093_SB0227eng

 
SB227 Engrossed                      LRB093 04616 SJM 04669 b

 1        AN ACT concerning taxes.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The  Cigarette  Tax Act is amended by adding
 5    Section 3-2 as follows:

 6        (35 ILCS 130/3-2 new)
 7        Sec. 3-2. Credit voucher for bad debts.
 8        (a) Definitions. As used in this Section:
 9        "Bad debt" means the taxes attributable to any portion of
10    a debt that is related to a sale of cigarettes subject to tax
11    under  Section  2  that  is  not  otherwise   deductible   or
12    excludable  for any tax purpose, that has become worthless or
13    uncollectible within  60  days  after  the  delivery  of  the
14    cigarettes  that  are represented by a claim. "Bad debt" does
15    not  include  any  interest  on  the  wholesale  price  of  a
16    cigarette, uncollectible amounts on property that remains  in
17    the  possession  of  the  distributor until the full purchase
18    price is paid, expenses incurred in attempting to collect any
19    account receivable or any portion of the debt recovered,  any
20    accounts  receivable that have been sold to a third party for
21    collection, or repossessed property.
22        "Reasonable collection practices" means that at  least  3
23    attempts  are  made  to collect the debt within 60 days after
24    the delivery of the cigarettes by providing  written  notices
25    with  one  being mailed within 30 days after the delivery and
26    another being mailed within 45  days  after  delivery,  which
27    shall be mailed by certified mail.
28        "Written   notice"  means  notice  in  writing  from  the
29    distributor to the retailer which shall include  a  statement
30    that  a portion of the collection is for that amount of taxes
31    charged by the State and represented by the stamp.
 
SB227 Engrossed             -2-      LRB093 04616 SJM 04669 b
 1        "Person" means an actual  person  and  any  successor  or
 2    related party.
 3        (b) The Department is authorized to issue credit vouchers
 4    for  bad debts to applicants meeting the requirements of this
 5    Section. Beginning on January  1,  2004,  a  distributor  may
 6    submit  an application to the Department for a credit voucher
 7    in the amount of bad debts from the tax imposed under Section
 8    2. The amount of the requested credit must be charged off  as
 9    uncollectible within 3 years after the stamps were first sold
10    to  the  distributor.  Any  claim for a credit voucher in the
11    amount of bad debts from the tax imposed under Section  2  is
12    subject  to  this  statute  of  limitations  and shall not be
13    allowed after 3 years after the stamp is first  sold  to  the
14    distributor.
15        (c)  The amount of the credit voucher shall be determined
16    using the following as guidelines:
17             (1) What is the amount of  the  taxes  owed  to  the
18        distributor?
19             (2) Who owed the amount to the distributor?
20             (3) Is the amount owed greater than $50?
21             (4)  Has  the  distributor  received a credit in any
22        other years as a result of a bad debt from  this  person?
23        If  yes,  the distributor is not eligible for the voucher
24        provided under this Section.
25             (5) Is the claim for a credit voucher made within 30
26        days after the determination that the debt is a bad  debt
27        as defined by this Section?
28        (d) A credit voucher issued under this Section shall have
29    an expiration date of not less than 45 days after issuance.
30        (e)  A  claim for a credit voucher must be made within 30
31    days after the determination that the debt is a bad  debt  as
32    defined by this Section.
33        (f) Any claim for a bad debt submitted under this Section
34    must contain all of the following:
 
SB227 Engrossed             -3-      LRB093 04616 SJM 04669 b
 1             (1) A copy of the original invoice that must contain
 2        the  distributor's legal name and address, as well as the
 3        legal name of the retailer.
 4             (2) The name of the person who  is  responsible  for
 5        the bad debt.
 6             (3)  Evidence  that  the cigarettes described in the
 7        invoice and containing stamps were received by the person
 8        who is responsible for the bad debt.
 9             (4) Evidence that the person who is responsible  for
10        the  bad  debt  did  not  pay the distributor for the bad
11        debt.
12             (5) Evidence that the  distributor  used  reasonable
13        collection practices in efforts to collect the bad debt.
14             (6)  Evidence that the claim for a credit voucher is
15        made within 30 days after the determination that the debt
16        is a bad debt as defined by this Section.
17        (g) Recapture.
18             (1) A bad debt is reduced by any  amounts  collected
19        by  the  distributor  from the retailer within the 60-day
20        period with respect to such debt, regardless  of  whether
21        the   amounts   so   collected  are  attributable  to  or
22        designated by the parties or other law as collected  with
23        respect to the taxes imposed under Section 2.
24             (2)   Any   amount  subsequently  collected  by  the
25        distributor from the retailer with respect to a debt that
26        gave  rise  to  a  credit  voucher,  regardless  of   any
27        designation of the parties or other law, shall be treated
28        as reimbursement for the taxes imposed under Section 2.
29             (3)  In  the case of a partially worthless debt, the
30        amount of the debt attributable to  taxes  imposed  under
31        Section  2  shall  be  treated to the extent possible, as
32        attributable to the non-worthless portion of such debt.
33        (h) Any person aggrieved by any action of the  Department
34    under this Section may protest the action by making a written
 
SB227 Engrossed             -4-      LRB093 04616 SJM 04669 b
 1    request  for  a  hearing  within  60  days after the original
 2    action. If the hearing is not requested in writing within  60
 3    days, the original action is final.
 4        (i)  An  application  for  a  credit  voucher  under this
 5    Section must be signed by the claimant and verified.

 6        Section 10. The Cigarette  Use  Tax  Act  is  amended  by
 7    adding Section 3-2 as follows:

 8        (35 ILCS 135/3-2 new)
 9        Sec. 3-2. Credit voucher for bad debts.
10        (a) Definitions. As used in this Section:
11        "Bad debt" means the taxes attributable to any portion of
12    a debt that is related to a sale of cigarettes subject to tax
13    under   Section   2  that  is  not  otherwise  deductible  or
14    excludable for any tax purpose, that has become worthless  or
15    uncollectible  within  60  days  after  the  delivery  of the
16    cigarettes that are represented by a claim. "Bad  debt"  does
17    not  include  any  interest  on  the  wholesale  price  of  a
18    cigarette,  uncollectible amounts on property that remains in
19    the possession of the distributor  until  the  full  purchase
20    price is paid, expenses incurred in attempting to collect any
21    account  receivable or any portion of the debt recovered, any
22    accounts receivable that have been sold to a third party  for
23    collection, or repossessed property.
24        "Reasonable  collection  practices" means that at least 3
25    attempts are made to collect the debt within  60  days  after
26    the  delivery  of the cigarettes by providing written notices
27    with one being mailed within 30 days after the  delivery  and
28    another  being  mailed  within  45 days after delivery, which
29    shall be mailed by certified mail.
30        "Written  notice"  means  notice  in  writing  from   the
31    distributor  to  the retailer which shall include a statement
32    that a portion of the collection is for that amount of  taxes
 
SB227 Engrossed             -5-      LRB093 04616 SJM 04669 b
 1    charged by the State and represented by the stamp.
 2        "Person"  means  an  actual  person  and any successor or
 3    related party.
 4        (b) The Department is authorized to issue credit vouchers
 5    for bad debts to applicants meeting the requirements of  this
 6    Section.  Beginning  on  January  1,  2004, a distributor may
 7    submit an application to the Department for a credit  voucher
 8    in the amount of bad debts from the tax imposed under Section
 9    2.  The amount of the requested credit must be charged off as
10    uncollectible within 3 years after the stamps were first sold
11    to the distributor. Any claim for a  credit  voucher  in  the
12    amount  of  bad debts from the tax imposed under Section 2 is
13    subject to this statute  of  limitations  and  shall  not  be
14    allowed  after  3  years after the stamp is first sold to the
15    distributor.
16        (c) The amount of the credit voucher shall be  determined
17    using the following as guidelines:
18             (1)  What  is  the  amount  of the taxes owed to the
19        distributor?
20             (2) Who owed the amount to the distributor?
21             (3) Is the amount owed greater than $50?
22             (4) Has the distributor received  a  credit  in  any
23        other  years  as a result of a bad debt from this person?
24        If yes, the distributor is not eligible for  the  voucher
25        provided under this Section.
26             (5) Is the claim for a credit voucher made within 30
27        days  after the determination that the debt is a bad debt
28        as defined by this Section?
29        (d) A credit voucher issued under this Section shall have
30    an expiration date of not less than 45 days after issuance.
31        (e) A claim for a credit voucher must be made  within  30
32    days  after  the determination that the debt is a bad debt as
33    defined by this Section.
34        (f) Any claim for a bad debt submitted under this Section
 
SB227 Engrossed             -6-      LRB093 04616 SJM 04669 b
 1    must contain all of the following:
 2             (1) A copy of the original invoice that must contain
 3        the distributor's legal name and address, as well as  the
 4        legal name of the retailer.
 5             (2)  The  name  of the person who is responsible for
 6        the bad debt.
 7             (3) Evidence that the cigarettes  described  in  the
 8        invoice and containing stamps were received by the person
 9        who is responsible for the bad debt.
10             (4)  Evidence that the person who is responsible for
11        the bad debt did not pay  the  distributor  for  the  bad
12        debt.
13             (5)  Evidence  that  the distributor used reasonable
14        collection practices in efforts to collect the bad debt.
15             (6) Evidence that the claim for a credit voucher  is
16        made within 30 days after the determination that the debt
17        is a bad debt as defined by this Section.
18        (g) Recapture.
19             (1)  A  bad debt is reduced by any amounts collected
20        by the distributor from the retailer  within  the  60-day
21        period  with  respect to such debt, regardless of whether
22        the  amounts  so  collected  are   attributable   to   or
23        designated  by the parties or other law as collected with
24        respect to the taxes imposed under Section 2.
25             (2)  Any  amount  subsequently  collected   by   the
26        distributor from the retailer with respect to a debt that
27        gave   rise  to  a  credit  voucher,  regardless  of  any
28        designation of the parties or other law, shall be treated
29        as reimbursement for the taxes imposed under Section 2.
30             (3) In the case of a partially worthless  debt,  the
31        amount  of  the  debt attributable to taxes imposed under
32        Section 2 shall be treated to  the  extent  possible,  as
33        attributable to the non-worthless portion of such debt.
34        (h)  Any person aggrieved by any action of the Department
 
SB227 Engrossed             -7-      LRB093 04616 SJM 04669 b
 1    under this Section may protest the action by making a written
 2    request for a hearing  within  60  days  after  the  original
 3    action.  If the hearing is not requested in writing within 60
 4    days, the original action is final.
 5        (i) An  application  for  a  credit  voucher  under  this
 6    Section must be signed by the claimant and verified.

 7        Section  15.  The  Tobacco  Products  Tax  Act of 1995 is
 8    amended by adding Section 10-32 as follows:

 9        (35 ILCS 143/10-32 new)
10        Sec. 3-2. Credit voucher for bad debts.
11        (a) Definitions. As used in this Section:
12        "Bad debt" means the taxes attributable to any portion of
13    a debt that is related to a sale of cigarettes subject to tax
14    under Section 10-10  that  is  not  otherwise  deductible  or
15    excludable  for any tax purpose, that has become worthless or
16    uncollectible within  60  days  after  the  delivery  of  the
17    cigarettes  that  are represented by a claim. "Bad debt" does
18    not  include  any  interest  on  the  wholesale  price  of  a
19    cigarette, uncollectible amounts on property that remains  in
20    the  possession  of  the  distributor until the full purchase
21    price is paid, expenses incurred in attempting to collect any
22    account receivable or any portion of the debt recovered,  any
23    accounts  receivable that have been sold to a third party for
24    collection, or repossessed property.
25        "Reasonable collection practices" means that at  least  3
26    attempts  are  made  to collect the debt within 60 days after
27    the delivery of the cigarettes by providing  written  notices
28    with  one  being mailed within 30 days after the delivery and
29    another being mailed within 45  days  after  delivery,  which
30    shall be mailed by certified mail.
31        "Written   notice"  means  notice  in  writing  from  the
32    distributor to the retailer which shall include  a  statement
 
SB227 Engrossed             -8-      LRB093 04616 SJM 04669 b
 1    that  a portion of the collection is for that amount of taxes
 2    charged by the State and represented by the stamp.
 3        "Person" means an actual  person  and  any  successor  or
 4    related party.
 5        (b) The Department is authorized to issue credit vouchers
 6    for  bad debts to applicants meeting the requirements of this
 7    Section. Beginning on January  1,  2004,  a  distributor  may
 8    submit  an application to the Department for a credit voucher
 9    in the amount of bad debts from the tax imposed under Section
10    10-10. The amount of the requested credit must be charged off
11    as uncollectible within 3 years after the stamps  were  first
12    sold  to  the  distributor. Any claim for a credit voucher in
13    the amount of bad debts from the tax  imposed  under  Section
14    10-10 is subject to this statute of limitations and shall not
15    be allowed after 3 years after the stamp is first sold to the
16    distributor.
17        (c)  The amount of the credit voucher shall be determined
18    using the following as guidelines:
19             (1) What is the amount of  the  taxes  owed  to  the
20        distributor?
21             (2) Who owed the amount to the distributor?
22             (3) Is the amount owed greater than $50?
23             (4)  Has  the  distributor  received a credit in any
24        other years as a result of a bad debt from  this  person?
25        If  yes,  the distributor is not eligible for the voucher
26        provided under this Section.
27             (5) Is the claim for a credit voucher made within 30
28        days after the determination that the debt is a bad  debt
29        as defined by this Section?
30        (d) A credit voucher issued under this Section shall have
31    an expiration date of not less than 45 days after issuance.
32        (e)  A  claim for a credit voucher must be made within 30
33    days after the determination that the debt is a bad  debt  as
34    defined by this Section.
 
SB227 Engrossed             -9-      LRB093 04616 SJM 04669 b
 1        (f) Any claim for a bad debt submitted under this Section
 2    must contain all of the following:
 3             (1) A copy of the original invoice that must contain
 4        the  distributor's legal name and address, as well as the
 5        legal name of the retailer.
 6             (2) The name of the person who  is  responsible  for
 7        the bad debt.
 8             (3)  Evidence  that  the cigarettes described in the
 9        invoice and containing stamps were received by the person
10        who is responsible for the bad debt.
11             (4) Evidence that the person who is responsible  for
12        the  bad  debt  did  not  pay the distributor for the bad
13        debt.
14             (5) Evidence that the  distributor  used  reasonable
15        collection practices in efforts to collect the bad debt.
16             (6)  Evidence that the claim for a credit voucher is
17        made within 30 days after the determination that the debt
18        is a bad debt as defined by this Section.
19        (g) Recapture.
20             (1) A bad debt is reduced by any  amounts  collected
21        by  the  distributor  from the retailer within the 60-day
22        period with respect to such debt, regardless  of  whether
23        the   amounts   so   collected  are  attributable  to  or
24        designated by the parties or other law as collected  with
25        respect to the taxes imposed under Section 10-10.
26             (2)   Any   amount  subsequently  collected  by  the
27        distributor from the retailer with respect to a debt that
28        gave  rise  to  a  credit  voucher,  regardless  of   any
29        designation of the parties or other law, shall be treated
30        as  reimbursement  for  the  taxes  imposed under Section
31        10-10.
32             (3) In the case of a partially worthless  debt,  the
33        amount  of  the  debt attributable to taxes imposed under
34        Section 10-10 shall be treated to the extent possible, as
 
SB227 Engrossed             -10-     LRB093 04616 SJM 04669 b
 1        attributable to the non-worthless portion of such debt.
 2        (h) Any person aggrieved by any action of the  Department
 3    under this Section may protest the action by making a written
 4    request  for  a  hearing  within  60  days after the original
 5    action. If the hearing is not requested in writing within  60
 6    days, the original action is final.
 7        (i)  An  application  for  a  credit  voucher  under this
 8    Section must be signed by the claimant and verified.

 9        Section 99. Effective date. This Act  takes  effect  upon
10    becoming law.