97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB0157

 

Introduced 2/8/2011, by Sen. Matt Murphy

 

SYNOPSIS AS INTRODUCED:
 
55 ILCS 5/5-1006  from Ch. 34, par. 5-1006
55 ILCS 5/5-1007  from Ch. 34, par. 5-1007

    Amends the Home Rule County Retailers' Occupation Tax Law of the Counties Code and the Home Rule County Service Occupation Tax Law of the Counties Code. Provides that the maximum tax rate that is permitted under those Laws is 0.75%, unless a higher rate is authorized by referendum. Preempts home rule powers. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
HOME RULE NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

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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 Counties Code is amended by changing
5Sections 5-1006 and 5-1007 as follows:
 
6    (55 ILCS 5/5-1006)  (from Ch. 34, par. 5-1006)
7    Sec. 5-1006. Home Rule County Retailers' Occupation Tax
8Law. Any county that is a home rule unit may impose a tax upon
9all persons engaged in the business of selling tangible
10personal property, other than an item of tangible personal
11property titled or registered with an agency of this State's
12government, at retail in the county on the gross receipts from
13such sales made in the course of their business. If imposed,
14this tax shall only be imposed in 1/4% increments. On and after
15September 1, 1991, this additional tax may not be imposed on
16the sales of food for human consumption which is to be consumed
17off the premises where it is sold (other than alcoholic
18beverages, soft drinks and food which has been prepared for
19immediate consumption) and prescription and nonprescription
20medicines, drugs, medical appliances and insulin, urine
21testing materials, syringes and needles used by diabetics. The
22tax imposed by a home rule county pursuant to this Section and
23all civil penalties that may be assessed as an incident thereof

 

 

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1shall be collected and enforced by the State Department of
2Revenue. The certificate of registration that is issued by the
3Department to a retailer under the Retailers' Occupation Tax
4Act shall permit the retailer to engage in a business that is
5taxable under any ordinance or resolution enacted pursuant to
6this Section without registering separately with the
7Department under such ordinance or resolution or under this
8Section. The Department shall have full power to administer and
9enforce this Section; to collect all taxes and penalties due
10hereunder; to dispose of taxes and penalties so collected in
11the manner hereinafter provided; and to determine all rights to
12credit memoranda arising on account of the erroneous payment of
13tax or penalty hereunder. In the administration of, and
14compliance with, this Section, the Department and persons who
15are subject to this Section shall have the same rights,
16remedies, privileges, immunities, powers and duties, and be
17subject to the same conditions, restrictions, limitations,
18penalties and definitions of terms, and employ the same modes
19of procedure, as are prescribed in Sections 1, 1a, 1a-1, 1d,
201e, 1f, 1i, 1j, 1k, 1m, 1n, 2 through 2-65 (in respect to all
21provisions therein other than the State rate of tax), 4, 5, 5a,
225b, 5c, 5d, 5e, 5f, 5g, 5h, 5i, 5j, 5k, 5l, 6, 6a, 6b, 6c, 7, 8,
239, 10, 11, 12 and 13 of the Retailers' Occupation Tax Act and
24Section 3-7 of the Uniform Penalty and Interest Act, as fully
25as if those provisions were set forth herein.
26    No tax may be imposed by a home rule county pursuant to

 

 

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1this Section unless the county also imposes a tax at the same
2rate pursuant to Section 5-1007.
3    Persons subject to any tax imposed pursuant to the
4authority granted in this Section may reimburse themselves for
5their seller's tax liability hereunder by separately stating
6such tax as an additional charge, which charge may be stated in
7combination, in a single amount, with State tax which sellers
8are required to collect under the Use Tax Act, pursuant to such
9bracket schedules as the Department may prescribe.
10    Whenever the Department determines that a refund should be
11made under this Section to a claimant instead of issuing a
12credit memorandum, the Department shall notify the State
13Comptroller, who shall cause the order to be drawn for the
14amount specified and to the person named in the notification
15from the Department. The refund shall be paid by the State
16Treasurer out of the home rule county retailers' occupation tax
17fund.
18    The Department shall forthwith pay over to the State
19Treasurer, ex officio, as trustee, all taxes and penalties
20collected hereunder.
21    As soon as possible after the first day of each month,
22beginning January 1, 2011, upon certification of the Department
23of Revenue, the Comptroller shall order transferred, and the
24Treasurer shall transfer, to the STAR Bonds Revenue Fund the
25local sales tax increment, as defined in the Innovation
26Development and Economy Act, collected under this Section

 

 

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1during the second preceding calendar month for sales within a
2STAR bond district.
3    After the monthly transfer to the STAR Bonds Revenue Fund,
4on or before the 25th day of each calendar month, the
5Department shall prepare and certify to the Comptroller the
6disbursement of stated sums of money to named counties, the
7counties to be those from which retailers have paid taxes or
8penalties hereunder to the Department during the second
9preceding calendar month. The amount to be paid to each county
10shall be the amount (not including credit memoranda) collected
11hereunder during the second preceding calendar month by the
12Department plus an amount the Department determines is
13necessary to offset any amounts that were erroneously paid to a
14different taxing body, and not including an amount equal to the
15amount of refunds made during the second preceding calendar
16month by the Department on behalf of such county, and not
17including any amount which the Department determines is
18necessary to offset any amounts which were payable to a
19different taxing body but were erroneously paid to the county,
20and not including any amounts that are transferred to the STAR
21Bonds Revenue Fund. Within 10 days after receipt, by the
22Comptroller, of the disbursement certification to the counties
23provided for in this Section to be given to the Comptroller by
24the Department, the Comptroller shall cause the orders to be
25drawn for the respective amounts in accordance with the
26directions contained in the certification.

 

 

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1    In addition to the disbursement required by the preceding
2paragraph, an allocation shall be made in March of each year to
3each county that received more than $500,000 in disbursements
4under the preceding paragraph in the preceding calendar year.
5The allocation shall be in an amount equal to the average
6monthly distribution made to each such county under the
7preceding paragraph during the preceding calendar year
8(excluding the 2 months of highest receipts). The distribution
9made in March of each year subsequent to the year in which an
10allocation was made pursuant to this paragraph and the
11preceding paragraph shall be reduced by the amount allocated
12and disbursed under this paragraph in the preceding calendar
13year. The Department shall prepare and certify to the
14Comptroller for disbursement the allocations made in
15accordance with this paragraph.
16    For the purpose of determining the local governmental unit
17whose tax is applicable, a retail sale by a producer of coal or
18other mineral mined in Illinois is a sale at retail at the
19place where the coal or other mineral mined in Illinois is
20extracted from the earth. This paragraph does not apply to coal
21or other mineral when it is delivered or shipped by the seller
22to the purchaser at a point outside Illinois so that the sale
23is exempt under the United States Constitution as a sale in
24interstate or foreign commerce.
25    Nothing in this Section shall be construed to authorize a
26county to impose a tax upon the privilege of engaging in any

 

 

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1business which under the Constitution of the United States may
2not be made the subject of taxation by this State.
3    An ordinance or resolution imposing or discontinuing a tax
4hereunder or effecting a change in the rate thereof shall be
5adopted and a certified copy thereof filed with the Department
6on or before the first day of June, whereupon the Department
7shall proceed to administer and enforce this Section as of the
8first day of September next following such adoption and filing.
9Beginning January 1, 1992, an ordinance or resolution imposing
10or discontinuing the tax hereunder or effecting a change in the
11rate thereof shall be adopted and a certified copy thereof
12filed with the Department on or before the first day of July,
13whereupon the Department shall proceed to administer and
14enforce this Section as of the first day of October next
15following such adoption and filing. Beginning January 1, 1993,
16an ordinance or resolution imposing or discontinuing the tax
17hereunder or effecting a change in the rate thereof shall be
18adopted and a certified copy thereof filed with the Department
19on or before the first day of October, whereupon the Department
20shall proceed to administer and enforce this Section as of the
21first day of January next following such adoption and filing.
22Beginning April 1, 1998, an ordinance or resolution imposing or
23discontinuing the tax hereunder or effecting a change in the
24rate thereof shall either (i) be adopted and a certified copy
25thereof filed with the Department on or before the first day of
26April, whereupon the Department shall proceed to administer and

 

 

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1enforce this Section as of the first day of July next following
2the adoption and filing; or (ii) be adopted and a certified
3copy thereof filed with the Department on or before the first
4day of October, whereupon the Department shall proceed to
5administer and enforce this Section as of the first day of
6January next following the adoption and filing.
7    When certifying the amount of a monthly disbursement to a
8county under this Section, the Department shall increase or
9decrease such amount by an amount necessary to offset any
10misallocation of previous disbursements. The offset amount
11shall be the amount erroneously disbursed within the previous 6
12months from the time a misallocation is discovered.
13    Except as otherwise provided in this Section, beginning on
14the first day of the first month to occur not less than 30
15calendar days after the effective date of this amendatory Act
16of the 97th General Assembly, the maximum rate of any tax
17imposed under this Section is 0.75%. If the rate of tax exceeds
180.75% on the effective date of this amendatory Act of the 97th
19General Assembly, then the rate shall be reduced to 0.75%
20beginning on the first day of the first month to occur not less
21than 30 calendar days after the effective date of this
22amendatory Act of the 97th General Assembly. The county board
23of a county that is authorized to impose a tax under this
24Section may increase the rate to more than 0.75%, but only
25after the question is approved by the voters of the county at
26an election held in accordance with the general election law.

 

 

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1The county board proposing the increase shall certify the
2proposition to the proper election officials who shall submit
3the proposition to the voters at an election in accordance with
4the general election law. The proposition shall be in
5substantially the following form:
6        "Shall (county) be authorized to increase its
7    retailers' occupation tax to (percent)?"
8    Votes shall be recorded as "Yes" or "No". If a majority of
9the votes cast on the proposition are in favor of the increase,
10then the increase is authorized.
11    A home rule unit may not impose retailers' occupation taxes
12in a manner that is inconsistent with this Section. This
13Section is a limitation of home rule powers and functions under
14subsection (g) of Section 6 of Article VII of the Illinois
15Constitution.
16    This Section shall be known and may be cited as the Home
17Rule County Retailers' Occupation Tax Law.
18(Source: P.A. 96-939, eff. 6-24-10.)
 
19    (55 ILCS 5/5-1007)  (from Ch. 34, par. 5-1007)
20    Sec. 5-1007. Home Rule County Service Occupation Tax Law.
21The corporate authorities of a home rule county may impose a
22tax upon all persons engaged, in such county, in the business
23of making sales of service at the same rate of tax imposed
24pursuant to Section 5-1006 of the selling price of all tangible
25personal property transferred by such servicemen either in the

 

 

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1form of tangible personal property or in the form of real
2estate as an incident to a sale of service. If imposed, such
3tax shall only be imposed in 1/4% increments. On and after
4September 1, 1991, this additional tax may not be imposed on
5the sales of food for human consumption which is to be consumed
6off the premises where it is sold (other than alcoholic
7beverages, soft drinks and food which has been prepared for
8immediate consumption) and prescription and nonprescription
9medicines, drugs, medical appliances and insulin, urine
10testing materials, syringes and needles used by diabetics. The
11tax imposed by a home rule county pursuant to this Section and
12all civil penalties that may be assessed as an incident thereof
13shall be collected and enforced by the State Department of
14Revenue. The certificate of registration which is issued by the
15Department to a retailer under the Retailers' Occupation Tax
16Act or under the Service Occupation Tax Act shall permit such
17registrant to engage in a business which is taxable under any
18ordinance or resolution enacted pursuant to this Section
19without registering separately with the Department under such
20ordinance or resolution or under this Section. The Department
21shall have full power to administer and enforce this Section;
22to collect all taxes and penalties due hereunder; to dispose of
23taxes and penalties so collected in the manner hereinafter
24provided; and to determine all rights to credit memoranda
25arising on account of the erroneous payment of tax or penalty
26hereunder. In the administration of, and compliance with, this

 

 

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1Section the Department and persons who are subject to this
2Section shall have the same rights, remedies, privileges,
3immunities, powers and duties, and be subject to the same
4conditions, restrictions, limitations, penalties and
5definitions of terms, and employ the same modes of procedure,
6as are prescribed in Sections 1a-1, 2, 2a, 3 through 3-50 (in
7respect to all provisions therein other than the State rate of
8tax), 4 (except that the reference to the State shall be to the
9taxing county), 5, 7, 8 (except that the jurisdiction to which
10the tax shall be a debt to the extent indicated in that Section
118 shall be the taxing county), 9 (except as to the disposition
12of taxes and penalties collected, and except that the returned
13merchandise credit for this county tax may not be taken against
14any State tax), 10, 11, 12 (except the reference therein to
15Section 2b of the Retailers' Occupation Tax Act), 13 (except
16that any reference to the State shall mean the taxing county),
17the first paragraph of Section 15, 16, 17, 18, 19 and 20 of the
18Service Occupation Tax Act and Section 3-7 of the Uniform
19Penalty and Interest Act, as fully as if those provisions were
20set forth herein.
21    No tax may be imposed by a home rule county pursuant to
22this Section unless such county also imposes a tax at the same
23rate pursuant to Section 5-1006.
24    Persons subject to any tax imposed pursuant to the
25authority granted in this Section may reimburse themselves for
26their serviceman's tax liability hereunder by separately

 

 

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1stating such tax as an additional charge, which charge may be
2stated in combination, in a single amount, with State tax which
3servicemen are authorized to collect under the Service Use Tax
4Act, pursuant to such bracket schedules as the Department may
5prescribe.
6    Whenever the Department determines that a refund should be
7made under this Section to a claimant instead of issuing credit
8memorandum, the Department shall notify the State Comptroller,
9who shall cause the order to be drawn for the amount specified,
10and to the person named, in such notification from the
11Department. Such refund shall be paid by the State Treasurer
12out of the home rule county retailers' occupation tax fund.
13    The Department shall forthwith pay over to the State
14Treasurer, ex-officio, as trustee, all taxes and penalties
15collected hereunder.
16    As soon as possible after the first day of each month,
17beginning January 1, 2011, upon certification of the Department
18of Revenue, the Comptroller shall order transferred, and the
19Treasurer shall transfer, to the STAR Bonds Revenue Fund the
20local sales tax increment, as defined in the Innovation
21Development and Economy Act, collected under this Section
22during the second preceding calendar month for sales within a
23STAR bond district.
24    After the monthly transfer to the STAR Bonds Revenue Fund,
25on or before the 25th day of each calendar month, the
26Department shall prepare and certify to the Comptroller the

 

 

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1disbursement of stated sums of money to named counties, the
2counties to be those from which suppliers and servicemen have
3paid taxes or penalties hereunder to the Department during the
4second preceding calendar month. The amount to be paid to each
5county shall be the amount (not including credit memoranda)
6collected hereunder during the second preceding calendar month
7by the Department, and not including an amount equal to the
8amount of refunds made during the second preceding calendar
9month by the Department on behalf of such county, and not
10including any amounts that are transferred to the STAR Bonds
11Revenue Fund. Within 10 days after receipt, by the Comptroller,
12of the disbursement certification to the counties provided for
13in this Section to be given to the Comptroller by the
14Department, the Comptroller shall cause the orders to be drawn
15for the respective amounts in accordance with the directions
16contained in such certification.
17    In addition to the disbursement required by the preceding
18paragraph, an allocation shall be made in each year to each
19county which received more than $500,000 in disbursements under
20the preceding paragraph in the preceding calendar year. The
21allocation shall be in an amount equal to the average monthly
22distribution made to each such county under the preceding
23paragraph during the preceding calendar year (excluding the 2
24months of highest receipts). The distribution made in March of
25each year subsequent to the year in which an allocation was
26made pursuant to this paragraph and the preceding paragraph

 

 

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1shall be reduced by the amount allocated and disbursed under
2this paragraph in the preceding calendar year. The Department
3shall prepare and certify to the Comptroller for disbursement
4the allocations made in accordance with this paragraph.
5    Nothing in this Section shall be construed to authorize a
6county to impose a tax upon the privilege of engaging in any
7business which under the Constitution of the United States may
8not be made the subject of taxation by this State.
9    An ordinance or resolution imposing or discontinuing a tax
10hereunder or effecting a change in the rate thereof shall be
11adopted and a certified copy thereof filed with the Department
12on or before the first day of June, whereupon the Department
13shall proceed to administer and enforce this Section as of the
14first day of September next following such adoption and filing.
15Beginning January 1, 1992, an ordinance or resolution imposing
16or discontinuing the tax hereunder or effecting a change in the
17rate thereof shall be adopted and a certified copy thereof
18filed with the Department on or before the first day of July,
19whereupon the Department shall proceed to administer and
20enforce this Section as of the first day of October next
21following such adoption and filing. Beginning January 1, 1993,
22an ordinance or resolution imposing or discontinuing the tax
23hereunder or effecting a change in the rate thereof shall be
24adopted and a certified copy thereof filed with the Department
25on or before the first day of October, whereupon the Department
26shall proceed to administer and enforce this Section as of the

 

 

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1first day of January next following such adoption and filing.
2Beginning April 1, 1998, an ordinance or resolution imposing or
3discontinuing the tax hereunder or effecting a change in the
4rate thereof shall either (i) be adopted and a certified copy
5thereof filed with the Department on or before the first day of
6April, whereupon the Department shall proceed to administer and
7enforce this Section as of the first day of July next following
8the adoption and filing; or (ii) be adopted and a certified
9copy thereof filed with the Department on or before the first
10day of October, whereupon the Department shall proceed to
11administer and enforce this Section as of the first day of
12January next following the adoption and filing.
13    Except as otherwise provided in this Section, beginning on
14the first day of the first month to occur not less than 30
15calendar days after the effective date of this amendatory Act
16of the 97th General Assembly, the maximum rate of any tax
17imposed under this Section is 0.75%. If the rate of tax exceeds
180.75% on the effective date of this amendatory Act of the 97th
19General Assembly, then the rate shall be reduced to 0.75%
20beginning on the first day of the first month to occur not less
21than 30 calendar days after the effective date of this
22amendatory Act of the 97th General Assembly. The county board
23of a county that is authorized to impose a tax under this
24Section may increase the rate to more than 0.75%, but only
25after the question is approved by the voters of the county at
26an election held in accordance with the general election law.

 

 

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1The county board proposing the increase shall certify the
2proposition to the proper election officials who shall submit
3the proposition to the voters at an election in accordance with
4the general election law. The proposition shall be in
5substantially the following form:
6        "Shall (county) be authorized to increase its service
7    occupation tax to (percent)?"
8    Votes shall be recorded as "Yes" or "No". If a majority of
9the votes cast on the proposition are in favor of the increase,
10then the increase is authorized.
11    A home rule unit may not impose service occupation taxes in
12a manner that is inconsistent with this Section. This Section
13is a limitation of home rule powers and functions under
14subsection (g) of Section 6 of Article VII of the Illinois
15Constitution.
16    This Section shall be known and may be cited as the Home
17Rule County Service Occupation Tax Law.
18(Source: P.A. 96-939, eff. 6-24-10.)
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.