101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB3664

 

Introduced , by Rep. Monica Bristow

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 105/2  from Ch. 120, par. 439.2
35 ILCS 120/1  from Ch. 120, par. 440

    Amends the Use Tax Act and the Retailers' Occupation Tax Act. Provides that, beginning on January 1, 2020, "selling price" shall not include any shipping or delivery charges, which means any freight, express, mail, truck, or other carrier conveyance or delivery process.


LRB101 10400 HLH 55506 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3664LRB101 10400 HLH 55506 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section 2
5as follows:
 
6    (35 ILCS 105/2)  (from Ch. 120, par. 439.2)
7    Sec. 2. Definitions.
8    "Use" means the exercise by any person of any right or
9power over tangible personal property incident to the ownership
10of that property, except that it does not include the sale of
11such property in any form as tangible personal property in the
12regular course of business to the extent that such property is
13not first subjected to a use for which it was purchased, and
14does not include the use of such property by its owner for
15demonstration purposes: Provided that the property purchased
16is deemed to be purchased for the purpose of resale, despite
17first being used, to the extent to which it is resold as an
18ingredient of an intentionally produced product or by-product
19of manufacturing. "Use" does not mean the demonstration use or
20interim use of tangible personal property by a retailer before
21he sells that tangible personal property. For watercraft or
22aircraft, if the period of demonstration use or interim use by
23the retailer exceeds 18 months, the retailer shall pay on the

 

 

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1retailers' original cost price the tax imposed by this Act, and
2no credit for that tax is permitted if the watercraft or
3aircraft is subsequently sold by the retailer. "Use" does not
4mean the physical incorporation of tangible personal property,
5to the extent not first subjected to a use for which it was
6purchased, as an ingredient or constituent, into other tangible
7personal property (a) which is sold in the regular course of
8business or (b) which the person incorporating such ingredient
9or constituent therein has undertaken at the time of such
10purchase to cause to be transported in interstate commerce to
11destinations outside the State of Illinois: Provided that the
12property purchased is deemed to be purchased for the purpose of
13resale, despite first being used, to the extent to which it is
14resold as an ingredient of an intentionally produced product or
15by-product of manufacturing.
16    "Watercraft" means a Class 2, Class 3, or Class 4
17watercraft as defined in Section 3-2 of the Boat Registration
18and Safety Act, a personal watercraft, or any boat equipped
19with an inboard motor.
20    "Purchase at retail" means the acquisition of the ownership
21of or title to tangible personal property through a sale at
22retail.
23    "Purchaser" means anyone who, through a sale at retail,
24acquires the ownership of tangible personal property for a
25valuable consideration.
26    "Sale at retail" means any transfer of the ownership of or

 

 

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1title to tangible personal property to a purchaser, for the
2purpose of use, and not for the purpose of resale in any form
3as tangible personal property to the extent not first subjected
4to a use for which it was purchased, for a valuable
5consideration: Provided that the property purchased is deemed
6to be purchased for the purpose of resale, despite first being
7used, to the extent to which it is resold as an ingredient of
8an intentionally produced product or by-product of
9manufacturing. For this purpose, slag produced as an incident
10to manufacturing pig iron or steel and sold is considered to be
11an intentionally produced by-product of manufacturing. "Sale
12at retail" includes any such transfer made for resale unless
13made in compliance with Section 2c of the Retailers' Occupation
14Tax Act, as incorporated by reference into Section 12 of this
15Act. Transactions whereby the possession of the property is
16transferred but the seller retains the title as security for
17payment of the selling price are sales.
18    "Sale at retail" shall also be construed to include any
19Illinois florist's sales transaction in which the purchase
20order is received in Illinois by a florist and the sale is for
21use or consumption, but the Illinois florist has a florist in
22another state deliver the property to the purchaser or the
23purchaser's donee in such other state.
24    Nonreusable tangible personal property that is used by
25persons engaged in the business of operating a restaurant,
26cafeteria, or drive-in is a sale for resale when it is

 

 

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1transferred to customers in the ordinary course of business as
2part of the sale of food or beverages and is used to deliver,
3package, or consume food or beverages, regardless of where
4consumption of the food or beverages occurs. Examples of those
5items include, but are not limited to nonreusable, paper and
6plastic cups, plates, baskets, boxes, sleeves, buckets or other
7containers, utensils, straws, placemats, napkins, doggie bags,
8and wrapping or packaging materials that are transferred to
9customers as part of the sale of food or beverages in the
10ordinary course of business.
11    The purchase, employment and transfer of such tangible
12personal property as newsprint and ink for the primary purpose
13of conveying news (with or without other information) is not a
14purchase, use or sale of tangible personal property.
15    "Selling price" means the consideration for a sale valued
16in money whether received in money or otherwise, including
17cash, credits, property other than as hereinafter provided, and
18services, but not including the value of or credit given for
19traded-in tangible personal property where the item that is
20traded-in is of like kind and character as that which is being
21sold, and shall be determined without any deduction on account
22of the cost of the property sold, the cost of materials used,
23labor or service cost or any other expense whatsoever, but does
24not include interest or finance charges which appear as
25separate items on the bill of sale or sales contract nor
26charges that are added to prices by sellers on account of the

 

 

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1seller's tax liability under the "Retailers' Occupation Tax
2Act", or on account of the seller's duty to collect, from the
3purchaser, the tax that is imposed by this Act, or, except as
4otherwise provided with respect to any cigarette tax imposed by
5a home rule unit, on account of the seller's tax liability
6under any local occupation tax administered by the Department,
7or, except as otherwise provided with respect to any cigarette
8tax imposed by a home rule unit on account of the seller's duty
9to collect, from the purchasers, the tax that is imposed under
10any local use tax administered by the Department. Effective
11December 1, 1985, "selling price" shall include charges that
12are added to prices by sellers on account of the seller's tax
13liability under the Cigarette Tax Act, on account of the
14seller's duty to collect, from the purchaser, the tax imposed
15under the Cigarette Use Tax Act, and on account of the seller's
16duty to collect, from the purchaser, any cigarette tax imposed
17by a home rule unit. Beginning January 1, 2020, "selling price"
18shall not include any shipping or delivery charges, which means
19any freight, express, mail, truck, or other carrier conveyance
20or delivery process.
21    Notwithstanding any law to the contrary, for any motor
22vehicle, as defined in Section 1-146 of the Vehicle Code, that
23is sold on or after January 1, 2015 for the purpose of leasing
24the vehicle for a defined period that is longer than one year
25and (1) is a motor vehicle of the second division that: (A) is
26a self-contained motor vehicle designed or permanently

 

 

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1converted to provide living quarters for recreational,
2camping, or travel use, with direct walk through access to the
3living quarters from the driver's seat; (B) is of the van
4configuration designed for the transportation of not less than
57 nor more than 16 passengers; or (C) has a gross vehicle
6weight rating of 8,000 pounds or less or (2) is a motor vehicle
7of the first division, "selling price" or "amount of sale"
8means the consideration received by the lessor pursuant to the
9lease contract, including amounts due at lease signing and all
10monthly or other regular payments charged over the term of the
11lease. Also included in the selling price is any amount
12received by the lessor from the lessee for the leased vehicle
13that is not calculated at the time the lease is executed,
14including, but not limited to, excess mileage charges and
15charges for excess wear and tear. For sales that occur in
16Illinois, with respect to any amount received by the lessor
17from the lessee for the leased vehicle that is not calculated
18at the time the lease is executed, the lessor who purchased the
19motor vehicle does not incur the tax imposed by the Use Tax Act
20on those amounts, and the retailer who makes the retail sale of
21the motor vehicle to the lessor is not required to collect the
22tax imposed by this Act or to pay the tax imposed by the
23Retailers' Occupation Tax Act on those amounts. However, the
24lessor who purchased the motor vehicle assumes the liability
25for reporting and paying the tax on those amounts directly to
26the Department in the same form (Illinois Retailers' Occupation

 

 

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

 

 

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

 

 

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1which, if sold at retail by that retailer, would be exempt from
2retailers' occupation tax and use tax as an isolated or
3occasional sale.
4    "Department" means the Department of Revenue.
5    "Person" means any natural individual, firm, partnership,
6association, joint stock company, joint adventure, public or
7private corporation, limited liability company, or a receiver,
8executor, trustee, guardian or other representative appointed
9by order of any court.
10    "Retailer" means and includes every person engaged in the
11business of making sales at retail as defined in this Section.
12    A person who holds himself or herself out as being engaged
13(or who habitually engages) in selling tangible personal
14property at retail is a retailer hereunder with respect to such
15sales (and not primarily in a service occupation)
16notwithstanding the fact that such person designs and produces
17such tangible personal property on special order for the
18purchaser and in such a way as to render the property of value
19only to such purchaser, if such tangible personal property so
20produced on special order serves substantially the same
21function as stock or standard items of tangible personal
22property that are sold at retail.
23    A person whose activities are organized and conducted
24primarily as a not-for-profit service enterprise, and who
25engages in selling tangible personal property at retail
26(whether to the public or merely to members and their guests)

 

 

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1is a retailer with respect to such transactions, excepting only
2a person organized and operated exclusively for charitable,
3religious or educational purposes either (1), to the extent of
4sales by such person to its members, students, patients or
5inmates of tangible personal property to be used primarily for
6the purposes of such person, or (2), to the extent of sales by
7such person of tangible personal property which is not sold or
8offered for sale by persons organized for profit. The selling
9of school books and school supplies by schools at retail to
10students is not "primarily for the purposes of" the school
11which does such selling. This paragraph does not apply to nor
12subject to taxation occasional dinners, social or similar
13activities of a person organized and operated exclusively for
14charitable, religious or educational purposes, whether or not
15such activities are open to the public.
16    A person who is the recipient of a grant or contract under
17Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
18serves meals to participants in the federal Nutrition Program
19for the Elderly in return for contributions established in
20amount by the individual participant pursuant to a schedule of
21suggested fees as provided for in the federal Act is not a
22retailer under this Act with respect to such transactions.
23    Persons who engage in the business of transferring tangible
24personal property upon the redemption of trading stamps are
25retailers hereunder when engaged in such business.
26    The isolated or occasional sale of tangible personal

 

 

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1property at retail by a person who does not hold himself out as
2being engaged (or who does not habitually engage) in selling
3such tangible personal property at retail or a sale through a
4bulk vending machine does not make such person a retailer
5hereunder. However, any person who is engaged in a business
6which is not subject to the tax imposed by the "Retailers'
7Occupation Tax Act" because of involving the sale of or a
8contract to sell real estate or a construction contract to
9improve real estate, but who, in the course of conducting such
10business, transfers tangible personal property to users or
11consumers in the finished form in which it was purchased, and
12which does not become real estate, under any provision of a
13construction contract or real estate sale or real estate sales
14agreement entered into with some other person arising out of or
15because of such nontaxable business, is a retailer to the
16extent of the value of the tangible personal property so
17transferred. If, in such transaction, a separate charge is made
18for the tangible personal property so transferred, the value of
19such property, for the purposes of this Act, is the amount so
20separately charged, but not less than the cost of such property
21to the transferor; if no separate charge is made, the value of
22such property, for the purposes of this Act, is the cost to the
23transferor of such tangible personal property.
24    "Retailer maintaining a place of business in this State",
25or any like term, means and includes any of the following
26retailers:

 

 

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1        (1) A retailer having or maintaining within this State,
2    directly or by a subsidiary, an office, distribution house,
3    sales house, warehouse or other place of business, or any
4    agent or other representative operating within this State
5    under the authority of the retailer or its subsidiary,
6    irrespective of whether such place of business or agent or
7    other representative is located here permanently or
8    temporarily, or whether such retailer or subsidiary is
9    licensed to do business in this State. However, the
10    ownership of property that is located at the premises of a
11    printer with which the retailer has contracted for printing
12    and that consists of the final printed product, property
13    that becomes a part of the final printed product, or copy
14    from which the printed product is produced shall not result
15    in the retailer being deemed to have or maintain an office,
16    distribution house, sales house, warehouse, or other place
17    of business within this State.
18        (1.1) A retailer having a contract with a person
19    located in this State under which the person, for a
20    commission or other consideration based upon the sale of
21    tangible personal property by the retailer, directly or
22    indirectly refers potential customers to the retailer by
23    providing to the potential customers a promotional code or
24    other mechanism that allows the retailer to track purchases
25    referred by such persons. Examples of mechanisms that allow
26    the retailer to track purchases referred by such persons

 

 

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1    include but are not limited to the use of a link on the
2    person's Internet website, promotional codes distributed
3    through the person's hand-delivered or mailed material,
4    and promotional codes distributed by the person through
5    radio or other broadcast media. The provisions of this
6    paragraph (1.1) shall apply only if the cumulative gross
7    receipts from sales of tangible personal property by the
8    retailer to customers who are referred to the retailer by
9    all persons in this State under such contracts exceed
10    $10,000 during the preceding 4 quarterly periods ending on
11    the last day of March, June, September, and December. A
12    retailer meeting the requirements of this paragraph (1.1)
13    shall be presumed to be maintaining a place of business in
14    this State but may rebut this presumption by submitting
15    proof that the referrals or other activities pursued within
16    this State by such persons were not sufficient to meet the
17    nexus standards of the United States Constitution during
18    the preceding 4 quarterly periods.
19        (1.2) Beginning July 1, 2011, a retailer having a
20    contract with a person located in this State under which:
21            (A) the retailer sells the same or substantially
22        similar line of products as the person located in this
23        State and does so using an identical or substantially
24        similar name, trade name, or trademark as the person
25        located in this State; and
26            (B) the retailer provides a commission or other

 

 

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1        consideration to the person located in this State based
2        upon the sale of tangible personal property by the
3        retailer.
4    The provisions of this paragraph (1.2) shall apply only if
5    the cumulative gross receipts from sales of tangible
6    personal property by the retailer to customers in this
7    State under all such contracts exceed $10,000 during the
8    preceding 4 quarterly periods ending on the last day of
9    March, June, September, and December.
10        (2) A retailer soliciting orders for tangible personal
11    property by means of a telecommunication or television
12    shopping system (which utilizes toll free numbers) which is
13    intended by the retailer to be broadcast by cable
14    television or other means of broadcasting, to consumers
15    located in this State.
16        (3) A retailer, pursuant to a contract with a
17    broadcaster or publisher located in this State, soliciting
18    orders for tangible personal property by means of
19    advertising which is disseminated primarily to consumers
20    located in this State and only secondarily to bordering
21    jurisdictions.
22        (4) A retailer soliciting orders for tangible personal
23    property by mail if the solicitations are substantial and
24    recurring and if the retailer benefits from any banking,
25    financing, debt collection, telecommunication, or
26    marketing activities occurring in this State or benefits

 

 

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1    from the location in this State of authorized installation,
2    servicing, or repair facilities.
3        (5) A retailer that is owned or controlled by the same
4    interests that own or control any retailer engaging in
5    business in the same or similar line of business in this
6    State.
7        (6) A retailer having a franchisee or licensee
8    operating under its trade name if the franchisee or
9    licensee is required to collect the tax under this Section.
10        (7) A retailer, pursuant to a contract with a cable
11    television operator located in this State, soliciting
12    orders for tangible personal property by means of
13    advertising which is transmitted or distributed over a
14    cable television system in this State.
15        (8) A retailer engaging in activities in Illinois,
16    which activities in the state in which the retail business
17    engaging in such activities is located would constitute
18    maintaining a place of business in that state.
19        (9) Beginning October 1, 2018, a retailer making sales
20    of tangible personal property to purchasers in Illinois
21    from outside of Illinois if:
22            (A) the cumulative gross receipts from sales of
23        tangible personal property to purchasers in Illinois
24        are $100,000 or more; or
25            (B) the retailer enters into 200 or more separate
26        transactions for the sale of tangible personal

 

 

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1        property to purchasers in Illinois.
2        The retailer shall determine on a quarterly basis,
3    ending on the last day of March, June, September, and
4    December, whether he or she meets the criteria of either
5    subparagraph (A) or (B) of this paragraph (9) for the
6    preceding 12-month period. If the retailer meets the
7    criteria of either subparagraph (A) or (B) for a 12-month
8    period, he or she is considered a retailer maintaining a
9    place of business in this State and is required to collect
10    and remit the tax imposed under this Act and file returns
11    for one year. At the end of that one-year period, the
12    retailer shall determine whether the retailer met the
13    criteria of either subparagraph (A) or (B) during the
14    preceding 12-month period. If the retailer met the criteria
15    in either subparagraph (A) or (B) for the preceding
16    12-month period, he or she is considered a retailer
17    maintaining a place of business in this State and is
18    required to collect and remit the tax imposed under this
19    Act and file returns for the subsequent year. If at the end
20    of a one-year period a retailer that was required to
21    collect and remit the tax imposed under this Act determines
22    that he or she did not meet the criteria in either
23    subparagraph (A) or (B) during the preceding 12-month
24    period, the retailer shall subsequently determine on a
25    quarterly basis, ending on the last day of March, June,
26    September, and December, whether he or she meets the

 

 

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1    criteria of either subparagraph (A) or (B) for the
2    preceding 12-month period.
3    "Bulk vending machine" means a vending machine, containing
4unsorted confections, nuts, toys, or other items designed
5primarily to be used or played with by children which, when a
6coin or coins of a denomination not larger than $0.50 are
7inserted, are dispensed in equal portions, at random and
8without selection by the customer.
9(Source: P.A. 99-78, eff. 7-20-15; 100-587, eff. 6-4-18.)
 
10    Section 10. The Retailers' Occupation Tax Act is amended by
11changing Section 1 as follows:
 
12    (35 ILCS 120/1)  (from Ch. 120, par. 440)
13    Sec. 1. Definitions. "Sale at retail" means any transfer of
14the ownership of or title to tangible personal property to a
15purchaser, for the purpose of use or consumption, and not for
16the purpose of resale in any form as tangible personal property
17to the extent not first subjected to a use for which it was
18purchased, for a valuable consideration: Provided that the
19property purchased is deemed to be purchased for the purpose of
20resale, despite first being used, to the extent to which it is
21resold as an ingredient of an intentionally produced product or
22byproduct of manufacturing. For this purpose, slag produced as
23an incident to manufacturing pig iron or steel and sold is
24considered to be an intentionally produced byproduct of

 

 

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1manufacturing. Transactions whereby the possession of the
2property is transferred but the seller retains the title as
3security for payment of the selling price shall be deemed to be
4sales.
5    "Sale at retail" shall be construed to include any transfer
6of the ownership of or title to tangible personal property to a
7purchaser, for use or consumption by any other person to whom
8such purchaser may transfer the tangible personal property
9without a valuable consideration, and to include any transfer,
10whether made for or without a valuable consideration, for
11resale in any form as tangible personal property unless made in
12compliance with Section 2c of this Act.
13    Sales of tangible personal property, which property, to the
14extent not first subjected to a use for which it was purchased,
15as an ingredient or constituent, goes into and forms a part of
16tangible personal property subsequently the subject of a "Sale
17at retail", are not sales at retail as defined in this Act:
18Provided that the property purchased is deemed to be purchased
19for the purpose of resale, despite first being used, to the
20extent to which it is resold as an ingredient of an
21intentionally produced product or byproduct of manufacturing.
22    "Sale at retail" shall be construed to include any Illinois
23florist's sales transaction in which the purchase order is
24received in Illinois by a florist and the sale is for use or
25consumption, but the Illinois florist has a florist in another
26state deliver the property to the purchaser or the purchaser's

 

 

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1donee in such other state.
2    Nonreusable tangible personal property that is used by
3persons engaged in the business of operating a restaurant,
4cafeteria, or drive-in is a sale for resale when it is
5transferred to customers in the ordinary course of business as
6part of the sale of food or beverages and is used to deliver,
7package, or consume food or beverages, regardless of where
8consumption of the food or beverages occurs. Examples of those
9items include, but are not limited to nonreusable, paper and
10plastic cups, plates, baskets, boxes, sleeves, buckets or other
11containers, utensils, straws, placemats, napkins, doggie bags,
12and wrapping or packaging materials that are transferred to
13customers as part of the sale of food or beverages in the
14ordinary course of business.
15    The purchase, employment and transfer of such tangible
16personal property as newsprint and ink for the primary purpose
17of conveying news (with or without other information) is not a
18purchase, use or sale of tangible personal property.
19    A person whose activities are organized and conducted
20primarily as a not-for-profit service enterprise, and who
21engages in selling tangible personal property at retail
22(whether to the public or merely to members and their guests)
23is engaged in the business of selling tangible personal
24property at retail with respect to such transactions, excepting
25only a person organized and operated exclusively for
26charitable, religious or educational purposes either (1), to

 

 

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1the extent of sales by such person to its members, students,
2patients or inmates of tangible personal property to be used
3primarily for the purposes of such person, or (2), to the
4extent of sales by such person of tangible personal property
5which is not sold or offered for sale by persons organized for
6profit. The selling of school books and school supplies by
7schools at retail to students is not "primarily for the
8purposes of" the school which does such selling. The provisions
9of this paragraph shall not apply to nor subject to taxation
10occasional dinners, socials or similar activities of a person
11organized and operated exclusively for charitable, religious
12or educational purposes, whether or not such activities are
13open to the public.
14    A person who is the recipient of a grant or contract under
15Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
16serves meals to participants in the federal Nutrition Program
17for the Elderly in return for contributions established in
18amount by the individual participant pursuant to a schedule of
19suggested fees as provided for in the federal Act is not
20engaged in the business of selling tangible personal property
21at retail with respect to such transactions.
22    "Purchaser" means anyone who, through a sale at retail,
23acquires the ownership of or title to tangible personal
24property for a valuable consideration.
25    "Reseller of motor fuel" means any person engaged in the
26business of selling or delivering or transferring title of

 

 

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1motor fuel to another person other than for use or consumption.
2No person shall act as a reseller of motor fuel within this
3State without first being registered as a reseller pursuant to
4Section 2c or a retailer pursuant to Section 2a.
5    "Selling price" or the "amount of sale" means the
6consideration for a sale valued in money whether received in
7money or otherwise, including cash, credits, property, other
8than as hereinafter provided, and services, but not including
9the value of or credit given for traded-in tangible personal
10property where the item that is traded-in is of like kind and
11character as that which is being sold, and shall be determined
12without any deduction on account of the cost of the property
13sold, the cost of materials used, labor or service cost or any
14other expense whatsoever, but does not include charges that are
15added to prices by sellers on account of the seller's tax
16liability under this Act, or on account of the seller's duty to
17collect, from the purchaser, the tax that is imposed by the Use
18Tax Act, or, except as otherwise provided with respect to any
19cigarette tax imposed by a home rule unit, on account of the
20seller's tax liability under any local occupation tax
21administered by the Department, or, except as otherwise
22provided with respect to any cigarette tax imposed by a home
23rule unit on account of the seller's duty to collect, from the
24purchasers, the tax that is imposed under any local use tax
25administered by the Department. Effective December 1, 1985,
26"selling price" shall include charges that are added to prices

 

 

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1by sellers on account of the seller's tax liability under the
2Cigarette Tax Act, on account of the sellers' duty to collect,
3from the purchaser, the tax imposed under the Cigarette Use Tax
4Act, and on account of the seller's duty to collect, from the
5purchaser, any cigarette tax imposed by a home rule unit.
6Beginning January 1, 2020, "selling price" shall not include
7any shipping or delivery charges, which means any freight,
8express, mail, truck, or other carrier conveyance or delivery
9process.
10    Notwithstanding any law to the contrary, for any motor
11vehicle, as defined in Section 1-146 of the Vehicle Code, that
12is sold on or after January 1, 2015 for the purpose of leasing
13the vehicle for a defined period that is longer than one year
14and (1) is a motor vehicle of the second division that: (A) is
15a self-contained motor vehicle designed or permanently
16converted to provide living quarters for recreational,
17camping, or travel use, with direct walk through access to the
18living quarters from the driver's seat; (B) is of the van
19configuration designed for the transportation of not less than
207 nor more than 16 passengers; or (C) has a gross vehicle
21weight rating of 8,000 pounds or less or (2) is a motor vehicle
22of the first division, "selling price" or "amount of sale"
23means the consideration received by the lessor pursuant to the
24lease contract, including amounts due at lease signing and all
25monthly or other regular payments charged over the term of the
26lease. Also included in the selling price is any amount

 

 

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

 

 

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1shall be transferred to the lessor with respect to the tax paid
2by the lessor for any amount received by the lessor from the
3lessee for the leased vehicle that is not calculated at the
4time the lease is executed; provided that the discount is only
5allowed if the return is timely filed and for amounts timely
6paid. The "selling price" of a motor vehicle that is sold on or
7after January 1, 2015 for the purpose of leasing for a defined
8period of longer than one year shall not be reduced by the
9value of or credit given for traded-in tangible personal
10property owned by the lessor, nor shall it be reduced by the
11value of or credit given for traded-in tangible personal
12property owned by the lessee, regardless of whether the
13trade-in value thereof is assigned by the lessee to the lessor.
14In the case of a motor vehicle that is sold for the purpose of
15leasing for a defined period of longer than one year, the sale
16occurs at the time of the delivery of the vehicle, regardless
17of the due date of any lease payments. A lessor who incurs a
18Retailers' Occupation Tax liability on the sale of a motor
19vehicle coming off lease may not take a credit against that
20liability for the Use Tax the lessor paid upon the purchase of
21the motor vehicle (or for any tax the lessor paid with respect
22to any amount received by the lessor from the lessee for the
23leased vehicle that was not calculated at the time the lease
24was executed) if the selling price of the motor vehicle at the
25time of purchase was calculated using the definition of
26"selling price" as defined in this paragraph. Notwithstanding

 

 

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1any other provision of this Act to the contrary, lessors shall
2file all returns and make all payments required under this
3paragraph to the Department by electronic means in the manner
4and form as required by the Department. This paragraph does not
5apply to leases of motor vehicles for which, at the time the
6lease is entered into, the term of the lease is not a defined
7period, including leases with a defined initial period with the
8option to continue the lease on a month-to-month or other basis
9beyond the initial defined period.
10    The phrase "like kind and character" shall be liberally
11construed (including but not limited to any form of motor
12vehicle for any form of motor vehicle, or any kind of farm or
13agricultural implement for any other kind of farm or
14agricultural implement), while not including a kind of item
15which, if sold at retail by that retailer, would be exempt from
16retailers' occupation tax and use tax as an isolated or
17occasional sale.
18    "Gross receipts" from the sales of tangible personal
19property at retail means the total selling price or the amount
20of such sales, as hereinbefore defined. In the case of charge
21and time sales, the amount thereof shall be included only as
22and when payments are received by the seller. Receipts or other
23consideration derived by a seller from the sale, transfer or
24assignment of accounts receivable to a wholly owned subsidiary
25will not be deemed payments prior to the time the purchaser
26makes payment on such accounts.

 

 

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1    "Department" means the Department of Revenue.
2    "Person" means any natural individual, firm, partnership,
3association, joint stock company, joint adventure, public or
4private corporation, limited liability company, or a receiver,
5executor, trustee, guardian or other representative appointed
6by order of any court.
7    The isolated or occasional sale of tangible personal
8property at retail by a person who does not hold himself out as
9being engaged (or who does not habitually engage) in selling
10such tangible personal property at retail, or a sale through a
11bulk vending machine, does not constitute engaging in a
12business of selling such tangible personal property at retail
13within the meaning of this Act; provided that any person who is
14engaged in a business which is not subject to the tax imposed
15by this Act because of involving the sale of or a contract to
16sell real estate or a construction contract to improve real
17estate or a construction contract to engineer, install, and
18maintain an integrated system of products, but who, in the
19course of conducting such business, transfers tangible
20personal property to users or consumers in the finished form in
21which it was purchased, and which does not become real estate
22or was not engineered and installed, under any provision of a
23construction contract or real estate sale or real estate sales
24agreement entered into with some other person arising out of or
25because of such nontaxable business, is engaged in the business
26of selling tangible personal property at retail to the extent

 

 

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1of the value of the tangible personal property so transferred.
2If, in such a transaction, a separate charge is made for the
3tangible personal property so transferred, the value of such
4property, for the purpose of this Act, shall be the amount so
5separately charged, but not less than the cost of such property
6to the transferor; if no separate charge is made, the value of
7such property, for the purposes of this Act, is the cost to the
8transferor of such tangible personal property. Construction
9contracts for the improvement of real estate consisting of
10engineering, installation, and maintenance of voice, data,
11video, security, and all telecommunication systems do not
12constitute engaging in a business of selling tangible personal
13property at retail within the meaning of this Act if they are
14sold at one specified contract price.
15    A person who holds himself or herself out as being engaged
16(or who habitually engages) in selling tangible personal
17property at retail is a person engaged in the business of
18selling tangible personal property at retail hereunder with
19respect to such sales (and not primarily in a service
20occupation) notwithstanding the fact that such person designs
21and produces such tangible personal property on special order
22for the purchaser and in such a way as to render the property
23of value only to such purchaser, if such tangible personal
24property so produced on special order serves substantially the
25same function as stock or standard items of tangible personal
26property that are sold at retail.

 

 

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1    Persons who engage in the business of transferring tangible
2personal property upon the redemption of trading stamps are
3engaged in the business of selling such property at retail and
4shall be liable for and shall pay the tax imposed by this Act
5on the basis of the retail value of the property transferred
6upon redemption of such stamps.
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.)