101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3359

 

Introduced , by Rep. Arthur Turner

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Video Service Tax Modernization Act. Imposes a tax upon the act or privilege of providing direct-to-home satellite service, direct broadcast satellite service, or digital audio-visual works to a subscriber in the State. Provides that the tax is imposed at the rate of 5% of the provider's gross revenues derived from or attributable to that subscriber. Creates the Entertainment Tax Fairness Act. Imposes a tax upon the subscribers of entertainment in the State at the rate of 1% of the charges paid for the privilege to witness, view, or otherwise enjoy the entertainment. Defines "entertainment" as any paid video programming, direct-to-home satellite service, direct broadcast satellite service, digital audio-visual works service, or video service to a subscriber in the State.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3359LRB101 11152 HLH 56384 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4
ARTICLE 10. VIDEO SERVICE TAX MODERNIZATION

 
5    Section 10-1. Short title. This Act may be cited as the
6Video Service Tax Modernization Act.
 
7    Section 10-5. Application. This Act applies to the
8provision of direct-to-home satellite service, direct
9broadcast satellite service, and digital audio-visual works on
10or after the effective date of this Act.
11    This Act does not apply to: (1) satellite radio service or
12subscription radio service whereby a digital radio signal is
13broadcast without any corresponding or related video
14programming or services; or (2) a satellite television
15transmission of simulcast horse races broadcast from or
16received at locations operated by an organization licensee, an
17inter-track wagering licensee, or an inter-track wagering
18location licensee licensed under the Illinois Horse Racing Act
19of 1975.
 
20    Section 10-10. Definitions. As used in this Act:
21    "Department" means the Department of Revenue.

 

 

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1    "Digital audio-visual works" means a series of related
2images that, when shown in succession, impart an impression of
3motion, together with accompanying sounds, if any, sold to an
4end user with rights of less than permanent use. "Digital
5audio-visual works" does not include cable service provided by
6a cable operator, as those terms are defined in 47 U.S.C. 522,
7and does not include video service provided by a holder, as
8those terms are defined in Article 21 of the Public Utilities
9Act.
10    "Direct broadcast satellite service" means video services
11transmitted or broadcast by satellite directly to the
12subscriber's premises with the use of or accompanied by ground
13receiving or distribution equipment, including, but not
14limited to, infrastructure to provide Internet access used in
15the transmission or broadcast of such video services, at the
16subscriber's premises, but not in the uplink process to the
17satellite, and includes, but is not limited to, the
18retransmission of local broadcast television, the provision of
19premium channels, other recurring monthly services, service
20and pay-per-view, video-on-demand, and other event-based
21services.
22    "Direct-to-home satellite service" has the meaning given
23to that term in Public Law No. 104-104, Title VI, Section
24602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
25152).
26    "End user" means any person other than a person who

 

 

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1receives by contract a product transferred electronically for
2further commercial broadcast, rebroadcast, transmission,
3retransmission, licensing, relicensing, distribution,
4redistribution, or exhibition of the product, in whole or in
5part, to another person or persons.
6    "Gross revenue" means all consideration of any kind or
7nature received by a provider, or an affiliate of the provider,
8in connection with the provision of direct-to-home satellite
9service, direct broadcast satellite service, or digital
10audio-visual works to subscribers. "Gross revenue" does not
11include:
12        (1) charges for the rental of equipment related to the
13    provision of direct-to-home satellite service, direct
14    broadcast satellite service, or digital audiovisual works;
15        (2) activation, installation, repair, or maintenance
16    charges or similar service charges related to the provision
17    of direct-to-home satellite service, direct broadcast
18    satellite service, or digital audio-visual works;
19        (3) service order charges, service termination
20    charges, or any other administrative charges related to the
21    provision of direct-to-home satellite service, direct
22    broadcast satellite service, or digital audiovisual works;
23        (4) revenue not actually received, regardless of
24    whether it is billed, including, but not limited to, bad
25    debts;
26        (5) revenue received by an affiliate or other person in

 

 

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1    exchange for supplying goods and services used by a
2    provider;
3        (6) the amount of any refunds, rebates, or discounts
4    made to subscribers, advertisers, or other persons;
5        (7) revenue from any service that is subject to tax
6    under the Service Occupation Tax Act, Retailers'
7    Occupation Tax Act, Service Use Tax Act, or Use Tax Act;
8        (8) the tax imposed by this Act or any other tax of
9    general applicability imposed on a provider or a purchaser
10    of direct-to-home satellite service, direct broadcast
11    satellite service, or digital audio-visual works by a
12    federal, State, or local governmental entity and required
13    to be collected by a person and remitted to the taxing
14    entity;
15        (9) charges, other than those charges specifically
16    described in this Act, that are aggregated or bundled with
17    such specifically-described charges on a subscriber's
18    bill, if the provider can reasonably identify the charges
19    in its books and records kept in the regular course of
20    business;
21        (10) revenue from advertising services; or
22        (11) charges that may not be taxed pursuant to the
23    federal Internet Tax Freedom Act.
24    "Permanent" means perpetual or for an indefinite or
25unspecified length of time.
26    "Person" means a natural individual, firm, trust, estate,

 

 

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1partnership, association, joint stock company, joint venture,
2corporation, or limited liability company, or a receiver,
3trustee, guardian, or other representative appointed by order
4of any court, and includes the federal and State governments,
5including State universities created by statute, and
6municipalities, counties, and other political subdivisions of
7this State.
8    "Premises" means a residence or place of business of a
9subscriber in this State.
10    "Provider" means a person who transmits, broadcasts,
11sells, or distributes direct-to-home satellite service, direct
12broadcast satellite service, or digital audio-visual works to
13subscribers in the State.
14    "Subscriber" means a member of the general public who
15receives direct-to-home satellite service, direct broadcast
16satellite service, or digital audio-visual works from a
17provider and does not further distribute the service in the
18ordinary course of business.
 
19    Section 10-15. Imposition of tax.
20    (a) A tax is imposed upon the act or privilege of providing
21direct-to-home satellite service, direct broadcast satellite
22service, or digital audio-visual works to a subscriber in this
23State by any provider at the rate of 5% of the provider's gross
24revenues derived from or attributable to that subscriber.
25    (b) For purposes of the tax imposed by subsection (a), a

 

 

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1subscriber is in this State if the subscriber's street address
2representative of where the subscriber's use or access of the
3direct-to-home satellite service, direct broadcast satellite
4service, or digital audio visual work primarily occurs, which
5must be the street address of the subscriber based on such
6other information kept by the provider in the regular course of
7its business.
8    (c) The tax imposed by subsection (a) may be passed through
9to, and collected from, the provider's subscribers in Illinois.
10To the extent allowed under federal or State law, a provider
11may identify as a separate line item on each regular bill
12issued to a subscriber the amount of the total bill assessed as
13a tax under this Act.
14    (d) To prevent actual multi-state taxation upon the act or
15privilege that is subject to taxation under this Act, any
16taxpayer, upon proof that that taxpayer has paid a tax in
17another state on such event, shall be allowed a credit against
18the tax imposed in this Act to the extent of the amount of such
19tax properly due and paid in such other state. However, such
20tax is not imposed on the act or privilege to the extent such
21act or privilege may not, under the Constitution and statutes
22of the United States, be made the subject of taxation by the
23State.
 
24    Section 10-20. Remittances.
25    (a) On or before the twentieth day of each calendar month,

 

 

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1every provider of direct-to-home satellite service, direct
2broadcast satellite service, or digital audio-visual works
3that provides such service or services to a subscriber in this
4State during the preceding calendar month shall file a return
5with the Department, in a form prescribed by the Department,
6stating:
7        (1) the name of the provider;
8        (2) the address of the provider's principal place of
9    business;
10        (3) the total amount of gross revenues received by the
11    provider during the preceding calendar month, quarter, or
12    year, as the case may be, from the provision of
13    direct-to-home satellite service, direct broadcast
14    satellite service, or digital audio-visual works during
15    that preceding calendar month, quarter, or year and upon
16    the basis of which the tax is imposed;
17        (4) the amount of tax due;
18        (5) the signature of the taxpayer; and
19        (6) such other reasonable information as the
20    Department may require.
21    (b) If a taxpayer fails to sign a return within 30 days
22after the proper notice and demand for signature by the
23Department is received by the taxpayer, then the return shall
24be considered valid and any amount shown to be due on the
25return shall be deemed assessed.
26    (c) If the provider is otherwise required to file a monthly

 

 

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1return, and if the provider's average monthly tax liability to
2the Department under this Act does not exceed $200, the
3Department may authorize the provider's returns to be filed on
4a quarter annual basis, with the return for January, February,
5and March of a given year being due by April 20 of that year;
6with the return for April, May, and June of a given year being
7due by July 20 of that year; with the return for July, August,
8and September of a given year being due by October 20 of that
9year, and with the return for October, November, and December
10of a given year being due by January 20 of the following year.
11    (d) If the provider is otherwise required to file a monthly
12or quarterly return, and if the provider's average monthly tax
13liability with the Department under this Act does not exceed
14$50, the Department may authorize the provider's returns to be
15filed on an annual basis, with the return for a given year
16being due by January 20 of the following year.
17    (e) Those quarterly and annual returns shall be subject to
18the same requirements as to form and substance as monthly
19returns.
20    (f) A taxpayer who has an annual tax liability in the
21amount set forth in subsection (b) of Section 2505-210 of the
22Department of Revenue Law shall make all payments required by
23rules of the Department by electronic funds transfer.
24    Any taxpayer not required to make payments by electronic
25funds transfer may make payments by electronic funds transfer
26with the permission of the Department.

 

 

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1    All taxpayers required to make payment by electronic funds
2transfer and any taxpayers authorized to voluntarily make
3payments by electronic funds transfer shall make those payments
4in the manner authorized by the Department.
 
5    Section 10-25. Records.
6    (a) A provider on whom the tax is imposed by this Act shall
7maintain the necessary records, and any other information
8required by the Department, to determine the amount of the tax
9that the provider is required to remit and any credit that the
10provider is entitled to claim under this Act.
11    (b) The records shall be open at all times to inspection by
12the Department.
 
13    Section 10-30. Rules. The Department is authorized to adopt
14and enforce any reasonable rules and to prescribe such forms
15relating to the administration and enforcement of this Act as
16it may deem appropriate.
 
17    Section 10-35. Incorporation of Retailers' Occupation Tax
18Act and Uniform Penalty and Interest Act. All of the provisions
19of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
20Retailers' Occupation Tax Act, which are not inconsistent with
21this Act, and the Uniform Penalty and Interest Act, shall
22apply, as far as practicable, to the subject matter of this Act
23to the same extent as if such provisions were included herein.

 

 

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1References in those incorporated Sections to taxpayers and to
2persons engaged in the business of selling tangible personal
3property at retail mean providers of direct-to-home satellite
4service, direct broadcast satellite service, or digital
5audio-visual works when used in this Act.
 
6
ARTICLE 15. ENTERTAINMENT TAX FAIRNESS ACT

 
7    Section 15-1. Short title. This Act may be cited as the
8Entertainment Tax Fairness Act.
 
9    Section 15-5. Application. This Act applies to all
10subscribers of entertainment in this State for the privilege to
11witness, view, or otherwise enjoy the entertainment.
12    This Act does not apply to: (1) satellite radio service or
13subscription radio service whereby a digital radio signal is
14broadcast without any corresponding or related video
15programming or services; or (2) a satellite television
16transmission of simulcast horse races broadcast from or
17received at locations operated by an organization licensee, an
18inter-track wagering licensee, or an inter-track wagering
19location licensee licensed under the Illinois Horse Racing Act
20of 1975.
 
21    Section 15-10. Definitions. As used in this Act:
22    "Cable service" has the meaning given to that term in item

 

 

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1(6) of 47 U.S.C. 522.
2    "Department" means the Department of Revenue.
3    "Digital audio-visual works service" means the
4transmission of a series of related images that, when shown in
5succession, impart an impression of motion, together with
6accompanying sounds, if any, sold to an end user with rights of
7less than permanent use. "Digital audio-visual works service"
8does not include cable service or video service.
9    "Direct broadcast satellite service" means video services
10transmitted or broadcast by satellite directly to the
11subscriber's premises with the use of or accompanied by ground
12receiving or distribution equipment, including, but not
13limited to, infrastructure to provide Internet access used in
14the transmission or broadcast of such video services, at the
15subscriber's premises, but not in the uplink process to the
16satellite, and includes, but is not limited to, the
17retransmission of local broadcast television, the provision of
18premium channels, other recurring monthly services, service
19and pay-per-view, video-on-demand, and other event-based
20services.
21    "Direct-to-home satellite service" has the meaning given
22to that term in Public Law No. 104-104, Title VI, Section
23602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
24152).
25    "End user" means any person other than a person who
26receives by contract a product transferred electronically for

 

 

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1further commercial broadcast, rebroadcast, transmission,
2retransmission, licensing, relicensing, distribution,
3redistribution, or exhibition of the product, in whole or in
4part, to another person or persons.
5    "Entertainment" means any paid video programming whether
6transmitted by cable service, direct-to-home satellite
7service, direct broadcast satellite service, digital
8audio-visual works service, or video service to a subscriber in
9this State.
10    "Permanent" means perpetual or for an indefinite or
11unspecified length of time.
12    "Provider" means a person who transmits, broadcasts,
13sells, or distributes cable service, direct-to-home satellite
14service, direct broadcast satellite service, digital
15audio-visual works service, or video service to subscribers in
16the State.
17    "Subscriber" means a member of the general public who
18receives cable service, direct-to-home satellite service,
19direct broadcast satellite service, or digital audio-visual
20works service, or video service from a provider and does not
21further distribute the service in the ordinary course of
22business.
23    "Video service" has the meaning given to that term in the
24Cable and Video Competition Law of 2007 of the Public Utilities
25Act.
 

 

 

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1    Section 15-15. Imposition of tax.
2    (a) A tax is imposed upon the subscribers of entertainment
3in this State at the rate of 1% of the charges paid for the
4privilege to witness, view, or otherwise enjoy the
5entertainment.
6    (b) For purposes of the tax imposed by subsection (a), a
7subscriber is in this State if the subscriber's street address
8is representative of where the subscriber's use or access of
9the entertainment primarily occurs, which must be the street
10address of the subscriber based on such other information kept
11by the provider in the regular course of its business.
12    (c) The provider of the entertainment shall collect and
13secure from each subscriber the tax imposed by this Act and
14remit the tax to the Department as set forth in Section 15-20
15of this Act.
 
16    Section 15-20. Remittances.
17    (a) On or before the twentieth day of each calendar month,
18every provider shall file a return with the Department, in a
19form prescribed by the Department, stating:
20        (1) the name of the provider;
21        (2) the address of the provider's principal place of
22    business;
23        (3) the total amount of tax revenues collected by the
24    provider under this Act during the preceding calendar
25    month, quarter, or year, as the case may be, during that

 

 

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

 

 

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1basis, with the return for a given year being due by January 20
2of the following year.
3    (e) Those quarterly and annual returns shall be subject to
4the same requirements as to form and substance as monthly
5returns.
6    (f) A provider responsible for collecting and remitting the
7amount set forth in subsection (b) of Section 2505-210 of the
8Department of Revenue Law shall make all payments required by
9rules of the Department by electronic funds transfer.
10    Any provider not required to make payments by electronic
11funds transfer may make payments by electronic funds transfer
12with the permission of the Department.
13    All providers required to make payment by electronic funds
14transfer and any taxpayers authorized to voluntarily make
15payments by electronic funds transfer shall make those payments
16in the manner authorized by the Department.
 
17    Section 15-25. Records.
18    (a) A provider subject to this Act shall maintain the
19necessary records, and any other information required by the
20Department, to determine the amount of the tax that the
21provider is required to collect and remit and any credit that
22the provider is entitled to claim under this Act.
23    (b) The records shall be open at all times to inspection by
24the Department.
 

 

 

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1    Section 15-30. Rules. The Department is authorized to adopt
2and enforce any reasonable rules and to prescribe such forms
3relating to the administration and enforcement of this Act as
4it may deem appropriate.
 
5    Section 15-35. Incorporation of Retailers' Occupation Tax
6Act and Uniform Penalty and Interest Act. All of the provisions
7of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
8Retailers' Occupation Tax Act, which are not inconsistent with
9this Act, and the Uniform Penalty and Interest Act, shall
10apply, as far as practicable, to the subject matter of this Act
11to the same extent as if such provisions were included herein.
12References in those incorporated Sections to taxpayers and to
13persons engaged in the business of selling tangible personal
14property at retail mean providers of direct-to-home satellite
15service, direct broadcast satellite service, or digital
16audio-visual works service when used in this Act.