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| | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB3532 Introduced 2/17/2023, by Rep. Tony M. McCombie SYNOPSIS AS INTRODUCED: |
| 35 ILCS 105/3-55 | from Ch. 120, par. 439.3-55 | 35 ILCS 110/3-45 | from Ch. 120, par. 439.33-45 |
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Amends the Use Tax Act and the Service Use Tax Act. Provides that, for the purpose of the multistate exemption, use in this State does not include the return of the property of a lessor or purchaser to this State for storage, repair, or refurbishment so long as the property is not used by a lessee or purchaser in this State.
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| | A BILL FOR |
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1 | | AN ACT concerning revenue.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Use Tax Act is amended by changing Section |
5 | | 3-55 as follows:
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6 | | (35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
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7 | | Sec. 3-55. Multistate exemption. To prevent actual or |
8 | | likely multistate taxation, the tax imposed by this
Act
does |
9 | | not apply to the use of
tangible personal property in this |
10 | | State under the following circumstances:
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11 | | (a) The use, in this State, of tangible personal property |
12 | | acquired
outside this State by a nonresident individual and |
13 | | brought into this
State by the individual for his or her own |
14 | | use while temporarily within
this State or while passing |
15 | | through this State.
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16 | | (b) (Blank).
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17 | | (c) The use, in this State, by owners, lessors,
or
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18 | | shippers
of tangible personal property that is utilized by |
19 | | interstate carriers
for hire for use as rolling stock moving |
20 | | in interstate commerce as
long as so used by the interstate |
21 | | carriers for hire, and equipment
operated by a |
22 | | telecommunications provider, licensed as a common carrier by |
23 | | the
Federal Communications Commission, which is permanently |
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1 | | installed in or affixed
to aircraft moving in interstate |
2 | | commerce.
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3 | | (d) The use, in this State, of tangible personal property |
4 | | that is
acquired outside this State and caused to be brought |
5 | | into this State by
a person who has already paid a tax in |
6 | | another State in respect to the
sale, purchase, or use of that |
7 | | property, to the extent of the amount of
the tax properly due |
8 | | and paid in the other State.
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9 | | (e) The temporary storage, in this State, of tangible |
10 | | personal
property that is acquired outside this State and |
11 | | that, after
being brought into this State and stored here |
12 | | temporarily, is used
solely outside this State or is |
13 | | physically attached to or incorporated
into other tangible |
14 | | personal property that is used solely outside this
State, or |
15 | | is altered by converting, fabricating, manufacturing, |
16 | | printing,
processing, or shaping, and, as altered, is used |
17 | | solely outside this State. For purposes of this subsection, |
18 | | use in this State does not include the return of the property |
19 | | of a lessor or purchaser to this State for storage, repair, or |
20 | | refurbishment so long as the property is not used by a lessee |
21 | | or purchaser in this State. Refurbishment includes the |
22 | | replacement of component parts as well as upgrades.
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23 | | (f) The temporary storage in this State of building |
24 | | materials and
fixtures that are acquired either in this State |
25 | | or outside this State
by an Illinois registered combination |
26 | | retailer and construction contractor, and
that the purchaser |
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1 | | thereafter uses outside this State by incorporating that
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2 | | property into real estate located outside this State.
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3 | | (g) The use or purchase of tangible personal property by a |
4 | | common carrier
by rail or motor that receives the physical |
5 | | possession of the property in
Illinois, and
that transports |
6 | | the property, or shares with another common carrier in the
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7 | | transportation of the property, out of Illinois on a standard |
8 | | uniform bill of
lading showing the seller of the property as |
9 | | the shipper or consignor of the
property to a destination |
10 | | outside Illinois, for use outside Illinois.
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11 | | (h) Except as provided in subsection (h-1), the use, in |
12 | | this State, of a motor vehicle that was sold in
this State to a |
13 | | nonresident, even though the motor vehicle is
delivered to the |
14 | | nonresident in this State, if the motor vehicle
is not to be |
15 | | titled in this State, and if a
drive-away permit is issued to |
16 | | the motor vehicle as
provided in Section 3-603 of the Illinois |
17 | | Vehicle Code or if the
nonresident purchaser has vehicle |
18 | | registration plates to transfer
to the motor vehicle upon |
19 | | returning to his or her home state.
The issuance of the |
20 | | drive-away permit or having the
out-of-state
registration |
21 | | plates to be transferred shall be prima facie evidence
that |
22 | | the motor vehicle will not be titled in this State.
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23 | | (h-1) The exemption under subsection (h) does not apply if |
24 | | the state in which the motor vehicle will be titled does not |
25 | | allow a reciprocal exemption for the use in that state of a |
26 | | motor vehicle sold and delivered in that state to an Illinois |
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1 | | resident but titled in Illinois. The tax collected under this |
2 | | Act on the sale of a motor vehicle in this State to a resident |
3 | | of another state that does not allow a reciprocal exemption |
4 | | shall be imposed at a rate equal to the state's rate of tax on |
5 | | taxable property in the state in which the purchaser is a |
6 | | resident, except that the tax shall not exceed the tax that |
7 | | would otherwise be imposed under this Act. At the time of the |
8 | | sale, the purchaser shall execute a statement, signed under |
9 | | penalty of perjury, of his or her intent to title the vehicle |
10 | | in the state in which the purchaser is a resident within 30 |
11 | | days after the sale and of the fact of the payment to the State |
12 | | of Illinois of tax in an amount equivalent to the state's rate |
13 | | of tax on taxable property in his or her state of residence and |
14 | | shall submit the statement to the appropriate tax collection |
15 | | agency in his or her state of residence. In addition, the |
16 | | retailer must retain a signed copy of the statement in his or |
17 | | her records. Nothing in this subsection shall be construed to |
18 | | require the removal of the vehicle from this state following |
19 | | the filing of an intent to title the vehicle in the purchaser's |
20 | | state of residence if the purchaser titles the vehicle in his |
21 | | or her state of residence within 30 days after the date of |
22 | | sale. The tax collected under this Act in accordance with this |
23 | | subsection (h-1) shall be proportionately distributed as if |
24 | | the tax were collected at the 6.25% general rate imposed under |
25 | | this Act.
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26 | | (h-2) The following exemptions apply with respect to |
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1 | | certain aircraft: |
2 | | (1) Beginning on July 1, 2007, no tax is imposed under |
3 | | this Act on the purchase of an aircraft, as defined in |
4 | | Section 3 of the Illinois Aeronautics Act, if all of the |
5 | | following conditions are met: |
6 | | (A) the aircraft leaves this State within 15 days |
7 | | after the later of either the issuance of the final |
8 | | billing for the purchase of the aircraft or the |
9 | | authorized approval for return to service, completion |
10 | | of the maintenance record entry, and completion of the |
11 | | test flight and ground test for inspection, as |
12 | | required by 14 C.F.R. 91.407; |
13 | | (B) the aircraft is not based or registered in |
14 | | this State after the purchase of the aircraft; and |
15 | | (C) the purchaser provides the Department with a |
16 | | signed and dated certification, on a form prescribed |
17 | | by the Department, certifying that the requirements of |
18 | | this item (1) are met. The certificate must also |
19 | | include the name and address of the purchaser, the |
20 | | address of the location where the aircraft is to be |
21 | | titled or registered, the address of the primary |
22 | | physical location of the aircraft, and other |
23 | | information that the Department may reasonably |
24 | | require. |
25 | | (2) Beginning on July 1, 2007, no tax is imposed under |
26 | | this Act on the use of an aircraft, as defined in Section 3 |
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1 | | of the Illinois Aeronautics Act, that is temporarily |
2 | | located in this State for the purpose of a prepurchase |
3 | | evaluation if all of the following conditions are met: |
4 | | (A) the aircraft is not based or registered in |
5 | | this State after the prepurchase evaluation; and |
6 | | (B) the purchaser provides the Department with a |
7 | | signed and dated certification, on a form prescribed |
8 | | by the Department, certifying that the requirements of |
9 | | this item (2) are met. The certificate must also |
10 | | include the name and address of the purchaser, the |
11 | | address of the location where the aircraft is to be |
12 | | titled or registered, the address of the primary |
13 | | physical location of the aircraft, and other |
14 | | information that the Department may reasonably |
15 | | require. |
16 | | (3) Beginning on July 1, 2007, no tax is imposed under |
17 | | this Act on the use of an aircraft, as defined in Section 3 |
18 | | of the Illinois Aeronautics Act, that is temporarily |
19 | | located in this State for the purpose of a post-sale |
20 | | customization if all of the following conditions are met: |
21 | | (A) the aircraft leaves this State within 15 days |
22 | | after the authorized approval for return to service, |
23 | | completion of the maintenance record entry, and |
24 | | completion of the test flight and ground test for |
25 | | inspection, as required by 14 C.F.R. 91.407; |
26 | | (B) the aircraft is not based or registered in |
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1 | | this State either before or after the post-sale |
2 | | customization; and |
3 | | (C) the purchaser provides the Department with a |
4 | | signed and dated certification, on a form prescribed |
5 | | by the Department, certifying that the requirements of |
6 | | this item (3) are met. The certificate must also |
7 | | include the name and address of the purchaser, the |
8 | | address of the location where the aircraft is to be |
9 | | titled or registered, the address of the primary |
10 | | physical location of the aircraft, and other |
11 | | information that the Department may reasonably |
12 | | require. |
13 | | If tax becomes due under this subsection (h-2) because of |
14 | | the purchaser's use of the aircraft in this State, the |
15 | | purchaser shall file a return with the Department and pay the |
16 | | tax on the fair market value of the aircraft. This return and |
17 | | payment of the tax must be made no later than 30 days after the |
18 | | aircraft is used in a taxable manner in this State. The tax is |
19 | | based on the fair market value of the aircraft on the date that |
20 | | it is first used in a taxable manner in this State. |
21 | | For purposes of this subsection (h-2): |
22 | | "Based in this State" means hangared, stored, or otherwise |
23 | | used, excluding post-sale customizations as defined in this |
24 | | Section, for 10 or more days in each 12-month period |
25 | | immediately following the date of the sale of the aircraft. |
26 | | "Post-sale customization" means any improvement, |
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1 | | maintenance, or repair that is performed on an aircraft |
2 | | following a transfer of ownership of the aircraft. |
3 | | "Prepurchase evaluation" means an examination of an |
4 | | aircraft to provide a potential purchaser with information |
5 | | relevant to the potential purchase. |
6 | | "Registered in this State" means an aircraft registered |
7 | | with the Department of Transportation, Aeronautics Division, |
8 | | or titled or registered with the Federal Aviation |
9 | | Administration to an address located in this State.
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10 | | This subsection (h-2) is exempt from the provisions of |
11 | | Section 3-90.
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12 | | (i) Beginning July 1, 1999, the use, in this State, of fuel |
13 | | acquired
outside this State and brought into this State in the |
14 | | fuel supply
tanks of locomotives engaged in freight hauling |
15 | | and passenger service for
interstate commerce. This subsection |
16 | | is exempt from the provisions of Section
3-90.
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17 | | (j) Beginning on January 1, 2002 and through June 30, |
18 | | 2016, the use of tangible personal property
purchased from an |
19 | | Illinois retailer by a taxpayer engaged in centralized
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20 | | purchasing activities in Illinois who will, upon receipt of |
21 | | the property in
Illinois, temporarily store the property in |
22 | | Illinois (i) for the purpose of
subsequently transporting it |
23 | | outside this State for use or consumption
thereafter solely |
24 | | outside this State or (ii) for the purpose of being
processed, |
25 | | fabricated, or manufactured into, attached to, or incorporated |
26 | | into
other tangible personal property to be transported |
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1 | | outside this State and
thereafter used or consumed solely |
2 | | outside this State. The Director of Revenue
shall, pursuant to |
3 | | rules adopted in accordance with the Illinois Administrative
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4 | | Procedure Act, issue a permit to any taxpayer in good standing |
5 | | with the
Department who is eligible for the exemption under |
6 | | this subsection (j). The
permit issued under this subsection |
7 | | (j) shall authorize the holder, to the
extent and in the manner |
8 | | specified in the rules adopted under this Act, to
purchase |
9 | | tangible personal property from a retailer exempt from the |
10 | | taxes
imposed by this Act. Taxpayers shall maintain all |
11 | | necessary books and records
to substantiate the use and |
12 | | consumption of all such tangible personal property
outside of |
13 | | the State of Illinois.
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14 | | (Source: P.A. 100-321, eff. 8-24-17.)
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15 | | Section 10. The Service Use Tax Act is amended by changing |
16 | | Section 3-45 as follows:
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17 | | (35 ILCS 110/3-45) (from Ch. 120, par. 439.33-45)
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18 | | Sec. 3-45. Multistate exemption. To prevent actual or |
19 | | likely multistate
taxation, the tax imposed by this Act does |
20 | | not apply
to the use of tangible personal property in this |
21 | | State under the following
circumstances:
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22 | | (a) The use, in this State, of property acquired outside |
23 | | this State
by a nonresident individual and brought into this |
24 | | State by the
individual for his or her own use while |
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1 | | temporarily within this State or
while passing through this |
2 | | State.
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3 | | (b) The use, in this State, of property that is
acquired |
4 | | outside
this State and that is moved into this State for use as |
5 | | rolling stock
moving in interstate commerce.
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6 | | (c) The use, in this State, of property that is acquired |
7 | | outside
this State and caused to be brought into this State by |
8 | | a person who has
already paid a tax in another state in respect |
9 | | to the sale, purchase, or
use of that property, to the extent |
10 | | of the amount of the tax properly
due and paid in the other |
11 | | state.
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12 | | (d) The temporary storage, in this State, of property that |
13 | | is
acquired outside this State and that after being brought |
14 | | into
this State and stored here temporarily, is used solely |
15 | | outside this
State or is physically attached to or |
16 | | incorporated into other property
that is used solely outside |
17 | | this State, or is altered by converting,
fabricating, |
18 | | manufacturing, printing, processing, or shaping, and, as
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19 | | altered, is used solely outside this State. For purposes of |
20 | | this subsection, use in this State does not include the return |
21 | | of the property of a lessor or purchaser to this State for |
22 | | storage, repair, or refurbishment so long as the property is |
23 | | not used by a lessee or purchaser in this State. Refurbishment |
24 | | includes the replacement of component parts as well as |
25 | | upgrades.
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26 | | (e) Beginning July 1, 1999, the use, in this State, of fuel |
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1 | | acquired
outside this State and brought into this State in the |
2 | | fuel supply
tanks of locomotives engaged in freight hauling |
3 | | and passenger service for
interstate commerce. This subsection |
4 | | is exempt from the provisions of Section
3-75.
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5 | | (f) Beginning on January 1, 2002 and through June 30, |
6 | | 2016, the use of tangible personal property
purchased from an |
7 | | Illinois retailer by a taxpayer engaged in centralized
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8 | | purchasing activities in Illinois who will, upon receipt of |
9 | | the property in
Illinois, temporarily store the property in |
10 | | Illinois (i) for the purpose of
subsequently transporting it |
11 | | outside this State for use or consumption
thereafter solely |
12 | | outside this State or (ii) for the purpose of being
processed, |
13 | | fabricated, or manufactured into, attached to, or incorporated |
14 | | into
other tangible personal property to be transported |
15 | | outside this State and
thereafter used or consumed solely |
16 | | outside this State. The Director of Revenue
shall, pursuant to |
17 | | rules adopted in accordance with the Illinois Administrative
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18 | | Procedure Act, issue a permit to any taxpayer in good standing |
19 | | with the
Department who is eligible for the exemption under |
20 | | this subsection (f). The
permit issued under this subsection |
21 | | (f) shall authorize the holder, to the
extent and in the manner |
22 | | specified in the rules adopted under this Act, to
purchase |
23 | | tangible personal property from a retailer exempt from the |
24 | | taxes
imposed by this Act. Taxpayers shall maintain all |
25 | | necessary books and records
to substantiate the use and |
26 | | consumption of all such tangible personal property
outside of |