101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB0826

 

Introduced , by Rep. Kelly M. Burke

 

SYNOPSIS AS INTRODUCED:
 
65 ILCS 5/8-11-2.7 new

    Amends the Illinois Municipal Code. Creates the Municipal Gas Use Tax Law. Provides that beginning January 1, 2020, a municipality may impose a self-assessing purchaser tax rate of the lower of 2.4 cents per therm or 5% of the purchase price for the privilege of using in the municipality gas obtained in a purchase of out-of-state gas. Provides that, in the alternative, a purchaser may elect for a tax of 2.4 cents per therm that a delivering supplier maintaining a place of business in the State collects from the purchaser. Provides for registration requirements for self-assessing purchasers and delivering suppliers. Includes procedures for self-assessing purchasers and delivering suppliers to submit returns and to remit the tax to the Department of Revenue. Effective January 1, 2020.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning local government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Municipal Code is amended by adding
5Section 8-11-2.7 as follows:
 
6    (65 ILCS 5/8-11-2.7 new)
7    Sec. 8-11-2.7. Municipal Gas Use Tax.
8    (a) This Section may be cited as the Municipal Gas Use Tax
9Law.
10    (b) As used in this Section:
11    "Delivering supplier" means a person engaged in the
12business of delivering gas to another person for use or
13consumption and not for resale, and who, in any case where more
14than one person participates in the delivery of gas to a
15specific purchaser, is the last of the suppliers engaged in
16delivering the gas prior to its receipt by the purchaser.
17    "Delivering supplier maintaining a place of business in
18this State" means any delivering supplier having or maintaining
19within this State, directly or by a subsidiary, an office,
20distribution facility, sales office, or other place of
21business, or any employee, agent, or other representative
22operating within this State under the authority of the
23delivering supplier or the delivering supplier's subsidiary,

 

 

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1irrespective of whether the place of business or agent or other
2representative is located in this State permanently or
3temporarily, or whether the delivering supplier or the
4delivering supplier's subsidiary is licensed to do business in
5this State.
6    "Department" means the Department of Revenue.
7    "Gas" means any gaseous fuel distributed through a pipeline
8system.
9    "Person" means any natural individual, firm, trust,
10estate, partnership, association, joint stock company, joint
11adventure, corporation, or limited liability company, any
12receiver, trustee, guardian, or other representative appointed
13by order of any court, or any city, town, county, or other
14political subdivision of this State.
15    "Purchase of out-of-State gas" means a transaction for the
16purchase of gas from any supplier in a manner that does not
17subject the seller of that gas to liability under the Gas
18Revenue Tax Act.
19    "Purchase price" means the consideration paid for the
20distribution, supply, furnishing, sale, transportation, or
21delivery of gas to a person for use or consumption and not for
22resale, and for all services directly related to the
23production, transportation, or distribution of gas
24distributed, supplied, furnished, sold, transmitted, or
25delivered for use or consumption, including cash, services, and
26property of every kind and nature. "Purchase price" does not

 

 

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1include consideration paid for:
2        (1) a charge for a dishonored check;
3        (2) a finance or credit charge, penalty, charge for
4    delayed payment, or discount for prompt payment;
5        (3) a charge for reconnection of service or for
6    replacement or relocation of facilities;
7        (4) an advance or contribution in aid of construction.
8        (5) repair, inspection, or servicing of equipment
9    located on customer premises;
10        (6) leasing or rental of equipment, the leasing or
11    rental of which is not necessary to furnishing, supplying,
12    or selling gas;
13        (7) a purchase by a purchaser if the supplier is
14    prohibited by a federal or State constitution, treaty,
15    convention, statute, or court decision from recovering the
16    related tax liability from such purchaser; or
17        (8) an amount added to a purchaser's bill because of
18    changes made pursuant to the tax imposed by the
19    municipality.
20    (c) The privilege of using or consuming gas acquired in a
21purchase at retail and used or consumed within the corporate
22limits of a municipality may be taxed at rates not to exceed
23the maximum rates, calculated on a monthly basis for each
24purchaser, as provided in this Section.
25    (d) Beginning January 1, 2020, a municipality may impose
26upon the privilege of using in the municipality gas obtained in

 

 

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1a purchase of out-of-state gas at the rate of 2.4 cents per
2therm or 5% of the purchase price for the billing period,
3whichever is the lower rate. This tax rate is the
4self-assessing purchaser tax rate. Beginning with bills issued
5by delivering suppliers on and after January 1, 2020 to
6purchasers within a municipality imposing a tax pursuant to
7this Section, purchasers may elect an alternative tax rate of
82.4 cents per therm to be paid under the provisions of
9subsection (e) to a delivering supplier maintaining a place of
10business in this State. This tax rate is the alternate tax
11rate.
12    (e) Beginning with bills issued on and after January 1,
132020, a delivering supplier maintaining a place of business in
14this State shall collect from the purchasers within a
15municipality imposing a tax pursuant to this Section who have
16elected the alternate tax rate provided in subsection (d) the
17tax that is imposed by the municipality at the alternate 2.4
18cents per therm rate. The tax imposed at the alternate tax rate
19shall, when collected, be stated as a distinct and separate
20item apart from the selling price of the gas. The tax collected
21by a delivering supplier shall constitute a debt owed by that
22person to the municipality imposing the tax. Upon receipt by a
23delivering supplier of a copy of a certificate of registration
24issued to a self-assessing purchaser under subsection (f), the
25delivering supplier is relieved of the duty to collect the
26alternate tax from that self-assessing purchaser beginning

 

 

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1with bills issued to that self-assessing purchaser 30 or more
2days after receipt of the copy of that certificate of
3registration.
4    (f) Any purchaser who does not elect the alternate tax rate
5to be paid to a delivering supplier shall register with the
6Department as a self-assessing purchaser and pay the tax
7imposed by subsection (d) directly to the Department at the
8self-assessing purchaser rate.
9    Application for a certificate of registration as a
10self-assessing purchaser shall be made to the Department on
11forms furnished by the Department and shall contain any
12reasonable information that the Department requires. The
13self-assessing purchaser shall disclose the name of the
14delivering supplier or suppliers who are delivering the gas
15upon which the self-assessing purchaser will be paying tax to
16the Department.
17    Upon receipt of an application for a certificate of
18registration in proper form, the Department shall issue to the
19applicant a certificate of registration as a self-assessing
20purchaser. The applicant shall provide a copy of the
21certificate of registration as a self-assessing purchaser to
22the applicant's delivering supplier or suppliers. A purchaser
23registering as a self-assessing purchaser may not revoke the
24registration for at least one year after registration.
25    (g) Except for purchasers who have chosen the alternate tax
26rate to be paid to a delivering supplier maintaining a place of

 

 

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1business in this State, the tax imposed by the municipality
2pursuant to subsection (d) shall be paid to the Department
3directly by each self-assessing purchaser that is subject to
4the tax imposed by the municipality. Each self-assessing
5purchaser shall, on or before the 15th day of each month, make
6a return to the Department for the preceding calendar month,
7stating the following:
8        (1) the self-assessing purchaser's name and principal
9    address;
10        (2) the total number of therms used by the
11    self-assessing purchaser during the preceding calendar
12    month and upon the basis of which the tax is imposed.
13        (3) the purchase price of gas used by the
14    self-assessing purchaser during the preceding calendar
15    month and upon the basis of which the tax is imposed;
16        (4) amount of tax (computed upon items (2) and (3));
17    and
18        (5) any other reasonable information the Department
19    may require.
20    (h) A delivering supplier maintaining a place of business
21in this State who engages in the delivery of gas in this State
22shall register with the Department. A delivering supplier, if
23required to otherwise register pursuant to a tax imposed under
24Section 8-11-2 of this Code, need not obtain an additional
25certificate of registration under this Section, but shall be
26deemed to be sufficiently registered by virtue of that

 

 

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1registration with the Department.
2    Application for a certificate of registration shall be made
3to the Department on forms furnished by the Department and
4shall contain any reasonable information the Department may
5require. Upon receipt of a completed application for a
6certificate of registration, the Department shall issue to the
7applicant a certificate of registration. The Department may
8deny a certificate of registration to any applicant if the
9applicant is in default for moneys due under this Section. A
10person aggrieved by a decision of the Department under this
11subsection may, within 20 days after notice of the decision,
12protest and request a hearing, whereupon the Department shall
13give notice to the person of the time and place fixed for the
14hearing, shall hold a hearing in conformity with the provisions
15of this Section, and then issue its final administrative
16decision in the matter to the person. In the absence of a
17protest within 20 days, the Department's decision shall become
18final without any further determination being made or notice
19given.
20    (i) A delivering supplier who is required under subsection
21(e) to collect the tax imposed by the municipality shall make a
22return to the Department on or before the 15th day of each
23month for the preceding calendar month stating the following:
24        (1) the delivering supplier's name;
25        (2) the address of the delivering supplier's principal
26    place of business and the address of the principal place of

 

 

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1    business (if that is a different address) from which the
2    delivering supplier engages in the business of delivering
3    gas to persons for use or consumption and not for resale;
4        (3) the total number of therms of gas delivered to
5    purchasers within a municipality imposing a tax pursuant to
6    this Section during the preceding calendar month and upon
7    the basis of which the tax is imposed;
8        (4) the amount of tax computed upon item (3); and
9        (5) any other reasonable information as the Department
10    may require.
11    In making the return, the delivering supplier engaged in
12the business of delivering gas to persons for use or
13consumption and not for resale may use any reasonable method to
14derive reportable therms from the delivering supplier's
15billing and payment records.
16    Notwithstanding any other provision in this Section
17concerning the time within which a delivering supplier may file
18its return, in the case of a delivering supplier who ceases to
19engage in a kind of business that makes it responsible for
20filing returns with a municipality imposing a tax under this
21Section, the delivering supplier shall file a final return
22under this Section with the Department of the affected
23municipality not more than one month after discontinuing a kind
24of business that makes it responsible for filing returns with a
25municipality.
26    The delivering supplier making the return provided for in

 

 

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1this Section shall, at the time of making the return, pay to
2the Department the amount of tax imposed by the municipality.
 
3    Section 99. Effective date. This Act takes effect January
41, 2020.