1minus deposits into the Income Tax Refund Fund, into the
2Commitment to Human Services Fund:
3        (1) beginning February 1, 2015, and prior to February
4    1, 2025, 1/30; and
5        (2) beginning February 1, 2025, 1/26.
6    If the rate of tax imposed by subsection (a) and (b) of
7Section 201 is reduced pursuant to Section 201.5 of this Act,
8the Department shall not make the deposits required by this
9subsection (g) on or after the effective date of the reduction.
10    (h) Deposits into the Tax Compliance and Administration
11Fund. Beginning on the first day of the first calendar month to
12occur on or after August 26, 2014 (the effective date of Public
13Act 98-1098), each month the Department shall pay into the Tax
14Compliance and Administration Fund, to be used, subject to
15appropriation, to fund additional auditors and compliance
16personnel at the Department, an amount equal to 1/12 of 5% of
17the cash receipts collected during the preceding fiscal year by
18the Audit Bureau of the Department from the tax imposed by
19subsections (a), (b), (c), and (d) of Section 201 of this Act,
20net of deposits into the Income Tax Refund Fund made from those
21cash receipts.
22(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
2398-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
247-20-15.)
 
25    (35 ILCS 5/1501)  (from Ch. 120, par. 15-1501)

 

 

10000SB0009sam006- 183 -LRB100 06347 HLH 26817 a

1    Sec. 1501. Definitions.
2    (a) In general. When used in this Act, where not otherwise
3distinctly expressed or manifestly incompatible with the
4intent thereof:
5        (1) Business income. The term "business income" means
6    all income that may be treated as apportionable business
7    income under the Constitution of the United States.
8    Business income is net of the deductions allocable thereto.
9    Such term does not include compensation or the deductions
10    allocable thereto. For each taxable year beginning on or
11    after January 1, 2003, a taxpayer may elect to treat all
12    income other than compensation as business income. This
13    election shall be made in accordance with rules adopted by
14    the Department and, once made, shall be irrevocable.
15        (1.5) Captive real estate investment trust:
16            (A) The term "captive real estate investment
17        trust" means a corporation, trust, or association:
18                (i) that is considered a real estate
19            investment trust for the taxable year under
20            Section 856 of the Internal Revenue Code;
21                (ii) the certificates of beneficial interest
22            or shares of which are not regularly traded on an
23            established securities market; and
24                (iii) of which more than 50% of the voting
25            power or value of the beneficial interest or
26            shares, at any time during the last half of the

 

 

10000SB0009sam006- 184 -LRB100 06347 HLH 26817 a

1            taxable year, is owned or controlled, directly,
2            indirectly, or constructively, by a single
3            corporation.
4            (B) The term "captive real estate investment
5        trust" does not include:
6                (i) a real estate investment trust of which
7            more than 50% of the voting power or value of the
8            beneficial interest or shares is owned or
9            controlled, directly, indirectly, or
10            constructively, by:
11                    (a) a real estate investment trust, other
12                than a captive real estate investment trust;
13                    (b) a person who is exempt from taxation
14                under Section 501 of the Internal Revenue Code,
15                and who is not required to treat income
16                received from the real estate investment trust
17                as unrelated business taxable income under
18                Section 512 of the Internal Revenue Code;
19                    (c) a listed Australian property trust, if
20                no more than 50% of the voting power or value
21                of the beneficial interest or shares of that
22                trust, at any time during the last half of the
23                taxable year, is owned or controlled, directly
24                or indirectly, by a single person;
25                    (d) an entity organized as a trust,
26                provided a listed Australian property trust

 

 

10000SB0009sam006- 185 -LRB100 06347 HLH 26817 a

1                described in subparagraph (c) owns or
2                controls, directly or indirectly, or
3                constructively, 75% or more of the voting power
4                or value of the beneficial interests or shares
5                of such entity; or
6                    (e) an entity that is organized outside of
7                the laws of the United States and that
8                satisfies all of the following criteria:
9                        (1) at least 75% of the entity's total
10                    asset value at the close of its taxable
11                    year is represented by real estate assets
12                    (as defined in Section 856(c)(5)(B) of the
13                    Internal Revenue Code, thereby including
14                    shares or certificates of beneficial
15                    interest in any real estate investment
16                    trust), cash and cash equivalents, and
17                    U.S. Government securities;
18                        (2) the entity is not subject to tax on
19                    amounts that are distributed to its
20                    beneficial owners or is exempt from
21                    entity-level taxation;
22                        (3) the entity distributes at least
23                    85% of its taxable income (as computed in
24                    the jurisdiction in which it is organized)
25                    to the holders of its shares or
26                    certificates of beneficial interest on an

 

 

10000SB0009sam006- 186 -LRB100 06347 HLH 26817 a

1                    annual basis;
2                        (4) either (i) the shares or
3                    beneficial interests of the entity are
4                    regularly traded on an established
5                    securities market or (ii) not more than 10%
6                    of the voting power or value in the entity
7                    is held, directly, indirectly, or
8                    constructively, by a single entity or
9                    individual; and
10                        (5) the entity is organized in a
11                    country that has entered into a tax treaty
12                    with the United States; or
13                (ii) during its first taxable year for which it
14            elects to be treated as a real estate investment
15            trust under Section 856(c)(1) of the Internal
16            Revenue Code, a real estate investment trust the
17            certificates of beneficial interest or shares of
18            which are not regularly traded on an established
19            securities market, but only if the certificates of
20            beneficial interest or shares of the real estate
21            investment trust are regularly traded on an
22            established securities market prior to the earlier
23            of the due date (including extensions) for filing
24            its return under this Act for that first taxable
25            year or the date it actually files that return.
26            (C) For the purposes of this subsection (1.5), the

 

 

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1        constructive ownership rules prescribed under Section
2        318(a) of the Internal Revenue Code, as modified by
3        Section 856(d)(5) of the Internal Revenue Code, apply
4        in determining the ownership of stock, assets, or net
5        profits of any person.
6            (D) For the purposes of this item (1.5), for
7        taxable years ending on or after August 16, 2007, the
8        voting power or value of the beneficial interest or
9        shares of a real estate investment trust does not
10        include any voting power or value of beneficial
11        interest or shares in a real estate investment trust
12        held directly or indirectly in a segregated asset
13        account by a life insurance company (as described in
14        Section 817 of the Internal Revenue Code) to the extent
15        such voting power or value is for the benefit of
16        entities or persons who are either immune from taxation
17        or exempt from taxation under subtitle A of the
18        Internal Revenue Code.
19        (2) Commercial domicile. The term "commercial
20    domicile" means the principal place from which the trade or
21    business of the taxpayer is directed or managed.
22        (3) Compensation. The term "compensation" means wages,
23    salaries, commissions and any other form of remuneration
24    paid to employees for personal services.
25        (4) Corporation. The term "corporation" includes
26    associations, joint-stock companies, insurance companies

 

 

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1    and cooperatives. Any entity, including a limited
2    liability company formed under the Illinois Limited
3    Liability Company Act, shall be treated as a corporation if
4    it is so classified for federal income tax purposes.
5        (5) Department. The term "Department" means the
6    Department of Revenue of this State.
7        (6) Director. The term "Director" means the Director of
8    Revenue of this State.
9        (7) Fiduciary. The term "fiduciary" means a guardian,
10    trustee, executor, administrator, receiver, or any person
11    acting in any fiduciary capacity for any person.
12        (8) Financial organization.
13            (A) The term "financial organization" means any
14        bank, bank holding company, trust company, savings
15        bank, industrial bank, land bank, safe deposit
16        company, private banker, savings and loan association,
17        building and loan association, credit union, currency
18        exchange, cooperative bank, small loan company, sales
19        finance company, investment company, or any person
20        which is owned by a bank or bank holding company. For
21        the purpose of this Section a "person" will include
22        only those persons which a bank holding company may
23        acquire and hold an interest in, directly or
24        indirectly, under the provisions of the Bank Holding
25        Company Act of 1956 (12 U.S.C. 1841, et seq.), except
26        where interests in any person must be disposed of

 

 

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1        within certain required time limits under the Bank
2        Holding Company Act of 1956.
3            (B) For purposes of subparagraph (A) of this
4        paragraph, the term "bank" includes (i) any entity that
5        is regulated by the Comptroller of the Currency under
6        the National Bank Act, or by the Federal Reserve Board,
7        or by the Federal Deposit Insurance Corporation and
8        (ii) any federally or State chartered bank operating as
9        a credit card bank.
10            (C) For purposes of subparagraph (A) of this
11        paragraph, the term "sales finance company" has the
12        meaning provided in the following item (i) or (ii):
13                (i) A person primarily engaged in one or more
14            of the following businesses: the business of
15            purchasing customer receivables, the business of
16            making loans upon the security of customer
17            receivables, the business of making loans for the
18            express purpose of funding purchases of tangible
19            personal property or services by the borrower, or
20            the business of finance leasing. For purposes of
21            this item (i), "customer receivable" means:
22                    (a) a retail installment contract or
23                retail charge agreement within the meaning of
24                the Sales Finance Agency Act, the Retail
25                Installment Sales Act, or the Motor Vehicle
26                Retail Installment Sales Act;

 

 

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1                    (b) an installment, charge, credit, or
2                similar contract or agreement arising from the
3                sale of tangible personal property or services
4                in a transaction involving a deferred payment
5                price payable in one or more installments
6                subsequent to the sale; or
7                    (c) the outstanding balance of a contract
8                or agreement described in provisions (a) or (b)
9                of this item (i).
10                A customer receivable need not provide for
11            payment of interest on deferred payments. A sales
12            finance company may purchase a customer receivable
13            from, or make a loan secured by a customer
14            receivable to, the seller in the original
15            transaction or to a person who purchased the
16            customer receivable directly or indirectly from
17            that seller.
18                (ii) A corporation meeting each of the
19            following criteria:
20                    (a) the corporation must be a member of an
21                "affiliated group" within the meaning of
22                Section 1504(a) of the Internal Revenue Code,
23                determined without regard to Section 1504(b)
24                of the Internal Revenue Code;
25                    (b) more than 50% of the gross income of
26                the corporation for the taxable year must be

 

 

10000SB0009sam006- 191 -LRB100 06347 HLH 26817 a

1                interest income derived from qualifying loans.
2                A "qualifying loan" is a loan made to a member
3                of the corporation's affiliated group that
4                originates customer receivables (within the
5                meaning of item (i)) or to whom customer
6                receivables originated by a member of the
7                affiliated group have been transferred, to the
8                extent the average outstanding balance of
9                loans from that corporation to members of its
10                affiliated group during the taxable year do not
11                exceed the limitation amount for that
12                corporation. The "limitation amount" for a
13                corporation is the average outstanding
14                balances during the taxable year of customer
15                receivables (within the meaning of item (i))
16                originated by all members of the affiliated
17                group. If the average outstanding balances of
18                the loans made by a corporation to members of
19                its affiliated group exceed the limitation
20                amount, the interest income of that
21                corporation from qualifying loans shall be
22                equal to its interest income from loans to
23                members of its affiliated groups times a
24                fraction equal to the limitation amount
25                divided by the average outstanding balances of
26                the loans made by that corporation to members

 

 

10000SB0009sam006- 192 -LRB100 06347 HLH 26817 a

1                of its affiliated group;
2                    (c) the total of all shareholder's equity
3                (including, without limitation, paid-in
4                capital on common and preferred stock and
5                retained earnings) of the corporation plus the
6                total of all of its loans, advances, and other
7                obligations payable or owed to members of its
8                affiliated group may not exceed 20% of the
9                total assets of the corporation at any time
10                during the tax year; and
11                    (d) more than 50% of all interest-bearing
12                obligations of the affiliated group payable to
13                persons outside the group determined in
14                accordance with generally accepted accounting
15                principles must be obligations of the
16                corporation.
17            This amendatory Act of the 91st General Assembly is
18        declaratory of existing law.
19            (D) Subparagraphs (B) and (C) of this paragraph are
20        declaratory of existing law and apply retroactively,
21        for all tax years beginning on or before December 31,
22        1996, to all original returns, to all amended returns
23        filed no later than 30 days after the effective date of
24        this amendatory Act of 1996, and to all notices issued
25        on or before the effective date of this amendatory Act
26        of 1996 under subsection (a) of Section 903, subsection

 

 

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1        (a) of Section 904, subsection (e) of Section 909, or
2        Section 912. A taxpayer that is a "financial
3        organization" that engages in any transaction with an
4        affiliate shall be a "financial organization" for all
5        purposes of this Act.
6            (E) For all tax years beginning on or before
7        December 31, 1996, a taxpayer that falls within the
8        definition of a "financial organization" under
9        subparagraphs (B) or (C) of this paragraph, but who
10        does not fall within the definition of a "financial
11        organization" under the Proposed Regulations issued by
12        the Department of Revenue on July 19, 1996, may
13        irrevocably elect to apply the Proposed Regulations
14        for all of those years as though the Proposed
15        Regulations had been lawfully promulgated, adopted,
16        and in effect for all of those years. For purposes of
17        applying subparagraphs (B) or (C) of this paragraph to
18        all of those years, the election allowed by this
19        subparagraph applies only to the taxpayer making the
20        election and to those members of the taxpayer's unitary
21        business group who are ordinarily required to
22        apportion business income under the same subsection of
23        Section 304 of this Act as the taxpayer making the
24        election. No election allowed by this subparagraph
25        shall be made under a claim filed under subsection (d)
26        of Section 909 more than 30 days after the effective

 

 

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1        date of this amendatory Act of 1996.
2            (F) Finance Leases. For purposes of this
3        subsection, a finance lease shall be treated as a loan
4        or other extension of credit, rather than as a lease,
5        regardless of how the transaction is characterized for
6        any other purpose, including the purposes of any
7        regulatory agency to which the lessor is subject. A
8        finance lease is any transaction in the form of a lease
9        in which the lessee is treated as the owner of the
10        leased asset entitled to any deduction for
11        depreciation allowed under Section 167 of the Internal
12        Revenue Code.
13        (9) Fiscal year. The term "fiscal year" means an
14    accounting period of 12 months ending on the last day of
15    any month other than December.
16        (9.5) Fixed place of business. The term "fixed place of
17    business" has the same meaning as that term is given in
18    Section 864 of the Internal Revenue Code and the related
19    Treasury regulations.
20        (10) Includes and including. The terms "includes" and
21    "including" when used in a definition contained in this Act
22    shall not be deemed to exclude other things otherwise
23    within the meaning of the term defined.
24        (11) Internal Revenue Code. The term "Internal Revenue
25    Code" means the United States Internal Revenue Code of 1954
26    or any successor law or laws relating to federal income

 

 

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1    taxes in effect for the taxable year.
2        (11.5) Investment partnership.
3            (A) The term "investment partnership" means any
4        entity that is treated as a partnership for federal
5        income tax purposes that meets the following
6        requirements:
7                (i) no less than 90% of the partnership's cost
8            of its total assets consists of qualifying
9            investment securities, deposits at banks or other
10            financial institutions, and office space and
11            equipment reasonably necessary to carry on its
12            activities as an investment partnership;
13                (ii) no less than 90% of its gross income
14            consists of interest, dividends, and gains from
15            the sale or exchange of qualifying investment
16            securities; and
17                (iii) the partnership is not a dealer in
18            qualifying investment securities.
19            (B) For purposes of this paragraph (11.5), the term
20        "qualifying investment securities" includes all of the
21        following:
22                (i) common stock, including preferred or debt
23            securities convertible into common stock, and
24            preferred stock;
25                (ii) bonds, debentures, and other debt
26            securities;

 

 

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1                (iii) foreign and domestic currency deposits
2            secured by federal, state, or local governmental
3            agencies;
4                (iv) mortgage or asset-backed securities
5            secured by federal, state, or local governmental
6            agencies;
7                (v) repurchase agreements and loan
8            participations;
9                (vi) foreign currency exchange contracts and
10            forward and futures contracts on foreign
11            currencies;
12                (vii) stock and bond index securities and
13            futures contracts and other similar financial
14            securities and futures contracts on those
15            securities;
16                (viii) options for the purchase or sale of any
17            of the securities, currencies, contracts, or
18            financial instruments described in items (i) to
19            (vii), inclusive;
20                (ix) regulated futures contracts;
21                (x) commodities (not described in Section
22            1221(a)(1) of the Internal Revenue Code) or
23            futures, forwards, and options with respect to
24            such commodities, provided, however, that any item
25            of a physical commodity to which title is actually
26            acquired in the partnership's capacity as a dealer

 

 

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1            in such commodity shall not be a qualifying
2            investment security;
3                (xi) derivatives; and
4                (xii) a partnership interest in another
5            partnership that is an investment partnership.
6        (12) Mathematical error. The term "mathematical error"
7    includes the following types of errors, omissions, or
8    defects in a return filed by a taxpayer which prevents
9    acceptance of the return as filed for processing:
10            (A) arithmetic errors or incorrect computations on
11        the return or supporting schedules;
12            (B) entries on the wrong lines;
13            (C) omission of required supporting forms or
14        schedules or the omission of the information in whole
15        or in part called for thereon; and
16            (D) an attempt to claim, exclude, deduct, or
17        improperly report, in a manner directly contrary to the
18        provisions of the Act and regulations thereunder any
19        item of income, exemption, deduction, or credit.
20        (13) Nonbusiness income. The term "nonbusiness income"
21    means all income other than business income or
22    compensation.
23        (14) Nonresident. The term "nonresident" means a
24    person who is not a resident.
25        (15) Paid, incurred and accrued. The terms "paid",
26    "incurred" and "accrued" shall be construed according to

 

 

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1    the method of accounting upon the basis of which the
2    person's base income is computed under this Act.
3        (16) Partnership and partner. The term "partnership"
4    includes a syndicate, group, pool, joint venture or other
5    unincorporated organization, through or by means of which
6    any business, financial operation, or venture is carried
7    on, and which is not, within the meaning of this Act, a
8    trust or estate or a corporation; and the term "partner"
9    includes a member in such syndicate, group, pool, joint
10    venture or organization.
11        The term "partnership" includes any entity, including
12    a limited liability company formed under the Illinois
13    Limited Liability Company Act, classified as a partnership
14    for federal income tax purposes.
15        The term "partnership" does not include a syndicate,
16    group, pool, joint venture, or other unincorporated
17    organization established for the sole purpose of playing
18    the Illinois State Lottery.
19        (17) Part-year resident. The term "part-year resident"
20    means an individual who became a resident during the
21    taxable year or ceased to be a resident during the taxable
22    year. Under Section 1501(a)(20)(A)(i) residence commences
23    with presence in this State for other than a temporary or
24    transitory purpose and ceases with absence from this State
25    for other than a temporary or transitory purpose. Under
26    Section 1501(a)(20)(A)(ii) residence commences with the

 

 

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1    establishment of domicile in this State and ceases with the
2    establishment of domicile in another State.
3        (18) Person. The term "person" shall be construed to
4    mean and include an individual, a trust, estate,
5    partnership, association, firm, company, corporation,
6    limited liability company, or fiduciary. For purposes of
7    Section 1301 and 1302 of this Act, a "person" means (i) an
8    individual, (ii) a corporation, (iii) an officer, agent, or
9    employee of a corporation, (iv) a member, agent or employee
10    of a partnership, or (v) a member, manager, employee,
11    officer, director, or agent of a limited liability company
12    who in such capacity commits an offense specified in
13    Section 1301 and 1302.
14        (18A) Records. The term "records" includes all data
15    maintained by the taxpayer, whether on paper, microfilm,
16    microfiche, or any type of machine-sensible data
17    compilation.
18        (19) Regulations. The term "regulations" includes
19    rules promulgated and forms prescribed by the Department.
20        (20) Resident. The term "resident" means:
21            (A) an individual (i) who is in this State for
22        other than a temporary or transitory purpose during the
23        taxable year; or (ii) who is domiciled in this State
24        but is absent from the State for a temporary or
25        transitory purpose during the taxable year;
26            (B) The estate of a decedent who at his or her

 

 

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1        death was domiciled in this State;
2            (C) A trust created by a will of a decedent who at
3        his death was domiciled in this State; and
4            (D) An irrevocable trust, the grantor of which was
5        domiciled in this State at the time such trust became
6        irrevocable. For purpose of this subparagraph, a trust
7        shall be considered irrevocable to the extent that the
8        grantor is not treated as the owner thereof under
9        Sections 671 through 678 of the Internal Revenue Code.
10        (21) Sales. The term "sales" means all gross receipts
11    of the taxpayer not allocated under Sections 301, 302 and
12    303.
13        (22) State. The term "state" when applied to a
14    jurisdiction other than this State means any state of the
15    United States, the District of Columbia, the Commonwealth
16    of Puerto Rico, any Territory or Possession of the United
17    States, and any foreign country, or any political
18    subdivision of any of the foregoing. For purposes of the
19    foreign tax credit under Section 601, the term "state"
20    means any state of the United States, the District of
21    Columbia, the Commonwealth of Puerto Rico, and any
22    territory or possession of the United States, or any
23    political subdivision of any of the foregoing, effective
24    for tax years ending on or after December 31, 1989.
25        (23) Taxable year. The term "taxable year" means the
26    calendar year, or the fiscal year ending during such

 

 

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1    calendar year, upon the basis of which the base income is
2    computed under this Act. "Taxable year" means, in the case
3    of a return made for a fractional part of a year under the
4    provisions of this Act, the period for which such return is
5    made.
6        (24) Taxpayer. The term "taxpayer" means any person
7    subject to the tax imposed by this Act.
8        (25) International banking facility. The term
9    international banking facility shall have the same meaning
10    as is set forth in the Illinois Banking Act or as is set
11    forth in the laws of the United States or regulations of
12    the Board of Governors of the Federal Reserve System.
13        (26) Income Tax Return Preparer.
14            (A) The term "income tax return preparer" means any
15        person who prepares for compensation, or who employs
16        one or more persons to prepare for compensation, any
17        return of tax imposed by this Act or any claim for
18        refund of tax imposed by this Act. The preparation of a
19        substantial portion of a return or claim for refund
20        shall be treated as the preparation of that return or
21        claim for refund.
22            (B) A person is not an income tax return preparer
23        if all he or she does is
24                (i) furnish typing, reproducing, or other
25            mechanical assistance;
26                (ii) prepare returns or claims for refunds for

 

 

10000SB0009sam006- 202 -LRB100 06347 HLH 26817 a

1            the employer by whom he or she is regularly and
2            continuously employed;
3                (iii) prepare as a fiduciary returns or claims
4            for refunds for any person; or
5                (iv) prepare claims for refunds for a taxpayer
6            in response to any notice of deficiency issued to
7            that taxpayer or in response to any waiver of
8            restriction after the commencement of an audit of
9            that taxpayer or of another taxpayer if a
10            determination in the audit of the other taxpayer
11            directly or indirectly affects the tax liability
12            of the taxpayer whose claims he or she is
13            preparing.
14        (27) Unitary business group.
15            (A) The term "unitary business group" means a group
16        of persons related through common ownership whose
17        business activities are integrated with, dependent
18        upon and contribute to each other. The group will not
19        include those members whose business activity outside
20        the United States is 80% or more of any such member's
21        total business activity; for purposes of this
22        paragraph and clause (a)(3)(B)(ii) of Section 304,
23        business activity within the United States shall be
24        measured by means of the factors ordinarily applicable
25        under subsections (a), (b), (c), (d), or (h) of Section
26        304 except that, in the case of members ordinarily

 

 

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1        required to apportion business income by means of the 3
2        factor formula of property, payroll and sales
3        specified in subsection (a) of Section 304, including
4        the formula as weighted in subsection (h) of Section
5        304, such members shall not use the sales factor in the
6        computation and the results of the property and payroll
7        factor computations of subsection (a) of Section 304
8        shall be divided by 2 (by one if either the property or
9        payroll factor has a denominator of zero). The
10        computation required by the preceding sentence shall,
11        in each case, involve the division of the member's
12        property, payroll, or revenue miles in the United
13        States, insurance premiums on property or risk in the
14        United States, or financial organization business
15        income from sources within the United States, as the
16        case may be, by the respective worldwide figures for
17        such items. Common ownership in the case of
18        corporations is the direct or indirect control or
19        ownership of more than 50% of the outstanding voting
20        stock of the persons carrying on unitary business
21        activity. Unitary business activity can ordinarily be
22        illustrated where the activities of the members are:
23        (1) in the same general line (such as manufacturing,
24        wholesaling, retailing of tangible personal property,
25        insurance, transportation or finance); or (2) are
26        steps in a vertically structured enterprise or process

 

 

10000SB0009sam006- 204 -LRB100 06347 HLH 26817 a

1        (such as the steps involved in the production of
2        natural resources, which might include exploration,
3        mining, refining, and marketing); and, in either
4        instance, the members are functionally integrated
5        through the exercise of strong centralized management
6        (where, for example, authority over such matters as
7        purchasing, financing, tax compliance, product line,
8        personnel, marketing and capital investment is not
9        left to each member).
10            (B) In no event, for taxable years beginning prior
11        to January 1, 2017, and excepting any unitary business
12        group that apportions business income under Section
13        304(b) of this Act and is subject to the insurance
14        premium tax imposed under the Illinois Insurance Code,
15        shall any unitary business group include members which
16        are ordinarily required to apportion business income
17        under different subsections of Section 304 except that
18        for tax years ending on or after December 31, 1987 this
19        prohibition shall not apply to a holding company that
20        would otherwise be a member of a unitary business group
21        with taxpayers that apportion business income under
22        any of subsections (b), (c), (c-1), or (d) of Section
23        304. If a unitary business group would, but for the
24        preceding sentence, include members that are
25        ordinarily required to apportion business income under
26        different subsections of Section 304, then for each

 

 

10000SB0009sam006- 205 -LRB100 06347 HLH 26817 a

1        subsection of Section 304 for which there are two or
2        more members, there shall be a separate unitary
3        business group composed of such members. For purposes
4        of the preceding two sentences, a member is "ordinarily
5        required to apportion business income" under a
6        particular subsection of Section 304 if it would be
7        required to use the apportionment method prescribed by
8        such subsection except for the fact that it derives
9        business income solely from Illinois. As used in this
10        paragraph, the phrase "United States" means only the 50
11        states and the District of Columbia and , but does not
12        include any territory or possession of the United
13        States, but, for taxable years ending on or after
14        December 31, 2017, does include or any area over which
15        the United States has asserted jurisdiction or claimed
16        exclusive rights with respect to the exploration for or
17        exploitation of natural resources.
18            (C) Holding companies.
19                (i) For purposes of this subparagraph, a
20            "holding company" is a corporation (other than a
21            corporation that is a financial organization under
22            paragraph (8) of this subsection (a) of Section
23            1501 because it is a bank holding company under the
24            provisions of the Bank Holding Company Act of 1956
25            (12 U.S.C. 1841, et seq.) or because it is owned by
26            a bank or a bank holding company) that owns a

 

 

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1            controlling interest in one or more other
2            taxpayers ("controlled taxpayers"); that, during
3            the period that includes the taxable year and the 2
4            immediately preceding taxable years or, if the
5            corporation was formed during the current or
6            immediately preceding taxable year, the taxable
7            years in which the corporation has been in
8            existence, derived substantially all its gross
9            income from dividends, interest, rents, royalties,
10            fees or other charges received from controlled
11            taxpayers for the provision of services, and gains
12            on the sale or other disposition of interests in
13            controlled taxpayers or in property leased or
14            licensed to controlled taxpayers or used by the
15            taxpayer in providing services to controlled
16            taxpayers; and that incurs no substantial expenses
17            other than expenses (including interest and other
18            costs of borrowing) incurred in connection with
19            the acquisition and holding of interests in
20            controlled taxpayers and in the provision of
21            services to controlled taxpayers or in the leasing
22            or licensing of property to controlled taxpayers.
23                (ii) The income of a holding company which is a
24            member of more than one unitary business group
25            shall be included in each unitary business group of
26            which it is a member on a pro rata basis, by

 

 

10000SB0009sam006- 207 -LRB100 06347 HLH 26817 a

1            including in each unitary business group that
2            portion of the base income of the holding company
3            that bears the same proportion to the total base
4            income of the holding company as the gross receipts
5            of the unitary business group bears to the combined
6            gross receipts of all unitary business groups (in
7            both cases without regard to the holding company)
8            or on any other reasonable basis, consistently
9            applied.
10                (iii) A holding company shall apportion its
11            business income under the subsection of Section
12            304 used by the other members of its unitary
13            business group. The apportionment factors of a
14            holding company which would be a member of more
15            than one unitary business group shall be included
16            with the apportionment factors of each unitary
17            business group of which it is a member on a pro
18            rata basis using the same method used in clause
19            (ii).
20                (iv) The provisions of this subparagraph (C)
21            are intended to clarify existing law.
22            (D) If including the base income and factors of a
23        holding company in more than one unitary business group
24        under subparagraph (C) does not fairly reflect the
25        degree of integration between the holding company and
26        one or more of the unitary business groups, the

 

 

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1        dependence of the holding company and one or more of
2        the unitary business groups upon each other, or the
3        contributions between the holding company and one or
4        more of the unitary business groups, the holding
5        company may petition the Director, under the
6        procedures provided under Section 304(f), for
7        permission to include all base income and factors of
8        the holding company only with members of a unitary
9        business group apportioning their business income
10        under one subsection of subsections (a), (b), (c), or
11        (d) of Section 304. If the petition is granted, the
12        holding company shall be included in a unitary business
13        group only with persons apportioning their business
14        income under the selected subsection of Section 304
15        until the Director grants a petition of the holding
16        company either to be included in more than one unitary
17        business group under subparagraph (C) or to include its
18        base income and factors only with members of a unitary
19        business group apportioning their business income
20        under a different subsection of Section 304.
21            (E) If the unitary business group members'
22        accounting periods differ, the common parent's
23        accounting period or, if there is no common parent, the
24        accounting period of the member that is expected to
25        have, on a recurring basis, the greatest Illinois
26        income tax liability must be used to determine whether

 

 

10000SB0009sam006- 209 -LRB100 06347 HLH 26817 a

1        to use the apportionment method provided in subsection
2        (a) or subsection (h) of Section 304. The prohibition
3        against membership in a unitary business group for
4        taxpayers ordinarily required to apportion income
5        under different subsections of Section 304 does not
6        apply to taxpayers required to apportion income under
7        subsection (a) and subsection (h) of Section 304. The
8        provisions of this amendatory Act of 1998 apply to tax
9        years ending on or after December 31, 1998.
10        (28) Subchapter S corporation. The term "Subchapter S
11    corporation" means a corporation for which there is in
12    effect an election under Section 1362 of the Internal
13    Revenue Code, or for which there is a federal election to
14    opt out of the provisions of the Subchapter S Revision Act
15    of 1982 and have applied instead the prior federal
16    Subchapter S rules as in effect on July 1, 1982.
17        (30) Foreign person. The term "foreign person" means
18    any person who is a nonresident alien individual and any
19    nonindividual entity, regardless of where created or
20    organized, whose business activity outside the United
21    States is 80% or more of the entity's total business
22    activity.
 
23    (b) Other definitions.
24        (1) Words denoting number, gender, and so forth, when
25    used in this Act, where not otherwise distinctly expressed

 

 

10000SB0009sam006- 210 -LRB100 06347 HLH 26817 a

1    or manifestly incompatible with the intent thereof:
2            (A) Words importing the singular include and apply
3        to several persons, parties or things;
4            (B) Words importing the plural include the
5        singular; and
6            (C) Words importing the masculine gender include
7        the feminine as well.
8        (2) "Company" or "association" as including successors
9    and assigns. The word "company" or "association", when used
10    in reference to a corporation, shall be deemed to embrace
11    the words "successors and assigns of such company or
12    association", and in like manner as if these last-named
13    words, or words of similar import, were expressed.
14        (3) Other terms. Any term used in any Section of this
15    Act with respect to the application of, or in connection
16    with, the provisions of any other Section of this Act shall
17    have the same meaning as in such other Section.
18(Source: P.A. 99-213, eff. 7-31-15.)
 
19    Section 30-15. The Film Production Services Tax Credit Act
20of 2008 is amended by changing Section 42 as follows:
 
21    (35 ILCS 16/42)
22    Sec. 42. Sunset of credits. The application of credits
23awarded pursuant to this Act shall be limited by a reasonable
24and appropriate sunset date. A taxpayer shall not be entitled

 

 

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1to take a credit awarded pursuant to this Act for tax years
2beginning on or after January 1, 2027 10 years after the
3effective date of this amendatory Act of the 97th General
4Assembly. After the initial 10-year sunset, the General
5Assembly may extend the sunset date by 5-year intervals.
6(Source: P.A. 97-2, eff. 5-6-11; 97-3, eff. 5-6-11.)
 
7    Section 30-20. The Use Tax Act is amended by changing
8Sections 2, 3, 3-5, 3-10, 3-10.5, 3-45, 3-50, 3-55, 3-65, 3-75,
93a, 4, 5, 6, 7, 8, 9, 10, and 11 and by adding Section 2a-2 as
10follows:
 
11    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
12    Sec. 2. Definitions.
13    "Use" means the exercise by any person of any right or
14power over tangible personal property incident to the ownership
15of that property or the exercise by any person of any right or
16power over, or the enjoyment of, a taxable service, except that
17it does not include the sale of such property or taxable
18service in any form as tangible personal property or a taxable
19service in the regular course of business to the extent that
20such property or taxable service is not first subjected to a
21use for which it was purchased, and does not include the use of
22such property or taxable service by its owner for demonstration
23purposes: Provided that the property or service purchased is
24deemed to be purchased for the purpose of resale, despite first

 

 

10000SB0009sam006- 212 -LRB100 06347 HLH 26817 a

1being used, to the extent to which it is resold as an
2ingredient of an intentionally produced product or by-product
3of manufacturing or is otherwise transferred to the purchaser
4of tangible personal property or taxable service. "Use" does
5not mean the demonstration use or interim use of tangible
6personal property or a taxable service by a retailer before he
7sells that tangible personal property or taxable service. For
8watercraft or aircraft, if the period of demonstration use or
9interim use by the retailer exceeds 18 months, the retailer
10shall pay on the retailers' original cost price the tax imposed
11by this Act, and no credit for that tax is permitted if the
12watercraft or aircraft is subsequently sold by the retailer.
13"Use" does not mean the physical incorporation of tangible
14personal property, to the extent not first subjected to a use
15for which it was purchased, as an ingredient or constituent,
16into other tangible personal property (a) which is sold in the
17regular course of business or (b) which the person
18incorporating such ingredient or constituent therein has
19undertaken at the time of such purchase to cause to be
20transported in interstate commerce to destinations outside the
21State of Illinois: Provided that the property purchased is
22deemed to be purchased for the purpose of resale, despite first
23being used, to the extent to which it is resold as an
24ingredient of an intentionally produced product or by-product
25of manufacturing.
26    "Watercraft" means a Class 2, Class 3, or Class 4

 

 

10000SB0009sam006- 213 -LRB100 06347 HLH 26817 a

1watercraft as defined in Section 3-2 of the Boat Registration
2and Safety Act, a personal watercraft, or any boat equipped
3with an inboard motor.
4    "Purchase at retail" means the acquisition of the ownership
5of or title to tangible personal property or the acquisition of
6a taxable service through a sale at retail.
7    "Purchaser" means anyone who, through a sale at retail,
8acquires a taxable service or the ownership of tangible
9personal property for a valuable consideration.
10    "Sale at retail" means any transfer of the ownership of or
11title to tangible personal property to a purchaser or the
12performance of a taxable service for a purchaser, for the
13purpose of use, and not for the purpose of resale in any form
14as tangible personal property or taxable service to the extent
15not first subjected to a use for which it was purchased, for a
16valuable consideration: Provided that the property purchased
17is deemed to be purchased for the purpose of resale, despite
18first being used, to the extent to which it is resold as an
19ingredient of an intentionally produced product or by-product
20of manufacturing. For this purpose, slag produced as an
21incident to manufacturing pig iron or steel and sold is
22considered to be an intentionally produced by-product of
23manufacturing. "Sale at retail" includes any such transfer made
24for resale unless made in compliance with Section 2c of the
25Retailers' Occupation Tax Act, as incorporated by reference
26into Section 12 of this Act. Transactions whereby the

 

 

10000SB0009sam006- 214 -LRB100 06347 HLH 26817 a

1possession of the property is transferred but the seller
2retains the title as security for payment of the selling price
3are sales.
4    "Sale at retail" shall also be construed to include any
5Illinois florist's sales transaction in which the purchase
6order is received in Illinois by a florist and the sale is for
7use or consumption, but the Illinois florist has a florist in
8another state deliver the property to the purchaser or the
9purchaser's donee in such other state.
10    Nonreusable tangible personal property that is used by
11persons engaged in the business of operating a restaurant,
12cafeteria, or drive-in is a sale for resale when it is
13transferred to customers in the ordinary course of business as
14part of the sale of food or beverages and is used to deliver,
15package, or consume food or beverages, regardless of where
16consumption of the food or beverages occurs. Examples of those
17items include, but are not limited to nonreusable, paper and
18plastic cups, plates, baskets, boxes, sleeves, buckets or other
19containers, utensils, straws, placemats, napkins, doggie bags,
20and wrapping or packaging materials that are transferred to
21customers as part of the sale of food or beverages in the
22ordinary course of business.
23    The purchase, employment and transfer of such tangible
24personal property as newsprint and ink for the primary purpose
25of conveying news (with or without other information) is not a
26purchase, use or sale of tangible personal property.

 

 

10000SB0009sam006- 215 -LRB100 06347 HLH 26817 a

1    "Selling price" means the consideration for a sale valued
2in money whether received in money or otherwise, including
3cash, credits, property other than as hereinafter provided, and
4services, but not including the value of or credit given for
5traded-in tangible personal property where the item that is
6traded-in is of like kind and character as that which is being
7sold, and shall be determined without any deduction on account
8of the cost of the property sold, the cost of materials used,
9labor or service cost or any other expense whatsoever, but does
10not include interest or finance charges which appear as
11separate items on the bill of sale or sales contract nor
12charges that are added to prices by sellers on account of the
13seller's tax liability under the "Retailers' Occupation Tax
14Act", or on account of the seller's duty to collect, from the
15purchaser, the tax that is imposed by this Act, or, except as
16otherwise provided with respect to any cigarette tax imposed by
17a home rule unit, on account of the seller's tax liability
18under any local occupation tax administered by the Department,
19or, except as otherwise provided with respect to any cigarette
20tax imposed by a home rule unit on account of the seller's duty
21to collect, from the purchasers, the tax that is imposed under
22any local use tax administered by the Department. Effective
23December 1, 1985, "selling price" shall include charges that
24are added to prices by sellers on account of the seller's tax
25liability under the Cigarette Tax Act, on account of the
26seller's duty to collect, from the purchaser, the tax imposed

 

 

10000SB0009sam006- 216 -LRB100 06347 HLH 26817 a

1under the Cigarette Use Tax Act, and on account of the seller's
2duty to collect, from the purchaser, any cigarette tax imposed
3by a home rule unit.
4    Notwithstanding any law to the contrary, for any motor
5vehicle, as defined in Section 1-146 of the Vehicle Code, that
6is sold on or after January 1, 2015 for the purpose of leasing
7the vehicle for a defined period that is longer than one year
8and (1) is a motor vehicle of the second division that: (A) is
9a self-contained motor vehicle designed or permanently
10converted to provide living quarters for recreational,
11camping, or travel use, with direct walk through access to the
12living quarters from the driver's seat; (B) is of the van
13configuration designed for the transportation of not less than
147 nor more than 16 passengers; or (C) has a gross vehicle
15weight rating of 8,000 pounds or less or (2) is a motor vehicle
16of the first division, "selling price" or "amount of sale"
17means the consideration received by the lessor pursuant to the
18lease contract, including amounts due at lease signing and all
19monthly or other regular payments charged over the term of the
20lease. Also included in the selling price is any amount
21received by the lessor from the lessee for the leased vehicle
22that is not calculated at the time the lease is executed,
23including, but not limited to, excess mileage charges and
24charges for excess wear and tear. For sales that occur in
25Illinois, with respect to any amount received by the lessor
26from the lessee for the leased vehicle that is not calculated

 

 

10000SB0009sam006- 217 -LRB100 06347 HLH 26817 a

1at the time the lease is executed, the lessor who purchased the
2motor vehicle does not incur the tax imposed by the Use Tax Act
3on those amounts, and the retailer who makes the retail sale of
4the motor vehicle to the lessor is not required to collect the
5tax imposed by this Act or to pay the tax imposed by the
6Retailers' Occupation Tax Act on those amounts. However, the
7lessor who purchased the motor vehicle assumes the liability
8for reporting and paying the tax on those amounts directly to
9the Department in the same form (Illinois Retailers' Occupation
10Tax, and local retailers' occupation taxes, if applicable) in
11which the retailer would have reported and paid such tax if the
12retailer had accounted for the tax to the Department. For
13amounts received by the lessor from the lessee that are not
14calculated at the time the lease is executed, the lessor must
15file the return and pay the tax to the Department by the due
16date otherwise required by this Act for returns other than
17transaction returns. If the retailer is entitled under this Act
18to a discount for collecting and remitting the tax imposed
19under this Act to the Department with respect to the sale of
20the motor vehicle to the lessor, then the right to the discount
21provided in this Act shall be transferred to the lessor with
22respect to the tax paid by the lessor for any amount received
23by the lessor from the lessee for the leased vehicle that is
24not calculated at the time the lease is executed; provided that
25the discount is only allowed if the return is timely filed and
26for amounts timely paid. The "selling price" of a motor vehicle

 

 

10000SB0009sam006- 218 -LRB100 06347 HLH 26817 a

1that is sold on or after January 1, 2015 for the purpose of
2leasing for a defined period of longer than one year shall not
3be reduced by the value of or credit given for traded-in
4tangible personal property owned by the lessor, nor shall it be
5reduced by the value of or credit given for traded-in tangible
6personal property owned by the lessee, regardless of whether
7the trade-in value thereof is assigned by the lessee to the
8lessor. In the case of a motor vehicle that is sold for the
9purpose of leasing for a defined period of longer than one
10year, the sale occurs at the time of the delivery of the
11vehicle, regardless of the due date of any lease payments. A
12lessor who incurs a Retailers' Occupation Tax liability on the
13sale of a motor vehicle coming off lease may not take a credit
14against that liability for the Use Tax the lessor paid upon the
15purchase of the motor vehicle (or for any tax the lessor paid
16with respect to any amount received by the lessor from the
17lessee for the leased vehicle that was not calculated at the
18time the lease was executed) if the selling price of the motor
19vehicle at the time of purchase was calculated using the
20definition of "selling price" as defined in this paragraph.
21Notwithstanding any other provision of this Act to the
22contrary, lessors shall file all returns and make all payments
23required under this paragraph to the Department by electronic
24means in the manner and form as required by the Department.
25This paragraph does not apply to leases of motor vehicles for
26which, at the time the lease is entered into, the term of the

 

 

10000SB0009sam006- 219 -LRB100 06347 HLH 26817 a

1lease is not a defined period, including leases with a defined
2initial period with the option to continue the lease on a
3month-to-month or other basis beyond the initial defined
4period.
5    The phrase "like kind and character" shall be liberally
6construed (including but not limited to any form of motor
7vehicle for any form of motor vehicle, or any kind of farm or
8agricultural implement for any other kind of farm or
9agricultural implement), while not including a kind of item
10which, if sold at retail by that retailer, would be exempt from
11retailers' occupation tax and use tax as an isolated or
12occasional sale.
13    "Department" means the Department of Revenue.
14    "Person" means any natural individual, firm, partnership,
15association, joint stock company, joint adventure, public or
16private corporation, limited liability company, or a receiver,
17executor, trustee, guardian or other representative appointed
18by order of any court.
19    "Retailer" means and includes every person engaged in the
20business of making sales at retail as defined in this Section.
21    A person who holds himself or herself out as being engaged
22(or who habitually engages) in selling tangible personal
23property or taxable services at retail is a retailer hereunder
24with respect to such sales (and not primarily in a nontaxable
25service occupation) notwithstanding the fact that such person
26designs and produces such tangible personal property or taxable

 

 

10000SB0009sam006- 220 -LRB100 06347 HLH 26817 a

1service on special order for the purchaser and in such a way as
2to render the property or service of value only to such
3purchaser, if such tangible personal property or taxable
4service so produced on special order serves substantially the
5same function as stock or standard items of tangible personal
6property or taxable service that are sold at retail.
7    A person whose activities are organized and conducted
8primarily as a not-for-profit service enterprise, and who
9engages in selling tangible personal property or taxable
10services at retail (whether to the public or merely to members
11and their guests) is a retailer with respect to such
12transactions, excepting only a person organized and operated
13exclusively for charitable, religious or educational purposes
14either (1), to the extent of sales by such person to its
15members, students, patients or inmates of tangible personal
16property to be used primarily for the purposes of such person,
17or (2), to the extent of sales by such person of tangible
18personal property or taxable services which are is not sold or
19offered for sale by persons organized for profit. The selling
20of school books and school supplies by schools at retail to
21students is not "primarily for the purposes of" the school
22which does such selling. This paragraph does not apply to nor
23subject to taxation occasional dinners, social or similar
24activities of a person organized and operated exclusively for
25charitable, religious or educational purposes, whether or not
26such activities are open to the public.

 

 

10000SB0009sam006- 221 -LRB100 06347 HLH 26817 a

1    A person who is the recipient of a grant or contract under
2Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
3serves meals to participants in the federal Nutrition Program
4for the Elderly in return for contributions established in
5amount by the individual participant pursuant to a schedule of
6suggested fees as provided for in the federal Act is not a
7retailer under this Act with respect to such transactions.
8    Persons who engage in the business of transferring tangible
9personal property or taxable services upon the redemption of
10trading stamps are retailers hereunder when engaged in such
11business.
12    The isolated or occasional sale of tangible personal
13property or taxable services at retail by a person who does not
14hold himself out as being engaged (or who does not habitually
15engage) in selling such tangible personal property or taxable
16services at retail or a sale through a bulk vending machine
17does not make such person a retailer hereunder. However, any
18person who is engaged in a business which is not subject to the
19tax imposed by the "Retailers' Occupation Tax Act" because of
20involving the sale of or a contract to sell real estate or a
21construction contract to improve real estate, but who, in the
22course of conducting such business, transfers tangible
23personal property to users or consumers in the finished form in
24which it was purchased, and which does not become real estate,
25under any provision of a construction contract or real estate
26sale or real estate sales agreement entered into with some

 

 

10000SB0009sam006- 222 -LRB100 06347 HLH 26817 a

1other person arising out of or because of such nontaxable
2business, is a retailer to the extent of the value of the
3tangible personal property so transferred. If, in such
4transaction, a separate charge is made for the tangible
5personal property so transferred, the value of such property,
6for the purposes of this Act, is the amount so separately
7charged, but not less than the cost of such property to the
8transferor; if no separate charge is made, the value of such
9property, for the purposes of this Act, is the cost to the
10transferor of such tangible personal property.
11    "Retailer maintaining a place of business in this State",
12or any like term, means and includes any of the following
13retailers:
14        1. A retailer having or maintaining within this State,
15    directly or by a subsidiary, an office, distribution house,
16    sales house, warehouse or other place of business, or any
17    agent or other representative operating within this State
18    under the authority of the retailer or its subsidiary,
19    irrespective of whether such place of business or agent or
20    other representative is located here permanently or
21    temporarily, or whether such retailer or subsidiary is
22    licensed to do business in this State. However, the
23    ownership of property that is located at the premises of a
24    printer with which the retailer has contracted for printing
25    and that consists of the final printed product, property
26    that becomes a part of the final printed product, or copy

 

 

10000SB0009sam006- 223 -LRB100 06347 HLH 26817 a

1    from which the printed product is produced shall not result
2    in the retailer being deemed to have or maintain an office,
3    distribution house, sales house, warehouse, or other place
4    of business within this State.
5        1.1. A retailer having a contract with a person located
6    in this State under which the person, for a commission or
7    other consideration based upon the sale of tangible
8    personal property or taxable services by the retailer,
9    directly or indirectly refers potential customers to the
10    retailer by providing to the potential customers a
11    promotional code or other mechanism that allows the
12    retailer to track purchases referred by such persons.
13    Examples of mechanisms that allow the retailer to track
14    purchases referred by such persons include but are not
15    limited to the use of a link on the person's Internet
16    website, promotional codes distributed through the
17    person's hand-delivered or mailed material, and
18    promotional codes distributed by the person through radio
19    or other broadcast media. The provisions of this paragraph
20    1.1 shall apply only if the cumulative gross receipts from
21    sales of tangible personal property or taxable service by
22    the retailer to customers who are referred to the retailer
23    by all persons in this State under such contracts exceed
24    $10,000 during the preceding 4 quarterly periods ending on
25    the last day of March, June, September, and December. A
26    retailer meeting the requirements of this paragraph 1.1

 

 

10000SB0009sam006- 224 -LRB100 06347 HLH 26817 a

1    shall be presumed to be maintaining a place of business in
2    this State but may rebut this presumption by submitting
3    proof that the referrals or other activities pursued within
4    this State by such persons were not sufficient to meet the
5    nexus standards of the United States Constitution during
6    the preceding 4 quarterly periods.
7        1.2. Beginning July 1, 2011, a retailer having a
8    contract with a person located in this State under which:
9            A. the retailer sells the same or substantially
10        similar line of products or taxable services as the
11        person located in this State and does so using an
12        identical or substantially similar name, trade name,
13        or trademark as the person located in this State; and
14            B. the retailer provides a commission or other
15        consideration to the person located in this State based
16        upon the sale of tangible personal property or taxable
17        service by the retailer.
18    The provisions of this paragraph 1.2 shall apply only if
19    the cumulative gross receipts from sales of tangible
20    personal property or taxable service by the retailer to
21    customers in this State under all such contracts exceed
22    $10,000 during the preceding 4 quarterly periods ending on
23    the last day of March, June, September, and December.
24        2. A retailer soliciting orders for tangible personal
25    property or taxable service by means of a telecommunication
26    or television shopping system (which utilizes toll free

 

 

10000SB0009sam006- 225 -LRB100 06347 HLH 26817 a

1    numbers) which is intended by the retailer to be broadcast
2    by cable television or other means of broadcasting, to
3    consumers located in this State.
4        3. A retailer, pursuant to a contract with a
5    broadcaster or publisher located in this State, soliciting
6    orders for tangible personal property or taxable service by
7    means of advertising which is disseminated primarily to
8    consumers located in this State and only secondarily to
9    bordering jurisdictions.
10        4. A retailer soliciting orders for tangible personal
11    property or taxable service by mail if the solicitations
12    are substantial and recurring and if the retailer benefits
13    from any banking, financing, debt collection,
14    telecommunication, or marketing activities occurring in
15    this State or benefits from the location in this State of
16    authorized installation, servicing, or repair facilities.
17        5. A retailer that is owned or controlled by the same
18    interests that own or control any retailer engaging in
19    business in the same or similar line of business in this
20    State.
21        6. A retailer having a franchisee or licensee operating
22    under its trade name if the franchisee or licensee is
23    required to collect the tax under this Section.
24        7. A retailer, pursuant to a contract with a cable
25    television operator located in this State, soliciting
26    orders for tangible personal property or taxable service by

 

 

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1    means of advertising which is transmitted or distributed
2    over a cable television system in this State.
3        8. A retailer engaging in activities in Illinois, which
4    activities in the state in which the retail business
5    engaging in such activities is located would constitute
6    maintaining a place of business in that state.
7    "Bulk vending machine" means a vending machine, containing
8unsorted confections, nuts, toys, or other items designed
9primarily to be used or played with by children which, when a
10coin or coins of a denomination not larger than $0.50 are
11inserted, are dispensed in equal portions, at random and
12without selection by the customer.
13(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14;
1498-1089, eff. 1-1-15; 99-78, eff. 7-20-15.)
 
15    (35 ILCS 105/2a-2 new)
16    Sec. 2a-2. Taxable services. Beginning January 1, 2018,
17"taxable service" means any of the following services:
18        (1) Providing space for storage.
19            (A) "Storage" means the retaining or keeping of
20        tangible personal property in this State for any
21        purpose. For purposes of this Section, tangible
22        personal property, does not include "grain" as defined
23        in the Public Grain Warehouse and Warehouse Receipts
24        Act.
25            (B) "Space for storage" means (i) secure areas,

 

 

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1        such as rooms, units, compartments or containers,
2        whether accessible from outside or from within a
3        building, that are designated for the use of a
4        purchaser, where the purchaser can store and retrieve
5        property, including self-storage units, mini-storage
6        units, and areas by any other name; (ii) any parking
7        lot, ramp, or parking garage for a vehicle, whether the
8        vehicle is parked by the operator of the vehicle or by
9        an attendant; (iii) any aircraft parking area, ramp, or
10        hanger; (iv) any boat slip, dock, or dry dock; (v) any
11        recreational vehicle parking area or garage; and (vi)
12        any other areas for storage or parking of tangible
13        personal property.
14            (C) "Self-storage or mini-storage" includes
15        storage lockers or storage units in apartment
16        complexes (if the locker or unit is utilized at the
17        tenant's option and includes payment of a fee in
18        addition to apartment rental), and in amusement parks,
19        water parks, recreational facilities, and other
20        locations where lockers are rented for self-storage.
21        (2) Laundry, drycleaning, cloth pressing, dyeing, or
22    linen service, except when the service is performed by the
23    purchaser through the use of coin-operated, self-service
24    machines.
25        (3) Private detective, private alarm, and private
26    security service for which the provider of the service is

 

 

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1    required to be licensed pursuant to the Private Detective,
2    Private Alarm, Private Security, Fingerprint Vendor, and
3    Locksmith Act of 2004, or would be required to be so
4    licensed in performing those services in this State.
5        (4) Structural pest control services. "Structural pest
6    control services" means use of any device or the
7    application of any substance to prevent, repel, mitigate,
8    curb, control, or eradicate any structural pest in, on,
9    under, or around a structure, or within a part of, or
10    materials used in building, a structure; the use of any
11    pesticide, including insecticides, fungicides and other
12    wood treatment products, attractants, repellents,
13    rodenticides, fumigants, or mechanical devices for
14    preventing, controlling, eradicating, identifying,
15    mitigating, diminishing, or curbing insects, vermin, rats,
16    mice, or other pests in, on, under, or around a structure,
17    or within a part of, or materials used in building, a
18    structure; vault fumigation and fumigation of box cars,
19    trucks, ships, airplanes, docks, warehouses, and common
20    carriers or soliciting to perform any of the foregoing
21    functions.
22        (5) Personal care services, including skin care, the
23    application of cosmetics, manicuring, pedicuring, hair
24    removal, tattooing, body piercing, tanning, and other
25    similar services. "Personal care services" does not
26    include massage therapy or personal care services provided

 

 

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1    by or on the order of a licensed physician, licensed
2    chiropractor, physician assistant, advanced practice
3    nurse, registered nurse, or licensed practical nurse, or
4    the cutting, coloring, or styling of an individual's hair.
 
5    (35 ILCS 105/3)  (from Ch. 120, par. 439.3)
6    Sec. 3. Tax imposed. A tax is imposed upon the privilege of
7using in this State a taxable service or tangible personal
8property purchased at retail from a retailer, including
9computer software, and including photographs, negatives, and
10positives that are the product of photoprocessing, but not
11including products of photoprocessing produced for use in
12motion pictures for commercial exhibition. Beginning January
131, 2001, prepaid telephone calling arrangements shall be
14considered tangible personal property subject to the tax
15imposed under this Act regardless of the form in which those
16arrangements may be embodied, transmitted, or fixed by any
17method now known or hereafter developed. Purchases of (1)
18electricity delivered to customers by wire; (2) natural or
19artificial gas that is delivered to customers through pipes,
20pipelines, or mains; and (3) water that is delivered to
21customers through pipes, pipelines, or mains are not subject to
22tax under this Act. The provisions of this amendatory Act of
23the 98th General Assembly are declaratory of existing law as to
24the meaning and scope of this Act.
25(Source: P.A. 98-583, eff. 1-1-14.)
 

 

 

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1    (35 ILCS 105/3-5)
2    Sec. 3-5. Exemptions. Use of the following tangible
3personal property or taxable service is exempt from the tax
4imposed by this Act:
5    (1) Personal property or taxable services purchased from a
6corporation, society, association, foundation, institution, or
7organization, other than a limited liability company, that is
8organized and operated as a not-for-profit service enterprise
9for the benefit of persons 65 years of age or older if the
10personal property or taxable service was not purchased by the
11enterprise for the purpose of resale by the enterprise.
12    (2) Personal property or taxable service purchased by a
13not-for-profit Illinois county fair association for use in
14conducting, operating, or promoting the county fair.
15    (3) Personal property or taxable services purchased by a
16not-for-profit arts or cultural organization that establishes,
17by proof required by the Department by rule, that it has
18received an exemption under Section 501(c)(3) of the Internal
19Revenue Code and that is organized and operated primarily for
20the presentation or support of arts or cultural programming,
21activities, or services. These organizations include, but are
22not limited to, music and dramatic arts organizations such as
23symphony orchestras and theatrical groups, arts and cultural
24service organizations, local arts councils, visual arts
25organizations, and media arts organizations. On and after the

 

 

10000SB0009sam006- 231 -LRB100 06347 HLH 26817 a

1effective date of this amendatory Act of the 92nd General
2Assembly, however, an entity otherwise eligible for this
3exemption shall not make tax-free purchases unless it has an
4active identification number issued by the Department.
5    (4) Personal property or taxable services purchased by a
6governmental body, by a corporation, society, association,
7foundation, or institution organized and operated exclusively
8for charitable, religious, or educational purposes, or by a
9not-for-profit corporation, society, association, foundation,
10institution, or organization that has no compensated officers
11or employees and that is organized and operated primarily for
12the recreation of persons 55 years of age or older. A limited
13liability company may qualify for the exemption under this
14paragraph only if the limited liability company is organized
15and operated exclusively for educational purposes. On and after
16July 1, 1987, however, no entity otherwise eligible for this
17exemption shall make tax-free purchases unless it has an active
18exemption identification number issued by the Department.
19    (5) Until July 1, 2003, a passenger car that is a
20replacement vehicle to the extent that the purchase price of
21the car is subject to the Replacement Vehicle Tax.
22    (6) Until July 1, 2003 and beginning again on September 1,
232004 through August 30, 2014, graphic arts machinery and
24equipment, including repair and replacement parts, both new and
25used, and including that manufactured on special order,
26certified by the purchaser to be used primarily for graphic

 

 

10000SB0009sam006- 232 -LRB100 06347 HLH 26817 a

1arts production, and including machinery and equipment
2purchased for lease. Equipment includes chemicals or chemicals
3acting as catalysts but only if the chemicals or chemicals
4acting as catalysts effect a direct and immediate change upon a
5graphic arts product. Beginning on July 1, 2017, graphic arts
6machinery and equipment is included in the manufacturing and
7assembling machinery and equipment exemption under paragraph
8(18).
9    (7) Farm chemicals.
10    (8) Legal tender, currency, medallions, or gold or silver
11coinage issued by the State of Illinois, the government of the
12United States of America, or the government of any foreign
13country, and bullion.
14    (9) Personal property purchased from a teacher-sponsored
15student organization affiliated with an elementary or
16secondary school located in Illinois.
17    (10) A motor vehicle that is used for automobile renting,
18as defined in the Automobile Renting Occupation and Use Tax
19Act.
20    (11) Farm machinery and equipment, both new and used,
21including that manufactured on special order, certified by the
22purchaser to be used primarily for production agriculture or
23State or federal agricultural programs, including individual
24replacement parts for the machinery and equipment, including
25machinery and equipment purchased for lease, and including
26implements of husbandry defined in Section 1-130 of the

 

 

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1Illinois Vehicle Code, farm machinery and agricultural
2chemical and fertilizer spreaders, and nurse wagons required to
3be registered under Section 3-809 of the Illinois Vehicle Code,
4but excluding other motor vehicles required to be registered
5under the Illinois Vehicle Code. Horticultural polyhouses or
6hoop houses used for propagating, growing, or overwintering
7plants shall be considered farm machinery and equipment under
8this item (11). Agricultural chemical tender tanks and dry
9boxes shall include units sold separately from a motor vehicle
10required to be licensed and units sold mounted on a motor
11vehicle required to be licensed if the selling price of the
12tender is separately stated.
13    Farm machinery and equipment shall include precision
14farming equipment that is installed or purchased to be
15installed on farm machinery and equipment including, but not
16limited to, tractors, harvesters, sprayers, planters, seeders,
17or spreaders. Precision farming equipment includes, but is not
18limited to, soil testing sensors, computers, monitors,
19software, global positioning and mapping systems, and other
20such equipment.
21    Farm machinery and equipment also includes computers,
22sensors, software, and related equipment used primarily in the
23computer-assisted operation of production agriculture
24facilities, equipment, and activities such as, but not limited
25to, the collection, monitoring, and correlation of animal and
26crop data for the purpose of formulating animal diets and

 

 

10000SB0009sam006- 234 -LRB100 06347 HLH 26817 a

1agricultural chemicals. This item (11) is exempt from the
2provisions of Section 3-90.
3    (12) Until June 30, 2013, fuel and petroleum products sold
4to or used by an air common carrier, certified by the carrier
5to be used for consumption, shipment, or storage in the conduct
6of its business as an air common carrier, for a flight destined
7for or returning from a location or locations outside the
8United States without regard to previous or subsequent domestic
9stopovers.
10    Beginning July 1, 2013, fuel and petroleum products sold to
11or used by an air carrier, certified by the carrier to be used
12for consumption, shipment, or storage in the conduct of its
13business as an air common carrier, for a flight that (i) is
14engaged in foreign trade or is engaged in trade between the
15United States and any of its possessions and (ii) transports at
16least one individual or package for hire from the city of
17origination to the city of final destination on the same
18aircraft, without regard to a change in the flight number of
19that aircraft.
20    (13) Proceeds of mandatory service charges separately
21stated on customers' bills for the purchase and consumption of
22food and beverages or taxable services purchased at retail from
23a retailer, to the extent that the proceeds of the service
24charge are in fact turned over as tips or as a substitute for
25tips to the employees who participate directly in preparing,
26serving, hosting or cleaning up the food or beverage function

 

 

10000SB0009sam006- 235 -LRB100 06347 HLH 26817 a

1with respect to which the service charge is imposed.
2    (14) Until July 1, 2003, oil field exploration, drilling,
3and production equipment, including (i) rigs and parts of rigs,
4rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
5tubular goods, including casing and drill strings, (iii) pumps
6and pump-jack units, (iv) storage tanks and flow lines, (v) any
7individual replacement part for oil field exploration,
8drilling, and production equipment, and (vi) machinery and
9equipment purchased for lease; but excluding motor vehicles
10required to be registered under the Illinois Vehicle Code.
11    (15) Photoprocessing machinery and equipment, including
12repair and replacement parts, both new and used, including that
13manufactured on special order, certified by the purchaser to be
14used primarily for photoprocessing, and including
15photoprocessing machinery and equipment purchased for lease.
16    (16) Coal and aggregate exploration, mining, off-highway
17hauling, processing, maintenance, and reclamation equipment,
18including replacement parts and equipment, and including
19equipment purchased for lease, but excluding motor vehicles
20required to be registered under the Illinois Vehicle Code. The
21changes made to this Section by Public Act 97-767 apply on and
22after July 1, 2003, but no claim for credit or refund is
23allowed on or after August 16, 2013 (the effective date of
24Public Act 98-456) for such taxes paid during the period
25beginning July 1, 2003 and ending on August 16, 2013 (the
26effective date of Public Act 98-456).

 

 

10000SB0009sam006- 236 -LRB100 06347 HLH 26817 a

1    (17) Until July 1, 2003, distillation machinery and
2equipment, sold as a unit or kit, assembled or installed by the
3retailer, certified by the user to be used only for the
4production of ethyl alcohol that will be used for consumption
5as motor fuel or as a component of motor fuel for the personal
6use of the user, and not subject to sale or resale.
7    (18) Manufacturing and assembling machinery and equipment
8used primarily in the process of manufacturing or assembling
9tangible personal property for wholesale or retail sale or
10lease, whether that sale or lease is made directly by the
11manufacturer or by some other person, whether the materials
12used in the process are owned by the manufacturer or some other
13person, or whether that sale or lease is made apart from or as
14an incident to the seller's engaging in the service occupation
15of producing machines, tools, dies, jigs, patterns, gauges, or
16other similar items of no commercial value on special order for
17a particular purchaser. The exemption provided by this
18paragraph (18) does not include machinery and equipment used in
19(i) the generation of electricity for wholesale or retail sale;
20(ii) the generation or treatment of natural or artificial gas
21for wholesale or retail sale that is delivered to customers
22through pipes, pipelines, or mains; or (iii) the treatment of
23water for wholesale or retail sale that is delivered to
24customers through pipes, pipelines, or mains. The provisions of
25Public Act 98-583 are declaratory of existing law as to the
26meaning and scope of this exemption. Beginning on July 1, 2017,

 

 

10000SB0009sam006- 237 -LRB100 06347 HLH 26817 a

1the exemption provided by this paragraph (18) includes, but is
2not limited to, graphic arts machinery and equipment, as
3defined in paragraph (6) of this Section. Beginning on July 1,
42017, the exemption provided by this paragraph (18) includes,
5but is not limited to, production related tangible personal
6property, as defined in Section 3-50 of this Act. The exemption
7provided by this paragraph (18) is exempt from the provisions
8of Section 3-90.
9    (19) Personal property delivered to a purchaser or
10purchaser's donee inside Illinois when the purchase order for
11that personal property was received by a florist located
12outside Illinois who has a florist located inside Illinois
13deliver the personal property.
14    (20) Semen used for artificial insemination of livestock
15for direct agricultural production.
16    (21) Horses, or interests in horses, registered with and
17meeting the requirements of any of the Arabian Horse Club
18Registry of America, Appaloosa Horse Club, American Quarter
19Horse Association, United States Trotting Association, or
20Jockey Club, as appropriate, used for purposes of breeding or
21racing for prizes. This item (21) is exempt from the provisions
22of Section 3-90, and the exemption provided for under this item
23(21) applies for all periods beginning May 30, 1995, but no
24claim for credit or refund is allowed on or after January 1,
252008 for such taxes paid during the period beginning May 30,
262000 and ending on January 1, 2008.

 

 

10000SB0009sam006- 238 -LRB100 06347 HLH 26817 a

1    (22) Computers and communications equipment utilized for
2any hospital purpose and equipment used in the diagnosis,
3analysis, or treatment of hospital patients purchased by a
4lessor who leases the equipment, under a lease of one year or
5longer executed or in effect at the time the lessor would
6otherwise be subject to the tax imposed by this Act, to a
7hospital that has been issued an active tax exemption
8identification number by the Department under Section 1g of the
9Retailers' Occupation Tax Act. If the equipment is leased in a
10manner that does not qualify for this exemption or is used in
11any other non-exempt manner, the lessor shall be liable for the
12tax imposed under this Act or the Service Use Tax Act, as the
13case may be, based on the fair market value of the property at
14the time the non-qualifying use occurs. No lessor shall collect
15or attempt to collect an amount (however designated) that
16purports to reimburse that lessor for the tax imposed by this
17Act or the Service Use Tax Act, as the case may be, if the tax
18has not been paid by the lessor. If a lessor improperly
19collects any such amount from the lessee, the lessee shall have
20a legal right to claim a refund of that amount from the lessor.
21If, however, that amount is not refunded to the lessee for any
22reason, the lessor is liable to pay that amount to the
23Department.
24    (23) Personal property purchased by a lessor who leases the
25property, under a lease of one year or longer executed or in
26effect at the time the lessor would otherwise be subject to the

 

 

10000SB0009sam006- 239 -LRB100 06347 HLH 26817 a

1tax imposed by this Act, to a governmental body that has been
2issued an active sales tax exemption identification number by
3the Department under Section 1g of the Retailers' Occupation
4Tax Act. If the property is leased in a manner that does not
5qualify for this exemption or used in any other non-exempt
6manner, the lessor shall be liable for the tax imposed under
7this Act or the Service Use Tax Act, as the case may be, based
8on the fair market value of the property at the time the
9non-qualifying use occurs. No lessor shall collect or attempt
10to collect an amount (however designated) that purports to
11reimburse that lessor for the tax imposed by this Act or the
12Service Use Tax Act, as the case may be, if the tax has not been
13paid by the lessor. If a lessor improperly collects any such
14amount from the lessee, the lessee shall have a legal right to
15claim a refund of that amount from the lessor. If, however,
16that amount is not refunded to the lessee for any reason, the
17lessor is liable to pay that amount to the Department.
18    (24) Beginning with taxable years ending on or after
19December 31, 1995 and ending with taxable years ending on or
20before December 31, 2004, personal property that is donated for
21disaster relief to be used in a State or federally declared
22disaster area in Illinois or bordering Illinois by a
23manufacturer or retailer that is registered in this State to a
24corporation, society, association, foundation, or institution
25that has been issued a sales tax exemption identification
26number by the Department that assists victims of the disaster

 

 

10000SB0009sam006- 240 -LRB100 06347 HLH 26817 a

1who reside within the declared disaster area.
2    (25) Beginning with taxable years ending on or after
3December 31, 1995 and ending with taxable years ending on or
4before December 31, 2004, personal property that is used in the
5performance of infrastructure repairs in this State, including
6but not limited to municipal roads and streets, access roads,
7bridges, sidewalks, waste disposal systems, water and sewer
8line extensions, water distribution and purification
9facilities, storm water drainage and retention facilities, and
10sewage treatment facilities, resulting from a State or
11federally declared disaster in Illinois or bordering Illinois
12when such repairs are initiated on facilities located in the
13declared disaster area within 6 months after the disaster.
14    (26) Beginning July 1, 1999, game or game birds purchased
15at a "game breeding and hunting preserve area" as that term is
16used in the Wildlife Code. This paragraph is exempt from the
17provisions of Section 3-90.
18    (27) A motor vehicle, as that term is defined in Section
191-146 of the Illinois Vehicle Code, that is donated to a
20corporation, limited liability company, society, association,
21foundation, or institution that is determined by the Department
22to be organized and operated exclusively for educational
23purposes. For purposes of this exemption, "a corporation,
24limited liability company, society, association, foundation,
25or institution organized and operated exclusively for
26educational purposes" means all tax-supported public schools,

 

 

10000SB0009sam006- 241 -LRB100 06347 HLH 26817 a

1private schools that offer systematic instruction in useful
2branches of learning by methods common to public schools and
3that compare favorably in their scope and intensity with the
4course of study presented in tax-supported schools, and
5vocational or technical schools or institutes organized and
6operated exclusively to provide a course of study of not less
7than 6 weeks duration and designed to prepare individuals to
8follow a trade or to pursue a manual, technical, mechanical,
9industrial, business, or commercial occupation.
10    (28) Beginning January 1, 2000, personal property,
11including food, purchased through fundraising events for the
12benefit of a public or private elementary or secondary school,
13a group of those schools, or one or more school districts if
14the events are sponsored by an entity recognized by the school
15district that consists primarily of volunteers and includes
16parents and teachers of the school children. This paragraph
17does not apply to fundraising events (i) for the benefit of
18private home instruction or (ii) for which the fundraising
19entity purchases the personal property sold at the events from
20another individual or entity that sold the property for the
21purpose of resale by the fundraising entity and that profits
22from the sale to the fundraising entity. This paragraph is
23exempt from the provisions of Section 3-90.
24    (29) Beginning January 1, 2000 and through December 31,
252001, new or used automatic vending machines that prepare and
26serve hot food and beverages, including coffee, soup, and other

 

 

10000SB0009sam006- 242 -LRB100 06347 HLH 26817 a

1items, and replacement parts for these machines. Beginning
2January 1, 2002 and through June 30, 2003, machines and parts
3for machines used in commercial, coin-operated amusement and
4vending business if a use or occupation tax is paid on the
5gross receipts derived from the use of the commercial,
6coin-operated amusement and vending machines. This paragraph
7is exempt from the provisions of Section 3-90.
8    (30) Beginning January 1, 2001 and through June 30, 2016,
9food for human consumption that is to be consumed off the
10premises where it is sold (other than alcoholic beverages, soft
11drinks, and food that has been prepared for immediate
12consumption) and prescription and nonprescription medicines,
13drugs, medical appliances, and insulin, urine testing
14materials, syringes, and needles used by diabetics, for human
15use, when purchased for use by a person receiving medical
16assistance under Article V of the Illinois Public Aid Code who
17resides in a licensed long-term care facility, as defined in
18the Nursing Home Care Act, or in a licensed facility as defined
19in the ID/DD Community Care Act, the MC/DD Act, or the
20Specialized Mental Health Rehabilitation Act of 2013.
21    (31) Beginning on the effective date of this amendatory Act
22of the 92nd General Assembly, computers and communications
23equipment utilized for any hospital purpose and equipment used
24in the diagnosis, analysis, or treatment of hospital patients
25purchased by a lessor who leases the equipment, under a lease
26of one year or longer executed or in effect at the time the

 

 

10000SB0009sam006- 243 -LRB100 06347 HLH 26817 a

1lessor would otherwise be subject to the tax imposed by this
2Act, to a hospital that has been issued an active tax exemption
3identification number by the Department under Section 1g of the
4Retailers' Occupation Tax Act. If the equipment is leased in a
5manner that does not qualify for this exemption or is used in
6any other nonexempt manner, the lessor shall be liable for the
7tax imposed under this Act or the Service Use Tax Act, as the
8case may be, based on the fair market value of the property at
9the time the nonqualifying use occurs. No lessor shall collect
10or attempt to collect an amount (however designated) that
11purports to reimburse that lessor for the tax imposed by this
12Act or the Service Use Tax Act, as the case may be, if the tax
13has not been paid by the lessor. If a lessor improperly
14collects any such amount from the lessee, the lessee shall have
15a legal right to claim a refund of that amount from the lessor.
16If, however, that amount is not refunded to the lessee for any
17reason, the lessor is liable to pay that amount to the
18Department. This paragraph is exempt from the provisions of
19Section 3-90.
20    (32) Beginning on the effective date of this amendatory Act
21of the 92nd General Assembly, personal property purchased by a
22lessor who leases the property, under a lease of one year or
23longer executed or in effect at the time the lessor would
24otherwise be subject to the tax imposed by this Act, to a
25governmental body that has been issued an active sales tax
26exemption identification number by the Department under

 

 

10000SB0009sam006- 244 -LRB100 06347 HLH 26817 a

1Section 1g of the Retailers' Occupation Tax Act. If the
2property is leased in a manner that does not qualify for this
3exemption or used in any other nonexempt manner, the lessor
4shall be liable for the tax imposed under this Act or the
5Service Use Tax Act, as the case may be, based on the fair
6market value of the property at the time the nonqualifying use
7occurs. No lessor shall collect or attempt to collect an amount
8(however designated) that purports to reimburse that lessor for
9the tax imposed by this Act or the Service Use Tax Act, as the
10case may be, if the tax has not been paid by the lessor. If a
11lessor improperly collects any such amount from the lessee, the
12lessee shall have a legal right to claim a refund of that
13amount from the lessor. If, however, that amount is not
14refunded to the lessee for any reason, the lessor is liable to
15pay that amount to the Department. This paragraph is exempt
16from the provisions of Section 3-90.
17    (33) On and after July 1, 2003 and through June 30, 2004,
18the use in this State of motor vehicles of the second division
19with a gross vehicle weight in excess of 8,000 pounds and that
20are subject to the commercial distribution fee imposed under
21Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
221, 2004 and through June 30, 2005, the use in this State of
23motor vehicles of the second division: (i) with a gross vehicle
24weight rating in excess of 8,000 pounds; (ii) that are subject
25to the commercial distribution fee imposed under Section
263-815.1 of the Illinois Vehicle Code; and (iii) that are

 

 

10000SB0009sam006- 245 -LRB100 06347 HLH 26817 a

1primarily used for commercial purposes. Through June 30, 2005,
2this exemption applies to repair and replacement parts added
3after the initial purchase of such a motor vehicle if that
4motor vehicle is used in a manner that would qualify for the
5rolling stock exemption otherwise provided for in this Act. For
6purposes of this paragraph, the term "used for commercial
7purposes" means the transportation of persons or property in
8furtherance of any commercial or industrial enterprise,
9whether for-hire or not.
10    (34) Beginning January 1, 2008, tangible personal property
11used in the construction or maintenance of a community water
12supply, as defined under Section 3.145 of the Environmental
13Protection Act, that is operated by a not-for-profit
14corporation that holds a valid water supply permit issued under
15Title IV of the Environmental Protection Act. This paragraph is
16exempt from the provisions of Section 3-90.
17    (35) Beginning January 1, 2010, materials, parts,
18equipment, components, and furnishings incorporated into or
19upon an aircraft as part of the modification, refurbishment,
20completion, replacement, repair, or maintenance of the
21aircraft. This exemption includes consumable supplies used in
22the modification, refurbishment, completion, replacement,
23repair, and maintenance of aircraft, but excludes any
24materials, parts, equipment, components, and consumable
25supplies used in the modification, replacement, repair, and
26maintenance of aircraft engines or power plants, whether such

 

 

10000SB0009sam006- 246 -LRB100 06347 HLH 26817 a

1engines or power plants are installed or uninstalled upon any
2such aircraft. "Consumable supplies" include, but are not
3limited to, adhesive, tape, sandpaper, general purpose
4lubricants, cleaning solution, latex gloves, and protective
5films. This exemption applies only to the use of qualifying
6tangible personal property by persons who modify, refurbish,
7complete, repair, replace, or maintain aircraft and who (i)
8hold an Air Agency Certificate and are empowered to operate an
9approved repair station by the Federal Aviation
10Administration, (ii) have a Class IV Rating, and (iii) conduct
11operations in accordance with Part 145 of the Federal Aviation
12Regulations. The exemption does not include aircraft operated
13by a commercial air carrier providing scheduled passenger air
14service pursuant to authority issued under Part 121 or Part 129
15of the Federal Aviation Regulations. The changes made to this
16paragraph (35) by Public Act 98-534 are declarative of existing
17law.
18    (36) Tangible personal property purchased by a
19public-facilities corporation, as described in Section
2011-65-10 of the Illinois Municipal Code, for purposes of
21constructing or furnishing a municipal convention hall, but
22only if the legal title to the municipal convention hall is
23transferred to the municipality without any further
24consideration by or on behalf of the municipality at the time
25of the completion of the municipal convention hall or upon the
26retirement or redemption of any bonds or other debt instruments

 

 

10000SB0009sam006- 247 -LRB100 06347 HLH 26817 a

1issued by the public-facilities corporation in connection with
2the development of the municipal convention hall. This
3exemption includes existing public-facilities corporations as
4provided in Section 11-65-25 of the Illinois Municipal Code.
5This paragraph is exempt from the provisions of Section 3-90.
6    (37) Beginning January 1, 2017, menstrual pads, tampons,
7and menstrual cups.
8    (38) Beginning January 1, 2018, taxable services performed
9on or to tangible personal property the sale of which is exempt
10from taxation under this Act. This paragraph is exempt from the
11provisions of Section 2-70.
12    (39) Beginning January 1, 2018, taxable services performed
13in a transaction that would be exempt from taxation under this
14Act if it involved solely the sale of tangible personal
15property. Such exemption could be due to the nature of the
16seller or of the service provider, the purchaser or service
17recipient, or other features of the transaction, including but
18not limited to the location or sale-for-resale nature of the
19transaction. Any such exemption applies to transactions
20involving solely the sale of tangible personal property, solely
21the performance of taxable service, or some combination
22thereof. This paragraph is exempt from the provisions of
23Section 2-70.
24    (40) Beginning January 1, 2018, taxable services performed
25for or provided to businesses making purchases of service for
26the benefit of or in furtherance of the business. This

 

 

10000SB0009sam006- 248 -LRB100 06347 HLH 26817 a

1paragraph is exempt from the provisions of Section 2-70.
2(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
398-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
41-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
57-29-15; 99-855, eff. 8-19-16.)
 
6    (35 ILCS 105/3-10)
7    Sec. 3-10. Rate of tax. Unless otherwise provided in this
8Section, the tax imposed by this Act is at the rate of 6.25% of
9either the selling price or the fair market value, if any, of
10the tangible personal property. Beginning on July 1, 2017, the
11tax is also imposed at the rate of 6.25% of either the selling
12price or the fair market value, if any, of taxable services. In
13all cases where property or service functionally used or
14consumed is the same as the property or service that was
15purchased at retail, then the tax is imposed on the selling
16price of the property or taxable service. In all cases where
17property functionally used or consumed is a by-product or waste
18product that has been refined, manufactured, or produced from
19property purchased at retail, then the tax is imposed on the
20lower of the fair market value, if any, of the specific
21property so used in this State or on the selling price of the
22property purchased at retail. For purposes of this Section
23"fair market value" means the price at which property or
24service would change hands between a willing buyer and a
25willing seller, neither being under any compulsion to buy or

 

 

10000SB0009sam006- 249 -LRB100 06347 HLH 26817 a

1sell and both having reasonable knowledge of the relevant
2facts. The fair market value shall be established by Illinois
3sales by the taxpayer of the same property or service as that
4functionally used or consumed, or if there are no such sales by
5the taxpayer, then comparable sales or purchases of property or
6service of like kind and character in Illinois.
7    Beginning on July 1, 2000 and through December 31, 2000,
8with respect to motor fuel, as defined in Section 1.1 of the
9Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
10the Use Tax Act, the tax is imposed at the rate of 1.25%.
11    Beginning on August 6, 2010 through August 15, 2010, with
12respect to sales tax holiday items as defined in Section 3-6 of
13this Act, the tax is imposed at the rate of 1.25%.
14    With respect to gasohol, the tax imposed by this Act
15applies to (i) 70% of the proceeds of sales made on or after
16January 1, 1990, and before July 1, 2003, (ii) 80% of the
17proceeds of sales made on or after July 1, 2003 and on or
18before December 31, 2018, and (iii) 100% of the proceeds of
19sales made thereafter. If, at any time, however, the tax under
20this Act on sales of gasohol is imposed at the rate of 1.25%,
21then the tax imposed by this Act applies to 100% of the
22proceeds of sales of gasohol made during that time.
23    With respect to majority blended ethanol fuel, the tax
24imposed by this Act does not apply to the proceeds of sales
25made on or after July 1, 2003 and on or before December 31,
262018 but applies to 100% of the proceeds of sales made

 

 

10000SB0009sam006- 250 -LRB100 06347 HLH 26817 a

1thereafter.
2    With respect to biodiesel blends with no less than 1% and
3no more than 10% biodiesel, the tax imposed by this Act applies
4to (i) 80% of the proceeds of sales made on or after July 1,
52003 and on or before December 31, 2018 and (ii) 100% of the
6proceeds of sales made thereafter. If, at any time, however,
7the tax under this Act on sales of biodiesel blends with no
8less than 1% and no more than 10% biodiesel is imposed at the
9rate of 1.25%, then the tax imposed by this Act applies to 100%
10of the proceeds of sales of biodiesel blends with no less than
111% and no more than 10% biodiesel made during that time.
12    With respect to 100% biodiesel and biodiesel blends with
13more than 10% but no more than 99% biodiesel, the tax imposed
14by this Act does not apply to the proceeds of sales made on or
15after July 1, 2003 and on or before December 31, 2018 but
16applies to 100% of the proceeds of sales made thereafter.
17    With respect to food for human consumption that is to be
18consumed off the premises where it is sold (other than
19alcoholic beverages, soft drinks, and food that has been
20prepared for immediate consumption) and prescription and
21nonprescription medicines, drugs, medical appliances, products
22classified as Class III medical devices by the United States
23Food and Drug Administration that are used for cancer treatment
24pursuant to a prescription, as well as any accessories and
25components related to those devices, modifications to a motor
26vehicle for the purpose of rendering it usable by a person with

 

 

10000SB0009sam006- 251 -LRB100 06347 HLH 26817 a

1a disability, and insulin, urine testing materials, syringes,
2and needles used by diabetics, for human use, the tax is
3imposed at the rate of 1%. For the purposes of this Section,
4until September 1, 2009: the term "soft drinks" means any
5complete, finished, ready-to-use, non-alcoholic drink, whether
6carbonated or not, including but not limited to soda water,
7cola, fruit juice, vegetable juice, carbonated water, and all
8other preparations commonly known as soft drinks of whatever
9kind or description that are contained in any closed or sealed
10bottle, can, carton, or container, regardless of size; but
11"soft drinks" does not include coffee, tea, non-carbonated
12water, infant formula, milk or milk products as defined in the
13Grade A Pasteurized Milk and Milk Products Act, or drinks
14containing 50% or more natural fruit or vegetable juice.
15    Notwithstanding any other provisions of this Act,
16beginning September 1, 2009, "soft drinks" means non-alcoholic
17beverages that contain natural or artificial sweeteners. "Soft
18drinks" do not include beverages that contain milk or milk
19products, soy, rice or similar milk substitutes, or greater
20than 50% of vegetable or fruit juice by volume.
21    Until August 1, 2009, and notwithstanding any other
22provisions of this Act, "food for human consumption that is to
23be consumed off the premises where it is sold" includes all
24food sold through a vending machine, except soft drinks and
25food products that are dispensed hot from a vending machine,
26regardless of the location of the vending machine. Beginning

 

 

10000SB0009sam006- 252 -LRB100 06347 HLH 26817 a

1August 1, 2009, and notwithstanding any other provisions of
2this Act, "food for human consumption that is to be consumed
3off the premises where it is sold" includes all food sold
4through a vending machine, except soft drinks, candy, and food
5products that are dispensed hot from a vending machine,
6regardless of the location of the vending machine.
7    Notwithstanding any other provisions of this Act,
8beginning September 1, 2009, "food for human consumption that
9is to be consumed off the premises where it is sold" does not
10include candy. For purposes of this Section, "candy" means a
11preparation of sugar, honey, or other natural or artificial
12sweeteners in combination with chocolate, fruits, nuts or other
13ingredients or flavorings in the form of bars, drops, or
14pieces. "Candy" does not include any preparation that contains
15flour or requires refrigeration.
16    Notwithstanding any other provisions of this Act,
17beginning September 1, 2009, "nonprescription medicines and
18drugs" does not include grooming and hygiene products. For
19purposes of this Section, "grooming and hygiene products"
20includes, but is not limited to, soaps and cleaning solutions,
21shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
22lotions and screens, unless those products are available by
23prescription only, regardless of whether the products meet the
24definition of "over-the-counter-drugs". For the purposes of
25this paragraph, "over-the-counter-drug" means a drug for human
26use that contains a label that identifies the product as a drug

 

 

10000SB0009sam006- 253 -LRB100 06347 HLH 26817 a

1as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
2label includes:
3        (A) A "Drug Facts" panel; or
4        (B) A statement of the "active ingredient(s)" with a
5    list of those ingredients contained in the compound,
6    substance or preparation.
7    Beginning on the effective date of this amendatory Act of
8the 98th General Assembly, "prescription and nonprescription
9medicines and drugs" includes medical cannabis purchased from a
10registered dispensing organization under the Compassionate Use
11of Medical Cannabis Pilot Program Act.
12    If the property that is purchased at retail from a retailer
13is acquired outside Illinois and used outside Illinois before
14being brought to Illinois for use here and is taxable under
15this Act, the "selling price" on which the tax is computed
16shall be reduced by an amount that represents a reasonable
17allowance for depreciation for the period of prior out-of-state
18use.
19(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
2099-858, eff. 8-19-16.)
 
21    (35 ILCS 105/3-10.5)
22    Sec. 3-10.5. Direct payment of retailers' occupation tax
23and applicable local retailers' occupation tax by purchaser;
24purchaser relieved of paying use tax and local retailers'
25occupation tax reimbursement liabilities to retailer.

 

 

10000SB0009sam006- 254 -LRB100 06347 HLH 26817 a

1    (a) A retailer who makes a retail sale of tangible personal
2property or taxable service to a purchaser who provides the
3retailer with a copy of the purchaser's valid Direct Pay Permit
4issued under Section 2-10.5 of the Retailers' Occupation Tax
5Act is not required under Section 3-45 of this Act to collect
6the tax imposed by this Act on that sale.
7    (b) A purchaser who makes a purchase from a retailer who
8would otherwise incur retailers' occupation tax liability on
9the transaction and who provides the retailer with a copy of a
10valid Direct Pay Permit issued under Section 2-10.5 of the
11Retailers' Occupation Tax Act does not incur the tax imposed by
12this Act on the purchase. The purchaser assumes the retailer's
13obligation to pay the retailers' occupation tax directly to the
14Department, including all local retailers' occupation tax
15liabilities applicable to that retail sale.
16    (c) A purchaser who makes a purchase from a retailer who
17would not incur retailers' occupation tax liability on the
18transaction and who provides the retailer with a copy of a
19valid Direct Pay Permit issued under Section 2-10.5 of the
20Retailers' Occupation Tax Act incurs the tax imposed by this
21Act on the purchase. If, on any transaction, the retailer is
22entitled under this Act to a discount for collecting and
23remitting the tax imposed under this Act to the Department, the
24right to the discount provided in Section 9 of this Act shall
25be transferred to the Permit holder. If the retailer would not
26be entitled to a discount as provided in Section 9 of this Act,

 

 

10000SB0009sam006- 255 -LRB100 06347 HLH 26817 a

1then the Permit holder is not entitled to a discount.
2(Source: P.A. 92-484, eff. 8-23-01.)
 
3    (35 ILCS 105/3-45)  (from Ch. 120, par. 439.3-45)
4    Sec. 3-45. Collection. The tax imposed by this Act shall be
5collected from the purchaser by a retailer maintaining a place
6of business in this State or a retailer authorized by the
7Department under Section 6 of this Act, and shall be remitted
8to the Department as provided in Section 9 of this Act, except
9as provided in Section 3-10.5 of this Act.
10    The tax imposed by this Act that is not paid to a retailer
11under this Section shall be paid to the Department directly by
12any person using the property within this State as provided in
13Section 10 of this Act.
14    Retailers shall collect the tax from users by adding the
15tax to the selling price of tangible personal property or
16taxable service, when sold for use, in the manner prescribed by
17the Department. The Department may adopt and promulgate
18reasonable rules and regulations for the adding of the tax by
19retailers to selling prices by prescribing bracket systems for
20the purpose of enabling the retailers to add and collect, as
21far as practicable, the amount of the tax.
22    If a seller collects use tax measured by receipts that are
23not subject to use tax, or if a seller, in collecting use tax
24measured by receipts that are subject to tax under this Act,
25collects more from the purchaser than the required amount of

 

 

10000SB0009sam006- 256 -LRB100 06347 HLH 26817 a

1the use tax on the transaction, the purchaser shall have a
2legal right to claim a refund of that amount from the seller.
3If, however, that amount is not refunded to the purchaser for
4any reason, the seller is liable to pay that amount to the
5Department. This paragraph does not apply to an amount
6collected by the seller as use tax on receipts that are subject
7to tax under this Act as long as the collection is made in
8compliance with the tax collection brackets prescribed by the
9Department in its rules and regulations.
10(Source: P.A. 91-51, eff. 6-30-99; 92-484, eff. 8-23-01.)
 
11    (35 ILCS 105/3-50)  (from Ch. 120, par. 439.3-50)
12    Sec. 3-50. Manufacturing and assembly exemption. The
13manufacturing and assembling machinery and equipment exemption
14includes machinery and equipment that replaces machinery and
15equipment in an existing manufacturing facility as well as
16machinery and equipment that are for use in an expanded or new
17manufacturing facility. The machinery and equipment exemption
18also includes machinery and equipment used in the general
19maintenance or repair of exempt machinery and equipment or for
20in-house manufacture of exempt machinery and equipment.
21Beginning on July 1, 2017, the manufacturing and assembling
22machinery and equipment exemption also includes graphic arts
23machinery and equipment, as defined in paragraph (6) of Section
243-5. Beginning on July 1, 2017, the manufacturing and
25assembling machinery and equipment exemption also includes

 

 

10000SB0009sam006- 257 -LRB100 06347 HLH 26817 a

1production related tangible personal property, as defined in
2this Section. The machinery and equipment exemption does not
3include machinery and equipment used in (i) the generation of
4electricity for wholesale or retail sale; (ii) the generation
5or treatment of natural or artificial gas for wholesale or
6retail sale that is delivered to customers through pipes,
7pipelines, or mains; or (iii) the treatment of water for
8wholesale or retail sale that is delivered to customers through
9pipes, pipelines, or mains. The provisions of this amendatory
10Act of the 98th General Assembly are declaratory of existing
11law as to the meaning and scope of this exemption. For the
12purposes of this exemption, terms have the following meanings:
13        (1) "Manufacturing process" means the production of an
14    article of tangible personal property, whether the article
15    is a finished product or an article for use in the process
16    of manufacturing or assembling a different article of
17    tangible personal property, by a procedure commonly
18    regarded as manufacturing, processing, fabricating, or
19    refining that changes some existing material into a
20    material with a different form, use, or name. In relation
21    to a recognized integrated business composed of a series of
22    operations that collectively constitute manufacturing, or
23    individually constitute manufacturing operations, the
24    manufacturing process commences with the first operation
25    or stage of production in the series and does not end until
26    the completion of the final product in the last operation

 

 

10000SB0009sam006- 258 -LRB100 06347 HLH 26817 a

1    or stage of production in the series. For purposes of this
2    exemption, photoprocessing is a manufacturing process of
3    tangible personal property for wholesale or retail sale.
4        (2) "Assembling process" means the production of an
5    article of tangible personal property, whether the article
6    is a finished product or an article for use in the process
7    of manufacturing or assembling a different article of
8    tangible personal property, by the combination of existing
9    materials in a manner commonly regarded as assembling that
10    results in an article or material of a different form, use,
11    or name.
12        (3) "Machinery" means major mechanical machines or
13    major components of those machines contributing to a
14    manufacturing or assembling process.
15        (4) "Equipment" includes an independent device or tool
16    separate from machinery but essential to an integrated
17    manufacturing or assembly process; including computers
18    used primarily in a manufacturer's computer assisted
19    design, computer assisted manufacturing (CAD/CAM) system;
20    any subunit or assembly comprising a component of any
21    machinery or auxiliary, adjunct, or attachment parts of
22    machinery, such as tools, dies, jigs, fixtures, patterns,
23    and molds; and any parts that require periodic replacement
24    in the course of normal operation; but does not include
25    hand tools. Equipment includes chemicals or chemicals
26    acting as catalysts but only if the chemicals or chemicals

 

 

10000SB0009sam006- 259 -LRB100 06347 HLH 26817 a

1    acting as catalysts effect a direct and immediate change
2    upon a product being manufactured or assembled for
3    wholesale or retail sale or lease.
4        (5) "Production related tangible personal property"
5    means all tangible personal property that is used or
6    consumed by the purchaser in a manufacturing facility in
7    which a manufacturing process takes place and includes,
8    without limitation, tangible personal property that is
9    purchased for incorporation into real estate within a
10    manufacturing facility and tangible personal property that
11    is used or consumed in activities such as research and
12    development, preproduction material handling, receiving,
13    quality control, inventory control, storage, staging, and
14    packaging for shipping and transportation purposes.
15    "Production related tangible personal property" does not
16    include (i) tangible personal property that is used, within
17    or without a manufacturing facility, in sales, purchasing,
18    accounting, fiscal management, marketing, personnel
19    recruitment or selection, or landscaping or (ii) tangible
20    personal property that is required to be titled or
21    registered with a department, agency, or unit of federal,
22    State, or local government.
23    The manufacturing and assembling machinery and equipment
24exemption includes production related tangible personal
25property that is purchased (i) on or after July 1, 2007 and on
26or before June 30, 2008 or (ii) on and after July 1, 2017. The

 

 

10000SB0009sam006- 260 -LRB100 06347 HLH 26817 a

1exemption for production related tangible personal property
2purchased on or after July 1, 2007 and on or before June 30,
32008 is subject to both of the following limitations:
4        (1) The maximum amount of the exemption for any one
5    taxpayer may not exceed 5% of the purchase price of
6    production related tangible personal property that is
7    purchased on or after July 1, 2007 and on or before June
8    30, 2008. A credit under Section 3-85 of this Act may not
9    be earned by the purchase of production related tangible
10    personal property for which an exemption is received under
11    this Section.
12        (2) The maximum aggregate amount of the exemptions for
13    production related tangible personal property awarded
14    under this Act and the Retailers' Occupation Tax Act to all
15    taxpayers may not exceed $10,000,000. If the claims for the
16    exemption exceed $10,000,000, then the Department shall
17    reduce the amount of the exemption to each taxpayer on a
18    pro rata basis.
19The Department may adopt rules to implement and administer the
20exemption for production related tangible personal property.
21    The manufacturing and assembling machinery and equipment
22exemption includes the sale of materials to a purchaser who
23produces exempted types of machinery, equipment, or tools and
24who rents or leases that machinery, equipment, or tools to a
25manufacturer of tangible personal property. This exemption
26also includes the sale of materials to a purchaser who

 

 

10000SB0009sam006- 261 -LRB100 06347 HLH 26817 a

1manufactures those materials into an exempted type of
2machinery, equipment, or tools that the purchaser uses himself
3or herself in the manufacturing of tangible personal property.
4This exemption includes the sale of exempted types of machinery
5or equipment to a purchaser who is not the manufacturer, but
6who rents or leases the use of the property to a manufacturer.
7The purchaser of the machinery and equipment who has an active
8resale registration number shall furnish that number to the
9seller at the time of purchase. A user of the machinery,
10equipment, or tools without an active resale registration
11number shall prepare a certificate of exemption for each
12transaction stating facts establishing the exemption for that
13transaction, and that certificate shall be available to the
14Department for inspection or audit. The Department shall
15prescribe the form of the certificate. Informal rulings,
16opinions, or letters issued by the Department in response to an
17inquiry or request for an opinion from any person regarding the
18coverage and applicability of this exemption to specific
19devices shall be published, maintained as a public record, and
20made available for public inspection and copying. If the
21informal ruling, opinion, or letter contains trade secrets or
22other confidential information, where possible, the Department
23shall delete that information before publication. Whenever
24informal rulings, opinions, or letters contain a policy of
25general applicability, the Department shall formulate and
26adopt that policy as a rule in accordance with the Illinois

 

 

10000SB0009sam006- 262 -LRB100 06347 HLH 26817 a

1Administrative Procedure Act.
2    The manufacturing and assembling machinery and equipment
3exemption, including the addition of production related
4tangible personal property, is exempt from the provisions of
5Section 3-90.
6(Source: P.A. 98-583, eff. 1-1-14.)
 
7    (35 ILCS 105/3-55)  (from Ch. 120, par. 439.3-55)
8    Sec. 3-55. Multistate exemption. To prevent actual or
9likely multistate taxation, the tax imposed by this Act does
10not apply to the use of tangible personal property in this
11State under the following circumstances:
12    (a) The use, in this State, of tangible personal property
13acquired outside this State by a nonresident individual and
14brought into this State by the individual for his or her own
15use while temporarily within this State or while passing
16through this State.
17    (b) The use, in this State, of tangible personal property
18by an interstate carrier for hire as rolling stock moving in
19interstate commerce or by lessors under a lease of one year or
20longer executed or in effect at the time of purchase of
21tangible personal property by interstate carriers for-hire for
22use as rolling stock moving in interstate commerce as long as
23so used by the interstate carriers for-hire, and equipment
24operated by a telecommunications provider, licensed as a common
25carrier by the Federal Communications Commission, which is

 

 

10000SB0009sam006- 263 -LRB100 06347 HLH 26817 a

1permanently installed in or affixed to aircraft moving in
2interstate commerce.
3    (c) The use, in this State, by owners, lessors, or shippers
4of tangible personal property that is utilized by interstate
5carriers for hire for use as rolling stock moving in interstate
6commerce as long as so used by the interstate carriers for
7hire, and equipment operated by a telecommunications provider,
8licensed as a common carrier by the Federal Communications
9Commission, which is permanently installed in or affixed to
10aircraft moving in interstate commerce.
11    (d) The use, in this State, of tangible personal property
12or taxable service that is acquired outside this State and
13caused to be brought into or performed in this State by a
14person who has already paid a tax in another State in respect
15to the sale, purchase, or use of that property, to the extent
16of the amount of the tax properly due and paid in the other
17State.
18    (e) The temporary storage, in this State, of tangible
19personal property that is acquired outside this State and that,
20after being brought into this State and stored here
21temporarily, is used solely outside this State or is physically
22attached to or incorporated into other tangible personal
23property that is used solely outside this State, or is altered
24by converting, fabricating, manufacturing, printing,
25processing, or shaping, and, as altered, is used solely outside
26this State.

 

 

10000SB0009sam006- 264 -LRB100 06347 HLH 26817 a

1    (f) The temporary storage in this State of building
2materials and fixtures that are acquired either in this State
3or outside this State by an Illinois registered combination
4retailer and construction contractor, and that the purchaser
5thereafter uses outside this State by incorporating that
6property into real estate located outside this State.
7    (g) The use or purchase of tangible personal property by a
8common carrier by rail or motor that receives the physical
9possession of the property in Illinois, and that transports the
10property, or shares with another common carrier in the
11transportation of the property, out of Illinois on a standard
12uniform bill of lading showing the seller of the property as
13the shipper or consignor of the property to a destination
14outside Illinois, for use outside Illinois.
15    (h) Except as provided in subsection (h-1), the use, in
16this State, of a motor vehicle that was sold in this State to a
17nonresident, even though the motor vehicle is delivered to the
18nonresident in this State, if the motor vehicle is not to be
19titled in this State, and if a drive-away permit is issued to
20the motor vehicle as provided in Section 3-603 of the Illinois
21Vehicle Code or if the nonresident purchaser has vehicle
22registration plates to transfer to the motor vehicle upon
23returning to his or her home state. The issuance of the
24drive-away permit or having the out-of-state registration
25plates to be transferred shall be prima facie evidence that the
26motor vehicle will not be titled in this State.

 

 

10000SB0009sam006- 265 -LRB100 06347 HLH 26817 a

1    (h-1) The exemption under subsection (h) does not apply if
2the state in which the motor vehicle will be titled does not
3allow a reciprocal exemption for the use in that state of a
4motor vehicle sold and delivered in that state to an Illinois
5resident but titled in Illinois. The tax collected under this
6Act on the sale of a motor vehicle in this State to a resident
7of another state that does not allow a reciprocal exemption
8shall be imposed at a rate equal to the state's rate of tax on
9taxable property in the state in which the purchaser is a
10resident, except that the tax shall not exceed the tax that
11would otherwise be imposed under this Act. At the time of the
12sale, the purchaser shall execute a statement, signed under
13penalty of perjury, of his or her intent to title the vehicle
14in the state in which the purchaser is a resident within 30
15days after the sale and of the fact of the payment to the State
16of Illinois of tax in an amount equivalent to the state's rate
17of tax on taxable property in his or her state of residence and
18shall submit the statement to the appropriate tax collection
19agency in his or her state of residence. In addition, the
20retailer must retain a signed copy of the statement in his or
21her records. Nothing in this subsection shall be construed to
22require the removal of the vehicle from this state following
23the filing of an intent to title the vehicle in the purchaser's
24state of residence if the purchaser titles the vehicle in his
25or her state of residence within 30 days after the date of
26sale. The tax collected under this Act in accordance with this

 

 

10000SB0009sam006- 266 -LRB100 06347 HLH 26817 a

1subsection (h-1) shall be proportionately distributed as if the
2tax were collected at the 6.25% general rate imposed under this
3Act.
4    (h-2) The following exemptions apply with respect to
5certain aircraft:
6        (1) Beginning on July 1, 2007, no tax is imposed under
7    this Act on the purchase of an aircraft, as defined in
8    Section 3 of the Illinois Aeronautics Act, if all of the
9    following conditions are met:
10            (A) the aircraft leaves this State within 15 days
11        after the later of either the issuance of the final
12        billing for the purchase of the aircraft or the
13        authorized approval for return to service, completion
14        of the maintenance record entry, and completion of the
15        test flight and ground test for inspection, as required
16        by 14 C.F.R. 91.407;
17            (B) the aircraft is not based or registered in this
18        State after the purchase of the aircraft; and
19            (C) the purchaser provides the Department with a
20        signed and dated certification, on a form prescribed by
21        the Department, certifying that the requirements of
22        this item (1) are met. The certificate must also
23        include the name and address of the purchaser, the
24        address of the location where the aircraft is to be
25        titled or registered, the address of the primary
26        physical location of the aircraft, and other

 

 

10000SB0009sam006- 267 -LRB100 06347 HLH 26817 a

1        information that the Department may reasonably
2        require.
3        (2) Beginning on July 1, 2007, no tax is imposed under
4    this Act on the use of an aircraft, as defined in Section 3
5    of the Illinois Aeronautics Act, that is temporarily
6    located in this State for the purpose of a prepurchase
7    evaluation if all of the following conditions are met:
8            (A) the aircraft is not based or registered in this
9        State after the prepurchase evaluation; and
10            (B) the purchaser provides the Department with a
11        signed and dated certification, on a form prescribed by
12        the Department, certifying that the requirements of
13        this item (2) are met. The certificate must also
14        include the name and address of the purchaser, the
15        address of the location where the aircraft is to be
16        titled or registered, the address of the primary
17        physical location of the aircraft, and other
18        information that the Department may reasonably
19        require.
20        (3) Beginning on July 1, 2007, no tax is imposed under
21    this Act on the use of an aircraft, as defined in Section 3
22    of the Illinois Aeronautics Act, that is temporarily
23    located in this State for the purpose of a post-sale
24    customization if all of the following conditions are met:
25            (A) the aircraft leaves this State within 15 days
26        after the authorized approval for return to service,

 

 

10000SB0009sam006- 268 -LRB100 06347 HLH 26817 a

1        completion of the maintenance record entry, and
2        completion of the test flight and ground test for
3        inspection, as required by 14 C.F.R. 91.407;
4            (B) the aircraft is not based or registered in this
5        State either before or after the post-sale
6        customization; and
7            (C) the purchaser provides the Department with a
8        signed and dated certification, on a form prescribed by
9        the Department, certifying that the requirements of
10        this item (3) are met. The certificate must also
11        include the name and address of the purchaser, the
12        address of the location where the aircraft is to be
13        titled or registered, the address of the primary
14        physical location of the aircraft, and other
15        information that the Department may reasonably
16        require.
17    If tax becomes due under this subsection (h-2) because of
18the purchaser's use of the aircraft in this State, the
19purchaser shall file a return with the Department and pay the
20tax on the fair market value of the aircraft. This return and
21payment of the tax must be made no later than 30 days after the
22aircraft is used in a taxable manner in this State. The tax is
23based on the fair market value of the aircraft on the date that
24it is first used in a taxable manner in this State.
25    For purposes of this subsection (h-2):
26    "Based in this State" means hangared, stored, or otherwise

 

 

10000SB0009sam006- 269 -LRB100 06347 HLH 26817 a

1used, excluding post-sale customizations as defined in this
2Section, for 10 or more days in each 12-month period
3immediately following the date of the sale of the aircraft.
4    "Post-sale customization" means any improvement,
5maintenance, or repair that is performed on an aircraft
6following a transfer of ownership of the aircraft.
7    "Prepurchase evaluation" means an examination of an
8aircraft to provide a potential purchaser with information
9relevant to the potential purchase.
10    "Registered in this State" means an aircraft registered
11with the Department of Transportation, Aeronautics Division,
12or titled or registered with the Federal Aviation
13Administration to an address located in this State.
14    This subsection (h-2) is exempt from the provisions of
15Section 3-90.
16    (i) Beginning July 1, 1999, the use, in this State, of fuel
17acquired outside this State and brought into this State in the
18fuel supply tanks of locomotives engaged in freight hauling and
19passenger service for interstate commerce. This subsection is
20exempt from the provisions of Section 3-90.
21    (j) Beginning on January 1, 2002 and through June 30, 2016,
22the use of tangible personal property purchased from an
23Illinois retailer by a taxpayer engaged in centralized
24purchasing activities in Illinois who will, upon receipt of the
25property in Illinois, temporarily store the property in
26Illinois (i) for the purpose of subsequently transporting it

 

 

10000SB0009sam006- 270 -LRB100 06347 HLH 26817 a

1outside this State for use or consumption thereafter solely
2outside this State or (ii) for the purpose of being processed,
3fabricated, or manufactured into, attached to, or incorporated
4into other tangible personal property to be transported outside
5this State and thereafter used or consumed solely outside this
6State. The Director of Revenue shall, pursuant to rules adopted
7in accordance with the Illinois Administrative Procedure Act,
8issue a permit to any taxpayer in good standing with the
9Department who is eligible for the exemption under this
10subsection (j). The permit issued under this subsection (j)
11shall authorize the holder, to the extent and in the manner
12specified in the rules adopted under this Act, to purchase
13tangible personal property from a retailer exempt from the
14taxes imposed by this Act. Taxpayers shall maintain all
15necessary books and records to substantiate the use and
16consumption of all such tangible personal property outside of
17the State of Illinois.
18(Source: P.A. 97-73, eff. 6-30-11.)
 
19    (35 ILCS 105/3-65)  (from Ch. 120, par. 439.3-65)
20    Sec. 3-65. R.O.T. nontaxability. If the seller of tangible
21personal property or taxable service for use would not be
22taxable under the Retailers' Occupation Tax Act despite all
23elements of the sale occurring in Illinois, then the tax
24imposed by this Act does not apply to the use of the tangible
25personal property or taxable service in this State.

 

 

10000SB0009sam006- 271 -LRB100 06347 HLH 26817 a

1(Source: P.A. 91-51, eff. 6-30-99.)
 
2    (35 ILCS 105/3-75)  (from Ch. 120, par. 439.3-75)
3    Sec. 3-75. Serviceman transfer. Tangible personal property
4purchased by a serviceman, as defined in Section 2 of the
5Service Occupation Tax Act, is subject to the tax imposed by
6this Act when purchased for transfer by the serviceman
7incidental to completion of a maintenance agreement. Effective
8January 1, 2018, purchases of tangible personal property
9purchased for transfer incidental to performance of a taxable
10service is not subject to the tax imposed by this Act.
11(Source: P.A. 91-51, eff. 6-30-99.)
 
12    (35 ILCS 105/3a)  (from Ch. 120, par. 439.3a)
13    Sec. 3a. The tax imposed by the Act shall when collected be
14stated as a distinct item separate and apart from the selling
15price of the tangible personal property or taxable service.
16However, where it is not possible to state the sales tax
17separately in situations such as sales from vending machines or
18sales of liquor by the drink the Department may by rule exempt
19such sales from this requirement so long as purchasers are
20notified by a sign that the tax is included in the selling
21price.
22(Source: P.A. 84-229.)
 
23    (35 ILCS 105/4)  (from Ch. 120, par. 439.4)

 

 

10000SB0009sam006- 272 -LRB100 06347 HLH 26817 a

1    Sec. 4. Evidence that tangible personal property or taxable
2service was sold by any person for delivery to a person
3residing or engaged in business in this State shall be prima
4facie evidence that such tangible personal property or taxable
5service was sold for use in this State.
6(Source: Laws 1955, p. 2027.)
 
7    (35 ILCS 105/5)  (from Ch. 120, par. 439.5)
8    Sec. 5. Except as to motor vehicles and other items of
9tangible personal property that must be titled or registered
10under an Illinois law, but that cannot be so titled or
11registered without a use tax receipt or exemption determination
12from the Department, every retailer maintaining a place of
13business in this State and making sales of tangible personal
14property or taxable service for use in this State (whether
15those sales are made within or without this State) shall, when
16collecting the tax as provided in Section 3-45 of this Act from
17the purchaser, give to the purchaser (if demanded by the
18purchaser) a receipt for the tax in the manner and form
19prescribed by the Department. The receipt shall be sufficient
20to relieve the purchaser from further liability for the tax to
21which the receipt may refer. Each retailer shall list with the
22Department the names and addresses of all of his or her agents
23operating in this State and the location of any and all of his
24or her distribution or sales houses, offices, or other places
25of business in this State.

 

 

10000SB0009sam006- 273 -LRB100 06347 HLH 26817 a

1(Source: P.A. 86-1475.)
 
2    (35 ILCS 105/7)  (from Ch. 120, par. 439.7)
3    Sec. 7.
4    It is unlawful for any retailer to advertise or hold out or
5state to the public or to any purchaser, consumer or user,
6directly or indirectly, that the tax or any part thereof
7imposed by Section 3 hereof will be assumed or absorbed by the
8retailer or that it will not be added to the selling price of
9the property or taxable service sold, or if added that it or
10any part thereof will be refunded other than when the retailer
11refunds the selling price and tax because of the merchandise's
12being returned to the retailer (or the taxable service
13transaction's being partially or wholly cancelled) or other
14than when the retailer credits or refunds the tax to the
15purchaser to support a claim filed with the Department under
16the Retailers' Occupation Tax Act or under this Act. Any person
17violating any of the provisions of this Section within this
18State shall be guilty of a Class A misdemeanor.
19(Source: P.A. 77-2830.)
 
20    (35 ILCS 105/9)  (from Ch. 120, par. 439.9)
21    Sec. 9. Except as to motor vehicles, watercraft, aircraft,
22and trailers that are required to be registered with an agency
23of this State, each retailer required or authorized to collect
24the tax imposed by this Act shall pay to the Department the

 

 

10000SB0009sam006- 274 -LRB100 06347 HLH 26817 a

1amount of such tax (except as otherwise provided) at the time
2when he is required to file his return for the period during
3which such tax was collected, less a discount of 2.1% prior to
4January 1, 1990, and 1.75% on and after January 1, 1990, or $5
5per calendar year, whichever is greater, which is allowed to
6reimburse the retailer for expenses incurred in collecting the
7tax, keeping records, preparing and filing returns, remitting
8the tax and supplying data to the Department on request. In the
9case of retailers who report and pay the tax on a transaction
10by transaction basis, as provided in this Section, such
11discount shall be taken with each such tax remittance instead
12of when such retailer files his periodic return. The Department
13may disallow the discount for retailers whose certificate of
14registration is revoked at the time the return is filed, but
15only if the Department's decision to revoke the certificate of
16registration has become final. A retailer need not remit that
17part of any tax collected by him to the extent that he is
18required to remit and does remit the tax imposed by the
19Retailers' Occupation Tax Act, with respect to the sale of the
20same property.
21    Where such tangible personal property or taxable service is
22sold under a conditional sales contract, or under any other
23form of sale wherein the payment of the principal sum, or a
24part thereof, is extended beyond the close of the period for
25which the return is filed, the retailer, in collecting the tax
26(except as to motor vehicles, watercraft, aircraft, and

 

 

10000SB0009sam006- 275 -LRB100 06347 HLH 26817 a

1trailers that are required to be registered with an agency of
2this State), may collect for each tax return period, only the
3tax applicable to that part of the selling price actually
4received during such tax return period.
5    Except as provided in this Section, on or before the
6twentieth day of each calendar month, such retailer shall file
7a return for the preceding calendar month. Such return shall be
8filed on forms prescribed by the Department and shall furnish
9such information as the Department may reasonably require.
10    The Department may require returns to be filed on a
11quarterly basis. If so required, a return for each calendar
12quarter shall be filed on or before the twentieth day of the
13calendar month following the end of such calendar quarter. The
14taxpayer shall also file a return with the Department for each
15of the first two months of each calendar quarter, on or before
16the twentieth day of the following calendar month, stating:
17        1. The name of the seller;
18        2. The address of the principal place of business from
19    which he engages in the business of selling tangible
20    personal property at retail in this State;
21        3. The total amount of taxable receipts received by him
22    during the preceding calendar month from sales of tangible
23    personal property by him during such preceding calendar
24    month, including receipts from charge and time sales, but
25    less all deductions allowed by law;
26        4. The amount of credit provided in Section 2d of this

 

 

10000SB0009sam006- 276 -LRB100 06347 HLH 26817 a

1    Act;
2        5. The amount of tax due;
3        5-5. The signature of the taxpayer; and
4        6. Such other reasonable information as the Department
5    may require.
6    If a taxpayer fails to sign a return within 30 days after
7the proper notice and demand for signature by the Department,
8the return shall be considered valid and any amount shown to be
9due on the return shall be deemed assessed.
10    Beginning October 1, 1993, a taxpayer who has an average
11monthly tax liability of $150,000 or more shall make all
12payments required by rules of the Department by electronic
13funds transfer. Beginning October 1, 1994, a taxpayer who has
14an average monthly tax liability of $100,000 or more shall make
15all payments required by rules of the Department by electronic
16funds transfer. Beginning October 1, 1995, a taxpayer who has
17an average monthly tax liability of $50,000 or more shall make
18all payments required by rules of the Department by electronic
19funds transfer. Beginning October 1, 2000, a taxpayer who has
20an annual tax liability of $200,000 or more shall make all
21payments required by rules of the Department by electronic
22funds transfer. The term "annual tax liability" shall be the
23sum of the taxpayer's liabilities under this Act, and under all
24other State and local occupation and use tax laws administered
25by the Department, for the immediately preceding calendar year.
26The term "average monthly tax liability" means the sum of the

 

 

10000SB0009sam006- 277 -LRB100 06347 HLH 26817 a

1taxpayer's liabilities under this Act, and under all other
2State and local occupation and use tax laws administered by the
3Department, for the immediately preceding calendar year
4divided by 12. Beginning on October 1, 2002, a taxpayer who has
5a tax liability in the amount set forth in subsection (b) of
6Section 2505-210 of the Department of Revenue Law shall make
7all payments required by rules of the Department by electronic
8funds transfer.
9    Before August 1 of each year beginning in 1993, the
10Department shall notify all taxpayers required to make payments
11by electronic funds transfer. All taxpayers required to make
12payments by electronic funds transfer shall make those payments
13for a minimum of one year beginning on October 1.
14    Any taxpayer not required to make payments by electronic
15funds transfer may make payments by electronic funds transfer
16with the permission of the Department.
17    All taxpayers required to make payment by electronic funds
18transfer and any taxpayers authorized to voluntarily make
19payments by electronic funds transfer shall make those payments
20in the manner authorized by the Department.
21    The Department shall adopt such rules as are necessary to
22effectuate a program of electronic funds transfer and the
23requirements of this Section.
24    Before October 1, 2000, if the taxpayer's average monthly
25tax liability to the Department under this Act, the Retailers'
26Occupation Tax Act, the Service Occupation Tax Act, the Service

 

 

10000SB0009sam006- 278 -LRB100 06347 HLH 26817 a

1Use Tax Act was $10,000 or more during the preceding 4 complete
2calendar quarters, he shall file a return with the Department
3each month by the 20th day of the month next following the
4month during which such tax liability is incurred and shall
5make payments to the Department on or before the 7th, 15th,
622nd and last day of the month during which such liability is
7incurred. On and after October 1, 2000, if the taxpayer's
8average monthly tax liability to the Department under this Act,
9the Retailers' Occupation Tax Act, the Service Occupation Tax
10Act, and the Service Use Tax Act was $20,000 or more during the
11preceding 4 complete calendar quarters, he shall file a return
12with the Department each month by the 20th day of the month
13next following the month during which such tax liability is
14incurred and shall make payment to the Department on or before
15the 7th, 15th, 22nd and last day of the month during which such
16liability is incurred. If the month during which such tax
17liability is incurred began prior to January 1, 1985, each
18payment shall be in an amount equal to 1/4 of the taxpayer's
19actual liability for the month or an amount set by the
20Department not to exceed 1/4 of the average monthly liability
21of the taxpayer to the Department for the preceding 4 complete
22calendar quarters (excluding the month of highest liability and
23the month of lowest liability in such 4 quarter period). If the
24month during which such tax liability is incurred begins on or
25after January 1, 1985, and prior to January 1, 1987, each
26payment shall be in an amount equal to 22.5% of the taxpayer's

 

 

10000SB0009sam006- 279 -LRB100 06347 HLH 26817 a

1actual liability for the month or 27.5% of the taxpayer's
2liability for the same calendar month of the preceding year. If
3the month during which such tax liability is incurred begins on
4or after January 1, 1987, and prior to January 1, 1988, each
5payment shall be in an amount equal to 22.5% of the taxpayer's
6actual liability for the month or 26.25% of the taxpayer's
7liability for the same calendar month of the preceding year. If
8the month during which such tax liability is incurred begins on
9or after January 1, 1988, and prior to January 1, 1989, or
10begins on or after January 1, 1996, each payment shall be in an
11amount equal to 22.5% of the taxpayer's actual liability for
12the month or 25% of the taxpayer's liability for the same
13calendar month of the preceding year. If the month during which
14such tax liability is incurred begins on or after January 1,
151989, and prior to January 1, 1996, each payment shall be in an
16amount equal to 22.5% of the taxpayer's actual liability for
17the month or 25% of the taxpayer's liability for the same
18calendar month of the preceding year or 100% of the taxpayer's
19actual liability for the quarter monthly reporting period. The
20amount of such quarter monthly payments shall be credited
21against the final tax liability of the taxpayer's return for
22that month. Before October 1, 2000, once applicable, the
23requirement of the making of quarter monthly payments to the
24Department shall continue until such taxpayer's average
25monthly liability to the Department during the preceding 4
26complete calendar quarters (excluding the month of highest

 

 

10000SB0009sam006- 280 -LRB100 06347 HLH 26817 a

1liability and the month of lowest liability) is less than
2$9,000, or until such taxpayer's average monthly liability to
3the Department as computed for each calendar quarter of the 4
4preceding complete calendar quarter period is less than
5$10,000. However, if a taxpayer can show the Department that a
6substantial change in the taxpayer's business has occurred
7which causes the taxpayer to anticipate that his average
8monthly tax liability for the reasonably foreseeable future
9will fall below the $10,000 threshold stated above, then such
10taxpayer may petition the Department for change in such
11taxpayer's reporting status. On and after October 1, 2000, once
12applicable, the requirement of the making of quarter monthly
13payments to the Department shall continue until such taxpayer's
14average monthly liability to the Department during the
15preceding 4 complete calendar quarters (excluding the month of
16highest liability and the month of lowest liability) is less
17than $19,000 or until such taxpayer's average monthly liability
18to the Department as computed for each calendar quarter of the
194 preceding complete calendar quarter period is less than
20$20,000. However, if a taxpayer can show the Department that a
21substantial change in the taxpayer's business has occurred
22which causes the taxpayer to anticipate that his average
23monthly tax liability for the reasonably foreseeable future
24will fall below the $20,000 threshold stated above, then such
25taxpayer may petition the Department for a change in such
26taxpayer's reporting status. The Department shall change such

 

 

10000SB0009sam006- 281 -LRB100 06347 HLH 26817 a

1taxpayer's reporting status unless it finds that such change is
2seasonal in nature and not likely to be long term. If any such
3quarter monthly payment is not paid at the time or in the
4amount required by this Section, then the taxpayer shall be
5liable for penalties and interest on the difference between the
6minimum amount due and the amount of such quarter monthly
7payment actually and timely paid, except insofar as the
8taxpayer has previously made payments for that month to the
9Department in excess of the minimum payments previously due as
10provided in this Section. The Department shall make reasonable
11rules and regulations to govern the quarter monthly payment
12amount and quarter monthly payment dates for taxpayers who file
13on other than a calendar monthly basis.
14    If any such payment provided for in this Section exceeds
15the taxpayer's liabilities under this Act, the Retailers'
16Occupation Tax Act, the Service Occupation Tax Act and the
17Service Use Tax Act, as shown by an original monthly return,
18the Department shall issue to the taxpayer a credit memorandum
19no later than 30 days after the date of payment, which
20memorandum may be submitted by the taxpayer to the Department
21in payment of tax liability subsequently to be remitted by the
22taxpayer to the Department or be assigned by the taxpayer to a
23similar taxpayer under this Act, the Retailers' Occupation Tax
24Act, the Service Occupation Tax Act or the Service Use Tax Act,
25in accordance with reasonable rules and regulations to be
26prescribed by the Department, except that if such excess

 

 

10000SB0009sam006- 282 -LRB100 06347 HLH 26817 a

1payment is shown on an original monthly return and is made
2after December 31, 1986, no credit memorandum shall be issued,
3unless requested by the taxpayer. If no such request is made,
4the taxpayer may credit such excess payment against tax
5liability subsequently to be remitted by the taxpayer to the
6Department under this Act, the Retailers' Occupation Tax Act,
7the Service Occupation Tax Act or the Service Use Tax Act, in
8accordance with reasonable rules and regulations prescribed by
9the Department. If the Department subsequently determines that
10all or any part of the credit taken was not actually due to the
11taxpayer, the taxpayer's 2.1% or 1.75% vendor's discount shall
12be reduced by 2.1% or 1.75% of the difference between the
13credit taken and that actually due, and the taxpayer shall be
14liable for penalties and interest on such difference.
15    If the retailer is otherwise required to file a monthly
16return and if the retailer's average monthly tax liability to
17the Department does not exceed $200, the Department may
18authorize his returns to be filed on a quarter annual basis,
19with the return for January, February, and March of a given
20year being due by April 20 of such year; with the return for
21April, May and June of a given year being due by July 20 of such
22year; with the return for July, August and September of a given
23year being due by October 20 of such year, and with the return
24for October, November and December of a given year being due by
25January 20 of the following year.
26    If the retailer is otherwise required to file a monthly or

 

 

10000SB0009sam006- 283 -LRB100 06347 HLH 26817 a

1quarterly return and if the retailer's average monthly tax
2liability to the Department does not exceed $50, the Department
3may authorize his returns to be filed on an annual basis, with
4the return for a given year being due by January 20 of the
5following year.
6    Such quarter annual and annual returns, as to form and
7substance, shall be subject to the same requirements as monthly
8returns.
9    Notwithstanding any other provision in this Act concerning
10the time within which a retailer may file his return, in the
11case of any retailer who ceases to engage in a kind of business
12which makes him responsible for filing returns under this Act,
13such retailer shall file a final return under this Act with the
14Department not more than one month after discontinuing such
15business.
16    In addition, with respect to motor vehicles, watercraft,
17aircraft, and trailers that are required to be registered with
18an agency of this State, every retailer selling this kind of
19tangible personal property shall file, with the Department,
20upon a form to be prescribed and supplied by the Department, a
21separate return for each such item of tangible personal
22property which the retailer sells, except that if, in the same
23transaction, (i) a retailer of aircraft, watercraft, motor
24vehicles or trailers transfers more than one aircraft,
25watercraft, motor vehicle or trailer to another aircraft,
26watercraft, motor vehicle or trailer retailer for the purpose

 

 

10000SB0009sam006- 284 -LRB100 06347 HLH 26817 a

1of resale or (ii) a retailer of aircraft, watercraft, motor
2vehicles, or trailers transfers more than one aircraft,
3watercraft, motor vehicle, or trailer to a purchaser for use as
4a qualifying rolling stock as provided in Section 3-55 of this
5Act, then that seller may report the transfer of all the
6aircraft, watercraft, motor vehicles or trailers involved in
7that transaction to the Department on the same uniform
8invoice-transaction reporting return form. For purposes of
9this Section, "watercraft" means a Class 2, Class 3, or Class 4
10watercraft as defined in Section 3-2 of the Boat Registration
11and Safety Act, a personal watercraft, or any boat equipped
12with an inboard motor.
13    The transaction reporting return in the case of motor
14vehicles or trailers that are required to be registered with an
15agency of this State, shall be the same document as the Uniform
16Invoice referred to in Section 5-402 of the Illinois Vehicle
17Code and must show the name and address of the seller; the name
18and address of the purchaser; the amount of the selling price
19including the amount allowed by the retailer for traded-in
20property, if any; the amount allowed by the retailer for the
21traded-in tangible personal property, if any, to the extent to
22which Section 2 of this Act allows an exemption for the value
23of traded-in property; the balance payable after deducting such
24trade-in allowance from the total selling price; the amount of
25tax due from the retailer with respect to such transaction; the
26amount of tax collected from the purchaser by the retailer on

 

 

10000SB0009sam006- 285 -LRB100 06347 HLH 26817 a

1such transaction (or satisfactory evidence that such tax is not
2due in that particular instance, if that is claimed to be the
3fact); the place and date of the sale; a sufficient
4identification of the property sold; such other information as
5is required in Section 5-402 of the Illinois Vehicle Code, and
6such other information as the Department may reasonably
7require.
8    The transaction reporting return in the case of watercraft
9and aircraft must show the name and address of the seller; the
10name and address of the purchaser; the amount of the selling
11price including the amount allowed by the retailer for
12traded-in property, if any; the amount allowed by the retailer
13for the traded-in tangible personal property, if any, to the
14extent to which Section 2 of this Act allows an exemption for
15the value of traded-in property; the balance payable after
16deducting such trade-in allowance from the total selling price;
17the amount of tax due from the retailer with respect to such
18transaction; the amount of tax collected from the purchaser by
19the retailer on such transaction (or satisfactory evidence that
20such tax is not due in that particular instance, if that is
21claimed to be the fact); the place and date of the sale, a
22sufficient identification of the property sold, and such other
23information as the Department may reasonably require.
24    Such transaction reporting return shall be filed not later
25than 20 days after the date of delivery of the item that is
26being sold, but may be filed by the retailer at any time sooner

 

 

10000SB0009sam006- 286 -LRB100 06347 HLH 26817 a

1than that if he chooses to do so. The transaction reporting
2return and tax remittance or proof of exemption from the tax
3that is imposed by this Act may be transmitted to the
4Department by way of the State agency with which, or State
5officer with whom, the tangible personal property must be
6titled or registered (if titling or registration is required)
7if the Department and such agency or State officer determine
8that this procedure will expedite the processing of
9applications for title or registration.
10    With each such transaction reporting return, the retailer
11shall remit the proper amount of tax due (or shall submit
12satisfactory evidence that the sale is not taxable if that is
13the case), to the Department or its agents, whereupon the
14Department shall issue, in the purchaser's name, a tax receipt
15(or a certificate of exemption if the Department is satisfied
16that the particular sale is tax exempt) which such purchaser
17may submit to the agency with which, or State officer with
18whom, he must title or register the tangible personal property
19that is involved (if titling or registration is required) in
20support of such purchaser's application for an Illinois
21certificate or other evidence of title or registration to such
22tangible personal property.
23    No retailer's failure or refusal to remit tax under this
24Act precludes a user, who has paid the proper tax to the
25retailer, from obtaining his certificate of title or other
26evidence of title or registration (if titling or registration

 

 

10000SB0009sam006- 287 -LRB100 06347 HLH 26817 a

1is required) upon satisfying the Department that such user has
2paid the proper tax (if tax is due) to the retailer. The
3Department shall adopt appropriate rules to carry out the
4mandate of this paragraph.
5    If the user who would otherwise pay tax to the retailer
6wants the transaction reporting return filed and the payment of
7tax or proof of exemption made to the Department before the
8retailer is willing to take these actions and such user has not
9paid the tax to the retailer, such user may certify to the fact
10of such delay by the retailer, and may (upon the Department
11being satisfied of the truth of such certification) transmit
12the information required by the transaction reporting return
13and the remittance for tax or proof of exemption directly to
14the Department and obtain his tax receipt or exemption
15determination, in which event the transaction reporting return
16and tax remittance (if a tax payment was required) shall be
17credited by the Department to the proper retailer's account
18with the Department, but without the 2.1% or 1.75% discount
19provided for in this Section being allowed. When the user pays
20the tax directly to the Department, he shall pay the tax in the
21same amount and in the same form in which it would be remitted
22if the tax had been remitted to the Department by the retailer.
23    Where a retailer collects the tax with respect to the
24selling price of tangible personal property or taxable service
25which he sells and the purchaser thereafter returns such
26tangible personal property or cancels the providing of taxable

 

 

10000SB0009sam006- 288 -LRB100 06347 HLH 26817 a

1service and the retailer refunds the selling price thereof to
2the purchaser, such retailer shall also refund, to the
3purchaser, the tax so collected from the purchaser. When filing
4his return for the period in which he refunds such tax to the
5purchaser, the retailer may deduct the amount of the tax so
6refunded by him to the purchaser from any other use tax which
7such retailer may be required to pay or remit to the
8Department, as shown by such return, if the amount of the tax
9to be deducted was previously remitted to the Department by
10such retailer. If the retailer has not previously remitted the
11amount of such tax to the Department, he is entitled to no
12deduction under this Act upon refunding such tax to the
13purchaser.
14    Any retailer filing a return under this Section shall also
15include (for the purpose of paying tax thereon) the total tax
16covered by such return upon the selling price of tangible
17personal property or taxable service purchased by him at retail
18from a retailer, but as to which the tax imposed by this Act
19was not collected from the retailer filing such return, and
20such retailer shall remit the amount of such tax to the
21Department when filing such return.
22    If experience indicates such action to be practicable, the
23Department may prescribe and furnish a combination or joint
24return which will enable retailers, who are required to file
25returns hereunder and also under the Retailers' Occupation Tax
26Act, to furnish all the return information required by both

 

 

10000SB0009sam006- 289 -LRB100 06347 HLH 26817 a

1Acts on the one form.
2    Where the retailer has more than one business registered
3with the Department under separate registration under this Act,
4such retailer may not file each return that is due as a single
5return covering all such registered businesses, but shall file
6separate returns for each such registered business.
7    Beginning January 1, 1990, each month the Department shall
8pay into the State and Local Sales Tax Reform Fund, a special
9fund in the State Treasury which is hereby created, the net
10revenue realized for the preceding month from the 1% tax on
11sales of food for human consumption which is to be consumed off
12the premises where it is sold (other than alcoholic beverages,
13soft drinks and food which has been prepared for immediate
14consumption) and prescription and nonprescription medicines,
15drugs, medical appliances, products classified as Class III
16medical devices by the United States Food and Drug
17Administration that are used for cancer treatment pursuant to a
18prescription, as well as any accessories and components related
19to those devices, and insulin, urine testing materials,
20syringes and needles used by diabetics.
21    Beginning January 1, 1990, each month the Department shall
22pay into the County and Mass Transit District Fund 4% of the
23net revenue realized for the preceding month from the 6.25%
24general rate on the selling price of tangible personal property
25which is purchased outside Illinois at retail from a retailer
26and which is titled or registered by an agency of this State's

 

 

10000SB0009sam006- 290 -LRB100 06347 HLH 26817 a

1government.
2    Beginning January 1, 1990, each month the Department shall
3pay into the State and Local Sales Tax Reform Fund, a special
4fund in the State Treasury, 20% of the net revenue realized for
5the preceding month from the 6.25% general rate on the selling
6price of tangible personal property, other than tangible
7personal property which is purchased outside Illinois at retail
8from a retailer and which is titled or registered by an agency
9of this State's government.
10    From July 1, 2017 through June 30, 2018, no deposits shall
11be made into the State and Local Sales Tax Reform Fund from the
12net revenue realized from the 6.25% general rate on taxable
13services. Beginning July 1, 2018 and through June 30, 2019,
14each month the Department shall pay into the State and Local
15Sales Tax Reform Fund 7% of the net revenue realized for the
16preceding month from the 6.25% general rate on the selling
17price of taxable services. Beginning July 1, 2019 and through
18June 30, 2020, each month the Department shall pay into the
19State and Local Sales Tax Reform Fund 13% of the net revenue
20realized for the preceding month from the 6.25% general rate on
21the selling price of taxable services. Beginning July 1, 2020,
22each month the Department shall pay into the State and Local
23Sales Tax Reform Fund 20% of the net revenue realized for the
24preceding month from the 6.25% general rate on the selling
25price of taxable services.
26    Beginning August 1, 2000, each month the Department shall

 

 

10000SB0009sam006- 291 -LRB100 06347 HLH 26817 a

1pay into the State and Local Sales Tax Reform Fund 100% of the
2net revenue realized for the preceding month from the 1.25%
3rate on the selling price of motor fuel and gasohol. Beginning
4September 1, 2010, each month the Department shall pay into the
5State and Local Sales Tax Reform Fund 100% of the net revenue
6realized for the preceding month from the 1.25% rate on the
7selling price of sales tax holiday items.
8    Beginning January 1, 1990, each month the Department shall
9pay into the Local Government Tax Fund 16% of the net revenue
10realized for the preceding month from the 6.25% general rate on
11the selling price of tangible personal property which is
12purchased outside Illinois at retail from a retailer and which
13is titled or registered by an agency of this State's
14government.
15    Beginning October 1, 2009, each month the Department shall
16pay into the Capital Projects Fund an amount that is equal to
17an amount estimated by the Department to represent 80% of the
18net revenue realized for the preceding month from the sale of
19candy, grooming and hygiene products, and soft drinks that had
20been taxed at a rate of 1% prior to September 1, 2009 but that
21are now taxed at 6.25%.
22    Beginning July 1, 2011, each month the Department shall pay
23into the Clean Air Act Permit Fund 80% of the net revenue
24realized for the preceding month from the 6.25% general rate on
25the selling price of sorbents used in Illinois in the process
26of sorbent injection as used to comply with the Environmental

 

 

10000SB0009sam006- 292 -LRB100 06347 HLH 26817 a

1Protection Act or the federal Clean Air Act, but the total
2payment into the Clean Air Act Permit Fund under this Act and
3the Retailers' Occupation Tax Act shall not exceed $2,000,000
4in any fiscal year.
5    Beginning July 1, 2013, each month the Department shall pay
6into the Underground Storage Tank Fund from the proceeds
7collected under this Act, the Service Use Tax Act, the Service
8Occupation Tax Act, and the Retailers' Occupation Tax Act an
9amount equal to the average monthly deficit in the Underground
10Storage Tank Fund during the prior year, as certified annually
11by the Illinois Environmental Protection Agency, but the total
12payment into the Underground Storage Tank Fund under this Act,
13the Service Use Tax Act, the Service Occupation Tax Act, and
14the Retailers' Occupation Tax Act shall not exceed $18,000,000
15in any State fiscal year. As used in this paragraph, the
16"average monthly deficit" shall be equal to the difference
17between the average monthly claims for payment by the fund and
18the average monthly revenues deposited into the fund, excluding
19payments made pursuant to this paragraph.
20    Beginning July 1, 2015, of the remainder of the moneys
21received by the Department under this Act, the Service Use Tax
22Act, the Service Occupation Tax Act, and the Retailers'
23Occupation Tax Act, each month the Department shall deposit
24$500,000 into the State Crime Laboratory Fund.
25    Of the remainder of the moneys received by the Department
26pursuant to this Act, (a) 1.75% thereof shall be paid into the

 

 

10000SB0009sam006- 293 -LRB100 06347 HLH 26817 a

1Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
2and after July 1, 1989, 3.8% thereof shall be paid into the
3Build Illinois Fund; provided, however, that if in any fiscal
4year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
5may be, of the moneys received by the Department and required
6to be paid into the Build Illinois Fund pursuant to Section 3
7of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
8Act, Section 9 of the Service Use Tax Act, and Section 9 of the
9Service Occupation Tax Act, such Acts being hereinafter called
10the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
11may be, of moneys being hereinafter called the "Tax Act
12Amount", and (2) the amount transferred to the Build Illinois
13Fund from the State and Local Sales Tax Reform Fund shall be
14less than the Annual Specified Amount (as defined in Section 3
15of the Retailers' Occupation Tax Act), an amount equal to the
16difference shall be immediately paid into the Build Illinois
17Fund from other moneys received by the Department pursuant to
18the Tax Acts; and further provided, that if on the last
19business day of any month the sum of (1) the Tax Act Amount
20required to be deposited into the Build Illinois Bond Account
21in the Build Illinois Fund during such month and (2) the amount
22transferred during such month to the Build Illinois Fund from
23the State and Local Sales Tax Reform Fund shall have been less
24than 1/12 of the Annual Specified Amount, an amount equal to
25the difference shall be immediately paid into the Build
26Illinois Fund from other moneys received by the Department

 

 

10000SB0009sam006- 294 -LRB100 06347 HLH 26817 a

1pursuant to the Tax Acts; and, further provided, that in no
2event shall the payments required under the preceding proviso
3result in aggregate payments into the Build Illinois Fund
4pursuant to this clause (b) for any fiscal year in excess of
5the greater of (i) the Tax Act Amount or (ii) the Annual
6Specified Amount for such fiscal year; and, further provided,
7that the amounts payable into the Build Illinois Fund under
8this clause (b) shall be payable only until such time as the
9aggregate amount on deposit under each trust indenture securing
10Bonds issued and outstanding pursuant to the Build Illinois
11Bond Act is sufficient, taking into account any future
12investment income, to fully provide, in accordance with such
13indenture, for the defeasance of or the payment of the
14principal of, premium, if any, and interest on the Bonds
15secured by such indenture and on any Bonds expected to be
16issued thereafter and all fees and costs payable with respect
17thereto, all as certified by the Director of the Bureau of the
18Budget (now Governor's Office of Management and Budget). If on
19the last business day of any month in which Bonds are
20outstanding pursuant to the Build Illinois Bond Act, the
21aggregate of the moneys deposited in the Build Illinois Bond
22Account in the Build Illinois Fund in such month shall be less
23than the amount required to be transferred in such month from
24the Build Illinois Bond Account to the Build Illinois Bond
25Retirement and Interest Fund pursuant to Section 13 of the
26Build Illinois Bond Act, an amount equal to such deficiency

 

 

10000SB0009sam006- 295 -LRB100 06347 HLH 26817 a

1shall be immediately paid from other moneys received by the
2Department pursuant to the Tax Acts to the Build Illinois Fund;
3provided, however, that any amounts paid to the Build Illinois
4Fund in any fiscal year pursuant to this sentence shall be
5deemed to constitute payments pursuant to clause (b) of the
6preceding sentence and shall reduce the amount otherwise
7payable for such fiscal year pursuant to clause (b) of the
8preceding sentence. The moneys received by the Department
9pursuant to this Act and required to be deposited into the
10Build Illinois Fund are subject to the pledge, claim and charge
11set forth in Section 12 of the Build Illinois Bond Act.
12    Subject to payment of amounts into the Build Illinois Fund
13as provided in the preceding paragraph or in any amendment
14thereto hereafter enacted, the following specified monthly
15installment of the amount requested in the certificate of the
16Chairman of the Metropolitan Pier and Exposition Authority
17provided under Section 8.25f of the State Finance Act, but not
18in excess of the sums designated as "Total Deposit", shall be
19deposited in the aggregate from collections under Section 9 of
20the Use Tax Act, Section 9 of the Service Use Tax Act, Section
219 of the Service Occupation Tax Act, and Section 3 of the
22Retailers' Occupation Tax Act into the McCormick Place
23Expansion Project Fund in the specified fiscal years.
24Fiscal YearTotal Deposit
251993         $0
261994 53,000,000

 

 

10000SB0009sam006- 296 -LRB100 06347 HLH 26817 a

11995 58,000,000
21996 61,000,000
31997 64,000,000
41998 68,000,000
51999 71,000,000
62000 75,000,000
72001 80,000,000
82002 93,000,000
92003 99,000,000
102004103,000,000
112005108,000,000
122006113,000,000
132007119,000,000
142008126,000,000
152009132,000,000
162010139,000,000
172011146,000,000
182012153,000,000
192013161,000,000
202014170,000,000
212015179,000,000
222016189,000,000
232017199,000,000
242018210,000,000
252019221,000,000
262020233,000,000

 

 

10000SB0009sam006- 297 -LRB100 06347 HLH 26817 a

12021246,000,000
22022260,000,000
32023275,000,000
42024 275,000,000
52025 275,000,000
62026 279,000,000
72027 292,000,000
82028 307,000,000
92029 322,000,000
102030 338,000,000
112031 350,000,000
122032 350,000,000
13and
14each fiscal year
15thereafter that bonds
16are outstanding under
17Section 13.2 of the
18Metropolitan Pier and
19Exposition Authority Act,
20but not after fiscal year 2060.
21    Beginning July 20, 1993 and in each month of each fiscal
22year thereafter, one-eighth of the amount requested in the
23certificate of the Chairman of the Metropolitan Pier and
24Exposition Authority for that fiscal year, less the amount
25deposited into the McCormick Place Expansion Project Fund by
26the State Treasurer in the respective month under subsection

 

 

10000SB0009sam006- 298 -LRB100 06347 HLH 26817 a

1(g) of Section 13 of the Metropolitan Pier and Exposition
2Authority Act, plus cumulative deficiencies in the deposits
3required under this Section for previous months and years,
4shall be deposited into the McCormick Place Expansion Project
5Fund, until the full amount requested for the fiscal year, but
6not in excess of the amount specified above as "Total Deposit",
7has been deposited.
8    Subject to payment of amounts into the Build Illinois Fund
9and the McCormick Place Expansion Project Fund pursuant to the
10preceding paragraphs or in any amendments thereto hereafter
11enacted, beginning July 1, 1993 and ending on September 30,
122013, the Department shall each month pay into the Illinois Tax
13Increment Fund 0.27% of 80% of the net revenue realized for the
14preceding month from the 6.25% general rate on the selling
15price of tangible personal property.
16    Subject to payment of amounts into the Build Illinois Fund
17and the McCormick Place Expansion Project Fund pursuant to the
18preceding paragraphs or in any amendments thereto hereafter
19enacted, beginning with the receipt of the first report of
20taxes paid by an eligible business and continuing for a 25-year
21period, the Department shall each month pay into the Energy
22Infrastructure Fund 80% of the net revenue realized from the
236.25% general rate on the selling price of Illinois-mined coal
24that was sold to an eligible business. For purposes of this
25paragraph, the term "eligible business" means a new electric
26generating facility certified pursuant to Section 605-332 of

 

 

10000SB0009sam006- 299 -LRB100 06347 HLH 26817 a

1the Department of Commerce and Economic Opportunity Law of the
2Civil Administrative Code of Illinois.
3    Subject to payment of amounts into the Build Illinois Fund,
4the McCormick Place Expansion Project Fund, the Illinois Tax
5Increment Fund, and the Energy Infrastructure Fund pursuant to
6the preceding paragraphs or in any amendments to this Section
7hereafter enacted, beginning on the first day of the first
8calendar month to occur on or after August 26, 2014 (the
9effective date of Public Act 98-1098) this amendatory Act of
10the 98th General Assembly, each month, from the collections
11made under Section 9 of the Use Tax Act, Section 9 of the
12Service Use Tax Act, Section 9 of the Service Occupation Tax
13Act, and Section 3 of the Retailers' Occupation Tax Act, the
14Department shall pay into the Tax Compliance and Administration
15Fund, to be used, subject to appropriation, to fund additional
16auditors and compliance personnel at the Department of Revenue,
17an amount equal to 1/12 of 5% of 80% of the cash receipts
18collected during the preceding fiscal year by the Audit Bureau
19of the Department under the Use Tax Act, the Service Use Tax
20Act, the Service Occupation Tax Act, the Retailers' Occupation
21Tax Act, and associated local occupation and use taxes
22administered by the Department.
23    Of the remainder of the moneys received by the Department
24pursuant to this Act, 75% thereof shall be paid into the State
25Treasury and 25% shall be reserved in a special account and
26used only for the transfer to the Common School Fund as part of

 

 

10000SB0009sam006- 300 -LRB100 06347 HLH 26817 a

1the monthly transfer from the General Revenue Fund in
2accordance with Section 8a of the State Finance Act.
3    As soon as possible after the first day of each month, upon
4certification of the Department of Revenue, the Comptroller
5shall order transferred and the Treasurer shall transfer from
6the General Revenue Fund to the Motor Fuel Tax Fund an amount
7equal to 1.7% of 80% of the net revenue realized under this Act
8for the second preceding month. Beginning April 1, 2000, this
9transfer is no longer required and shall not be made.
10    Net revenue realized for a month shall be the revenue
11collected by the State pursuant to this Act, less the amount
12paid out during that month as refunds to taxpayers for
13overpayment of liability.
14    For greater simplicity of administration, manufacturers,
15importers and wholesalers whose products are sold at retail in
16Illinois by numerous retailers, and who wish to do so, may
17assume the responsibility for accounting and paying to the
18Department all tax accruing under this Act with respect to such
19sales, if the retailers who are affected do not make written
20objection to the Department to this arrangement.
21(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
2298-496, eff. 1-1-14; 98-756, eff. 7-16-14; 98-1098, eff.
238-26-14; 99-352, eff. 8-12-15; 99-858, eff. 8-19-16; 99-933,
24eff. 1-27-17; revised 2-3-17.)
 
25    (35 ILCS 105/10)  (from Ch. 120, par. 439.10)

 

 

10000SB0009sam006- 301 -LRB100 06347 HLH 26817 a

1    Sec. 10. Except as to motor vehicles, aircraft, watercraft,
2and trailers, and except as to cigarettes as defined in the
3Cigarette Use Tax Act, when tangible personal property or
4(beginning January 1, 2018 a taxable service) is purchased from
5a retailer for use in this State by a purchaser who did not pay
6the tax imposed by this Act to the retailer, and who does not
7file returns with the Department as a retailer under Section 9
8of this Act, such purchaser (by the last day of the month
9following the calendar month in which such purchaser makes any
10payment upon the selling price of such property) shall, except
11as otherwise provided in this Section, file a return with the
12Department and pay the tax upon that portion of the selling
13price so paid by the purchaser during the preceding calendar
14month. When tangible personal property, including but not
15limited to motor vehicles and aircraft, is purchased by a
16lessor, under a lease for one year or longer, executed or in
17effect at the time of purchase to an interstate carrier for
18hire, who did not pay the tax imposed by this Act to the
19retailer, such lessor (by the last day of the month following
20the calendar month in which such property reverts to the use of
21such lessor) shall file a return with the Department and pay
22the tax upon the fair market value of such property on the date
23of such reversion. However, in determining the fair market
24value at the time of reversion, the fair market value of such
25property shall not exceed the original purchase price of the
26property that was paid by the lessor at the time of purchase.

 

 

10000SB0009sam006- 302 -LRB100 06347 HLH 26817 a

1Such return shall be filed on a form prescribed by the
2Department and shall contain such information as the Department
3may reasonably require. Such return and payment from the
4purchaser shall be submitted to the Department sooner than the
5last day of the month after the month in which the purchase is
6made to the extent that that may be necessary in order to
7secure the title to a motor vehicle or the certificate of
8registration for an aircraft. However, except as to motor
9vehicles and aircraft, and except as to cigarettes as defined
10in the Cigarette Use Tax Act, if the purchaser's annual use tax
11liability does not exceed $600, the purchaser may file the
12return on an annual basis on or before April 15th of the year
13following the year use tax liability was incurred. Individual
14purchasers with an annual use tax liability that does not
15exceed $600 may, in lieu of the filing and payment requirements
16in this Section, file and pay in compliance with Section 502.1
17of the Illinois Income Tax Act.
18    If cigarettes, as defined in the Cigarette Use Tax Act, are
19purchased from a retailer for use in this State by a purchaser
20who did not pay the tax imposed by this Act to the retailer,
21and who does not file returns with the Department as a retailer
22under Section 9 of this Act, such purchaser must, within 30
23days after acquiring the cigarettes, file a return with the
24Department and pay the tax upon that portion of the selling
25price so paid by the purchaser for the cigarettes.
26    In addition with respect to motor vehicles, aircraft,

 

 

10000SB0009sam006- 303 -LRB100 06347 HLH 26817 a

1watercraft, and trailers, a purchaser of such tangible personal
2property for use in this State, who purchases such tangible
3personal property from an out-of-state retailer, shall file
4with the Department, upon a form to be prescribed and supplied
5by the Department, a return for each such item of tangible
6personal property purchased, except that if, in the same
7transaction, (i) a purchaser of motor vehicles, aircraft,
8watercraft, or trailers who is a retailer of motor vehicles,
9aircraft, watercraft, or trailers purchases more than one motor
10vehicle, aircraft, watercraft, or trailer for the purpose of
11resale or (ii) a purchaser of motor vehicles, aircraft,
12watercraft, or trailers purchases more than one motor vehicle,
13aircraft, watercraft, or trailer for use as qualifying rolling
14stock as provided in Section 3-55 of this Act, then the
15purchaser may report the purchase of all motor vehicles,
16aircraft, watercraft, or trailers involved in that transaction
17to the Department on a single return prescribed by the
18Department. Such return in the case of motor vehicles and
19aircraft must show the name and address of the seller, the
20name, address of purchaser, the amount of the selling price
21including the amount allowed by the retailer for traded in
22property, if any; the amount allowed by the retailer for the
23traded-in tangible personal property, if any, to the extent to
24which Section 2 of this Act allows an exemption for the value
25of traded-in property; the balance payable after deducting such
26trade-in allowance from the total selling price; the amount of

 

 

10000SB0009sam006- 304 -LRB100 06347 HLH 26817 a

1tax due from the purchaser with respect to such transaction;
2the amount of tax collected from the purchaser by the retailer
3on such transaction (or satisfactory evidence that such tax is
4not due in that particular instance if that is claimed to be
5the fact); the place and date of the sale, a sufficient
6identification of the property sold, and such other information
7as the Department may reasonably require.
8    Such return shall be filed not later than 30 days after
9such motor vehicle or aircraft is brought into this State for
10use.
11    For purposes of this Section, "watercraft" means a Class 2,
12Class 3, or Class 4 watercraft as defined in Section 3-2 of the
13Boat Registration and Safety Act, a personal watercraft, or any
14boat equipped with an inboard motor.
15    The return and tax remittance or proof of exemption from
16the tax that is imposed by this Act may be transmitted to the
17Department by way of the State agency with which, or State
18officer with whom, the tangible personal property must be
19titled or registered (if titling or registration is required)
20if the Department and such agency or State officer determine
21that this procedure will expedite the processing of
22applications for title or registration.
23    With each such return, the purchaser shall remit the proper
24amount of tax due (or shall submit satisfactory evidence that
25the sale is not taxable if that is the case), to the Department
26or its agents, whereupon the Department shall issue, in the

 

 

10000SB0009sam006- 305 -LRB100 06347 HLH 26817 a

1purchaser's name, a tax receipt (or a certificate of exemption
2if the Department is satisfied that the particular sale is tax
3exempt) which such purchaser may submit to the agency with
4which, or State officer with whom, he must title or register
5the tangible personal property that is involved (if titling or
6registration is required) in support of such purchaser's
7application for an Illinois certificate or other evidence of
8title or registration to such tangible personal property.
9    When a purchaser pays a tax imposed by this Act directly to
10the Department, the Department (upon request therefor from such
11purchaser) shall issue an appropriate receipt to such purchaser
12showing that he has paid such tax to the Department. Such
13receipt shall be sufficient to relieve the purchaser from
14further liability for the tax to which such receipt may refer.
15    A user who is liable to pay use tax directly to the
16Department only occasionally and not on a frequently recurring
17basis, and who is not required to file returns with the
18Department as a retailer under Section 9 of this Act, or under
19the "Retailers' Occupation Tax Act", or as a registrant with
20the Department under the "Service Occupation Tax Act" or the
21"Service Use Tax Act", need not register with the Department.
22However, if such a user has a frequently recurring direct use
23tax liability to pay to the Department, such user shall be
24required to register with the Department on forms prescribed by
25the Department and to obtain and display a certificate of
26registration from the Department. In that event, all of the

 

 

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1provisions of Section 9 of this Act concerning the filing of
2regular monthly, quarterly or annual tax returns and all of the
3provisions of Section 2a of the "Retailers' Occupation Tax Act"
4concerning the requirements for registrants to post bond or
5other security with the Department, as the provisions of such
6sections now exist or may hereafter be amended, shall apply to
7such users to the same extent as if such provisions were
8included herein.
9(Source: P.A. 96-520, eff. 8-14-09; 96-1000, eff. 7-2-10;
1096-1388, eff. 7-29-10.)
 
11    (35 ILCS 105/11)  (from Ch. 120, par. 439.11)
12    Sec. 11. Every retailer required or authorized to collect
13taxes hereunder and every person using in this State tangible
14personal property or taxable service purchased at retail from a
15retailer on or after the effective date hereof shall keep such
16records, receipts, invoices and other pertinent books,
17documents, memoranda and papers as the Department shall
18require, in such form as the Department shall require. The
19Department may adopt rules that establish requirements,
20including record forms and formats, for records required to be
21kept and maintained by taxpayers. For purposes of this Section,
22"records" means all data maintained by the taxpayer, including
23data on paper, microfilm, microfiche or any type of
24machine-sensible data compilation. For the purpose of
25administering and enforcing the provisions hereof, the

 

 

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1Department, or any officer or employee of the Department
2designated, in writing, by the Director thereof, may hold
3investigations and hearings concerning any matters covered
4herein and may examine any books, papers, records, documents or
5memoranda of any retailer or purchaser bearing upon the sales
6or purchases of tangible personal property, the privilege of
7using which is taxed hereunder, and may require the attendance
8of such person or any officer or employee of such person, or of
9any person having knowledge of the facts, and may take
10testimony and require proof for its information.
11(Source: P.A. 88-480.)
 
12    Section 30-25. The Service Use Tax Act is amended by
13changing Sections 2 and 3-5 as follows:
 
14    (35 ILCS 110/2)  (from Ch. 120, par. 439.32)
15    Sec. 2. Definitions.
16    "Use" means the exercise by any person of any right or
17power over tangible personal property incident to the ownership
18of that property, but does not include the sale or use for
19demonstration by him of that property in any form as tangible
20personal property in the regular course of business. "Use" does
21not mean the interim use of tangible personal property nor the
22physical incorporation of tangible personal property, as an
23ingredient or constituent, into other tangible personal
24property, (a) which is sold in the regular course of business

 

 

10000SB0009sam006- 308 -LRB100 06347 HLH 26817 a

1or (b) which the person incorporating such ingredient or
2constituent therein has undertaken at the time of such purchase
3to cause to be transported in interstate commerce to
4destinations outside the State of Illinois.
5    "Purchased from a serviceman" means the acquisition of the
6ownership of, or title to, tangible personal property through a
7sale of service.
8    "Purchaser" means any person who, through a sale of
9service, acquires the ownership of, or title to, any tangible
10personal property.
11    "Cost price" means the consideration paid by the serviceman
12for a purchase valued in money, whether paid in money or
13otherwise, including cash, credits and services, and shall be
14determined without any deduction on account of the supplier's
15cost of the property sold or on account of any other expense
16incurred by the supplier. When a serviceman contracts out part
17or all of the services required in his sale of service, it
18shall be presumed that the cost price to the serviceman of the
19property transferred to him or her by his or her subcontractor
20is equal to 50% of the subcontractor's charges to the
21serviceman in the absence of proof of the consideration paid by
22the subcontractor for the purchase of such property.
23    "Selling price" means the consideration for a sale valued
24in money whether received in money or otherwise, including
25cash, credits and service, and shall be determined without any
26deduction on account of the serviceman's cost of the property

 

 

10000SB0009sam006- 309 -LRB100 06347 HLH 26817 a

1sold, the cost of materials used, labor or service cost or any
2other expense whatsoever, but does not include interest or
3finance charges which appear as separate items on the bill of
4sale or sales contract nor charges that are added to prices by
5sellers on account of the seller's duty to collect, from the
6purchaser, the tax that is imposed by this Act.
7    "Department" means the Department of Revenue.
8    "Person" means any natural individual, firm, partnership,
9association, joint stock company, joint venture, public or
10private corporation, limited liability company, and any
11receiver, executor, trustee, guardian or other representative
12appointed by order of any court.
13    "Sale of service" means any transaction except:
14        (1) a retail sale of tangible personal property taxable
15    under the Retailers' Occupation Tax Act or under the Use
16    Tax Act.
17        (2) a sale of tangible personal property for the
18    purpose of resale made in compliance with Section 2c of the
19    Retailers' Occupation Tax Act.
20        (3) except as hereinafter provided, a sale or transfer
21    of tangible personal property as an incident to the
22    rendering of service for or by any governmental body, or
23    for or by any corporation, society, association,
24    foundation or institution organized and operated
25    exclusively for charitable, religious or educational
26    purposes or any not-for-profit corporation, society,

 

 

10000SB0009sam006- 310 -LRB100 06347 HLH 26817 a

1    association, foundation, institution or organization which
2    has no compensated officers or employees and which is
3    organized and operated primarily for the recreation of
4    persons 55 years of age or older. A limited liability
5    company may qualify for the exemption under this paragraph
6    only if the limited liability company is organized and
7    operated exclusively for educational purposes.
8        (4) a sale or transfer of tangible personal property as
9    an incident to the rendering of service for interstate
10    carriers for hire for use as rolling stock moving in
11    interstate commerce or by lessors under a lease of one year
12    or longer, executed or in effect at the time of purchase of
13    personal property, to interstate carriers for hire for use
14    as rolling stock moving in interstate commerce so long as
15    so used by such interstate carriers for hire, and equipment
16    operated by a telecommunications provider, licensed as a
17    common carrier by the Federal Communications Commission,
18    which is permanently installed in or affixed to aircraft
19    moving in interstate commerce.
20        (4a) a sale or transfer of tangible personal property
21    as an incident to the rendering of service for owners,
22    lessors, or shippers of tangible personal property which is
23    utilized by interstate carriers for hire for use as rolling
24    stock moving in interstate commerce so long as so used by
25    interstate carriers for hire, and equipment operated by a
26    telecommunications provider, licensed as a common carrier

 

 

10000SB0009sam006- 311 -LRB100 06347 HLH 26817 a

1    by the Federal Communications Commission, which is
2    permanently installed in or affixed to aircraft moving in
3    interstate commerce.
4        (4a-5) on and after July 1, 2003 and through June 30,
5    2004, a sale or transfer of a motor vehicle of the second
6    division with a gross vehicle weight in excess of 8,000
7    pounds as an incident to the rendering of service if that
8    motor vehicle is subject to the commercial distribution fee
9    imposed under Section 3-815.1 of the Illinois Vehicle Code.
10    Beginning on July 1, 2004 and through June 30, 2005, the
11    use in this State of motor vehicles of the second division:
12    (i) with a gross vehicle weight rating in excess of 8,000
13    pounds; (ii) that are subject to the commercial
14    distribution fee imposed under Section 3-815.1 of the
15    Illinois Vehicle Code; and (iii) that are primarily used
16    for commercial purposes. Through June 30, 2005, this
17    exemption applies to repair and replacement parts added
18    after the initial purchase of such a motor vehicle if that
19    motor vehicle is used in a manner that would qualify for
20    the rolling stock exemption otherwise provided for in this
21    Act. For purposes of this paragraph, "used for commercial
22    purposes" means the transportation of persons or property
23    in furtherance of any commercial or industrial enterprise
24    whether for-hire or not.
25        (5) a sale or transfer of machinery and equipment used
26    primarily in the process of the manufacturing or

 

 

10000SB0009sam006- 312 -LRB100 06347 HLH 26817 a

1    assembling, either in an existing, an expanded or a new
2    manufacturing facility, of tangible personal property for
3    wholesale or retail sale or lease, whether such sale or
4    lease is made directly by the manufacturer or by some other
5    person, whether the materials used in the process are owned
6    by the manufacturer or some other person, or whether such
7    sale or lease is made apart from or as an incident to the
8    seller's engaging in a service occupation and the
9    applicable tax is a Service Use Tax or Service Occupation
10    Tax, rather than Use Tax or Retailers' Occupation Tax. The
11    exemption provided by this paragraph (5) does not include
12    machinery and equipment used in (i) the generation of
13    electricity for wholesale or retail sale; (ii) the
14    generation or treatment of natural or artificial gas for
15    wholesale or retail sale that is delivered to customers
16    through pipes, pipelines, or mains; or (iii) the treatment
17    of water for wholesale or retail sale that is delivered to
18    customers through pipes, pipelines, or mains. The
19    provisions of this amendatory Act of the 98th General
20    Assembly are declaratory of existing law as to the meaning
21    and scope of this exemption. The exemption under this
22    paragraph (5) is exempt from the provisions of Section
23    3-75.
24        (5a) the repairing, reconditioning or remodeling, for
25    a common carrier by rail, of tangible personal property
26    which belongs to such carrier for hire, and as to which

 

 

10000SB0009sam006- 313 -LRB100 06347 HLH 26817 a

1    such carrier receives the physical possession of the
2    repaired, reconditioned or remodeled item of tangible
3    personal property in Illinois, and which such carrier
4    transports, or shares with another common carrier in the
5    transportation of such property, out of Illinois on a
6    standard uniform bill of lading showing the person who
7    repaired, reconditioned or remodeled the property to a
8    destination outside Illinois, for use outside Illinois.
9        (5b) a sale or transfer of tangible personal property
10    which is produced by the seller thereof on special order in
11    such a way as to have made the applicable tax the Service
12    Occupation Tax or the Service Use Tax, rather than the
13    Retailers' Occupation Tax or the Use Tax, for an interstate
14    carrier by rail which receives the physical possession of
15    such property in Illinois, and which transports such
16    property, or shares with another common carrier in the
17    transportation of such property, out of Illinois on a
18    standard uniform bill of lading showing the seller of the
19    property as the shipper or consignor of such property to a
20    destination outside Illinois, for use outside Illinois.
21        (6) until July 1, 2003, a sale or transfer of
22    distillation machinery and equipment, sold as a unit or kit
23    and assembled or installed by the retailer, which machinery
24    and equipment is certified by the user to be used only for
25    the production of ethyl alcohol that will be used for
26    consumption as motor fuel or as a component of motor fuel

 

 

10000SB0009sam006- 314 -LRB100 06347 HLH 26817 a

1    for the personal use of such user and not subject to sale
2    or resale.
3        (7) at the election of any serviceman not required to
4    be otherwise registered as a retailer under Section 2a of
5    the Retailers' Occupation Tax Act, made for each fiscal
6    year sales of service in which the aggregate annual cost
7    price of tangible personal property transferred as an
8    incident to the sales of service is less than 35%, or 75%
9    in the case of servicemen transferring prescription drugs
10    or servicemen engaged in graphic arts production, of the
11    aggregate annual total gross receipts from all sales of
12    service. The purchase of such tangible personal property by
13    the serviceman shall be subject to tax under the Retailers'
14    Occupation Tax Act and the Use Tax Act. However, if a
15    primary serviceman who has made the election described in
16    this paragraph subcontracts service work to a secondary
17    serviceman who has also made the election described in this
18    paragraph, the primary serviceman does not incur a Use Tax
19    liability if the secondary serviceman (i) has paid or will
20    pay Use Tax on his or her cost price of any tangible
21    personal property transferred to the primary serviceman
22    and (ii) certifies that fact in writing to the primary
23    serviceman.
24    Tangible personal property transferred incident to the
25completion of a maintenance agreement is exempt from the tax
26imposed pursuant to this Act.

 

 

10000SB0009sam006- 315 -LRB100 06347 HLH 26817 a

1    Exemption (5) also includes machinery and equipment used in
2the general maintenance or repair of such exempt machinery and
3equipment or for in-house manufacture of exempt machinery and
4equipment. On and after July 1, 2017, exemption (5) also
5includes production related tangible personal property, as
6defined in Section 3-50 of the Use Tax Act. On and after July
71, 2017, exemption (5) also includes graphic arts machinery and
8equipment, as defined in paragraph (5) of Section 3-5. The
9machinery and equipment exemption does not include machinery
10and equipment used in (i) the generation of electricity for
11wholesale or retail sale; (ii) the generation or treatment of
12natural or artificial gas for wholesale or retail sale that is
13delivered to customers through pipes, pipelines, or mains; or
14(iii) the treatment of water for wholesale or retail sale that
15is delivered to customers through pipes, pipelines, or mains.
16The provisions of this amendatory Act of the 98th General
17Assembly are declaratory of existing law as to the meaning and
18scope of this exemption. For the purposes of exemption (5),
19each of these terms shall have the following meanings: (1)
20"manufacturing process" shall mean the production of any
21article of tangible personal property, whether such article is
22a finished product or an article for use in the process of
23manufacturing or assembling a different article of tangible
24personal property, by procedures commonly regarded as
25manufacturing, processing, fabricating, or refining which
26changes some existing material or materials into a material

 

 

10000SB0009sam006- 316 -LRB100 06347 HLH 26817 a

1with a different form, use or name. In relation to a recognized
2integrated business composed of a series of operations which
3collectively constitute manufacturing, or individually
4constitute manufacturing operations, the manufacturing process
5shall be deemed to commence with the first operation or stage
6of production in the series, and shall not be deemed to end
7until the completion of the final product in the last operation
8or stage of production in the series; and further, for purposes
9of exemption (5), photoprocessing is deemed to be a
10manufacturing process of tangible personal property for
11wholesale or retail sale; (2) "assembling process" shall mean
12the production of any article of tangible personal property,
13whether such article is a finished product or an article for
14use in the process of manufacturing or assembling a different
15article of tangible personal property, by the combination of
16existing materials in a manner commonly regarded as assembling
17which results in a material of a different form, use or name;
18(3) "machinery" shall mean major mechanical machines or major
19components of such machines contributing to a manufacturing or
20assembling process; and (4) "equipment" shall include any
21independent device or tool separate from any machinery but
22essential to an integrated manufacturing or assembly process;
23including computers used primarily in a manufacturer's
24computer assisted design, computer assisted manufacturing
25(CAD/CAM) system; or any subunit or assembly comprising a
26component of any machinery or auxiliary, adjunct or attachment

 

 

10000SB0009sam006- 317 -LRB100 06347 HLH 26817 a

1parts of machinery, such as tools, dies, jigs, fixtures,
2patterns and molds; or any parts which require periodic
3replacement in the course of normal operation; but shall not
4include hand tools. Equipment includes chemicals or chemicals
5acting as catalysts but only if the chemicals or chemicals
6acting as catalysts effect a direct and immediate change upon a
7product being manufactured or assembled for wholesale or retail
8sale or lease. The purchaser of such machinery and equipment
9who has an active resale registration number shall furnish such
10number to the seller at the time of purchase. The user of such
11machinery and equipment and tools without an active resale
12registration number shall prepare a certificate of exemption
13for each transaction stating facts establishing the exemption
14for that transaction, which certificate shall be available to
15the Department for inspection or audit. The Department shall
16prescribe the form of the certificate.
17    Any informal rulings, opinions or letters issued by the
18Department in response to an inquiry or request for any opinion
19from any person regarding the coverage and applicability of
20exemption (5) to specific devices shall be published,
21maintained as a public record, and made available for public
22inspection and copying. If the informal ruling, opinion or
23letter contains trade secrets or other confidential
24information, where possible the Department shall delete such
25information prior to publication. Whenever such informal
26rulings, opinions, or letters contain any policy of general

 

 

10000SB0009sam006- 318 -LRB100 06347 HLH 26817 a

1applicability, the Department shall formulate and adopt such
2policy as a rule in accordance with the provisions of the
3Illinois Administrative Procedure Act.
4    On and after July 1, 1987, no entity otherwise eligible
5under exemption (3) of this Section shall make tax free
6purchases unless it has an active exemption identification
7number issued by the Department.
8    The purchase, employment and transfer of such tangible
9personal property as newsprint and ink for the primary purpose
10of conveying news (with or without other information) is not a
11purchase, use or sale of service or of tangible personal
12property within the meaning of this Act.
13    "Serviceman" means any person who is engaged in the
14occupation of making sales of service.
15    "Sale at retail" means "sale at retail" as defined in the
16Retailers' Occupation Tax Act.
17    "Supplier" means any person who makes sales of tangible
18personal property to servicemen for the purpose of resale as an
19incident to a sale of service.
20    "Serviceman maintaining a place of business in this State",
21or any like term, means and includes any serviceman:
22        1. having or maintaining within this State, directly or
23    by a subsidiary, an office, distribution house, sales
24    house, warehouse or other place of business, or any agent
25    or other representative operating within this State under
26    the authority of the serviceman or its subsidiary,

 

 

10000SB0009sam006- 319 -LRB100 06347 HLH 26817 a

1    irrespective of whether such place of business or agent or
2    other representative is located here permanently or
3    temporarily, or whether such serviceman or subsidiary is
4    licensed to do business in this State;
5        1.1. having a contract with a person located in this
6    State under which the person, for a commission or other
7    consideration based on the sale of service by the
8    serviceman, directly or indirectly refers potential
9    customers to the serviceman by providing to the potential
10    customers a promotional code or other mechanism that allows
11    the serviceman to track purchases referred by such persons.
12    Examples of mechanisms that allow the serviceman to track
13    purchases referred by such persons include but are not
14    limited to the use of a link on the person's Internet
15    website, promotional codes distributed through the
16    person's hand-delivered or mailed material, and
17    promotional codes distributed by the person through radio
18    or other broadcast media. The provisions of this paragraph
19    1.1 shall apply only if the cumulative gross receipts from
20    sales of service by the serviceman to customers who are
21    referred to the serviceman by all persons in this State
22    under such contracts exceed $10,000 during the preceding 4
23    quarterly periods ending on the last day of March, June,
24    September, and December; a serviceman meeting the
25    requirements of this paragraph 1.1 shall be presumed to be
26    maintaining a place of business in this State but may rebut

 

 

10000SB0009sam006- 320 -LRB100 06347 HLH 26817 a

1    this presumption by submitting proof that the referrals or
2    other activities pursued within this State by such persons
3    were not sufficient to meet the nexus standards of the
4    United States Constitution during the preceding 4
5    quarterly periods;
6        1.2. beginning July 1, 2011, having a contract with a
7    person located in this State under which:
8            A. the serviceman sells the same or substantially
9        similar line of services as the person located in this
10        State and does so using an identical or substantially
11        similar name, trade name, or trademark as the person
12        located in this State; and
13            B. the serviceman provides a commission or other
14        consideration to the person located in this State based
15        upon the sale of services by the serviceman.
16    The provisions of this paragraph 1.2 shall apply only if
17    the cumulative gross receipts from sales of service by the
18    serviceman to customers in this State under all such
19    contracts exceed $10,000 during the preceding 4 quarterly
20    periods ending on the last day of March, June, September,
21    and December;
22        2. soliciting orders for tangible personal property by
23    means of a telecommunication or television shopping system
24    (which utilizes toll free numbers) which is intended by the
25    retailer to be broadcast by cable television or other means
26    of broadcasting, to consumers located in this State;

 

 

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1        3. pursuant to a contract with a broadcaster or
2    publisher located in this State, soliciting orders for
3    tangible personal property by means of advertising which is
4    disseminated primarily to consumers located in this State
5    and only secondarily to bordering jurisdictions;
6        4. soliciting orders for tangible personal property by
7    mail if the solicitations are substantial and recurring and
8    if the retailer benefits from any banking, financing, debt
9    collection, telecommunication, or marketing activities
10    occurring in this State or benefits from the location in
11    this State of authorized installation, servicing, or
12    repair facilities;
13        5. being owned or controlled by the same interests
14    which own or control any retailer engaging in business in
15    the same or similar line of business in this State;
16        6. having a franchisee or licensee operating under its
17    trade name if the franchisee or licensee is required to
18    collect the tax under this Section;
19        7. pursuant to a contract with a cable television
20    operator located in this State, soliciting orders for
21    tangible personal property by means of advertising which is
22    transmitted or distributed over a cable television system
23    in this State; or
24        8. engaging in activities in Illinois, which
25    activities in the state in which the supply business
26    engaging in such activities is located would constitute

 

 

10000SB0009sam006- 322 -LRB100 06347 HLH 26817 a

1    maintaining a place of business in that state.
2(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
 
3    (35 ILCS 110/3-5)
4    Sec. 3-5. Exemptions. Use of the following tangible
5personal property is exempt from the tax imposed by this Act:
6    (1) Personal property purchased from a corporation,
7society, association, foundation, institution, or
8organization, other than a limited liability company, that is
9organized and operated as a not-for-profit service enterprise
10for the benefit of persons 65 years of age or older if the
11personal property was not purchased by the enterprise for the
12purpose of resale by the enterprise.
13    (2) Personal property purchased by a non-profit Illinois
14county fair association for use in conducting, operating, or
15promoting the county fair.
16    (3) Personal property purchased by a not-for-profit arts or
17cultural organization that establishes, by proof required by
18the Department by rule, that it has received an exemption under
19Section 501(c)(3) of the Internal Revenue Code and that is
20organized and operated primarily for the presentation or
21support of arts or cultural programming, activities, or
22services. These organizations include, but are not limited to,
23music and dramatic arts organizations such as symphony
24orchestras and theatrical groups, arts and cultural service
25organizations, local arts councils, visual arts organizations,

 

 

10000SB0009sam006- 323 -LRB100 06347 HLH 26817 a

1and media arts organizations. On and after the effective date
2of this amendatory Act of the 92nd General Assembly, however,
3an entity otherwise eligible for this exemption shall not make
4tax-free purchases unless it has an active identification
5number issued by the Department.
6    (4) Legal tender, currency, medallions, or gold or silver
7coinage issued by the State of Illinois, the government of the
8United States of America, or the government of any foreign
9country, and bullion.
10    (5) Until July 1, 2003 and beginning again on September 1,
112004 through August 30, 2014, graphic arts machinery and
12equipment, including repair and replacement parts, both new and
13used, and including that manufactured on special order or
14purchased for lease, certified by the purchaser to be used
15primarily for graphic arts production. Equipment includes
16chemicals or chemicals acting as catalysts but only if the
17chemicals or chemicals acting as catalysts effect a direct and
18immediate change upon a graphic arts product. Beginning on July
191, 2017, graphic arts machinery and equipment is included in
20the manufacturing and assembling machinery and equipment
21exemption under Section 2 of this Act.
22    (6) Personal property purchased from a teacher-sponsored
23student organization affiliated with an elementary or
24secondary school located in Illinois.
25    (7) Farm machinery and equipment, both new and used,
26including that manufactured on special order, certified by the

 

 

10000SB0009sam006- 324 -LRB100 06347 HLH 26817 a

1purchaser to be used primarily for production agriculture or
2State or federal agricultural programs, including individual
3replacement parts for the machinery and equipment, including
4machinery and equipment purchased for lease, and including
5implements of husbandry defined in Section 1-130 of the
6Illinois Vehicle Code, farm machinery and agricultural
7chemical and fertilizer spreaders, and nurse wagons required to
8be registered under Section 3-809 of the Illinois Vehicle Code,
9but excluding other motor vehicles required to be registered
10under the Illinois Vehicle Code. Horticultural polyhouses or
11hoop houses used for propagating, growing, or overwintering
12plants shall be considered farm machinery and equipment under
13this item (7). Agricultural chemical tender tanks and dry boxes
14shall include units sold separately from a motor vehicle
15required to be licensed and units sold mounted on a motor
16vehicle required to be licensed if the selling price of the
17tender is separately stated.
18    Farm machinery and equipment shall include precision
19farming equipment that is installed or purchased to be
20installed on farm machinery and equipment including, but not
21limited to, tractors, harvesters, sprayers, planters, seeders,
22or spreaders. Precision farming equipment includes, but is not
23limited to, soil testing sensors, computers, monitors,
24software, global positioning and mapping systems, and other
25such equipment.
26    Farm machinery and equipment also includes computers,

 

 

10000SB0009sam006- 325 -LRB100 06347 HLH 26817 a

1sensors, software, and related equipment used primarily in the
2computer-assisted operation of production agriculture
3facilities, equipment, and activities such as, but not limited
4to, the collection, monitoring, and correlation of animal and
5crop data for the purpose of formulating animal diets and
6agricultural chemicals. This item (7) is exempt from the
7provisions of Section 3-75.
8    (8) Until June 30, 2013, fuel and petroleum products sold
9to or used by an air common carrier, certified by the carrier
10to be used for consumption, shipment, or storage in the conduct
11of its business as an air common carrier, for a flight destined
12for or returning from a location or locations outside the
13United States without regard to previous or subsequent domestic
14stopovers.
15    Beginning July 1, 2013, fuel and petroleum products sold to
16or used by an air carrier, certified by the carrier to be used
17for consumption, shipment, or storage in the conduct of its
18business as an air common carrier, for a flight that (i) is
19engaged in foreign trade or is engaged in trade between the
20United States and any of its possessions and (ii) transports at
21least one individual or package for hire from the city of
22origination to the city of final destination on the same
23aircraft, without regard to a change in the flight number of
24that aircraft.
25    (9) Proceeds of mandatory service charges separately
26stated on customers' bills for the purchase and consumption of

 

 

10000SB0009sam006- 326 -LRB100 06347 HLH 26817 a

1food and beverages acquired as an incident to the purchase of a
2service from a serviceman, to the extent that the proceeds of
3the service charge are in fact turned over as tips or as a
4substitute for tips to the employees who participate directly
5in preparing, serving, hosting or cleaning up the food or
6beverage function with respect to which the service charge is
7imposed.
8    (10) Until July 1, 2003, oil field exploration, drilling,
9and production equipment, including (i) rigs and parts of rigs,
10rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
11tubular goods, including casing and drill strings, (iii) pumps
12and pump-jack units, (iv) storage tanks and flow lines, (v) any
13individual replacement part for oil field exploration,
14drilling, and production equipment, and (vi) machinery and
15equipment purchased for lease; but excluding motor vehicles
16required to be registered under the Illinois Vehicle Code.
17    (11) Proceeds from the sale of photoprocessing machinery
18and equipment, including repair and replacement parts, both new
19and used, including that manufactured on special order,
20certified by the purchaser to be used primarily for
21photoprocessing, and including photoprocessing machinery and
22equipment purchased for lease.
23    (12) Coal and aggregate exploration, mining, off-highway
24hauling, processing, maintenance, and reclamation equipment,
25including replacement parts and equipment, and including
26equipment purchased for lease, but excluding motor vehicles

 

 

10000SB0009sam006- 327 -LRB100 06347 HLH 26817 a

1required to be registered under the Illinois Vehicle Code. The
2changes made to this Section by Public Act 97-767 apply on and
3after July 1, 2003, but no claim for credit or refund is
4allowed on or after August 16, 2013 (the effective date of
5Public Act 98-456) for such taxes paid during the period
6beginning July 1, 2003 and ending on August 16, 2013 (the
7effective date of Public Act 98-456).
8    (13) Semen used for artificial insemination of livestock
9for direct agricultural production.
10    (14) Horses, or interests in horses, registered with and
11meeting the requirements of any of the Arabian Horse Club
12Registry of America, Appaloosa Horse Club, American Quarter
13Horse Association, United States Trotting Association, or
14Jockey Club, as appropriate, used for purposes of breeding or
15racing for prizes. This item (14) is exempt from the provisions
16of Section 3-75, and the exemption provided for under this item
17(14) applies for all periods beginning May 30, 1995, but no
18claim for credit or refund is allowed on or after the effective
19date of this amendatory Act of the 95th General Assembly for
20such taxes paid during the period beginning May 30, 2000 and
21ending on the effective date of this amendatory Act of the 95th
22General Assembly.
23    (15) Computers and communications equipment utilized for
24any hospital purpose and equipment used in the diagnosis,
25analysis, or treatment of hospital patients purchased by a
26lessor who leases the equipment, under a lease of one year or

 

 

10000SB0009sam006- 328 -LRB100 06347 HLH 26817 a

1longer executed or in effect at the time the lessor would
2otherwise be subject to the tax imposed by this Act, to a
3hospital that has been issued an active tax exemption
4identification number by the Department under Section 1g of the
5Retailers' Occupation Tax Act. If the equipment is leased in a
6manner that does not qualify for this exemption or is used in
7any other non-exempt manner, the lessor shall be liable for the
8tax imposed under this Act or the Use Tax Act, as the case may
9be, based on the fair market value of the property at the time
10the non-qualifying use occurs. No lessor shall collect or
11attempt to collect an amount (however designated) that purports
12to reimburse that lessor for the tax imposed by this Act or the
13Use Tax Act, as the case may be, if the tax has not been paid by
14the lessor. If a lessor improperly collects any such amount
15from the lessee, the lessee shall have a legal right to claim a
16refund of that amount from the lessor. If, however, that amount
17is not refunded to the lessee for any reason, the lessor is
18liable to pay that amount to the Department.
19    (16) Personal property purchased by a lessor who leases the
20property, under a lease of one year or longer executed or in
21effect at the time the lessor would otherwise be subject to the
22tax imposed by this Act, to a governmental body that has been
23issued an active tax exemption identification number by the
24Department under Section 1g of the Retailers' Occupation Tax
25Act. If the property is leased in a manner that does not
26qualify for this exemption or is used in any other non-exempt

 

 

10000SB0009sam006- 329 -LRB100 06347 HLH 26817 a

1manner, the lessor shall be liable for the tax imposed under
2this Act or the Use Tax Act, as the case may be, based on the
3fair market value of the property at the time the
4non-qualifying use occurs. No lessor shall collect or attempt
5to collect an amount (however designated) that purports to
6reimburse that lessor for the tax imposed by this Act or the
7Use Tax Act, as the case may be, if the tax has not been paid by
8the lessor. If a lessor improperly collects any such amount
9from the lessee, the lessee shall have a legal right to claim a
10refund of that amount from the lessor. If, however, that amount
11is not refunded to the lessee for any reason, the lessor is
12liable to pay that amount to the Department.
13    (17) Beginning with taxable years ending on or after
14December 31, 1995 and ending with taxable years ending on or
15before December 31, 2004, personal property that is donated for
16disaster relief to be used in a State or federally declared
17disaster area in Illinois or bordering Illinois by a
18manufacturer or retailer that is registered in this State to a
19corporation, society, association, foundation, or institution
20that has been issued a sales tax exemption identification
21number by the Department that assists victims of the disaster
22who reside within the declared disaster area.
23    (18) Beginning with taxable years ending on or after
24December 31, 1995 and ending with taxable years ending on or
25before December 31, 2004, personal property that is used in the
26performance of infrastructure repairs in this State, including

 

 

10000SB0009sam006- 330 -LRB100 06347 HLH 26817 a

1but not limited to municipal roads and streets, access roads,
2bridges, sidewalks, waste disposal systems, water and sewer
3line extensions, water distribution and purification
4facilities, storm water drainage and retention facilities, and
5sewage treatment facilities, resulting from a State or
6federally declared disaster in Illinois or bordering Illinois
7when such repairs are initiated on facilities located in the
8declared disaster area within 6 months after the disaster.
9    (19) Beginning July 1, 1999, game or game birds purchased
10at a "game breeding and hunting preserve area" as that term is
11used in the Wildlife Code. This paragraph is exempt from the
12provisions of Section 3-75.
13    (20) A motor vehicle, as that term is defined in Section
141-146 of the Illinois Vehicle Code, that is donated to a
15corporation, limited liability company, society, association,
16foundation, or institution that is determined by the Department
17to be organized and operated exclusively for educational
18purposes. For purposes of this exemption, "a corporation,
19limited liability company, society, association, foundation,
20or institution organized and operated exclusively for
21educational purposes" means all tax-supported public schools,
22private schools that offer systematic instruction in useful
23branches of learning by methods common to public schools and
24that compare favorably in their scope and intensity with the
25course of study presented in tax-supported schools, and
26vocational or technical schools or institutes organized and

 

 

10000SB0009sam006- 331 -LRB100 06347 HLH 26817 a

1operated exclusively to provide a course of study of not less
2than 6 weeks duration and designed to prepare individuals to
3follow a trade or to pursue a manual, technical, mechanical,
4industrial, business, or commercial occupation.
5    (21) Beginning January 1, 2000, personal property,
6including food, purchased through fundraising events for the
7benefit of a public or private elementary or secondary school,
8a group of those schools, or one or more school districts if
9the events are sponsored by an entity recognized by the school
10district that consists primarily of volunteers and includes
11parents and teachers of the school children. This paragraph
12does not apply to fundraising events (i) for the benefit of
13private home instruction or (ii) for which the fundraising
14entity purchases the personal property sold at the events from
15another individual or entity that sold the property for the
16purpose of resale by the fundraising entity and that profits
17from the sale to the fundraising entity. This paragraph is
18exempt from the provisions of Section 3-75.
19    (22) Beginning January 1, 2000 and through December 31,
202001, new or used automatic vending machines that prepare and
21serve hot food and beverages, including coffee, soup, and other
22items, and replacement parts for these machines. Beginning
23January 1, 2002 and through June 30, 2003, machines and parts
24for machines used in commercial, coin-operated amusement and
25vending business if a use or occupation tax is paid on the
26gross receipts derived from the use of the commercial,

 

 

10000SB0009sam006- 332 -LRB100 06347 HLH 26817 a

1coin-operated amusement and vending machines. This paragraph
2is exempt from the provisions of Section 3-75.
3    (23) Beginning August 23, 2001 and through June 30, 2016,
4food for human consumption that is to be consumed off the
5premises where it is sold (other than alcoholic beverages, soft
6drinks, and food that has been prepared for immediate
7consumption) and prescription and nonprescription medicines,
8drugs, medical appliances, and insulin, urine testing
9materials, syringes, and needles used by diabetics, for human
10use, when purchased for use by a person receiving medical
11assistance under Article V of the Illinois Public Aid Code who
12resides in a licensed long-term care facility, as defined in
13the Nursing Home Care Act, or in a licensed facility as defined
14in the ID/DD Community Care Act, the MC/DD Act, or the
15Specialized Mental Health Rehabilitation Act of 2013.
16    (24) Beginning on the effective date of this amendatory Act
17of the 92nd General Assembly, computers and communications
18equipment utilized for any hospital purpose and equipment used
19in the diagnosis, analysis, or treatment of hospital patients
20purchased by a lessor who leases the equipment, under a lease
21of one year or longer executed or in effect at the time the
22lessor would otherwise be subject to the tax imposed by this
23Act, to a hospital that has been issued an active tax exemption
24identification number by the Department under Section 1g of the
25Retailers' Occupation Tax Act. If the equipment is leased in a
26manner that does not qualify for this exemption or is used in

 

 

10000SB0009sam006- 333 -LRB100 06347 HLH 26817 a

1any other nonexempt manner, the lessor shall be liable for the
2tax imposed under this Act or the Use Tax Act, as the case may
3be, based on the fair market value of the property at the time
4the nonqualifying use occurs. No lessor shall collect or
5attempt to collect an amount (however designated) that purports
6to reimburse that lessor for the tax imposed by this Act or the
7Use Tax Act, as the case may be, if the tax has not been paid by
8the lessor. If a lessor improperly collects any such amount
9from the lessee, the lessee shall have a legal right to claim a
10refund of that amount from the lessor. If, however, that amount
11is not refunded to the lessee for any reason, the lessor is
12liable to pay that amount to the Department. This paragraph is
13exempt from the provisions of Section 3-75.
14    (25) Beginning on the effective date of this amendatory Act
15of the 92nd General Assembly, personal property purchased by a
16lessor who leases the property, under a lease of one year or
17longer executed or in effect at the time the lessor would
18otherwise be subject to the tax imposed by this Act, to a
19governmental body that has been issued an active tax exemption
20identification number by the Department under Section 1g of the
21Retailers' Occupation Tax Act. If the property is leased in a
22manner that does not qualify for this exemption or is used in
23any other nonexempt manner, the lessor shall be liable for the
24tax imposed under this Act or the Use Tax Act, as the case may
25be, based on the fair market value of the property at the time
26the nonqualifying use occurs. No lessor shall collect or

 

 

10000SB0009sam006- 334 -LRB100 06347 HLH 26817 a

1attempt to collect an amount (however designated) that purports
2to reimburse that lessor for the tax imposed by this Act or the
3Use Tax Act, as the case may be, if the tax has not been paid by
4the lessor. If a lessor improperly collects any such amount
5from the lessee, the lessee shall have a legal right to claim a
6refund of that amount from the lessor. If, however, that amount
7is not refunded to the lessee for any reason, the lessor is
8liable to pay that amount to the Department. This paragraph is
9exempt from the provisions of Section 3-75.
10    (26) Beginning January 1, 2008, tangible personal property
11used in the construction or maintenance of a community water
12supply, as defined under Section 3.145 of the Environmental
13Protection Act, that is operated by a not-for-profit
14corporation that holds a valid water supply permit issued under
15Title IV of the Environmental Protection Act. This paragraph is
16exempt from the provisions of Section 3-75.
17    (27) Beginning January 1, 2010, materials, parts,
18equipment, components, and furnishings incorporated into or
19upon an aircraft as part of the modification, refurbishment,
20completion, replacement, repair, or maintenance of the
21aircraft. This exemption includes consumable supplies used in
22the modification, refurbishment, completion, replacement,
23repair, and maintenance of aircraft, but excludes any
24materials, parts, equipment, components, and consumable
25supplies used in the modification, replacement, repair, and
26maintenance of aircraft engines or power plants, whether such

 

 

10000SB0009sam006- 335 -LRB100 06347 HLH 26817 a

1engines or power plants are installed or uninstalled upon any
2such aircraft. "Consumable supplies" include, but are not
3limited to, adhesive, tape, sandpaper, general purpose
4lubricants, cleaning solution, latex gloves, and protective
5films. This exemption applies only to the use of qualifying
6tangible personal property transferred incident to the
7modification, refurbishment, completion, replacement, repair,
8or maintenance of aircraft by persons who (i) hold an Air
9Agency Certificate and are empowered to operate an approved
10repair station by the Federal Aviation Administration, (ii)
11have a Class IV Rating, and (iii) conduct operations in
12accordance with Part 145 of the Federal Aviation Regulations.
13The exemption does not include aircraft operated by a
14commercial air carrier providing scheduled passenger air
15service pursuant to authority issued under Part 121 or Part 129
16of the Federal Aviation Regulations. The changes made to this
17paragraph (27) by Public Act 98-534 are declarative of existing
18law.
19    (28) Tangible personal property purchased by a
20public-facilities corporation, as described in Section
2111-65-10 of the Illinois Municipal Code, for purposes of
22constructing or furnishing a municipal convention hall, but
23only if the legal title to the municipal convention hall is
24transferred to the municipality without any further
25consideration by or on behalf of the municipality at the time
26of the completion of the municipal convention hall or upon the

 

 

10000SB0009sam006- 336 -LRB100 06347 HLH 26817 a

1retirement or redemption of any bonds or other debt instruments
2issued by the public-facilities corporation in connection with
3the development of the municipal convention hall. This
4exemption includes existing public-facilities corporations as
5provided in Section 11-65-25 of the Illinois Municipal Code.
6This paragraph is exempt from the provisions of Section 3-75.
7    (29) Beginning January 1, 2017, menstrual pads, tampons,
8and menstrual cups.
9(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1098-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
117-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)
 
12    Section 30-30. The Service Occupation Tax Act is amended by
13changing Sections 2 and 3-5 as follows:
 
14    (35 ILCS 115/2)  (from Ch. 120, par. 439.102)
15    Sec. 2. "Transfer" means any transfer of the title to
16property or of the ownership of property whether or not the
17transferor retains title as security for the payment of amounts
18due him from the transferee.
19    "Cost Price" means the consideration paid by the serviceman
20for a purchase valued in money, whether paid in money or
21otherwise, including cash, credits and services, and shall be
22determined without any deduction on account of the supplier's
23cost of the property sold or on account of any other expense
24incurred by the supplier. When a serviceman contracts out part

 

 

10000SB0009sam006- 337 -LRB100 06347 HLH 26817 a

1or all of the services required in his sale of service, it
2shall be presumed that the cost price to the serviceman of the
3property transferred to him by his or her subcontractor is
4equal to 50% of the subcontractor's charges to the serviceman
5in the absence of proof of the consideration paid by the
6subcontractor for the purchase of such property.
7    "Department" means the Department of Revenue.
8    "Person" means any natural individual, firm, partnership,
9association, joint stock company, joint venture, public or
10private corporation, limited liability company, and any
11receiver, executor, trustee, guardian or other representative
12appointed by order of any court.
13    "Sale of Service" means any transaction except:
14    (a) A retail sale of tangible personal property taxable
15under the Retailers' Occupation Tax Act or under the Use Tax
16Act.
17    (b) A sale of tangible personal property for the purpose of
18resale made in compliance with Section 2c of the Retailers'
19Occupation Tax Act.
20    (c) Except as hereinafter provided, a sale or transfer of
21tangible personal property as an incident to the rendering of
22service for or by any governmental body or for or by any
23corporation, society, association, foundation or institution
24organized and operated exclusively for charitable, religious
25or educational purposes or any not-for-profit corporation,
26society, association, foundation, institution or organization

 

 

10000SB0009sam006- 338 -LRB100 06347 HLH 26817 a

1which has no compensated officers or employees and which is
2organized and operated primarily for the recreation of persons
355 years of age or older. A limited liability company may
4qualify for the exemption under this paragraph only if the
5limited liability company is organized and operated
6exclusively for educational purposes.
7    (d) A sale or transfer of tangible personal property as an
8incident to the rendering of service for interstate carriers
9for hire for use as rolling stock moving in interstate commerce
10or lessors under leases of one year or longer, executed or in
11effect at the time of purchase, to interstate carriers for hire
12for use as rolling stock moving in interstate commerce, and
13equipment operated by a telecommunications provider, licensed
14as a common carrier by the Federal Communications Commission,
15which is permanently installed in or affixed to aircraft moving
16in interstate commerce.
17    (d-1) A sale or transfer of tangible personal property as
18an incident to the rendering of service for owners, lessors or
19shippers of tangible personal property which is utilized by
20interstate carriers for hire for use as rolling stock moving in
21interstate commerce, and equipment operated by a
22telecommunications provider, licensed as a common carrier by
23the Federal Communications Commission, which is permanently
24installed in or affixed to aircraft moving in interstate
25commerce.
26    (d-1.1) On and after July 1, 2003 and through June 30,

 

 

10000SB0009sam006- 339 -LRB100 06347 HLH 26817 a

12004, a sale or transfer of a motor vehicle of the second
2division with a gross vehicle weight in excess of 8,000 pounds
3as an incident to the rendering of service if that motor
4vehicle is subject to the commercial distribution fee imposed
5under Section 3-815.1 of the Illinois Vehicle Code. Beginning
6on July 1, 2004 and through June 30, 2005, the use in this
7State of motor vehicles of the second division: (i) with a
8gross vehicle weight rating in excess of 8,000 pounds; (ii)
9that are subject to the commercial distribution fee imposed
10under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
11that are primarily used for commercial purposes. Through June
1230, 2005, this exemption applies to repair and replacement
13parts added after the initial purchase of such a motor vehicle
14if that motor vehicle is used in a manner that would qualify
15for the rolling stock exemption otherwise provided for in this
16Act. For purposes of this paragraph, "used for commercial
17purposes" means the transportation of persons or property in
18furtherance of any commercial or industrial enterprise whether
19for-hire or not.
20    (d-2) The repairing, reconditioning or remodeling, for a
21common carrier by rail, of tangible personal property which
22belongs to such carrier for hire, and as to which such carrier
23receives the physical possession of the repaired,
24reconditioned or remodeled item of tangible personal property
25in Illinois, and which such carrier transports, or shares with
26another common carrier in the transportation of such property,

 

 

10000SB0009sam006- 340 -LRB100 06347 HLH 26817 a

1out of Illinois on a standard uniform bill of lading showing
2the person who repaired, reconditioned or remodeled the
3property as the shipper or consignor of such property to a
4destination outside Illinois, for use outside Illinois.
5    (d-3) A sale or transfer of tangible personal property
6which is produced by the seller thereof on special order in
7such a way as to have made the applicable tax the Service
8Occupation Tax or the Service Use Tax, rather than the
9Retailers' Occupation Tax or the Use Tax, for an interstate
10carrier by rail which receives the physical possession of such
11property in Illinois, and which transports such property, or
12shares with another common carrier in the transportation of
13such property, out of Illinois on a standard uniform bill of
14lading showing the seller of the property as the shipper or
15consignor of such property to a destination outside Illinois,
16for use outside Illinois.
17    (d-4) Until January 1, 1997, a sale, by a registered
18serviceman paying tax under this Act to the Department, of
19special order printed materials delivered outside Illinois and
20which are not returned to this State, if delivery is made by
21the seller or agent of the seller, including an agent who
22causes the product to be delivered outside Illinois by a common
23carrier or the U.S. postal service.
24    (e) A sale or transfer of machinery and equipment used
25primarily in the process of the manufacturing or assembling,
26either in an existing, an expanded or a new manufacturing

 

 

10000SB0009sam006- 341 -LRB100 06347 HLH 26817 a

1facility, of tangible personal property for wholesale or retail
2sale or lease, whether such sale or lease is made directly by
3the manufacturer or by some other person, whether the materials
4used in the process are owned by the manufacturer or some other
5person, or whether such sale or lease is made apart from or as
6an incident to the seller's engaging in a service occupation
7and the applicable tax is a Service Occupation Tax or Service
8Use Tax, rather than Retailers' Occupation Tax or Use Tax. The
9exemption provided by this paragraph (e) does not include
10machinery and equipment used in (i) the generation of
11electricity for wholesale or retail sale; (ii) the generation
12or treatment of natural or artificial gas for wholesale or
13retail sale that is delivered to customers through pipes,
14pipelines, or mains; or (iii) the treatment of water for
15wholesale or retail sale that is delivered to customers through
16pipes, pipelines, or mains. The provisions of this amendatory
17Act of the 98th General Assembly are declaratory of existing
18law as to the meaning and scope of this exemption. The
19exemption under this subsection (e) is exempt from the
20provisions of Section 3-75.
21    (f) Until July 1, 2003, the sale or transfer of
22distillation machinery and equipment, sold as a unit or kit and
23assembled or installed by the retailer, which machinery and
24equipment is certified by the user to be used only for the
25production of ethyl alcohol that will be used for consumption
26as motor fuel or as a component of motor fuel for the personal

 

 

10000SB0009sam006- 342 -LRB100 06347 HLH 26817 a

1use of such user and not subject to sale or resale.
2    (g) At the election of any serviceman not required to be
3otherwise registered as a retailer under Section 2a of the
4Retailers' Occupation Tax Act, made for each fiscal year sales
5of service in which the aggregate annual cost price of tangible
6personal property transferred as an incident to the sales of
7service is less than 35% (75% in the case of servicemen
8transferring prescription drugs or servicemen engaged in
9graphic arts production) of the aggregate annual total gross
10receipts from all sales of service. The purchase of such
11tangible personal property by the serviceman shall be subject
12to tax under the Retailers' Occupation Tax Act and the Use Tax
13Act. However, if a primary serviceman who has made the election
14described in this paragraph subcontracts service work to a
15secondary serviceman who has also made the election described
16in this paragraph, the primary serviceman does not incur a Use
17Tax liability if the secondary serviceman (i) has paid or will
18pay Use Tax on his or her cost price of any tangible personal
19property transferred to the primary serviceman and (ii)
20certifies that fact in writing to the primary serviceman.
21    Tangible personal property transferred incident to the
22completion of a maintenance agreement is exempt from the tax
23imposed pursuant to this Act.
24    Exemption (e) also includes machinery and equipment used in
25the general maintenance or repair of such exempt machinery and
26equipment or for in-house manufacture of exempt machinery and

 

 

10000SB0009sam006- 343 -LRB100 06347 HLH 26817 a

1equipment. On and after July 1, 2017, exemption (e) also
2includes production related tangible personal property, as
3defined in Section 2-45 of the Retailers' Occupation Tax Act.
4On and after July 1, 2017, exemption (e) also includes graphic
5arts machinery and equipment, as defined in paragraph (5) of
6Section 3-5. The machinery and equipment exemption does not
7include machinery and equipment used in (i) the generation of
8electricity for wholesale or retail sale; (ii) the generation
9or treatment of natural or artificial gas for wholesale or
10retail sale that is delivered to customers through pipes,
11pipelines, or mains; or (iii) the treatment of water for
12wholesale or retail sale that is delivered to customers through
13pipes, pipelines, or mains. The provisions of this amendatory
14Act of the 98th General Assembly are declaratory of existing
15law as to the meaning and scope of this exemption. For the
16purposes of exemption (e), each of these terms shall have the
17following meanings: (1) "manufacturing process" shall mean the
18production of any article of tangible personal property,
19whether such article is a finished product or an article for
20use in the process of manufacturing or assembling a different
21article of tangible personal property, by procedures commonly
22regarded as manufacturing, processing, fabricating, or
23refining which changes some existing material or materials into
24a material with a different form, use or name. In relation to a
25recognized integrated business composed of a series of
26operations which collectively constitute manufacturing, or

 

 

10000SB0009sam006- 344 -LRB100 06347 HLH 26817 a

1individually constitute manufacturing operations, the
2manufacturing process shall be deemed to commence with the
3first operation or stage of production in the series, and shall
4not be deemed to end until the completion of the final product
5in the last operation or stage of production in the series; and
6further for purposes of exemption (e), photoprocessing is
7deemed to be a manufacturing process of tangible personal
8property for wholesale or retail sale; (2) "assembling process"
9shall mean the production of any article of tangible personal
10property, whether such article is a finished product or an
11article for use in the process of manufacturing or assembling a
12different article of tangible personal property, by the
13combination of existing materials in a manner commonly regarded
14as assembling which results in a material of a different form,
15use or name; (3) "machinery" shall mean major mechanical
16machines or major components of such machines contributing to a
17manufacturing or assembling process; and (4) "equipment" shall
18include any independent device or tool separate from any
19machinery but essential to an integrated manufacturing or
20assembly process; including computers used primarily in a
21manufacturer's computer assisted design, computer assisted
22manufacturing (CAD/CAM) system; or any subunit or assembly
23comprising a component of any machinery or auxiliary, adjunct
24or attachment parts of machinery, such as tools, dies, jigs,
25fixtures, patterns and molds; or any parts which require
26periodic replacement in the course of normal operation; but

 

 

10000SB0009sam006- 345 -LRB100 06347 HLH 26817 a

1shall not include hand tools. Equipment includes chemicals or
2chemicals acting as catalysts but only if the chemicals or
3chemicals acting as catalysts effect a direct and immediate
4change upon a product being manufactured or assembled for
5wholesale or retail sale or lease. The purchaser of such
6machinery and equipment who has an active resale registration
7number shall furnish such number to the seller at the time of
8purchase. The purchaser of such machinery and equipment and
9tools without an active resale registration number shall
10furnish to the seller a certificate of exemption for each
11transaction stating facts establishing the exemption for that
12transaction, which certificate shall be available to the
13Department for inspection or audit.
14    Except as provided in Section 2d of this Act, the rolling
15stock exemption applies to rolling stock used by an interstate
16carrier for hire, even just between points in Illinois, if such
17rolling stock transports, for hire, persons whose journeys or
18property whose shipments originate or terminate outside
19Illinois.
20    Any informal rulings, opinions or letters issued by the
21Department in response to an inquiry or request for any opinion
22from any person regarding the coverage and applicability of
23exemption (e) to specific devices shall be published,
24maintained as a public record, and made available for public
25inspection and copying. If the informal ruling, opinion or
26letter contains trade secrets or other confidential

 

 

10000SB0009sam006- 346 -LRB100 06347 HLH 26817 a

1information, where possible the Department shall delete such
2information prior to publication. Whenever such informal
3rulings, opinions, or letters contain any policy of general
4applicability, the Department shall formulate and adopt such
5policy as a rule in accordance with the provisions of the
6Illinois Administrative Procedure Act.
7    On and after July 1, 1987, no entity otherwise eligible
8under exemption (c) of this Section shall make tax free
9purchases unless it has an active exemption identification
10number issued by the Department.
11    "Serviceman" means any person who is engaged in the
12occupation of making sales of service.
13    "Sale at Retail" means "sale at retail" as defined in the
14Retailers' Occupation Tax Act.
15    "Supplier" means any person who makes sales of tangible
16personal property to servicemen for the purpose of resale as an
17incident to a sale of service.
18(Source: P.A. 98-583, eff. 1-1-14.)
 
19    (35 ILCS 115/3-5)
20    Sec. 3-5. Exemptions. The following tangible personal
21property is exempt from the tax imposed by this Act:
22    (1) Personal property sold by a corporation, society,
23association, foundation, institution, or organization, other
24than a limited liability company, that is organized and
25operated as a not-for-profit service enterprise for the benefit

 

 

10000SB0009sam006- 347 -LRB100 06347 HLH 26817 a

1of persons 65 years of age or older if the personal property
2was not purchased by the enterprise for the purpose of resale
3by the enterprise.
4    (2) Personal property purchased by a not-for-profit
5Illinois county fair association for use in conducting,
6operating, or promoting the county fair.
7    (3) Personal property purchased by any not-for-profit arts
8or cultural organization that establishes, by proof required by
9the Department by rule, that it has received an exemption under
10Section 501(c)(3) of the Internal Revenue Code and that is
11organized and operated primarily for the presentation or
12support of arts or cultural programming, activities, or
13services. These organizations include, but are not limited to,
14music and dramatic arts organizations such as symphony
15orchestras and theatrical groups, arts and cultural service
16organizations, local arts councils, visual arts organizations,
17and media arts organizations. On and after the effective date
18of this amendatory Act of the 92nd General Assembly, however,
19an entity otherwise eligible for this exemption shall not make
20tax-free purchases unless it has an active identification
21number issued by the Department.
22    (4) Legal tender, currency, medallions, or gold or silver
23coinage issued by the State of Illinois, the government of the
24United States of America, or the government of any foreign
25country, and bullion.
26    (5) Until July 1, 2003 and beginning again on September 1,

 

 

10000SB0009sam006- 348 -LRB100 06347 HLH 26817 a

12004 through August 30, 2014, graphic arts machinery and
2equipment, including repair and replacement parts, both new and
3used, and including that manufactured on special order or
4purchased for lease, certified by the purchaser to be used
5primarily for graphic arts production. Equipment includes
6chemicals or chemicals acting as catalysts but only if the
7chemicals or chemicals acting as catalysts effect a direct and
8immediate change upon a graphic arts product. Beginning on July
91, 2017, graphic arts machinery and equipment is included in
10the manufacturing and assembling machinery and equipment
11exemption under Section 2 of this Act.
12    (6) Personal property sold by a teacher-sponsored student
13organization affiliated with an elementary or secondary school
14located in Illinois.
15    (7) Farm machinery and equipment, both new and used,
16including that manufactured on special order, certified by the
17purchaser to be used primarily for production agriculture or
18State or federal agricultural programs, including individual
19replacement parts for the machinery and equipment, including
20machinery and equipment purchased for lease, and including
21implements of husbandry defined in Section 1-130 of the
22Illinois Vehicle Code, farm machinery and agricultural
23chemical and fertilizer spreaders, and nurse wagons required to
24be registered under Section 3-809 of the Illinois Vehicle Code,
25but excluding other motor vehicles required to be registered
26under the Illinois Vehicle Code. Horticultural polyhouses or

 

 

10000SB0009sam006- 349 -LRB100 06347 HLH 26817 a

1hoop houses used for propagating, growing, or overwintering
2plants shall be considered farm machinery and equipment under
3this item (7). Agricultural chemical tender tanks and dry boxes
4shall include units sold separately from a motor vehicle
5required to be licensed and units sold mounted on a motor
6vehicle required to be licensed if the selling price of the
7tender is separately stated.
8    Farm machinery and equipment shall include precision
9farming equipment that is installed or purchased to be
10installed on farm machinery and equipment including, but not
11limited to, tractors, harvesters, sprayers, planters, seeders,
12or spreaders. Precision farming equipment includes, but is not
13limited to, soil testing sensors, computers, monitors,
14software, global positioning and mapping systems, and other
15such equipment.
16    Farm machinery and equipment also includes computers,
17sensors, software, and related equipment used primarily in the
18computer-assisted operation of production agriculture
19facilities, equipment, and activities such as, but not limited
20to, the collection, monitoring, and correlation of animal and
21crop data for the purpose of formulating animal diets and
22agricultural chemicals. This item (7) is exempt from the
23provisions of Section 3-55.
24    (8) Until June 30, 2013, fuel and petroleum products sold
25to or used by an air common carrier, certified by the carrier
26to be used for consumption, shipment, or storage in the conduct

 

 

10000SB0009sam006- 350 -LRB100 06347 HLH 26817 a

1of its business as an air common carrier, for a flight destined
2for or returning from a location or locations outside the
3United States without regard to previous or subsequent domestic
4stopovers.
5    Beginning July 1, 2013, fuel and petroleum products sold to
6or used by an air carrier, certified by the carrier to be used
7for consumption, shipment, or storage in the conduct of its
8business as an air common carrier, for a flight that (i) is
9engaged in foreign trade or is engaged in trade between the
10United States and any of its possessions and (ii) transports at
11least one individual or package for hire from the city of
12origination to the city of final destination on the same
13aircraft, without regard to a change in the flight number of
14that aircraft.
15    (9) Proceeds of mandatory service charges separately
16stated on customers' bills for the purchase and consumption of
17food and beverages, to the extent that the proceeds of the
18service charge are in fact turned over as tips or as a
19substitute for tips to the employees who participate directly
20in preparing, serving, hosting or cleaning up the food or
21beverage function with respect to which the service charge is
22imposed.
23    (10) Until July 1, 2003, oil field exploration, drilling,
24and production equipment, including (i) rigs and parts of rigs,
25rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
26tubular goods, including casing and drill strings, (iii) pumps

 

 

10000SB0009sam006- 351 -LRB100 06347 HLH 26817 a

1and pump-jack units, (iv) storage tanks and flow lines, (v) any
2individual replacement part for oil field exploration,
3drilling, and production equipment, and (vi) machinery and
4equipment purchased for lease; but excluding motor vehicles
5required to be registered under the Illinois Vehicle Code.
6    (11) Photoprocessing machinery and equipment, including
7repair and replacement parts, both new and used, including that
8manufactured on special order, certified by the purchaser to be
9used primarily for photoprocessing, and including
10photoprocessing machinery and equipment purchased for lease.
11    (12) Coal and aggregate exploration, mining, off-highway
12hauling, processing, maintenance, and reclamation equipment,
13including replacement parts and equipment, and including
14equipment purchased for lease, but excluding motor vehicles
15required to be registered under the Illinois Vehicle Code. The
16changes made to this Section by Public Act 97-767 apply on and
17after July 1, 2003, but no claim for credit or refund is
18allowed on or after August 16, 2013 (the effective date of
19Public Act 98-456) for such taxes paid during the period
20beginning July 1, 2003 and ending on August 16, 2013 (the
21effective date of Public Act 98-456).
22    (13) Beginning January 1, 1992 and through June 30, 2016,
23food for human consumption that is to be consumed off the
24premises where it is sold (other than alcoholic beverages, soft
25drinks and food that has been prepared for immediate
26consumption) and prescription and non-prescription medicines,

 

 

10000SB0009sam006- 352 -LRB100 06347 HLH 26817 a

1drugs, medical appliances, and insulin, urine testing
2materials, syringes, and needles used by diabetics, for human
3use, when purchased for use by a person receiving medical
4assistance under Article V of the Illinois Public Aid Code who
5resides in a licensed long-term care facility, as defined in
6the Nursing Home Care Act, or in a licensed facility as defined
7in the ID/DD Community Care Act, the MC/DD Act, or the
8Specialized Mental Health Rehabilitation Act of 2013.
9    (14) Semen used for artificial insemination of livestock
10for direct agricultural production.
11    (15) Horses, or interests in horses, registered with and
12meeting the requirements of any of the Arabian Horse Club
13Registry of America, Appaloosa Horse Club, American Quarter
14Horse Association, United States Trotting Association, or
15Jockey Club, as appropriate, used for purposes of breeding or
16racing for prizes. This item (15) is exempt from the provisions
17of Section 3-55, and the exemption provided for under this item
18(15) applies for all periods beginning May 30, 1995, but no
19claim for credit or refund is allowed on or after January 1,
202008 (the effective date of Public Act 95-88) for such taxes
21paid during the period beginning May 30, 2000 and ending on
22January 1, 2008 (the effective date of Public Act 95-88).
23    (16) Computers and communications equipment utilized for
24any hospital purpose and equipment used in the diagnosis,
25analysis, or treatment of hospital patients sold to a lessor
26who leases the equipment, under a lease of one year or longer

 

 

10000SB0009sam006- 353 -LRB100 06347 HLH 26817 a

1executed or in effect at the time of the purchase, to a
2hospital that has been issued an active tax exemption
3identification number by the Department under Section 1g of the
4Retailers' Occupation Tax Act.
5    (17) Personal property sold to a lessor who leases the
6property, under a lease of one year or longer executed or in
7effect at the time of the purchase, to a governmental body that
8has been issued an active tax exemption identification number
9by the Department under Section 1g of the Retailers' Occupation
10Tax Act.
11    (18) Beginning with taxable years ending on or after
12December 31, 1995 and ending with taxable years ending on or
13before December 31, 2004, personal property that is donated for
14disaster relief to be used in a State or federally declared
15disaster area in Illinois or bordering Illinois by a
16manufacturer or retailer that is registered in this State to a
17corporation, society, association, foundation, or institution
18that has been issued a sales tax exemption identification
19number by the Department that assists victims of the disaster
20who reside within the declared disaster area.
21    (19) Beginning with taxable years ending on or after
22December 31, 1995 and ending with taxable years ending on or
23before December 31, 2004, personal property that is used in the
24performance of infrastructure repairs in this State, including
25but not limited to municipal roads and streets, access roads,
26bridges, sidewalks, waste disposal systems, water and sewer

 

 

10000SB0009sam006- 354 -LRB100 06347 HLH 26817 a

1line extensions, water distribution and purification
2facilities, storm water drainage and retention facilities, and
3sewage treatment facilities, resulting from a State or
4federally declared disaster in Illinois or bordering Illinois
5when such repairs are initiated on facilities located in the
6declared disaster area within 6 months after the disaster.
7    (20) Beginning July 1, 1999, game or game birds sold at a
8"game breeding and hunting preserve area" as that term is used
9in the Wildlife Code. This paragraph is exempt from the
10provisions of Section 3-55.
11    (21) A motor vehicle, as that term is defined in Section
121-146 of the Illinois Vehicle Code, that is donated to a
13corporation, limited liability company, society, association,
14foundation, or institution that is determined by the Department
15to be organized and operated exclusively for educational
16purposes. For purposes of this exemption, "a corporation,
17limited liability company, society, association, foundation,
18or institution organized and operated exclusively for
19educational purposes" means all tax-supported public schools,
20private schools that offer systematic instruction in useful
21branches of learning by methods common to public schools and
22that compare favorably in their scope and intensity with the
23course of study presented in tax-supported schools, and
24vocational or technical schools or institutes organized and
25operated exclusively to provide a course of study of not less
26than 6 weeks duration and designed to prepare individuals to

 

 

10000SB0009sam006- 355 -LRB100 06347 HLH 26817 a

1follow a trade or to pursue a manual, technical, mechanical,
2industrial, business, or commercial occupation.
3    (22) Beginning January 1, 2000, personal property,
4including food, purchased through fundraising events for the
5benefit of a public or private elementary or secondary school,
6a group of those schools, or one or more school districts if
7the events are sponsored by an entity recognized by the school
8district that consists primarily of volunteers and includes
9parents and teachers of the school children. This paragraph
10does not apply to fundraising events (i) for the benefit of
11private home instruction or (ii) for which the fundraising
12entity purchases the personal property sold at the events from
13another individual or entity that sold the property for the
14purpose of resale by the fundraising entity and that profits
15from the sale to the fundraising entity. This paragraph is
16exempt from the provisions of Section 3-55.
17    (23) Beginning January 1, 2000 and through December 31,
182001, new or used automatic vending machines that prepare and
19serve hot food and beverages, including coffee, soup, and other
20items, and replacement parts for these machines. Beginning
21January 1, 2002 and through June 30, 2003, machines and parts
22for machines used in commercial, coin-operated amusement and
23vending business if a use or occupation tax is paid on the
24gross receipts derived from the use of the commercial,
25coin-operated amusement and vending machines. This paragraph
26is exempt from the provisions of Section 3-55.

 

 

10000SB0009sam006- 356 -LRB100 06347 HLH 26817 a

1    (24) Beginning on the effective date of this amendatory Act
2of the 92nd General Assembly, computers and communications
3equipment utilized for any hospital purpose and equipment used
4in the diagnosis, analysis, or treatment of hospital patients
5sold to a lessor who leases the equipment, under a lease of one
6year or longer executed or in effect at the time of the
7purchase, to a hospital that has been issued an active tax
8exemption identification number by the Department under
9Section 1g of the Retailers' Occupation Tax Act. This paragraph
10is exempt from the provisions of Section 3-55.
11    (25) Beginning on the effective date of this amendatory Act
12of the 92nd General Assembly, personal property sold to a
13lessor who leases the property, under a lease of one year or
14longer executed or in effect at the time of the purchase, to a
15governmental body that has been issued an active tax exemption
16identification number by the Department under Section 1g of the
17Retailers' Occupation Tax Act. This paragraph is exempt from
18the provisions of Section 3-55.
19    (26) Beginning on January 1, 2002 and through June 30,
202016, tangible personal property purchased from an Illinois
21retailer by a taxpayer engaged in centralized purchasing
22activities in Illinois who will, upon receipt of the property
23in Illinois, temporarily store the property in Illinois (i) for
24the purpose of subsequently transporting it outside this State
25for use or consumption thereafter solely outside this State or
26(ii) for the purpose of being processed, fabricated, or

 

 

10000SB0009sam006- 357 -LRB100 06347 HLH 26817 a

1manufactured into, attached to, or incorporated into other
2tangible personal property to be transported outside this State
3and thereafter used or consumed solely outside this State. The
4Director of Revenue shall, pursuant to rules adopted in
5accordance with the Illinois Administrative Procedure Act,
6issue a permit to any taxpayer in good standing with the
7Department who is eligible for the exemption under this
8paragraph (26). The permit issued under this paragraph (26)
9shall authorize the holder, to the extent and in the manner
10specified in the rules adopted under this Act, to purchase
11tangible personal property from a retailer exempt from the
12taxes imposed by this Act. Taxpayers shall maintain all
13necessary books and records to substantiate the use and
14consumption of all such tangible personal property outside of
15the State of Illinois.
16    (27) Beginning January 1, 2008, tangible personal property
17used in the construction or maintenance of a community water
18supply, as defined under Section 3.145 of the Environmental
19Protection Act, that is operated by a not-for-profit
20corporation that holds a valid water supply permit issued under
21Title IV of the Environmental Protection Act. This paragraph is
22exempt from the provisions of Section 3-55.
23    (28) Tangible personal property sold to a
24public-facilities corporation, as described in Section
2511-65-10 of the Illinois Municipal Code, for purposes of
26constructing or furnishing a municipal convention hall, but

 

 

10000SB0009sam006- 358 -LRB100 06347 HLH 26817 a

1only if the legal title to the municipal convention hall is
2transferred to the municipality without any further
3consideration by or on behalf of the municipality at the time
4of the completion of the municipal convention hall or upon the
5retirement or redemption of any bonds or other debt instruments
6issued by the public-facilities corporation in connection with
7the development of the municipal convention hall. This
8exemption includes existing public-facilities corporations as
9provided in Section 11-65-25 of the Illinois Municipal Code.
10This paragraph is exempt from the provisions of Section 3-55.
11    (29) Beginning January 1, 2010, materials, parts,
12equipment, components, and furnishings incorporated into or
13upon an aircraft as part of the modification, refurbishment,
14completion, replacement, repair, or maintenance of the
15aircraft. This exemption includes consumable supplies used in
16the modification, refurbishment, completion, replacement,
17repair, and maintenance of aircraft, but excludes any
18materials, parts, equipment, components, and consumable
19supplies used in the modification, replacement, repair, and
20maintenance of aircraft engines or power plants, whether such
21engines or power plants are installed or uninstalled upon any
22such aircraft. "Consumable supplies" include, but are not
23limited to, adhesive, tape, sandpaper, general purpose
24lubricants, cleaning solution, latex gloves, and protective
25films. This exemption applies only to the transfer of
26qualifying tangible personal property incident to the

 

 

10000SB0009sam006- 359 -LRB100 06347 HLH 26817 a

1modification, refurbishment, completion, replacement, repair,
2or maintenance of an aircraft by persons who (i) hold an Air
3Agency Certificate and are empowered to operate an approved
4repair station by the Federal Aviation Administration, (ii)
5have a Class IV Rating, and (iii) conduct operations in
6accordance with Part 145 of the Federal Aviation Regulations.
7The exemption does not include aircraft operated by a
8commercial air carrier providing scheduled passenger air
9service pursuant to authority issued under Part 121 or Part 129
10of the Federal Aviation Regulations. The changes made to this
11paragraph (29) by Public Act 98-534 are declarative of existing
12law.
13    (30) Beginning January 1, 2017, menstrual pads, tampons,
14and menstrual cups.
15(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1698-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
177-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)
 
18    Section 30-35. The Retailers' Occupation Tax Act is amended
19by changing Sections 1, 2, 2-5, 2-10, 2-10.5, 2-12, 2-45, 2-55,
202a, 2b, 2c, 3, 7, and 13 and by adding Section 1b as follows:
 
21    (35 ILCS 120/1)  (from Ch. 120, par. 440)
22    Sec. 1. Definitions. "Sale at retail" means any transfer of
23the ownership of or title to tangible personal property to a
24purchaser or the performance of a taxable service for a

 

 

10000SB0009sam006- 360 -LRB100 06347 HLH 26817 a

1purchaser, for the purpose of use or consumption, and not for
2the purpose of resale in any form as tangible personal property
3or taxable service to the extent not first subjected to a use
4for which it was purchased, for a valuable consideration:
5Provided that the property or service purchased is deemed to be
6purchased for the purpose of resale, despite first being used,
7to the extent to which it is resold as an ingredient of an
8intentionally produced product or byproduct of manufacturing
9or otherwise transferred to the purchaser of tangible personal
10property or taxable service. For this purpose, slag produced as
11an incident to manufacturing pig iron or steel and sold is
12considered to be an intentionally produced byproduct of
13manufacturing. Transactions whereby the possession of the
14property is transferred but the seller retains the title as
15security for payment of the selling price shall be deemed to be
16sales.
17    "Sale at retail" shall be construed to include any transfer
18of the ownership of or title to tangible personal property to a
19purchaser or the performance of a taxable service for a
20purchaser, for use or consumption by any other person to whom
21such purchaser may transfer the tangible personal property or
22taxable service without a valuable consideration, and to
23include any transfer, whether made for or without a valuable
24consideration, for resale in any form as tangible personal
25property or taxable service unless made in compliance with
26Section 2c of this Act.

 

 

10000SB0009sam006- 361 -LRB100 06347 HLH 26817 a

1    Sales of tangible personal property, which property, to the
2extent not first subjected to a use for which it was purchased,
3as an ingredient or constituent, goes into and forms a part of
4tangible personal property subsequently the subject of a "Sale
5at retail", or transferred to a purchaser of a taxable service
6that is a "sale at retail" are not sales at retail as defined
7in this Act: Provided that the property purchased is deemed to
8be purchased for the purpose of resale, despite first being
9used, to the extent to which it is resold as an ingredient of
10an intentionally produced product or byproduct of
11manufacturing.
12    "Sale at retail" shall be construed to include any Illinois
13florist's sales transaction in which the purchase order is
14received in Illinois by a florist and the sale is for use or
15consumption, but the Illinois florist has a florist in another
16state deliver the property to the purchaser or the purchaser's
17donee in such other state.
18    Nonreusable tangible personal property that is used by
19persons engaged in the business of operating a restaurant,
20cafeteria, or drive-in is a sale for resale when it is
21transferred to customers in the ordinary course of business as
22part of the sale of food or beverages and is used to deliver,
23package, or consume food or beverages, regardless of where
24consumption of the food or beverages occurs. Examples of those
25items include, but are not limited to nonreusable, paper and
26plastic cups, plates, baskets, boxes, sleeves, buckets or other

 

 

10000SB0009sam006- 362 -LRB100 06347 HLH 26817 a

1containers, utensils, straws, placemats, napkins, doggie bags,
2and wrapping or packaging materials that are transferred to
3customers as part of the sale of food or beverages in the
4ordinary course of business.
5    The purchase, employment and transfer of such tangible
6personal property as newsprint and ink for the primary purpose
7of conveying news (with or without other information) is not a
8purchase, use or sale of tangible personal property.
9    A person whose activities are organized and conducted
10primarily as a not-for-profit service enterprise, and who
11engages in selling tangible personal property or taxable
12service at retail (whether to the public or merely to members
13and their guests) is engaged in the business of selling
14tangible personal property or taxable service at retail with
15respect to such transactions, excepting only a person organized
16and operated exclusively for charitable, religious or
17educational purposes either (1), to the extent of sales by such
18person to its members, students, patients or inmates of
19tangible personal property or taxable service to be used
20primarily for the purposes of such person, or (2), to the
21extent of sales by such person of tangible personal property or
22taxable service which is not sold or offered for sale by
23persons organized for profit. The selling of school books and
24school supplies by schools at retail to students is not
25"primarily for the purposes of" the school which does such
26selling. The provisions of this paragraph shall not apply to

 

 

10000SB0009sam006- 363 -LRB100 06347 HLH 26817 a

1nor subject to taxation occasional dinners, socials or similar
2activities of a person organized and operated exclusively for
3charitable, religious or educational purposes, whether or not
4such activities are open to the public.
5    A person who is the recipient of a grant or contract under
6Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
7serves meals to participants in the federal Nutrition Program
8for the Elderly in return for contributions established in
9amount by the individual participant pursuant to a schedule of
10suggested fees as provided for in the federal Act is not
11engaged in the business of selling tangible personal property
12or taxable service at retail with respect to such transactions.
13    "Purchaser" means anyone who, through a sale at retail,
14acquires the ownership of or title to tangible personal
15property or taxable service for a valuable consideration.
16    "Reseller of motor fuel" means any person engaged in the
17business of selling or delivering or transferring title of
18motor fuel to another person other than for use or consumption.
19No person shall act as a reseller of motor fuel within this
20State without first being registered as a reseller pursuant to
21Section 2c or a retailer pursuant to Section 2a.
22    "Selling price" or the "amount of sale" means the
23consideration for a sale valued in money whether received in
24money or otherwise, including cash, credits, property, other
25than as hereinafter provided, and services, but not including
26the value of or credit given for traded-in tangible personal

 

 

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1property where the item that is traded-in is of like kind and
2character as that which is being sold, and shall be determined
3without any deduction on account of the cost of the property
4sold, the cost of materials used, labor or service cost or any
5other expense whatsoever, but does not include charges that are
6added to prices by sellers on account of the seller's tax
7liability under this Act, or on account of the seller's duty to
8collect, from the purchaser, the tax that is imposed by the Use
9Tax Act, or, except as otherwise provided with respect to any
10cigarette tax imposed by a home rule unit, on account of the
11seller's tax liability under any local occupation tax
12administered by the Department, or, except as otherwise
13provided with respect to any cigarette tax imposed by a home
14rule unit on account of the seller's duty to collect, from the
15purchasers, the tax that is imposed under any local use tax
16administered by the Department. Effective December 1, 1985,
17"selling price" shall include charges that are added to prices
18by sellers on account of the seller's tax liability under the
19Cigarette Tax Act, on account of the sellers' duty to collect,
20from the purchaser, the tax imposed under the Cigarette Use Tax
21Act, and on account of the seller's duty to collect, from the
22purchaser, any cigarette tax imposed by a home rule unit.
23    Notwithstanding any law to the contrary, for any motor
24vehicle, as defined in Section 1-146 of the Vehicle Code, that
25is sold on or after January 1, 2015 for the purpose of leasing
26the vehicle for a defined period that is longer than one year

 

 

10000SB0009sam006- 365 -LRB100 06347 HLH 26817 a

1and (1) is a motor vehicle of the second division that: (A) is
2a self-contained motor vehicle designed or permanently
3converted to provide living quarters for recreational,
4camping, or travel use, with direct walk through access to the
5living quarters from the driver's seat; (B) is of the van
6configuration designed for the transportation of not less than
77 nor more than 16 passengers; or (C) has a gross vehicle
8weight rating of 8,000 pounds or less or (2) is a motor vehicle
9of the first division, "selling price" or "amount of sale"
10means the consideration received by the lessor pursuant to the
11lease contract, including amounts due at lease signing and all
12monthly or other regular payments charged over the term of the
13lease. Also included in the selling price is any amount
14received by the lessor from the lessee for the leased vehicle
15that is not calculated at the time the lease is executed,
16including, but not limited to, excess mileage charges and
17charges for excess wear and tear. For sales that occur in
18Illinois, with respect to any amount received by the lessor
19from the lessee for the leased vehicle that is not calculated
20at the time the lease is executed, the lessor who purchased the
21motor vehicle does not incur the tax imposed by the Use Tax Act
22on those amounts, and the retailer who makes the retail sale of
23the motor vehicle to the lessor is not required to collect the
24tax imposed by the Use Tax Act or to pay the tax imposed by this
25Act on those amounts. However, the lessor who purchased the
26motor vehicle assumes the liability for reporting and paying

 

 

10000SB0009sam006- 366 -LRB100 06347 HLH 26817 a

1the tax on those amounts directly to the Department in the same
2form (Illinois Retailers' Occupation Tax, and local retailers'
3occupation taxes, if applicable) in which the retailer would
4have reported and paid such tax if the retailer had accounted
5for the tax to the Department. For amounts received by the
6lessor from the lessee that are not calculated at the time the
7lease is executed, the lessor must file the return and pay the
8tax to the Department by the due date otherwise required by
9this Act for returns other than transaction returns. If the
10retailer is entitled under this Act to a discount for
11collecting and remitting the tax imposed under this Act to the
12Department with respect to the sale of the motor vehicle to the
13lessor, then the right to the discount provided in this Act
14shall be transferred to the lessor with respect to the tax paid
15by the lessor for any amount received by the lessor from the
16lessee for the leased vehicle that is not calculated at the
17time the lease is executed; provided that the discount is only
18allowed if the return is timely filed and for amounts timely
19paid. The "selling price" of a motor vehicle that is sold on or
20after January 1, 2015 for the purpose of leasing for a defined
21period of longer than one year shall not be reduced by the
22value of or credit given for traded-in tangible personal
23property owned by the lessor, nor shall it be reduced by the
24value of or credit given for traded-in tangible personal
25property owned by the lessee, regardless of whether the
26trade-in value thereof is assigned by the lessee to the lessor.

 

 

10000SB0009sam006- 367 -LRB100 06347 HLH 26817 a

1In the case of a motor vehicle that is sold for the purpose of
2leasing for a defined period of longer than one year, the sale
3occurs at the time of the delivery of the vehicle, regardless
4of the due date of any lease payments. A lessor who incurs a
5Retailers' Occupation Tax liability on the sale of a motor
6vehicle coming off lease may not take a credit against that
7liability for the Use Tax the lessor paid upon the purchase of
8the motor vehicle (or for any tax the lessor paid with respect
9to any amount received by the lessor from the lessee for the
10leased vehicle that was not calculated at the time the lease
11was executed) if the selling price of the motor vehicle at the
12time of purchase was calculated using the definition of
13"selling price" as defined in this paragraph. Notwithstanding
14any other provision of this Act to the contrary, lessors shall
15file all returns and make all payments required under this
16paragraph to the Department by electronic means in the manner
17and form as required by the Department. This paragraph does not
18apply to leases of motor vehicles for which, at the time the
19lease is entered into, the term of the lease is not a defined
20period, including leases with a defined initial period with the
21option to continue the lease on a month-to-month or other basis
22beyond the initial defined period.
23    The phrase "like kind and character" shall be liberally
24construed (including but not limited to any form of motor
25vehicle for any form of motor vehicle, or any kind of farm or
26agricultural implement for any other kind of farm or

 

 

10000SB0009sam006- 368 -LRB100 06347 HLH 26817 a

1agricultural implement), while not including a kind of item
2which, if sold at retail by that retailer, would be exempt from
3retailers' occupation tax and use tax as an isolated or
4occasional sale.
5    "Gross receipts" from the sales of tangible personal
6property or taxable service at retail means the total selling
7price or the amount of such sales, as hereinbefore defined. In
8the case of charge and time sales, the amount thereof shall be
9included only as and when payments are received by the seller.
10Receipts or other consideration derived by a seller from the
11sale, transfer or assignment of accounts receivable to a wholly
12owned subsidiary will not be deemed payments prior to the time
13the purchaser makes payment on such accounts.
14    "Department" means the Department of Revenue.
15    "Person" means any natural individual, firm, partnership,
16association, joint stock company, joint adventure, public or
17private corporation, limited liability company, or a receiver,
18executor, trustee, guardian or other representative appointed
19by order of any court.
20    The isolated or occasional sale of tangible personal
21property or taxable service at retail by a person who does not
22hold himself out as being engaged (or who does not habitually
23engage) in selling such tangible personal property or taxable
24service at retail, or a sale through a bulk vending machine,
25does not constitute engaging in a business of selling such
26tangible personal property or taxable service at retail within

 

 

10000SB0009sam006- 369 -LRB100 06347 HLH 26817 a

1the meaning of this Act; provided that any person who is
2engaged in a business which is not subject to the tax imposed
3by this Act because of involving the sale of or a contract to
4sell real estate or a construction contract to improve real
5estate or a construction contract to engineer, install, and
6maintain an integrated system of products, but who, in the
7course of conducting such business, transfers tangible
8personal property to users or consumers in the finished form in
9which it was purchased, and which does not become real estate
10or was not engineered and installed, under any provision of a
11construction contract or real estate sale or real estate sales
12agreement entered into with some other person arising out of or
13because of such nontaxable business, is engaged in the business
14of selling tangible personal property at retail to the extent
15of the value of the tangible personal property so transferred.
16If, in such a transaction, a separate charge is made for the
17tangible personal property so transferred, the value of such
18property, for the purpose of this Act, shall be the amount so
19separately charged, but not less than the cost of such property
20to the transferor; if no separate charge is made, the value of
21such property, for the purposes of this Act, is the cost to the
22transferor of such tangible personal property. Construction
23contracts for the improvement of real estate consisting of
24engineering, installation, and maintenance of voice, data,
25video, security, and all telecommunication systems do not
26constitute engaging in a business of selling tangible personal

 

 

10000SB0009sam006- 370 -LRB100 06347 HLH 26817 a

1property or taxable service at retail within the meaning of
2this Act if they are sold at one specified contract price.
3    A person who holds himself or herself out as being engaged
4(or who habitually engages) in selling tangible personal
5property or taxable service at retail is a person engaged in
6the business of selling tangible personal property or taxable
7service at retail hereunder with respect to such sales (and not
8primarily in a nontaxable service occupation) notwithstanding
9the fact that such person designs and produces such tangible
10personal property or taxable service on special order for the
11purchaser and in such a way as to render the property or
12service of value only to such purchaser, if such tangible
13personal property or taxable service so produced on special
14order serves substantially the same function as stock or
15standard items of tangible personal property or taxable service
16that are sold at retail.
17    Persons who engage in the business of transferring tangible
18personal property or taxable service upon the redemption of
19trading stamps are engaged in the business of selling such
20property or service at retail and shall be liable for and shall
21pay the tax imposed by this Act on the basis of the retail
22value of the property or service transferred upon redemption of
23such stamps.
24    "Bulk vending machine" means a vending machine, containing
25unsorted confections, nuts, toys, or other items designed
26primarily to be used or played with by children which, when a

 

 

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1coin or coins of a denomination not larger than $0.50 are
2inserted, are dispensed in equal portions, at random and
3without selection by the customer.
4(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14.)
 
5    (35 ILCS 120/1b new)
6    Sec. 1b. Taxable service. Beginning January 1, 2018,
7"taxable service" has the meaning provided in Section 2a-2 of
8the Use Tax Act.
 
9    (35 ILCS 120/2)  (from Ch. 120, par. 441)
10    Sec. 2. Tax imposed. A tax is imposed upon persons engaged
11in the business of selling at retail taxable service or
12tangible personal property, or both, including computer
13software, and including photographs, negatives, and positives
14that are the product of photoprocessing, but not including
15products of photoprocessing produced for use in motion pictures
16for public commercial exhibition. Beginning January 1, 2001,
17prepaid telephone calling arrangements shall be considered
18tangible personal property subject to the tax imposed under
19this Act regardless of the form in which those arrangements may
20be embodied, transmitted, or fixed by any method now known or
21hereafter developed. Sales of (1) electricity delivered to
22customers by wire; (2) natural or artificial gas that is
23delivered to customers through pipes, pipelines, or mains; and
24(3) water that is delivered to customers through pipes,

 

 

10000SB0009sam006- 372 -LRB100 06347 HLH 26817 a

1pipelines, or mains are not subject to tax under this Act. The
2provisions of this amendatory Act of the 98th General Assembly
3are declaratory of existing law as to the meaning and scope of
4this Act.
5(Source: P.A. 98-583, eff. 1-1-14.)
 
6    (35 ILCS 120/2-5)
7    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
8sale of the following tangible personal property and taxable
9services are exempt from the tax imposed by this Act:
10    (1) Farm chemicals.
11    (2) Farm machinery and equipment, both new and used,
12including that manufactured on special order, certified by the
13purchaser to be used primarily for production agriculture or
14State or federal agricultural programs, including individual
15replacement parts for the machinery and equipment, including
16machinery and equipment purchased for lease, and including
17implements of husbandry defined in Section 1-130 of the
18Illinois Vehicle Code, farm machinery and agricultural
19chemical and fertilizer spreaders, and nurse wagons required to
20be registered under Section 3-809 of the Illinois Vehicle Code,
21but excluding other motor vehicles required to be registered
22under the Illinois Vehicle Code. Horticultural polyhouses or
23hoop houses used for propagating, growing, or overwintering
24plants shall be considered farm machinery and equipment under
25this item (2). Agricultural chemical tender tanks and dry boxes

 

 

10000SB0009sam006- 373 -LRB100 06347 HLH 26817 a

1shall include units sold separately from a motor vehicle
2required to be licensed and units sold mounted on a motor
3vehicle required to be licensed, if the selling price of the
4tender is separately stated.
5    Farm machinery and equipment shall include precision
6farming equipment that is installed or purchased to be
7installed on farm machinery and equipment including, but not
8limited to, tractors, harvesters, sprayers, planters, seeders,
9or spreaders. Precision farming equipment includes, but is not
10limited to, soil testing sensors, computers, monitors,
11software, global positioning and mapping systems, and other
12such equipment.
13    Farm machinery and equipment also includes computers,
14sensors, software, and related equipment used primarily in the
15computer-assisted operation of production agriculture
16facilities, equipment, and activities such as, but not limited
17to, the collection, monitoring, and correlation of animal and
18crop data for the purpose of formulating animal diets and
19agricultural chemicals. This item (2) is exempt from the
20provisions of Section 2-70.
21    (3) Until July 1, 2003, distillation machinery and
22equipment, sold as a unit or kit, assembled or installed by the
23retailer, certified by the user to be used only for the
24production of ethyl alcohol that will be used for consumption
25as motor fuel or as a component of motor fuel for the personal
26use of the user, and not subject to sale or resale.

 

 

10000SB0009sam006- 374 -LRB100 06347 HLH 26817 a

1    (4) Until July 1, 2003 and beginning again September 1,
22004 through August 30, 2014, graphic arts machinery and
3equipment, including repair and replacement parts, both new and
4used, and including that manufactured on special order or
5purchased for lease, certified by the purchaser to be used
6primarily for graphic arts production. Equipment includes
7chemicals or chemicals acting as catalysts but only if the
8chemicals or chemicals acting as catalysts effect a direct and
9immediate change upon a graphic arts product. Beginning on July
101, 2017, graphic arts machinery and equipment is included in
11the manufacturing and assembling machinery and equipment
12exemption under paragraph (14).
13    (5) A motor vehicle that is used for automobile renting, as
14defined in the Automobile Renting Occupation and Use Tax Act.
15This paragraph is exempt from the provisions of Section 2-70.
16    (6) Personal property sold by a teacher-sponsored student
17organization affiliated with an elementary or secondary school
18located in Illinois.
19    (7) Until July 1, 2003, proceeds of that portion of the
20selling price of a passenger car the sale of which is subject
21to the Replacement Vehicle Tax.
22    (8) Personal property sold to an Illinois county fair
23association for use in conducting, operating, or promoting the
24county fair.
25    (9) Personal property sold to or taxable service performed
26for a not-for-profit arts or cultural organization that

 

 

10000SB0009sam006- 375 -LRB100 06347 HLH 26817 a

1establishes, by proof required by the Department by rule, that
2it has received an exemption under Section 501(c)(3) of the
3Internal Revenue Code and that is organized and operated
4primarily for the presentation or support of arts or cultural
5programming, activities, or services. These organizations
6include, but are not limited to, music and dramatic arts
7organizations such as symphony orchestras and theatrical
8groups, arts and cultural service organizations, local arts
9councils, visual arts organizations, and media arts
10organizations. On and after the effective date of this
11amendatory Act of the 92nd General Assembly, however, an entity
12otherwise eligible for this exemption shall not make tax-free
13purchases unless it has an active identification number issued
14by the Department.
15    (10) Personal property sold or taxable service performed by
16a corporation, society, association, foundation, institution,
17or organization, other than a limited liability company, that
18is organized and operated as a not-for-profit service
19enterprise for the benefit of persons 65 years of age or older
20if the personal property was not purchased by the enterprise
21for the purpose of resale by the enterprise.
22    (11) Personal property or taxable service sold to a
23governmental body, to a corporation, society, association,
24foundation, or institution organized and operated exclusively
25for charitable, religious, or educational purposes, or to a
26not-for-profit corporation, society, association, foundation,

 

 

10000SB0009sam006- 376 -LRB100 06347 HLH 26817 a

1institution, or organization that has no compensated officers
2or employees and that is organized and operated primarily for
3the recreation of persons 55 years of age or older. A limited
4liability company may qualify for the exemption under this
5paragraph only if the limited liability company is organized
6and operated exclusively for educational purposes. On and after
7July 1, 1987, however, no entity otherwise eligible for this
8exemption shall make tax-free purchases unless it has an active
9identification number issued by the Department.
10    (12) Tangible personal property sold to interstate
11carriers for hire for use as rolling stock moving in interstate
12commerce or to lessors under leases of one year or longer
13executed or in effect at the time of purchase by interstate
14carriers for hire for use as rolling stock moving in interstate
15commerce and equipment operated by a telecommunications
16provider, licensed as a common carrier by the Federal
17Communications Commission, which is permanently installed in
18or affixed to aircraft moving in interstate commerce.
19    (12-5) On and after July 1, 2003 and through June 30, 2004,
20motor vehicles of the second division with a gross vehicle
21weight in excess of 8,000 pounds that are subject to the
22commercial distribution fee imposed under Section 3-815.1 of
23the Illinois Vehicle Code. Beginning on July 1, 2004 and
24through June 30, 2005, the use in this State of motor vehicles
25of the second division: (i) with a gross vehicle weight rating
26in excess of 8,000 pounds; (ii) that are subject to the

 

 

10000SB0009sam006- 377 -LRB100 06347 HLH 26817 a

1commercial distribution fee imposed under Section 3-815.1 of
2the Illinois Vehicle Code; and (iii) that are primarily used
3for commercial purposes. Through June 30, 2005, this exemption
4applies to repair and replacement parts added after the initial
5purchase of such a motor vehicle if that motor vehicle is used
6in a manner that would qualify for the rolling stock exemption
7otherwise provided for in this Act. For purposes of this
8paragraph, "used for commercial purposes" means the
9transportation of persons or property in furtherance of any
10commercial or industrial enterprise whether for-hire or not.
11    (13) Proceeds from sales to owners, lessors, or shippers of
12tangible personal property that is utilized by interstate
13carriers for hire for use as rolling stock moving in interstate
14commerce and equipment operated by a telecommunications
15provider, licensed as a common carrier by the Federal
16Communications Commission, which is permanently installed in
17or affixed to aircraft moving in interstate commerce.
18    (14) Machinery and equipment that will be used by the
19purchaser, or a lessee of the purchaser, primarily in the
20process of manufacturing or assembling tangible personal
21property for wholesale or retail sale or lease, whether the
22sale or lease is made directly by the manufacturer or by some
23other person, whether the materials used in the process are
24owned by the manufacturer or some other person, or whether the
25sale or lease is made apart from or as an incident to the
26seller's engaging in the service occupation of producing

 

 

10000SB0009sam006- 378 -LRB100 06347 HLH 26817 a

1machines, tools, dies, jigs, patterns, gauges, or other similar
2items of no commercial value on special order for a particular
3purchaser. The exemption provided by this paragraph (14) does
4not include machinery and equipment used in (i) the generation
5of electricity for wholesale or retail sale; (ii) the
6generation or treatment of natural or artificial gas for
7wholesale or retail sale that is delivered to customers through
8pipes, pipelines, or mains; or (iii) the treatment of water for
9wholesale or retail sale that is delivered to customers through
10pipes, pipelines, or mains. The provisions of Public Act 98-583
11are declaratory of existing law as to the meaning and scope of
12this exemption. Beginning on July 1, 2017, the exemption
13provided by this paragraph (14) includes, but is not limited
14to, graphic arts machinery and equipment, as defined in
15paragraph (4) of this Section. Beginning on July 1, 2017, the
16exemption provided by this paragraph (14) includes, but is not
17limited to, production related tangible personal property, as
18defined in Section 2-45 of this Act. The exemption provided by
19this paragraph (14) is exempt from the provisions of Section
202-70.
21    (15) Proceeds of mandatory service charges separately
22stated on customers' bills for purchase and consumption of food
23and beverages or of taxable service, to the extent that the
24proceeds of the service charge are in fact turned over as tips
25or as a substitute for tips to the employees who participate
26directly in preparing, serving, hosting or cleaning up the food

 

 

10000SB0009sam006- 379 -LRB100 06347 HLH 26817 a

1or beverage function with respect to which the service charge
2is imposed.
3    (16) Petroleum products sold to a purchaser if the seller
4is prohibited by federal law from charging tax to the
5purchaser.
6    (17) Tangible personal property sold to a common carrier by
7rail or motor that receives the physical possession of the
8property in Illinois and that transports the property, or
9shares with another common carrier in the transportation of the
10property, out of Illinois on a standard uniform bill of lading
11showing the seller of the property as the shipper or consignor
12of the property to a destination outside Illinois, for use
13outside Illinois.
14    (18) Legal tender, currency, medallions, or gold or silver
15coinage issued by the State of Illinois, the government of the
16United States of America, or the government of any foreign
17country, and bullion.
18    (19) Until July 1 2003, oil field exploration, drilling,
19and production equipment, including (i) rigs and parts of rigs,
20rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
21tubular goods, including casing and drill strings, (iii) pumps
22and pump-jack units, (iv) storage tanks and flow lines, (v) any
23individual replacement part for oil field exploration,
24drilling, and production equipment, and (vi) machinery and
25equipment purchased for lease; but excluding motor vehicles
26required to be registered under the Illinois Vehicle Code.

 

 

10000SB0009sam006- 380 -LRB100 06347 HLH 26817 a

1    (20) Photoprocessing machinery and equipment, including
2repair and replacement parts, both new and used, including that
3manufactured on special order, certified by the purchaser to be
4used primarily for photoprocessing, and including
5photoprocessing machinery and equipment purchased for lease.
6    (21) Coal and aggregate exploration, mining, off-highway
7hauling, processing, maintenance, and reclamation equipment,
8including replacement parts and equipment, and including
9equipment purchased for lease, but excluding motor vehicles
10required to be registered under the Illinois Vehicle Code. The
11changes made to this Section by Public Act 97-767 apply on and
12after July 1, 2003, but no claim for credit or refund is
13allowed on or after August 16, 2013 (the effective date of
14Public Act 98-456) for such taxes paid during the period
15beginning July 1, 2003 and ending on August 16, 2013 (the
16effective date of Public Act 98-456).
17    (22) Until June 30, 2013, fuel and petroleum products sold
18to or used by an air carrier, certified by the carrier to be
19used for consumption, shipment, or storage in the conduct of
20its business as an air common carrier, for a flight destined
21for or returning from a location or locations outside the
22United States without regard to previous or subsequent domestic
23stopovers.
24    Beginning July 1, 2013, fuel and petroleum products sold to
25or used by an air carrier, certified by the carrier to be used
26for consumption, shipment, or storage in the conduct of its

 

 

10000SB0009sam006- 381 -LRB100 06347 HLH 26817 a

1business as an air common carrier, for a flight that (i) is
2engaged in foreign trade or is engaged in trade between the
3United States and any of its possessions and (ii) transports at
4least one individual or package for hire from the city of
5origination to the city of final destination on the same
6aircraft, without regard to a change in the flight number of
7that aircraft.
8    (23) A transaction in which the purchase order is received
9by a florist who is located outside Illinois, but who has a
10florist located in Illinois deliver the property to the
11purchaser or the purchaser's donee in Illinois.
12    (24) Fuel consumed or used in the operation of ships,
13barges, or vessels that are used primarily in or for the
14transportation of property or the conveyance of persons for
15hire on rivers bordering on this State if the fuel is delivered
16by the seller to the purchaser's barge, ship, or vessel while
17it is afloat upon that bordering river.
18    (25) Except as provided in item (25-5) of this Section, a
19motor vehicle sold in this State to a nonresident even though
20the motor vehicle is delivered to the nonresident in this
21State, if the motor vehicle is not to be titled in this State,
22and if a drive-away permit is issued to the motor vehicle as
23provided in Section 3-603 of the Illinois Vehicle Code or if
24the nonresident purchaser has vehicle registration plates to
25transfer to the motor vehicle upon returning to his or her home
26state. The issuance of the drive-away permit or having the

 

 

10000SB0009sam006- 382 -LRB100 06347 HLH 26817 a

1out-of-state registration plates to be transferred is prima
2facie evidence that the motor vehicle will not be titled in
3this State.
4    (25-5) The exemption under item (25) does not apply if the
5state in which the motor vehicle will be titled does not allow
6a reciprocal exemption for a motor vehicle sold and delivered
7in that state to an Illinois resident but titled in Illinois.
8The tax collected under this Act on the sale of a motor vehicle
9in this State to a resident of another state that does not
10allow a reciprocal exemption shall be imposed at a rate equal
11to the state's rate of tax on taxable property in the state in
12which the purchaser is a resident, except that the tax shall
13not exceed the tax that would otherwise be imposed under this
14Act. At the time of the sale, the purchaser shall execute a
15statement, signed under penalty of perjury, of his or her
16intent to title the vehicle in the state in which the purchaser
17is a resident within 30 days after the sale and of the fact of
18the payment to the State of Illinois of tax in an amount
19equivalent to the state's rate of tax on taxable property in
20his or her state of residence and shall submit the statement to
21the appropriate tax collection agency in his or her state of
22residence. In addition, the retailer must retain a signed copy
23of the statement in his or her records. Nothing in this item
24shall be construed to require the removal of the vehicle from
25this state following the filing of an intent to title the
26vehicle in the purchaser's state of residence if the purchaser

 

 

10000SB0009sam006- 383 -LRB100 06347 HLH 26817 a

1titles the vehicle in his or her state of residence within 30
2days after the date of sale. The tax collected under this Act
3in accordance with this item (25-5) shall be proportionately
4distributed as if the tax were collected at the 6.25% general
5rate imposed under this Act.
6    (25-7) Beginning on July 1, 2007, no tax is imposed under
7this Act on the sale of an aircraft, as defined in Section 3 of
8the Illinois Aeronautics Act, if all of the following
9conditions are met:
10        (1) the aircraft leaves this State within 15 days after
11    the later of either the issuance of the final billing for
12    the sale of the aircraft, or the authorized approval for
13    return to service, completion of the maintenance record
14    entry, and completion of the test flight and ground test
15    for inspection, as required by 14 C.F.R. 91.407;
16        (2) the aircraft is not based or registered in this
17    State after the sale of the aircraft; and
18        (3) the seller retains in his or her books and records
19    and provides to the Department a signed and dated
20    certification from the purchaser, on a form prescribed by
21    the Department, certifying that the requirements of this
22    item (25-7) are met. The certificate must also include the
23    name and address of the purchaser, the address of the
24    location where the aircraft is to be titled or registered,
25    the address of the primary physical location of the
26    aircraft, and other information that the Department may

 

 

10000SB0009sam006- 384 -LRB100 06347 HLH 26817 a

1    reasonably require.
2    For purposes of this item (25-7):
3    "Based in this State" means hangared, stored, or otherwise
4used, excluding post-sale customizations as defined in this
5Section, for 10 or more days in each 12-month period
6immediately following the date of the sale of the aircraft.
7    "Registered in this State" means an aircraft registered
8with the Department of Transportation, Aeronautics Division,
9or titled or registered with the Federal Aviation
10Administration to an address located in this State.
11    This paragraph (25-7) is exempt from the provisions of
12Section 2-70.
13    (26) Semen used for artificial insemination of livestock
14for direct agricultural production.
15    (27) Horses, or interests in horses, registered with and
16meeting the requirements of any of the Arabian Horse Club
17Registry of America, Appaloosa Horse Club, American Quarter
18Horse Association, United States Trotting Association, or
19Jockey Club, as appropriate, used for purposes of breeding or
20racing for prizes. This item (27) is exempt from the provisions
21of Section 2-70, and the exemption provided for under this item
22(27) applies for all periods beginning May 30, 1995, but no
23claim for credit or refund is allowed on or after January 1,
242008 (the effective date of Public Act 95-88) for such taxes
25paid during the period beginning May 30, 2000 and ending on
26January 1, 2008 (the effective date of Public Act 95-88).

 

 

10000SB0009sam006- 385 -LRB100 06347 HLH 26817 a

1    (28) Computers and communications equipment utilized for
2any hospital purpose and equipment used in the diagnosis,
3analysis, or treatment of hospital patients sold to a lessor
4who leases the equipment, under a lease of one year or longer
5executed or in effect at the time of the purchase, to a
6hospital that has been issued an active tax exemption
7identification number by the Department under Section 1g of
8this Act.
9    (29) Personal property sold to a lessor who leases the
10property, under a lease of one year or longer executed or in
11effect at the time of the purchase, to a governmental body that
12has been issued an active tax exemption identification number
13by the Department under Section 1g of this Act.
14    (30) Beginning with taxable years ending on or after
15December 31, 1995 and ending with taxable years ending on or
16before December 31, 2004, personal property that is donated for
17disaster relief to be used in a State or federally declared
18disaster area in Illinois or bordering Illinois by a
19manufacturer or retailer that is registered in this State to a
20corporation, society, association, foundation, or institution
21that has been issued a sales tax exemption identification
22number by the Department that assists victims of the disaster
23who reside within the declared disaster area.
24    (31) Beginning with taxable years ending on or after
25December 31, 1995 and ending with taxable years ending on or
26before December 31, 2004, personal property that is used in the

 

 

10000SB0009sam006- 386 -LRB100 06347 HLH 26817 a

1performance of infrastructure repairs in this State, including
2but not limited to municipal roads and streets, access roads,
3bridges, sidewalks, waste disposal systems, water and sewer
4line extensions, water distribution and purification
5facilities, storm water drainage and retention facilities, and
6sewage treatment facilities, resulting from a State or
7federally declared disaster in Illinois or bordering Illinois
8when such repairs are initiated on facilities located in the
9declared disaster area within 6 months after the disaster.
10    (32) Beginning July 1, 1999, game or game birds sold at a
11"game breeding and hunting preserve area" as that term is used
12in the Wildlife Code. This paragraph is exempt from the
13provisions of Section 2-70.
14    (33) A motor vehicle, as that term is defined in Section
151-146 of the Illinois Vehicle Code, that is donated to a
16corporation, limited liability company, society, association,
17foundation, or institution that is determined by the Department
18to be organized and operated exclusively for educational
19purposes. For purposes of this exemption, "a corporation,
20limited liability company, society, association, foundation,
21or institution organized and operated exclusively for
22educational purposes" means all tax-supported public schools,
23private schools that offer systematic instruction in useful
24branches of learning by methods common to public schools and
25that compare favorably in their scope and intensity with the
26course of study presented in tax-supported schools, and

 

 

10000SB0009sam006- 387 -LRB100 06347 HLH 26817 a

1vocational or technical schools or institutes organized and
2operated exclusively to provide a course of study of not less
3than 6 weeks duration and designed to prepare individuals to
4follow a trade or to pursue a manual, technical, mechanical,
5industrial, business, or commercial occupation.
6    (34) Beginning January 1, 2000, personal property,
7including food, purchased through fundraising events for the
8benefit of a public or private elementary or secondary school,
9a group of those schools, or one or more school districts if
10the events are sponsored by an entity recognized by the school
11district that consists primarily of volunteers and includes
12parents and teachers of the school children. This paragraph
13does not apply to fundraising events (i) for the benefit of
14private home instruction or (ii) for which the fundraising
15entity purchases the personal property sold at the events from
16another individual or entity that sold the property for the
17purpose of resale by the fundraising entity and that profits
18from the sale to the fundraising entity. This paragraph is
19exempt from the provisions of Section 2-70.
20    (35) Beginning January 1, 2000 and through December 31,
212001, new or used automatic vending machines that prepare and
22serve hot food and beverages, including coffee, soup, and other
23items, and replacement parts for these machines. Beginning
24January 1, 2002 and through June 30, 2003, machines and parts
25for machines used in commercial, coin-operated amusement and
26vending business if a use or occupation tax is paid on the

 

 

10000SB0009sam006- 388 -LRB100 06347 HLH 26817 a

1gross receipts derived from the use of the commercial,
2coin-operated amusement and vending machines. This paragraph
3is exempt from the provisions of Section 2-70.
4    (35-5) Beginning August 23, 2001 and through June 30, 2016,
5food for human consumption that is to be consumed off the
6premises where it is sold (other than alcoholic beverages, soft
7drinks, and food that has been prepared for immediate
8consumption) and prescription and nonprescription medicines,
9drugs, medical appliances, and insulin, urine testing
10materials, syringes, and needles used by diabetics, for human
11use, when purchased for use by a person receiving medical
12assistance under Article V of the Illinois Public Aid Code who
13resides in a licensed long-term care facility, as defined in
14the Nursing Home Care Act, or a licensed facility as defined in
15the ID/DD Community Care Act, the MC/DD Act, or the Specialized
16Mental Health Rehabilitation Act of 2013.
17    (36) Beginning August 2, 2001, computers and
18communications equipment utilized for any hospital purpose and
19equipment used in the diagnosis, analysis, or treatment of
20hospital patients sold to a lessor who leases the equipment,
21under a lease of one year or longer executed or in effect at
22the time of the purchase, to a hospital that has been issued an
23active tax exemption identification number by the Department
24under Section 1g of this Act. This paragraph is exempt from the
25provisions of Section 2-70.
26    (37) Beginning August 2, 2001, personal property sold to a

 

 

10000SB0009sam006- 389 -LRB100 06347 HLH 26817 a

1lessor who leases the property, under a lease of one year or
2longer executed or in effect at the time of the purchase, to a
3governmental body that has been issued an active tax exemption
4identification number by the Department under Section 1g of
5this Act. This paragraph is exempt from the provisions of
6Section 2-70.
7    (38) Beginning on January 1, 2002 and through June 30,
82016, tangible personal property purchased from an Illinois
9retailer by a taxpayer engaged in centralized purchasing
10activities in Illinois who will, upon receipt of the property
11in Illinois, temporarily store the property in Illinois (i) for
12the purpose of subsequently transporting it outside this State
13for use or consumption thereafter solely outside this State or
14(ii) for the purpose of being processed, fabricated, or
15manufactured into, attached to, or incorporated into other
16tangible personal property to be transported outside this State
17and thereafter used or consumed solely outside this State. The
18Director of Revenue shall, pursuant to rules adopted in
19accordance with the Illinois Administrative Procedure Act,
20issue a permit to any taxpayer in good standing with the
21Department who is eligible for the exemption under this
22paragraph (38). The permit issued under this paragraph (38)
23shall authorize the holder, to the extent and in the manner
24specified in the rules adopted under this Act, to purchase
25tangible personal property from a retailer exempt from the
26taxes imposed by this Act. Taxpayers shall maintain all

 

 

10000SB0009sam006- 390 -LRB100 06347 HLH 26817 a

1necessary books and records to substantiate the use and
2consumption of all such tangible personal property outside of
3the State of Illinois.
4    (39) Beginning January 1, 2008, tangible personal property
5used in the construction or maintenance of a community water
6supply, as defined under Section 3.145 of the Environmental
7Protection Act, that is operated by a not-for-profit
8corporation that holds a valid water supply permit issued under
9Title IV of the Environmental Protection Act. This paragraph is
10exempt from the provisions of Section 2-70.
11    (40) Beginning January 1, 2010, materials, parts,
12equipment, components, and furnishings incorporated into or
13upon an aircraft as part of the modification, refurbishment,
14completion, replacement, repair, or maintenance of the
15aircraft. This exemption includes consumable supplies used in
16the modification, refurbishment, completion, replacement,
17repair, and maintenance of aircraft, but excludes any
18materials, parts, equipment, components, and consumable
19supplies used in the modification, replacement, repair, and
20maintenance of aircraft engines or power plants, whether such
21engines or power plants are installed or uninstalled upon any
22such aircraft. "Consumable supplies" include, but are not
23limited to, adhesive, tape, sandpaper, general purpose
24lubricants, cleaning solution, latex gloves, and protective
25films. This exemption applies only to the sale of qualifying
26tangible personal property to persons who modify, refurbish,

 

 

10000SB0009sam006- 391 -LRB100 06347 HLH 26817 a

1complete, replace, or maintain an aircraft and who (i) hold an
2Air Agency Certificate and are empowered to operate an approved
3repair station by the Federal Aviation Administration, (ii)
4have a Class IV Rating, and (iii) conduct operations in
5accordance with Part 145 of the Federal Aviation Regulations.
6The exemption does not include aircraft operated by a
7commercial air carrier providing scheduled passenger air
8service pursuant to authority issued under Part 121 or Part 129
9of the Federal Aviation Regulations. The changes made to this
10paragraph (40) by Public Act 98-534 are declarative of existing
11law.
12    (41) Tangible personal property sold to a
13public-facilities corporation, as described in Section
1411-65-10 of the Illinois Municipal Code, for purposes of
15constructing or furnishing a municipal convention hall, but
16only if the legal title to the municipal convention hall is
17transferred to the municipality without any further
18consideration by or on behalf of the municipality at the time
19of the completion of the municipal convention hall or upon the
20retirement or redemption of any bonds or other debt instruments
21issued by the public-facilities corporation in connection with
22the development of the municipal convention hall. This
23exemption includes existing public-facilities corporations as
24provided in Section 11-65-25 of the Illinois Municipal Code.
25This paragraph is exempt from the provisions of Section 2-70.
26    (42) Beginning January 1, 2017, menstrual pads, tampons,

 

 

10000SB0009sam006- 392 -LRB100 06347 HLH 26817 a

1and menstrual cups.
2    (43) Beginning January 1, 2018, taxable service performed
3on or to tangible personal property the sale of which is exempt
4from taxation under this Act. This paragraph is exempt from the
5provisions of Section 2-70.
6    (44) Beginning January 1, 2018, taxable service performed
7in a transaction that would be exempt from taxation under this
8Act if it involved solely the sale of tangible personal
9property. Such exemption could be due to the nature of the
10seller or of the service provider, the purchaser or service
11recipient, or other features of the transaction, including but
12not limited to the location or sale-for-resale nature of the
13transaction. Any such exemption applies to transactions
14involving solely the sale of tangible personal property, solely
15the performance of taxable service, or some combination
16thereof. This paragraph is exempt from the provisions of
17Section 2-70.
18    (45) Beginning January 1, 2018, taxable service performed
19for or provided to businesses making purchases of services for
20the benefit of or in furtherance of the business. This
21paragraph is exempt from the provisions of Section 2-70.
22(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
2398-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
241-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
257-29-15; 99-855, eff. 8-19-16.)
 

 

 

10000SB0009sam006- 393 -LRB100 06347 HLH 26817 a

1    (35 ILCS 120/2-10)
2    Sec. 2-10. Rate of tax. Unless otherwise provided in this
3Section, the tax imposed by this Act is at the rate of 6.25% of
4gross receipts from sales of tangible personal property made in
5the course of business. Beginning July 1, 2017, the tax is also
6imposed at the rate of 6.25% of the gross receipts from sales
7of taxable services.
8    Beginning on July 1, 2000 and through December 31, 2000,
9with respect to motor fuel, as defined in Section 1.1 of the
10Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
11the Use Tax Act, the tax is imposed at the rate of 1.25%.
12    Beginning on August 6, 2010 through August 15, 2010, with
13respect to sales tax holiday items as defined in Section 2-8 of
14this Act, the tax is imposed at the rate of 1.25%.
15    Within 14 days after the effective date of this amendatory
16Act of the 91st General Assembly, each retailer of motor fuel
17and gasohol shall cause the following notice to be posted in a
18prominently visible place on each retail dispensing device that
19is used to dispense motor fuel or gasohol in the State of
20Illinois: "As of July 1, 2000, the State of Illinois has
21eliminated the State's share of sales tax on motor fuel and
22gasohol through December 31, 2000. The price on this pump
23should reflect the elimination of the tax." The notice shall be
24printed in bold print on a sign that is no smaller than 4
25inches by 8 inches. The sign shall be clearly visible to
26customers. Any retailer who fails to post or maintain a

 

 

10000SB0009sam006- 394 -LRB100 06347 HLH 26817 a

1required sign through December 31, 2000 is guilty of a petty
2offense for which the fine shall be $500 per day per each
3retail premises where a violation occurs.
4    With respect to gasohol, as defined in the Use Tax Act, the
5tax imposed by this Act applies to (i) 70% of the proceeds of
6sales made on or after January 1, 1990, and before July 1,
72003, (ii) 80% of the proceeds of sales made on or after July
81, 2003 and on or before December 31, 2018, and (iii) 100% of
9the proceeds of sales made thereafter. If, at any time,
10however, the tax under this Act on sales of gasohol, as defined
11in the Use Tax Act, is imposed at the rate of 1.25%, then the
12tax imposed by this Act applies to 100% of the proceeds of
13sales of gasohol made during that time.
14    With respect to majority blended ethanol fuel, as defined
15in the Use Tax Act, the tax imposed by this Act does not apply
16to the proceeds of sales made on or after July 1, 2003 and on or
17before December 31, 2018 but applies to 100% of the proceeds of
18sales made thereafter.
19    With respect to biodiesel blends, as defined in the Use Tax
20Act, with no less than 1% and no more than 10% biodiesel, the
21tax imposed by this Act applies to (i) 80% of the proceeds of
22sales made on or after July 1, 2003 and on or before December
2331, 2018 and (ii) 100% of the proceeds of sales made
24thereafter. If, at any time, however, the tax under this Act on
25sales of biodiesel blends, as defined in the Use Tax Act, with
26no less than 1% and no more than 10% biodiesel is imposed at

 

 

10000SB0009sam006- 395 -LRB100 06347 HLH 26817 a

1the rate of 1.25%, then the tax imposed by this Act applies to
2100% of the proceeds of sales of biodiesel blends with no less
3than 1% and no more than 10% biodiesel made during that time.
4    With respect to 100% biodiesel, as defined in the Use Tax
5Act, and biodiesel blends, as defined in the Use Tax Act, with
6more than 10% but no more than 99% biodiesel, the tax imposed
7by this Act does not apply to the proceeds of sales made on or
8after July 1, 2003 and on or before December 31, 2018 but
9applies to 100% of the proceeds of sales made thereafter.
10    With respect to food for human consumption that is to be
11consumed off the premises where it is sold (other than
12alcoholic beverages, soft drinks, and food that has been
13prepared for immediate consumption) and prescription and
14nonprescription medicines, drugs, medical appliances, products
15classified as Class III medical devices by the United States
16Food and Drug Administration that are used for cancer treatment
17pursuant to a prescription, as well as any accessories and
18components related to those devices, modifications to a motor
19vehicle for the purpose of rendering it usable by a person with
20a disability, and insulin, urine testing materials, syringes,
21and needles used by diabetics, for human use, the tax is
22imposed at the rate of 1%. For the purposes of this Section,
23until September 1, 2009: the term "soft drinks" means any
24complete, finished, ready-to-use, non-alcoholic drink, whether
25carbonated or not, including but not limited to soda water,
26cola, fruit juice, vegetable juice, carbonated water, and all

 

 

10000SB0009sam006- 396 -LRB100 06347 HLH 26817 a

1other preparations commonly known as soft drinks of whatever
2kind or description that are contained in any closed or sealed
3bottle, can, carton, or container, regardless of size; but
4"soft drinks" does not include coffee, tea, non-carbonated
5water, infant formula, milk or milk products as defined in the
6Grade A Pasteurized Milk and Milk Products Act, or drinks
7containing 50% or more natural fruit or vegetable juice.
8    Notwithstanding any other provisions of this Act,
9beginning September 1, 2009, "soft drinks" means non-alcoholic
10beverages that contain natural or artificial sweeteners. "Soft
11drinks" do not include beverages that contain milk or milk
12products, soy, rice or similar milk substitutes, or greater
13than 50% of vegetable or fruit juice by volume.
14    Until August 1, 2009, and notwithstanding any other
15provisions of this Act, "food for human consumption that is to
16be consumed off the premises where it is sold" includes all
17food sold through a vending machine, except soft drinks and
18food products that are dispensed hot from a vending machine,
19regardless of the location of the vending machine. Beginning
20August 1, 2009, and notwithstanding any other provisions of
21this Act, "food for human consumption that is to be consumed
22off the premises where it is sold" includes all food sold
23through a vending machine, except soft drinks, candy, and food
24products that are dispensed hot from a vending machine,
25regardless of the location of the vending machine.
26    Notwithstanding any other provisions of this Act,

 

 

10000SB0009sam006- 397 -LRB100 06347 HLH 26817 a

1beginning September 1, 2009, "food for human consumption that
2is to be consumed off the premises where it is sold" does not
3include candy. For purposes of this Section, "candy" means a
4preparation of sugar, honey, or other natural or artificial
5sweeteners in combination with chocolate, fruits, nuts or other
6ingredients or flavorings in the form of bars, drops, or
7pieces. "Candy" does not include any preparation that contains
8flour or requires refrigeration.
9    Notwithstanding any other provisions of this Act,
10beginning September 1, 2009, "nonprescription medicines and
11drugs" does not include grooming and hygiene products. For
12purposes of this Section, "grooming and hygiene products"
13includes, but is not limited to, soaps and cleaning solutions,
14shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
15lotions and screens, unless those products are available by
16prescription only, regardless of whether the products meet the
17definition of "over-the-counter-drugs". For the purposes of
18this paragraph, "over-the-counter-drug" means a drug for human
19use that contains a label that identifies the product as a drug
20as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
21label includes:
22        (A) A "Drug Facts" panel; or
23        (B) A statement of the "active ingredient(s)" with a
24    list of those ingredients contained in the compound,
25    substance or preparation.
26    Beginning on the effective date of this amendatory Act of

 

 

10000SB0009sam006- 398 -LRB100 06347 HLH 26817 a

1the 98th General Assembly, "prescription and nonprescription
2medicines and drugs" includes medical cannabis purchased from a
3registered dispensing organization under the Compassionate Use
4of Medical Cannabis Pilot Program Act.
5(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
699-858, eff. 8-19-16.)
 
7    (35 ILCS 120/2-10.5)
8    Sec. 2-10.5. Direct payment program; purchaser's providing
9of permit to retailer; retailer relieved of collecting use tax
10and local retailers' occupation tax reimbursements from
11purchaser; direct payment of retailers' occupation tax and
12local retailers' occupation tax by purchaser.
13    (a) Beginning on July 1, 2001 there is established in this
14State a Direct Payment Program to be administered by the
15Department. The Department shall issue a Direct Pay Permit to
16applicants who have been approved to participate in the Direct
17Payment Program. Each person applying to participate in the
18Direct Payment Program must demonstrate (1) the applicant's
19ability to comply with the retailers' occupation tax laws and
20the use tax laws in effect in this State and that the
21applicant's accounting system will reflect the proper amount of
22tax due, (2) that the applicant has a valid business purpose
23for participating in the Direct Payment Program, and (3) how
24the applicant's participation in the Direct Payment Program
25will benefit tax compliance. Application shall be made on forms

 

 

10000SB0009sam006- 399 -LRB100 06347 HLH 26817 a

1provided by the Department and shall contain information as the
2Department may reasonably require. The Department shall
3approve or deny an applicant within 90 days after the
4Department's receipt of the application, unless the Department
5makes a written request for additional information from the
6applicant.
7    (b) A person who has been approved for the Direct Payment
8Program and who has been issued a Direct Pay Permit by the
9Department is relieved of paying tax to a retailer when
10purchasing tangible personal property or taxable service for
11use or consumption, except as provided in subsection (d), by
12providing that retailer a copy of that Direct Pay Permit. A
13retailer who accepts a copy of a customer's Direct Pay Permit
14is relieved of the obligation to remit the tax imposed by this
15Act on the transaction. References in this Section to "the tax
16imposed by this Act" include any local occupation taxes
17administered by the Department that would be incurred on the
18retail sale.
19    (c) Once the holder of a Direct Pay Permit uses that Permit
20to relieve the Permit holder from paying tax to a particular
21retailer, the holder must use its Permit for all purchases,
22except as provided in subsection (d), from that retailer for so
23long as the Permit is valid.
24    (d) Direct Pay Permits are not valid and shall not be used
25for sales or purchases of:
26        (1) food or beverage;

 

 

10000SB0009sam006- 400 -LRB100 06347 HLH 26817 a

1        (2) tangible personal property required to be titled or
2    registered with an agency of government; or
3        (3) any transactions subject to the Service Occupation
4    Tax Act or Service Use Tax Act.
5    (e) Direct Pay Permits are not assignable and are not
6transferable. As an illustration, a construction contractor
7shall not make purchases using a customer's Direct Pay Permit.
8    (f) A Direct Pay Permit is valid until it is revoked by the
9Department or until the holder notifies the Department in
10writing that the holder is withdrawing from the Direct Payment
11Program. A Direct Pay Permit can be revoked by the Department,
12after notice and hearing, if the holder violates any provision
13of this Act, any provision of the Illinois Use Tax Act, or any
14provision of any Act imposing a local retailers' occupation tax
15administered by the Department.
16    (g) The holder of a Direct Pay Permit who has been relieved
17of paying tax to a retailer on a purchase for use or
18consumption by representing to that retailer that it would pay
19all applicable taxes directly to the Department shall pay those
20taxes to the Department not later than the 20th day of the
21month following the month in which the purchase was made.
22Permit holders making such purchases are subject to all
23provisions of this Act, and the tax must be reported and paid
24as retailers' occupation tax in the same manner that the
25retailer from whom the purchases were made would have reported
26and paid it, including any local retailers' occupation taxes

 

 

10000SB0009sam006- 401 -LRB100 06347 HLH 26817 a

1applicable to that retail sale. Notwithstanding any other
2provision of this Act, Permit holders shall make all payments
3to the Department through the use of electronic funds transfer.
4(Source: P.A. 92-484, eff. 8-23-01.)
 
5    (35 ILCS 120/2-12)
6    Sec. 2-12. Location where retailer is deemed to be engaged
7in the business of selling. The purpose of this Section is to
8specify where a retailer is deemed to be engaged in the
9business of selling tangible personal property or taxable
10service for the purposes of this Act, the Use Tax Act, the
11Service Use Tax Act, and the Service Occupation Tax Act, and
12for the purpose of collecting any other local retailers'
13occupation tax administered by the Department. This Section
14applies only with respect to the particular selling activities
15described in the following paragraphs. The provisions of this
16Section are not intended to, and shall not be interpreted to,
17affect where a retailer is deemed to be engaged in the business
18of selling with respect to any activity that is not
19specifically described in the following paragraphs.
20        (1) If a purchaser who is present at the retailer's
21    place of business, having no prior commitment to the
22    retailer, agrees to purchase and makes payment for tangible
23    personal property at the retailer's place of business, then
24    the transaction shall be deemed an over-the-counter sale
25    occurring at the retailer's same place of business where

 

 

10000SB0009sam006- 402 -LRB100 06347 HLH 26817 a

1    the purchaser was present and made payment for that
2    tangible personal property if the retailer regularly
3    stocks the purchased tangible personal property or similar
4    tangible personal property in the quantity, or similar
5    quantity, for sale at the retailer's same place of business
6    and then either (i) the purchaser takes possession of the
7    tangible personal property at the same place of business or
8    (ii) the retailer delivers or arranges for the tangible
9    personal property to be delivered to the purchaser.
10        (2) If a purchaser, having no prior commitment to the
11    retailer, agrees to purchase tangible personal property
12    and makes payment over the phone, in writing, or via the
13    Internet and takes possession of the tangible personal
14    property at the retailer's place of business, then the sale
15    shall be deemed to have occurred at the retailer's place of
16    business where the purchaser takes possession of the
17    property if the retailer regularly stocks the item or
18    similar items in the quantity, or similar quantities,
19    purchased by the purchaser.
20        (3) A retailer is deemed to be engaged in the business
21    of selling food, beverages, or other tangible personal
22    property through a vending machine at the location where
23    the vending machine is located at the time the sale is made
24    if (i) the vending machine is a device operated by coin,
25    currency, credit card, token, coupon or similar device; (2)
26    the food, beverage or other tangible personal property is

 

 

10000SB0009sam006- 403 -LRB100 06347 HLH 26817 a

1    contained within the vending machine and dispensed from the
2    vending machine; and (3) the purchaser takes possession of
3    the purchased food, beverage or other tangible personal
4    property immediately.
5        (4) Minerals. A producer of coal or other mineral mined
6    in Illinois is deemed to be engaged in the business of
7    selling at the place where the coal or other mineral mined
8    in Illinois is extracted from the earth. With respect to
9    minerals (i) the term "extracted from the earth" means the
10    location at which the coal or other mineral is extracted
11    from the mouth of the mine, and (ii) a "mineral" includes
12    not only coal, but also oil, sand, stone taken from a
13    quarry, gravel and any other thing commonly regarded as a
14    mineral and extracted from the earth. This paragraph does
15    not apply to coal or another mineral when it is delivered
16    or shipped by the seller to the purchaser at a point
17    outside Illinois so that the sale is exempt under the
18    United States Constitution as a sale in interstate or
19    foreign commerce.
20        (5) A retailer selling tangible personal property to a
21    nominal lessee or bailee pursuant to a lease with a dollar
22    or other nominal option to purchase is engaged in the
23    business of selling at the location where the property is
24    first delivered to the lessee or bailee for its intended
25    use.
26        (6) Landscaping services shall be sourced to the

 

 

10000SB0009sam006- 404 -LRB100 06347 HLH 26817 a

1    location of the parcel or tract of land where the benefit
2    of the landscaping services is realized.
3(Source: P.A. 98-1098, eff. 8-26-14; 99-126, eff. 7-23-15.)
 
4    (35 ILCS 120/2-45)  (from Ch. 120, par. 441-45)
5    Sec. 2-45. Manufacturing and assembly exemption. The
6manufacturing and assembly machinery and equipment exemption
7includes machinery and equipment that replaces machinery and
8equipment in an existing manufacturing facility as well as
9machinery and equipment that are for use in an expanded or new
10manufacturing facility.
11    The machinery and equipment exemption also includes
12machinery and equipment used in the general maintenance or
13repair of exempt machinery and equipment or for in-house
14manufacture of exempt machinery and equipment. Beginning on
15July 1, 2017, the manufacturing and assembling machinery and
16equipment exemption also includes graphic arts machinery and
17equipment, as defined in paragraph (4) of Section 2-5.
18Beginning on July 1, 2017, the manufacturing and assembling
19machinery and equipment exemption also includes production
20related tangible personal property, as defined in this Section.
21The machinery and equipment exemption does not include
22machinery and equipment used in (i) the generation of
23electricity for wholesale or retail sale; (ii) the generation
24or treatment of natural or artificial gas for wholesale or
25retail sale that is delivered to customers through pipes,

 

 

10000SB0009sam006- 405 -LRB100 06347 HLH 26817 a

1pipelines, or mains; or (iii) the treatment of water for
2wholesale or retail sale that is delivered to customers through
3pipes, pipelines, or mains. The provisions of this amendatory
4Act of the 98th General Assembly are declaratory of existing
5law as to the meaning and scope of this exemption. For the
6purposes of this exemption, terms have the following meanings:
7        (1) "Manufacturing process" means the production of an
8    article of tangible personal property, whether the article
9    is a finished product or an article for use in the process
10    of manufacturing or assembling a different article of
11    tangible personal property, by a procedure commonly
12    regarded as manufacturing, processing, fabricating, or
13    refining that changes some existing material or materials
14    into a material with a different form, use, or name. In
15    relation to a recognized integrated business composed of a
16    series of operations that collectively constitute
17    manufacturing, or individually constitute manufacturing
18    operations, the manufacturing process commences with the
19    first operation or stage of production in the series and
20    does not end until the completion of the final product in
21    the last operation or stage of production in the series.
22    For purposes of this exemption, photoprocessing is a
23    manufacturing process of tangible personal property for
24    wholesale or retail sale.
25        (2) "Assembling process" means the production of an
26    article of tangible personal property, whether the article

 

 

10000SB0009sam006- 406 -LRB100 06347 HLH 26817 a

1    is a finished product or an article for use in the process
2    of manufacturing or assembling a different article of
3    tangible personal property, by the combination of existing
4    materials in a manner commonly regarded as assembling that
5    results in a material of a different form, use, or name.
6        (3) "Machinery" means major mechanical machines or
7    major components of those machines contributing to a
8    manufacturing or assembling process.
9        (4) "Equipment" includes an independent device or tool
10    separate from machinery but essential to an integrated
11    manufacturing or assembly process; including computers
12    used primarily in a manufacturer's computer assisted
13    design, computer assisted manufacturing (CAD/CAM) system;
14    any subunit or assembly comprising a component of any
15    machinery or auxiliary, adjunct, or attachment parts of
16    machinery, such as tools, dies, jigs, fixtures, patterns,
17    and molds; and any parts that require periodic replacement
18    in the course of normal operation; but does not include
19    hand tools. Equipment includes chemicals or chemicals
20    acting as catalysts but only if the chemicals or chemicals
21    acting as catalysts effect a direct and immediate change
22    upon a product being manufactured or assembled for
23    wholesale or retail sale or lease.
24        (5) "Production related tangible personal property"
25    means all tangible personal property that is used or
26    consumed by the purchaser in a manufacturing facility in

 

 

10000SB0009sam006- 407 -LRB100 06347 HLH 26817 a

1    which a manufacturing process takes place and includes,
2    without limitation, tangible personal property that is
3    purchased for incorporation into real estate within a
4    manufacturing facility and tangible personal property that
5    is used or consumed in activities such as research and
6    development, preproduction material handling, receiving,
7    quality control, inventory control, storage, staging, and
8    packaging for shipping and transportation purposes.
9    "Production related tangible personal property" does not
10    include (i) tangible personal property that is used, within
11    or without a manufacturing facility, in sales, purchasing,
12    accounting, fiscal management, marketing, personnel
13    recruitment or selection, or landscaping or (ii) tangible
14    personal property that is required to be titled or
15    registered with a department, agency, or unit of federal,
16    State, or local government.
17    The manufacturing and assembling machinery and equipment
18exemption includes production related tangible personal
19property that is purchased (i) on or after July 1, 2007 and on
20or before June 30, 2008 or (ii) on and after July 1, 2017. The
21exemption for production related tangible personal property
22purchased on or after July 1, 2007 and on or before June 30,
232008 is subject to both of the following limitations:
24        (1) The maximum amount of the exemption for any one
25    taxpayer may not exceed 5% of the purchase price of
26    production related tangible personal property that is

 

 

10000SB0009sam006- 408 -LRB100 06347 HLH 26817 a

1    purchased on or after July 1, 2007 and on or before June
2    30, 2008. A credit under Section 3-85 of this Act may not
3    be earned by the purchase of production related tangible
4    personal property for which an exemption is received under
5    this Section.
6        (2) The maximum aggregate amount of the exemptions for
7    production related tangible personal property awarded
8    under this Act and the Use Tax Act to all taxpayers may not
9    exceed $10,000,000. If the claims for the exemption exceed
10    $10,000,000, then the Department shall reduce the amount of
11    the exemption to each taxpayer on a pro rata basis.
12The Department may adopt rules to implement and administer the
13exemption for production related tangible personal property.
14    The manufacturing and assembling machinery and equipment
15exemption includes the sale of materials to a purchaser who
16produces exempted types of machinery, equipment, or tools and
17who rents or leases that machinery, equipment, or tools to a
18manufacturer of tangible personal property. This exemption
19also includes the sale of materials to a purchaser who
20manufactures those materials into an exempted type of
21machinery, equipment, or tools that the purchaser uses himself
22or herself in the manufacturing of tangible personal property.
23The purchaser of the machinery and equipment who has an active
24resale registration number shall furnish that number to the
25seller at the time of purchase. A purchaser of the machinery,
26equipment, and tools without an active resale registration

 

 

10000SB0009sam006- 409 -LRB100 06347 HLH 26817 a

1number shall furnish to the seller a certificate of exemption
2for each transaction stating facts establishing the exemption
3for that transaction, and that certificate shall be available
4to the Department for inspection or audit. Informal rulings,
5opinions, or letters issued by the Department in response to an
6inquiry or request for an opinion from any person regarding the
7coverage and applicability of this exemption to specific
8devices shall be published, maintained as a public record, and
9made available for public inspection and copying. If the
10informal ruling, opinion, or letter contains trade secrets or
11other confidential information, where possible, the Department
12shall delete that information before publication. Whenever
13informal rulings, opinions, or letters contain a policy of
14general applicability, the Department shall formulate and
15adopt that policy as a rule in accordance with the Illinois
16Administrative Procedure Act.
17    The manufacturing and assembling machinery and equipment
18exemption is exempt from the provisions of Section 2-70.
19(Source: P.A. 98-583, eff. 1-1-14.)
 
20    (35 ILCS 120/2-55)  (from Ch. 120, par. 441-55)
21    Sec. 2-55. Serviceman transfer. Tangible personal property
22purchased by a serviceman, as defined in Section 2 of the
23Service Occupation Tax Act, is subject to the tax imposed by
24this Act when purchased for transfer by the serviceman
25incidental to completion of a maintenance agreement. Effective

 

 

10000SB0009sam006- 410 -LRB100 06347 HLH 26817 a

1January 1, 2018, purchases of tangible personal property
2purchased for transfer incidental to performance of a taxable
3service is not subject to the tax imposed by this Act.
4(Source: P.A. 91-51, eff. 6-30-99.)
 
5    (35 ILCS 120/2a)  (from Ch. 120, par. 441a)
6    Sec. 2a. It is unlawful for any person to engage in the
7business of selling tangible personal property or taxable
8service at retail in this State without a certificate of
9registration from the Department. Application for a
10certificate of registration shall be made to the Department
11upon forms furnished by it. Each such application shall be
12signed and verified and shall state: (1) the name and social
13security number of the applicant; (2) the address of his
14principal place of business; (3) the address of the principal
15place of business from which he engages in the business of
16selling tangible personal property or taxable service at retail
17in this State and the addresses of all other places of
18business, if any (enumerating such addresses, if any, in a
19separate list attached to and made a part of the application),
20from which he engages in the business of selling tangible
21personal property or taxable service at retail in this State;
22(4) the name and address of the person or persons who will be
23responsible for filing returns and payment of taxes due under
24this Act; (5) in the case of a publicly traded corporation, the
25name and title of the Chief Financial Officer, Chief Operating

 

 

10000SB0009sam006- 411 -LRB100 06347 HLH 26817 a

1Officer, and any other officer or employee with responsibility
2for preparing tax returns under this Act, along with the last 4
3digits of each of their social security numbers, and, in the
4case of all other corporations, the name, title, and social
5security number of each corporate officer; (6) in the case of a
6limited liability company, the name, social security number,
7and FEIN number of each manager and member; and (7) such other
8information as the Department may reasonably require. The
9application shall contain an acceptance of responsibility
10signed by the person or persons who will be responsible for
11filing returns and payment of the taxes due under this Act. If
12the applicant will sell tangible personal property at retail
13through vending machines, his application to register shall
14indicate the number of vending machines to be so operated. If
15requested by the Department at any time, that person shall
16verify the total number of vending machines he or she uses in
17his or her business of selling tangible personal property at
18retail.
19    The Department may deny a certificate of registration to
20any applicant if a person who is named as the owner, a partner,
21a manager or member of a limited liability company, or a
22corporate officer of the applicant on the application for the
23certificate of registration is or has been named as the owner,
24a partner, a manager or member of a limited liability company,
25or a corporate officer on the application for the certificate
26of registration of another retailer that is in default for

 

 

10000SB0009sam006- 412 -LRB100 06347 HLH 26817 a

1moneys due under this Act or any other tax or fee Act
2administered by the Department. For purposes of this paragraph
3only, in determining whether a person is in default for moneys
4due, the Department shall include only amounts established as a
5final liability within the 20 years prior to the date of the
6Department's notice of denial of a certificate of registration.
7    The Department may require an applicant for a certificate
8of registration hereunder to, at the time of filing such
9application, furnish a bond from a surety company authorized to
10do business in the State of Illinois, or an irrevocable bank
11letter of credit or a bond signed by 2 personal sureties who
12have filed, with the Department, sworn statements disclosing
13net assets equal to at least 3 times the amount of the bond to
14be required of such applicant, or a bond secured by an
15assignment of a bank account or certificate of deposit, stocks
16or bonds, conditioned upon the applicant paying to the State of
17Illinois all moneys becoming due under this Act and under any
18other State tax law or municipal or county tax ordinance or
19resolution under which the certificate of registration that is
20issued to the applicant under this Act will permit the
21applicant to engage in business without registering separately
22under such other law, ordinance or resolution. In making a
23determination as to whether to require a bond or other
24security, the Department shall take into consideration whether
25the owner, any partner, any manager or member of a limited
26liability company, or a corporate officer of the applicant is

 

 

10000SB0009sam006- 413 -LRB100 06347 HLH 26817 a

1or has been the owner, a partner, a manager or member of a
2limited liability company, or a corporate officer of another
3retailer that is in default for moneys due under this Act or
4any other tax or fee Act administered by the Department; and
5whether the owner, any partner, any manager or member of a
6limited liability company, or a corporate officer of the
7applicant is or has been the owner, a partner, a manager or
8member of a limited liability company, or a corporate officer
9of another retailer whose certificate of registration has been
10revoked within the previous 5 years under this Act or any other
11tax or fee Act administered by the Department. If a bond or
12other security is required, the Department shall fix the amount
13of the bond or other security, taking into consideration the
14amount of money expected to become due from the applicant under
15this Act and under any other State tax law or municipal or
16county tax ordinance or resolution under which the certificate
17of registration that is issued to the applicant under this Act
18will permit the applicant to engage in business without
19registering separately under such other law, ordinance, or
20resolution. The amount of security required by the Department
21shall be such as, in its opinion, will protect the State of
22Illinois against failure to pay the amount which may become due
23from the applicant under this Act and under any other State tax
24law or municipal or county tax ordinance or resolution under
25which the certificate of registration that is issued to the
26applicant under this Act will permit the applicant to engage in

 

 

10000SB0009sam006- 414 -LRB100 06347 HLH 26817 a

1business without registering separately under such other law,
2ordinance or resolution, but the amount of the security
3required by the Department shall not exceed three times the
4amount of the applicant's average monthly tax liability, or
5$50,000.00, whichever amount is lower.
6    No certificate of registration under this Act shall be
7issued by the Department until the applicant provides the
8Department with satisfactory security, if required, as herein
9provided for.
10    Upon receipt of the application for certificate of
11registration in proper form, and upon approval by the
12Department of the security furnished by the applicant, if
13required, the Department shall issue to such applicant a
14certificate of registration which shall permit the person to
15whom it is issued to engage in the business of selling tangible
16personal property at retail in this State. The certificate of
17registration shall be conspicuously displayed at the place of
18business which the person so registered states in his
19application to be the principal place of business from which he
20engages in the business of selling tangible personal property
21at retail in this State.
22    No certificate of registration issued to a taxpayer who
23files returns required by this Act on a monthly basis shall be
24valid after the expiration of 5 years from the date of its
25issuance or last renewal. The expiration date of a
26sub-certificate of registration shall be that of the

 

 

10000SB0009sam006- 415 -LRB100 06347 HLH 26817 a

1certificate of registration to which the sub-certificate
2relates. A certificate of registration shall automatically be
3renewed, subject to revocation as provided by this Act, for an
4additional 5 years from the date of its expiration unless
5otherwise notified by the Department as provided by this
6paragraph. Where a taxpayer to whom a certificate of
7registration is issued under this Act is in default to the
8State of Illinois for delinquent returns or for moneys due
9under this Act or any other State tax law or municipal or
10county ordinance administered or enforced by the Department,
11the Department shall, not less than 60 days before the
12expiration date of such certificate of registration, give
13notice to the taxpayer to whom the certificate was issued of
14the account period of the delinquent returns, the amount of
15tax, penalty and interest due and owing from the taxpayer, and
16that the certificate of registration shall not be automatically
17renewed upon its expiration date unless the taxpayer, on or
18before the date of expiration, has filed and paid the
19delinquent returns or paid the defaulted amount in full. A
20taxpayer to whom such a notice is issued shall be deemed an
21applicant for renewal. The Department shall promulgate
22regulations establishing procedures for taxpayers who file
23returns on a monthly basis but desire and qualify to change to
24a quarterly or yearly filing basis and will no longer be
25subject to renewal under this Section, and for taxpayers who
26file returns on a yearly or quarterly basis but who desire or

 

 

10000SB0009sam006- 416 -LRB100 06347 HLH 26817 a

1are required to change to a monthly filing basis and will be
2subject to renewal under this Section.
3    The Department may in its discretion approve renewal by an
4applicant who is in default if, at the time of application for
5renewal, the applicant files all of the delinquent returns or
6pays to the Department such percentage of the defaulted amount
7as may be determined by the Department and agrees in writing to
8waive all limitations upon the Department for collection of the
9remaining defaulted amount to the Department over a period not
10to exceed 5 years from the date of renewal of the certificate;
11however, no renewal application submitted by an applicant who
12is in default shall be approved if the immediately preceding
13renewal by the applicant was conditioned upon the installment
14payment agreement described in this Section. The payment
15agreement herein provided for shall be in addition to and not
16in lieu of the security that may be required by this Section of
17a taxpayer who is no longer considered a prior continuous
18compliance taxpayer. The execution of the payment agreement as
19provided in this Act shall not toll the accrual of interest at
20the statutory rate.
21    The Department may suspend a certificate of registration if
22the Department finds that the person to whom the certificate of
23registration has been issued knowingly sold contraband
24cigarettes.
25    A certificate of registration issued under this Act more
26than 5 years before the effective date of this amendatory Act

 

 

10000SB0009sam006- 417 -LRB100 06347 HLH 26817 a

1of 1989 shall expire and be subject to the renewal provisions
2of this Section on the next anniversary of the date of issuance
3of such certificate which occurs more than 6 months after the
4effective date of this amendatory Act of 1989. A certificate of
5registration issued less than 5 years before the effective date
6of this amendatory Act of 1989 shall expire and be subject to
7the renewal provisions of this Section on the 5th anniversary
8of the issuance of the certificate.
9    If the person so registered states that he operates other
10places of business from which he engages in the business of
11selling tangible personal property or taxable service at retail
12in this State, the Department shall furnish him with a
13sub-certificate of registration for each such place of
14business, and the applicant shall display the appropriate
15sub-certificate of registration at each such place of business.
16All sub-certificates of registration shall bear the same
17registration number as that appearing upon the certificate of
18registration to which such sub-certificates relate.
19    If the applicant will sell tangible personal property at
20retail through vending machines, the Department shall furnish
21him with a sub-certificate of registration for each such
22vending machine, and the applicant shall display the
23appropriate sub-certificate of registration on each such
24vending machine by attaching the sub-certificate of
25registration to a conspicuous part of such vending machine. If
26a person who is registered to sell tangible personal property

 

 

10000SB0009sam006- 418 -LRB100 06347 HLH 26817 a

1at retail through vending machines adds an additional vending
2machine or additional vending machines to the number of vending
3machines he or she uses in his or her business of selling
4tangible personal property at retail, he or she shall notify
5the Department, on a form prescribed by the Department, to
6request an additional sub-certificate or additional
7sub-certificates of registration, as applicable. With each
8such request, the applicant shall report the number of
9sub-certificates of registration he or she is requesting as
10well as the total number of vending machines from which he or
11she makes retail sales.
12    Where the same person engages in 2 or more businesses of
13selling tangible personal property or taxable service at retail
14in this State, which businesses are substantially different in
15character or engaged in under different trade names or engaged
16in under other substantially dissimilar circumstances (so that
17it is more practicable, from an accounting, auditing or
18bookkeeping standpoint, for such businesses to be separately
19registered), the Department may require or permit such person
20(subject to the same requirements concerning the furnishing of
21security as those that are provided for hereinbefore in this
22Section as to each application for a certificate of
23registration) to apply for and obtain a separate certificate of
24registration for each such business or for any of such
25businesses, under a single certificate of registration
26supplemented by related sub-certificates of registration.

 

 

10000SB0009sam006- 419 -LRB100 06347 HLH 26817 a

1    Any person who is registered under the "Retailers'
2Occupation Tax Act" as of March 8, 1963, and who, during the
33-year period immediately prior to March 8, 1963, or during a
4continuous 3-year period part of which passed immediately
5before and the remainder of which passes immediately after
6March 8, 1963, has been so registered continuously and who is
7determined by the Department not to have been either delinquent
8or deficient in the payment of tax liability during that period
9under this Act or under any other State tax law or municipal or
10county tax ordinance or resolution under which the certificate
11of registration that is issued to the registrant under this Act
12will permit the registrant to engage in business without
13registering separately under such other law, ordinance or
14resolution, shall be considered to be a Prior Continuous
15Compliance taxpayer. Also any taxpayer who has, as verified by
16the Department, faithfully and continuously complied with the
17condition of his bond or other security under the provisions of
18this Act for a period of 3 consecutive years shall be
19considered to be a Prior Continuous Compliance taxpayer.
20    Every Prior Continuous Compliance taxpayer shall be exempt
21from all requirements under this Act concerning the furnishing
22of a bond or other security as a condition precedent to his
23being authorized to engage in the business of selling tangible
24personal property or taxable service at retail in this State.
25This exemption shall continue for each such taxpayer until such
26time as he may be determined by the Department to be delinquent

 

 

10000SB0009sam006- 420 -LRB100 06347 HLH 26817 a

1in the filing of any returns, or is determined by the
2Department (either through the Department's issuance of a final
3assessment which has become final under the Act, or by the
4taxpayer's filing of a return which admits tax that is not paid
5to be due) to be delinquent or deficient in the paying of any
6tax under this Act or under any other State tax law or
7municipal or county tax ordinance or resolution under which the
8certificate of registration that is issued to the registrant
9under this Act will permit the registrant to engage in business
10without registering separately under such other law, ordinance
11or resolution, at which time that taxpayer shall become subject
12to all the financial responsibility requirements of this Act
13and, as a condition of being allowed to continue to engage in
14the business of selling tangible personal property or taxable
15service at retail, may be required to post bond or other
16acceptable security with the Department covering liability
17which such taxpayer may thereafter incur. Any taxpayer who
18fails to pay an admitted or established liability under this
19Act may also be required to post bond or other acceptable
20security with this Department guaranteeing the payment of such
21admitted or established liability.
22    No certificate of registration shall be issued to any
23person who is in default to the State of Illinois for moneys
24due under this Act or under any other State tax law or
25municipal or county tax ordinance or resolution under which the
26certificate of registration that is issued to the applicant

 

 

10000SB0009sam006- 421 -LRB100 06347 HLH 26817 a

1under this Act will permit the applicant to engage in business
2without registering separately under such other law, ordinance
3or resolution.
4    Any person aggrieved by any decision of the Department
5under this Section may, within 20 days after notice of such
6decision, protest and request a hearing, whereupon the
7Department shall give notice to such person of the time and
8place fixed for such hearing and shall hold a hearing in
9conformity with the provisions of this Act and then issue its
10final administrative decision in the matter to such person. In
11the absence of such a protest within 20 days, the Department's
12decision shall become final without any further determination
13being made or notice given.
14    With respect to security other than bonds (upon which the
15Department may sue in the event of a forfeiture), if the
16taxpayer fails to pay, when due, any amount whose payment such
17security guarantees, the Department shall, after such
18liability is admitted by the taxpayer or established by the
19Department through the issuance of a final assessment that has
20become final under the law, convert the security which that
21taxpayer has furnished into money for the State, after first
22giving the taxpayer at least 10 days' written notice, by
23registered or certified mail, to pay the liability or forfeit
24such security to the Department. If the security consists of
25stocks or bonds or other securities which are listed on a
26public exchange, the Department shall sell such securities

 

 

10000SB0009sam006- 422 -LRB100 06347 HLH 26817 a

1through such public exchange. If the security consists of an
2irrevocable bank letter of credit, the Department shall convert
3the security in the manner provided for in the Uniform
4Commercial Code. If the security consists of a bank certificate
5of deposit, the Department shall convert the security into
6money by demanding and collecting the amount of such bank
7certificate of deposit from the bank which issued such
8certificate. If the security consists of a type of stocks or
9other securities which are not listed on a public exchange, the
10Department shall sell such security to the highest and best
11bidder after giving at least 10 days' notice of the date, time
12and place of the intended sale by publication in the "State
13Official Newspaper". If the Department realizes more than the
14amount of such liability from the security, plus the expenses
15incurred by the Department in converting the security into
16money, the Department shall pay such excess to the taxpayer who
17furnished such security, and the balance shall be paid into the
18State Treasury.
19    The Department shall discharge any surety and shall release
20and return any security deposited, assigned, pledged or
21otherwise provided to it by a taxpayer under this Section
22within 30 days after:
23        (1) such taxpayer becomes a Prior Continuous
24    Compliance taxpayer; or
25        (2) such taxpayer has ceased to collect receipts on
26    which he is required to remit tax to the Department, has

 

 

10000SB0009sam006- 423 -LRB100 06347 HLH 26817 a

1    filed a final tax return, and has paid to the Department an
2    amount sufficient to discharge his remaining tax
3    liability, as determined by the Department, under this Act
4    and under every other State tax law or municipal or county
5    tax ordinance or resolution under which the certificate of
6    registration issued under this Act permits the registrant
7    to engage in business without registering separately under
8    such other law, ordinance or resolution. The Department
9    shall make a final determination of the taxpayer's
10    outstanding tax liability as expeditiously as possible
11    after his final tax return has been filed; if the
12    Department cannot make such final determination within 45
13    days after receiving the final tax return, within such
14    period it shall so notify the taxpayer, stating its reasons
15    therefor.
16(Source: P.A. 97-335, eff. 1-1-12; 98-496, eff. 1-1-14; 98-583,
17eff. 1-1-14; 98-756, eff. 7-16-14; 98-974, eff. 1-1-15.)
 
18    (35 ILCS 120/2b)  (from Ch. 120, par. 441b)
19    Sec. 2b. The Department may, after notice and a hearing as
20provided herein, revoke the certificate of registration of any
21person who violates any of the provisions of this Act. Before
22revocation of a certificate of registration the Department
23shall, within 90 days after non-compliance and at least 7 days
24prior to the date of the hearing, give the person so accused
25notice in writing of the charge against him or her, and on the

 

 

10000SB0009sam006- 424 -LRB100 06347 HLH 26817 a

1date designated shall conduct a hearing upon this matter. The
2lapse of such 90 day period shall not preclude the Department
3from conducting revocation proceedings at a later date if
4necessary. Any hearing held under this Section shall be
5conducted by the Director of Revenue or by any officer or
6employee of the Department designated, in writing, by the
7Director of Revenue.
8    Upon the hearing of any such proceeding, the Director of
9Revenue, or any officer or employee of the Department
10designated, in writing, by the Director of Revenue, may
11administer oaths and the Department may procure by its subpoena
12the attendance of witnesses and, by its subpoena duces tecum,
13the production of relevant books and papers. Any circuit court,
14upon application either of the accused or of the Department,
15may, by order duly entered, require the attendance of witnesses
16and the production of relevant books and papers, before the
17Department in any hearing relating to the revocation of
18certificates of registration. Upon refusal or neglect to obey
19the order of the court, the court may compel obedience thereof
20by proceedings for contempt.
21    The Department may, by application to any circuit court,
22obtain an injunction restraining any person who engages in the
23business of selling tangible personal property or taxable
24service at retail in this State without a certificate of
25registration (either because the certificate of registration
26has been revoked or because of a failure to obtain a

 

 

10000SB0009sam006- 425 -LRB100 06347 HLH 26817 a

1certificate of registration in the first instance) from
2engaging in such business until such person, as if he or she
3were a new applicant for a certificate of registration, shall
4comply with all of the conditions, restrictions and
5requirements of Section 2a of this Act and qualify for and
6obtain a certificate of registration. Upon refusal or neglect
7to obey the order of the court, the court may compel obedience
8thereof by proceedings for contempt.
9    It shall not be a defense in a proceeding before the
10Department to revoke a certificate of registration issued under
11the Act, or in any action by the Department to collect any tax
12due under this Act, that the holder of the certificate is a
13party to an installment payment agreement under Section 2a of
14this Act if the liability which is the basis of the revocation
15proceeding, or the tax that is sought to be collected: (1) was
16incurred after the date of the agreement was approved by the
17Department; or (2) was incurred prior to the date the agreement
18was approved by the Department, but was not included in the
19agreement; or (3) was included in the agreement, but the
20taxpayer is in default of the agreement.
21(Source: P.A. 86-338; 86-383; 86-1028.)
 
22    (35 ILCS 120/2c)  (from Ch. 120, par. 441c)
23    Sec. 2c. If the purchaser is not registered with the
24Department as a taxpayer, but claims to be a reseller of the
25tangible personal property or taxable service in such a way

 

 

10000SB0009sam006- 426 -LRB100 06347 HLH 26817 a

1that such resales are not taxable under this Act or under some
2other tax law which the Department may administer, such
3purchaser (except in the case of an out-of-State purchaser who
4will always resell and deliver the property to his customers
5outside Illinois) shall apply to the Department for a resale
6number. Such applicant shall state facts which will show the
7Department why such applicant is not liable for tax under this
8Act or under some other tax law which the Department may
9administer on any of his resales and shall furnish such
10additional information as the Department may reasonably
11require.
12    Upon approval of the application, the Department shall
13assign a resale number to the applicant and shall certify such
14number to him. The Department may cancel any such number which
15is obtained through misrepresentation, or which is used to make
16a purchase tax-free when the purchase in fact is not a purchase
17for resale, or which no longer applies because of the
18purchaser's having discontinued the making of tax exempt
19resales of the property.
20    The Department may restrict the use of the number to one
21year at a time or to some other definite period if the
22Department finds it impracticable or otherwise inadvisable to
23issue such numbers for indefinite periods.
24    Except as provided hereinabove in this Section, a sale
25shall be made tax-free on the ground of being a sale for resale
26if the purchaser has an active registration number or resale

 

 

10000SB0009sam006- 427 -LRB100 06347 HLH 26817 a

1number from the Department and furnishes that number to the
2seller in connection with certifying to the seller that any
3sale to such purchaser is nontaxable because of being a sale
4for resale.
5    Failure to present an active registration number or resale
6number and a certification to the seller that a sale is for
7resale creates a presumption that a sale is not for resale.
8This presumption may be rebutted by other evidence that all of
9the seller's sales are sale for resale, or that a particular
10sale is a sale for resale.
11(Source: P.A. 83-1463.)
 
12    (35 ILCS 120/3)  (from Ch. 120, par. 442)
13    Sec. 3. Except as provided in this Section, on or before
14the twentieth day of each calendar month, every person engaged
15in the business of selling tangible personal property or
16taxable service at retail in this State during the preceding
17calendar month shall file a return with the Department,
18stating:
19        1. The name of the seller;
20        2. His residence address and the address of his
21    principal place of business and the address of the
22    principal place of business (if that is a different
23    address) from which he engages in the business of selling
24    tangible personal property or taxable service at retail in
25    this State;

 

 

10000SB0009sam006- 428 -LRB100 06347 HLH 26817 a

1        3. Total amount of receipts received by him during the
2    preceding calendar month or quarter, as the case may be,
3    from sales of tangible personal property and taxable
4    service, and from services other than taxable services
5    furnished, by him during such preceding calendar month or
6    quarter;
7        4. Total amount received by him during the preceding
8    calendar month or quarter on charge and time sales of
9    tangible personal property and taxable service, and from
10    services other than taxable services furnished, by him
11    prior to the month or quarter for which the return is
12    filed;
13        5. Deductions allowed by law;
14        6. Gross receipts which were received by him during the
15    preceding calendar month or quarter and upon the basis of
16    which the tax is imposed;
17        7. The amount of credit provided in Section 2d of this
18    Act;
19        8. The amount of tax due;
20        9. The signature of the taxpayer; and
21        10. Such other reasonable information as the
22    Department may require.
23    If a taxpayer fails to sign a return within 30 days after
24the proper notice and demand for signature by the Department,
25the return shall be considered valid and any amount shown to be
26due on the return shall be deemed assessed.

 

 

10000SB0009sam006- 429 -LRB100 06347 HLH 26817 a

1    Each return shall be accompanied by the statement of
2prepaid tax issued pursuant to Section 2e for which credit is
3claimed.
4    Prior to October 1, 2003, and on and after September 1,
52004 a retailer may accept a Manufacturer's Purchase Credit
6certification from a purchaser in satisfaction of Use Tax as
7provided in Section 3-85 of the Use Tax Act if the purchaser
8provides the appropriate documentation as required by Section
93-85 of the Use Tax Act. A Manufacturer's Purchase Credit
10certification, accepted by a retailer prior to October 1, 2003
11and on and after September 1, 2004 as provided in Section 3-85
12of the Use Tax Act, may be used by that retailer to satisfy
13Retailers' Occupation Tax liability in the amount claimed in
14the certification, not to exceed 6.25% of the receipts subject
15to tax from a qualifying purchase. A Manufacturer's Purchase
16Credit reported on any original or amended return filed under
17this Act after October 20, 2003 for reporting periods prior to
18September 1, 2004 shall be disallowed. Manufacturer's
19Purchaser Credit reported on annual returns due on or after
20January 1, 2005 will be disallowed for periods prior to
21September 1, 2004. No Manufacturer's Purchase Credit may be
22used after September 30, 2003 through August 31, 2004 to
23satisfy any tax liability imposed under this Act, including any
24audit liability.
25    The Department may require returns to be filed on a
26quarterly basis. If so required, a return for each calendar

 

 

10000SB0009sam006- 430 -LRB100 06347 HLH 26817 a

1quarter shall be filed on or before the twentieth day of the
2calendar month following the end of such calendar quarter. The
3taxpayer shall also file a return with the Department for each
4of the first two months of each calendar quarter, on or before
5the twentieth day of the following calendar month, stating:
6        1. The name of the seller;
7        2. The address of the principal place of business from
8    which he engages in the business of selling tangible
9    personal property at retail in this State;
10        3. The total amount of taxable receipts received by him
11    during the preceding calendar month from sales of tangible
12    personal property and taxable services by him during such
13    preceding calendar month, including receipts from charge
14    and time sales, but less all deductions allowed by law;
15        4. The amount of credit provided in Section 2d of this
16    Act;
17        5. The amount of tax due; and
18        6. Such other reasonable information as the Department
19    may require.
20    Beginning on October 1, 2003, any person who is not a
21licensed distributor, importing distributor, or manufacturer,
22as defined in the Liquor Control Act of 1934, but is engaged in
23the business of selling, at retail, alcoholic liquor shall file
24a statement with the Department of Revenue, in a format and at
25a time prescribed by the Department, showing the total amount
26paid for alcoholic liquor purchased during the preceding month

 

 

10000SB0009sam006- 431 -LRB100 06347 HLH 26817 a

1and such other information as is reasonably required by the
2Department. The Department may adopt rules to require that this
3statement be filed in an electronic or telephonic format. Such
4rules may provide for exceptions from the filing requirements
5of this paragraph. For the purposes of this paragraph, the term
6"alcoholic liquor" shall have the meaning prescribed in the
7Liquor Control Act of 1934.
8    Beginning on October 1, 2003, every distributor, importing
9distributor, and manufacturer of alcoholic liquor as defined in
10the Liquor Control Act of 1934, shall file a statement with the
11Department of Revenue, no later than the 10th day of the month
12for the preceding month during which transactions occurred, by
13electronic means, showing the total amount of gross receipts
14from the sale of alcoholic liquor sold or distributed during
15the preceding month to purchasers; identifying the purchaser to
16whom it was sold or distributed; the purchaser's tax
17registration number; and such other information reasonably
18required by the Department. A distributor, importing
19distributor, or manufacturer of alcoholic liquor must
20personally deliver, mail, or provide by electronic means to
21each retailer listed on the monthly statement a report
22containing a cumulative total of that distributor's, importing
23distributor's, or manufacturer's total sales of alcoholic
24liquor to that retailer no later than the 10th day of the month
25for the preceding month during which the transaction occurred.
26The distributor, importing distributor, or manufacturer shall

 

 

10000SB0009sam006- 432 -LRB100 06347 HLH 26817 a

1notify the retailer as to the method by which the distributor,
2importing distributor, or manufacturer will provide the sales
3information. If the retailer is unable to receive the sales
4information by electronic means, the distributor, importing
5distributor, or manufacturer shall furnish the sales
6information by personal delivery or by mail. For purposes of
7this paragraph, the term "electronic means" includes, but is
8not limited to, the use of a secure Internet website, e-mail,
9or facsimile.
10    If a total amount of less than $1 is payable, refundable or
11creditable, such amount shall be disregarded if it is less than
1250 cents and shall be increased to $1 if it is 50 cents or more.
13    Beginning October 1, 1993, a taxpayer who has an average
14monthly tax liability of $150,000 or more shall make all
15payments required by rules of the Department by electronic
16funds transfer. Beginning October 1, 1994, a taxpayer who has
17an average monthly tax liability of $100,000 or more shall make
18all payments required by rules of the Department by electronic
19funds transfer. Beginning October 1, 1995, a taxpayer who has
20an average monthly tax liability of $50,000 or more shall make
21all payments required by rules of the Department by electronic
22funds transfer. Beginning October 1, 2000, a taxpayer who has
23an annual tax liability of $200,000 or more shall make all
24payments required by rules of the Department by electronic
25funds transfer. The term "annual tax liability" shall be the
26sum of the taxpayer's liabilities under this Act, and under all

 

 

10000SB0009sam006- 433 -LRB100 06347 HLH 26817 a

1other State and local occupation and use tax laws administered
2by the Department, for the immediately preceding calendar year.
3The term "average monthly tax liability" shall be the sum of
4the taxpayer's liabilities under this Act, and under all other
5State and local occupation and use tax laws administered by the
6Department, for the immediately preceding calendar year
7divided by 12. Beginning on October 1, 2002, a taxpayer who has
8a tax liability in the amount set forth in subsection (b) of
9Section 2505-210 of the Department of Revenue Law shall make
10all payments required by rules of the Department by electronic
11funds transfer.
12    Before August 1 of each year beginning in 1993, the
13Department shall notify all taxpayers required to make payments
14by electronic funds transfer. All taxpayers required to make
15payments by electronic funds transfer shall make those payments
16for a minimum of one year beginning on October 1.
17    Any taxpayer not required to make payments by electronic
18funds transfer may make payments by electronic funds transfer
19with the permission of the Department.
20    All taxpayers required to make payment by electronic funds
21transfer and any taxpayers authorized to voluntarily make
22payments by electronic funds transfer shall make those payments
23in the manner authorized by the Department.
24    The Department shall adopt such rules as are necessary to
25effectuate a program of electronic funds transfer and the
26requirements of this Section.

 

 

10000SB0009sam006- 434 -LRB100 06347 HLH 26817 a

1    Any amount which is required to be shown or reported on any
2return or other document under this Act shall, if such amount
3is not a whole-dollar amount, be increased to the nearest
4whole-dollar amount in any case where the fractional part of a
5dollar is 50 cents or more, and decreased to the nearest
6whole-dollar amount where the fractional part of a dollar is
7less than 50 cents.
8    If the retailer is otherwise required to file a monthly
9return and if the retailer's average monthly tax liability to
10the Department does not exceed $200, the Department may
11authorize his returns to be filed on a quarter annual basis,
12with the return for January, February and March of a given year
13being due by April 20 of such year; with the return for April,
14May and June of a given year being due by July 20 of such year;
15with the return for July, August and September of a given year
16being due by October 20 of such year, and with the return for
17October, November and December of a given year being due by
18January 20 of the following year.
19    If the retailer is otherwise required to file a monthly or
20quarterly return and if the retailer's average monthly tax
21liability with the Department does not exceed $50, the
22Department may authorize his returns to be filed on an annual
23basis, with the return for a given year being due by January 20
24of the following year.
25    Such quarter annual and annual returns, as to form and
26substance, shall be subject to the same requirements as monthly

 

 

10000SB0009sam006- 435 -LRB100 06347 HLH 26817 a

1returns.
2    Notwithstanding any other provision in this Act concerning
3the time within which a retailer may file his return, in the
4case of any retailer who ceases to engage in a kind of business
5which makes him responsible for filing returns under this Act,
6such retailer shall file a final return under this Act with the
7Department not more than one month after discontinuing such
8business.
9    Where the same person has more than one business registered
10with the Department under separate registrations under this
11Act, such person may not file each return that is due as a
12single return covering all such registered businesses, but
13shall file separate returns for each such registered business.
14    In addition, with respect to motor vehicles, watercraft,
15aircraft, and trailers that are required to be registered with
16an agency of this State, every retailer selling this kind of
17tangible personal property shall file, with the Department,
18upon a form to be prescribed and supplied by the Department, a
19separate return for each such item of tangible personal
20property which the retailer sells, except that if, in the same
21transaction, (i) a retailer of aircraft, watercraft, motor
22vehicles or trailers transfers more than one aircraft,
23watercraft, motor vehicle or trailer to another aircraft,
24watercraft, motor vehicle retailer or trailer retailer for the
25purpose of resale or (ii) a retailer of aircraft, watercraft,
26motor vehicles, or trailers transfers more than one aircraft,

 

 

10000SB0009sam006- 436 -LRB100 06347 HLH 26817 a

1watercraft, motor vehicle, or trailer to a purchaser for use as
2a qualifying rolling stock as provided in Section 2-5 of this
3Act, then that seller may report the transfer of all aircraft,
4watercraft, motor vehicles or trailers involved in that
5transaction to the Department on the same uniform
6invoice-transaction reporting return form. For purposes of
7this Section, "watercraft" means a Class 2, Class 3, or Class 4
8watercraft as defined in Section 3-2 of the Boat Registration
9and Safety Act, a personal watercraft, or any boat equipped
10with an inboard motor.
11    Any retailer who sells only motor vehicles, watercraft,
12aircraft, or trailers that are required to be registered with
13an agency of this State, so that all retailers' occupation tax
14liability is required to be reported, and is reported, on such
15transaction reporting returns and who is not otherwise required
16to file monthly or quarterly returns, need not file monthly or
17quarterly returns. However, those retailers shall be required
18to file returns on an annual basis.
19    The transaction reporting return, in the case of motor
20vehicles or trailers that are required to be registered with an
21agency of this State, shall be the same document as the Uniform
22Invoice referred to in Section 5-402 of The Illinois Vehicle
23Code and must show the name and address of the seller; the name
24and address of the purchaser; the amount of the selling price
25including the amount allowed by the retailer for traded-in
26property, if any; the amount allowed by the retailer for the

 

 

10000SB0009sam006- 437 -LRB100 06347 HLH 26817 a

1traded-in tangible personal property, if any, to the extent to
2which Section 1 of this Act allows an exemption for the value
3of traded-in property; the balance payable after deducting such
4trade-in allowance from the total selling price; the amount of
5tax due from the retailer with respect to such transaction; the
6amount of tax collected from the purchaser by the retailer on
7such transaction (or satisfactory evidence that such tax is not
8due in that particular instance, if that is claimed to be the
9fact); the place and date of the sale; a sufficient
10identification of the property sold; such other information as
11is required in Section 5-402 of The Illinois Vehicle Code, and
12such other information as the Department may reasonably
13require.
14    The transaction reporting return in the case of watercraft
15or aircraft must show the name and address of the seller; the
16name and address of the purchaser; the amount of the selling
17price including the amount allowed by the retailer for
18traded-in property, if any; the amount allowed by the retailer
19for the traded-in tangible personal property, if any, to the
20extent to which Section 1 of this Act allows an exemption for
21the value of traded-in property; the balance payable after
22deducting such trade-in allowance from the total selling price;
23the amount of tax due from the retailer with respect to such
24transaction; the amount of tax collected from the purchaser by
25the retailer on such transaction (or satisfactory evidence that
26such tax is not due in that particular instance, if that is

 

 

10000SB0009sam006- 438 -LRB100 06347 HLH 26817 a

1claimed to be the fact); the place and date of the sale, a
2sufficient identification of the property sold, and such other
3information as the Department may reasonably require.
4    Such transaction reporting return shall be filed not later
5than 20 days after the day of delivery of the item that is
6being sold, but may be filed by the retailer at any time sooner
7than that if he chooses to do so. The transaction reporting
8return and tax remittance or proof of exemption from the
9Illinois use tax may be transmitted to the Department by way of
10the State agency with which, or State officer with whom the
11tangible personal property must be titled or registered (if
12titling or registration is required) if the Department and such
13agency or State officer determine that this procedure will
14expedite the processing of applications for title or
15registration.
16    With each such transaction reporting return, the retailer
17shall remit the proper amount of tax due (or shall submit
18satisfactory evidence that the sale is not taxable if that is
19the case), to the Department or its agents, whereupon the
20Department shall issue, in the purchaser's name, a use tax
21receipt (or a certificate of exemption if the Department is
22satisfied that the particular sale is tax exempt) which such
23purchaser may submit to the agency with which, or State officer
24with whom, he must title or register the tangible personal
25property that is involved (if titling or registration is
26required) in support of such purchaser's application for an

 

 

10000SB0009sam006- 439 -LRB100 06347 HLH 26817 a

1Illinois certificate or other evidence of title or registration
2to such tangible personal property.
3    No retailer's failure or refusal to remit tax under this
4Act precludes a user, who has paid the proper tax to the
5retailer, from obtaining his certificate of title or other
6evidence of title or registration (if titling or registration
7is required) upon satisfying the Department that such user has
8paid the proper tax (if tax is due) to the retailer. The
9Department shall adopt appropriate rules to carry out the
10mandate of this paragraph.
11    If the user who would otherwise pay tax to the retailer
12wants the transaction reporting return filed and the payment of
13the tax or proof of exemption made to the Department before the
14retailer is willing to take these actions and such user has not
15paid the tax to the retailer, such user may certify to the fact
16of such delay by the retailer and may (upon the Department
17being satisfied of the truth of such certification) transmit
18the information required by the transaction reporting return
19and the remittance for tax or proof of exemption directly to
20the Department and obtain his tax receipt or exemption
21determination, in which event the transaction reporting return
22and tax remittance (if a tax payment was required) shall be
23credited by the Department to the proper retailer's account
24with the Department, but without the 2.1% or 1.75% discount
25provided for in this Section being allowed. When the user pays
26the tax directly to the Department, he shall pay the tax in the

 

 

10000SB0009sam006- 440 -LRB100 06347 HLH 26817 a

1same amount and in the same form in which it would be remitted
2if the tax had been remitted to the Department by the retailer.
3    Refunds made by the seller during the preceding return
4period to purchasers, on account of tangible personal property
5returned to the seller or taxable services not performed in
6full, shall be allowed as a deduction under subdivision 5 of
7his monthly or quarterly return, as the case may be, in case
8the seller had theretofore included the receipts from the sale
9of such tangible personal property in a return filed by him and
10had paid the tax imposed by this Act with respect to such
11receipts.
12    Where the seller is a corporation, the return filed on
13behalf of such corporation shall be signed by the president,
14vice-president, secretary or treasurer or by the properly
15accredited agent of such corporation.
16    Where the seller is a limited liability company, the return
17filed on behalf of the limited liability company shall be
18signed by a manager, member, or properly accredited agent of
19the limited liability company.
20    Except as provided in this Section, the retailer filing the
21return under this Section shall, at the time of filing such
22return, pay to the Department the amount of tax imposed by this
23Act less a discount of 2.1% prior to January 1, 1990 and 1.75%
24on and after January 1, 1990, or $5 per calendar year,
25whichever is greater, which is allowed to reimburse the
26retailer for the expenses incurred in keeping records,

 

 

10000SB0009sam006- 441 -LRB100 06347 HLH 26817 a

1preparing and filing returns, remitting the tax and supplying
2data to the Department on request. Any prepayment made pursuant
3to Section 2d of this Act shall be included in the amount on
4which such 2.1% or 1.75% discount is computed. In the case of
5retailers who report and pay the tax on a transaction by
6transaction basis, as provided in this Section, such discount
7shall be taken with each such tax remittance instead of when
8such retailer files his periodic return. The Department may
9disallow the discount for retailers whose certificate of
10registration is revoked at the time the return is filed, but
11only if the Department's decision to revoke the certificate of
12registration has become final.
13    Before October 1, 2000, if the taxpayer's average monthly
14tax liability to the Department under this Act, the Use Tax
15Act, the Service Occupation Tax Act, and the Service Use Tax
16Act, excluding any liability for prepaid sales tax to be
17remitted in accordance with Section 2d of this Act, was $10,000
18or more during the preceding 4 complete calendar quarters, he
19shall file a return with the Department each month by the 20th
20day of the month next following the month during which such tax
21liability is incurred and shall make payments to the Department
22on or before the 7th, 15th, 22nd and last day of the month
23during which such liability is incurred. On and after October
241, 2000, if the taxpayer's average monthly tax liability to the
25Department under this Act, the Use Tax Act, the Service
26Occupation Tax Act, and the Service Use Tax Act, excluding any

 

 

10000SB0009sam006- 442 -LRB100 06347 HLH 26817 a

1liability for prepaid sales tax to be remitted in accordance
2with Section 2d of this Act, was $20,000 or more during the
3preceding 4 complete calendar quarters, he shall file a return
4with the Department each month by the 20th day of the month
5next following the month during which such tax liability is
6incurred and shall make payment to the Department on or before
7the 7th, 15th, 22nd and last day of the month during which such
8liability is incurred. If the month during which such tax
9liability is incurred began prior to January 1, 1985, each
10payment shall be in an amount equal to 1/4 of the taxpayer's
11actual liability for the month or an amount set by the
12Department not to exceed 1/4 of the average monthly liability
13of the taxpayer to the Department for the preceding 4 complete
14calendar quarters (excluding the month of highest liability and
15the month of lowest liability in such 4 quarter period). If the
16month during which such tax liability is incurred begins on or
17after January 1, 1985 and prior to January 1, 1987, each
18payment shall be in an amount equal to 22.5% of the taxpayer's
19actual liability for the month or 27.5% of the taxpayer's
20liability for the same calendar month of the preceding year. If
21the month during which such tax liability is incurred begins on
22or after January 1, 1987 and prior to January 1, 1988, each
23payment shall be in an amount equal to 22.5% of the taxpayer's
24actual liability for the month or 26.25% of the taxpayer's
25liability for the same calendar month of the preceding year. If
26the month during which such tax liability is incurred begins on

 

 

10000SB0009sam006- 443 -LRB100 06347 HLH 26817 a

1or after January 1, 1988, and prior to January 1, 1989, or
2begins on or after January 1, 1996, each payment shall be in an
3amount equal to 22.5% of the taxpayer's actual liability for
4the month or 25% of the taxpayer's liability for the same
5calendar month of the preceding year. If the month during which
6such tax liability is incurred begins on or after January 1,
71989, and prior to January 1, 1996, each payment shall be in an
8amount equal to 22.5% of the taxpayer's actual liability for
9the month or 25% of the taxpayer's liability for the same
10calendar month of the preceding year or 100% of the taxpayer's
11actual liability for the quarter monthly reporting period. The
12amount of such quarter monthly payments shall be credited
13against the final tax liability of the taxpayer's return for
14that month. Before October 1, 2000, once applicable, the
15requirement of the making of quarter monthly payments to the
16Department by taxpayers having an average monthly tax liability
17of $10,000 or more as determined in the manner provided above
18shall continue until such taxpayer's average monthly liability
19to the Department during the preceding 4 complete calendar
20quarters (excluding the month of highest liability and the
21month of lowest liability) is less than $9,000, or until such
22taxpayer's average monthly liability to the Department as
23computed for each calendar quarter of the 4 preceding complete
24calendar quarter period is less than $10,000. However, if a
25taxpayer can show the Department that a substantial change in
26the taxpayer's business has occurred which causes the taxpayer

 

 

10000SB0009sam006- 444 -LRB100 06347 HLH 26817 a

1to anticipate that his average monthly tax liability for the
2reasonably foreseeable future will fall below the $10,000
3threshold stated above, then such taxpayer may petition the
4Department for a change in such taxpayer's reporting status. On
5and after October 1, 2000, once applicable, the requirement of
6the making of quarter monthly payments to the Department by
7taxpayers having an average monthly tax liability of $20,000 or
8more as determined in the manner provided above shall continue
9until such taxpayer's average monthly liability to the
10Department during the preceding 4 complete calendar quarters
11(excluding the month of highest liability and the month of
12lowest liability) is less than $19,000 or until such taxpayer's
13average monthly liability to the Department as computed for
14each calendar quarter of the 4 preceding complete calendar
15quarter period is less than $20,000. However, if a taxpayer can
16show the Department that a substantial change in the taxpayer's
17business has occurred which causes the taxpayer to anticipate
18that his average monthly tax liability for the reasonably
19foreseeable future will fall below the $20,000 threshold stated
20above, then such taxpayer may petition the Department for a
21change in such taxpayer's reporting status. The Department
22shall change such taxpayer's reporting status unless it finds
23that such change is seasonal in nature and not likely to be
24long term. If any such quarter monthly payment is not paid at
25the time or in the amount required by this Section, then the
26taxpayer shall be liable for penalties and interest on the

 

 

10000SB0009sam006- 445 -LRB100 06347 HLH 26817 a

1difference between the minimum amount due as a payment and the
2amount of such quarter monthly payment actually and timely
3paid, except insofar as the taxpayer has previously made
4payments for that month to the Department in excess of the
5minimum payments previously due as provided in this Section.
6The Department shall make reasonable rules and regulations to
7govern the quarter monthly payment amount and quarter monthly
8payment dates for taxpayers who file on other than a calendar
9monthly basis.
10    The provisions of this paragraph apply before October 1,
112001. Without regard to whether a taxpayer is required to make
12quarter monthly payments as specified above, any taxpayer who
13is required by Section 2d of this Act to collect and remit
14prepaid taxes and has collected prepaid taxes which average in
15excess of $25,000 per month during the preceding 2 complete
16calendar quarters, shall file a return with the Department as
17required by Section 2f and shall make payments to the
18Department on or before the 7th, 15th, 22nd and last day of the
19month during which such liability is incurred. If the month
20during which such tax liability is incurred began prior to
21September 1, 1985 (the effective date of Public Act 84-221)
22this amendatory Act of 1985, each payment shall be in an amount
23not less than 22.5% of the taxpayer's actual liability under
24Section 2d. If the month during which such tax liability is
25incurred begins on or after January 1, 1986, each payment shall
26be in an amount equal to 22.5% of the taxpayer's actual

 

 

10000SB0009sam006- 446 -LRB100 06347 HLH 26817 a

1liability for the month or 27.5% of the taxpayer's liability
2for the same calendar month of the preceding calendar year. If
3the month during which such tax liability is incurred begins on
4or after January 1, 1987, each payment shall be in an amount
5equal to 22.5% of the taxpayer's actual liability for the month
6or 26.25% of the taxpayer's liability for the same calendar
7month of the preceding year. The amount of such quarter monthly
8payments shall be credited against the final tax liability of
9the taxpayer's return for that month filed under this Section
10or Section 2f, as the case may be. Once applicable, the
11requirement of the making of quarter monthly payments to the
12Department pursuant to this paragraph shall continue until such
13taxpayer's average monthly prepaid tax collections during the
14preceding 2 complete calendar quarters is $25,000 or less. If
15any such quarter monthly payment is not paid at the time or in
16the amount required, the taxpayer shall be liable for penalties
17and interest on such difference, except insofar as the taxpayer
18has previously made payments for that month in excess of the
19minimum payments previously due.
20    The provisions of this paragraph apply on and after October
211, 2001. Without regard to whether a taxpayer is required to
22make quarter monthly payments as specified above, any taxpayer
23who is required by Section 2d of this Act to collect and remit
24prepaid taxes and has collected prepaid taxes that average in
25excess of $20,000 per month during the preceding 4 complete
26calendar quarters shall file a return with the Department as

 

 

10000SB0009sam006- 447 -LRB100 06347 HLH 26817 a

1required by Section 2f and shall make payments to the
2Department on or before the 7th, 15th, 22nd and last day of the
3month during which the liability is incurred. Each payment
4shall be in an amount equal to 22.5% of the taxpayer's actual
5liability for the month or 25% of the taxpayer's liability for
6the same calendar month of the preceding year. The amount of
7the quarter monthly payments shall be credited against the
8final tax liability of the taxpayer's return for that month
9filed under this Section or Section 2f, as the case may be.
10Once applicable, the requirement of the making of quarter
11monthly payments to the Department pursuant to this paragraph
12shall continue until the taxpayer's average monthly prepaid tax
13collections during the preceding 4 complete calendar quarters
14(excluding the month of highest liability and the month of
15lowest liability) is less than $19,000 or until such taxpayer's
16average monthly liability to the Department as computed for
17each calendar quarter of the 4 preceding complete calendar
18quarters is less than $20,000. If any such quarter monthly
19payment is not paid at the time or in the amount required, the
20taxpayer shall be liable for penalties and interest on such
21difference, except insofar as the taxpayer has previously made
22payments for that month in excess of the minimum payments
23previously due.
24    If any payment provided for in this Section exceeds the
25taxpayer's liabilities under this Act, the Use Tax Act, the
26Service Occupation Tax Act and the Service Use Tax Act, as

 

 

10000SB0009sam006- 448 -LRB100 06347 HLH 26817 a

1shown on an original monthly return, the Department shall, if
2requested by the taxpayer, issue to the taxpayer a credit
3memorandum no later than 30 days after the date of payment. The
4credit evidenced by such credit memorandum may be assigned by
5the taxpayer to a similar taxpayer under this Act, the Use Tax
6Act, the Service Occupation Tax Act or the Service Use Tax Act,
7in accordance with reasonable rules and regulations to be
8prescribed by the Department. If no such request is made, the
9taxpayer may credit such excess payment against tax liability
10subsequently to be remitted to the Department under this Act,
11the Use Tax Act, the Service Occupation Tax Act or the Service
12Use Tax Act, in accordance with reasonable rules and
13regulations prescribed by the Department. If the Department
14subsequently determined that all or any part of the credit
15taken was not actually due to the taxpayer, the taxpayer's 2.1%
16and 1.75% vendor's discount shall be reduced by 2.1% or 1.75%
17of the difference between the credit taken and that actually
18due, and that taxpayer shall be liable for penalties and
19interest on such difference.
20    If a retailer of motor fuel is entitled to a credit under
21Section 2d of this Act which exceeds the taxpayer's liability
22to the Department under this Act for the month which the
23taxpayer is filing a return, the Department shall issue the
24taxpayer a credit memorandum for the excess.
25    Beginning January 1, 1990, each month the Department shall
26pay into the Local Government Tax Fund, a special fund in the

 

 

10000SB0009sam006- 449 -LRB100 06347 HLH 26817 a

1State treasury which is hereby created, the net revenue
2realized for the preceding month from the 1% tax on sales of
3food for human consumption which is to be consumed off the
4premises where it is sold (other than alcoholic beverages, soft
5drinks and food which has been prepared for immediate
6consumption) and prescription and nonprescription medicines,
7drugs, medical appliances, products classified as Class III
8medical devices by the United States Food and Drug
9Administration that are used for cancer treatment pursuant to a
10prescription, as well as any accessories and components related
11to those devices, and insulin, urine testing materials,
12syringes and needles used by diabetics.
13    Beginning January 1, 1990, each month the Department shall
14pay into the County and Mass Transit District Fund, a special
15fund in the State treasury which is hereby created, 4% of the
16net revenue realized for the preceding month from the 6.25%
17general rate.
18    Beginning August 1, 2000, each month the Department shall
19pay into the County and Mass Transit District Fund 20% of the
20net revenue realized for the preceding month from the 1.25%
21rate on the selling price of motor fuel and gasohol. Beginning
22September 1, 2010, each month the Department shall pay into the
23County and Mass Transit District Fund 20% of the net revenue
24realized for the preceding month from the 1.25% rate on the
25selling price of sales tax holiday items.
26    Beginning January 1, 1990, each month the Department shall

 

 

10000SB0009sam006- 450 -LRB100 06347 HLH 26817 a

1pay into the Local Government Tax Fund 16% of the net revenue
2realized for the preceding month from the 6.25% general rate on
3the selling price of tangible personal property.
4    From July 1, 2017 through June 30, 2018, no deposits shall
5be made into the County and Mass Transit District Fund or the
6Local Government Tax Fund from the net revenue realized from
7the 6.25% general rate on taxable services. Beginning July 1,
82018 and through June 30, 2019, each month the Department shall
9pay into the County and Mass Transit District Fund 1.4% of the
10net revenue realized for the preceding month from the 6.25%
11general rate on the selling price of taxable services and shall
12pay into the Local Government Tax Fund 5.6% of the net revenue
13realized for the preceding month from the 6.25% general rate on
14the selling price of taxable services. Beginning July 1, 2019
15and through June 30, 2020, each month the Department shall pay
16into the County and Mass Transit District Fund 2.6% of the net
17revenue realized for the preceding month from the 6.25% general
18rate on the selling price of taxable services and shall pay
19into the Local Government Tax Fund 10.4% of the net revenue
20realized for the preceding month from the 6.25% general rate on
21the selling price of taxable services. Beginning July 1, 2020,
22each month the Department shall pay into the County and Mass
23Transit District Fund 4% of the net revenue realized for the
24preceding month from the 6.25% general rate on the selling
25price of taxable services and shall pay into the Local
26Government Tax Fund 16% of the net revenue realized for the

 

 

10000SB0009sam006- 451 -LRB100 06347 HLH 26817 a

1preceding month from the 6.25% general rate on the selling
2price of taxable services.
3    Beginning August 1, 2000, each month the Department shall
4pay into the Local Government Tax Fund 80% of the net revenue
5realized for the preceding month from the 1.25% rate on the
6selling price of motor fuel and gasohol. Beginning September 1,
72010, each month the Department shall pay into the Local
8Government Tax Fund 80% of the net revenue realized for the
9preceding month from the 1.25% rate on the selling price of
10sales tax holiday items.
11    Beginning October 1, 2009, each month the Department shall
12pay into the Capital Projects Fund an amount that is equal to
13an amount estimated by the Department to represent 80% of the
14net revenue realized for the preceding month from the sale of
15candy, grooming and hygiene products, and soft drinks that had
16been taxed at a rate of 1% prior to September 1, 2009 but that
17are now taxed at 6.25%.
18    Beginning July 1, 2011, each month the Department shall pay
19into the Clean Air Act Permit Fund 80% of the net revenue
20realized for the preceding month from the 6.25% general rate on
21the selling price of sorbents used in Illinois in the process
22of sorbent injection as used to comply with the Environmental
23Protection Act or the federal Clean Air Act, but the total
24payment into the Clean Air Act Permit Fund under this Act and
25the Use Tax Act shall not exceed $2,000,000 in any fiscal year.
26    Beginning July 1, 2013, each month the Department shall pay

 

 

10000SB0009sam006- 452 -LRB100 06347 HLH 26817 a

1into the Underground Storage Tank Fund from the proceeds
2collected under this Act, the Use Tax Act, the Service Use Tax
3Act, and the Service Occupation Tax Act an amount equal to the
4average monthly deficit in the Underground Storage Tank Fund
5during the prior year, as certified annually by the Illinois
6Environmental Protection Agency, but the total payment into the
7Underground Storage Tank Fund under this Act, the Use Tax Act,
8the Service Use Tax Act, and the Service Occupation Tax Act
9shall not exceed $18,000,000 in any State fiscal year. As used
10in this paragraph, the "average monthly deficit" shall be equal
11to the difference between the average monthly claims for
12payment by the fund and the average monthly revenues deposited
13into the fund, excluding payments made pursuant to this
14paragraph.
15    Beginning July 1, 2015, of the remainder of the moneys
16received by the Department under the Use Tax Act, the Service
17Use Tax Act, the Service Occupation Tax Act, and this Act, each
18month the Department shall deposit $500,000 into the State
19Crime Laboratory Fund.
20    Of the remainder of the moneys received by the Department
21pursuant to this Act, (a) 1.75% thereof shall be paid into the
22Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
23and after July 1, 1989, 3.8% thereof shall be paid into the
24Build Illinois Fund; provided, however, that if in any fiscal
25year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
26may be, of the moneys received by the Department and required

 

 

10000SB0009sam006- 453 -LRB100 06347 HLH 26817 a

1to be paid into the Build Illinois Fund pursuant to this Act,
2Section 9 of the Use Tax Act, Section 9 of the Service Use Tax
3Act, and Section 9 of the Service Occupation Tax Act, such Acts
4being hereinafter called the "Tax Acts" and such aggregate of
52.2% or 3.8%, as the case may be, of moneys being hereinafter
6called the "Tax Act Amount", and (2) the amount transferred to
7the Build Illinois Fund from the State and Local Sales Tax
8Reform Fund shall be less than the Annual Specified Amount (as
9hereinafter defined), an amount equal to the difference shall
10be immediately paid into the Build Illinois Fund from other
11moneys received by the Department pursuant to the Tax Acts; the
12"Annual Specified Amount" means the amounts specified below for
13fiscal years 1986 through 1993:
14Fiscal YearAnnual Specified Amount
151986$54,800,000
161987$76,650,000
171988$80,480,000
181989$88,510,000
191990$115,330,000
201991$145,470,000
211992$182,730,000
221993$206,520,000;
23and means the Certified Annual Debt Service Requirement (as
24defined in Section 13 of the Build Illinois Bond Act) or the
25Tax Act Amount, whichever is greater, for fiscal year 1994 and
26each fiscal year thereafter; and further provided, that if on

 

 

10000SB0009sam006- 454 -LRB100 06347 HLH 26817 a

1the last business day of any month the sum of (1) the Tax Act
2Amount required to be deposited into the Build Illinois Bond
3Account in the Build Illinois Fund during such month and (2)
4the amount transferred to the Build Illinois Fund from the
5State and Local Sales Tax Reform Fund shall have been less than
61/12 of the Annual Specified Amount, an amount equal to the
7difference shall be immediately paid into the Build Illinois
8Fund from other moneys received by the Department pursuant to
9the Tax Acts; and, further provided, that in no event shall the
10payments required under the preceding proviso result in
11aggregate payments into the Build Illinois Fund pursuant to
12this clause (b) for any fiscal year in excess of the greater of
13(i) the Tax Act Amount or (ii) the Annual Specified Amount for
14such fiscal year. The amounts payable into the Build Illinois
15Fund under clause (b) of the first sentence in this paragraph
16shall be payable only until such time as the aggregate amount
17on deposit under each trust indenture securing Bonds issued and
18outstanding pursuant to the Build Illinois Bond Act is
19sufficient, taking into account any future investment income,
20to fully provide, in accordance with such indenture, for the
21defeasance of or the payment of the principal of, premium, if
22any, and interest on the Bonds secured by such indenture and on
23any Bonds expected to be issued thereafter and all fees and
24costs payable with respect thereto, all as certified by the
25Director of the Bureau of the Budget (now Governor's Office of
26Management and Budget). If on the last business day of any

 

 

10000SB0009sam006- 455 -LRB100 06347 HLH 26817 a

1month in which Bonds are outstanding pursuant to the Build
2Illinois Bond Act, the aggregate of moneys deposited in the
3Build Illinois Bond Account in the Build Illinois Fund in such
4month shall be less than the amount required to be transferred
5in such month from the Build Illinois Bond Account to the Build
6Illinois Bond Retirement and Interest Fund pursuant to Section
713 of the Build Illinois Bond Act, an amount equal to such
8deficiency shall be immediately paid from other moneys received
9by the Department pursuant to the Tax Acts to the Build
10Illinois Fund; provided, however, that any amounts paid to the
11Build Illinois Fund in any fiscal year pursuant to this
12sentence shall be deemed to constitute payments pursuant to
13clause (b) of the first sentence of this paragraph and shall
14reduce the amount otherwise payable for such fiscal year
15pursuant to that clause (b). The moneys received by the
16Department pursuant to this Act and required to be deposited
17into the Build Illinois Fund are subject to the pledge, claim
18and charge set forth in Section 12 of the Build Illinois Bond
19Act.
20    Subject to payment of amounts into the Build Illinois Fund
21as provided in the preceding paragraph or in any amendment
22thereto hereafter enacted, the following specified monthly
23installment of the amount requested in the certificate of the
24Chairman of the Metropolitan Pier and Exposition Authority
25provided under Section 8.25f of the State Finance Act, but not
26in excess of sums designated as "Total Deposit", shall be

 

 

10000SB0009sam006- 456 -LRB100 06347 HLH 26817 a

1deposited in the aggregate from collections under Section 9 of
2the Use Tax Act, Section 9 of the Service Use Tax Act, Section
39 of the Service Occupation Tax Act, and Section 3 of the
4Retailers' Occupation Tax Act into the McCormick Place
5Expansion Project Fund in the specified fiscal years.
6Fiscal YearTotal Deposit
71993         $0
81994 53,000,000
91995 58,000,000
101996 61,000,000
111997 64,000,000
121998 68,000,000
131999 71,000,000
142000 75,000,000
152001 80,000,000
162002 93,000,000
172003 99,000,000
182004103,000,000
192005108,000,000
202006113,000,000
212007119,000,000
222008126,000,000
232009132,000,000
242010139,000,000
252011146,000,000

 

 

10000SB0009sam006- 457 -LRB100 06347 HLH 26817 a

12012153,000,000
22013161,000,000
32014170,000,000
42015179,000,000
52016189,000,000
62017199,000,000
72018210,000,000
82019221,000,000
92020233,000,000
102021246,000,000
112022260,000,000
122023275,000,000
132024 275,000,000
142025 275,000,000
152026 279,000,000
162027 292,000,000
172028 307,000,000
182029 322,000,000
192030 338,000,000
202031 350,000,000
212032 350,000,000
22and
23each fiscal year
24thereafter that bonds
25are outstanding under
26Section 13.2 of the

 

 

10000SB0009sam006- 458 -LRB100 06347 HLH 26817 a

1Metropolitan Pier and
2Exposition Authority Act,
3but not after fiscal year 2060.
4    Beginning July 20, 1993 and in each month of each fiscal
5year thereafter, one-eighth of the amount requested in the
6certificate of the Chairman of the Metropolitan Pier and
7Exposition Authority for that fiscal year, less the amount
8deposited into the McCormick Place Expansion Project Fund by
9the State Treasurer in the respective month under subsection
10(g) of Section 13 of the Metropolitan Pier and Exposition
11Authority Act, plus cumulative deficiencies in the deposits
12required under this Section for previous months and years,
13shall be deposited into the McCormick Place Expansion Project
14Fund, until the full amount requested for the fiscal year, but
15not in excess of the amount specified above as "Total Deposit",
16has been deposited.
17    Subject to payment of amounts into the Build Illinois Fund
18and the McCormick Place Expansion Project Fund pursuant to the
19preceding paragraphs or in any amendments thereto hereafter
20enacted, beginning July 1, 1993 and ending on September 30,
212013, the Department shall each month pay into the Illinois Tax
22Increment Fund 0.27% of 80% of the net revenue realized for the
23preceding month from the 6.25% general rate on the selling
24price of tangible personal property.
25    Subject to payment of amounts into the Build Illinois Fund
26and the McCormick Place Expansion Project Fund pursuant to the

 

 

10000SB0009sam006- 459 -LRB100 06347 HLH 26817 a

1preceding paragraphs or in any amendments thereto hereafter
2enacted, beginning with the receipt of the first report of
3taxes paid by an eligible business and continuing for a 25-year
4period, the Department shall each month pay into the Energy
5Infrastructure Fund 80% of the net revenue realized from the
66.25% general rate on the selling price of Illinois-mined coal
7that was sold to an eligible business. For purposes of this
8paragraph, the term "eligible business" means a new electric
9generating facility certified pursuant to Section 605-332 of
10the Department of Commerce and Economic Opportunity Law of the
11Civil Administrative Code of Illinois.
12    Subject to payment of amounts into the Build Illinois Fund,
13the McCormick Place Expansion Project Fund, the Illinois Tax
14Increment Fund, and the Energy Infrastructure Fund pursuant to
15the preceding paragraphs or in any amendments to this Section
16hereafter enacted, beginning on the first day of the first
17calendar month to occur on or after August 26, 2014 (the
18effective date of Public Act 98-1098) this amendatory Act of
19the 98th General Assembly, each month, from the collections
20made under Section 9 of the Use Tax Act, Section 9 of the
21Service Use Tax Act, Section 9 of the Service Occupation Tax
22Act, and Section 3 of the Retailers' Occupation Tax Act, the
23Department shall pay into the Tax Compliance and Administration
24Fund, to be used, subject to appropriation, to fund additional
25auditors and compliance personnel at the Department of Revenue,
26an amount equal to 1/12 of 5% of 80% of the cash receipts

 

 

10000SB0009sam006- 460 -LRB100 06347 HLH 26817 a

1collected during the preceding fiscal year by the Audit Bureau
2of the Department under the Use Tax Act, the Service Use Tax
3Act, the Service Occupation Tax Act, the Retailers' Occupation
4Tax Act, and associated local occupation and use taxes
5administered by the Department.
6    Of the remainder of the moneys received by the Department
7pursuant to this Act, 75% thereof shall be paid into the State
8Treasury and 25% shall be reserved in a special account and
9used only for the transfer to the Common School Fund as part of
10the monthly transfer from the General Revenue Fund in
11accordance with Section 8a of the State Finance Act.
12    The Department may, upon separate written notice to a
13taxpayer, require the taxpayer to prepare and file with the
14Department on a form prescribed by the Department within not
15less than 60 days after receipt of the notice an annual
16information return for the tax year specified in the notice.
17Such annual return to the Department shall include a statement
18of gross receipts as shown by the retailer's last Federal
19income tax return. If the total receipts of the business as
20reported in the Federal income tax return do not agree with the
21gross receipts reported to the Department of Revenue for the
22same period, the retailer shall attach to his annual return a
23schedule showing a reconciliation of the 2 amounts and the
24reasons for the difference. The retailer's annual return to the
25Department shall also disclose the cost of goods sold by the
26retailer during the year covered by such return, opening and

 

 

10000SB0009sam006- 461 -LRB100 06347 HLH 26817 a

1closing inventories of such goods for such year, costs of goods
2used from stock or taken from stock and given away by the
3retailer during such year, payroll information of the
4retailer's business during such year and any additional
5reasonable information which the Department deems would be
6helpful in determining the accuracy of the monthly, quarterly
7or annual returns filed by such retailer as provided for in
8this Section.
9    If the annual information return required by this Section
10is not filed when and as required, the taxpayer shall be liable
11as follows:
12        (i) Until January 1, 1994, the taxpayer shall be liable
13    for a penalty equal to 1/6 of 1% of the tax due from such
14    taxpayer under this Act during the period to be covered by
15    the annual return for each month or fraction of a month
16    until such return is filed as required, the penalty to be
17    assessed and collected in the same manner as any other
18    penalty provided for in this Act.
19        (ii) On and after January 1, 1994, the taxpayer shall
20    be liable for a penalty as described in Section 3-4 of the
21    Uniform Penalty and Interest Act.
22    The chief executive officer, proprietor, owner or highest
23ranking manager shall sign the annual return to certify the
24accuracy of the information contained therein. Any person who
25willfully signs the annual return containing false or
26inaccurate information shall be guilty of perjury and punished

 

 

10000SB0009sam006- 462 -LRB100 06347 HLH 26817 a

1accordingly. The annual return form prescribed by the
2Department shall include a warning that the person signing the
3return may be liable for perjury.
4    The provisions of this Section concerning the filing of an
5annual information return do not apply to a retailer who is not
6required to file an income tax return with the United States
7Government.
8    As soon as possible after the first day of each month, upon
9certification of the Department of Revenue, the Comptroller
10shall order transferred and the Treasurer shall transfer from
11the General Revenue Fund to the Motor Fuel Tax Fund an amount
12equal to 1.7% of 80% of the net revenue realized under this Act
13for the second preceding month. Beginning April 1, 2000, this
14transfer is no longer required and shall not be made.
15    Net revenue realized for a month shall be the revenue
16collected by the State pursuant to this Act, less the amount
17paid out during that month as refunds to taxpayers for
18overpayment of liability.
19    For greater simplicity of administration, manufacturers,
20importers and wholesalers whose products are sold at retail in
21Illinois by numerous retailers, and who wish to do so, may
22assume the responsibility for accounting and paying to the
23Department all tax accruing under this Act with respect to such
24sales, if the retailers who are affected do not make written
25objection to the Department to this arrangement.
26    Any person who promotes, organizes, provides retail

 

 

10000SB0009sam006- 463 -LRB100 06347 HLH 26817 a

1selling space for concessionaires or other types of sellers at
2the Illinois State Fair, DuQuoin State Fair, county fairs,
3local fairs, art shows, flea markets and similar exhibitions or
4events, including any transient merchant as defined by Section
52 of the Transient Merchant Act of 1987, is required to file a
6report with the Department providing the name of the merchant's
7business, the name of the person or persons engaged in
8merchant's business, the permanent address and Illinois
9Retailers Occupation Tax Registration Number of the merchant,
10the dates and location of the event and other reasonable
11information that the Department may require. The report must be
12filed not later than the 20th day of the month next following
13the month during which the event with retail sales was held.
14Any person who fails to file a report required by this Section
15commits a business offense and is subject to a fine not to
16exceed $250.
17    Any person engaged in the business of selling tangible
18personal property or taxable service at retail as a
19concessionaire or other type of seller at the Illinois State
20Fair, county fairs, art shows, flea markets and similar
21exhibitions or events, or any transient merchants, as defined
22by Section 2 of the Transient Merchant Act of 1987, may be
23required to make a daily report of the amount of such sales to
24the Department and to make a daily payment of the full amount
25of tax due. The Department shall impose this requirement when
26it finds that there is a significant risk of loss of revenue to

 

 

10000SB0009sam006- 464 -LRB100 06347 HLH 26817 a

1the State at such an exhibition or event. Such a finding shall
2be based on evidence that a substantial number of
3concessionaires or other sellers who are not residents of
4Illinois will be engaging in the business of selling tangible
5personal property or taxable service at retail at the
6exhibition or event, or other evidence of a significant risk of
7loss of revenue to the State. The Department shall notify
8concessionaires and other sellers affected by the imposition of
9this requirement. In the absence of notification by the
10Department, the concessionaires and other sellers shall file
11their returns as otherwise required in this Section.
12(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
1398-496, eff. 1-1-14; 98-756, eff. 7-16-14; 98-1098, eff.
148-26-14; 99-352, eff. 8-12-15; 99-858, eff. 8-19-16; 99-933,
15eff. 1-27-17; revised 2-3-17.)
 
16    (35 ILCS 120/7)  (from Ch. 120, par. 446)
17    Sec. 7. Every person engaged in the business of selling
18tangible personal property or taxable service at retail in this
19State shall keep records and books of all sales of tangible
20personal property, together with invoices, bills of lading,
21sales records, copies of bills of sale, inventories prepared as
22of December 31 of each year or otherwise annually as has been
23the custom in the specific trade and other pertinent papers and
24documents. Every person who is engaged in the business of
25selling tangible personal property or taxable service at retail

 

 

10000SB0009sam006- 465 -LRB100 06347 HLH 26817 a

1in this State and who, in connection with such business, also
2engages in other activities (including, but not limited to,
3engaging in a service occupation not subject to tax under this
4Act) shall keep such additional records and books of all such
5activities as will accurately reflect the character and scope
6of such activities and the amount of receipts realized
7therefrom. The Department may adopt rules that establish
8requirements, including record forms and formats, for records
9required to be kept and maintained by taxpayers. For purposes
10of this Section, "records" means all data maintained by the
11taxpayer, including data on paper, microfilm, microfiche or any
12type of machine-sensible data compilation.
13    All books and records and other papers and documents which
14are required by this Act to be kept shall be kept in the
15English language and shall, at all times during business hours
16of the day, be subject to inspection by the Department or its
17duly authorized agents and employees.
18    To support deductions made on the tax return form, or
19authorized under this Act, on account of receipts from isolated
20or occasional sales of tangible personal property or taxable
21service, on account of receipts from sales of tangible personal
22property or taxable service for resale, on account of receipts
23from sales to governmental bodies or other exempted types of
24purchasers, on account of receipts from sales of tangible
25personal property or taxable service in interstate commerce,
26and on account of receipts from any other kind of transaction

 

 

10000SB0009sam006- 466 -LRB100 06347 HLH 26817 a

1that is not taxable under this Act, entries in any books,
2records or other pertinent papers or documents of the taxpayer
3in relation thereto shall be in detail sufficient to show the
4name and address of the taxpayer's customer in each such
5transaction, the character of every such transaction, the date
6of every such transaction, the amount of receipts realized from
7every such transaction and such other information as may be
8necessary to establish the non-taxable character of such
9transaction under this Act.
10    Except in the case of a sale to a purchaser who will always
11resell and deliver the property to his customers outside
12Illinois, anyone claiming that he has made a nontaxable sale
13for resale in some form as tangible personal property shall
14also keep a record of the purchaser's registration number or
15resale number with the Department.
16    It shall be presumed that all sales of tangible personal
17property or taxable service are subject to tax under this Act
18until the contrary is established, and the burden of proving
19that a transaction is not taxable hereunder shall be upon the
20person who would be required to remit the tax to the Department
21if such transaction is taxable. In the course of any audit or
22investigation or hearing by the Department with reference to a
23given taxpayer, if the Department finds that the taxpayer lacks
24documentary evidence needed to support the taxpayer's claim to
25exemption from tax hereunder, the Department is authorized to
26notify the taxpayer in writing to produce such evidence, and

 

 

10000SB0009sam006- 467 -LRB100 06347 HLH 26817 a

1the taxpayer shall have 60 days subject to the right in the
2Department to extend this period either on request for good
3cause shown or on its own motion from the date when such notice
4is sent to the taxpayer by certified or registered mail (or
5delivered to the taxpayer if the notice is served personally)
6in which to obtain and produce such evidence for the
7Department's inspection, failing which the matter shall be
8closed, and the transaction shall be conclusively presumed to
9be taxable hereunder.
10    Books and records and other papers reflecting gross
11receipts received during any period with respect to which the
12Department is authorized to issue notices of tax liability as
13provided by Sections 4 and 5 of this Act shall be preserved
14until the expiration of such period unless the Department, in
15writing, shall authorize their destruction or disposal prior to
16such expiration.
17(Source: P.A. 88-480.)
 
18    (35 ILCS 120/13)  (from Ch. 120, par. 452)
19    Sec. 13. Criminal penalties.
20    (a) When the amount due is under $300, any person engaged
21in the business of selling tangible personal property or
22taxable service at retail in this State who fails to file a
23return, or who files a fraudulent return, or any officer,
24employee or agent of a corporation, member, employee or agent
25of a partnership, or manager, member, agent, or employee of a

 

 

10000SB0009sam006- 468 -LRB100 06347 HLH 26817 a

1limited liability company engaged in the business of selling
2tangible personal property or taxable service at retail in this
3State who, as such officer, employee, agent, manager, or member
4is under a duty to file a return, or any officer, agent or
5employee of a corporation, member, agent, or employee of a
6partnership, or manager, member, agent, or employee of a
7limited liability company engaged in the business of selling
8tangible personal property or taxable service at retail in this
9State who files or causes to be filed or signs or causes to be
10signed a fraudulent return filed on behalf of such corporation
11or limited liability company, or any accountant or other agent
12who knowingly enters false information on the return of any
13taxpayer under this Act, is guilty of a Class 4 felony.
14    Any person who or any officer or director of any
15corporation, partner or member of any partnership, or manager
16or member of a limited liability company that: (a) violates
17Section 2a of this Act or (b) fails to keep books and records,
18or fails to produce books and records as required by Section 7
19or (c) willfully violates a rule or regulation of the
20Department for the administration and enforcement of this Act
21is guilty of a Class A misdemeanor. Any person, manager or
22member of a limited liability company, or officer or director
23of any corporation who engages in the business of selling
24tangible personal property at retail after the certificate of
25registration of that person, corporation, limited liability
26company, or partnership has been revoked is guilty of a Class A

 

 

10000SB0009sam006- 469 -LRB100 06347 HLH 26817 a

1misdemeanor. Each day such person, corporation, or partnership
2is engaged in business without a certificate of registration or
3after the certificate of registration of that person,
4corporation, or partnership has been revoked constitutes a
5separate offense.
6    Any purchaser who obtains a registration number or resale
7number from the Department through misrepresentation, or who
8represents to a seller that such purchaser has a registration
9number or a resale number from the Department when he knows
10that he does not, or who uses his registration number or resale
11number to make a seller believe that he is buying tangible
12personal property for resale when such purchaser in fact knows
13that this is not the case is guilty of a Class 4 felony.
14    Any distributor, supplier or other reseller of motor fuel
15registered pursuant to Section 2a or 2c of this Act who fails
16to collect the prepaid tax on invoiced gallons of motor fuel
17sold or who fails to deliver a statement of tax paid to the
18purchaser or to the Department as required by Sections 2d and
192e of this Act, respectively, shall be guilty of a Class A
20misdemeanor if the amount due is under $300, and a Class 4
21felony if the amount due is $300 or more.
22    When the amount due is under $300, any person who accepts
23money that is due to the Department under this Act from a
24taxpayer for the purpose of acting as the taxpayer's agent to
25make the payment to the Department, but who fails to remit such
26payment to the Department when due is guilty of a Class 4

 

 

10000SB0009sam006- 470 -LRB100 06347 HLH 26817 a

1felony.
2    Any seller who collects or attempts to collect an amount
3(however designated) which purports to reimburse such seller
4for retailers' occupation tax liability measured by receipts
5which such seller knows are not subject to retailers'
6occupation tax, or any seller who knowingly over-collects or
7attempts to over-collect an amount purporting to reimburse such
8seller for retailers' occupation tax liability in a transaction
9which is subject to the tax that is imposed by this Act, shall
10be guilty of a Class 4 felony for each such offense. This
11paragraph does not apply to an amount collected by the seller
12as reimbursement for the seller's retailers' occupation tax
13liability on receipts which are subject to tax under this Act
14as long as such collection is made in compliance with the tax
15collection brackets prescribed by the Department in its Rules
16and Regulations.
17    When the amount due is $300 or more, any person engaged in
18the business of selling tangible personal property or taxable
19service at retail in this State who fails to file a return, or
20who files a fraudulent return, or any officer, employee or
21agent of a corporation, member, employee or agent of a
22partnership, or manager, member, agent, or employee of a
23limited liability company engaged in the business of selling
24tangible personal property or taxable service at retail in this
25State who, as such officer, employee, agent, manager, or member
26is under a duty to file a return and who fails to file such

 

 

10000SB0009sam006- 471 -LRB100 06347 HLH 26817 a

1return or any officer, agent, or employee of a corporation,
2member, agent or employee of a partnership, or manager, member,
3agent, or employee of a limited liability company engaged in
4the business of selling tangible personal property or taxable
5service at retail in this State who files or causes to be filed
6or signs or causes to be signed a fraudulent return filed on
7behalf of such corporation or limited liability company, or any
8accountant or other agent who knowingly enters false
9information on the return of any taxpayer under this Act is
10guilty of a Class 3 felony.
11    When the amount due is $300 or more, any person engaged in
12the business of selling tangible personal property at retail in
13this State who accepts money that is due to the Department
14under this Act from a taxpayer for the purpose of acting as the
15taxpayer's agent to make payment to the Department but fails to
16remit such payment to the Department when due, is guilty of a
17Class 3 felony.
18    Any person whose principal place of business is in this
19State and who is charged with a violation under this Section
20shall be tried in the county where his principal place of
21business is located unless he asserts a right to be tried in
22another venue.
23    Any taxpayer or agent of a taxpayer who with the intent to
24defraud purports to make a payment due to the Department by
25issuing or delivering a check or other order upon a real or
26fictitious depository for the payment of money, knowing that it

 

 

10000SB0009sam006- 472 -LRB100 06347 HLH 26817 a

1will not be paid by the depository, shall be guilty of a
2deceptive practice in violation of Section 17-1 of the Criminal
3Code of 2012.
4    (b) A person commits the offense of sales tax evasion under
5this Act when he knowingly attempts in any manner to evade or
6defeat the tax imposed on him or on any other person, or the
7payment thereof, and he commits an affirmative act in
8furtherance of the evasion. For purposes of this Section, an
9"affirmative act in furtherance of the evasion" means an act
10designed in whole or in part to (i) conceal, misrepresent,
11falsify, or manipulate any material fact or (ii) tamper with or
12destroy documents or materials related to a person's tax
13liability under this Act. Two or more acts of sales tax evasion
14may be charged as a single count in any indictment,
15information, or complaint and the amount of tax deficiency may
16be aggregated for purposes of determining the amount of tax
17which is attempted to be or is evaded and the period between
18the first and last acts may be alleged as the date of the
19offense.
20        (1) When the amount of tax, the assessment or payment
21    of which is attempted to be or is evaded is less than $500
22    a person is guilty of a Class 4 felony.
23        (2) When the amount of tax, the assessment or payment
24    of which is attempted to be or is evaded is $500 or more
25    but less than $10,000, a person is guilty of a Class 3
26    felony.

 

 

10000SB0009sam006- 473 -LRB100 06347 HLH 26817 a

1        (3) When the amount of tax, the assessment or payment
2    of which is attempted to be or is evaded is $10,000 or more
3    but less than $100,000, a person is guilty of a Class 2
4    felony.
5        (4) When the amount of tax, the assessment or payment
6    of which is attempted to be or is evaded is $100,000 or
7    more, a person is guilty of a Class 1 felony.
8    Any person who knowingly sells, purchases, installs,
9transfers, possesses, uses, or accesses any automated sales
10suppression device, zapper, or phantom-ware in this State is
11guilty of a Class 3 felony.
12    For the purposes of this Section:
13    "Automated sales suppression device" or "zapper" means a
14software program that falsifies the electronic records of an
15electronic cash register or other point-of-sale system,
16including, but not limited to, transaction data and transaction
17reports. The term includes the software program, any device
18that carries the software program, or an Internet link to the
19software program.
20    "Phantom-ware" means a hidden programming option embedded
21in the operating system of an electronic cash register or
22hardwired into an electronic cash register that can be used to
23create a second set of records or that can eliminate or
24manipulate transaction records in an electronic cash register.
25    "Electronic cash register" means a device that keeps a
26register or supporting documents through the use of an

 

 

10000SB0009sam006- 474 -LRB100 06347 HLH 26817 a

1electronic device or computer system designed to record
2transaction data for the purpose of computing, compiling, or
3processing retail sales transaction data in any manner.
4    "Transaction data" includes: items purchased by a
5customer; the price of each item; a taxability determination
6for each item; a segregated tax amount for each taxed item; the
7amount of cash or credit tendered; the net amount returned to
8the customer in change; the date and time of the purchase; the
9name, address, and identification number of the vendor; and the
10receipt or invoice number of the transaction.
11    "Transaction report" means a report that documents,
12without limitation, the sales, taxes, or fees collected, media
13totals, and discount voids at an electronic cash register and
14that is printed on a cash register tape at the end of a day or
15shift, or a report that documents every action at an electronic
16cash register and is stored electronically.
17    (c) A prosecution for any act in violation of this Section
18may be commenced at any time within 5 years of the commission
19of that act.
20(Source: P.A. 97-1074, eff. 1-1-13; 97-1150, eff. 1-25-13;
2198-352, eff. 1-1-14.)
 
22    Section 30-50. The Counties Code is amended by changing
23Section 5-1009 and by adding Section 5-1008.10 as follows:
 
24    (55 ILCS 5/5-1008.10 new)

 

 

10000SB0009sam006- 475 -LRB100 06347 HLH 26817 a

1    Sec. 5-1008.10. Taxable services. Notwithstanding any
2other provision of law, whenever a home rule or non-home rule
3county is authorized to impose a tax on the use or sale of
4tangible personal property, that county shall also be
5authorized to impose a tax at the same rate on taxable
6services, as defined in Section 2a-2 of the Use Tax Act.
 
7    (55 ILCS 5/5-1009)  (from Ch. 34, par. 5-1009)
8    Sec. 5-1009. Limitation on home rule powers. Except as
9provided in Sections 5-1006, 5-1006.5, 5-1007 and 5-1008, on
10and after September 1, 1990, no home rule county has the
11authority to impose, pursuant to its home rule authority, a
12retailer's occupation tax, service occupation tax, use tax,
13sales tax or other tax on the (i) use, sale or purchase of
14tangible personal property based on the gross receipts from
15such sales or the selling or purchase price, (ii) gross
16receipts, or (iii) weight or volume from the use, sale, or
17purchase of that said tangible personal property.
18Notwithstanding the foregoing, this Section does not preempt
19any home rule imposed tax such as the following: (1) a tax on
20alcoholic beverages, whether based on gross receipts, volume
21sold or any other measurement; (2) a tax based on the number of
22units of cigarettes or tobacco products; (3) a tax, however
23measured, based on the use of a hotel or motel room or similar
24facility; (4) a tax, however measured, on the sale or transfer
25of real property; (5) a tax, however measured, on lease

 

 

10000SB0009sam006- 476 -LRB100 06347 HLH 26817 a

1receipts; (6) a tax on food prepared for immediate consumption
2and on alcoholic beverages sold by a business which provides
3for on premise consumption of said food or alcoholic beverages;
4or (7) other taxes not based on the selling or purchase price
5or gross receipts from the use, sale or purchase of tangible
6personal property; or (8) a tax on the sale of taxable
7services, as defined in the Use Tax Act. This Section does not
8preempt a home rule county from imposing a tax, however
9measured, on the use, for consideration, of a parking lot,
10garage, or other parking facility. This Section is a
11limitation, pursuant to subsection (g) of Section 6 of Article
12VII of the Illinois Constitution, on the power of home rule
13units to tax.
14(Source: P.A. 97-1168, eff. 3-8-13; 97-1169, eff. 3-8-13.)
 
15    Section 30-55. The Illinois Municipal Code is amended by
16changing Section 8-11-6a and by adding Sections 8-3-20 as
17follows:
 
18    (65 ILCS 5/8-3-20 new)
19    Sec. 8-3-20. Taxable services. Notwithstanding any other
20provision of law, whenever a home rule or non-home rule
21municipality is authorized to impose a tax on the use or sale
22of tangible personal property, that municipality shall also be
23authorized to impose a tax at the same rate on taxable
24services, as defined in Section 2a-2 of the Use Tax Act.
 

 

 

10000SB0009sam006- 477 -LRB100 06347 HLH 26817 a

1    (65 ILCS 5/8-11-6a)  (from Ch. 24, par. 8-11-6a)
2    Sec. 8-11-6a. Home rule municipalities; preemption of
3certain taxes. Except as provided in Sections 8-11-1, 8-11-5,
48-11-6, 8-11-6b, 8-11-6c, and 11-74.3-6 on and after September
51, 1990, no home rule municipality has the authority to impose,
6pursuant to its home rule authority, a retailer's occupation
7tax, service occupation tax, use tax, sales tax or other tax on
8the use, sale or purchase of tangible personal property based
9on (i) the selling or purchase price, (ii) the gross receipts,
10or (iii) the weight or volume from the use, sale, or purchase
11from such sales or the selling or purchase price of said
12tangible personal property. Notwithstanding the foregoing,
13this Section does not preempt any home rule imposed tax such as
14the following: (1) a tax on alcoholic beverages, whether based
15on gross receipts, volume sold or any other measurement; (2) a
16tax based on the number of units of cigarettes or tobacco
17products (provided, however, that a home rule municipality that
18has not imposed a tax based on the number of units of
19cigarettes or tobacco products before July 1, 1993, shall not
20impose such a tax after that date); (3) a tax, however
21measured, based on the use of a hotel or motel room or similar
22facility; (4) a tax, however measured, on the sale or transfer
23of real property; (5) a tax, however measured, on lease
24receipts; (6) a tax on food prepared for immediate consumption
25and on alcoholic beverages sold by a business which provides

 

 

10000SB0009sam006- 478 -LRB100 06347 HLH 26817 a

1for on premise consumption of said food or alcoholic beverages;
2or (7) other taxes not based on (i) the selling or purchase
3price, (ii) the or gross receipts, or (iii) the weight or
4volume from the use, sale or purchase of tangible personal
5property; or (8) a tax on the sale of taxable services, as
6defined in the Use Tax Act. This Section does not preempt a
7home rule municipality with a population of more than 2,000,000
8from imposing a tax, however measured, on the use, for
9consideration, of a parking lot, garage, or other parking
10facility. This Section is not intended to affect any existing
11tax on food and beverages prepared for immediate consumption on
12the premises where the sale occurs, or any existing tax on
13alcoholic beverages, or any existing tax imposed on the charge
14for renting a hotel or motel room, which was in effect January
1515, 1988, or any extension of the effective date of such an
16existing tax by ordinance of the municipality imposing the tax,
17which extension is hereby authorized, in any non-home rule
18municipality in which the imposition of such a tax has been
19upheld by judicial determination, nor is this Section intended
20to preempt the authority granted by Public Act 85-1006. This
21Section is a limitation, pursuant to subsection (g) of Section
226 of Article VII of the Illinois Constitution, on the power of
23home rule units to tax.
24(Source: P.A. 97-1168, eff. 3-8-13; 97-1169, eff. 3-8-13.)
 
25    Section 30-65. The Illinois False Claims Act is amended by

 

 

10000SB0009sam006- 479 -LRB100 06347 HLH 26817 a

1changing Section 3 as follows:
 
2    (740 ILCS 175/3)  (from Ch. 127, par. 4103)
3    Sec. 3. False claims.
4    (a) Liability for certain acts.
5        (1) In general, any person who:
6            (A) knowingly presents, or causes to be presented,
7        a false or fraudulent claim for payment or approval;
8            (B) knowingly makes, uses, or causes to be made or
9        used, a false record or statement material to a false
10        or fraudulent claim;
11            (C) conspires to commit a violation of
12        subparagraph (A), (B), (D), (E), (F), or (G);
13            (D) has possession, custody, or control of
14        property or money used, or to be used, by the State and
15        knowingly delivers, or causes to be delivered, less
16        than all the money or property;
17            (E) is authorized to make or deliver a document
18        certifying receipt of property used, or to be used, by
19        the State and, intending to defraud the State, makes or
20        delivers the receipt without completely knowing that
21        the information on the receipt is true;
22             (F) knowingly buys, or receives as a pledge of an
23        obligation or debt, public property from an officer or
24        employee of the State, or a member of the Guard, who
25        lawfully may not sell or pledge property; or

 

 

10000SB0009sam006- 480 -LRB100 06347 HLH 26817 a

1            (G) knowingly makes, uses, or causes to be made or
2        used, a false record or statement material to an
3        obligation to pay or transmit money or property to the
4        State, or knowingly conceals or knowingly and
5        improperly avoids or decreases an obligation to pay or
6        transmit money or property to the State,
7    is liable to the State for a civil penalty of not less than
8    $5,500 and not more than $11,000, plus 3 times the amount
9    of damages which the State sustains because of the act of
10    that person. The penalties in this Section are intended to
11    be remedial rather than punitive, and shall not preclude,
12    nor be precluded by, a criminal prosecution for the same
13    conduct.
14        (2) A person violating this subsection shall also be
15    liable to the State for the costs of a civil action brought
16    to recover any such penalty or damages.
17    (b) Definitions. For purposes of this Section:
18        (1) The terms "knowing" and "knowingly":
19            (A) mean that a person, with respect to
20        information:
21                (i) has actual knowledge of the information;
22                (ii) acts in deliberate ignorance of the truth
23            or falsity of the information; or
24                (iii) acts in reckless disregard of the truth
25            or falsity of the information, and
26            (B) require no proof of specific intent to defraud.

 

 

10000SB0009sam006- 481 -LRB100 06347 HLH 26817 a

1        (2) The term "claim":
2            (A) means any request or demand, whether under a
3        contract or otherwise, for money or property and
4        whether or not the State has title to the money or
5        property, that
6                (i) is presented to an officer, employee, or
7            agent of the State; or
8                (ii) is made to a contractor, grantee, or other
9            recipient, if the money or property is to be spent
10            or used on the State's behalf or to advance a State
11            program or interest, and if the State:
12                    (I) provides or has provided any portion
13                of the money or property requested or demanded;
14                or
15                    (II) will reimburse such contractor,
16                grantee, or other recipient for any portion of
17                the money or property which is requested or
18                demanded; and
19            (B) does not include requests or demands for money
20        or property that the State has paid to an individual as
21        compensation for State employment or as an income
22        subsidy with no restrictions on that individual's use
23        of the money or property.
24        (3) The term "obligation" means an established duty,
25    whether or not fixed, arising from an express or implied
26    contractual, grantor-grantee, or licensor-licensee

 

 

10000SB0009sam006- 482 -LRB100 06347 HLH 26817 a

1    relationship, from a fee-based or similar relationship,
2    from statute or regulation, or from the retention of any
3    overpayment.
4        (4) The term "material" means having a natural tendency
5    to influence, or be capable of influencing, the payment or
6    receipt of money or property.
7    (c) Exclusion. This Section does not apply to any taxes
8imposed, collected, or administered by the State of Illinois
9claims, records, or statements made under the Illinois Income
10Tax Act.
11(Source: P.A. 95-128, eff. 1-1-08; 96-1304, eff. 7-27-10.)
 
12
ARTICLE 99. EFFECTIVE DATE

 
13    Section 99-999. Effective date. This Act takes effect upon
14becoming law.".