101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB4932

 

Introduced 2/18/2020, by Rep. David A. Welter

 

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 July 1, 2020, the term "selling price" no longer includes the value of or credit given for traded-in tangible personal property. Effective immediately.


LRB101 17162 HLH 66563 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4932LRB101 17162 HLH 66563 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, prior to January 1, 2020 and beginning again on
19July 1, 2020, not including the value of or credit given for
20traded-in tangible personal property where the item that is
21traded-in is of like kind and character as that which is being
22sold; beginning January 1, 2020 and through June 30, 2020,
23"selling price" includes the portion of the value of or credit
24given for traded-in motor vehicles of the First Division as
25defined in Section 1-146 of the Illinois Vehicle Code of like
26kind and character as that which is being sold that exceeds

 

 

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1$10,000. "Selling price" shall be determined without any
2deduction on account of the cost of the property sold, the cost
3of materials used, labor or service cost or any other expense
4whatsoever, but does not include interest or finance charges
5which appear as separate items on the bill of sale or sales
6contract nor charges that are added to prices by sellers on
7account of the seller's tax liability under the Retailers'
8Occupation Tax Act, or on account of the seller's duty to
9collect, from the purchaser, the tax that is imposed by this
10Act, or, except as otherwise provided with respect to any
11cigarette tax imposed by a home rule unit, on account of the
12seller's tax liability under any local occupation tax
13administered by the Department, or, except as otherwise
14provided with respect to any cigarette tax imposed by a home
15rule unit on account of the seller's duty to collect, from the
16purchasers, the tax that is imposed under any local use tax
17administered by the Department. Effective December 1, 1985,
18"selling price" shall include charges that are added to prices
19by sellers on account of the seller's tax liability under the
20Cigarette Tax Act, on account of the seller's duty to collect,
21from the purchaser, the tax imposed under the Cigarette Use Tax
22Act, and on account of the seller's duty to collect, from the
23purchaser, any cigarette tax imposed by a home rule unit.
24    Notwithstanding any law to the contrary, for any motor
25vehicle, as defined in Section 1-146 of the Vehicle Code, that
26is sold on or after January 1, 2015 for the purpose of leasing

 

 

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1the vehicle for a defined period that is longer than one year
2and (1) is a motor vehicle of the second division that: (A) is
3a self-contained motor vehicle designed or permanently
4converted to provide living quarters for recreational,
5camping, or travel use, with direct walk through access to the
6living quarters from the driver's seat; (B) is of the van
7configuration designed for the transportation of not less than
87 nor more than 16 passengers; or (C) has a gross vehicle
9weight rating of 8,000 pounds or less or (2) is a motor vehicle
10of the first division, "selling price" or "amount of sale"
11means the consideration received by the lessor pursuant to the
12lease contract, including amounts due at lease signing and all
13monthly or other regular payments charged over the term of the
14lease. Also included in the selling price is any amount
15received by the lessor from the lessee for the leased vehicle
16that is not calculated at the time the lease is executed,
17including, but not limited to, excess mileage charges and
18charges for excess wear and tear. For sales that occur in
19Illinois, with respect to any amount received by the lessor
20from the lessee for the leased vehicle that is not calculated
21at the time the lease is executed, the lessor who purchased the
22motor vehicle does not incur the tax imposed by the Use Tax Act
23on those amounts, and the retailer who makes the retail sale of
24the motor vehicle to the lessor is not required to collect the
25tax imposed by this Act or to pay the tax imposed by the
26Retailers' Occupation Tax Act on those amounts. However, the

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        similar name, trade name, or trademark as the person
2        located in this State; and
3            (B) the retailer provides a commission or other
4        consideration to the person located in this State based
5        upon the sale of tangible personal property by the
6        retailer.
7        The provisions of this paragraph (1.2) shall apply only
8    if the cumulative gross receipts from sales of tangible
9    personal property by the retailer to customers in this
10    State under all such contracts exceed $10,000 during the
11    preceding 4 quarterly periods ending on the last day of
12    March, June, September, and December.
13        (2) (Blank).
14        (3) (Blank).
15        (4) (Blank).
16        (5) (Blank).
17        (6) (Blank).
18        (7) (Blank).
19        (8) (Blank).
20        (9) Beginning October 1, 2018, a retailer making sales
21    of tangible personal property to purchasers in Illinois
22    from outside of Illinois if:
23            (A) the cumulative gross receipts from sales of
24        tangible personal property to purchasers in Illinois
25        are $100,000 or more; or
26            (B) the retailer enters into 200 or more separate

 

 

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

 

 

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1    September, and December, whether he or she meets the
2    threshold of either subparagraph (A) or (B) for the
3    preceding 12-month period.
4        Beginning January 1, 2020, neither the gross receipts
5    from nor the number of separate transactions for sales of
6    tangible personal property to purchasers in Illinois that a
7    retailer makes through a marketplace facilitator and for
8    which the retailer has received a certification from the
9    marketplace facilitator pursuant to Section 2d of this Act
10    shall be included for purposes of determining whether he or
11    she has met the thresholds of this paragraph (9).
12        (10) Beginning January 1, 2020, a marketplace
13    facilitator that meets a threshold set forth in subsection
14    (b) of Section 2d of this Act.
15    "Bulk vending machine" means a vending machine, containing
16unsorted confections, nuts, toys, or other items designed
17primarily to be used or played with by children which, when a
18coin or coins of a denomination not larger than $0.50 are
19inserted, are dispensed in equal portions, at random and
20without selection by the customer.
21(Source: P.A. 100-587, eff. 6-4-18; 101-9, eff. 6-5-19; 101-31,
22eff. 1-1-20; 101-604, eff. 1-1-20.)
 
23    Section 10. The Retailers' Occupation Tax Act is amended by
24changing Section 1 as follows:
 

 

 

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1    (35 ILCS 120/1)  (from Ch. 120, par. 440)
2    Sec. 1. Definitions. "Sale at retail" means any transfer of
3the ownership of or title to tangible personal property to a
4purchaser, for the purpose of use or consumption, and not for
5the purpose of resale in any form as tangible personal property
6to the extent not first subjected to a use for which it was
7purchased, for a valuable consideration: Provided that the
8property purchased is deemed to be purchased for the purpose of
9resale, despite first being used, to the extent to which it is
10resold as an ingredient of an intentionally produced product or
11byproduct of manufacturing. For this purpose, slag produced as
12an incident to manufacturing pig iron or steel and sold is
13considered to be an intentionally produced byproduct of
14manufacturing. Transactions whereby the possession of the
15property is transferred but the seller retains the title as
16security for payment of the selling price shall be deemed to be
17sales.
18    "Sale at retail" shall be construed to include any transfer
19of the ownership of or title to tangible personal property to a
20purchaser, for use or consumption by any other person to whom
21such purchaser may transfer the tangible personal property
22without a valuable consideration, and to include any transfer,
23whether made for or without a valuable consideration, for
24resale in any form as tangible personal property unless made in
25compliance with Section 2c of this Act.
26    Sales of tangible personal property, which property, to the

 

 

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

 

 

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1ordinary course of business.
2    The purchase, employment and transfer of such tangible
3personal property as newsprint and ink for the primary purpose
4of conveying news (with or without other information) is not a
5purchase, use or sale of tangible personal property.
6    A person whose activities are organized and conducted
7primarily as a not-for-profit service enterprise, and who
8engages in selling tangible personal property at retail
9(whether to the public or merely to members and their guests)
10is engaged in the business of selling tangible personal
11property at retail with respect to such transactions, excepting
12only a person organized and operated exclusively for
13charitable, religious or educational purposes either (1), to
14the extent of sales by such person to its members, students,
15patients or inmates of tangible personal property to be used
16primarily for the purposes of such person, or (2), to the
17extent of sales by such person of tangible personal property
18which is not sold or offered for sale by persons organized for
19profit. The selling of school books and school supplies by
20schools at retail to students is not "primarily for the
21purposes of" the school which does such selling. The provisions
22of this paragraph shall not apply to nor subject to taxation
23occasional dinners, socials or similar activities of a person
24organized and operated exclusively for charitable, religious
25or educational purposes, whether or not such activities are
26open to the public.

 

 

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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
7engaged in the business of selling tangible personal property
8at retail with respect to such transactions.
9    "Purchaser" means anyone who, through a sale at retail,
10acquires the ownership of or title to tangible personal
11property for a valuable consideration.
12    "Reseller of motor fuel" means any person engaged in the
13business of selling or delivering or transferring title of
14motor fuel to another person other than for use or consumption.
15No person shall act as a reseller of motor fuel within this
16State without first being registered as a reseller pursuant to
17Section 2c or a retailer pursuant to Section 2a.
18    "Selling price" or the "amount of sale" means the
19consideration for a sale valued in money whether received in
20money or otherwise, including cash, credits, property, other
21than as hereinafter provided, and services, but, prior to
22January 1, 2020 and beginning again on July 1, 2020, not
23including the value of or credit given for traded-in tangible
24personal property where the item that is traded-in is of like
25kind and character as that which is being sold; beginning
26January 1, 2020 and through June 30, 2020, "selling price"

 

 

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1includes the portion of the value of or credit given for
2traded-in motor vehicles of the First Division as defined in
3Section 1-146 of the Illinois Vehicle Code of like kind and
4character as that which is being sold that exceeds $10,000.
5"Selling price" shall be determined without any deduction on
6account of the cost of the property sold, the cost of materials
7used, labor or service cost or any other expense whatsoever,
8but does not include charges that are added to prices by
9sellers on account of the seller's tax liability under this
10Act, or on account of the seller's duty to collect, from the
11purchaser, the tax that is imposed by the Use Tax Act, or,
12except as otherwise provided with respect to any cigarette tax
13imposed by a home rule unit, on account of the seller's tax
14liability under any local occupation tax administered by the
15Department, or, except as otherwise provided with respect to
16any cigarette tax imposed by a home rule unit on account of the
17seller's duty to collect, from the purchasers, the tax that is
18imposed under any local use tax administered by the Department.
19Effective December 1, 1985, "selling price" shall include
20charges that are added to prices by sellers on account of the
21seller's tax liability under the Cigarette Tax Act, on account
22of the sellers' duty to collect, from the purchaser, the tax
23imposed under the Cigarette Use Tax Act, and on account of the
24seller's duty to collect, from the purchaser, any cigarette tax
25imposed by a home rule unit.
26    Notwithstanding any law to the contrary, for any motor

 

 

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1vehicle, as defined in Section 1-146 of the Vehicle Code, that
2is sold on or after January 1, 2015 for the purpose of leasing
3the vehicle for a defined period that is longer than one year
4and (1) is a motor vehicle of the second division that: (A) is
5a self-contained motor vehicle designed or permanently
6converted to provide living quarters for recreational,
7camping, or travel use, with direct walk through access to the
8living quarters from the driver's seat; (B) is of the van
9configuration designed for the transportation of not less than
107 nor more than 16 passengers; or (C) has a gross vehicle
11weight rating of 8,000 pounds or less or (2) is a motor vehicle
12of the first division, "selling price" or "amount of sale"
13means the consideration received by the lessor pursuant to the
14lease contract, including amounts due at lease signing and all
15monthly or other regular payments charged over the term of the
16lease. Also included in the selling price is any amount
17received by the lessor from the lessee for the leased vehicle
18that is not calculated at the time the lease is executed,
19including, but not limited to, excess mileage charges and
20charges for excess wear and tear. For sales that occur in
21Illinois, with respect to any amount received by the lessor
22from the lessee for the leased vehicle that is not calculated
23at the time the lease is executed, the lessor who purchased the
24motor vehicle does not incur the tax imposed by the Use Tax Act
25on those amounts, and the retailer who makes the retail sale of
26the motor vehicle to the lessor is not required to collect the

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1video, security, and all telecommunication systems do not
2constitute engaging in a business of selling tangible personal
3property at retail within the meaning of this Act if they are
4sold at one specified contract price.
5    A person who holds himself or herself out as being engaged
6(or who habitually engages) in selling tangible personal
7property at retail is a person engaged in the business of
8selling tangible personal property at retail hereunder with
9respect to such sales (and not primarily in a service
10occupation) notwithstanding the fact that such person designs
11and produces such tangible personal property on special order
12for the purchaser and in such a way as to render the property
13of value only to such purchaser, if such tangible personal
14property so produced on special order serves substantially the
15same function as stock or standard items of tangible personal
16property that are sold at retail.
17    Persons who engage in the business of transferring tangible
18personal property upon the redemption of trading stamps are
19engaged in the business of selling such property at retail and
20shall be liable for and shall pay the tax imposed by this Act
21on the basis of the retail value of the property transferred
22upon redemption of such stamps.
23    "Bulk vending machine" means a vending machine, containing
24unsorted confections, nuts, toys, or other items designed
25primarily to be used or played with by children which, when a
26coin or coins of a denomination not larger than $0.50 are

 

 

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1inserted, are dispensed in equal portions, at random and
2without selection by the customer.
3    "Remote retailer" means a retailer that does not maintain
4within this State, directly or by a subsidiary, an office,
5distribution house, sales house, warehouse or other place of
6business, or any agent or other representative operating within
7this State under the authority of the retailer or its
8subsidiary, irrespective of whether such place of business or
9agent is located here permanently or temporarily or whether
10such retailer or subsidiary is licensed to do business in this
11State.
12    "Marketplace" means a physical or electronic place, forum,
13platform, application, or other method by which a marketplace
14seller sells or offers to sell items.
15    "Marketplace facilitator" means a person who, pursuant to
16an agreement with an unrelated third-party marketplace seller,
17directly or indirectly through one or more affiliates
18facilitates a retail sale by an unrelated third party
19marketplace seller by:
20        (1) listing or advertising for sale by the marketplace
21    seller in a marketplace, tangible personal property that is
22    subject to tax under this Act; and
23        (2) either directly or indirectly, through agreements
24    or arrangements with third parties, collecting payment
25    from the customer and transmitting that payment to the
26    marketplace seller regardless of whether the marketplace

 

 

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1    facilitator receives compensation or other consideration
2    in exchange for its services.
3    A person who provides advertising services, including
4listing products for sale, is not considered a marketplace
5facilitator, so long as the advertising service platform or
6forum does not engage, directly or indirectly through one or
7more affiliated persons, in the activities described in
8paragraph (2) of this definition of "marketplace facilitator".
9    "Marketplace seller" means a person that makes sales
10through a marketplace operated by an unrelated third party
11marketplace facilitator.
12(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
 
13    Section 99. Effective date. This Act takes effect upon
14becoming law.