SB2481 EngrossedLRB101 16485 HLH 65865 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 120
19days after the effective date of this amendatory Act of the
20101st General Assembly, not including the value of or credit
21given for traded-in tangible personal property where the item
22that is traded-in is of like kind and character as that which
23is being sold; beginning January 1, 2020 and until 120 days
24after the effective date of this amendatory Act of the 101st
25General Assembly, "selling price" includes the portion of the
26value of or credit given for traded-in motor vehicles of the

 

 

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1First Division as defined in Section 1-146 of the Illinois
2Vehicle Code of like kind and character as that which is being
3sold that exceeds $10,000. "Selling price" shall be determined
4without any deduction on account of the cost of the property
5sold, the cost of materials used, labor or service cost or any
6other expense whatsoever, but does not include interest or
7finance charges which appear as separate items on the bill of
8sale or sales contract nor charges that are added to prices by
9sellers on account of the seller's tax liability under the
10Retailers' Occupation Tax Act, or on account of the seller's
11duty to collect, from the purchaser, the tax that is imposed by
12this Act, or, except as otherwise provided with respect to any
13cigarette tax imposed by a home rule unit, on account of the
14seller's tax liability under any local occupation tax
15administered by the Department, or, except as otherwise
16provided with respect to any cigarette tax imposed by a home
17rule unit on account of the seller's duty to collect, from the
18purchasers, the tax that is imposed under any local use tax
19administered by the Department. Effective December 1, 1985,
20"selling price" shall include charges that are added to prices
21by sellers on account of the seller's tax liability under the
22Cigarette Tax Act, on account of the seller's duty to collect,
23from the purchaser, the tax imposed under the Cigarette Use Tax
24Act, and on account of the seller's duty to collect, from the
25purchaser, any cigarette tax imposed 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 this Act or to pay the tax imposed by the
2Retailers' Occupation Tax Act on those amounts. However, the
3lessor who purchased the motor vehicle assumes the liability
4for reporting and paying the tax on those amounts directly to
5the Department in the same form (Illinois Retailers' Occupation
6Tax, and local retailers' occupation taxes, if applicable) in
7which the retailer would have reported and paid such tax if the
8retailer had accounted for the tax to the Department. For
9amounts received by the lessor from the lessee that are not
10calculated at the time the lease is executed, the lessor must
11file the return and pay the tax to the Department by the due
12date otherwise required by this Act for returns other than
13transaction returns. If the retailer is entitled under this Act
14to a discount for collecting and remitting the tax imposed
15under this Act to the Department with respect to the sale of
16the motor vehicle to the lessor, then the right to the discount
17provided in this Act shall be transferred to the lessor with
18respect to the tax paid by the lessor for any amount received
19by the lessor from the lessee for the leased vehicle that is
20not calculated at the time the lease is executed; provided that
21the discount is only allowed if the return is timely filed and
22for amounts timely paid. The "selling price" of a motor vehicle
23that is sold on or after January 1, 2015 for the purpose of
24leasing for a defined period of longer than one year shall not
25be reduced by the value of or credit given for traded-in
26tangible personal property owned by the lessor, nor shall it be

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1        are $100,000 or more; or
2            (B) the retailer enters into 200 or more separate
3        transactions for the sale of tangible personal
4        property to purchasers in Illinois.
5        The retailer shall determine on a quarterly basis,
6    ending on the last day of March, June, September, and
7    December, whether he or she meets the criteria of either
8    subparagraph (A) or (B) of this paragraph (9) for the
9    preceding 12-month period. If the retailer meets the
10    threshold of either subparagraph (A) or (B) for a 12-month
11    period, he or she is considered a retailer maintaining a
12    place of business in this State and is required to collect
13    and remit the tax imposed under this Act and file returns
14    for one year. At the end of that one-year period, the
15    retailer shall determine whether he or she met the
16    threshold of either subparagraph (A) or (B) during the
17    preceding 12-month period. If the retailer met the criteria
18    in either subparagraph (A) or (B) for the preceding
19    12-month period, he or she is considered a retailer
20    maintaining a place of business in this State and is
21    required to collect and remit the tax imposed under this
22    Act and file returns for the subsequent year. If at the end
23    of a one-year period a retailer that was required to
24    collect and remit the tax imposed under this Act determines
25    that he or she did not meet the threshold in either
26    subparagraph (A) or (B) during the preceding 12-month

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1or educational purposes, whether or not such activities are
2open to the public.
3    A person who is the recipient of a grant or contract under
4Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
5serves meals to participants in the federal Nutrition Program
6for the Elderly in return for contributions established in
7amount by the individual participant pursuant to a schedule of
8suggested fees as provided for in the federal Act is not
9engaged in the business of selling tangible personal property
10at retail with respect to such transactions.
11    "Purchaser" means anyone who, through a sale at retail,
12acquires the ownership of or title to tangible personal
13property for a valuable consideration.
14    "Reseller of motor fuel" means any person engaged in the
15business of selling or delivering or transferring title of
16motor fuel to another person other than for use or consumption.
17No person shall act as a reseller of motor fuel within this
18State without first being registered as a reseller pursuant to
19Section 2c or a retailer pursuant to Section 2a.
20    "Selling price" or the "amount of sale" means the
21consideration for a sale valued in money whether received in
22money or otherwise, including cash, credits, property, other
23than as hereinafter provided, and services, but, prior to
24January 1, 2020 and beginning again 120 days after the
25effective date of this amendatory Act of the 101st General
26Assembly, not including the value of or credit given for

 

 

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1traded-in tangible personal property where the item that is
2traded-in is of like kind and character as that which is being
3sold; beginning January 1, 2020 and until 120 days after the
4effective date of this amendatory Act of the 101st General
5Assembly, "selling price" includes the portion of the value of
6or credit given for traded-in motor vehicles of the First
7Division as defined in Section 1-146 of the Illinois Vehicle
8Code of like kind and character as that which is being sold
9that exceeds $10,000. "Selling price" shall be determined
10without any deduction on account of the cost of the property
11sold, the cost of materials used, labor or service cost or any
12other expense whatsoever, but does not include charges that are
13added to prices by sellers on account of the seller's tax
14liability under this Act, or on account of the seller's duty to
15collect, from the purchaser, the tax that is imposed by the Use
16Tax Act, or, except as otherwise provided with respect to any
17cigarette tax imposed by a home rule unit, on account of the
18seller's tax liability under any local occupation tax
19administered by the Department, or, except as otherwise
20provided with respect to any cigarette tax imposed by a home
21rule unit on account of the seller's duty to collect, from the
22purchasers, the tax that is imposed under any local use tax
23administered by the Department. Effective December 1, 1985,
24"selling price" shall include charges that are added to prices
25by sellers on account of the seller's tax liability under the
26Cigarette Tax Act, on account of the sellers' duty to collect,

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    The isolated or occasional sale of tangible personal
2property at retail by a person who does not hold himself out as
3being engaged (or who does not habitually engage) in selling
4such tangible personal property at retail, or a sale through a
5bulk vending machine, does not constitute engaging in a
6business of selling such tangible personal property at retail
7within the meaning of this Act; provided that any person who is
8engaged in a business which is not subject to the tax imposed
9by this Act because of involving the sale of or a contract to
10sell real estate or a construction contract to improve real
11estate or a construction contract to engineer, install, and
12maintain an integrated system of products, but who, in the
13course of conducting such business, transfers tangible
14personal property to users or consumers in the finished form in
15which it was purchased, and which does not become real estate
16or was not engineered and installed, under any provision of a
17construction contract or real estate sale or real estate sales
18agreement entered into with some other person arising out of or
19because of such nontaxable business, is engaged in the business
20of selling tangible personal property at retail to the extent
21of the value of the tangible personal property so transferred.
22If, in such a transaction, a separate charge is made for the
23tangible personal property so transferred, the value of such
24property, for the purpose of this Act, shall be the amount so
25separately charged, but not less than the cost of such property
26to the transferor; if no separate charge is made, the value of

 

 

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1such property, for the purposes of this Act, is the cost to the
2transferor of such tangible personal property. Construction
3contracts for the improvement of real estate consisting of
4engineering, installation, and maintenance of voice, data,
5video, security, and all telecommunication systems do not
6constitute engaging in a business of selling tangible personal
7property at retail within the meaning of this Act if they are
8sold at one specified contract price.
9    A person who holds himself or herself out as being engaged
10(or who habitually engages) in selling tangible personal
11property at retail is a person engaged in the business of
12selling tangible personal property at retail hereunder with
13respect to such sales (and not primarily in a service
14occupation) notwithstanding the fact that such person designs
15and produces such tangible personal property on special order
16for the purchaser and in such a way as to render the property
17of value only to such purchaser, if such tangible personal
18property so produced on special order serves substantially the
19same function as stock or standard items of tangible personal
20property that are sold at retail.
21    Persons who engage in the business of transferring tangible
22personal property upon the redemption of trading stamps are
23engaged in the business of selling such property at retail and
24shall be liable for and shall pay the tax imposed by this Act
25on the basis of the retail value of the property transferred
26upon redemption of such stamps.

 

 

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1    "Bulk vending machine" means a vending machine, containing
2unsorted confections, nuts, toys, or other items designed
3primarily to be used or played with by children which, when a
4coin or coins of a denomination not larger than $0.50 are
5inserted, are dispensed in equal portions, at random and
6without selection by the customer.
7    "Remote retailer" means a retailer that does not maintain
8within this State, directly or by a subsidiary, an office,
9distribution house, sales house, warehouse or other place of
10business, or any agent or other representative operating within
11this State under the authority of the retailer or its
12subsidiary, irrespective of whether such place of business or
13agent is located here permanently or temporarily or whether
14such retailer or subsidiary is licensed to do business in this
15State.
16    "Marketplace" means a physical or electronic place, forum,
17platform, application, or other method by which a marketplace
18seller sells or offers to sell items.
19    "Marketplace facilitator" means a person who, pursuant to
20an agreement with an unrelated third-party marketplace seller,
21directly or indirectly through one or more affiliates
22facilitates a retail sale by an unrelated third party
23marketplace seller by:
24        (1) listing or advertising for sale by the marketplace
25    seller in a marketplace, tangible personal property that is
26    subject to tax under this Act; and

 

 

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1        (2) either directly or indirectly, through agreements
2    or arrangements with third parties, collecting payment
3    from the customer and transmitting that payment to the
4    marketplace seller regardless of whether the marketplace
5    facilitator receives compensation or other consideration
6    in exchange for its services.
7    A person who provides advertising services, including
8listing products for sale, is not considered a marketplace
9facilitator, so long as the advertising service platform or
10forum does not engage, directly or indirectly through one or
11more affiliated persons, in the activities described in
12paragraph (2) of this definition of "marketplace facilitator".
13    "Marketplace seller" means a person that makes sales
14through a marketplace operated by an unrelated third party
15marketplace facilitator.
16(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20.)
 
17    Section 15. The Illinois Vehicle Code is amended by
18changing Section 3-1001 as follows:
 
19    (625 ILCS 5/3-1001)  (from Ch. 95 1/2, par. 3-1001)
20    Sec. 3-1001. A tax is hereby imposed on the privilege of
21using, in this State, any motor vehicle as defined in Section
221-146 of this Code acquired by gift, transfer, or purchase, and
23having a year model designation preceding the year of
24application for title by 5 or fewer years prior to October 1,

 

 

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11985 and 10 or fewer years on and after October 1, 1985 and
2prior to January 1, 1988. On and after January 1, 1988, the tax
3shall apply to all motor vehicles without regard to model year.
4Except that the tax shall not apply
5        (i) if the use of the motor vehicle is otherwise taxed
6    under the Use Tax Act;
7        (ii) if the motor vehicle is bought and used by a
8    governmental agency or a society, association, foundation
9    or institution organized and operated exclusively for
10    charitable, religious or educational purposes;
11        (iii) if the use of the motor vehicle is not subject to
12    the Use Tax Act by reason of subsection (a), (b), (c), (d),
13    (e) or (f) of Section 3-55 of that Act dealing with the
14    prevention of actual or likely multistate taxation;
15        (iv) to implements of husbandry;
16        (v) when a junking certificate is issued pursuant to
17    Section 3-117(a) of this Code;
18        (vi) when a vehicle is subject to the replacement
19    vehicle tax imposed by Section 3-2001 of this Act;
20        (vii) when the transfer is a gift to a beneficiary in
21    the administration of an estate and the beneficiary is a
22    surviving spouse.
23    Prior to January 1, 1988, the rate of tax shall be 5% of
24the selling price for each purchase of a motor vehicle covered
25by Section 3-1001 of this Code. Except as hereinafter provided,
26beginning January 1, 1988 and until 120 days after the

 

 

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1effective date of this amendatory Act of the 101st General
2Assembly, the rate of tax shall be as follows for transactions
3in which the selling price of the motor vehicle is less than
4$15,000:
5Number of Years Transpired AfterApplicable Tax
6Model Year of Motor Vehicle
71 or less$390
82290
93215
104165
115115
12690
13780
14865
15950
161040
17over 1025
18Except as hereinafter provided, beginning January 1, 1988 and
19until 120 days after the effective date of this amendatory Act
20of the 101st General Assembly, the rate of tax shall be as
21follows for transactions in which the selling price of the
22motor vehicle is $15,000 or more:
23Selling PriceApplicable Tax
24$15,000 - $19,999$ 750
25$20,000 - $24,999$1,000
26$25,000 - $29,999$1,250

 

 

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1$30,000 and over$1,500
2    Except as hereinafter provided, beginning 120 days after
3the effective date of this amendatory Act of the 101st General
4Assembly, the rate of tax shall be as follows for transactions
5in which the selling price of the motor vehicle is less than
6$15,000:
7        (1) if one year or less has transpired after the model
8    year of the vehicle, then the applicable tax is $465;
9        (2) if 2 years have transpired after the model year of
10    the motor vehicle, then the applicable tax is $365;
11        (3) if 3 years have transpired after the model year of
12    the motor vehicle, then the applicable tax is $290;
13        (4) if 4 years have transpired after the model year of
14    the motor vehicle, then the applicable tax is $240;
15        (5) if 5 years have transpired after the model year of
16    the motor vehicle, then the applicable tax is $190;
17        (6) if 6 years have transpired after the model year of
18    the motor vehicle, then the applicable tax is $165;
19        (7) if 7 years have transpired after the model year of
20    the motor vehicle, then the applicable tax is $155;
21        (8) if 8 years have transpired after the model year of
22    the motor vehicle, then the applicable tax is $140;
23        (9) if 9 years have transpired after the model year of
24    the motor vehicle, then the applicable tax is $125;
25        (10) if 10 years have transpired after the model year
26    of the motor vehicle, then the applicable tax is $115; and

 

 

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1        (11) if more than 10 years have transpired after the
2    model year of the motor vehicle, then the applicable tax is
3    $100.
4    Except as hereinafter provided, beginning 120 days after
5the effective date of this amendatory Act of the 101st General
6Assembly, the rate of tax shall be as follows for transactions
7in which the selling price of the motor vehicle is $15,000 or
8more:
9        (1) if the selling price is $15,000 or more, but less
10    than $20,000, then the applicable tax shall be $850;
11        (2) if the selling price is $20,000 or more, but less
12    than $25,000, then the applicable tax shall be $1,100;
13        (3) if the selling price is $25,000 or more, but less
14    than $30,000, then the applicable tax shall be $1,350;
15        (4) if the selling price is $30,000 or more, but less
16    than $50,000, then the applicable tax shall be $1,600;
17        (5) if the selling price is $50,000 or more, but less
18    than $100,000, then the applicable tax shall be $2,600;
19        (6) if the selling price is $100,000 or more, but less
20    than $1,000,000, then the applicable tax shall be $5,100;
21    and
22        (7) if the selling price is $1,000,000 or more, then
23    the applicable tax shall be $10,100.
24For the following transactions, the tax rate shall be $15 for
25each motor vehicle acquired in such transaction:
26        (i) when the transferee or purchaser is the spouse,

 

 

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1    mother, father, brother, sister or child of the transferor;
2        (ii) when the transfer is a gift to a beneficiary in
3    the administration of an estate and the beneficiary is not
4    a surviving spouse;
5        (iii) when a motor vehicle which has once been
6    subjected to the Illinois retailers' occupation tax or use
7    tax is transferred in connection with the organization,
8    reorganization, dissolution or partial liquidation of an
9    incorporated or unincorporated business wherein the
10    beneficial ownership is not changed.
11    A claim that the transaction is taxable under subparagraph
12(i) shall be supported by such proof of family relationship as
13provided by rules of the Department.
14    For a transaction in which a motorcycle, motor driven
15cycle, or moped is acquired the tax rate shall be $25.
16    On and after October 1, 1985 and until the first day of the
17first month to begin not less than 120 days after the effective
18date of this amendatory Act of the 101st General Assembly, 1/12
19of $5,000,000 of the moneys received by the Department of
20Revenue pursuant to this Section shall be paid each month into
21the Build Illinois Fund; on and after the first day of the
22first month to begin not less than 120 days after the effective
23date of this amendatory Act of the 101st General Assembly, 1/12
24of $40,000,000 of the moneys received by the Department of
25Revenue pursuant to this Section shall be paid each month into
26the Build Illinois Fund; and the remainder shall be paid into

 

 

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1the General Revenue Fund.
2    The tax imposed by this Section shall be abated and no
3longer imposed when the amount deposited to secure the bonds
4issued pursuant to the Build Illinois Bond Act is sufficient to
5provide for the payment of the principal of, and interest and
6premium, if any, on the bonds, as certified to the State
7Comptroller and the Director of Revenue by the Director of the
8Governor's Office of Management and Budget.
9(Source: P.A. 96-554, eff. 1-1-10.)
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.